All this talk about how much profit the pharma’s should be allowed to make, etc. etc. has been really bugging me lately. It just doesn’t seem consistent with a free country for [the government/liberals] to decide how much money either people or business should make. But yet it seems par for the course around here*, which is one of the things I’d really like to challenge.
In this regard, given the latest news about Goldman Sachs, I am forced to ask:
If Goldman Sachs provided products services that most people actually cared about, would you then feel free to:
– put in price controls?
– feel entitled to their products/services?
– judge how much profit they are allowed to make?
Luckily for Goldman, they don’t really bring new lifesaving therapies to the world and therefore they are free of leftist demands for entitlement.
-demo
* note in my 10 things I hate about liberals was the propensity to judge need…
The question “How much money should Pharma make?” is their spin on the issue. Naturally, it misrepresents what their critics are saying.
<
p>
The true question is “How much money in government grants and breaks should go to companies already pulling down huge profits?”
<
p>
Said question applies to pharmaceutical companies, energy companies, and telecoms to name a few.
The question about how much profit pharma’s should make has been asked several times on this very site by a variety of folks including Charley (and others I think).
<
p>
But I agree with you actually, why are we subsidizing any company with the government? If we are subsidizing anything at all, hopefully we are subsidizing things like domestic energy exploration (as it is in the national interest to become less reliant on foreign oil) and in the case of pharmaceuticals, perhaps subsidizing research to combat some major public health crisis such as AIDS.
<
p>
I recall recently they had hearings about the huge profits that the oil companies were making and everyone was surprised that the oil co’s were unrepentant; they actually suggested taking away oil subsidies rather than bothering them about their profits! Bravo! So why are we still subsidizing? I dont know but its a coming topic and it will be interesting to watch.
<
p>
Ideally the government shouldn’t subsidize any company or person.
The pharmaceutical companies only exist in the first place because of government regulations that protect their intellectual property. The question is, where is the correct balance between between creating something that is useful for all of us, and something that is abusive. The core business of Goldman Sachs, by contrast, is less dependent on government regulation (although they too, as 1929 showed, would not have much of a business without regulators to set rules for the market). As an aside, conservatives are running our entire government right now, not to mention the #1 TV news channel, so it is much more accurate to write “government/conservatives” than “government/liberals.” Sorry to say, demolisher, you have met the enemy — big deficits, huge spending increases, massive expansion in state sector employment, increasingly intrusive federal government — and it is the Bush Administration and the Republican Party.
I couldnt disagree more.
<
p>
1. protection of property – intellectual or physical – is one of the reasons we have a government at all. Government exists so that we can enjoy our basic freedoms such as property rights, speech, religion, pursuit of happiness, etc. To say that this gives government the right to judge how much we should have is not only logically flawed, it is backwards. Government which exists to protect a right cannot therefore arbitrarily revoke that same right just because it is protecting it. Right? Make sense?
<
p>
2. Republicans spent too much recently and in the past and stand a good chance of spending too much in the future. This is regrettable. Democrats, however, want to spend even more. Almost every domestic idea that the democrats have (aside from abortion and gay marriage) involves spending more than the republicans already are. To call the conservatives the big spenders not only gets wrong the distinction between republicans and conservatives (and ignores debates on the right) but also implies that the republicans want to spend more than democrats, when the opposite is true.
<
p>
Finally, “control” of government has been severely hampered by the filibuster and other major democratic pushes, as you well know. These prevented social security reform and stand in the way of many other reforms that would shrink government. In other words, the only things republicans can easily do with a limited majority tend to be spending. Yea, that sucks.
Here’s a good example of why I think liberalism is slowly departing the realm of reality.
<
p>
The protection of property interests is the first function of government. Indeed, the failure of the previous regime that governed this state to fulfill that function in a satisfactory manner prompted a chain of events leading to the founding of the United States.
<
p>
And this, you think, is some sort of government welfare?
<
p>
One of the reasons that I think liberalism of this sort has reached its philosophical and political dead end is that it regards property rights as an impediment to policy rather than a goal.
I thought government’s first responsibility was to ensure its propogation by securing fiscal and physical security.
to ensure its own growth in size and power by increasing the amount of dependents it creates?
The protection of property interests is the first function of government.
<
p>
Absolutely not.
<
p>
Our government exists “to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity.”
