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Attack on Democracy

By Noam Chomsky at Aug 23, 2004

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The standard doctrine -- preached by Alan Greenspan, any number of economists, and commentators commonly -- that the marvellous "new economy" is a tribute to "entrepreneurial initiative," "consumer choice," and other free market wonders does not stand up to even a casual look, let alone careful analysis. ... And furthermore, business leaders understand very well that high-tech industry cannot survive in such an environment, and "the government must be the savior," as the business press explained after World War II. There are more specific matters: e.g., the illusions that Reagan was a free-marketer -- in fact, he broke new postwar records in import restrictions and pouring federal funds into the economy to "reindustrialize America" and compensate for failures of American management. That extends to just about every area of the economy, including the pharmaceutical issues that are among the most serious problems of the domestic economy in the coming years. These are matters of essential significance, which large-scale human consequences, and it is important to understand them, not to be deluded by self-serving slogans. Furthermore, these delusions are constantly used as a weapon against the weak, at home and abroad: THEY must be "liberated" from the "cycle of dependency," as Gingrich and others like to put it, while the rich and privileged huddle under the protection of the nanny state. All of this resumes processes that have been underway for centuries, a large factor in the current division between the North and the South, and its domestic analogue. These are not small matters. The explicit critique goes well beyond. The whole system is a radical attack on democracy. The military cover (and others like it) excludes the public from decisions about economic development, clearly crucial questions for people in any society, certainly any society that pretends to be democratic To be concrete, suppose that in the 1950s the public was given an informed choice about whether to devote its taxes to the eventual development of computers, internet, etc, which would someday be handed over to huge private tyrannies to develop further and market after the basic costs and risks of R&D had been socialized, or whether to devote those funds to other ends: education, health, livable communities, protection of an environment for their children, and innumerable other social goals. The military cover and other pretexts exclude the public from such decisions, which are the essence of a functioning democracy. Maybe an informed public would have made the same decisions as the planners in the state and business, but they plainly did not want to take the chance -- a realistic judgment on their part, I think. These too are not small matters. There are also particular issues...like the onerous and unprecedented patent regimes imposed in the grossly misnamed "free trade agreements," which guarantee monopoly pricing rights to private tyrannies for work largely funded in the public sector. For the pharmaceutical corporations, the most profitable industry for some time, the effects have been studied by economist Dean Baker, who estimates that if the public share of R&D were to rise to 100% (thus undercutting the pretense that high costs reflect R&D expenses) and the corporations were forced to sell on the market, the savings to consumers would be extraordinary. But those issues too do not enter the arena of public discussion, in a "failed state" with democratic forms that function only in limited ways. And it goes well beyond that. The "free trade agreements" deny to the "developing countries" the methods that were used by every current rich society to reach its present state -- what was called "kicking away the ladder" by the 19th century economist Friedrich List, who generalized Alexander Hamilton's principles about state intervention in the economy, which underlie US economic development from the earliest days (as Britain before it), to a more general theory of economic development, which has been largely confirmed by the general course of economic history.

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Re: Attack on Democracy

By Stevebird, Sbird at Sep 01, 2004 08:37 AM
Eric: And what will be the implications of that revolution? That we will force drug companies to produce better drugs for less money through legislation? Never gonna happen; they donate too much money to politicians. That we will get some form of socialized medicine, a federal drug plan? All the money for that plan just got spent on stealth bombers and a missile shield defense. George: Yet the current situation is utterly intolerable. Eric: Or are you suggesting that we get into bed with AARP and the various State Attorneys General, the people who will be most interested in forming drug-buying collectives to drive down prices by using market forces? This seems more promising; to use the capitalist system to beat the capitalists by raising the market power of the consumers. Not as sexy as a revolution, but possibly more achievable.

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Re: Attack on Democracy

By Stevebird, Sbird at Sep 01, 2004 08:34 AM
An interesting exchange from the following source: http://www.thebody.com/gmhc/issues/apr02/reforms.html Can We Reform the Drug Industry? An Online Discussion George Carter is an activist interested in patent reform and researching complementary therapies; Eric Goldman is a patent attorney. Eric: This is a nation that functions on the profit motive. We have to accept that. Take away the profit motive, and investors in pharmaceutical companies will move their money someplace else. And, since we all seem to agree that the U.S. drug industry is the primary source of R&D, this prospect scares me. George: The bottom line is, the industry is not going to settle for any situation where they don't make obscene profits... Frankly, this is a campaign that other groups of pharmaceutical consumers are keenly interested in and the industry is frightened by that. Because a reform movement like this represents genuine leverage against their outrageous power and greed. Settling for the few crumbs they sweep from the table is a failed form of activism. It's time for a revolution.

