Posted by: captainfalcon | August 4, 2014

Chris’s Problem With Jacobin Magazine

Chris complained in conversation that articles in Jacobin often don’t engage with obvious counterarguments.  I’m basically sympathetic to Jacobin’s take on the way the world works but I take Chris’s point and thought I’d point out that this article (which is, in fairness to Jacobin, below its usual standards) is a remarkable example of how articles in Jacobin fail to engage with obvious arguments from the other side.  The article’s thesis is that all kinds of bad consequences have flowed from the Bayh-Dole act, which, according to the article, permitted universities to sell patents and give exclusive licenses to private companies for (among other things) medical inventions (call this situation the Bayh-Dole Regime).  What’s astonishing about the article is that it cogently and sympathetically sets out the case in favor of the Bayh-Dole Regime [this might in fact be its most cogent part] but barely even attempts to rebut it.

The case for the Bayh-Dole Regime:

At the time of its passage, the 1980 Bayh-Dole Act was intended to drive innovation in academic research. By removing restrictions on what universities could do with their scientific discoveries, it would ostensibly bring more money to the university system. To pay for their work, academic research facilities could now sell off their patents,or hand out exclusive licenses to private industry. With a monopoly on intellectual property provided by the patent, the private sector would be incentivized to quickly develop those patents into advanced consumer products and services.

The supporters of Bayh-Dole claimed that the opportunity to make more money would push academic science to make more discoveries and encourage private industry to bring more of those discoveries to market. Not long after its passage, the financial repercussions were already being realized. Researchers at Columbia University applied for patents on the process of DNA cotransformation, known as the Axel patents, that would eventually earn the university hundreds of millions in licensing fees.

. . .

Previously, discoveries made by public universities could only be given out to private industry through non-exclusive licenses. Private entities could develop new drugs and new inventions based on groundbreaking research, but so could any other company. The supporters of Bayh-Dole argued that this grace period was essentially a disincentive to innovate. If one company didn’t have exclusive rights to an invention, then there was little money to be made in its development. Why bother innovating if the competition could do the same and eat away at the potential profit margin? Inventions would be left to “rot on the shelf.” 

Nowhere does the article give any reasons to reject these claims.  In fact, the paragraph after implies that defenders of the Bayh-Dole Regime were right:

The public-license restriction protected academic research from descending into an intellectual-property gold rush. Removing it has unleashed a flood of capital from private industry eager to possess a monopoly on cutting-edge scientific advancements. Private bodies now help fund academic institutions in return for priority in the process of “tech transfer” — the exclusive licensing of publicly-funded research to private industry. Giant pharmaceutical conglomerates like Merck and GlaxoSmithKline fund partnerships with private and state universities on projects to research currently incurable diseases, with the explicit stipulation that those companies will reap the benefits by obtaining exclusive licenses on any forthcoming discoveries. Those discoveries, whether they are related to the original aim of the project or not, are then turned into overpriced, brand-name pharmaceutical drugs.

The only criticism here is that private capital has resulted in “overpriced” drugs.  But why are they overpriced?  Why is the cost not worth paying in exchange for the innovations?  It may well be ugly that intellectual property protection and resultant high prices can (and do) exclude poor people from cutting-edge medicine, but should we really be so strongly committed to egalitarianism that we’d be willing to accept a situation where everybody’s health is some degree poorer in the long-term in exchange for making sure that all medical innovations are more affordable immediately?  And, in any event, is the BDR the villain here or is it the lack of subsidies for health care?  There are obviously possible responses to these questions.  Possibly a presupposition of my hypothetical — that eliminating the BDR would mean that everybody’s health would be some degree poorer in the long-term — is false.[1]  Possibly we are so strongly committed to egalitarianism that we’re willing to accept (slightly?) poorer health in the long-term for everybody in exchange for more equal access to healthcare.  But both of these possibilities need to be argued for and Hinkes-Jones doesn’t make the argument — he doesn’t even make the claims.

