A (3:54)

And the idea is we lost a bunch of patents that would otherwise have been granted to black Americans but weren't able to be because of all of this violence. Was there effect as well? Is there any way of telling? Was there also an effect on the number of patents granted to white Americans? Was that hurt as well? Or is it just that the economy as a whole didn't benefit from the patents that weren't given to black folks?

B (4:19)

The economy as a whole was not able to benefit from the patents that would have been granted to African Americans.

C (4:28)

So you had this really wonderful example, Lisa, because I think when we just say like, oh, patents weren't granted, it sounds kind of clinical. But these are inventions that never came to be. It's like all this innovation, all these leaps in technological know how that we like literally we'll never know what could have been because inventors were scared away or they weren't able to work to their full capacity or potential because maybe a fear or as you lay it out in your paper, but you had this really great example when you went on Planet Money. I think it was a relative of yours. And it wasn't an example of someone who didn't get a patent, it was someone who did, but just barely. The cortisol invention. Could you talk about that? I thought that was so interesting.

B (5:13)

My cousin in law, Percy Julian, was the first African American to had a corporate laboratory and it was Glidden Labs. And he was in this race to industrially create cortisone, to create it at an industrial scale. And this was an international race. There was a chemist in Austria who was involved in this race. Other big corporate labs in the US were involved in this race. And my cousin Percy Julian got there first and his house was bombed, firebombed twice. And he had small children at the time. So this is really scary. So it wasn't as if being an inventor. Often we think about inventors as being untouchable, as being the elites in society. Well, inventors weren't precluded from having that kind of violence visited upon them. That was the example that I was giving. So, yes, he was able to receive many different patents, but that was not inevitable. There could have been serious consequences from. There were serious consequences, but ones that had to do with the lives of him and his family. Had the bombers succeeded.

A (6:36)

So tell me a bit, a little bit about the. And this is, this is the whole point of your paper, the effect of this on the national economy. You said that there was a international race to get this cortisone manufacturing patent. The idea then would be that basically we Americans got there first, we managed to manufacture cortisone under patent protection for the rest of the world, and we got to export lots of cortisone to the world because no one else was allowed to manufacture it because we had the patent. But if we hadn't got the patent, then the Swiss would have got the patent and they would have got all of the export revenue, and Switzerland would be that much richer and United States would be that much poorer. Is that. Is that pretty much it?

B (7:20)

Sort of. But. But for 20 years, you get to have the lead for 20 years, right?

A (7:24)

And.

B (7:25)

And then you have to cede to someone else who's. Or another firm that has created something generic, for example. So, you know, I don't think that the first way Percy was thinking about this was in terms of profit for the firm. I think it was the pure science. Can I get to the answer first? And there's a whole PBS special about him. And it shows sort of this. This scientific race to be able to get there first. And, you know, I've studied Soviet inventors, and one thing that they wanted to do because in their own patent office, they could not be identified. They could never get patents because they couldn't hold private property, but they got patents from the US Patent Office who could determine who had the idea first. That's why they were there. They didn't have to cite prior research when applying for a patent in the Soviet Union, but they were given the honor, the award of being the first with the idea in the U.S. patent office. And it was a, you know, it was a mundane activity. This is something that patent examiners have to do, have to ascertain novelty. At least at the time they had to ascertain novelty. So I think that was largely the race to being the first one to. To get there.

C (8:53)

You also talk about in the Times piece about comparative advantage and the economic consequences that everyone kind of suffers from when people can't work at their, the level they were educated at. So when like African American doctor can't work as a doctor, or when an inventor can invent and those consequences don't just accrue to those people. Can you talk about that?

B (9:16)

One of the things that we I think are seeing, for example, in the COVID period or everybody saw was this race to get a vaccine. So what if everybody who had the talent to be able to participate in that activity was able to do that? What if you had only half the people who had these skills, who had a knack for epidemiology? What if only half could participate? We would have gotten to half the vaccines in this possibly short amount of time, maybe even shorter. So that's where the penalty really is. And what the vaccines do is to raise the standard of living. They help to bring the economy back because the virus actually is the economy. And I think it's one of the most stark examples of how using your comparative advantage can be for the benefit of everybody in society, not just in your country, not just in your neighborhood, not just in your city, but in the world. So I think we know that a Syrian immigrant was one of the ones who helped to develop the. I think it's the. Is it the Moderna vaccine?