<
p>
Now it’s certainly true that protecting people’s property is part of that, but so are many other things. And “property” is a very broad term, that covers everything from your personal effects and possibly your home, to a trinket you forgot on the bus in another city you just got home from and a plot of land you bought and have never visited. The relative importance of protecting these sorts of property, and how it they relate to the primary goals of government, vary. Lumping them all together and calling this “the first function of government” is ludicrous.
<
p>
In context here, it’s even worse, because we’re not even talking about property. We’re talking about so-called “intellectual property”, a poisonously flawed metaphor. Patents, trademarks, and copyrights are established by our Constitution as means to an end, not as ends in and of themselves. They are not moral rights; their value lies entirely in how well they serve “to promote the progress of science and useful arts.”
<
p>
The belief that the protection of property interests is the top priority and first function of government, and that property rights are the most important of all rights, is a pretty good summary of the underpinnings of the Libertarian Party’s philosophy. But it is far from a mainstream belief or a national consensus.
I’m not a lawyer or an expert on gov’t regulation. I do know that the issue of corporations gaining “corporate personhood” and corporate rights began many years ago when when a court decision was made favoring a Calif. railroad co. and heralded some very deleterious developments for our country, for our states, and for the people that inhabit and raise families in these places.
<
p>
In my spare time I’ve been trying to learn more on this front because I know it impacts many dimensions of social justice including health care. I haven’t yet made it to one of the Democracy Schools that are offered around the country, but will keep trying to get to one. Click the link and take a look at the org. that runs these schools–they’re dong some great civic engagement stuff down in PA.
<
p>
A few years ago I went to a public meeting held on Cape Cod of a local organization called the Center for Democracy and the Constitution where I learned enough to know that I should keep learning, and try and spread the word to others. I hope others find these resources relevent, and interesting. It’s fascinating stuff imho.
By its name, democracy school would seem to teach about democracy. (Hardly a rare knowledge set I’d think) But this site seems to be some kind of “progressive” legal action fund that is, I guess, anti-corporation?
<
p>
An about page would be a good start for them.
<
p>
The second one is obviously just anti-corporations with some global warming and a quote from Howard Zinn thrown in at the end. Hey – question – if there are no corporations then who do you want people to get jobs from? The government maybe?
<
p>
And people acted shocked when I claimed marxist or communist undercurrents in this place. Zinn for Pete’s sake!
Yes, people work in a variety of settings, including corporations. That does not give corporations the right to trample on individual workers’ rights or communities’ rights, does it? The workers are what create the value and wealth of those corporations, don’t they? And corporations that largely “do the right thing” do exist, I think. Costco being a much better civic corporate partner than say, Walmart, comes to mind as an example.
<
p>
Re the group that runs the Democracy Schools, I think you were looking for the section they have on the homepage under “Welcome” (it’s not called “About”)
<
p>
More specifics on the content of their Democracy Schools curriculum is avail. at this link
<
p>
FYI here’s a fantastic group that is “pro-people and communities”, not “anti-all corporations”
<
p>
It seems that you, demo, equate “pro-people and communities” with “anti-corporation”. I would argue that that is a false dichotomy and that it distracts from the productive dialogue that does need to occur, which certainly can include strong (hopefully polite and respectful) disagreements!
<
p>
And I’m not an expert on Zinn or Marx or Communism but I do not believe that Zinn is a communist. I do think that a lot of what Zinn says makes a lot of sense from my perspective as an ordinary person trying to live a good life and take good care of my kids and our community.
Here are some quotes from the site which you linked:
<
p>
Force fed disinformation sponsored by the immensely wealthy fossil fuel industry and the politicians they have bought,…
<
p>
Corporate America knows how to drive spikes into our awareness and twist them to do its bidding. It accomplishes control in part by repeated exposure to its messages, day in and day out, through all available means of communication
<
p>
from the mission page:
The economic, environmental and human costs of corporate power and wealth are staggering. From the destruction of rainforests to the profits of war to toxic waste dumps to the mad science of genetically modified foods to global warming, the frenzied quest for money knows no limits in terms of human suffering and planetary destruction.
<
p>
and I wont quote it but pretty much this whole page: http://www.constitut…
<
p>
Are you trying to tell me that is not anti-corporation?? If not, then I can’t imagine what would be.
