The problem with “just desserts”

The blogosphere is aflutter over Harvard economist and former chairman of the Council of Economic Advisors to Bush 43, Greg Mankiw‘s recent article “Defending the One Percent“. Mankiw’s paper mostly argues against the classic utilitarian reason for redistribution – a dollar is more useful to a poor person than a rich one.  However, near the end of the paper he proposes that an alternative basis for fair income distribution should be the just desserts principle where everyone is compensated according to how much they contribute. Mankiw believes that the recent surge in income inequality is due to changes in technology that favour superstars who create much more value for the economy than the rest. He then argues that the superstars are superstars because of heritable innate qualities like IQ and not because the economy is rigged in their favour.

The problem with this idea is that genetic ability is a shared natural resource that came through a long process of evolution and everyone who has ever lived has contributed to this process. In many ways, we’re like a huge random Monte Carlo simulation where we randomly try out lots of different gene variants to see what works best. Mankiw’s superstars are the Monte Carlo trials that happen to be successful in our current system. However, the world could change and other qualities could become more important just as physical strength was more important in the pre-information age. The ninety-nine percent are reservoirs of genetic variability that we all need to prosper. Some impoverished person alive today may possess the genetic variant to resist some future plague and save humanity. She is providing immense uncompensated economic value. The just desserts world is really nothing more than a random world; a world where you are handed a lottery ticket and you hope you win. This would be fine but one shouldn’t couch it in terms of some deeper rationale. A world with a more equitable distribution is one where we compensate the less successful for their contribution to economic progress. However, that doesn’t mean we should have a world with completely equal income distribution. Unfortunately, the human mind needs incentives to try hard so for maximal economic growth, the lottery winners must always get at least a small bonus.

What I do

For those interested, here is a four page summary of my research activities that I wrote for my upcoming quadrennial review at NIH.  It doesn’t include everything I’ve done in the past four years, just the main lines of research.

June 24, 2013:  Corrected a small typo in the summary.

Body weight simulator iPhone app

The body weight simulator, originally a web based java application, is now also an iPhone app (see here in iTunes).  The simulator is based on the human metabolism model developed by Kevin Hall, myself, and collaborators.  The exact model is given in detail in our Lancet paper, which is listed here along with other related references.  The app predicts the time course of your body weight given your baseline parameters and your new diet and/or new physical activity.  It will also give a suggested daily caloric intake to attain a new weight over a specified period of time along with the diet required to maintain that weight.  The model uses parameters calibrated to the average American so your own mileage will vary.  Also, I basically wrote the app in my spare time over the past year so it is pretty primitive as far as apps go but it does the job.  Please try it out and give me feedback.

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Patent perspiration not inspiration

Little irks me more than the current state of US patent law. It stifles innovation and encourages patent trolls, the most famous being Nathan Myhrvold’s Intellectual Ventures. The main problem is that we are allowing patents for the wrong thing. Currently, patents are awarded for innovative ideas, which means you can try to patent fairly obvious ideas like a device that converts optical images into digital information, which amazingly enough is owned by one patent troll who is trying to extort money out of anyone who has ever used a scanner, including nonprofits (see here). This American Life had an episode devoted to this topic (see here). What we should do instead is to patent the effort and cost sunk into developing an idea into a product. Alex Tabarrok has been writing about this topic for a long time and has a nice paper giving the economic reasons of why this would be better (see here for reprint). You should only get patent protection in proportion to the costs you have incurred in developing the idea.

Ideas are cheap; turning them into successful businesses is the hard part. Me, and probably everyone else, had the idea for Google Glass years if not decades ago. I had no idea how to make it work, nor did I put any effort in trying to do so. I just thought it would be great to have a projection screen built into glasses. Actually, my full idea was that it would project an image onto the retina with the focus set at infinity so I wouldn’t have to strain my eyes to read it. I don’t think anyone should be able to patent such an idea. We should encourage lots of companies to come up with ways of implementing eyeglass projection systems and let them battle it out in the marketplace. In some sense, fashion should be our model. You can’t patent fashion so designers must constantly innovate to keep ahead of the imitators. If anything, there is too much innovation in fashion. Given that we are now on the wrong side of the “Tabarrok Curve“, the argument that abolishing patents would stifle innovation is no longer valid. This is one issue that both liberals and libertarians should agree on. If we are to get any laws passed at all this congressional term, we should get patent reform.

 

Genes can no longer be patented

The US Supreme Court ruled today that human genes cannot be patented. Here is the link to the New York Times article. The specific case regards Myriad Genetics, which held a patent that controlled the rights to all tests for the BRCA1 and BRCA2 genes implicated in breast cancer. The patent essentially blocked most research on the BRCA genes. The immediate effect will be that genetic testing will become cheaper and more widespread. People will argue that not allowing genes to be patented will discourage further innovation. I doubt it. Most discoveries, like genes, come from basic federally funded research. Any company can now develop a test for any newly discovered gene. Patent law has been broken for decades and this is just one small step to correcting it.

The demise of Arbaclofen for Fragile X

Seaside Therapeutics has recently announced that they would be withdrawing their Fragile X drug Arbaclofen (STX209) from further clinical trials (see here). They had already reached Phase 3 and the drug showed promise in some patients but probably not enough to secure enough funding to continue or guarantee FDA approval. See the New York Times story for some personal accounts of the impact of this decision. The drug is a GABA-B agonist and is similar to the drug Baclofen, which is used to treat muscle spasms. Fragile X syndrome, which has symptoms similar to autism,  is caused by a mutation to the FMR1 gene that silences the production of the FMRP protein. Like most proteins, it is not exactly clear what FMRP does except that it may involve protein translation and affects synaptic plasticity in mouse models. One hypothesis of the cause of autism and Fragile X is that there is an overabundance of synaptic excitation.

My paper with Shashaank Vattikuti explored the effects of such imbalances on a cortical circuit model and showed that it could reproduce some psychophysical experiments (see here for summary of the paper). It is thus a plausible hypothesis that a GABA-B agonist, which are inhibitory transmitters, may alleviate some of the symptoms and I believe that it does in some patients. However, such a blunt instrument would probably not work in all patients. One reason is that not all imbalances between excitation and inhibition are necessarily equal, i.e. too much excitation may not be the same as too little inhibition. A neural circuit with very high excitation and inhibition balancing each other could behave very differently from one with low amounts of each balancing each other. The high circuit would have “high gain” and be very responsive to perturbations while the low circuit would have low gain. It is also not clear that simply increasing inhibition everywhere will result in a net decrease in inhibition because of the multiple feedback loops in the system. Increasing inhibition between inhibitory neurons could decrease the net inhibition on excitatory neurons.

The trials seem to show that about a third of the patients improved with Arbaclofen. They are probably the ones that have too little inhibition and increasing inhibition helps. I think this case suggests that we may need a new model for FDA approval of drugs. Perhaps we should not insist that drugs only treat specific illnesses but should also be approved if they are shown to have some biological effect and do not cause harm. I believe that there are many drugs that have failed to obtain FDA approval that actually do work and could help some patients. Instead of waiting until we can figure out ahead of time which patients will benefit from a given drug before we approve of it, we can just approve of it for restricted use and try it on patients to see what happens. The danger of course is that it may be difficult to know if a drug works and desperate patients and especially parents will insist on using a drug even if the physician believes it has no effect. This could cause harm and increase the cost of medical care. One of the things we could do is to have the government or nonprofit companies take over failed but safe drugs and provide them at low cost under some regulation. Actually, I think we need to completely revamp how drugs are developed but I need to leave that to a future post.