A (10:40)

Well, there were two Turkish refugees in Germany who developed the Pfizer vaccine.

B (10:45)

The Pfizer one. Right, right, right. So, you know, I think we have to be open to think about who can contribute. You can't judge a book by its cover. And that's the whole thing that the research that I'm talking about in the New York Times piece or the paper, we have to make sure that there is a free flow of ideas and that we don't predetermine where those ideas can come from.

A (11:10)

Tell me where you stand on the very fraught issue in the news right now about the vaccine patents. Since we're talking about vaccines and we're talking about patents, I feel like we have to talk about vaccine patents. Under trips, which is a big international treaty protocol, it is possible for countries to just basically ignore patent protection on vaccines and go ahead and say this is a national emergency and we're going to just try and manufacture this much needed vaccine ourselves. Not under license. No one has done that yet because they're afraid of retaliation and because it's not just about the patents, it's also about the know how. And you really do need the cooperation of the people who develop the drugs to explain how best to produce them. But it does seem that the negotiations between countries and the vaccine manufacturers have dragged on quite a long time. It does seem to be a large part of why the European Union in particular is kind of behind the curve in terms of vaccinations. These negotiations took so long, and they took so long precisely because there was patent protection involved and the manufacturers were trying to monetize those patents as best they could. So would we have been better off basically trying to say this is a global emergency and we should just not have any patent protection on this? Would we have been better off if the University of Oxford hadn't licensed the patent to AstraZeneca and had just said this was done by a public university and will release it to the world just like Jonas Salk did with the polio vaccine?

B (12:53)

I think it's a really good question, but, you know, I don't think it's as stark as it was. The issue isn't as stark as it was during the HIV AIDS crisis when trips was being worked out. So, you know, the Serum Institute of India is producing, you know, gobs, you.

A (13:18)

Know, to use 1.1 billion doses.

B (13:21)

A billion doses? Is it a million or a billion?

A (13:24)

A billion. What happened was the University of Oxford licensed the IP simultaneously to AstraZeneca and to the Serum Institute. And so AstraZeneca is producing as many as it's producing and the Serum institute is producing 1.1 billion doses, which is so much more than, you know, all of Kovacs combined.

B (13:44)

Right, right. So in that sense, I think the licensing agreement is working. So. And I think that there should be many more of those.

A (13:52)

Except my point is that was licensed by the University of Oxford, not by a for profit pharmaceutical company. AstraZeneca, if it had its druthers, would never have done that deal.

B (14:02)

I take your point. I take your point. So if it were just for profit maximization, we would be in trouble because this is a pandemic, it's an emergency, it's a public good that should be provided. You know, I'm not sure whether Oxford. First of all, we don't know how this is all going to work out. Right. So we know in the interim there are so many problems that have nothing to do with ip, the vaccine hesitancy, the poor rollout in Europe altogether, the coordination within the European Union. There are a lot of things and then the stories that overestimate the symptoms associated with the vaccine or misidentify the symptoms associated with the vaccine. There are many problems associated with the rollout that have nothing to do with ip, I think we have to think about the scale to figure out and we have to have the information from two years from now, for example, to be able to say whether this is a good arrangement or a bad arrangement. But it is one that is getting a billion doses out there. And you know, this Indian company was a big part, along with Brazil, a big part of addressing the HIV AIDS crisis. So I think that in this sense the arrangement is working. So I really don't know enough to be able to say whether Oxford should have just allowed this IP to be obtained completely for free. It is still my position that governments see this as a public good. That means that they can invest in and pay for the production of this. There's certainly not the need for the kind of intellectual property protection that many companies say there is because they spend more on advertising than they do on ip.

A (16:04)

And when, like Dolly Parton gives a million dollars to Moderna to produce the Moderna vaccine, you know she's doing that philanthropically. She's not doing that so that they can then monetize that through patents.

B (16:16)

Exactly. No, that's right. Whether Oxford should have followed the Dolly Parton example, I'm not sure.

