Ah, as I wait for my lunch to warm up in the oven, I can do my log for the day.
As you'll remember, I signed off last with the promise that I would tell the long saga of my writing career, such as it is - truly, a cinescopic story. But today I am going to diverge from that fascinating subject and address Andrew Sullivan and the Giant PharmaCos. - which is not a children's story by Roald Dahl, but a little conflict of interest snare Mr. Sullivan has entangled himself in. You can go to Poynter.org - Jim Romenesko's Media News and see the links there, as well as my brilliant little letter.
To see A.S. defending the drug companies, you can go to Slate - dialogues dated 01-04-09.
Now, aside from the conflict of interest question, I've always wanted to have my say about Sullivan's position on this issue, which reflects a contradiction in the conservativism I've seen in many other conservative thinkers. So I'll have it here.
Here's the deal. Conservatives will often say, about something like the price of drugs, that the choice is between the Government and private enterprise. Slicing the discourse up neatly like this, however, isn't quite right. Because at the heart of Sullivan's position is an unanalyzed but powerful dependence on the State by the drug companies. By pretending they are rivals, the issue of monopoly power is masked.
For what is it, essentially, that pharmaceutical giants do? The patent pharmaceuticals. They might develop them, or they might not, but the end process is to patent them. This means that they apply to have monopoly control over a certain product. And their success depends on the state taking up arms for them - by, essentially, allowing them to forbid other companies from manufacturing and selling a particular drug for a particular season.
Adam Smith cast a pretty cold eye on monopolies, even when celebrating free enterprise. Here's a quote from Wealth of Nations:
"A monopoly granted either to an individual or to a trading company has the same effect as a secret in trade or manufactures. The monopolists, by keeping the market constantly understocked, by never fully supplying the effectual demand, sell their commodities much above the natural price, and raise their emoluments, whether they consist in wages or profit, greatly above their natural rate. The price of monopoly is upon every occasion the highest which can be got."
The Andrew Sullivans of the world are essentially arguing that there is a flaw in the system of competition. Whereas they believe competition for, say, electricity is a good thing, they are in effect saying that the state should nurse businesses by granting them a preliminary season of non-competitiveness - so they can get a fair return on their investments.
Notice the word "fair" here. If I were to argue, for instance, that companies should be forbidden to fire employees because it is unfair - if I were to argue, in other words, that employees be granted monopolies to their positions - conservatives would buzz like angry hornets. And their argument, after you peel off the rhetoric about freedom, would be that employing people at high rates of pay which aren't determined by competition in the labor market hurts the rest of us by upping prices. Apparently they are willing to concede that hurt in the case of intellectual property, however - perhaps because they have more invested in the concept of intellectual property.
But beyond the motives of unconscious self-interest, there is something else going on here - a sort of automatic servility before power. Although conservatives are quick to pounce on liberals for worshipping the nanny state, the genuflection before big corporations is, of course, of the same family of response: the awe of the clerk before his master.
I should say this, right away: I'm no libertarian. I do, however, have great respect for the empirical and logical arguments for competition, even if I think there are other social factors which lead me to support socializing power, healthcare, etc. I have no respect, however, for the argument of a "fair return." There's no empirical data that links a higher profit, due to monopoly, to more innovation. If there were, in fact, it would knock all the other conservative arguments on the head. When Penicillin was invented - I mean, after Fleming had diddled away his experiments with it, and it was taken up again at Oxford - the scientists who made it DIDN'T PATENT IT. Why? Because at that time, quaintly enough, it was considered unethical. If you read James Le Fanu's wonderfully cranky book, The Rise and Fall of Modern Medicine (and Le Fanu seems to be conservative), the picture of modern medical innovation he draws has nothing to do with BigPharma making tons of profit on drugs they are magically spewing out.
So let me end this spiel on this note: hey, it isn't that we want the State to get into drug dispensing - but to relax its interventions on behalf of big Pharmaceutical companies. Let those generics in there, let BigPharma compete, limit, severely, the term of state-granted monopoly. As Adam Smith once didn't say, let a thousand flowers bloom.