January 24, 2018
That seems like a reasonable question to ask. After all, we spend far more on prescription drugs, probably more than $470 billion or 2.4 percent of GDP this year, than we do on washing machines. And the protectionist barriers are far larger with drugs than with washing machines. Rather than adding 20 percent or 50 percent to the price of a washing machine, government-granted patent monopolies typically raise the price by around 1000 percent and sometimes more than 10,000 percent. And people don’t die due to lack of access to washing machines. And just as tariffs lead to economic waste and corruption, so do patent monopolies, except on a hugely greater scale.
It is probably worth noting that the people who benefit from protectionist measures on prescription drugs are overwhelmingly higher income and well-educated. The people who are ostensibly supposed to benefit from Trump’s tariffs are manufacturing workers, most of whom do not have college degrees.
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