If the creation of the WTO in 1995 was the last clear victory for Globalization, the specific point of farthest advance was probably the inclusion of intellectual property inside the trade regime. No sooner was TRIPS in place than the backlash began.
The most dependable of pro—Globalization economists were horrified. Why should coupon clipping be treated as trade? Jagdish Bhagwati: “[T]he corporate lobbies in pharmaceuticals and software had distorted and deformed an important multilateral institution, turning it away from its trade mission and rationale and transforming it into a royalty collection agency.”6 The developing world saw this as an attempt to limit their progress by installing a Western—oriented international pricing system for pharmaceuticals and other high—end products that they would not be able to Alford. But there was a third, even more fundamental, problem. The structure of intellectual property, now consecrated at the international level, creates cliffs of knowledge that newcomers to research are legally discouraged from scaling. This is a sign of in effective oligopoly system.
Indeed, here was a system designed for the pleasure of private sector technocrats frightened of risk. Ownership of intellectual property would give them safe, regular income. It now represents up to 5 percent of GDP. In an economic system that facilitates capital and property accumulation, the larger groups could simply purchase the smaller corporations that did the research and took the risks. Or, through their financial influence on governments they could encourage publicly funded R and D programs that at the last moment would convert intothe private ownership of ideas.
This is particularly true of the United States. As a result, European idea-based corporations began moving their activities to take advantage of what are, in effect, public subsidies leading to private intellectual property. I regularly hear German and French executives complaining about governmental regulations and interference at home as their excuse for decamping. The reality is that they are seeking the greater public funding of private ownership that exists in the United States.
In the mid—nineteenth century there was an international political crisis provoked by the ownership of land and commodities around the world by corporations and people living elsewhere. This absentee landlord problem was made famous by the Irish famine. But it was also central to the rise of false populism in Latin America. That false populism led to a spread of populist military dictatorships throughout the continent. Today this absentee landlord problem is often described as a positive force foreign investment. Increasingly it relates to a constant extraction of royalty payments. The populist rejection of this system is already well under way. Today’s potato farms are patentable ideas, and the post modern absentee land lord lives off the resulting income.
The problem isnot only international. Governments are everywhere giving in to the owners of copyright, particularly in the communications field. The period that copyright can remain in effect has been lengthened eleven times in the United States in the last forty years. It is now ninety—five years for corporations through most of the Western democracies. In other words, a movement that describes itself as driven by market competition and contempt for nation—state regulations has staked billions of dollars of income on its ability to influence or corrupt nation—state law.
Whether through TRIPS or local copyright law, what is at stake today is market control the elimination of competition — through a rigid architecture of access. This architecture of access has used technology as a control mechanism, size as another means of control and law as the ultimate form of control.
But all three are dependent on public compliance. And signs of pubic refusal to comply are growing.
There will be a restructuring of the ‘WTO in the next few years. When it happens, the central demands will he for the removal of TRIPS. This will be broadly embraced except by the direct beneficiaries — because the growing rebellion against these rules is making them increasingly unenforceable.
Pharmaceuticals, profit through fear.
The cutting edge of public anger, when it comes to intellectual property, is focused on the pharmaceutical industry. 1 h is anger cuts across all political lines in all sorts of societies. Populations in Africa, forced to face epidemics without the necessary medical tools, are on the same side as aging Americans, who can’t afford the medications they need, along with politicians everywhere caught in a permanent budgetary crisis because they cannot afford to finance public drug programs. The broad context has two implications: Western populations are aging, and epidemics in the developing world are spreading. The large pharmaceutical corporations are part of the problem in both cases.
The question is quite simple: How long will a handful of the most profitable joint stock corporations in the world, whose declared purpose is human well—being, be allowed to cause tens of thousands of premature deaths each year in the name of patent protection and stockholder interests? There are growing signs that the answer is not much longer.
The problem seems to have begun around 1980, when changes in laws — particularly in the United States converted a healthy business into a bonanza. (One of the key) changes allowed the private sector to get patent control over research done in universities at public expense.
The signs that the public no longer believed began in Brazil and South Africa. Brazil had chosen to treat health as a human right. From the early 1990s on, it attacked the growing AIDS crisis as Western countries had once successfully attacked polio: as a matter of public well—being, not market profitability. It distributed HRV/AIDS drugsfree of charge and broke the back of the disease’s growth.
In 2001 the United States government dragged Brazil before the WTO to protect corporate patents. After six months of protests around the world, Washington withdrew the complaint.
In South Africa a small citizen-based movement set out to accomplish the same thing, gradually convincing its own government to take up the cause. This provoked thirty—nine pharmaceutical companies into suing the South African government. In 2001 the corporations climbed down and withdrew their case.
These victories are never as clear as they might be. The corporations have now taken to offering cheaper drugs in needy countries; this is an attempt to hold on to their patents, avoid the use of generic drugs or, worse still, drugs given free of cost by governments. But the need is not for cheaper drugs when it comes to HIV/ADS, malaria and tuberculosis. In May 2003 the companies agreed to cut prices in South Africa by 25 to 80 percent. This approach was supported 1w the EU and the United States — homes of the major corporations. Going from an expenditure of $11,500 per person per year to $2,500 is meaningless in such circumstances; $100 would be unaffordable, except to he local elite. It is difficult to avoid asking whether these corporate cuts are not precisely an attempt to buy the silence of the society’s leadership. The dean of Yale’s school of medicine, David Kessler, said in the same year that the companies had to wake up to the public good. “At stake is the very patent protection system that allows them to control drug prices. The’ want to keep the power of pricing their products, but they must bend for a true international crisis.”
Instead of bending, they continue to play the corners, as if this were a cynical game. They offer some cuts here and there, all the while attempting to undermine public health systems. The CEO of the largest corporation, Pfizer, moans at specialist meetings: “[T]he fact is that Europe, Canada and Japan do not pay their share of the costs of research.” This is not a fact.
The fact is that “research and development isa relatively small part of the budgets of the big drug companies — dwarfed 1w their vast expenditures for marketing and administration.” in her remarkable analysis, Marcia Angell, author of the Truth about the Drug Companies, goes further. “The prices drug companies charge have little relationship to the cost of making the drugs and could be cut dramatically without coming anywhere close to threatening R and D.” Most new drugs have been “based on taxpayer-funded research.” Foreign companies are moving their R and D operations to the United States “to feed on the unparalleled research output of American universities and the National Institutes of Health. [I]t’s not private enterprise that draws them here hut the very opposite — our publicly sponsored research enterprise.”’
Their obsession with their corporate rights seems to prevent them from absorbing what real people identify as reality. Seventeen hundred children infected with HIV/All)S every day. Two million children under fourteen with AIRS in sub—Saharan Africa. India, Russia and China with infection numbers on the edge of tipping into full—blown epidemics.
People cannot believe in the seriousness of organizations that put their right to maximize profits ahead of the human right to life. In ‘September 2004, as if to prove that they had learned nothing, the corporations provoked the L.S. trade negotiators to once again threaten Brazil over intellectual property rights, this time threatening to punish Brazil in unrelated trade areas.
Excerpted from ‘The collapse of Globalism and the Reinvention of the world’ Page 179 -183.