Humanity matters, capitalism needs an upgrade

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Syllabus: GS 3

Synopsis: The COVID-19 vaccine crisis is a time when companies must rethink the resolve behind their existence.

Introduction 

Capitalists are of the opinion that private producers of vaccines must make profits because it’s their compensation for investing in research and production. If the cost of vaccines is unaffordable for some people, they are not morally bound to serve them at a loss.

• Governments should buy it from private producers and subsidise sales to poorer people. Taxes on private companies could be a significant source of revenue.
• New mRNA technologies provide the means to manipulate the composition of human bodies.  Some Covid-19 vaccines are made using this technology. Capitalists can create even more wealth using human beings.

How does capitalism function?

Capitalism grows by changing the commons into private capital. Garrett Hardin suggested that people will not care for something unless they own it. Capitalism will only end when the forces that support capitalism run out.

• Firstly, businesses turn natural capital into financial capital and use it for making profits for themselves. Over-exploitation of the earth’s resources has contributed to the crisis. 
• Secondly, capitalists used slaves without human rights as their economic assets until moralists objected. Slavery is banned now. Thus, capitalism converted knowledge into private property.
• Thirdly, modern rules of intellectual property rights (IPR) with patent lawyers help capitalists to make intellectual property monopolies. People are not allowed to use their own knowledge. For example, neem and turmeric are patented by capitalists.
  • The public contributes to the making of scientific knowledge. For example, large public help in various ways has helped U.S. pharmaceutical companies to develop their new COVID-19 vaccines.

What do you mean by compulsory licensing under the TRIPS agreement? What are the various stances regarding it?

• The Trade-Related Aspects of Intellectual Property Rights (TRIPS) was promoted by the World Trade Organization in 1995. TRIPS was started on the principle of product patents. India had a different method to IPR based on process patents.
  • Product patents allow creators of new drugs to have exclusive rights to produce and sell. Producers can fix high prices and make more profits by mending their investments in drug development. 
  • Process patents route required Indian producers to create routes for producing larger volumes of universal versions of the medicine at low cost. This benefited citizens of poorer countries including India. 
• TRIPS has a provision that allows governments to impose ‘compulsory licensing’. They can demand that an innovator company must allow domestic, lower cost, producers to increase the supply of the drug in an emergency. The compensation is given to the inventor. 
• Western companies do not like this provision. South African government used this to get drugs for AIDS produced by Indian low-cost producers. 
  • South Africa and India want to use this provision now to allow the production of the new U.S. invented COVID-19 vaccines, whose prices are too high.

What should be done?

• The purpose of governments is to improve the well-being of all citizens, and not just provide products to clients who can pay good prices for them. The COVID-19 crisis has exposed the insufficiency of capitalism to fulfill societal needs.
• Governments must create more public-spirited enterprises to provide public goods fairly to all citizens.
• Governments must have the means to regulate the prices and also to enhance production. 

The conclusion 

• The COVID-19 crisis will not end capitalism. Capitalism must change to survive. Companies must rethink the purpose of their existence. It is vital now that more human and less money values are adopted.