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I'm a libertarian and completely in favor of private property and an open, informed marketplace. Having said that, this is out of control. If you know you're s

I'm a libertarian and completely in favor of private property and an open, informed marketplace. Having said that, this is out of control. If you know you're selling me a life-or-death product which has no peer, and the government protects your property such that others can't make it cheaper? It's not a market. It's rent-seeking, highway robbery. Bad actors are going to cause an overreaction that is going to seriously disrupt new product research. The thing for these companies to do is back down while saving face. There are real medicines that might cost this much to develop, and we need to develop them. Polluting the pharma market with even more price-gouging will not end well for anybody concerned.

jerf 11y ago
"I'm a libertarian and completely in favor of private property and an open, informed marketplace." Price shenanigans like this is prima facie evidence that the marketplace has become closed or uninformed. I still say the best solution is to correct that, not to try to make this illegal, especially when it probably already is.
andybak 11y ago
> I'm a libertarian and completely in favor of private property and an open, informed marketplace. > Having said that, this is out of control. It sounds like you're well on your way to realising the flaw in straight-ahead libertarianism and joining those in the mainstream who want just enough market regulation to allow free markets without a huge social cost. I get the feel that most reasonable souls are in agreement on this. We merely differ in how much we think is 'just enough' and the point at which social benefits should trigger an intervention. Both the right and left are also probably in agreement that historically speaking - intervention has been problematic and flawed.
- athenot 11y ago
  This is highly despicable as it's pretty much guaranteed that some people will die from not being able to afford the med. The market is not as efficient as we'd like to think. In a perfect libertarian world, another company pops up and competes to drive the prices down. However, even if the IP of the drug itself is public domain, there's a cost to ramp up a new production line, all for a product which has low intrinsic value commercially. Shkreli purposely selected a drug that's needed enough (so guaranteed demand) but whose market is not too large, preventing bigger companies from jumping in. (And I'm ignoring for the moment his tactic to tightly secure the supply chain, essentially trying to build a little moat around this product.) This puts would-be competitors in a tough spot, where the risk is to invest in setting up the manufacturing line, only to have the original company drop the price again and ensure they won't be able to recover their cost. For the sake of the patients, I can only hope there are generic makers who go for it anyway.
- logfromblammo 11y ago
  You should be careful about suggesting that vanilla libertarians should abandon it. I'll explain why. The problem with non-aggression principle libertarianism is sociopaths like Martin Shkreli. On one side of it, those guys are regulated to do less harm, and on the other, they get murdered for a bounty. But right there in the middle of NAP-libertarianism, a sociopathic rent-seeker can be as much of a selfish asshole as he wants, because one man's asshole is another's visionary leader, and NAP-libertarians judge all deviant behaviors by identifiable and measurable harm to victims. Shkreli is not actually causing harm here, so he's A-OK by NAP standards. In this case, sick people are not able to compel the involuntary services of physicians and chemists, so they do not have the right to be provided with life-saving drugs. But nor does any other party have the right to prevent those people from acquiring them. So it would be inevitable for economic conditions to align on one drug or another such that the pricing rubs the median person's sense of justice the wrong way. The startup costs are just too high to be