In a recent LateLine discussion Jim Greenwood, president and CEO of the Biotechnology Industry Organisation put out a challenge to Australians to come up with a better way of financing research and development in gene research than the approach using patents. The following is a better way.

Patents are used to increase the cost of the commercial products arising from gene research and development.  This increase in cost is used to pay the interest and repay loans created to fund the investment research.
The other way of funding gene research and development is to give R&D institutions interest free loans to conduct the research and development and to repay the loans from any profits that might arise from products created from the R&D. That is, instead of increasing the cost of the final product to pay for the investment we reduce the financial cost of the investment and repay the zero interest loans from the profits. This will result in an explosion of research and development in this and other related technologies.
To see more on this idea visit this article on how to fund investment in ways to reduce greenhouse gas emissions. Another article that discusses the details of one way to implement and share the benefits from this approach can be found at this article on the democratisation of government spending.  There are many other variations on the same idea at on ways to fund investment in public infrastructure but the central idea is the same. 


The idea is an old one and was used by the British Colonies in America to fund the development of the USA once the USA broke away from Britain. It was used by the Japanese to fund their post war expansion. It appeared to start in the Renaissance Italian States but they, and other states that followed, tended to use it to fund wars and so the approach fell into disrepute. Perhaps the other reason the ideas have not become the dominant method of organising finances is that the current system concentrates wealth with a few and they tend to work to hold on to their economic advantage.
The same ideas are at the heart of the work of the Kelso Institute. Download the two books The Capitalist Manifesto and The New Capitalists.


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