A (16:22)

The Oxford question is a super interesting one because there's lots of rumors which I've been trying to get to the bottom of and haven't really got to the bottom of. There's lots of rumors that they wanted to do the Jonas Elk thing. They want put the IP into the public domain and that the reason they licensed it to AstraZeneca instead was somewhere that the Gates foundation sort of twisted their arm or persuaded them that they needed AstraZeneca's manufacturing, know how to be able to maximize the number of doses that were made very quickly. And also the Serum Institute, they could just give the IP to the Serum Institute, but the AstraZeneca wouldn't go out and manufacture all of the vaccine if it didn't have the license. Again, I think you're right. We'll probably learn more about this story in a few years time when people aren't trying to be secretive about all of this. But there is a lot of secretiveness going on. All of the contracts between the countries and the pharmaceutical companies are being kept secret and that can't be good for anyone. I feel like we need lots more transparency there.

B (17:28)

I agree. And that blew up in Germany's face, right? I mean, no, it wasn't Germany's, it was the European Union's face because the contract was signed in secret and then it had to be posted on the Internet just for people to be able to see what was in it. So I think that this is, you know, you have to be prepared for a crisis outside of the crisis. Right. Our crisis unit was gutted. That was left in the White House, the pandemic unit. And There was a 67 page, I believe, playbook that was left behind by the Obama administration that we could have been using. And I think it's just, it's tragic, really, that this was gutted and that we have to learn by doing during the pandemic, rather than learn much before, when we could have, for example, mandated face coverings, when the knowledge was available, when it was known that it was transmitted in a certain way, rather than keeping busy cleaning surfaces ad nauseam, for example, a lot of things could have been done better. But we've got to believe that a crisis is always around the corner and prepare for that crisis. That means preparing the ip. I mean, the Serum Institute has it down. I mean, that's how it came to be because of, you know, a horse that was dying. So they figured this out and they figured out the supply linkages that they needed. You know, I just think that we have to think about our modern world, our globalized world, one where there will be pandemics, where I was asking you about the avian flu earlier because that's something that was introduced to the rest of the world and that we should expect, expect from time to time. But we, we know how to deal with it. So we should have a plan for that, given globalization.

C (19:32)

I'm not familiar with the Serum Institute, nor do I know the story of the horse. So can you please explain?

B (19:40)

So the Serum Institute was originally a place that was taking care of horses, and one of the horses was very sick and they couldn't get the medication for the horse quickly enough. And what they decided to do was to make sure to have something on hand, some sort of medication on hand to treat horses. But they also figured out that they could make it at scale. And I can send you the link for the NPR story that I heard.

C (20:16)

Okay.

B (20:17)

That I heard last week. I think we've exhausted my knowledge of it.

C (20:22)

I didn't mean to put you on the spot. I was just really curious. I have so many thoughts about the pandemic and innovation because on the one hand, obviously it was a boon for innovation. All these vaccines were invented and rolled out and we leapt forward in this way. What once took 10 years took a year. So that's amazing. But then I was thinking of all, mostly a lot of the women who have been kind of sidelined for the past year, many because they had to do caregiving at home because the schools were closed, the childcare centers were closed. And I'm wondering if you have been thinking, because I certainly have been thinking. I know there's been a little bit of research looking at academics, and female academics haven't published as much over the past year as their male counterparts. And that got me thinking about your research, but then applied to just the past year and how gender and innovation could possibly be impacted longer term. Have you been thinking about that too?

B (21:17)

