That old free market magic

Social conservatives are encouraged — and fleeced — at every turn to support the magic of the free market. Let’s peek into the magicians’ black hat and see what’s really in there:

NYT — It would seem a business executive’s dream: legally pay a competitor to keep its product off the market for years. … In the case of Cipro, a powerful antibiotic with annual sales exceeding $1 billion, Bayer paid $400 million to a generic drug maker, Barr Laboratories, and other companies. In exchange, the generic makers said they would withhold their own lower-priced generic versions of the drug until 2003, when Bayer’s patent on the brand-name drug expired.

Hey, the efficient free market based on infinitely elastic supply and demand is ‘only a theory.’ But this is the antithesis of a free market, let alone an efficient one. This shit costs We the People money, individually and collectively:

Last year, the Congressional Budget Office estimated that a Senate bill to outlaw such payments would save the federal government $4.8 billion over 10 years and would lower drug costs in the United States by $11 billion. The legislation remains stalled in the Senate. The federal government is a major buyer of drugs through Medicare and the Department of Veterans Affairs.

Support the troops! Small business! And won’t someone please think of the children? Because they all deserve the very, very best most profitable products … that the wealthiest global corporations can bribe and price fix to the top of the consumer heap and lock into their grotesquely swollen bottom lines.

Remember this, because it’s not an abberation. Tilting the paying field in favor of the established rich at the expense of small businesses, tax payers, along with fair competition and brlliant innovation, is not a bug, this a feature of modern day conservative policy. The conservative CEO class has looted the nation for three decades under that policy. With President Mitt Romney they can dream of one more big score, but they can absolutely count on one of their own to help pull up the ladder and give them and their spoils safe passage to the gleaming offshore paradises that awai, when the jig is finally up.


  1. M Groesbeck says

    This shit costs We the People money, individually and collectively:

    That’s entirely separate from the Free Market. The FM requires unlimited expenses to be paid by capitalist-defined non-productive factors; if you’re not running a business, then you don’t count as a person under capitalist ideology, and your only conceivable role is as a non-sentient resource to be exploited. Sentience is, under capitalism, purely a matter of whether you’re a formal subject (taking profit from the work of others) or a formal object (the inanimate work from which value is extracted).

  2. blindrobin says

    “The Free Market” is not a “real thing” but a thought experiment that has become a sort of attractive hazard in it’s own right. It has become the magical invisible pink unicorn of socio-economic punditry. Every one seems to love it as a pure and simple ideal and worthy pursuit of right thinking persons. The reality is, that it cannot exist for the simple reason that the active entities (formal subjects)of which it is constituted by their very nature defy it’s existence.

  3. Blattafrax says

    …the generic makers said they would withhold their own lower-priced generic versions of the drug until 2003, when Bayer’s patent on the brand-name drug expired.

    If Bayer had a valid patent, then the generics companies would not be able to sell their copies. So as written, the post doesn’t make sense.

    What Bayer was actually doing was paying the generics companies not to challenge the patent. It was cheaper for them to do this than defend it. Just like it’s cheaper for generics companies to make a copy of a drug and threaten to challenge a established patent than it is for them to develop their own novel antibiotics.

    Yeah, the system’s broken, but not the way you think it is.

  4. Stefan says

    I don’t quite get why they need to pay the generic guys when their patent hasn’t expired. That’s what drug patents do, make it illegal for other companies to sell the same drug… What am I missing here? Was that a mistake in the article or is there a “loophole” I’m not aware of?

  5. d cwilson says

    The biggest myth of the “free market” is that laissez-faire government leads to competition, which then serves the consumer by giving them access to the best quality goods and services. In reality, laissez-faire inevitably leads to monopolies as one company comes to dominate the entire market, driving under or absorbing all of its competitors. Since monopolies are the antithesis of competition, the consumer then suffers with high prices and poor service, because where else are they going to grow.

    It’s ironic, but true, that without government regulation, the market can’t ever be “free”.

  6. says

    Monopoly is always the endgame in free markets; competition is a metastable equilibrium that only exists briefly along the route. Of course the fun part is that monopoly contains the seeds of its own demise since it becomes inflexible and stupid. Typically monopoly is never beaten on its own turf but merely side-stepped (most notably, IBM by Microsoft).

    The conservative CEO class has looted the nation for three decades under that policy. With President Mitt Romney they can dream of one more big score, but they can absolutely count on one of their own to help pull up the ladder and give them and their spoils safe passage to the gleaming offshore paradises that awai, when the jig is finally up.

    I’m a little confused by bits of this but I’ll interpret ‘awai’ -> ‘await’ and ‘the jig is finally up’ as the collapse of capitalism. I agree with the sentiment entirely.

    As 2008 proved when there is no negative feedback loop to regulate capitalism will always give in to its excesses. The banks knew they’d milked all the real money out of their mortgage scams but they couldn’t just take their winnings and run. They start drinking their own kool-aid. They deny there are limits to unsustainable growth but they find them the hard way. So there is only one way out, no soft landing, just hard crash.

    If he gets in mittens will probably be the last of the looters because there just isn’t enough left to loot without killing the body. Of course, scavengers never believe this and always expect there is more to go around but there is only some much they can steal before the whole jenga tower collapses.

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