According to my dictionary rentiers are defined as:
What's the relevance? It's this:
That came from the Guardian website a few minutes ago. It reminded me of something I read overnight, from US economist Dean Baker:
The pharmaceutical industry ... benefits from enormous rents through government granted patent monopolies. We spend more than $380 billion (2.2 percent of GDP) a year on drugs. We would spend 10 to 20 percent of this amount in a free market. We would not only have cheaper drugs, but likely better medicine if we funded research upfront instead of through patent monopolies since it would eliminate incentives to lie about research findings and conceal them from other researchers.
I have no idea if the ratios Baker (who I consider wholly reputable) are right, but I have a very strong suspicion that they are. His logic on this issue also sits comfortably, I think, with Mariana Mazzucato's 'Entrepreneurial State'.
The real plus for society regarding these companies would be that their hold on our well being be reduced. The reality is that we are letting them concentrate it, not least through their ability to extract excess profits long after they can be justified through the operation of state enforced patents.
That's where the rentier reference comes in. These mergers represent the continuing rise of rentier capitalism; the very sort that adds little value to society but ensures wealth flows to those who control it.
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And talking of forms of capitalism that add little value to society, Richard, I’ve just read George Monbiot’s latest insightful – but deeply depressing – piece on the impact of the government’s biodiversity offsetting policy http://www.theguardian.com/commentisfree/2014/apr/22/price-natural-world-agenda-ignores-destroys.
The story Monbiot tells illustrates once again how utterly false and fake any commitment from this government is to protecting anything from the corrupting and destructive tendencies of neoliberal capitalism. But then in the modern day Tory world everything, but everything, is inferior in form and function to anything that is or can masquerade as “business” and “commerce”.
But it also provides yet more evidence of the utter contempt this government has shown for maintaining the powers and independence of bodies that are supposed to regulate and protect features of the society in which we live that many of us deem valuable. In this specific case it’s Natural England: now with a Chairman and vice Chairman whose backgrounds and interests quite obviously run counter to the principles that once did – and clearly should – underpin the work of a body set up to protect the natural enviroment.
Of course, this should come as no surprise to any of us. It’s been evident since this government came to power that the Tory’s aim (ably supported by the Lib Dem wimps) was to abolish, undermine or take control of any agency or institution that it believed or perceived as standing in the way of capitalism “red in tooth and claw”, and those that benefit from it. But it’s also become increasingly obvious that Tories quite simply don’t “get” conflict of interest. How can they, when it’s clear that in their world view the end always justifies the means. And the end is a world/society that must be utterly and always dominated and debased by the gods of neoliberalism.
Agreed: very depressing
And I agree also re their (small) world view
Monbiot is quite amazing. Heard him on the radio a few days ago – they were talking environment matters, mostly about flood containment – his contribution stood out. He has written recently about TTIP, and although there’s been lots of stuff on the internet on this (and Linda Kaucher has being doing some heroic work) Monbiot has really brought it to the mainstream – at last. He also wrote a splendid article last year on LVT.
THe shame really is that these companies wont try to develop drugs or cures. Take Diabetes, no one cares. No one goes running for the illness, cancer yes, blind yes but not the big killer of the worlds people. Drug companies are making a fortune from it, selling the Worlds nations drugs to keep people alive.
The lack of developing new antibacterials is even more scary. The medics would want to hold back new treatments for only those situations where a patient has a drug-resistant strain of bacteria which inevitably means a limited market for a new product. This is not likely to provide a sufficiently lucrative return .. so Big Pharma is not investing.
We really need a nationalised or government funded group to develop products which are desperately needed but ‘unprofitable’. Apart from new antibiotics, there are many diseases of the developing world which require remedies.
Some years ago, there was a stunning collaboration between Imperial College and an Indian University to develop a new drug for (I think) diabetes. The whole process of R&D with testing was completed rapidly because of the co-operative open process which contrasted strongly with the commercial system.
I wonder whether we can refer to this as capitalism, when capital is deployed in a strategy of rent-seeking rather than investment in production. It llooks like a regression towards feudalism.
It’s always worth pointing out that markets are a construct, not a natural law, and that a marketplace protecting an investment in research with the award of temporary monopolies – the patents on inventions – is clearly artificial.
This system of incentives clearly isn’t working and it is time for the marketplace’s owners to adjust the rules.
I hate to yet again be banging on about the EU-US trade deal TTIP but the pharmaceutical lobby is one of the prime movers in the secret negotiations. They have an ambitious wish list:
‘Apart from the intention to expand periods of monopoly through patents and other intellectual property measures, there is a clear aspiration to undermine regulations established by democratically elected governments of European Member States to protect public health. Also, the European move towards transparency of clinical trial data is directly targeted by this agenda.’
https://www.dropbox.com/s/ek4jdehki9q9l75/24_03_2014_CivilSocietyResponse_BigPharma_WishList_final.pdf
This will allow Big Pharma to be an even bigger rentier than it is at present.
Agreed
The extra cost of patents is bad enough, but the greater harm is the distortion of priorities. Type 2 diabetes, Heart disease or Parkinson’s are wonderful diseases for drug research, because the patient will have to take the drugs for life. But there has been little advance on antibiotics, since you take them and get better. This despite the fact that a crisis of drug resistance is looming. Cancer does not do as well as you might think, because the improvement in quality life expectancy is often modest. But Richard will have better inside information.
You think drugs are bad?
Try foodstuffs:
http://www.testosteronepit.com/home/2014/4/19/seed-wars-latin-america-strikes-back-against-monsanto.html
Our ever-compliant (when it comes to lining their own pockets) EU legislators/dictators (with leaders recruited from Goldman, what could go wrong) are beating a path to the door of whoever it is that is handing out wads of cash…mainly BIG-pharma and BIG-agri and BIG-oil…
Meanwhile, back at the wages frontline…. :
http://www.testosteronepit.com/home/2014/4/20/draghis-bold-push-for-creeping-defaults-and-real-wage-cuts-i.html
And there is our own government:
http://evidenceuk.info/wordpress/additional-affordable-housing-supply-has-fallen-26-under-david-cameron/
Never mind, they are lending gov cash to developers to build more unaffordable housing, so there..
While, further down the webpage:
http://evidenceuk.info/wordpress/numbers-using-food-banks-soars-to-900000-reveals-trussell-trust/
Our other party leader, a certain Mr Miliband, normally so vocal on twitter, has disappeared under a barrage of complaints that maybe things like St Georges day are not really that important and he may like to think of the NHS…..which leaves Mr Denis Skinner to continue the fight that his leader has surrendered.
https://twitter.com/BolsoverBeast/status/458858922078916608/photo/1
https://twitter.com/marcuschown/status/458869089252155392/photo/1
And the rentiers reign because many of them can borrow at 0.5% interest. They can borrow cheaply and take big risks because that is where the big profit is. And when the bubble bursts, the mug taxpayer will clean up the mess yet again.