Take the pharmaceutical industry. Companies like GlaxoSmithKline and Pfizer regularly unveil new drugs, yet most real medical breakthroughs are made quietly at government-subsidised labs. Private companies mostly manufacture medications that resemble what we’ve already got. They get it patented and, with a hefty dose of marketing, a legion of lawyers, and a strong lobby, can live off the profits for years. In other words, the vast revenues of the pharmaceutical industry are the result of a tiny pinch of innovation and fistfuls of rent.
And we deliberately engineer it this way too you idiot.
Depending upon who you believe it costs $800 million to $2 billion to get a new drug approved by the FDA. If there were no method of extracting a rent from having done so no one would do so. Thus we create patents in order to produce that rent.
There are other solutions of course – blowing up the FDA is one of them. But to complain about the rent when it’s deliberately engineered into the system because of the public goods problem is, well, it’s stupid, isn’t it?