A recent article by well known economist Joseph Stiglitz
Race for the Prize proposes an alternative to patents for funding pharmaceutical R&D.
The proposal is to provide prizes for development of useful pharmaceuticals:
A scientific panel could establish a set of priorities by assessing the
number of people affected and the impact on mortality, morbidity, and
productivity. Once the discovery is made, it would be licensed.
The sheer absurdity of the patent system, not only for medecine but also in other areas has been widely understood by economists for a very long time. Other forms of intellectual property such as copyright are also widely recognized as a fetter on the productive forces.
Although practically anything might be an improvement there are two fundamental problems with relying on prizes.
1) It simply waves away the actual problem of resource allocation by airily referring to magic from a "scientific panel".
2) It fails to unleash the creative energy of cooperation for the common good and reinforces even more sharply competitive secrecy in R&D. Patents were developed partly to overcome the old problem of "trade secrecy". Competing for prizes would intensify hostilities.
Development of the productive forces relies on R&D which is only hindered by private property.
We would be devoting dramatically more resources to R&D which reduces the resources wasted by obsolete ways of doing things if we were not constrained by the need to show a profit rather than a social benefit.
Efficient production of public goods like R&D requires a transformation of work relations in which people see themselves as working for the common good rather than for private property.
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