Having said that, the bits I found juicy - i.e on the various shock analyses coming from patent introductions or increasing of scope, the studies on how effective first mover advantages was etc. all seemed pretty solid when I checked the sources - admittedly they were deeper into the book, so you may have already abandoned it by then.

> There are many other economists who have shown significant beneficial aspects of patents with empirical data but they conveniently don’t get mentioned at all.

Any chance you have some to share? When I LLM’d the topic a while ago the best I got was some weak investment effect in Singapore (unaccompanied by TFP/etc).

You’ll have to forgive me if my answer isn’t super satisfying - it’s possible, but I’d want to see patents under these conditions empirically validated.

Some things you might find interesting - the author(s) make various arguments such as:

1) Ranking (by various metrics/criteria) the most impactful medicines and making the case that the ones developed independently from patents are both over represented and more impactful. (There was some stuff around what kind of medicines are incentivised with each regime)

2) I don’t exactly remember what they say about R&D costs increasing with time (aside from (1)-style skepticism), but they did talk how as time went on, logistics/distribution/marketing technology has grown immeasurably, so the window one has before the copycats come in can be exploited with a lot more gusto.

3) Reverse engineering of medicines + especially their industrialisation takes longer (and requires more capital) than people think, and there’s a bit of a conundrum where, because you don’t know which medicines will be commercially successful, you have to wait to see how they perform on the market… but the longer you wait, the more (2) happens (and the more you have to fight first mover advantage, established marketing etc)

The points are more rigorously covered in the book - (2)+(3) had papers that quantified the stated effects in question.

I will stress again though that while the “counter-narratives” are interesting and may help build some intuition, I would set the gold standard to some econometric/shock-analysis of patents in action.

I would flag that we’re getting into “prove a negative” territory here: the goalpost is that we need to prove empirically that patents achieve the desired outcome. If the scenario you describe accounts for all game-theory/incentive/complex-adaptive-system universes, we should see this reflected in the data.

When it comes to pharmaceuticals, they looked into Italy and Switzerland who switched to a patent system in 1978 (and I believe Portugal in the 1990s). They looked at the growth curves of things like # of inventions, total factor productivity, percentage R&D spending, and the conclusion was that there was no statistically significant change in trajectory that would suggest the introduction of the patents had any positive effects. (Edit: they accounted for domestic/international + US filings before/after as well).

1) [the stronger one] while the scenario/narrative is a compelling one (or maybe it just feels compelling as I’ve heard it so many times), if it doesn’t have experimental/data backing I have to abandon it.

2) [the weaker one, as it replaces a narrative with another narrative within a complex system] I’ll only give the highlights as the arguments are a lot more eloquently laid out in the book; part of it is comparing the force of “many inventor nodes building on top of many invention nodes” vs “inventor nodes (with more investment individually?) building on top of fewer invention nodes”, part of it is the game theory effect of companies collectively investing less (proportionally) in R&D as the ROI from lawyers under this regime has more power, part of it was that actually, the reverse-engineering-simplicity story was too overblown and that actually the friction + domain knowledge has a stronger effect than people think (they published a paper on this). There were others, but it’s been a while now!

With that lens, I welcome gradually phasing this stuff out, especially as we navigate into the unknown game-theory landscape AI-as-inventors brings.

I agree with you in principle though - if all that were stopping us from achieving a cure were a 40 year patent, I would support your 1-day monarchy in a heartbeat.

Chapters 9 and 10 of the book cover this in more detail if you're interested (very self-contained).

Another interesting one is [1] where they asked readers of the BMJ to vote on the top 15 most important medical milestones. Of the 15, only the contraceptive pill and Chlorpromazine had anything to do with patents.

In [2] the "Chemical and Engineering News magazine" collected a list of top pharmaceuticals (46 total). To quote the book I linked:

> Patents had pretty much nothing to do with the development of 20 among the 46 top selling drugs [..] . For the remaining 26 products patents did play an important role [..]. Notice though that of these 26, 4 were discovered completely by chance and then patented (cisplatin, librium, taxol, thorazin), 2 were discovered in university labs before the Bayh-Dole Act was even conceived (cisplatin and taxol). Further, a few were simultaneously discovered by more than one company leading to long and expensive legal battles, however, the details are not relevant to our argument.

Regarding the cost of drug trials, they cover this well in Chapters 9 and 10, I found it quite interesting.

Regarding how else companies make money without being granted temporary govt-backed monopolies, Chapter 6 covers both the theoretical and real-life examples.

[1] https://www.bmj.com/content/medical-milestones [2] https://pubsapp.acs.org/cen/coverstory/83/8325/8325list.html

Having said that, I think you're right that under this system, research/capital definitely gets directed in a different way.

I see the endgame as one in which services just expose documentation to their APIs and the AI figures out, based on your request, what to call and how to present the results to you based on pre-set preferences.

The responsibility of discoverability also would shift from the UI/UX person to the AI.