<
p>
I agree with you that pro-people and anti-corporation is a false dichotomy. It is a false dichotomy created and presented by the sources you linked, and others like them.
<
p>
Leftists (forgive me!) tend to thrive on false dichotomies: rich vs. poor, black vs. white, owners of the means of production vs. the proletariat….
<
p>
Which brings us back to Zinn, and to that I’ll only quote the first two lines of a very positive wikipedia entry on the man:
<
p>
Howard Zinn (born August 24, 1922) is an American historian, social critic and political scientist.
<
p>
Zinn’s philosophy incorporates ideas from Marxism, anarchism, socialism, and social democracy.
<
p>
I hope you don’t find me uncivil; I’m into a good and vigorous debate but I’m not here to insult you.
<
p>
-D
<
p>
Again, what I’m trying to tell you is that it’s not “anti-all corporations”. Yes, it’s anti some, and they deserve it! Many corporations earn that kind of critical description and vigourous activist attention by individual citizens, by their stockholders, and by public interest groups. And I wish them godspeed in their work; oftimes many thousands of lives are depending on its success.
<
p>
D, maybe we’re not as far apart as we once thought we were. I appreciate the respectful discourse.
<
p>
p.s. I don’t have it in me to get into the Zinn stuff, it’s really not my forte.
Can you point to a few of the alleged quotes stating that drug company profits should be limited.
<
p>
Thank you.
http://www.bluemassg…
<
p>
“BTW, I have a couple of very good friends who work for big pharma companies — great places to work, BTW. But those companies are not entitled to max out their earnings (20%+, as I’ve pointed out in other threads, totally beyond other sectors in the economy) at taxpayer expense.” (Charley on the MTA)
<
p>
http://www.bluemassg…
<
p>
“demolisher, compare those profit margins to any other industry, and I think you’ll find that Big Pharma is still ludicrously profitable. I mean, if they only made 10% profit margins, drugs would still get made.
<
p>
Does Big Pharma have a God-given right to 20% profit margins?” (Charley again, sorry 🙂 )
<
p>
Will those suffice? (Did you not read them the first time?)
<
p>
None of these posts, as I read them, say that profits should be limited. Rather, they say that they’re not entitled to high profits, i.e., The People don’t have a responsibility to give them piles of money if they can figure out a way to give them less.
<
p>
Companies can make as much as they legally can. But I should be able to save as much money as I can. Certainly, I don’t feel like I have to prop pharma’s profits up – any more than I feel that I have to prop up GM’s or Microsoft’s profits.
In the context of the conversation, sure there was some element of “tax dollars” going to buy medicines but if you think about it, the 20% profit margins are from recent history, not (I think) arguably a direct result of tax dollars going to pharmas under medicare. So that argument doesn’t really work, but I don’t really think thats what it was about in any case.
<
p>
In my view, what was being said was:
– Govt has the right to regulate prices (based on profit calcs) for pharmas in the name of getting drugs to more needy people
– In reply to my objections about the end of innovation, a very calculated consideration of “what profit margin is required to keep the pharmas in business” was proposed.
<
p>
This is further supported by the assertion, made in this thread and in the PhRMA thread, that govt has the right to meddle with pharma profits because government “regulations” are the basis of IP rights. Not sure why that would have come up if we were only talking about spending tax dollars…
<
p>
Anyway, you don’t propose calculating minimum profit margins required for pharmas to stay in business unless you are thinking about acting on those, I dont think. Do you? It seems very clear that some people think pharma profits are too high and [that is justification for something, I guess].
<
p>
Finally, no analysis was given to the percent of profit margin (or revenue even) coming from entitled drugs.
<
p>
Back in the old days, when software came with printed manuals, afriend of mine worked for a humongous printing company. Microsoft was a big client.
<
p>
At one point, Microsoft hired a big consulting company to figure out what it was costing the printing to print its manuals. Armed with the figure, Microsoft went to the company and said “We know that it costs you X to print our manuals. We’ll pay you X plus a tiny amount to do the work – take it or leave it.”
<
p>
Two questions:
<
p>
1. Was it proper for Microsoft to do this?
2. Was Microsoft trying to limit the printers profit? Or were they negotiating to pay the lowest price?
Now, make not mistake: I’m no fan of Microsoft. I probably dislike them as much as you lefties dislike walmart. However, this is a free country and Microsoft can make any pricing demands that they would like to on their suppliers, whether they are calculated based on (assumed?) profit margins or otherwise. I personally find this to be a rather despicable business practice, but is it proper?
