Maxwell Tabarrok

I run a blog called Maximum Progress which covers topics in economics, mathematics, philosophy, history, and technology. You can read all of my essays on my Substack here: https://maximumprogress.substack.com/

Wiki Contributions

Comments

Progress studies as an (incomplete) “idea machine”

Do you think that you could significantly improve the prospects of nuclear power if you were commissioner of the NRC? or would you be too constrained by politics and other rules?

If you think it would be impactful to have a progress-minded person running the NRC, then convincing the current commissioner or getting the right person appointed seems like an important and even tractable agenda item.

Why doesn't progress seem to propagate?

He uses specific case studies but the book definitely synthesizes general principles which can explain the nontechnical barriers in many technologies. Things like 'failures of nerve' and imagination and 'the Machiavelli effect' are illustrated with cases but are applicable to a wide range of technologies. Jason's summary is great but I really think you would enjoy the book. It's fun to read, not too long, and I think it is the most comprehensive answer to your question out there right now.

Why doesn't progress seem to propagate?

If you haven't read it already, 'Where's my Flying Car' is basically a direct answer to the question you pose here. Hall has scientific, technological, political, and cultural analyses of several possibly impactful technologies like flying cars, nuclear energy, nanotech, etc. 

Intellectual Property Is Worse Than You Think
  1. Patents are much more useful in high-CAPEX industries, but I wouldn't call them necessary. There have been expensive capital investments without patent protection, even if they are not common.
  2. Agree here.
  3. 'Reasonable" does a lot of work here. Economists usually define reasonable as price = marginal cost and the whole goal here is to raise price high above that level. But the point is well taken that there is more consternation over pharma pricing than is justified.

This is sort of an orthogonal point but I think the reliance of pharma on patents is an example of the "break your leg and give you a crutch" strategy that the government often takes. A huge part of the CAPEX that goes into pharma development is going through FDA approval. So if that process is not going to change, patents are essential for further pharma development. But in some lassiez-faire counterfactuals I think we could get more pharma development even without IP protection. 

I think that prizes could replace the incentives of patents without most of the negative second order effects that I pointed out. Theoretically you could just match the monopoly profit with a subsidy, get the efficient quantity produced, and there are some mechanisms for dispersing the cash which avoid the rent dissipation.

Intellectual Property Is Worse Than You Think

I definitely agree that a bigger difference between original investment costs and copying costs makes patents more beneficial, but all of the criticisms I pointed out still apply. The Pharma industry spends billions on patent courts and lobbying. This has to be subtracted from the benefits that they provide, in addition to all the welfare losses from super expensive name-brand drugs.

What do you think about using prizes or direct subsidies for high CAPEX projects instead of IP?

In a more meta sense, I wonder if it is possible to have patents only for high CAPEX industries. It may be that the lobbying forces will inevitably push to expand the reach of patents, and one cannot separate the benefits of high CAPEX patents from the costs of low CAPEX ones.