Hinkes-Jones does go on to list some other regrettable effects that flow from the BDR:

  • Patents are costly to both consumers and researchers.  “Not only do patents push higher prices onto consumers, they burden the research world with the increased costs of paying for the intellectual property needed to do further research. Research labs have to pay thousands of dollars for the strains and processes needed to build upon current developments, adding more costs to cutting-edge research.”
  • As more private money is invested in universities private influence grows and corruption results as academics begin to shill for pharmaceutical companies.  This contributes to bad science: “The privatization of academic research not only hinders the scientific process, it also means that direct corruption — where scientists are paid off by private industry to deceive the public about toxins in their food or pollution in their air — has more opportunity to continue unabated. Researchers desperate for funding to maintain their positions and sustain their work are more susceptible to financing from industries eager to distort science to their own whims.”
  • Private funding distorts research incentives.  With tenure* and public funding, researchers could speak freely and focus on topics that avoided short-term, consumer-based, money-making propositions.”  *This sentence comes in a part of the article where Hinkes-Jones is also concerned about the demise of tenure, which he does not link to the BDR.

The first two problems are problems that it seems plausible to me would flow from incentivizing, and allowing for, a greater role for private money in academic research.  I’d be happy to concede for purposes of argument that private funding also results in diverting research efforts away from more speculative research (with potentially profound implications) toward research that is less likely to open up new frontiers but more likely to result in a moneymaking innovation quickly — although that doesn’t seem as obviously plausible to me (though nor does it seem deeply implausible).  But again, unlike, say, allowing human testing, these are problems to be traded off against potential gains.  And Hinkes-Jones nowhere does the trading-off.

In fairness to Jacobin, Hinkes-Jones’s article also veers off into non sequiturs, noting other problems that are not obviously related to the BDR at all:

  • Universities are going into debt in order to attract talent and money which is causing tuition to balloon.  Even with limited public funding and an increased dependence on private financing, universities haven’t stopped spending, particularly on new facilities. A McGraw-Hill Construction survey estimated that over $11 billion had been spent on construction by higher education institutions between 2010 and 2012. By floating massive bonds to pay for new biomedical research facilities and state-of-the-art gymnasiums, schools hope to attract the students, star researchers, and funding that will help pay for it all. But these schools have wildly overcommitted themselves, and by doing so they’ve entered into the vicious cycle of a debtor’s beauty contest.”
  • It’s hard to get a tenured position.  The flood of private money coming to the research system hasn’t made its way to expanding academic careers. Instead of employing more staff scientists, underpaid post-doctoral students are hired for half the cost to produce the eye-catching research that attracts grant money. Those students then go on to graduate into a science field flooded with other post-docs who are in direct competition for the dwindling number of established research positions available. The result is a highly competitive job market where too many are left fighting for fewer positions.”
  • There is an overpowering incentive in academia to publish groundbreaking research quickly which results in a lot of bad science being published.

Defenders of Jacobin could, of course, deny that this article is representative in its failure to engage with ideas from “the other side.”  Or they could say that it’s simply obvious that the benefits of privatization do not outweigh the costs (although in that case why write an article in such detail about the effects of privatization — a quick tweet that such-and-such is an instance of privatization would be enough to tell us all we need to know about where society’s ills are located).  Or they could say something else.  But I’d be interested to hear what they say because, as I said, I’m sympathetic to left politics — particularly in its diagnosis, I think a lot of what the left says about the way capitalism works, the goals of the right, the connection between incarceration and the economy, etc. is true — but even I stand unpersuaded.

[1] It could, of course, be false even if proponents of the BDR are correct that it causes medical innovation to occur more rapidly.  It could be that returning to the pre-BDR days would slow innovation slightly but vastly increase the rate at which poor people gain access to cutting-edge drugs such that, net, poor people are always better off under the older regime.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s


%d bloggers like this: