The left is socialism for the poor.
The right is socialism for the rich.

Here's a pop quiz to illustrate my point (taken from that commie rag, the Financial Times):

1. Which industry asks stockholders to take on the bulk of risks, while it gives half of all revenues to employees?

2. In which industry do the employees decide how much the stockholders receive and then get to keep the residual?

Obviously two socialist industries.
Which ones?

(answer in next comment)

Dean,

Your post smacks of non-partisan truth. It has no place in digital discourse. Watch out for the men with butterfly nets that will come to try to remove you from the game (I hear they don't play fair).

No bid contract crony capitalism, massive subsidies to billion dollar corporations and a trillion dollar arms industry sounds about as far from a free market as one can get.

Some have described the hundreds of billions tossed away on the "reconstruction" of Iraq (most spent on security) as neo-colonialism. That is, old school colonialism would invade and occupy a country and then proceed to rape it's resources for the benefit of invading country.

Neocolonialism does not wait for indigenous resources to be plundered but instead seeks to rape the treasury of the invading country for the benefit of connected crony corporations.

It goes without saying that neocolonialism has no regard for the welfare of the host nation, save those in the loop. It is, after all, a flat earth and we all now live in a global village. The transnational executives have residences besides the gated community mansions back in the states with it's own security force. The riff raff (formerly known as the middle class) can fend for themselves.

Big business and billionaires know all too well the deep well of the federal treasury and seek as much "government intervention" as can be achieved with the proper connections and palms greased.

Why for a measly million dollar campaign contribution and few dozen high paid lobbyists an industry can obtain billions in gov contracts. Just ask big Agribusiness who has conned congress into massive ethanol subsidies when in fact it takes more energy to produce ethanol that it provides.

A truly free market would entail ending all corporate welfare immediately, including the trillion dollar arms industry boondoggle, where 100 million dollar experimental vehicles are built and stored to collect dust, all the while seeking greater appropriations for yet more.

And there is no protest because the arms industry has spread it's plants in vital districts all throughout the 50 states. Just talk about shutting one down and it's a job and local tax revenue issue; bread and butter with the electorate. A very rigged game indeed.

This statement is confusing, Dean. Please clarify what you mean:

"The only reason that the government has reason to negotiate prices with the drug industry is that it gives them patent monopolies that allow them to charge exorbitant prices for life-saving drugs. In the absence of patent monopolies, virtually all drugs could be sold as generics at Wal-Mart for $4 a prescription. (Yes, we have to pay for drug research, but there are far more efficient mechanisms.)"

Thanks.

Odd that the right has not noticed this and bitches mightily about the Liberal Press, the NYT in particular.

I've no doubt that nearly all leaders of the right have noticed this, and many of the followers as well. It's just not particularly relevant to them, other than confirmation that their tactics work. (Of course, it helps to be pushing in the same direction as most corporaborgs.)

Tennessean,

If the government did not grant drug companies patent monopolies, then all drugs could be sold as generics, with anyone allowed to produce them. With very few exceptions, it is not expensive to manufacture drugs. Therefore, if the government did not grant monopolies, drug prices would fall to the competitive market price and there would be no reason for the government to try to negotiate low prices with the drug industry, they would already be low. 

Those who espouse the idea of the ideal "market" economy fall into two different groups. They use each other for the own personal goals.

The first group are those who benefit from the present system financially. These are the super wealthy and the just plain wealthy. The account for, at best, 5% of the population. The long history of "popularism" and individualism in this country means that they are held in disfavor by most people instinctively. This is why when many of them get older they spend their remaining years trying to burnish their image for posterity by become "philanthropists". Carnegie, Rockefeller and now Gates and Buffet fall into this group.

The second group are the libertarian ideologues. These are people of modest economic resources but who have adopted the philosophies of Hayek or Rand or Greenspan or... With them it is a quasi-religious belief system. They need the wealthy to provide them with employment. This can be through universities or think tanks or even as staff members at conservative publications. A few crumbs from the wealthy are sufficient to keep them on course. They provide the intellectual cover than keeps the average person confused.

It is common for people to conflate these groups, but they have different motives. The former greed, the latter ideology.

Here's a single example of how this alliance works: the campaign to repeal the estate tax. Those who benefit from the change are less than 100 wealthy families. The Waltons alone stand to save $40 billion in taxes if they succeed. To achieve their aim they needed to persuade people that everyone would (potentially) benefit from this narrow policy. To do this they enlisted the army of libertarian ideologue shills to blanket the media.

A recent report details how this all played out:

Spending Millions to Save Billions (PDF)

Just eighteen families are behind this entire campaign and by hiding their involvement through think tanks and support for other right wing organization as well as selective political donations they kept out of the public eye.

People don't realize how few are those who pull the strings in our society. An examination of the military-industrial sector will also show how it is that just 50 or so firms push our overall national priorities to militarism and even influence foreign policy. That no one speaks of war profiteers now as they did in WWI shows how much more skillful they have become at hiding their tracks.

--- Policies not Politics
Daily Landscape

There's no question that quite a bit of basic research that creates new drug classes comes from academic and government research, although some indeed is from industry. The decision to take a drug into clinical trials is principally a business decision based on future profitability, as well as research into sometimes-significant, sometimes-me-too, drug derivatives.

In trying to think of what the alternative mechanism for early development and clinical trials, I can think of a government agency that selects, or perhaps selects contractors to fund, the new drugs and runs the clinical trials. The good news about this would be that it could be a much more transparent process.

Taken to an extreme, it will legitimately hit the "socialized medicine" button if the system doesn't, at least, have internal competition. As an example of internal competition between government-funded laboratories, both Los Alamos and Lawrence Livermore labs design nuclear weapons. Their designs don't necessarily go into production. An odd example perhaps, but the first that comes to mind.

