Patents and the Abundance Agenda

[Passages]

Mar 31, 2025

By Dean Baker


I haven’t read Ezra Klein and Derek Thompson’s new book, Abundance, but everyone I know seems to be talking about it. Therefore, I thought I would throw in my two cents, not on the book for obvious reasons, but on what a serious Abundance Agenda (AA) should look like. Specifically, I want to talk about patents and how reform of the rules on intellectual property really needs to be at the center of a serious AA.

The key point that most people in policy debates seem determined to ignore is that there is a huge amount of money at stake with patent monopolies and their cousin, copyrights. My calculations indicate that these monopolies raise the cost of the protected items by more than $1 trillion a year. This comes to around $7,500 per household.

SNIP
Specifically, they repeatedly changed the rules on intellectual property to make patent and copyright monopolies longer and stronger. These rules changes, both in domestic law and international trade agreements, were not just the natural working of the market. They were deliberate policy that had the effect of shifting income from less-educated workers to those with college and advanced degrees.

Putting intellectual property reform on the table is acknowledgement that policy did in fact screw tens of millions of less-educated workers to the benefit of more educated workers. Just to take one important example, before the Bayh-Dole Act passed in 1980, which made it far easier for private corporations to get patents on publicly funding research, just 0.4 percent of GDP was spent of prescription drugs. Furthermore, there was no upward trend in this spending, it had been roughly the same for the prior two decades. Spending on drugs rose rapidly in the next two decades. It is now more than 2.2 percent of GDP, a difference of $540 billion a year.
https://cepr.net/publications/patents-and-the-abundance-agenda/

Dean Baker, a smart honest guy:
**Regarding the housing bubble, Baker was critical of Federal Reserve chair Alan Greenspan.[22][23][24] He has also been critical of the regulatory framework of the real estate and financial industries, the use of financial instruments like collateralized debt obligation, and U.S. politicians and regulators' performance and conflicts of interest.**
https://en.wikipedia.org/wiki/Dean_Baker