When reading Merges' chapter entitled Developing World Drugs, I could not help thinking that maybe developing countries are better off with strong IP protection, and not just for the intergenerational effect of more drugs being discovered because of increased investments that Merges mentioned. My argument is that strong IP protection leads to concentrated wealth which then finds its way into private charities that tend to be more efficient than government run programs. Although I obviously do not have sufficient statistical evidence to support my hypothesis, I think it is at least something worth considering.
For starters, I think it safe to assume that strong IP protection will lead to a larger concentration of wealth than would be seen in a world with weaker IP rights. Actors could not request multimillion-dollar salaries without strong copyright protection, and individual inventors would have far less "million dollar ideas" if they could not protect those ideas with patents. Without IP protection, Bill Gates and Bono, two of the worlds' best not philanthropists, simply would not exist.
Many individuals, who make their billions by IP rights, eventually end up giving large amount of their fortunes to charities that help developing countries. For example, Bill Gates just donated another $750 million to help those with AIDS in Africa. His fortune and the resulting Gates Foundation would not have been possible without strong IP rights. In addition, Gates, along with other's whose fortunes depended on IP rights, such as George Lucas and Mark Zuckerberg have pledged to give away over half of their wealth upon their death. Although one might argue in an alternative universe, overall charity would have been higher if the public did not have to pay monopoly prices for copyrighted and patented goods, I do not think this would actually happen. If it costs the average American $50 less to buy a computer, I am skeptical that this will have a huge increase in the amount he donates to charities. Part of the reason the ultra-rich are willing to donate such large percentages of their incomes is preciously because they are ultra-rich and simply have more money than they or their immediate descendants can ever spend. In essence, the concentration of wealth may help the poor in developing counties at the expense of middle-class consumers in the United States.
Although aid to developing countries is also accomplished by government taxation, there is ample evidence suggesting that private charities are more efficient than government programs. In fact, today 70% of every tax dollar designated to helping to poor actually pays for government bureaucrats. Another reason why we might prefer paying a "tax" to holders of IP rights is that Congress, which needs to consider its constituencies and diplomatic relationships when deciding where to send aid, might not be able to help those with the greatest need. For example, there is currently a large pushback against government-backed foreign aid because of the national debt, however a private philanthropists is free to give to what he deems to be the most deserving cause even if it is in another country.
Obviously, this proposal is not without its flaws. For starters, I have no hard evidence that the resulting aid received by those in developing countries is larger because of concentrated wealth created by IP rights (although I have strong hunch it is). Also, the theory falls apart if the IP right are held by corporations and do not lead to the creation of an ultra-rich class. Furthermore, there is no guarantee that the philanthropic craze that has currently taken hold of many of our country's richest citizens will last or is just a fad. In addition, our IP philanthropists might have odd choices of what charities to donate to and as a result funding might not end up where it could do the most good.
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