I begin my defense of a role for public funding of scientific research from a counterintuitive position: I agree with Terence Kealey in the general outline, if not all the particulars, of his comments about scientific research and public goods. Nevertheless it is insufficient, practically and logically, to say that because scientific research is not a public good, it therefore does not deserve public patronage.
Like Professor Kealey, I want to set aside the work of defunct economists, but more so. Looking to Francis Bacon, or even to Adam Smith, on contemporary research funding is about as helpful as asking Georges Louis Lesage, who patented the telegraph in 1774, to program your iPhone.
The situation with respect to the more contemporary economists upon which Professor Kealey relies is similar. The empiricists among them of necessity look backward into a world that – in terms of the nature of scientific research and development (R&D), its role in the economy, and the importance of various sectors (especially but not limited to information and communication technology) – is neither the world we live in, nor more certainly the world we are going to live in. The assumption that the past is like the present is like the future is spread quite thin, “like butter scraped over too much bread” as the aging Bilbo Baggins puts it.
Further, I share with Professor Kealey a curiosity about who benefits; capitalists who advocate capitalism are just as suspect as scientists who advocate science. Who benefits from the lack of publicly funded research? It is large corporations who have the resources to bear the costs of research, and who also stand to threaten individual rights and liberties as much as or more than government. In this, I am also with Keynes when he writes that the reliance on markets to produce good outcomes is “the astonishing belief that the nastiest motives of the nastiest men somehow or other work for the best results in the best of all possible worlds.” The cui bono is an opening bid, not the final trump.
So why should there be public sponsorship of scientific research? Not because without it, there would be no research, but because without it, there would only be private sponsorship of research. We require non-market ways of sponsoring and setting priorities for R&D, both for supporting the development of private enterprise and for other critical purposes besides.
Even the “minimal state” (in Nozick’s sense) has important knowledge inputs that require it to support scientific research. Analytically, functions like the census and standards of weights and measures, for example, are necessary even for a minimal state, for in determining its citizenry a state needs to enumerate citizens and in being available to enforce and adjudicate contracts it needs to have standards as references. Research in forensics is a necessary function of the fair and precise administration of criminal justice (especially when standards are stringent, like “beyond a reasonable doubt” – a libertarian safeguard). And because there is – both in today’s world and in Kealey’s imagined one – a strong private sector research enterprise that keeps advancing, the government’s activities in these areas will likewise have to become more sophisticated. It is plausible to argue that, even in a minimal state, the government would have to maintain access to research at least as sophisticated as the most sophisticated research being done in the private sector in order to enforce contracts involving that research. Do Apple and Samsung really want a stupid court system?
The case for defense research is obvious, but let me add a less obvious point: To the extent that defense is included in the minimal state, health will be included, and education, as well as such technical areas as meteorology, mathematics, hydrology, materials science, many fields of engineering, and so on, because the well-being, sophistication, and ultimately the superiority of the troops are importantly related to their ability to know the weather, plot a trajectory, ford or even move a river, design armor, and so on. And note that neither the civilian nor defense functions have anything directly to do with increasing GDP.
Historically, we see many of these examples playing out in the early republic, largely supported by both Federalist and Republican factions. While the nascent American state rejected ideas about supporting, say, a national university, it still supported functions that were cutting-edge science in their time. And in this understanding of the historical role of science and the American political economy – which is generally well-documented in A. Hunter Dupree’s Science in the Federal Government: A History of Policies and Activities – is where I disagree perhaps most strongly with Professor Kealey.
