Go Joe! Stiglitz that is – Worth Watching in 2007

Joseph Stiglitz is working himself up from simply winning a Nobel prize to being one of the leading critical commentators on all things economic and many things political. He doesn’t seem exactly shy, he writes well, he’s prepared to stir things up, and his credentials give him a platform that few others have. My prediction – watch him become more prominent and more controversial in the months to come. Go Joe!

Here are two examples.

Via slashdot, an editorial in the British Medical Journal about intellectual property rights, which is an issue that will only get bigger in the next few year. He not only lambasts the existing system, but actually has an alternative to propose (a medical prize to fund innovations). Here are some extracts:

… In 1995 the Uruguay round trade negotiations concluded in the establishment of the World Trade Organization, which imposed US style intellectual property rights around the world. These rights were intended to reduce access to generic medicines and they succeeded. As generic medicines cost a fraction of their brand name counterparts, billions could no longer afford the drugs they needed. For example, a year’s treatment with a generic cocktail of AIDS drugs might cost $130 (£65; {euro}170) compared with $10 000 for the brand name version.1 Billions of people living on $2-3 a day cannot afford $10 000, though they might be able to scrape together enough for the generic drugs. And matters are getting worse. New drug regimens recommended by the World Health Organization and second line defences that need to be used as resistance to standard treatments develops can cost much more. 

 

                Developing countries paid a high price for this agreement. But what have they received in return? Drug companies spend more on advertising and marketing than on research, more on research on lifestyle drugs than on life saving drugs, and almost nothing on diseases that affect developing countries only. This is not surprising. Poor people cannot afford drugs, and drug companies make investments that yield the highest returns. The chief executive of Novartis, a drug company with a history of social responsibility, said "We have no model which would [meet] the need for new drugs in a sustainable way … You can’t expect for-profit organizations to do this on a large scale." 

 

                Research needs money, but the current system results in limited funds being spent in the wrong way…A medical prize fund provides an alternative. Such a fund would give large rewards for cures or vaccines for diseases like malaria that affect millions,  and smaller rewards for drugs that are similar to existing ones, with perhaps slightly different side effects.

More here: Scrooge and intellectual property rights — Stiglitz 333 (7582): 1279 — BMJ.

For a second article, see his piece comparing J. K. Galbraith and Milton Friedman, quoted at Relentlessly Progressive Economics. It’s not so much aimed at the public, but more at economists, among whom Galbraith has a much lower reputation than Friedman. Stiglitz does a good job of arguing Galbraith’s case.

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