Against Intellectual Monopoly

admit having found very little technical and quantitative analysis of the pros and cons of such a policy shift in the literature
advocating it.

    Furthermore, we cannot help but notice the obvious, if cynical, economic
point: only when the worldwide gains from price discrimination are low
enough will large pharmaceutical companies find it attractive to get seriously involved in the development and production of new drugs specifically
targeted to the many diseases plaguing the poor countries of Africa, Latin
America, and so on. What this means is that reforming the pharmaceutical
markets of the United States, Europe, and Japan in the direction we indicate
is, in fact, almost a prerequisite to make sure that we can effectively address
the health problems of the less developed countries in a systematic and
not purely charitable way. Charity is commendable, useful, and valuable,
but history has taught us, over and again, that charity has never eradicated
and never will eradicate either poverty or widespread plaguelike diseases.
Free competitive markets and the technological innovation they foster are
a much more effective and well-tested medicine than any, temporary and
charitable, partial reform of the global system of pharmaceutical patents.
Trademarks
    We have given little attention to trademarks - which serve to identify rather
than to monopolize. Strangely, trademarks have attracted lots of attention in
the antiglobalization and antimarket movement, with a variety of antilogo,
antitrademark, anti-big corporation rallies, books, movies, and pamphlets being produced. This, we are afraid, is due more to the double desire of the
leading figures in that movement to become a recognizable logo themselves
and to the frustration of many youngsters of not owning enough "logoized"
items than it is to any serious social loss from the crocodiles stitched onto
colorful cotton T-shirts.

    In the eventuality, however, that copyright and patents are significantly
weakened, there would be a temptation to substitute trademark for other
forms of intellectual property protection. For example, if Disney were to
lose the copyright over Mickey Mouse, they would have a strong temptation
to trademark Mickey Mouse and so prevent the use of Mickey Mouse
images. So any effort toward legal reform of copyright and patent law will
necessarily have to consider how to limit the use of trademarks for purposes
of identification, and how prevent their use as a substitute for copyright and
patents.
Subsides for Innovation and Creation
    It is theoretically possible that the competitive market alone provides insufficient incentive to innovate - although there is no evidence that this is the
case. Suppose that we succeed in abolishing intellectual monopoly and discover, after a few years, that there is less innovation than would be socially
desirable. Unlikely as this event may be, the little theorist in us insists
that we nevertheless consider it. Hence, should we reintroduce intellectual
monopoly in this case?
    Intellectual property law is about the government enforcing private
monopolies. In countries without effective tax-collection mechanisms, both
historically and currently, government grants of monopolies were and are
commonplace; we all have seen some old label for a tea or chocolate brand
reporting "By Appointment of Her Majesty This or That." As nations
develop, more effective tax-collection infrastructures have been replacing
such revenue devices as the salt monopoly or the grant of exclusive import
rights to the brother-in-law of the president. Hence, the sale by government
officials of exclusive rights to carry out this or other commercial activity or
to produce and commercialize certain goods and services have progressively
disappeared in almost all advanced market economies. Intellectual property
is one of the few remaining anachronisms from the prehistory of modern
tax collection; worse, indeed, it is a distorted anachronism that is now being
exploited for rent-seeking purposes that are opposite to those for which it
was originally established. So, the answer is that, if there is indeed a need for
extra incentives, it should be done through subsidization and not through
government grants of monopoly.

    A first question might be, What level of subsidy would replace the profits
of the current monopolists?31 Schankerman makes the calculation that a
subsidy to R&D of 15 percent to 35 percent