I certainly have. Labor force participation rates for women where they were in 1987. We've lost 30 years overnight, almost overnight. What I really worry about is reintegration into the workforce. That's the first thing. So for people who are actually able to work from home, the papers that were produced at record speed and were published sometimes with record speed, they'll never be able to catch up with. So even if they got leave next year, especially for a public university, that would be tough because there are all sorts of expense reduction plans being put in place. It's going to be tough to catch up with that and it's going to be tough then to get promoted to be compared to your peers. It's going to be tough to get paid because let's say you're in a sense you're paid due to merit and therefore the number of publications you get out at a research university. So I think that if you're looking at pay and promotion, there are probably a lot of women who are going to be left behind and may need to take jobs in the much more flexible labor force of non tenure track positions, for example. And as we know, some of those positions pay less than minimum wage, the federal minimum wage, and don't have protections of all sorts. So I think for a certain sector, that's the big issue. For those who aren't able to work from home, I would argue that there are psychological costs. There are. I mean, there's psychological costs with the first category too, but certainly they're juggling a lot more with fewer resources, less paid leave, less flexibility, and the possibility that they're bringing Covid home to their children. I'm talking about the essential workers. So if we're talking about the upper branch of the K with respect to the academic workers and the lower branch of the K with respect to home health care workers, for example, some of those jobs may never come back. We have robots in Japan who are Taking care of the elderly, performing basic functions of the elderly. We might see a lot more adoption of that kind of technology given what we've learned from this pandemic. Some of these jobs that are labor intensive and public facing may never come back. They may be replaced by, by robots or other machinery and technology. But I think that we have to think seriously about where the missing 8 to 10 million jobs are going to come from because they're not here right now and not everybody's going back to work.

A (24:28)

Can I ask you about this idea of if I missed out a year? Basically, it's, it's very hard to catch up in the fast moving world of science. Obviously that's very germane to women who had to look after kids during COVID But on some level I feel like that's happened to the entire country of the United States, that we've all kind of been out of our labs, we've been working from home, we've been homeschooling our kids at the same time as it hasn't been happening in China and nearly all of China has been going full speed ahead at like over 100% capacity. It's been, you know, fueling the world's manufacturing R and D, just about everything. Have we allowed China? I mean, not through any particular fault of our own necessarily, but like has the way that China got the virus under control so quickly basically given it sort of one year head start, which it's going to be very difficult to catch up to?

B (25:32)

Well, that certainly depends on everything else. With respect to innovation, I'm quite serious about this. If you don't have an open society, it's really hard to innovate. And the industrial espionage that China engages in, I think there's a limit to how much of that you can do. So yes, on the one hand a lot of the manufacturing is going on, but I think something else has been exposed. We have outsourced. And when I say we, I'm talking about the West. I'm talking about the US outsourced certain manufacturing processes to various places like chip production, semiconductor production, in such a way that we are so dependent on one or two countries for one or two things. We know now that that's a national security hazard. We have been using inferior PPE and giving that to our health care workers. And we really should have thought about making sure that we had a supply of our own that was credible and dependable. So possibly, Felix, possibly one has a head start in that regard, but it really depends on a lot of other things. Being in place. And if you're talking about innovation, it takes many different types of people working together to get to the best ideas. And if those people don't have the ability for those ideas to flow freely, it might be to China's judgment.

A (27:19)

So let me ask you a little bit about semiconductors, because this is a big story these days. There's a massive semiconductor shortage, especially in the automotive industry. There's been like, virtually every single car manufacturer in the world has had to seriously slow down or even cancel car production because they can't get the chips they need because cars are now basically computers on wheels. And these chips are really cheap. They cost like two bucks. But Taiwan Semiconductor, which is the one place that makes all of these chips, has much more expensive chips to prioritize. And it's like, I'm not going to bother making these $2 automotive chips. I'm not going to make $200 graphics chips instead of. It's weird to me that the United States of America, which kind of birthed the idea of semiconductor manufacturing that has these great companies like intel and Motorola and you name it, seems to be incapable of manufacturing basic chips anymore. But it seems to be incapable of manufacturing basic chips anymore. What happened?

B (28:16)

Well, okay, I think there are at least two things that happen. First, the idea that companies had to pay less and less for labor was attractive. And even in that setting, American workers turned out to be some of the most productive workers in the world. So if you're just minimizing price, then this is the outcome that you're going to get. But what we weren't planning for is something like a pandemic or not having access to. To rare earth minerals. We have rare earth minerals here, but we don't mind them because we think that the supply from China is always going to be there. And China has used this as a negotiation tool in the past. So why would we outsource that in that way if it is so critical to production? We're using the Defense Production act to manufacture vaccines now. We probably should have been using it for something else earlier on. And we should have made sure, for example, that there were supplies of ppe. We shouldn't be talking about reliable supplies of PPE right now. That's really ridiculous. So that's a big part of it, that we were chasing lower labor costs. I think that went along with the assault on unions and on union membership. And I think what we're learning is that unions were actually good for something. They protected workers and provided a way for workers to have representation. You heard President Biden's speech about union membership and supporting unions. And many labor historians have been saying they've never heard a speech like that coming from a sitting US President in the modern era. So I think we're really learning what unions were good for. And whether we're talking about raising wages or we're talking about workplace climate, which is what the union that was started at Google is seeking sort of better working conditions and not necessarily more money.

