(book review)The Case against Government Science

[Alypius Skinner]

http://www.cycad.com/cgi-bin/pinc/apr2000/books/ff_govscience.html   The Case against Government Science The Economic Laws of Scientific Research Terence Kealey St. Martin's, New York, 1997 382 pp, paper ISBN 0-312-17306-7 Reviewed by Frank Forman Ayn Rand dramatized the case against government funding of science in Atlas Shrugged, but a dramatization is not evidence. The problem is that, according to standard economic theory, research is almost a perfect example of a "pure public good," a good that once produced can be consumed by all without any possibility of exclusion by way of property-rights delimitation. Such goods will be underproduced in the market, since the producers can capture only the benefits of the research that they themselves use. Rational citizens, all of them, might very well empower the state to provide for the provision of research and other public goods. Not every citizen would actually benefit from each good so provided, but under a well-designed constitution, each citizen would presumably be better off as a result of constitutionally limited state provision of public goods than without it. This would mean unanimity of agreement-a social contract-and hence no initiation of force. But what about government funding of science? Nearly every scientific paper, it is true, seems to conclude with an appeal for funds for "further research," but even so the case for public funding is accepted by nearly everyone except a few ideological extremists. Along comes a bombshell of a book by Terence Kealey, The Economic Laws of Scientific Research, that argues that government funding of science at best displaces private funding and in fact diverts research into less productive channels. I am surprised that this book has not gotten much more attention from the free-market community. The book is essentially a history of science and its funding, with the number of pages per century increasing up to the present. The author argues that technology drives science, even basic science, just as much as the reverse, which is awfully reminiscent of John Galt and his motor. Kealey describes the work of several engineers and other practical men turned scientists, such as Carnot, Torricelli, Joule, Pasteur, and Mendel. He argues that most new technology comes from old technology. The book is highly instructive on matters of history and greatly entertaining to read. To wit: "Laissez-faire works. The historical (and contemporary) evidence is compelling: the freer the markets and the lower the taxes, the richer the country grows. But laissez-faire fails to satisfy certain human needs. It fails the politician, who craves for power; it fails the socialist, who craves to impose equality on others; it fails the businessman, who craves for security; and it fails the anally fixated, who craves for order. It also fails the idle, the greedy, and the sluttish, who crave for a political system that allows them to acquire others' wealth under the due process of law. This dreadful collection of inadequates, therefore, will coalesce on dirigisme, high taxes and a strong state" (p. 260). Here are the three Laws of Funding for Civil R&D, based upon comparing different countries and across time: "The percentage of national GDP spent increases with national GDP per capita. "Public and private funding displace each other. "Public and private displacements are not equal: public funds displace more than they do themselves provide" (p. 245). But it is not just the funds that are displaced; so is their effectiveness, as a rule, from projects that have a promise to become useful to those that only keep scientists busy. Furthermore, many wealthy men generously fund science and are free to choose genuine innovators and not those merely expert in filling out grant applications. Kealey describes many gentleman amateurs, the greatest being Darwin. And he compares the quality of private and public medical research in England during this century in detail, with the advantage going to the former. Kealey also notes that businesses have to fund their own science departments even if they would rather let other businesses perform the research and free-ride off it: it takes pretty good scientists to be able to understand what the really good ones are up to. And those that have an talent for science will demand at least a small lab as part of the perks of the job. The Economic Laws of Scientific Research belongs on a growing shelf of books about the general futility and perversity of government activity. The perversity is better known: we all know about Charles Murray's thesis on the perversity of poverty programs from his Losing Ground (New York: Basic Books, 1984). What is less known is the futility of attempts to increase redistribution though government. Gordon Tullock, in Economics of Income Redistribution (Boston: Kluwer-Nijhof, 1983), argued that men are naturally moderately charitable and will give up five percent of their income to help the poor - and will do so whether organized privately or collectively. Public poverty programs are perverse, since public programs (esp. federal ones) must operate under bureaucratic rules and cannot distinguish the deserving from the undeserving poor. There is a similar constant in health care. The percentage of GDP devoted to health care in countries around the world is solely a function of GDP per capita and is independent of its organization, privately or publicly. (See the last chapter of Charles E. Phelps, Health Economics (New York: HarperCollins, 1992).) Public provision of health care is futile, in that it does not increase the amount of GDP devoted to it. It is perverse, since publicly funded health care suffers from the usual problems. And now Kealey has shown the same thing for science. Perversity, yes - but futility, much more so. Frank Forman is the author of The Metaphysics of Liberty (Dordrecht, Holland: Kluwer Academic, 1989). Cycad Web Works Mon Sep 23 12:31:15 EDT 2002 : # 1 : last modified 11/3/2000 pinc viewed by [EMAIL PROTECTED]