Friday, October 28, 2005
What gives? How come it was not likea big scandal?
Thursday, October 27, 2005
In a recent post I noted that around 15 years ago, Palmer published two law review articles (Intellectual Property: A Non-Posnerian Law and Economics Approach and Are Patents and Copyrights Morally Justified? The Philosophy of Property Rights and Ideal Objects) arguing against patent and copyright and also critiquing the wealth-maximization "law and economics" approach of Richard Posner. In the first article cited he criticizes "A jurisprudence that claims to be based on “law and economics” but that would constructively assign or rearrange rights as part of a strategy to achieve some pre-determined outcome (maximization of utility or of wealth, for example) .... " Notice that Palmer characterizes Posner's wealth-maximization framework as one that would lead to the rearranging of property rights to try to maximize wealth.
Now Posner is of course a Coasean. And in fact others such as Rothbard, Walter Block (2, 3), Gary North, and Hoppe (2) have made a similar observation about implications of Coase's views (see also the views of Roy Cordato (2); Timothy Terrell's and Sebastian Storfner's summaries of Austrian critiques of Coase). Some of them note that the Coase Theorem could be interpreted as a recommendation that courts assign property rights so as to maximize wealth--in fact this is exactly what uber-Coasian Posner recommends, at least according to Palmer.
What is interesting is that in Palmer's campaign to smear Hoppe by repeatedly distorting Hoppe's views, he also has attacked Hoppe several times (1, 2) for interpreting Coase the way Palmer interprets Posner. He says Hoppe's and Rothbard's reading of Coase as meaning that "that courts assign property rights to contesting parties in such a way that 'wealth' or the 'value of production' is maximized" is an "absurd parody of an interpretation" and a "bizarre misstatement" of Coase. Palmer goes on:
Hoppe once attacked another panelist at a conference who had discussed the Coase Theorem by accusing the panelist (and Coase) of arguing that judges should be empowered to confiscate and rearrange property whenever the judge determined that the new distribution would be efficient. Now Coase has never said that and that’s not a part of or even an implication (at least, not without a number of questionable additional premises) of the Coase Theorem.
So, let me get this straight: Palmer's interpretation of Coasian wealth-maximizer Posner is reasonable, while Rothbard and Hoppe's interpretation of Coasian wealth-maximizer Coase is absurd and bizarre...? Of course a given interpretation of Coase is open to reasonable criticism, but is Palmer's attack here--given his history of blatant distortions of Hoppe's views, repeated even after being exposed, and given his similar views on one of the chief Coasians--a reasonable one, or merely evidence of his desperate attempts to smear Hoppe?
For links to other libertarian critics of Coase, see this post.
Palmer's recent comments about patents are interesting in view of his previous publications about intellectual property.
First, around 15 years ago, Palmer published two law review articles (Intellectual Property: A Non-Posnerian Law And Economics Approach and Are Patents And Copyrights Morally Justified? The Philosophy Of Property Rights And Ideal Objects) arguing against patent and copyright and also critiquing the wealth-maximization "law and economics" approach of Richard Posner. Note that he opposed patents on principled grounds, and rejected the wealth-maximization approach. E.g., as he noted in the first article (p. 303),
A jurisprudence that claims to be based on “law and economics” but that would constructively assign or rearrange rights as part of a strategy to achieve some pre-determined outcome (maximization of utility or of wealth, for example) overlooks the analogy between the spontaneous order of the market and the spontaneous order of a legal system.
I.e., according to Palmer, Posner's wealth-maximization framework would lead to the rearranging of property rights to try to maximize wealth. Something he presumably opposes.
Anyhoo, back in 2003 some of Cato's scholars (Doug Bandow and Michael Krauss) came out in favor of restrictions on free trade based on the notion that reimportation of drugs would allow consumers to avoid some of the monopoly price charged due to the US patent system. Cato's adjunct scholar (and utilitarian) Richard Epstein has also argued in favor of patents, especially in the field of pharmaceuticals, and on this ground also opposed reimportation. Thus, as I have noted previously, support for intellectual property rights leads once again to the undermining of genuine private property rights, such as the right to trade.