A (30:38)

You're saying that like if intel and Motorola had been unionized, they might not have lost the race with TSMC and forward thinking.

B (30:48)

So let me get to the second point. There's the second part of this. Seeking shareholder value. The quest for shareholder value at maximum share price has also put us in this situation. It's not just minimizing labor costs, but thinking in a very short term way. So I think if you were thinking long term, you would start thinking that one day all labor is going to be competing at the same price because there's this never ending hunt for lower and lower labor costs. You don't necessarily go to China anymore, you go to Vietnam. Now some labor in Vietnam has gotten too expensive, so you go to a place like Madagascar. So there's only a finite number of places where you can replicate this. And coming back to this country might minimize some of the uncertainty associated with setting up in those places. Especially if some of those places had agreements, subsidized agreements, say with the EU that are no longer valid and in place, we're probably going to have to pay the full cost of using that kind of labor. So why not use American labor as well? So either unions or the voice of workers, not necessarily through unions. I think that would have been helpful.

C (32:17)

Are you saying essentially tech companies stop making chips domestically because they could get cheaper labor overseas? Not taking into account the costs of say, a pandemic which would screw up the supply chain or something like that. And if labor had had greater power than chip manufacturing would have stayed stateside.

B (32:39)

I think there would have been longer term thinking, that's all.

C (32:42)

Longer term thinking? Yes.

B (32:44)

That would have taken into account many of these other factors. Can I go back to your question, Felix? Yeah, because I want to question the, the premise. You were saying that it's not just true for women, it's true for everybody, that everybody's been at home. But what we know from the American Time Use survey is that women are more responsible for childcare and for household activities. And those activities aren't being shared.

A (33:13)

That's the problem that's absolutely true. Yeah.

B (33:16)

So I'm saying that we still have this empirical evidence of this divide, this asymmetric set of activities, and that is just being heightened in this pandemic. So that means that women's skills are atrophying with respect to work, whether we're talking about academia or whatever they're typically doing at work. And children possibly are becoming more reliant on them. Right. So it's not just going to be getting them back in school. It's addressing this new, more intensive attachment to women who've been at home.

A (33:52)

It's a huge problem. And I totally agree. Although I just want to say that I looked up the numbers just a couple days ago. My trusty Fred looked at the labor force participation rate for men and women and you're absolutely right about the labor force participation rate for women hitting levels not seen since the 80s. For men, it's unprecedentedly low levels. And what was interesting to me was that the gap between the two has been surprisingly kind of constant. It's about 11 and a half percent. And they've both been going down, they both come up a little bit since sort of March, April. It has hurt women more. This is like the 2008-9 recession was known as the man session because it hit like construction. And this pandemic is like the converse of that for sure.

C (34:51)

The she session.

A (34:52)

The she session.

C (34:53)

Trying not to say that. She session. Yeah, I just wanted to cost you $5, Emily.

B (34:59)

Every time you say that, it cost you $5. Right?

C (35:01)

I've never said it out loud before. Yeah, I just wanted to echo what you said, Lisa, because I actually spent a lot of today talking for a story, talking to women who left full time jobs this past year to either go part time or not work at all. And yeah, it just got me thinking. I mean, this is happening. There's like two things happening to women that's affecting innovation and labor force participation. One is they've a lot of them have lost their jobs because they were in customer facing industries like retail, whatever. And then there's this other thing where women are going part time, they're quitting altogether. And the women I spoke to today, you know, they, they said like, I had to stay home, like I'm not going to. My kid is sitting there at school on his computer and like, I need to help him. I need to make him breakfast. I used to be the school maiden breakfast. Now I make breakfast. Now I make lunch. Now I have to help my child. And that's my priority. But it's like you're going to. You're going to lose a year of work, and that means like a year, you don't put your money into your retirement account. It means you don't get a promotion. And the one woman said, well, I'm going to go back and in September, but I'm going back part time. They both said, I'm going back part time on contract at like, half their former salary. And I'm just thinking, and we know that academics aren't writing the papers, and it's not like the men who have managed to keep their jobs are working more productively at home, those who can do remote work. So I'm not sure that it's like the whole. Everyone in the US Got sidelined for a year. I think some people did, and some people were able to do more.