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Re: Attack on Democracy

By Nicholsj100, Nichols at Aug 31, 2004 19:31 PM
Even further, we notice that the constant effort to extend life (but not the quality of life) through drug production and research (which accounts for much of it) is (despite its obvious desirability) creating all manor of social and economic distortions and liabilities specifically within those societies that champion economic growth as the end all of human development and security –another way of asking if protecting technological innovation is theoretically or practically beneficial even within the regimes that demand it. In the end, what is important to protect and what is not will depend on examining the questions in a number of contexts. One wants to ferret out abuse, exaggeration and deceit; define the relationships between values and priorities that are in competition with one another; and subject theory or principle to scrutiny, in light of fact and history, keeping in mind that things are also always changing. What was good for yesterday might not be good for tomorrow. What is good for one thing might not be good for another.

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Re: Attack on Democracy

By Nicholsj100, Nichols at Aug 31, 2004 19:31 PM
the goods being produced. A smart strategy for stimulating trading partners' ability to both produce and consume, then, would be to make catalyzing technologies available at low cost, whether they were patented or not (although this is suicidal from an environmental point of view). If we add the fact that per/capita GDP increases through technological inputs, displacing workers –hence, displacing consumers– one can argue that high-tech innovation has as many curses as blessings even for the ideology and economic regimes that champion innovation as the fount of human well-being, making its protection of dubious value overall. The same can be said of the pharmos and the endless hype about the constant search for more and better drugs, as if the Physicians Desk Reference didn't contain an appalling number already; and as if we weren't competing against ourselves by adding more to counteract reckless, indulgent and polluted lifestyles.

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Re: Attack on Democracy

By Nicholsj100, Nichols at Aug 31, 2004 19:29 PM
contradictions for theorists in favor of global “free trade”. As I witnessed in Asia, software developed and manufactured in the US or elsewhere is pirated and made available at a fraction of the cost that it would sell for in the US (Windows XP or even AutoCAD for $5US), and is used by provincial government, small enterprise, conservation and development NGOs, students, etc. Hence, this software is widely available for use when it would otherwise be priced beyond the reach of many of those people and groups that will be critical to solving problems, stimulating economic development, doing conservation or working for communities –the kind of work that must be done to keep many of these countries from falling into complete ruin or simply becoming further entrenched as cheap labor and raw material resource providers for more developed nations. At the global level of the economy, over-production of goods (threatening broad deflation) is a big theme these days (has been for while, and can help to explain some of the massive privatization to open up new markets for capital), and much of this derives from the fact that large swaths of humanity simply can't buy the

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Re: Attack on Democracy

By Nicholsj100, Nichols at Aug 31, 2004 19:29 PM
Columbia University on an AIDS drug (interferon, I believe), which patent was signed over to a major pharmo (Bristol Meyers Squibb, I believe) for further development and clinical trials. The pharmo wildly exaggerated the costs of trials (by comparison to a government study), and even included as an aspect of the cost of development the loss of potential profits had they invested the same money into stocks or bonds, etc. –as if they weren't in the drug business at all. Even given that they did spend some funds on clinical trials, where does the argument that their patent in this case needed to be protected in order to protect creative advancement, since that came from the researchers at the university? I also understand that in the case of re-importation of drugs from Canada (which are considerably cheaper than their equivalent in the US), many of these drugs are manufactured in the US, and yet the argument is that quality control and safety is the problem. How can US manufactured drugs sell so much cheaper in Canada? Isn't it a complete ruse to say that safety is a problem? At the international level, patent and copyright protection encounter a number of

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Re: Attack on Democracy

By Nicholsj100, Nichols at Aug 31, 2004 19:28 PM
There are many issues here –some principles some practicalities– and either their validity or truthfulness must be determined at a variety of levels. For instance, what it true or false about the claim that patents or copyright protection stimulates excellence, creativity or technological advancement? What are the virtues and liabilities of creativity and rapid tech advances? To what extent are the virtues being used to disguise more cynical maneuvers to enlarge profits without justifications based on the principle –in many cases, that “rights” protection must be enforced in order to advance creativity, productivity or “human well-being”, etc? Does the “creative class” not act in the absence of profit motives? Who benefits most from rights protections: creators or industries and investors? What does history tell us? In the music industry, am I really supposed to care about protecting the profits of mass-produced popular music, which in many respects is a largely destructive industry? – Or shit literature? Have the best in cultural production ever depended on profits? In the pharmaceutical industry, I recall a case involving government-funded research at

