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Bill Gates Gives Loaves and Phishes

February 6, 2010

I’m a big supporter of Genetically Modified Organisms as a means to solve global crises such as droughts, poverty, malnutrition and disease since modification allows crops to grow virtually anywhere and anything, including RNA inhibitors which can kill diseases in their tracks.The fact that such technologies are placed inside food makes them “viral” and easily reproducible in long-term sustainable ways.  So, it’s unsurprising that Bill Gates also supports GMOs for their powerful ability to address problems plaguing impoverished countries and eventually allow them to sustainably pull themselves out of poverty.

In economic terms, these GMOs are technological monopolies in that the only substantial costs of production are the fixed costs (of research and development) and not the variable costs (of reproducing the crop).  As I’ve noted before, corporations can hold patents on mere facts and life itself.  Indeed, 20% of the human genome is currently patented.  E.g.,

Gene: HFE
Role: Mutation causes haemochromatosis, an overabsorption of iron.

Gene: ASPA
Role: Mutation causes Canavan disease through degeneration of nerve fiber insulation.

Gene: BMP7
Role: Creates bone

Gene: CDKN2A
Role: Mutation can increase risk of skin cancer

Gene: LEPR
Role: Variations may be associated with obesity

Source: USA TODAY research

Yes, I too was surprised to find that USA TODAY does research!  Thankfully, it does research and it reports on what might be the most important legal challenge in a decade: the ACLU’s court challenge to the U.S. Patent Office’s practice of granting patents on genetics once a gene has been isolated.  Needless to say, I hope they win.  The ACLU attorneys put their theory succinctly: “[I]solating [a gene] does not make it patentable. It’s a natural phenomenon, and the Supreme Court has always said natural phenomena are not patentable.”

Because agribusiness is able to hold patents on these crops and can extract licensing fees from impoverished countries trying to use those crops, the resulting strategy is to get the poor hooked and then collect royalties.  One would think that Bill Gates, whose foundation ostensibly aims at addressing root causes and not only keeping Africans addicted to unaffordable medicines, should realize that this “food DRM” would keep these countries impoverished once they start to get fed, since they’d just have to pay another bill collector with a different name.  Why doesn’t Bill Gates just buy the patents out from under agribusiness and make them free instead of getting the impoverished hooked on yet another drug they cannot afford at current market (read: monopolistic) prices?

The problem is that Bill fundamentally has to stand for the principle that intellectual property gives rise to legitimate monopolies in order to justify his own fortune.  Come on, Bill.  Teach a country to fish; don’t give them a few pieces of sushi and then send them the check once they order more.

4 Comments leave one →
  1. fish permalink
    February 6, 2010 8:32 pm

    doesn’t the sheer vastness of the pool of identifiable genes preclude even a titan like gates from carrying out this strategy in any sustainable way?

  2. slickricks permalink*
    February 7, 2010 9:33 am

    I didn’t mean to suggest that Gates should try to buy out all of the patented genes out there; rather, he could make a strategic purchase of the few that are incorporated into crops that could really make a difference. Golden Rice, for example, proved invaluable in solving beta-carotene deficiencies in Asia. Gates could free some analogous crop and give that as his gift to the world instead of giving them one round of crops engineered by Monsanto et al. that do not reproduce (they’re given what are called terminal seeds).

    Another slightly too on-the-nose phrase is applicable here: Gates should be “addressing root causes.”

    • fish permalink
      February 7, 2010 11:14 am

      hmmmm… doesn’t going for one crop encourage the owning agribusiness to engage in holdout pricing?

      • slickricks permalink*
        February 7, 2010 12:03 pm

        I’m not totally sure what you mean by that, but I don’t think it’s an argument against doing it. Maybe agribusiness would have to charge a significantly higher one-time price to recoup their investment up front, but they can still price the value of the patent by calculating its present value, discounting the future (possibly monopolistic) sales. The point is that with such a transaction, the Gates Foundation would bear the brunt of the monopolistic cost-extraction rather than the poor crop recipients who would then receive the equivalent of a capital transfusion rather than mere gap-filling aid that doesn’t solve their economic incapability.

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