B (36:34)

It's been a boom for some. I mean, you saw all the Econ Covid papers coming out that, you know, just, I mean, they were coming out at a dizzying rate. It's not just women with children. There are elder caregiving responsibilities that a lot of women have for people who are not in their home. And this is something that the American time you survey partly picks up, but it doesn't match to the people who are in the household. I spent a lot of time earlier this month and at the end of last month looking for a vaccine for my elderly aunt in Virginia. And there was one corner of Virginia where the vaccine wasn't getting to in the Hampton Roads area. And it became, you know, an hour a day, and then two or three hours a day, and then at the end it was about six hours a day, tried to help her find a vaccine. And I know that a number of younger people and families are helping their elders find this vaccine. But, you know, once you find out how isolated a number of elderly people are, the women in the family are the ones. The younger women in the family are the ones who are expected to take up that slack. And that's, again, what we know. This is consistent with what we know from the American time you survey, even though they're not in the households.

A (38:00)

I wanted to pull back a little bit because you were talking about patents and innovation and what that means for the economy and just talk a little bit about where we're at in the very big picture and where we should be. And there's a lot of different aspects of that and sort of pick the one that you want to go with. But the big questions I have is, number one, is the patent regime in the United States as it stands healthy, is it a good thing or a bad thing? We have this situation where especially tech companies wind up trading patent portfolios between them for tens of billions of dollars. And sometimes it winds up in extremely ugly court cases, which drag on for years. You have Nathan Mehrvold turning into a sort of patent troll. It seems like there's something broken there. And then the others, the other aspects of it. Is what you've been talking about, I think a little bit more, which is coming out of academia. Like, what role does academia play in terms of generating patents? What should happen to those patents? Like, Stanford University is famous for, like, monetizing patents in the way that other universities aren't. If we put more public money into universities, especially maybe as part of a new infrastructure bill, should that come with restrictions on the degree to which patents are monetized? Should we have more patents in the public domain? What do you think about all of these big questions?

B (39:29)

I think I'd like to think about the question differently. Is the patent system being reformed? Is it better than it was before patent reform was passed in 2011? And I think that there have been some improvements. One of the biggest ones was being the first one to the patent office rather than being the one with the new idea. Now, I told you that during the Soviet period that that was key. But this brings us in alignment with the other patent offices in the world. We're much more aware of the patent trolls than we used to be. But I'm not sure that we can say that it is fully reformed until we get rid of these frivolous patents. There are already large patent portfolios where companies patent around a certain idea preemptively. Those are still in place. The question is whether we have prevented many more of those portfolios from being created. I think that would be the mark of success. I think another issue that is being addressed through the Success act and through the Idea act is figuring out who's patenting, making sure that the 10 years that I spent trying to identify African Americans in the patent data set, nobody else has to spend that time doing. People wouldn't spend that much time doing it anyway because now there's Google Patent and there are many other tools. But still, we still don't have a good idea about who's patenting and how we might increase participation. So yes, my estimate is that we could have living standards, let's say GDP per capita, that's 0.6% or 4.4% higher if we included more women and underrepresented minorities in that process. But if we don't have a baseline from which to measure that, then we don't know how to make sure that more of them get in that pipeline. So I think that that's one thing that is being corrected that is long overdue. So I think there are many different pressure points to make sure that our patent system is working better. I would like to add one more thing, though, to broaden the question. I was in China in 2015, and I was taken to a number of different firms, and I was giving a talk on ip. Now, who volunteers to do that? I'm not sure, but I did. I gave a talk at university Intellectual Property. And I had one of the most lively conversations and at the same time, one of the most combative about intellectual property. Because what I discovered was that the Chinese firms, and this is from a broad swath of society and of the economy, they were quite dependent on American patents. So one of them was a wine producer, and he had this process that he'd been developing over, I'd say, three or four decades. And these grapes were so productive, and they wanted to compete with Canadian ice wine. And what the winemaker told me was that the piece of paper that he got in China was for show, basically that, you know, you needed to get some piece of paper, you need to register this invention in China. But in order to capitalize on all of the potential of that invention, he needed an American patent, and he needed an American patent for five or six different things. And he needed this German machine to be able to produce the wine. So he was using the full range of IP to be able to engage in the international economy. And I saw that again and again. And I saw it with even artwork. The terracotta soldiers, for example, I was there looking at them in Xi', an, and I was asking the tour guide, so what's that scribbling at the bottom of the. The spear? And what's that scribbling on the uniform? It's like that's the signature of the artist and the weapon maker. I was like, do you understand what you just told me? Do you understand what you just told me? So Venus de Mila, one of the oldest pieces of art in the Western world. We still don't know who is responsible for Venus de Mila, but we know to a person who is not only responsible for the sculpture for the terracotta soldier, we know who's responsible for the weapon. And you've assigned that to a person. We don't have that You've been protecting intellectual property for millennia and you're over here talking about you're a poor country and we need to get rid of the intellectual property rights regime. There's something funny about that. There's something deeply contradictory about that. So I appreciated again the lively conversation that I had with them. But every single firm, and these are random firms, every single firm was quite dependent on intellectual property protection. But that wasn't something that China was providing.