The American Century was grounded not on a lack of government support for scientific research, but rather on robust, mission-oriented research in areas of particular importance to the state and the economy. It was grounded on the mapping of ports and harbors and the challenge of geodesy by the Coast and Geodetic Survey; on the exploration and physical and ethnographic mapping of the interior, first by Lewis and Clark and then by the U.S. Geological Survey; and on the addition of wisdom to government by the Library of Congress, the Smithsonian Institution, and the National Academy of Sciences. It was grounded on the expertise dedicated to defense through the Surgeon General, the uniformed Public Health Service, the Army Corps of Engineers and the Army Signal Service’s Meteorological Service; on the public dedication to technical education through the Land Grant Colleges, West Point and the Naval Academy, and all the technological developments from ironclad ships and submersibles to Gatling guns and primitive tanks introduced during the Civil War. (And these examples are only at the national level; states had a large role, especially in geology and higher education.)
This was no research laissez faire.
The Edisons, Wrights, Bells, and Teslas that Professor Kealey rightly lionizes all follow these state-led developments. Even in their stereotypical conception of self-made inventors, they all required the patent system to protect and build their work. Both immigrants, Bell and Tesla brought high-end intellectual capital (Edinburgh and UCL, and the Technical University of Gratz, respectively) from Europe and developed it within the infrastructure that the United States had established. Edison, a drop-out, helped establish that infrastructure, but as the inventor of the industrial laboratory, he makes Dupree’s case that “before the rise of the universities, private foundations, and industrial laboratories, the fate of science rested more exclusively with the government than it did later.”
This 19th Century R&D funding did not crowd out private R&D because it was largely infrastructural, and besides, there was little so organized until Edison or later. While there may currently be some crowding out, there are also clear examples to the contrary, e.g., a natural experiment of sorts in 2004 when billions of dollars in corporate funds were repatriated thanks to a tax holiday: firms then spent this money on executive pay and dividends, not on R&D or jobs.
But crowding out is less important than Professor Kealey makes it seem because research differs profoundly in the contexts of sponsorship and performance. The entirety of the empirical literature on research demonstrates that context – profit or not-for-profit; intramural or extramural; mission-oriented or blue-sky – matters for the nature of the work performed. The problem with the over-emphasis on fundamental, exploratory, curiosity-driven research in the academy is not that the private sector would discover the Higgs boson if private investment in high-energy physics were not thwarted by the public expenditures. Rather, there are more socially useful purposes to which high-energy physics money might go. Some of those purposes might be other fundamental research topics (as some physicists claimed), or more mission-oriented or applied research topics, or paying down the debt, or putting money back into the taxpayers’ pockets. Making undifferentiated arguments that giving all public R&D money back to the taxpayers would result in the greatest GDP growth is rather like responding “food” to the question, “what would you like for dinner?” and expecting to have your hunger satisfied with your favorite dishes.
Similarly, as Victoria Harden nicely argues in her posting, the private sector would not bear the costs of many infrastructural R&D projects, particularly public health surveillance, monitoring, and humane interventions. To punctuate her concluding example of HIV/AIDS, one might imagine what the character of the private sector response might have been to AIDS in the early 1980s: Driven by “consumer” fear of contagion and prejudice against homosexuals and immigrants, and absent of sound morbidity and mortality data from the Centers for Disease Control and the technocratic but also compassionate mindset of folks like Tony Fauci at the National Institute for Allergies and Infectious Disease, the response would have been (and nearly was anyway) brutality toward gay men, drug users, and Haitians (and later Africans). Many thousands or tens of thousands more would have died, and not just in the gay community. We would also likely not have seen the historic emancipation – and true libertarian success – of gay people that we have since seen because so many more gay men would be in the ground and not out of the closet.
So, scientific research is not a pure public good. So what? In even a minimal state, there is an important role for a host of research activities related to particular public missions, and 19th century America was full of such research, providing the groundwork for American supremacy in the 20th century. GDP growth, however, is not all that we want out of research. If large positive changes in GDP were all we wanted, we would encourage the wanton destruction of coastal cities by hurricanes, because the GDP growth in rebuilding, greater than the lost production, is pre-defined as a benefit.
Let’s have a constructive dialogue about priorities within R&D spending, rather than a silly one about zeroing it out across the board.