In terms of pharmaceuticals, we are not asking the government scientific community to develop packaging or marketing, but to develop good medicine.
Brad DeLong wrote:
> >Brad DeLong wrote:
> >
> >> The NIH is very, very good at doing basic research. But there is no reason
> >> to think that a publicly-funded bureaucracy is particularly good at the
> >> process of drug development.
> >.
> >Why basic research but not drug development? Is it because all the profits
> >are in development?
>
> No. I think the reasons that you want to have decentralization in
> development are well laid out in James Scott's book, _Seeing Like a
> State_. Speaking broadly, state bureaucracies produce
> one-size-fits-all, middle-of-the-road solutions. They aren't very
> good at shipping products rapidly. They aren't very good at making
> risky long-run bets. They aren't very good at tolerating conflicting
> opinions.
>
> Decentralized development processes--which seems here-and-now to mean
> "firm," "market," and "patent," since we don't know how to do them
> any other way--are relatively good at making risky long-run bets and
> at shipping products rapidly. A diversity of organizations ensures at
> least some diversity of opinion. But the big problem with "firm,"
> "market," and "patent" is that the stuff produced is someone's
> private property, which they then sell at a monopoly price.
>
> So at the moment we are stuck: we (mostly) do basic research at the
> public level, believing that the benefits of widespread free
> distribution outweigh the costs of bureaucratic centralization; and
> we (mostly) do applied development at the firm level, believing that
> the benefits of entrepreneurship, enterprise, and "hard incentives"
> outweigh the costs of granting the drug company a
> temporary--temporary--monopoly over the products developed.
>
> But how about other institutional forms? Things that are neither the
> bureacratic state or the market with entrenched intellectual property
> rights? One might think--indeed, I know a president or two of a
> highly-endowed private university who does suspect--that a university
> whose mission is to spread knowledge and that is secure enough to
> allow its researchers to be free from bureaucratic fetters might
> provide a superior mode of organization (as long as its deans can be
> kept from focusing on how much money their schools might make if they
> sold rather than gave away their knowledge). But it is not clear to
> me how one organizes a semi-non-profit in such a way that it attains
> the benefits rather than the drawbacks of "state" and "market"...
>
> Brad DeLong
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Michael Perelman Economics Department California State University Chico, CA 95929
Tel. 530-898-5321 E-Mail michael at ecst.csuchico.edu