A (45:03)

And that's something they needed in order to participate in the global export market. That the importers wouldn't accept their produce unless it had been like they sort of ticked off a patent box or why did they need that? Take your wine guy. Why did he need the American patent? What did he need it for?

B (45:20)

So that nobody would copy his recipe. He'd spent four decades developing these grapes that were 60 to 70% more productive than comparable grapes.

A (45:30)

So the idea is that he gets a patent, a US patent on that, and then if anyone else tries to do that anywhere in the world, he can say, no, I've got the patent.

B (45:39)

He can sue them in an American court. And that's considered the gold standard for IP protection. And the ones who were producing for the domestic market were using licensed technology. One was using a pollution reducing machine from Germany and it had been shut down because it was emitting too much, but it licensed this technology. So, I mean, in almost every activity, whether for the domestic market or for the export market, folks were using IP and IP protection. Serious IP protection, American style IP protection.

C (46:17)

And that's how it should work. That's what IP is for, to protect inventions and to foster innovation. Sometimes it goes too far, like with patent trolls or with vaccines not going to enough people. But it does have a purpose in fostering and protecting inventors and inventions.

B (46:33)

Yeah. And this guy had brought billions of dollars to this little rural economy because of his activities. So it was in Chyna's interest to let him do exactly what he was doing and the way he was doing it.

A (46:49)

We should move on and have a numbers round. We haven't had enough numbers, I feel, on this show so far. I think we'll leave your number for last because I have a feeling it's gonna be a good one. Emily, do you have a number?

C (47:00)

Are you saying mine is a bad number?

A (47:03)

I'm saying yours is going to be inferior to Lisa's because, you know, Lisa Cook is amazing.

C (47:09)

That's fair. Fine. Because honestly, I did steal my number from the indicator this week because I had missed it when it came out. So my number is 300,000. There are 300,000 fewer births predicted to take place in 2021 because there is a Covid baby bust. So there are fewer pregnancies over the past year. And the first cohort of COVID babies were born in December. And then, you know, the babies will be rolling out for the rest of 2021, and there are going to be fewer of said babies. We've already seen a few signs, like in January, births were down in Florida by like something like 10% or something. According to this Brookings report, when things are uncertain, people don't have children. This has always been true, even before birth control was widely used, apparently. So that seems bad, but I'm hopeful that perhaps there will be a post Covid baby boom, that I can have a number for that in the next two years or something like that.