This call for restrictions on free trade caused an outcry in the libertarian community, prompting Ed Crane and Roger Pilon to meekly disavow Bandow's and Epstein's protectionism. Interesting, this piece apparently endorses "the need for drug patents to encourage R&D"--this apparent endorsement of a utilitarian, wealth-maximization approach to policy seems to conflict with Pilon's principled, deontological, non-utilitarian, rights-based libertarianism--as shown in his 1979 Georgia Law Review article "Ordering Rights Consistently: Or What We Do and Do Not Have Rights To" and his 1979 University of Chicago Ph.D. dissertation, "A Theory of Rights: Toward Limited Government."
In recent posts Palmer appears to bend over backward to soften his previous principled anti-patent stance so that he does not conflict with other pro-patent Catoites--apparently now including Krauss, Bandow, Epstein, Crane, and Pilon. Writes Palmer:
I've been critical of the patent system in the past. Mr. Brady has given me a quiz about whether I conform to his vision of right-thought or have drifted further into thought crime[,] as he defines it. I am not a fan of the patent system and think we could generally live well without it. (I've posted a few articles on my web site indicating why.) The one exception to that general hostility to patents, as I have suggested elsewhere, is the system of patents for chemicals, notably pharmaceuticals. Because chemical compounds are relatively easy to reverse-engineer and can be successfully marketed independently of their role in a larger product (unlike, say, innovations in jet engine design, which often are only valuable as part of a kind of engine), patents may indeed generate incentives for innovation that greatly improve human welfare. That's an argument for them. Since the innovation has the characterstics of public goods (costly to exclude and non-rivalrous in consumption, the latter being the relevant feature here), a good profit maximization strategy ought to be price discrimination, by which those who can pay more do so and others pay less.
Re the "public goods comment--note in the "Non-Posnerian" above piece Palmer's sensible criticisms (pp. 284-85) of the coherence of the very notion of public goods. As for the "suggested elsewhere" comment, he must be referring to this post, where he writes:
Pharmaceuticals and chemicals offer undoubtedly the best cases for patent protection on utilitarian grounds. In my Hamline Law Review article ..., p. 301, I quoted from a study by Edwin Mansfield from the American Economic Review in which he pointed out that "patent protection was judged to be essential for the development or introduction of one-third or more of the inventions during 1981-1983 in only 2 industries -- pharmaceuticals and chemicals." That seems not to have changed. The reason is pretty easy to understand: reverse-engineering in the case of chemicals (which broadly includes pharmaceuticals) is quite easy. In the case of pharmaceuticals, at least, R&D costs are very high and would still be high even without some of the very costly efficacy tests imposed by the Food and Drug Administration. Furthermore, the benefits of new pharmaceuticals are enormous. If one were to make a case for patent law, that's the strongest industry for which to make it.
Palmer has elsewhere rejected the wealth-maximization approach, so what does it matter that pharmaceuticals is the "best case" that can be made under this approach? Why does he say the case of patents for pharmaceuticals is "one exception to" his previous "general hostility to patents," when this case is utilitarian and wealth-maximization based, an approach he has rejected (and presumably he still maintains that even under the wealth-maximization approach the case fails).
Note how snippy he is to Mark Brady's questions to him about patents--"Mr. Brady has given me a quiz about whether I conform to his vision of right-thought or have drifted further into thought crime[,] as he defines it." It is as if Palmer is annoyed that in response to his seemingly pro-patent comments, his previous principled and anti-patent writings are being waved in his face. Given so many of his colleagues' utilitarian endorsement of patents, is Palmer now embarrassed by his previous opposition to both? Is he trying to say that he is still principled, and anti-patent, but that the dominant pro-patent, utilitarian approach of prominent Catoites is "respectable"--or that he has (sort of?) softened his "hostility" to this approach? It wouldn't be the first time Palmer's views have "evolved".
Wednesday, October 05, 2005
With all the news lately about Hurricane Katrina, we shouldn't forget That Houston has had it's share of devastating weather also.
The attached photo illustrates the damage caused to a home when Hurricane Rita passed through the Houston area a couple of days ago. It really makes you cherish what you have, and reminds us not to take life for granted!