22 May 2020

coercive charity: drug patents

Treatment of pandemic disease Z requires drug that was discovered, after costly research efforts, by pharmaceutical corporation X, which now has a patent over the intellectual property. As a general rule, the drug cannot be manufactured without observing prevailing laws on intellectual property, and these normally require payment of a patent royalty to X, the rate typically being set by X.
X the corporation is, of course, ultimately a group of individuals: shareholders, directors, employees.
Individuals in developing countries, or their governments, cannot afford the patent fees set by X.
For every increment of leniency given against the basic patent provisions, the income of X — and hence the income of the individuals behind X — declines accordingly.
Acceptable solution:
Pharmaceutical corporation X voluntarily agrees to soften, or waive, its patent rights in certain cases, e.g. by reducing for a specified period the patent royalty for manufacture in, or export to, specified countries.
(Cost of charitable act is borne by individuals behind X — voluntarily.)
Another acceptable solution:
Western governments, with the support of an overwhelming majority of their citizenry, subsidise the cost of the drug to developing countries.
(Cost of charitable act is borne by individual taxpayers — voluntarily, in the vast majority of cases.)
Possibly acceptable solution:
Western governments, with the support of a simple majority of their citizenry (explicit or implied), subsidise the cost of the drug to developing countries.
(Cost of charitable act is borne by individual taxpayers — in a large proportion of cases, involuntarily.)

Bad solution:
The global political elite endorses the breach of patent laws.
* Short-term costs of charitable act: borne by individuals behind X — involuntarily.
* Long-term costs #1 of charitable act: borne by individuals behind all other pharmaceutical corporations (given that the breach of legal principles softens global respect for drug patent laws) — involuntarily.
* Long-term costs #2 of charitable act: borne by all other individuals globally who benefit from patent and copyright laws, whether directly or indirectly (given that the breach of legal principles softens global respect for intellectual property rights generally) — involuntarily.
* Long-term costs #3 of charitable act: borne by all individuals, living or not yet born, who might benefit in the future from new drugs developed by corporations (given that the weakening of patent rules reduces the incentives for private pharmaceutical research) — involuntarily.

A distinction should be made between a developing country choosing unilaterally to ignore patent law as an act of emergency, with drug companies having the option of not pursuing the breach (under pressure from world opinion); and the global political elite actively legitimising such breaches in general and in perpetuity.

Spokesperson for Médecins Sans Frontières:
Gilead has no business profiteering from this pandemic and must commit to not enforce or claim its patents and other exclusive rights.
Change the emotive word "profiteering" to "making a profit" and you get, au contraire, precisely what is a pharmaceutical company's business: making profits from selling the drugs it has developed for the purpose of treating diseases. It is reasonable that those who risk their money on R&D, with an uncertain return, should expect to make an appropriate profit on their investment if the risk pays off.
   MSF seem to be implying that there comes a point in the seriousness or prevalence of a disease when that should cease to apply.

It's easy to be generous with resources that don't belong to you, without their owners' consent, but does this deserve to be described as "caring"?

If "profiteering" is taken to mean, more generally, exploiting a bad situation in order to to advance one's own agenda, then there are other possible offenders than those in the business sector.

08 May 2020

coercive charity

The Guardian's Polly Toynbee writes about the UK's deaths from COVID-19. What appears to incense her in particular is inequality in COVID mortality rates between richer and poorer regions. She accuses the government of causing a widening in health inequality.
   Absent from Polly Toynbee's article is an assertion along the following lines:
whenever there is an unfair situation, individuals should be forced to increase their contributions to the government in order to finance a programme to remedy the unfairness.
Such an assertion would bridge the gap in the article between {something unfair is happening} and {it's the government's fault if it doesn't get sorted out}.
   One may guess the bridging step has been omitted because fewer of the article's readers would be ready to concur with it, compared to the article's other assertions. The average reader may be willing to think "health inequality is unacceptable", or "something should be done", but less willing to agree that they, and others, should be forced to finance the solution.
   It seems to have become standard practice to leave it as understood that there should be an increase in coercive charity, when a pro-intervention commentator complains about a social problem, without bothering to state the demand explicitly. If we ask how this practice has arisen, a similar answer suggests itself: since the issue of coercive charity (i.e. being forced to pay taxes to finance welfare) is contentious, it is concealed, presumably in the hope that readers will forget it's there or, in some cases, never become aware of it in the first place.
   By evading the question of financing, discussions of social topics are cartoonised into being about caring: if you don't agree with the writer's implied demand for more government expenditure, it must be because you are indifferent to the sufferings of others.
   Welfare always has limits, given that its costs ultimately have to be borne by individuals. There will inevitably be inequalities in the distribution of medical care: if not dependent on wealth, they will be determined by the preferences of NHS doctors or other agents of the state.

