Think tanks wrap-up

WASHINGTON, Nov. 9 (UPI) -- The UPI Think Tank Wrap-Up is a daily digest covering brief opinion pieces, reactions to recent news events, and position statements released by various think tanks.

Institute for Public Accuracy

(The IPA is a nationwide consortium of policy researchers that seeks to broaden public discourse by gaining media access for experts whose perspectives are often overshadowed by major think tanks and other influential institutions.)

WTO and War: Invisible Hand and Invisible Fist?

-- Martin Khor, director of the Third World Network, is now in Doha, Qatar, for the WTO summit.

"An unbalanced draft declaration has been transmitted by the WTO General Council chair to the Doha meeting. This is another example of the untransparent, discriminatory, biased and manipulative process of decision-making at the WTO that favors a few developed countries at the expense of the many developing countries."

-- Robert McChesney, co-author of "The Global Media: The New Missionaries of Corporate Capitalism" and research professor in the Institute of Communications Research at the University of Illinois at Urbana-Champaign.

"The U.S. government has talked about the 'propaganda war' abroad, the need to counter the words and images of the Taliban. But citizens at home should realize that we are a target for propaganda as well, as U.S. officials do their best to spin the news in the United States."

-- Kevin Danaher, co-founder of Global Exchange and author of "Globalize This."

"It's been said that the invisible hand of the market can't operate without the invisible fist that is U.S. military power. The problem is that the market's hand isn't invisible for the millions of parents whose children are going hungry because of the inequality built into the global economy. And the fist isn't invisible for the victims of the so-called 'collateral damage.' The millions of people around the world struggling to change inhumane economic and military policies realize that these hands and fists will not bring global justice. Only a new ethic that values life over profit can do that."

-- Gerd Leipold, Greenpeace international executive director, is aboard the ship Rainbow Warrior, which sailed into Doha on Thursday in an effort to get the United States to commit to the Kyoto Protocol.

"The WTO's own charter claims it promotes the use of the world's resources for sustainable development. That claim is nonsense if they do not actively promote efforts to combat climate change through the Kyoto Protocol."

-- Mark Weisbrot, co-director of the Center for Economic and Policy Research.

Weisbrot criticizes the Trade Related Aspects of Intellectual Property Rights agreement at the WTO as "inconsistent with 'free trade' principles and -- in the case of patents on essential medicines -- a deadly form of protectionism."

Competitive Enterprise Institute

(CEI is a free-market think tank that supports principles of free enterprise and limited government, and actively engages in public policy debate.)

CEI C:\SPIN--Prescription For Stagnation

-- James V. DeLong

A search of a news-story database for "Cipro & patent" over the past 60 days produces 281 hits. Several are from this very morning, as the WTO starts its meeting in Qatar. The issue of drug patents "could well be the deal breaker," according to the WTO's director general.

The problem is simple to state and it affects not only pharmaceuticals but also software, books, entertainment, and other products for which the value comes from intellectual property. It is vital to all tech industries.

In the old nursery story, a goose lays golden eggs, but not fast enough for the impatient citizenry. They cut the goose open to get all the eggs hiding therein, with predictable results. Then they whine about the unfairness of a world in which no golden eggs are laid.

Pharmaceuticals are produced through a complicated system in which it costs centi- millions to raise a goose to maturity -- to develop, test and shepherd a useful drug through the FDA. After this initial work, it costs little to produce the golden eggs of the pills themselves.

If the pills were sold for the short-term cost of production, then we would get no new drugs. So drug companies get time-limited monopolies enabling them to recoup up-front investments. On the whole, this beneficent cycle creates a cornucopia of life-saving pharmaceuticals.

However, the system is not perfect. Drugs for uncommon diseases get short shrift. Convoluted FDA approval processes sometimes cause death and often suppress competition. The third-party payments that permeate the health care industry destroy market forces. Drug prices reasonable in the United States are beyond reach in the underdeveloped world. Every nation wants to free ride on research paid for by the citizens of other nations.

Many serious people are working on these issues. At CEI, we favor market solutions. Scholars with more faith in governments than one finds around here seek improved regulatory-dependent answers. Pharmaceutical companies are responding by establishing systems of variable prices or selectively waiving patent protection. A lot of ideas are floating around.

Unfortunately, the term "serious people" does not apply to many politicians, "public interest" representatives and journalists. These people focus on the low costs of manufacturing, ignore R&D investment and the long-term dynamics of the industry, and talk of "price gouging," "greed," and "valuing profits over lives." They would happily gut the goose, then blame others, of course. As Canadian writer Eric Reguly put it after the health minister summarily ignored Cipro's patent: "It's Halloween again ... and if you really want to scare your neighbors, why not dress up as a federal cabinet minister?"

