Nearly two years ago, developing countries led by India and South Africa proposed that intellectual-property rights should be waived indefinitely for Covid-19 related products (including vaccines). They argued that patents and copyrights might restrict the global supply of needed medical goods, and it would be best to give them up entirely as long as Covid-19 was spreading. Up to now, that effort has not succeeded.
Instead, the opposite has played out. Aided by intact property rights that allow firms to safely share their vaccine recipes, data, and other know-how, manufacturers all over the world have been able to take part in increasing the supply of crucial medical goods. In fact, as a direct result of intellectual-property protections, India and South Africa have not only increased their capacity to produce vaccines on their own, but they are sitting on stockpiles they can’t get rid of.
This idea is not at odds with the acknowledgment that clear, well-designed, and sensible regulations are essential to protect the environment, working conditions, and consumers. Nor should it be controversial to acknowledge that regulations may be costly to comply with and give rise to a host of unintended consequences. Unnecessary red tape exacerbates these costs — whether it’s policies designed by large and established businesses that discourage startups and other competition, occupational licensure or other labor laws that reduce employment, nanny-state rules that increase the cost of consumer goods and services, or a host of other regulations that appeal to politicians but don’t hold up to scrutiny.
These policies are like a vise that squeezes economically vulnerable populations. It is, therefore, not surprising that peer-reviewed research has found that higher levels of federal regulations are associated with both higher levels of income inequality and poverty in the United States.