Corporate America's True Believers

Okay, I know I owe you part one of the "FUD Wars", but before I get to that, a quick vignette.

Every once in a while, I make a post on slashdot that provokes some "free market" True Believer. Unintentionally, I assure you! Anyway, attached to this story about possible patent violations in the Linux kernel, the conversation turned to patents on life-saving drugs held by pharmaceutical companies. I made the following reply (the italics are part of the post to which I replied, by user "dfenstrate"):

The drugs protected by patents wouldn't even exist to save anyone if the pharmaceutical companies didn't think they could profit from developing them.

Perhaps. But should we not question the fact that the pharmaceutical industry is the most profitable industry in existence? Profit motive, okay. But at some point, they are fleecing people and unethically manufacturing a false scarcity of something that could save people's lives. Besides, buried in the industry's inflated cost estimates is their hugely aggresive advertising campaigns. Personally, I think it should be illegal to market prescription drugs, and the "payola" that goes on between pharmaceuticals and doctors is totally unethical, IMHO.

And I am going to bring up public funding. The companies' research is heavily assisted by university researchers who use NIH grants. NIH research consistently plays a critical role in developing important drugs, which are then given over to pharmaceutical companies to "bring to market". This is one of the worst exampes of corporate welfare.

To which dfenstrate replied:

I do not claim the system is perfect. I do claim, however, that it is better than a completely state funded medical research endevour with no patent rights to worry about.

The effective NIH subsidies could be argued as compensation for the FDA raising the standard for permissible medicines to ridiculously high levels, or the roll of the dice when it comes to litigation down the road when a drug may be considered to be imperfect.

I would personally like to see the standards for new medicines lowered by the FDA, and you and your doctor can decide if a particular medicine's side effects are worth it's benefits, and at the same time, a little more sanity return to our courtrooms. I'm talking about allowing personal decisions as to what risk is acceptable, and then people taking responsibility for those risks they chose should things go sour. This would bring more drugs all the way to market, so each successful drug would only have to support a dozen drugs that failed in trial, rather than two dozen (those numbers are wild-assed guesses.)

Doing those two things, we could easily eliminate NIH grants and the market would continue to develop drugs. Even better if the US wasn't the only market were companies could charge what they want, so we wouldn't have to support all the research with our dollars (both in NIH-spent taxes and drug purchases) while socialized medicine countries barely let drug companies charge the marginal cost.

Maybe we could even eliminate NIH subsidies now. Not really sure.

Now, in general, wether or not an industry is the most profitable in existance- this doesn't matter to me. I say good for them. Some industry has to be, and I'm not one to run around tearing down giants just because they're giants.

Could the system use a good deal of reform? Absolutely. Is a capitilist driven system superior to a state run system? Most definately.

Me again:

So, as an apparent free-marketeer, what is your opinion on the situations where what is good for the pharmaceutical company is bad for humanity?

For example, pharmaceuticals are currently making a huge profit on "drug cocktails" which do a very good job of removing the symptoms of AIDS, but without actually curing the disease.

Now, let us suppose that some researcher somewhere (say, in a public university) is making very promising progress toward a bona fide cure for AIDS, and that if her research pans out, the revenue stream of the drug cocktails will dry up, and the much cheaper (one-time cost) cure will take over the "market" of AIDS patients.

Would it not be in these companies' best interest to use their formidable influence in government and over the research budgets of universities to suppress this research? By law, would these companies not be *required* to do everything in their power to see that the true cure was not developed and brought to "market"?
After all, a corporation *must* do everything it can to maximize its profits. Any other consideration could get the executives sued by the shareholders.

This is just an example; it can easily be generalized. Don't you think that the inherent amorality and narrow-mindedness of corporate entities must be taken into consideration when we're dealing with something as important as the development of life-saving medications?

Let's not focus on the marginal increase in efficiency provided by private-sector research, and lose sight of the fact that we may not be getting what we want from the total privatization of everything. Particularly when there's a disconnect between the corporations' goals and the goals of society, as is so obviously the case in medical research.

Now user "bani" joins the conversation to defend the corporations' sacred honor:

Would it not be in these companies' best interest to use their formidable influence in government and over the research budgets of universities to suppress this research?

yep, that's exactly why iron lung manufacturers were successful in stopping the polio vaccine.

and the pony express was very successful in stopping the telegraph, don't you think?

gotta admire the horse & buggy manufacturers success in stopping the automobile.

and just look at all those evil film processing companies supressing digital cameras!

I wasn't going to reply, but what the heck:

What, exactly, is your point? You give four examples where a corporation did not or could not block a new development that would kill their business. Are we to conclude from these examples that corporations are incapable of doing so, or that they at least would refrain from doing something so selfish or "evil" as you put it, even if they could?

First of all, I remind you again that corporations are required by law to behave selfishly, in a manner that increases their own profit. This is a fact.

Second of all, I'd like to ask why you omitted the well-known cases in history where a corporation has tried to block the "greater good", often with what can only be described as exuberant success. I can only assume you are either unaware of such cases, or are willfully withholding them because it makes your untenable opinion more palatable. Here are three examples. There are many more.

• Cigarette companies repeatedly presented their pseudoscience to congress over decades of effort to keep their addictive poisons on the market
  
• Lead companies used their influence to shut down research labs at public universities which were finding disturbing effects of lead on the health and development of children
  
• A consortium of automobile, tire, and gasoline companies bought out the electric trains operating in 45 U.S. cities, and immediately shut them down, replacing them with less efficient, far-more-polluting, internal-combustion buses. For this conspiracy, they were convicted in court and fined: $5000. We get to choke on diesel fumes the rest of our lives, and they get fined $5000.
  

When Asimov imagined powerful, artificial beings living among us, he invented The Three Laws, because without such a fundamental regulation on their behavior, how could we avoid being subjugated and enslaved by our mechanical superiors?

Well, we have invented artificial entities of our own (the corporations), but I fear our regulations over them are not as foolproof as Dr. Asimov's Three Laws.

I just don't understand why these corporate apologists believe that the answer to every problem is to "let the market decide". Some things are too important to be left in the hands of the one group among us which is mandated to behave selfishly. It makes no sense.