Year 501 Copyright © 1993 by Noam Chomsky. Published by South End Press.
Chapter 4: Democracy and the Market Segment 7/7
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These developments give new urgency to the US demand for increased protection for "intellectual property" -- including patents -- at the ongoing GATT negotiations. "America's interest in intellectual property is by no means altruistic," the Economist observes. "From movies to microchips, America ran a healthy $12 billion surplus on its trade in ideas in 1990," while most other developed countries ran a loss, and the Third World is not even in the game. The new protectionist measures are intended to ensure that US corporations dominate the health and agricultural industries, thus controlling the essentials for human life; and to guarantee to US pharmaceutical corporations huge profits. Prices of the 20 most used prescription drugs rose at four times the inflation rate from 1984 to 1991, a 1992 study revealed, yielding skyrocketing profits for the drug companies; nearly half the 10 percent annual increase was devoted to marketing, profits, and administrative expenses.

"Basic biomedical research has long been heavily subsidized by United States taxpayers," the New York Times business pages observe, and "high-tech pharmaceuticals owe their origin largely to these investments and to Government scientists," funded by billions of taxpayer dollars. But drugs created with a public subsidy are priced beyond the reach of those who pay for their development, let alone the bulk of the world's population. Protection of "intellectual property" is designed to guarantee monopoly profits to the publicly-subsidized corporations, not to benefit those who pay; and the South must be denied the right to produce drugs, seeds, and other necessities at a fraction of the cost.

On similar grounds, the US refused to sign the a treaty on preserving the world's biological species. The Assistant Secretary of State for the Environment, Curtis Bohlen, said that the treaty "fails to give adequate patent protection to American companies that transfer biotechnology to developing companies," and "tries to regulate genetically engineered materials, a competitive area in which the United States leads," the Times reports.20

The US International Trade Commission estimates that US companies stand to gain $61 billion a year from the Third World if "intellectual property" rights are protected in accord with US demands, a cost to the South of somewhere between $100-300 billion when extrapolated to the other industrial countries, dwarfing the debt service flow of capital from South to North. The same US demands will require poor farmers to pay royalties to TNCs for seeds, denying them the traditional right to re-use seeds from their harvests. Cloned varieties of commercial crops exported by the South (palm oil, cotton, rubber, etc.) will also be commercial property, subject to increased royalties. "The main beneficiaries will be the core group of less than a dozen seeds and pharmaceuticals companies which control over 70 percent of world seeds trade," and agribusiness generally, Kevin Watkins observes.21

While the US seeks to ensure monopoly control for the future, the drug companies it protects are cheerfully exploiting the accumulated knowledge of indigenous cultures for products that bring in some $100 billion profits annually, offering virtually nothing in return to the native people who lead researchers to the medicines, seeds, and other products they have developed and refined over thousands of years. "The annual world market value for medicines derived from medicinal plants discovered from indigenous peoples is US $43 billion," ethnobotanist Darrell Posey estimates. "Less than 0.001 percent of the profits from drugs that originated from traditional medicine have ever gone to the indigenous people who led researchers to them." Profits of at least the same scale derive from natural insecticides, insect repellents, and plant genetic materials, he believes. The international seed industry alone accounts for some $15 billion a year, based in large measure on genetic materials from crop varieties "selected, nurtured, improved and developed by innovative Third World farmers for hundreds, even thousands of years," Maria Elena Hurtado adds.22

Only the knowledge of the rich and powerful merits protection.

The director of India's Working Group on Patent Laws comments that "the levels of contradiction and hypocrisy are breathtaking." The rich "call for competitiveness, but what they want is monopoly. It is blackmail. They are seeking to do through economic rules what formerly the powerful did through armies of invasion and occupation." The manager of a Bombay drug company adds that the West "protected their own infant industries, and they pirated the world to create wealth; and they now preach to other countries to practice what they never did themselves." The developed countries "only permitted product patents after their domestic industry and infrastructure were well established. Germany allowed product patents in pharmaceuticals only in 1966, Japan in 1976, Italy in 1982." The effect of the new economic rules will be to prevent such countries as India from manufacturing life-saving drugs at a fraction of the cost charged by the state-subsidized corporations of the rich countries.

Like other developed countries, the US did not abide by the rules it now seeks to impose. In the 19th century, the US rejected foreign claims to intellectual property rights on grounds that they would hamper its economic development. Japan followed the same course. And today, the concept of "intellectual property rights" is finely crafted to suit the needs of the powerful. Exactly as in the case of "free trade," Churchill's disruptive "hungry nations" with their indecent clamor are to be denied the methods that were used by the "rich men dwelling at peace within their habitations."23

The array of plans of the rulers is viewed from the South as "an act of unbridled piracy," Watkins observes, given that the genetic materials used by the Western corporations to create their patented and protected products are derived from Third World crops and wild plants, cultivated, refined, and identified over countless generations. The seed and pharmaceutical companies thus "reap monopoly profits, while the genius of the Third World farmers, past and present, in selecting and developing individual seed strains goes unrewarded." The New World Order as a whole is described by Egypt's leading newspaper, al-Ahram, as "codified international piracy," referring in this case to Bush Administration maneuvers to set up a confrontation with Qaddafi for domestic political purposes in the routine manner. The terminology is apt enough.24

The unbridled piracy takes on increased urgency as indigenous agriculture and knowledge are undermined by pressures on the South to abandon production for domestic needs in favor of ecologically unsustainable agroexport in the interests of the TNCs. One consequence is that the world's biological resources -- mostly in the South -- are in decline, raising the danger of disease and blight to potentially quite serious levels. To whatever extent biotechnology may provide a remedy, the effect again will be to transfer power and wealth to the world rulers, if the demands of the corporations for increased protection are implemented. That they will be is almost a foregone conclusion, given the distribution of power and the insulation of decision-making from public interference in the new imperial age of Year 501.


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20 Economist, Aug. 22, 1992. Richard Knox, BG, Sept. 11, 1992, study by Families USA Foundation; drug manufacturers conceded its accuracy. Fazlur Rahman, NYT, April 26; William Stevens, NYT, May 24, 1992.

21 Watkins, Fixing, 94-5.

22 "Intellectual Property Rights," Anthropology Today (UK), Aug. 1990.

23 Jeremy Seabrook, Race & Class, July 1992. Watkins, Fixing, 96.

24 David Hirst, Guardian (London), March 23, 1992.