Comments Elsewhere

Me: Just out of curiosity, how did you calculate what the most efficient rate of long-term investment in drug research would be, absent a process of free market competition?

Steve: I did no such calculation. I trust that the efficient level of investment will be determined by estimates on the return on capital. Since that return will be lower in the face of lower profits … there will be an adjustment downward in the amount of R & D spending for the development of new drugs.

Ceteris paribus, sure. The question is why this is supposed to be worrisome, or even worthy of remark. If the U.S. government dropped agricultural price floors and subsidy programs tomorrow, that would probably reduce investment in domestic agribusiness, perhaps quite dramatically. If so, so what? Is that supposed to be “bad news” for people who plan to eat lunch in the more distant future?