<
p>
I give you the same answer I gave Charley when he asked how much profits were proper for a pharma to earn: its none of our business. We may think whatever we want about Microsoft’s practices but we’d better not tell them what to do or we step right into totalitarian shoes (albeit with a mob rule / populist twist). So is it proper? Answer: n/a, we don’t judge what is proper for a company to do so long as they abide by the law and don’t trample the rights of others.
<
p>
Are they negotiating? Sure they are. (Although it is possible that they are not in fact negotiating but rather naming a take it or leave it price, but either way since its not our business how they run their business it doesn’t matter all that much how closely we define it).
<
p>
So what’s different? The government is neither a person nor a corporation. It doesn’t have the same rights; government is the main (only) threat of tyranny; government forcibly collects taxes and imposes regulations; government has all the power; government will put you in jail if you defy it. Now you may say they’ll just be negotiating (putting aside the excellent point that Gary made in the PhRMA thread about who does the buying) but first off, they aren’t in a position to negotiate, they are too powerful for that. They are in a position to impose their will. This is true of other governments which negotiate with the pharmas as well: sure they negotiate but if the pharmas say no, guess what happens? The other governments will just ignore the patent protection and clone the drug, stealing the IP that went into inventing it. Swell. The government is already powerful enough, don’t you think? We should be trying to limit the power of the government, not expand it.
<
p>
BTW, the private plans that administer part D already negotiate, don’t they?
<
p>
(Man I tell you I didn’t mind the worst president ever ad 1/100th as much as the don’t-eat-meat ad.)
Thank you for your thoughtful answer. I think that we’re in agreement that negotiating a price is different than forcing a price at gunpoint – even though they can sometimes seem similar.
<
p>
Are you in favor of privatizing all roads? If not, why not? I think public roads are a good idea simply because the alternative does not work well – I’m curious as to your take.
I thought we had already asked and answered the roads question but anyway here it is:
<
p>
No.
<
p>
Roads has always been something that only the government can do*, and also something necessary for the basic function of our society and therefore its OK to have the government involved.
<
p>
But wait hold on do you mean privatize the construction and maintenance of the roads? (i.e. pretty much everything that ever gets spent on roads aside from policing**?) Because if so I believe that is already privatized right? I wonder why?
<
p>
I would definitely be interested to see some experiments with private roads*** and by golly if they turned out feasible then get the government out of there! But roads really are one of those things that have natural conditions that make market action nearly impossible in most cases (similar to utilities actually) and therefore the government is appropriately involved.
<
p>
I’m not an anarchist you know!
<
p>
Hmm maybe a roads thread is in order.
<
p>
-D
<
p>
* or so goes the conventional wisdom. But there are many thorny issues of right-of-way, massive real estate considerations that would make multiple alternate roads simply infeasible, etc.
<
p>
** dont remember what the ** was for but it occurs to me that a gas tax is an almost perfectly appropriate source of funding roads; would that they could be tied perfectly together!
<
p>
*** there are some private roads in Maine btw, they make sense because the areas are too remote for the government to care enough to build roads there. I believe they charge a fee for access. I’d be interested to see private roads someplace more mainstream though – perhaps alongside toll roads. (since you are already paying for the public roads you’d have little other incentive to travel a private one besides maybe traffic avoidance..)
Under perfect capitalism, I think that profit would tend toward zero, not infinity. Why? Because there would be no artificial barriers to entry, unfair competition, etc. If the local pharmacy company is making $1b a year in profits, then someone else could just start up another company to get in on that pie.
<
p>
If pharmaceutical companies are raking in the dough, that shows me that there is an unfair advantage out there.
<
p>
I suppose that a company with exclusive set up to sell you your water might just be able to make a fortune as well, after all, if you don’t pay, you die. Talk about market power.
A few points to think about:
<
p>
– no artificial barriers to entry does not mean no barriers to entry at all; large investment is the most common real barrier.
<
p>
– consider innovation as a force that is in play (commensurate with investing usually) alongside the trending of profit towards 0 for any legacy product or service.
<
p>
Its not a 0-sum game out there ya know.