Science

Federal Science Funding Won't Accomplish Anything the Private Sector Can't Do Better

A bipartisan bill aimed to help the U.S. “compete” with China would only slow down scientific progress.

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A bipartisan group led by Senate Majority Leader Chuck Schumer (D-N.Y.) wants to counter China with legislation to dramatically increase government funding of pure science (science that is mainly concerned with theory rather than practical applications). They call their bill the U.S. Innovation and Competition Act. But if they really want to spur innovation and competition, they should be trying to slash science subsidies, not increase them.

The most potent criticisms of the government funding of science have come from government agencies themselves. The first came in 1969 when the Office of the Director of Defense Research and Engineering analyzed 700 research "events" that had led to the development of 20 weapons systems—finding that only two of those events were in pure science. 

Then the Congressional Budget Office (in both 1991 and 1998) and the Bureau of Labor Statistics (2007) reviewed the entire academic literature, finding that study after study showed that the research projects that governments funded had failed, on average, to generate profits: in contrast, the research projects that the private sector funded were, overall, highly profitable.

Finally, in 2003 the Organisation of Economic Cooperation and Development, on studying the growth rates of the 21 leading world economies between 1971 and 1998, found that whereas levels of privately funded R&D correlated strongly with national rates of economic growth, there was no positive impact on GDP per capita from publicly-funded research and development.

Government funding of science isn't just ineffective; it crowds out private sector success. When the government subsidizes a company's science, or when the government pays for a research program, that company or that program will benefit. But the economy at large will suffer, because scientists have been pulled out of the projects the market was trying to fund. 

Many view government funding of science as a foregone conclusion. But while the federal government has long funded so-called "mission research," such as the Coast Survey (1807), it didn't start to fund pure science until 1950, when it established the National Science Foundation (NSF).

The blueprint for the NSF was provided by American engineer Vannevar Bush. In his "linear" or "pipeline" model, he proposed there were both military and market failures in pure science: Only if the government funded pure science would U.S. technology flourish. In the ensuing years, much federally funded research has proven him wrong.

This is a tough story to propagate because the vested interests are aligned. The universities and the scientists lobby for governments to give them money on their own terms; industry lobbies for subsidies; and governments enjoy distributing research money, as the Medicis once did to Galileo. But the data show that these schemes will not benefit the economy.

Advocates for government funding of science will point to the many good things it has helped produce, including the internet. Vast funds for research will indeed yield good things, but the government studies cited above show that the costs of that research merely equal the benefits. In stark contrast, the costs of private research are dwarfed by their benefits. The plural of anecdote is not data; and if we are to get policy right, we should look to systematic cost-benefit studies, not anecdotes.

After the Soviets launched Sputnik in 1957, the federal government hugely increased its funding of research. Yet rates of growth in U.S. GDP per capita did not rise, and rates of productivity growth actually fell. That implies that government funding of research crowded out more useful work

Today, China has only a quarter of the U.S.'s GDP per capita. The federal government need not create a bogeyman out of an economic runt. Nor need it repeat the wasteful science expenditures it made after 1957.

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  1. The space race with the soviets wasn’t a science experiment, it was highly political. Same with military spending it was designed to make the soviets fail by overextending themselves, and fail they did – 30 years ago (they are presently reforming and we are doing nothing). I would say China learned a lot from that, and is watching as the US consumes itself trying to compete all the while they fund the push for illegal drugs, guns, and immigrants on our southern border. That we have a corrupt loser like Joe Biden in office just cements that tragedy.

    1. The best thing the government can do for science research is the same as everything else — butt out and let markets allocate resources to where people want them, not where a bunch of ignorant politicians want them.

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    2. All of it is designed to enrich and empower politicians, bureaucrats and their cronies. Any “reasons” given by said politicians, bureaucrats and their cronies are secondary.

    3. Of course, two of the things you list shouldn’t be illegal at all.

  2. A bipartisan group led by Senate Majority Leader Chuck Schumer (D-N.Y.)

    Hard pass.

    1. zero such things have ever existed.

      1. I believe that “bipartisan” in this case refers to far-left democrats and even further-left democrats.

        1. It passes the senate 68-32.

          Democrats 50-0 (100%)
          Republicans 18-32 (36%)

          That’s actually a lot more bipartisan than a lot of the bills the legacy media have been claiming as ‘bipartisan’ recently. Usually it’s something like 49-1 for the Dems and 2-48 for the Reps.

          1. >>That’s actually a lot more bipartisan

            if you consider (R) republicans.

  3. Over thinking this. If we want to out-compete China, just out-compete China. Simply get out of the way and allow US companies to manufacture here. Make federal laws that limit the state regulations on manufacturing of national security goods, like medicine, PPE, defense stuff, etc. fix corporate tax code to incentivize on-shoring of finances and operations.