Update 13 May
A colleague has received a promotional postcard from clothing retailer James Meade, offering to donate £5 to the NHS for every order over £50 placed before 31 December. An interesting idea, and certainly more ethically sound than simply demanding the government do more.

24 April 2020

blaming capitalism

Social critics tend to use the word "capitalism" when discussing the West. In fact, of course, we live in a mixed economy, i.e. one that combines elements of capitalism and socialism. A society in which 40-50% of GDP is allocated to the state can hardly be described as free market capitalism.
   Sometimes the things being complained about are plausibly more traceable to capitalism than socialism (e.g. pollution), but more typically it's simply assumed that it must be the capitalist part that is responsible, with little basis for the assumption. For example, the supposed dumbing down that tends to go with massification is often blamed on capitalism, although massification is likely to be correlated with income redistribution.
   During and after the 2008/09 financial meltdown, numerous commentators were ready to blame the crisis on "capitalism". Simplistic labels assist in the process of making simplistic assessments: we were living under capitalism, hence it must be capitalism's fault; it was the banking system that went wrong and banking is part of capitalism, hence capitalism was to blame; etc. In fact, the circumstances that led to the meltdown were a complex mixture of markets and intervention.
   If you interfere with the market, and the market goes wrong, you should consider the possibility that the interference contributed to the problem, or may even have been the primary source of the problem.
   The fact that nothing as sophisticated as this tends to happen, and that we get knee-jerk blaming of "capitalism" — usually without anyone bothering to consider what the term means — should not perhaps surprise us. Many (most?) contemporary social commentators have studied for degrees in humanities subjects. The humanities are increasingly dominated by the Marxist worldview, though it tends nowadays to come under the more respectable-sounding label of "Critical Theory". Marxism involves commitment to the belief that capitalism is unjust, intrinsically flawed, bound to end badly etc; and Critical Theory tends to uncritically identify Western societies as "capitalist".
   I have not yet come across any accounts of the COVID-19 pandemic that finger capitalism as a culprit, but I suspect it's just a matter of time.
   At the moment, we seem to be at the gloom/despair stage rather than the anger/blame stage. The Atlantic, for example, asks whether the USA is a broken state. America, like other nations, is temporarily in a bad way, but it seems a little premature to start talking about failed states.

10 April 2020

light entertainment

Some products that may help to relieve cabin fever. Nothing too dark.
The King's Watch series by Mark Hayden. The description "Harry Potter for adults" has been used before, but this seems like the real deal. Clever, densely plotted, and very very British. The hero is a man's man but most of the other characters are feisty women.
For murder mysteries with relatively little gore, try Faith Martin's Jenny Starling series.
Under the Silver Lake, a 2018 American noir comedy starring British-American actor Andrew Garfield. Seems to perfectly evoke the spirit of trendy central LA. Bizarre but stylish, with more than a hint of David Lynch.
For romantics: the 2000 Hong Kong classic In the Mood for Love, featuring the iconic Maggie Cheung. A bittersweet portrayal of love in another era.
Violin: Individualistic rendition of the Bach concertos by Japanese violinist Shunske Sato. Fizzing with oomph and flair.
Opera: Having nominated Kathleen Battle for position of most mellifluous voice, I propose as second candidate British soprano Lucy Crowe. This album of Handel arias provides a perfect showcase for her talents.

27 March 2020

from the archives: Money

In a press conference in January 2015, the then President of the European Central Bank, Mario Draghi, was asked whether the ECB's programme of quantitative easing ("QE"), intended to boost the ailing eurozone, might eventually lead to damaging price inflation. His response:
I think the best way to answer to this is, have we seen lots of inflation since QE programmes started? Have we seen that? And now it's been quite a few years since they started [...] And somehow this runaway inflation [predicted by some] hasn't come yet.
   What I'm saying is that certainly the jury's still out. But there must be a statute of limitations. Also for the people who say that there will be inflation, yes, when, please? Tell me, within what? *
Mr Draghi was correct to point out that there had at that time been negligible impact on reported inflation numbers from American, British and Japanese QE programmes. Five years later, there is still little sign that the implementation and subsequent reversal of QE has generated long-term problems for financial markets — though there were rumblings last year about possible trouble in the repo markets.
   Whether there is a period of time after which it is safe to assume the risks have disappeared, thus making it legitimate for governments to try similarly dramatic remedies again, is more debatable.
   If one looks at the Great Inflation of the 1970s, one could argue that the associated expansion of the money supply began in the 1960s. It required the trigger of a specific exogenous shock, in the form of the 1973 oil crisis, to turn the fuel of excess money into the fire of an inflationary spiral.
   In the absence of such exogenous shocks, and while global demand remains relatively depressed (the prices of many key commodities are still well below their pre- and post-meltdown highs), the fuel of excess money may be capable of remaining in a prolonged state of dormancy.