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Re: Attack on Democracy

By Rotmil, Adamrotmil at Aug 30, 2004 19:14 PM
That's very well put and I don't have much to add. I might differ a little on the philosophy, but in what I hope is a constructive way. If we aim to diffuse the benfits of innovation as widely as possible, it would be best that the knowledge is shared openly and freely. In my opinion, this should be guaranteed by a doctrine of open access to essential facilities, particularly intangible ones that can be easily shared. In order to do make this work, we have to look at the (real) drivers of innovation as well as the sources of funding. The only mainstream politicans I know are looking at all aspects at once are the Republicans -- but only to the extent that they coordinate them to benefit the industry, not the population. John Kerry has now said he will allow the government to negotiate lower prices and allow (re)importation from Canada. This will help increase competition at the product level, which does benefit consumers. But if we want to maintain a healthy cycle of innovation, we have to untie this knot all the way. I hope we can convince Kerry of this, presuming he takes office. We should continue to generate conversation on the topic, regardless.

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Re: Attack on Democracy

By Stevebird, Sbird at Aug 30, 2004 06:56 AM
Peeperkorn advocates non-enforcement of drug patents under the condition that a nation is faced with an AIDS epidemic. Agreed, and serious questions arise. Should this apply to any nation with an AIDS epidemic? Which ones? Is Peeperkorn proposing non-enforcement only of AIDS patents? How about all the other epidemics facing poor countries? Surely these present moral duties as well. Peeperkorn's proposal seems to be that drug companies have a moral duty to treat sick people. I can't see this sort of proposal getting much airtime in any serious policy making environment. More precision required. Non-enforcement of AIDS patents is one obvious progression towards better corp behaviour but how to go from this to its logical and equally distressing extensions?

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Re: Attack on Democracy

By Cra008, Peeperkorn at Aug 26, 2004 23:35 PM
I think we should err on the side of treating sick people. We can address patent issues while we do so. If a nation is faced with an AIDS epidemic, it has an urgent duty to its citizenry. We ought to respect that duty by quietly not enforcing drug patents. Meanwhile, some may feel their property rights are being violated. They will imply that if problems can't be solved via the market, they oughtn't (or can't) be solved at all. But corporations see no problem when exceptions to free market principles are made in their favor. Their security, growth, and profitability are routinely depicted as matters of public good. Hence the bailout, subsidy, loophole, etc. We could apply the same logic to public health issues. Powerful parties are happy to "protest on an ad hoc basis" when it suits them. We shouldn't expect any more from dying people. Can you imagine a drug company refusing a government subsidy in the name of even-handedness? Or because the issues haven't been spelled out clearly enough? All that being said, I do share your concerns, SBIRD.

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Re: Attack on Democracy

By Stevebird, Sbird at Aug 26, 2004 04:01 AM
If greed/abuse is the issue rather than 'patents as such' (though there are people who reject the notion of patents generally), I'd like to hear more about where the limits should be drawn/how we go about keeping the principle of patent protection (intellectual property protection) in place whilst preventing abuses. I agree that 'free trade' in many cases is anything but fair. But a company operating internationally realistically has to protect its intellectual property. At what point is this protection going to be considered onerous/unfair for the purchaser/importer, and at what point should intervention be introduced, and by whom? What's the definition of 'unholy'? We can't protest on an ad hoc basis with vague notions of 'they're poor' and 'the industry is rich' and 'the product is a human necessity'. I think it needs to be spelled out more clearly so it can be applied even-handedly. Has anyone spelled it out more clearly?

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By Ted_neeman, Tedn at Aug 26, 2004 02:35 AM
"Free-trade" agreements and patent protection interact in unholy ways, the most obvious example is with the pharmaceutical industry where third-world countries are forced to buy necessary medicine at first-world prices. I don't think the issue is really about patents as such.

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Re: Attack on Democracy

By Stevebird, Sbird at Aug 24, 2004 06:00 AM
A comment/question on 'patent regimes' I often read/hear complaints about 'patent regimes' without proposals for alternatives. Are you opposed to the notion of patent protection in general, or just abuses of the system? I'd like to hear about what sort of patent system if any that you would endorse.

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