In the Cipro instance, the crisis evaporated. The company quickly cut the price, albeit under the threat of having its patent ignored. The supposed monopoly disappeared because several drugs treat anthrax; Cipro's apparent uniqueness was a product of initial fear that the strain of anthrax might be resistant to other drugs, and of incentives created by FDA's rules.

Further, in any real crisis the government could use its powers of eminent domain to take over a patent, leaving it to the courts to sort out the issue of just compensation at leisure, so there is no reason at all to sabotage the system.

But the brouhaha over the drug patent issue is a notice to all industries that are characterized by this phenomenon of big up-front costs coupled with low variable costs. There is a lot of economic ignorance out there, and much of it is deliberate, generated by people who are no friends to either business or the free market.

(James V. DeLong is the senior fellow at the Project on Technology and Innovation at the Competitive Enterprise Institute.)

The Cato Institute

Council Right To Find Amtrak Insolvent, Scholar Says

A federal oversight panel declared today that Amtrak will not meet a congressional deadline for achieving financial self-sufficiency. This means that in 90 days the government-owned and operated passenger railroad will need to submit to Congress a plan for its own liquidation and the Amtrak Reform Council will submit a plan for reorganizing the rail monopoly.

In the recent Cato Institute study "Help Passenger Rail by Privatizing Amtrak," director of regulatory studies Edward L. Hudgins and Joseph Vranich, a former member of the council, urged the council to reach this decision. Today, Hudgins had the following comments.

"Amtrak has not been able to break even in the three decades since its creation, and has drained over $25 billion in taxpayer subsidies. It runs trains on many routes that lose money while neglecting more profitable opportunities. It has a poor on-time record and it obscures its poor performance by measuring on-time arrivals only at selected 'checkpoints.' Worse, Amtrak management has shown little interest in radically revamping the railroad. No wonder last year Amtrak carried only 22.5 million passengers, only three-tenths of 1 percent of intercity trips, compared to 660 million trips that Americans made by air.

"Incredibly, Amtrak officials argued that because of a surge in ridership after the Sept. 11 terrorist attacks, it needed even bigger handouts. (The airlines, by contrast, sought handouts because they were losing passengers.) Some members of Congress were inclined to back this request. But the Council vote makes clear that throwing good money after bad is no longer an option. Policy makers have an opportunity to sell Amtrak to private owners and to place its operations in private hands. This approach offers the best chance to preserve and improve passenger rail service in the United States."

The study is available at on the Cato Institute web site at cato.org/pubs/pas/pa-419es.html

Center for Strategic and International Studies

CSIS Analysts Comment on Upcoming Bush-Putin Summit

-- Celeste Wallander, director, CSIS Russia and Eurasia Program.

"The September attacks have crystallized opportunity in U.S. relations with Russia, but the issues that pre-dated them -- missile defense, NATO, and Russian economic integration -- have to be solved if the opportunity is to be realized. In addition to a likely agreement on missile defense and nuclear weapons, the United States should focus on NATO as a forum for intelligence cooperation with Russia and as a way for the Russian military to enter the 21st century as a partner against terrorism instead of continuing to prepare for the Cold War with the West."

-- Sarah Mendelson, senior fellow, CSIS Russia and Eurasia Program.

"The promotion of democracy and the strengthening of human rights norms will in the medium and long term prove to be the most effective and long lasting guarantees against terrorism. The Bush administration in its meetings with the Putin team should make clear that if Russia wants to help fight terrorism, then it should take seriously the need to strengthen its own fledgling democratic institutions, and protect the rights of its citizens. At the moment, the opposite is happening: The state has helped weaken democratic institutions and has committed grave human rights abuses all in the name of fighting terrorism. The strategies and tactics, particularly those used in Chechnya by Russian federal forces, have the unintended consequence of pushing people towards extremism. If Russia wants to help fight terrorism, then it must focus on making Russia a more open and stable society."

-- Antony Blinken, senior fellow, CSIS International Security Program.

"Talk of Russia joining NATO is, at best, many years premature. But enhancing cooperation between Russia and NATO is overdue. Counterterrorism, maritime security, theater missile defense, securing and destroying stockpiles of chemical and biological weapons, and the Balkans are all areas that would benefit from Russia and NATO working more closely together."

CSIS notes that these are the views of the individuals cited, not of CSIS, which does not take policy positions.