Stephen Monrad

This post follows on my last two posts. You should start with my post on September 27th.

It seems clear that the best outcome is for everyone who needs it to get the cure. The remaining question is who should benefit. At one extreme, everyone who is cured could be forced to live at subsistence level handing any surplus income over to the inventor of the cure. The other extreme would be for patients to pay nothing.

I don’t think there is any clean answer for how to divide up the benefit. The inventor can claim that the invention is his and others have no right to it. He should be able to extract as much money as he can from selling it.

The patients could argue that it is just bad luck that they got sick. They could argue that it costs the inventor nothing to give them the cure. It is unjust to make them pay large sums unnecessarily.

The mainstream economics approach of letting the market set the price so markets clear doesn’t work in this situation. The inventor has a monopoly. Competition is not present.

There is no objective or rational answer.

The likely real-world outcome would be that the inventor would become very wealthy, but would not manage to extract the whole value of the cure. How much the inventor extracts will depend on the legal system in place and the tolerance of people to put up with a high price for the cure.

My feeling is that the price should be kept low and the inventor should only be modestly compensated. The inventor should have compassion for others and not take excessive advantage of his good luck.