The potential obstacle here is that a lot of companies make their money from the UI/UX used to deliver their service on top of the service itself e.g by adding dark patterns, visual cues, collecting usage pattern data and showing you ads.

It does everything I need to function in 2024 (messaging people, navigating cities, managing tickets, NFC payments etc), while not tempting me into the dark/addictive side of smartphones.

Only problem is mine seems to be defective. After some time of usage everything hangs and I need to restart it, sometimes 4-5 times a day. Other people I know don’t have the issue. Luckily they’re cheap!

This may be tangential - but I’d like to point out, that while the Luddite movement may be painted as espousing the former, my readings have actually suggested the latter. In “Writings of the Luddites” they very much state that they have no problems with the machines, just that they wanted them not to be used in “dishonest” ways. Of course, movements of moderate sizes will include a spectrum of ideas so I wouldn’t be surprised if some of the first camp were in the mix, but it’s worth noting!

Lots of illuminating examples of how technological progress immediately made life worse for many people, until a revolt/change came about to prevent exploitation/share the newfound efficiency gains etc.

A few memorable anecdotes off the top of my head:

- In one instance, during the Industrial Revolution, they quoted a letter from a lord (owner of a coal mine) who said mines would stop being profitable if children were banned/restricted from working in them. Some new parts of mines accessible thanks to advances in dredging technology were narrow, very suited to children’s small bodies, and digging the tunnels to the size of an adult cost too much. There was a complaint that some children were suffering brain damage due to chronic sleep deprivation and being forced to push mine carts in tunnels with their heads.

- In the period leading up to the Industrial Revolution, there were proven advances in milling and agricultural technology in England, making grain production cheaper and more efficient. However, analysis of peasant skeletons showed signs of more and more malnutrition, as well as signs of damage from work. The author says the prevalent theory is that because the margin-per-hour-worked of a peasant increased, local lords had more incentive to work them harder (not an economist/historian, so can only take this at face value). Not having anywhere else to go (indeed, in multiple instances even during the industrial revolutions, it was either illegal or difficult to change jobs), they just got worse living conditions. Additionally, peasant access to the ever-more-efficient mills was tightly controlled and expensive, to the point where peasants found it better to just mill grain by hand at home. The lords/priests promptly made this illegal and would perform periodic raids to confiscate their equipment.

- Both during the construction of the Panama Canal and in the major industrial cities of England, dense worker concentrations and poor sanitation caused workers to die in droves and decrease the efficiency of the construction/factories. In the England case, diseases that hadn’t been seen in years had resurfaced. It took a long time for workers to finally convince management/government to invest in sanitation/health/sewage, which not only kept people alive and healthy, but increased productivity and completed the canal.

Of course, a lot of this is mixed with differing hierarchies or political scenarios, and isn’t a comprehensive before->after of every advancement etc. However, it certainly put a heavy dose of nuance on the optimism behind technological advancement, and made me wonder if we could have pre-emptively enacted the necessary social/political changes which allowed for the wide-spread benefitting of technology without first going through the preceding periods of intensified suffering.

In one case one person, as you say, did everything on their own and pays a couple thousand every year to keep the entity in the favourable jurisdiction. When asked if it was all above-board, they said it was one of those grey areas where they hoped the govt didn’t look too deeply into it, but so long as they weren’t making millions they weren’t worried about an audit.

The other cases asked various accounting companies to set this scenario up for them (one to establish a software engineering consulting company, others to set up other companies). The responses ranged from “yes we can do this, it’ll cost you 15-20k upfront, then 5k in annual upkeep” to “no this isn’t looked upon too well by the Portuguese govt”.

I know a few non-crypto entrepreneurs who came here for the NHR (non habitual resident scheme - the scheme mentioned in the article which allowed for the 20% tax cap on foreign income).

I can confirm that a lot of them were incredibly frustrated with the bureaucracy they encountered, not just when dealing with the government, but generally in everyday life. Most people have war stories related to accountants, lawyers, banks, telecom companies or landlords. The real kicker was when they realised that the 20% didn’t include social security payments, bringing most of them (those that didn’t pay hefty fees to set up companies in tax havens, and pay themselves exclusively in dividends) to an effective rate that wasn’t that far off what they’d be paying elsewhere. Needless to say the expat churn has been quite high.

Regarding Airbnbs and rising housing prices - I’m no economist but intuitively, I’ve always thought it made more sense to blame the explosive growth in tourism Portugal has had in the last decade or so (6M tourists visiting Lisbon, a city of 500k people) rather than the 10-20k digital nomads. Would be curious to know if anyone has better numbers or studies.

It seems that with rent control, you’d have higher demand and lower supply resulting in excess demand (both theoretically and it seems in practice). Does anyone know of any studies that:

- Analyse the effects of rent control in the presence of “vacancy-busting” measures like heavy vacancy tax/fines? (i.e forcing supply to stay high?)

- Analyse the price elasticity of the demand and supply respectively? (i.e is the excess demand mostly demand driven or supply driven?)