A (48:15)

So I have a weirdly related number. The relation is tenuous, but it's there. And the number is 59.4%, I think it is. Anyway, it's 59 point something percent, which is the degree to which the stock of Canadian mortgages has gone up between the first quarter of 2014 and the last quarter of 2020. There's a massive Canadian housing boom going on right now, and prices are becoming completely unaffordable. We talked many years ago about the housing bubble in Vancouver. The housing bubble in Vancouver became a housing bubble in Toronto. The housing bubble in Toronto basically became a housing bubble everywhere. And Canadian house prices are rising stratospherically in just about every single bit of Canada. And what has this got to do with baby busts? I hear you ask. And the answer is that house prices are deeply, deeply connected to supply and demand dynamics. And I learned this when I visited New Zealand after the Christchurch earthquake. And they were in a housing boom where the prices of houses in Auckland, which is completely the other end of the country from Christchurch, were going up incredibly fast because of the Christchurch earthquake, because it had destroyed enough of the housing stock and didn't destroy that much, but it destroyed enough of the housing stock that the supply and demand dynamics were out of whack. It wasn't possible to build houses quick enough to really solve that problem. And houses across the country started going up in value. And the connection to Canada is basically they have a healthy immigration system where lots of people immigrate to Canada. That's increasing demand. Supply can't really keep up. And if your increase in demand is even a little bit higher than your increase in supply, then prices can go through the roof. Because this is a very sort of price inelastic market. Everyone needs to cover their housing short. We are all born with a short position in housing and we all need to cover it every day. And one of the ways we do that is by buying houses. But yeah, babies are down and this is bad is what I'm saying. Even though it's probably good for house prices, keeping them low, it's bad for the American economy. We need more immigrants. And we need more immigrants, especially now, to make up for all of the babies we're not having.

C (50:43)

Yes, exactly. We need immigrants to replace the lost babies or something like that.

B (50:48)

The baby thing is going to be interesting because now we have in place child tax credits that we haven't had before. And they're temporary, I understand that, but they're more European style. And the reason they were put in place in these various countries in Europe was to not only support families but also to provide an incentive to have babies and combat the declining population.

A (51:20)

And it failed miserably in all of those countries which all have.

B (51:24)

I know they did. I know they did.

C (51:25)

Doesn't work. Yeah.

B (51:27)

It'll be interesting to see because I think that several things have been revealed. The actual cost of a child has been revealed. When you don't have childcare readily available. Readily available and cheaply available. I really think that there'll be a new calculation, a revised calculation for families with respect to having children. You know, it'll be interesting to see whether this tax credit has any and other supports for families have any effect on childbirth, because otherwise. Yeah, I mean, it was already the case that folks who've seen one financial crisis in their young life and now seeing two are not accumulating the kinds of durable goods, including housing and I thought cars. But I think that that turned out to be not true ultimately, but making major purchases that we count on in the long run. And they're not forming families. They weren't. I think that's still true. I think that was true early on in the Great Recession and I think it's still true. So the question is, what's going to happen to families post this pandemic? I think it's going to be a big question. But that wasn't my number. Can I give you my number?

A (52:51)

Please do.

B (52:52)

242 billion. And that is how much was deposited in people's accounts and stimulus checks by Wednesday. That's what the IRS paid. And the reason this is important to me is because, as you might know, I was putting forward a proposal to get money to people fast by using mobile money. I still think we could do it more quickly than direct deposit. There are many other ways to make sure that if we have a pandemic again, if we have a crisis again, maybe there is an account for everybody and we can just push out money that way. And we can push out money for various things, not just for direct payments for Social Security, for all kinds of things, so that we are not in the business of waiting forever for people to get some sort of relief. I mean, a lot of the checks from the First Cares act have not gone out right? So that should never be the case in an emergency in a pandemic.

A (53:59)

So that's an excellent number. And I've already determined that is what I want to talk to you about in Slate plus, because you've done a bunch of research in both east and West Africa, but certainly in West Africa about financial inclusion. And I want to ask you basically, who's better, the United States or Kenya when it comes to getting money around to poor folk? That's coming up on Slate Plus. But other than that, thank you so much for coming on Slate Money. It's been a great, great pleasure having you on. I'm so glad we finally managed to do it. Thank you to Jessam and Molly for producing. Thank you to everyone for listening and keeping the emails. Coming on sl slatemoneylate.com we have another Slate Money goes to the movies on Tuesday. We're talking about There Will Be Blood with Nyla Boudu.

C (54:46)

Will you be drinking milkshakes?

A (54:49)

We will be drinking milkshakes with Nyla Boudu on Tuesday, and we'll be back the following Saturday with more Slate money. Sam.