recovered, considering the marginal cost of production and the existing demand, so a natural monopoly forms. And there's the asshole in the middle of it, charging other people rent on their own health. From one point of view, he is charging them less than what it would cost them to treat themselves. But from another, he is profiting from human misery. Hard-core NAP-libertarians would probably suggest that other people should charge Shkreli $10000/night for hotel rooms, $100/gallon for gasoline, and $500/slice for pie, a solution that requires extensive reputation tracking systems and broad community support. After all, he has no more right to cheap food than others have a right to cheap drugs. For a preview of how this would work, look at any social justice warriors' controversy of the last decade. Both actual assholes and those merely accused would be tried in the court of public opinion, then sentenced to a lifetime of petty reprisals from every angle. People get fired and blackballed for one ill-considered phrase or act that follows them for a long, long time. In this, jacking up pill prices by 1000% would be very much like refusing to marry homosexuals, or carelessly saying forbidden words. You may not be aware of this, but NAP-libertarians are actually very reasonable moderates in the realm of libertarianism. Those who think it unworkable in practice have other options beyond a return to mainstream politics. They could sidestep into other moderate forms that better handle any one specific issue, or they could move on into the various forms of structured anarchism. Every political philosophy has its weaknesses, but I'm not certain that this case is enough for a NAP-libertarian to justify altering any core values. Price gouging in very small niche markets just does not seem all that bad of a problem, in comparison to the related problems that could stem from the solutions that similar political philosophies would provide. I have to say that NAP-libertarianism produces better outcomes in this specific case than even my own politics. (That's not an endorsement.)
aaron695 11y ago
> and the government protects your property such that others can't make it cheaper? How is this libertarian? This is the exact opposite. Without the FDA other companies could easily produce this product, it's out of patient but the claim is they are using government regulation to slow competition down. The exact opposite to libertarian.
- vlunkr 11y ago
  My thoughts exactly. It seems to me that many of the problems in the health care system stem from the fact that there are soo many convoluted regulations that it's impossible to enter and compete in that market. And in many cases, people get in there and completely take advantage of the situation.
clavalle 11y ago
I used to be Libertarian, too, until I realized one very important thing: a pure market approach does not take into account exploitation. It assumes that exploitation can be handled within the same system that spawned it -- the market -- and it simply can't. Much of the underlying mathematics of modern market theory assume that expectations on transactions are positive. Markets only move toward efficiency under that assumption. That is why things like muggings, an exploitative transaction, can never lead to market efficiency. Exploitation is where this assumption, and therefore the free market, breaks down. If a person might die if they don't make a deal that is clearly exploitation. In this case the guy is taking advantage of government constructed barriers to entry but, at its heart, that plan can only be successful because there is an exploitative element to the original transaction. If this guy was selling interesting pencils, for example, such a plan would never pan out. We need some sort of extra-market intervention in the case of potentially exploitative transactions. That is the litmus test and just the fumes from this company set it off.
mindcrime 11y ago
and the government protects your property such that others can't make it cheaper? The problem here isn't the market, corporations, or libertarianism. The problem is the government and its treatment of "imaginary property".