    Making a bunch of grant money available to scientists is mostly going to stimulate the grant writer and researcher market, and not much else.

    1. There are political and geopolitical problems with straight competition, though.

      For example, the Yuan doesn’t compete on the international currency market the same as other currencies. It used to be worse, at least now there’s an “international” version, but the yuan internally is what Xi’s minion say it is. Otherwise the end result of many of their policies would be an inflation commensurate with that massive growth in economy, wealth, etc…

      If they floated, and we were “competing” on the same global playing field, then their economic successes would significantly change the fact that they’re dirt cheap and so currently easily win on price. This is just one example, but there are a BUNCH of ways China has been allowed by the international community to game the system.

      That said, I’m just being pedantic. I agree with you. Grant money does nothing but get a bunch of people building an industry around getting grant money. I mean, it will produce something, but it is hardly efficient.

      1. Oh yes, it’s far more complex than I have time for here. The yuan is one factor, as is the lack of worker safety and other regs we have here.

    2. I’m weirded out right now. DOL made a good point. Wait, is this actually a sock?

      1. If you guys would be less emotional about certain matters of fact, you’d realize that I’m an actual classical liberal.

        I’m ex-GOP, and I’m not cutting them any slack. Makes people mad around here who are embarrassed republicans.

  4. What’s the point of funding more competition against China with the America taxpayers’ money if the Democrats and the NIH are also, for instance, using the American taxpayers’ money to fund research on behalf of the Chinese military, too?

    “Despite the WIV [Wuhan Institute of Virology] presenting itself as a civilian institution, the United States has determined that the WIV has collaborated on publications and secret projects with China’s military. The WIV has engaged in classified research, including laboratory animal experiments, on behalf of the Chinese military since at least 2017.

    —-U.S. Department of State

    https://2017-2021.state.gov/fact-sheet-activity-at-the-wuhan-institute-of-virology/index.html

    1. If you weren’t so daft you’d see that keeping Americans in all this institutes is good for national security. If the Chinese were to ever do anything nefarious like studying how to release a virus on a population wouldn’t you want to know about it?

      How about thinking before typing for once Ken?

      1. You could do with some pre-thought too. Do you think the Chinese don’t know how to do a little security of their own? You know, compartmentalize, isolate, keep the stupid Americans out of the loop?

        How stupid do you think the Chinese are? I’d think someone like you, adoring woke communist fan that you are, would have more respect for them.

      2. This is the dumbest thing I’ve seen you write.

        “The United States and other donors who funded or collaborated on civilian research at the WIV have a right and obligation to determine whether any of our research funding was diverted to secret Chinese military projects at the WIV.

        —-U.S. Department of State

        https://2017-2021.state.gov/fact-sheet-activity-at-the-wuhan-institute-of-virology/index.html

        Even the State Department thinks you’re stupid!

        1. “This is the dumbest thing I’ve seen you write.”

          Hey now, Ken, that’s a high bar you’re proposing there. Raspy has said a lot of really dumb shit.

          Certainly this is a solid entry, but I don’t know if I can go with “dumbest”. The comments about capitalism this morning were also very strong work on the idiocy front.

      3. If the Chinese were to ever do anything nefarious like studying how to release a virus on a population wouldn’t you want to know about it?

        Where the fuck have you been? Seriously, of all the stupid things I’ve read today, this is the latest.

    2. Chuck Schumer is at the helm, so I’m sure they won’t be funding Chinese bio weapons research. Instead they’ll probably do their own research to do things like find the gene that makes people vote Republican then engineering viruses that conservatives are more susceptible to. Cut out the middle man.

  5. I’m sure all those DARPA inventions were a waste too huh? None of them could’ve ever led to America primacy huh?

    1. Out of curiosity, I know Obama sent the Iranians pallets of cash, but do you know if Biden’s Energy Department has offered the Iranians any funding assistance for their nuclear weapons program?

      You’re a progressive, right? If we oppose funding Iran’s nuclear weapons program, do progressives think we’re being racist? I wouldn’t surprise me, not after seeing them denounce the lab leak theory as anti-Chinese racism.

  6. Government’s only competency is in incompetency, and government’s only efficiency is in inefficiency.

  7. >>wants to counter China

    nothing says (D) like attempted strength at the guy who owns all our debt.

  8. Federal Science Funding Won’t Accomplish Anything the Private Sector Can’t Do Better

    Really depends on what you’re trying to accomplish. If you’re looking for a quick economic return on your science, industrial science is good for that.

    But if you were waiting for the private sector to find the Higgs boson, you’d still be waiting a long, long time. The whole point of having government fund basic research is that it’s well understood not to be economically viable. Making a buck isn’t the point here.

    1. Yes.

      Most basic research produces nothing of monetary value. It produces one thing. People capable of producing things with potential value.

