Stiglitz On “How Intellectual Property Reinforces Inequality”

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In a really brilliant Op-Ed that’s worth reading several times over, Joseph Stiglitz castigates the effect of intellectual property battles on both foreign and domestic inequality, and argues that the SCOTUS case involving Myriad Genetics fully embodies three core themes found in his book “The Price of Inequality”:

“First, I argued that societal inequality was a result not just of the laws of economics, but also of how we shape the economy — through politics, including through almost every aspect of our legal system. Here, it’s our intellectual property regime that contributes needlessly to the gravest form of inequality. The right to life should not be contingent on the ability to pay.”
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“The second is that some of the most iniquitous aspects of inequality creation within our economic system are a result of “rent-seeking”: profits, and inequality, generated by manipulating social or political conditions to get a larger share of the economic pie, rather than increasing the size of that pie. And the most iniquitous aspect of this wealth appropriation arises when the wealth that goes to the top comes at the expense of the bottom. Myriad’s efforts satisfied both these conditions: the profits the company gained from charging for its test added nothing to the size and dynamism of the economy, and simultaneously decreased the welfare of those who could not afford it.”
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“Had that prior knowledge not been publicly available, Myriad could not have done what it did. And that’s the third major theme. I titled my book to emphasize that inequality is not just morally repugnant but also has material costs. When the legal regime governing intellectual property rights is designed poorly, it facilitates rent-seeking — and ours is poorly designed, though this and other recent Supreme Court decisions have led to one that is better than it otherwise would have been. And the result is that there is actually less innovation and more inequality.”

And since the U.S. has sought to impose its intellectual property regime on the rest of the world through bilateral and multilateral trade agreements, Stiglitz laments that the same public policy that is causing undue harm to American inequality, is in turn helping inequality to exacerbate worldwide:

“Economic power often speaks louder, though, than moral values; and in the many instances in which American corporate interests prevail in intellectual property rights, our policies help increase inequality abroad. In most countries, it’s much the same as in the United States: the lives of the poor are sacrificed at the altar of corporate profits. But even in those where, say, the government would provide a test like Myriad’s at affordable prices for all, there is a cost: when a government pays monopoly prices for a medical test, it takes money away that could be spent for other lifesaving health expenditures.”

(photo by Abhisit Vejjajjia

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