Friday, November 27, 2015

Anarcho-Capitalism And Drug Advertising

The American Medical Association has asked Congress to ban direct to consumer drug ads.  The US along with New Zealand are the only nations that permit direct to consumer drug advertising.  It was banned in the US prior to 1962 for a good reason.  Consumers are not able to properly evaluate the effectiveness of newly released drugs for their specific medical needs.  Drug companies marketed prescription drugs by calling directly on doctors to inform them about newly released drugs.  Today the drug companies spend most of their marketing budgets on direct to consumer advertising.  The drug companies have decided that it is more effective to sell their products to poorly informed consumers than it is to trained physicians.  Anyone watching television in the US bears witness to this shift in the marketing of drugs.  They are inundated with drug ads which tell them how some new drug will alleviate one of their symptoms.  Following the good news they are quickly warned about possible side effects that often include death. The drug companies must have found that consumers are more interested in relieving their symptoms than they are in potential side effects.  Since they are primarily concerned with increasing their profits, they are less concerned with effectiveness of the drugs that they bring to the market. They are promoting consumer freedom and business freedom to increase their profits.

The Food and Drug Administration was created to protect consumers from products which may not be effective or harmful.  The FDA has decided that it lacks the power to limit direct to consumer marketing by the drug companies.  The US Supreme Court has ruled that corporations are individuals and that corporate advertising is a form of free speech which is protected by the US Constitution.  The powerlessness of the FDA is probably good news for so called libertarians who believe that governments should not interfere with the market.  They preach the virtues of consumer sovereignty.  Consumers are better judges of their needs than government agencies or medical professionals.

John Stuart Mill, who was an effective advocate for the expansion of human liberty, would turn over in his grave if he could witness the misuse of his concept of liberty by anarchists who call themselves libertarians.  Capitalism could not operate in absence of government rules, regulations and laws which have been designed to enable markets to serve the public interest.  Most business leaders understand this.  The so called libertarians abuse the concept of liberty an freedom when they are unable to capture government agencies to serve their purposes.  Unfortunately, they have been successful in the US.  The FDA feels powerless against drug company advertising and the US Treasury believes that it does not have the power to stop multinational corporations from using complex schemes like inversions to avoid paying US taxes.

The Koch brothers advocate a form of "Anarcho- Capitalism" as a form of libertarianism.  They oppose government subsidies, even though they benefit from some government subsidies.  They also object to the Federal Reserves bailout of the banking system.  Apparently, we should have let the banking system collapse along with the global economy.  A second Great Depression is simply the price we pay for freedom.  They probably forget that libertarian ideology led to the deregulation of banking industry which gave bankers the freedom produce toxic securities which they fraudulently sold to investors.  At a more practical level, the Koch brothers are more concerned about the potential for the Environmental Protection Agency to use the threat of global warming to limit the use of fossil fuels.  They are one on the largest coal producers in the US. 

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