What is the more efficient mechanism that you see used, which would still include scientific competition, with incentives to improve existing drugs?

--
Howard

*equal opportunity offense to both extremes*

"Those who cannot remember the past are condemned to repeat it" [George Santayana]

There are various mechanisms through which you could have publicly funded research and still preserve competition. Joe Stiglitz and other have proposed a patent buyout fund in which the government buys out drug patents based on their usefulness and then places them in the public domain so that the drugs could be produced as generics.

My preferred method, for reasons explained in my paper, would be to have the government pay several lead contractors to parcel out research funding over long period (e.g. 8-12 years). The lead contracts would be competitively bid and renewals would depend on having a successful track record. A condition of the contracts is that all findings are made public as quickly as practical and all patents are placed in the public domain. This eliminates the problem of secrecy stifling research progress, which exists in any patent system (even a buyout system). It also eliminates the all or nothing character of the prize system, in which those who come in second can end up with nothing. 

Howard,

The only problem is how to select out useless projects.  The federal government tosses billions of dollars at relatively pointless physics projects.  This money is readily available for drug projects.  The countless Assistant and Associate Professors out there will conduct studies on anything with this money... The only real question is what not to study. 

Is this a new insight?  The "social contract" (the way our laws and social practices organize society) favor some over others.  There is no neutral ground level. Those who already have some advantage are never satisfied with what they have.  "The rich get richer."  It might start out accidentally (20,000 years ago), but after that everybody has used all his might to make sure he was on the winning side.

"What not to study" is not a trivial question. For example, within a class of drugs, some drug companies do an effectively equivalent molecular modification so they can compete for market share. In some of these cases, there's not a significant difference. In other cases, such as tricyclic antidepressants (e.g., amitriptyline vs. nortriptyline) or anticonvulsants (e.g., gapapentin vs. pregabalin), where the actual pill administered is a "prodrug" that needs biotransformation to the active metabolite, formulating a molecule that is closer to the active metabolite can reduce side effects. It is interesting that the manufacturer timed the release of pregabalin to happen just about the time the gabapentin patent ran out.

In yet other cases, we really don't know what is best until there are large scale-trials. I've had two statin changes so far, based on the results of large postmarketing studies that showed one or another drug having a clear superiority in preventing morbidity.

Among antibiotics, there was a mostly me-too in some of the early fluoroquinolones (e.g., ciprofloxacin vs. ofloxacin), but later modifications (e.g., gatifloxacin) have more efficacy in community-acquired pneumonias, are taken once rather than twice daily, but might have greater side effects. Seriously, how does one decide that the versions of a class are "good enough"?

In conditions such as Alzheimer's, the first drug that did anything, tacrine, didn't do all that much. Arguably, the commercial release of tacrine was more of a invitation to clinical trials, to get more information on the next generationt hat might be more active. Is it rational drug policy, if there were no major marketing costs, to introduce this sort of first-of-class drug, which you can be reasonably certain will be superceded?
--
Howard

*equal opportunity offense to both extremes*

"Those who cannot remember the past are condemned to repeat it" [George Santayana]

I'm reading the paper Dean Baker's paper, and it is provocative; the Kremer and Kucinich proposals seem most sensible on a first reading. As you say, it is a nontrivial problem, and in ways that aren't purely linked to profit.

I find, however, that I tend to need to think about some examples of nontrivial issues to decide if a policy proposal makes sense. Let me throw out several and see how they might work under some of the proposals.

For example, the panels that approve NIH-funded research tend to lean toward basic research and breakthrough drugs. This goes with some of the tendencies in US academic medicine, which rewards subspecialization more than specialization, and specialization more than primary care.

Are panels populated with such peer approval authority likely to authorize things that are more incremental improvements than breakthroughs? What is the metric for molecular modification of the "name" drug of a class to find less toxic versions that are otherwise therapeutically equivalent? I'm thinking of things such as amitriptyline vs. nortriptyline, and, for that matter, imipramine vs. desipramine?

How do we weight development of "significant" subclasses in a major category, such as within the family of macrolides, going from erythromycin to azithromycin and clarithromycin?

I'd tend to think that a good system would reward finding, and verifying, the equivalent of off-label new indications for drugs. Let us say that neurologists note, as they did, that anticonvulsants had benefit in neurogenic pain and mood disorders.

I'd also hope that the more egregious patent uses of indications would be prevented. For example, the drug bupropion is under one patent for the antidepressent Wellbutrin, and under a different patent for the smoking cessation drug Zyban. The two patented drugs are chemically identical.

--
Howard

*equal opportunity offense to both extremes*

"Those who cannot remember the past are condemned to repeat it" [George Santayana]

The answer is yes?

Our government would not need to fund anything. Companies today are more than happy to outsource any and all work to foreign countries. Let drug companies do the same.

And of course the right is smart enough to try to hide their role for government as just the natural working of the market.

Give that man a cupie doll!

Worse, I think a sizable number of the right actually believe that codswallop like a sow loves a mud wallow.

This is a silly comment.

If the government does not protect intellectual property, there will be no incentive for a private investor to fund research whether they do it here or off shore. Thus, if the government wants new drugs to be developed, they must fund their development with tax dollars.

Why can government not walk away over s specific drug, as long as there is a reasonable therapeutic equivalent? As a research patient at NIH Clinical Center, I've run into quite a few formulary restrictions, and other government hospitals also will only have a restricted list of drugs. The restrictions may be do to efficacy, cost, or a professional judgment that a cheaper agent is as (or more) therapeutically efficacious?

--
Howard

*equal opportunity offense to both extremes*

"Those who cannot remember the past are condemned to repeat it" [George Santayana]