This is an edited version of a post published in 2015 and reproduced in The Ideology of the Elites.
* Mario Draghi, 'Introductory statement to press conference', 22 January 2015.

13 March 2020

censorship in the arts

An ideology becomes dominant, not just by its adherents sounding passionate and persuasive, but via the suppression of dissent. Suppressing dissent is of course incompatible with other values such as freedom of speech, but such values seem to be being de-emphasised by Western cultural elites.
   The arts world has for many years given the appearance of being unified in its support for leftist-interventionist ideology, and of being unified in its contempt for conservatism. What wasn't clear was whether every individual within that world was committed to this approach, or whether there were potential dissenters but they were simply not promoted or given financial support.
   A recent survey on freedom of expression within the arts, carried out by ArtsProfessional, suggests the latter explanation is the correct one:
[The survey] indicates the openness, risk and rebellion that many believe characterises the sector is being eroded. [More than 80% of respondents] thought that "workers in the arts and cultural sector who share controversial opinions risk being professionally ostracised". [...]

Pressure to keep quiet was most likely to come from colleagues, according to two-thirds of respondents. However, the survey also revealed examples of retribution from organisations against arts workers who spoke their minds, from marginalisation and isolation to lost commissions [and] cancelled contracts [...].

The research indicates the arts and cultural sector is intolerant of viewpoints outside of the dominant norms. Anything that might be considered "politically incorrect" to the liberal-leaning sector — including expressing support or sympathy for Brexit, the Conservatives or other right-wing political parties — was felt to be risky territory.
One of the survey's respondents seems to have summed up the overall position fairly succinctly:
Our arts, culture, and indeed education sectors are supposed to be fearlessly freethinking and open to a wide range of challenging views. However, they are now dominated by a monolithic politically correct class (mostly of privileged white middle class people, by the way), who impose their intolerant views across those sectors.
The respondent adds that this is driving people who disagree away, and risks increasing support for the very things the politically correct class professes to stand against.

Meaningful critique of a dominant ideology can only happen if dissident individuals and organisations are given financial support.

28 February 2020

BBC — ITV — Channel 4

It is absurd that viewers cannot watch ITV or Channel 4, or any of Sky's own channels, without paying a tax to the BBC and having to endure adverts (or pay the Sky subscription). It is not only absurd, it is inefficient.
   Consider the class of viewers who only want to watch ITV and Channel 4, and consider the marginal consumer in this class. He only just regards:
(A) access to programmes
as preferable to:
(B) saving the licence fee and avoiding adverts.
If he did not have to pay the fee, this marginal consumer would be willing to endure more adverts. The consumers below him in keenness, who were not quite willing to endure fee-plus-ads, would now be willing to watch output with ads but no fee — which would imply a rise in possible charge per ad. Either way, the potential revenue of independent TV companies would increase, implying that these companies are currently operating at a suboptimal level of programming output.
   The fact that viewers of commercial TV have to endure both adverts and a licence fee means independent TV companies are effectively subsidising the BBC.
   Where it is readily possible to separate BBC viewing from non-BBC, as in online streaming, any BBC-related charge should be restricted to BBC viewing only. This should be done now, regardless of the ultimate future of the TV licence or its replacement. The fact that this may be inconsistent with the current charging system for traditional TV viewing seems irrelevant — the system as a whole is in any case scarcely coherent as it stands.

21 February 2020

financing the BBC

The UK's TV tax — now also applied to watching television output on other devices — makes little sense in the digital age. Should we therefore rush to abolish it? Not necessarily, but it does mean we should be thinking about switching to a new system in the not-too-distant future.
   A key question, obviously, is whether there should be state subsidy of public broadcasting at all. Even in the digital age, a few areas of media market failure remain (e.g. radio, because of the free rider issue) so there is certainly an argument for limited subsidy. The larger question of whether, beyond this, BBC output — or indeed culture in general — should be subsidised by the state is a more complex one.
   Let's assume subsidy of BBC output continues to be appropriate, given that a large number of UK voters seem to endorse this. The efficient way to achieve this is no longer via licensing. Ultimately, once online modes of viewing have become dominant, a scheme of the following type may be appropriate:
• charge for some parts of BBC output delivered online, in ways analogous to those already used by Amazon, Netflix et al.;
• leave other parts of online output available for free (including perhaps some of the things BBC Chairman David Clementi recently referred to as "bringing the country together": e.g. Strictly Come Dancing finals, Christmas specials, war anniversaries, Royal jubilees);
• give up charging for terrestrially broadcast output, which could be restricted to lower image quality;
• agree a top-up subsidy with the government.