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News for Bill Gates: Capitalism Is Still Capitalism Without Patent Monopolies

Summary:
Like Donald Trump, Bill Gates apparently has a hard time understanding some things. The NYT had a major article on Gate’s role in developing vaccines against the coronavirus. At one point, the piece notes critics of Gates, who complain about how he has promoted patent monopoly financing of the development of vaccines and drugs, which allow these items to sell at prices that can be many thousand percent above the free market price. The piece then presents Gates’ rejoinder: “This capitalism thing — there actually are some domains that actually works in, …. North Korea doesn’t have that many vaccines, as far as we can tell.” Gates apparently is not aware that the U.S. government paid for Moderna’s research and testing costs for its vaccines. While it also granted Moderna a patent monopoly on

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Like Donald Trump, Bill Gates apparently has a hard time understanding some things. The NYT had a major article on Gate’s role in developing vaccines against the coronavirus. At one point, the piece notes critics of Gates, who complain about how he has promoted patent monopoly financing of the development of vaccines and drugs, which allow these items to sell at prices that can be many thousand percent above the free market price.

The piece then presents Gates’ rejoinder:

“This capitalism thing — there actually are some domains that actually works in, …. North Korea doesn’t have that many vaccines, as far as we can tell.”

Gates apparently is not aware that the U.S. government paid for Moderna’s research and testing costs for its vaccines. While it also granted Moderna a patent monopoly on the vaccine (we can never give drug companies too much money) it is apparently possible to pay for research upfront, and the patent monopolies are not necessary. This would allow for vaccines and drugs to be sold as cheap generics from the day they approved by the FDA. It would also take away the incentive for drug companies to lie about the safety and effectiveness of their drugs, as they did in pushing opioids in the 1990s and 00s.

This would still very much be a capitalist system. The companies doing research would be making profits, just as military contractors like Lockheed make profits. They just would not be doing through government-granted patent monopolies. It is perhaps understandable that someone who became one of the world’s richest people as a result of these monopolies (actually most copyright monopolies), may not want to envision a capitalism that uses more efficient incentive mechanisms, the rest of us should be able to think more clearly about such issues.

The post News for Bill Gates: Capitalism Is Still Capitalism Without Patent Monopolies appeared first on Center for Economic and Policy Research.

Dean Baker
I am a senior economist at the Center for Economic and Policy Research (@ceprdc). I also run the blog Beat the Press (@beat_the_press)

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