jerf 11y ago

"I'm a libertarian and completely in favor of private property and an open, informed marketplace." Price shenanigans like this is prima facie evidence that the marketplace has become closed or uninformed. I still say the best solution is to correct that, not to try to make this illegal, especially when it probably already is.

andybak 11y ago

> I'm a libertarian and completely in favor of private property and an open, informed marketplace. > Having said that, this is out of control. It sounds like you're well on your way to realising the flaw in straight-ahead libertarianism and joining those in the mainstream who want just enough market regulation to allow free markets without a huge social cost. I get the feel that most reasonable souls are in agreement on this. We merely differ in how much we think is 'just enough' and the point at which social benefits should trigger an intervention. Both the right and left are also probably in agreement that historically speaking - intervention has been problematic and flawed.

athenot 11y ago
This is highly despicable as it's pretty much guaranteed that some people will die from not being able to afford the med. The market is not as efficient as we'd like to think. In a perfect libertarian world, another company pops up and competes to drive the prices down. However, even if the IP of the drug itself is public domain, there's a cost to ramp up a new production line, all for a product which has low intrinsic value commercially. Shkreli purposely selected a drug that's needed enough (so guaranteed demand) but whose market is not too large, preventing bigger companies from jumping in. (And I'm ignoring for the moment his tactic to tightly secure the supply chain, essentially trying to build a little moat around this product.) This puts would-be competitors in a tough spot, where the risk is to invest in setting up the manufacturing line, only to have the original company drop the price again and ensure they won't be able to recover their cost. For the sake of the patients, I can only hope there are generic makers who go for it anyway.
logfromblammo 11y ago
You should be careful about suggesting that vanilla libertarians should abandon it. I'll explain why. The problem with non-aggression principle libertarianism is sociopaths like Martin Shkreli. On one side of it, those guys are regulated to do less harm, and on the other, they get murdered for a bounty. But right there in the middle of NAP-libertarianism, a sociopathic rent-seeker can be as much of a selfish asshole as he wants, because one man's asshole is another's visionary leader, and NAP-libertarians judge all deviant behaviors by identifiable and measurable harm to victims. Shkreli is not actually causing harm here, so he's A-OK by NAP standards. In this case, sick people are not able to compel the involuntary services of physicians and chemists, so they do not have the right to be provided with life-saving drugs. But nor does any other party have the right to prevent those people from acquiring them. So it would be inevitable for economic conditions to align on one drug or another such that the pricing rubs the median person's sense of justice the wrong way. The startup costs are just too high to be recovered, considering the marginal cost of production and the existing demand, so a natural monopoly forms. And there's the asshole in the middle of it, charging other people rent on their own health. From one point of view, he is charging them less than what it would cost them to treat themselves. But from another, he is profiting from human misery. Hard-core NAP-libertarians would probably suggest that other people should charge Shkreli $10000/night for hotel rooms, $100/gallon for gasoline, and $500/slice for pie, a solution that requires extensive reputation tracking systems and broad community support. After all, he has no more right to cheap food than others have a right to cheap drugs. For a preview of how this would work, look at any social justice warriors' controversy of the last decade. Both actual assholes and those merely accused would be tried in the court of public opinion, then sentenced to a lifetime of petty reprisals from every angle. People get fired and blackballed for one ill-considered phrase or act that follows them for a long, long time. In this, jacking up pill prices by 1000% would be very much like refusing to marry homosexuals, or carelessly saying forbidden words. You may not be aware of this, but NAP-libertarians are actually very reasonable moderates in the realm of libertarianism. Those who think it unworkable in practice have other options beyond a return to mainstream politics. They could sidestep into other moderate forms that better handle any one specific issue, or they could move on into the various forms of structured anarchism. Every political philosophy has its weaknesses, but I'm not certain that this case is enough for a NAP-libertarian to justify altering any core values. Price gouging in very small niche markets just does not seem all that bad of a problem, in comparison to the related problems that could stem from the solutions that similar political philosophies would provide. I have to say that NAP-libertarianism produces better outcomes in this specific case than even my own politics. (That's not an endorsement.)

aaron695 11y ago

> and the government protects your property such that others can't make it cheaper? How is this libertarian? This is the exact opposite. Without the FDA other companies could easily produce this product, it's out of patient but the claim is they are using government regulation to slow competition down. The exact opposite to libertarian.

vlunkr 11y ago
My thoughts exactly. It seems to me that many of the problems in the health care system stem from the fact that there are soo many convoluted regulations that it's impossible to enter and compete in that market. And in many cases, people get in there and completely take advantage of the situation.

clavalle 11y ago

I used to be Libertarian, too, until I realized one very important thing: a pure market approach does not take into account exploitation. It assumes that exploitation can be handled within the same system that spawned it -- the market -- and it simply can't. Much of the underlying mathematics of modern market theory assume that expectations on transactions are positive. Markets only move toward efficiency under that assumption. That is why things like muggings, an exploitative transaction, can never lead to market efficiency. Exploitation is where this assumption, and therefore the free market, breaks down. If a person might die if they don't make a deal that is clearly exploitation. In this case the guy is taking advantage of government constructed barriers to entry but, at its heart, that plan can only be successful because there is an exploitative element to the original transaction. If this guy was selling interesting pencils, for example, such a plan would never pan out. We need some sort of extra-market intervention in the case of potentially exploitative transactions. That is the litmus test and just the fumes from this company set it off.

mindcrime 11y ago

and the government protects your property such that others can't make it cheaper? The problem here isn't the market, corporations, or libertarianism. The problem is the government and its treatment of "imaginary property".