Everyone’s favourite price-gouging, Wu Tang-baiting pharma bro is back in the news. Martin Shkreli is an odd figure. Brazen, but with a hint of desperation that suggests that his characteristic self-confidence might not be all there is to him. This week, he was called to testify before Congress, and remained uncharacteristically silent.
Why, though, was he called to testify before Congress? Hasn’t he just been plying the game, like all the rest of Wall Street? Well no, not really, he’s only been playing half the game. Shkreli is undoubtedly new money – the child of immigrants who worked as janitors. He is brazen, and doesn’t try to hide what he’s doing. That, really, is what he’s been called to testify for (he’s also under investigation for securities fraud, but that is a separate matter).
He’s been called to testify because if all of the wealthy were as brutally, publicly honest and unapologetic as him, people would fairly soon get pretty angry. He’s simply not doing it right. People as rich as Shkreli are supposed to gush about how much they contribute to society, to wear nice clothes and patronisingly explain that it simply has to be this way. They aren’t meant to openly admit that they are getting filthy rich off the backs of others.
What Shkreli did – buy up a life-saving drug and raise its price – is not exactly uncommon. He works in a multi-billion pound pharmaceutical industry devoted to doing pretty much exactly the same thing as he’s done – acquire some monopoly power and sell it for as much as you can. In reality, this quest for monopoly power underpins much of capitalism.
The intersection of the pharmaceutical and finance industries just happens to be about as blatant, direct and transparent as this process gets. Patents – the granting of a temporary legal monopoly – can be resold and then exploited as by Shkreli. This is pretty offensive, yes, but functionally very similar to practices in many, many industries, from fashion, to food, to carmaking. Every company wants monopoly power, and many spend a great deal trying to get it.
What are the chances that the most motor-mouthed of hedge fund CEOs happened to also be the worst, and most deserving of a congressional investigation? Fairly low, especially when you consider that basically nothing happened over the financial crisis. His brashness threatens to undermine the legitimacy of the system. Shkreli isn’t being investigated for his crimes against the American people, he’s being investigated for crimes against his fellow financiers – many of whom will have donated generously to those investigating him.