Collapsing Goods and the Milieu of Innovation

Abstract

In his article ‘‘Collapsing Goods in Medicine and the Value of Innovation,’’ Thomas Magnell argues for the moral superiority of innovation as a method for solving problems of collapsible goods. Furthermore, ‘‘the moral significance of innovation is such that if any of the other ways of dealing with problems in the form of moral problems with collapsing goods does more to promote innovation than the others, then that way has added moral value.’’ 1 Magnell suggests that a free market promotes innovation better than regulation. This suggestion should lead us to an examination of the relationship between markets and innovation. In general, there is a tendency to separate the advance of knowledge from economics. John Stuart Mill does this in On Liberty when he tells us that the ‘‘principle of free trade and the principle of liberty rest on different grounds and that the principle of individual liberty is not involved in the doctrine of Free Trade.’’ 2 Such a separation is a mistake with regard to innovation. Not only are the structures of science and markets relevantly similar, they depend on each other for their mutual advance. Free trade is just as important as the principle of liberty in advancing knowledge, and is crucial for the discovery of innovations that solve collapsing goods problems. Collapsing goods are goods that if used below a certain threshold, everyone benefits. As more people use the good, more people benefit. General utility increases up to and until a certain point is reached, a point which may not be known in advance. At that point over use leads to a collapse in general utility as the good loses most or all of its value. 3 For example, antibiotics help cure infections. More people using antibiotics tends to increase general utility as the population becomes healthier. However, an increase in the number of people who use antibiotics also tends to increase the number of people who misuse the drug. Such people either do not take the full course of the drug or take it for off-label uses. In either case, such misuse increases the odds that surviving bacteria will be immune to the antibiotic and replicate themselves