      1. It produces a library of research that others can use.

  9. https://twitter.com/mtracey/status/1405218356077150211?s=19

    Biden says Putin is suffering from diminished credibility on the world stage: “How would it be if the United States were viewed by the rest of the world as interfering with the elections directly of other countries?”

    Yes, how would this theoretical scenario ever play out? ????????????

    1. Obama’s interference in the Honduras election during his 1st term is an example.

    2. You can’t expect Biden to remember the several dozen times we’ve done that. Or what he had for breakfast.

  10. I’ve seen people who really believe that science wouldn’t exist without government funding. They’ll cite that most research has some government money involved, and conclude that the research wouldn’t exist if not for that funding.

    It’s as if Gog wouldn’t have invented the wheel if the tribe’s elder hadn’t demanded that everyone give him a rabbit pelt.

    1. >>Gog wouldn’t have invented the wheel

      aliens.

    2. Gog: “me have idea. Make work better”

      Chief: “Gog. You just want not work and hunt”

      Gog: Me need two moons. Ten rabbits. Then show you”

      Chief: “I give one moon five rabbits. When done you give twenty rabbits.

      Gog: “Deal”

  11. This is a seriously stupid article. Of course private sector science funding produces profit, they only fund projects that they have a high confidence that will generate profit. That is what businesses do, their goal is to make money. Public sector science funding is not aimed at generating profit, it is aimed at a general enhancement of human knowledge. To judge science solely on the generation of profit for private companies is idiotic.

    1. “Public sector science funding is not aimed at generating profit, it is aimed at a general enhancement of human knowledge.”

      Do it with your own money, Molly.

      If people don’t give a shit, you don’t have a right to force them at the point of a gun. You don’t even have the right to force other people to sacrifice their hard earned money for things that actually help other people–much less useless bullshit like, “the enhancement of human knowledge”.

      You can give the government all the money you want right here:

      https://www.pay.gov/public/form/start/23779454

      Leave the rest of us out of your welfare for scientists program.

      P.S. Fuck you.

      1. Go back into your rock cave your knuckle dragger. If it were up to you humans would still be living in caves hunting with spears.

        1. Living in caves isn’t the alternative to Neanderthals like you forcing other people to squander their future paychecks on your favorite useless shit–at the point of a gun.

          You’re a joke.

      2. What an asinine comment. I don’t want my tax dollars to pay for so-called “defense spending”. Yet they do. So put on your big boy panties and let’s spend a few taxpayer bucks on research that may not bear fruit for many years.

        1. The point is to take as much of it as possible out of the public sector. The money we deny the government is our own (through inflation and otherwise).

          Markets are about consumers making choices for themselves instead of having government bureaucrats force their choices on us against our will. If you’d rather give that money to the government to spend on a different cause, feel free. Why should the rest of us be forced to pay for your favorite research under threat of imprisonment?

          The legitimate purpose of government is to protect our rights. Forcing us to fund your favorite research under threat of imprisonment is not a legitimate function of government. That’s just you being an authoritarian asshole.

    2. Shorter Molly: People criticize the government squandering billions in their hard earned money for useless shit, but that’s stupid because the research is supposed to be useless!

      That’s just plain moronic.

      What, do you work for the government or something? That would explain the sense of entitlement to other people’s money, anyway. I bet you sit around doing useless shit all day, without thinking about the taxpayers who pay for it–ever.

      1. I am a scientist and I understand the value of basic level research that might not make profit but is highly valuable for other reasons. And I said the research is not profitable, not that it is useless. Non profitable research includes astronomy, archeology, psychology, history, political science, space exploration, and many others.

        There is also the idea that there is much research that does lead to profit or savings, but is not readily apparent or does not manifest for many years. And also the public funded science trains graduate students who then go on to do the profitable research.

        1. “Public sector science funding is not aimed at generating profit, it is aimed at a general enhancement of human knowledge.”

          —-Molly Godiva

          If no one is willing to pay more for the results of your research than the cost of the research, then the research shouldn’t be done.

          And taxpayers certainly shouldn’t be forced, under the threat of jailtime, to underwrite your research with their future paychecks.
          Because no one in their right mind would squander valuable resources on research that’s unlikely to be worth more than it costs, doesn’t justify doing the research. That justifies investing nothing.

          You’re a scientist? Then you should be able to wrap your head around the fundamentals of investment analysis. Even when government isn’t chasing a profit, they need to account for the benefits of one expenditure rather than another–and the benefits of doing research that no one will pay for willingly (because the benefits are less than the costs) necessarily fall somewhere behind the benefits of providing for lazy deadbeats.

          If you’re a scientist working for the government, I suspect you’re like all the other parasites, who come to imagine they’re entitled to suck the blood out of our backs. You’re still just taking advantage of people by threatening to throw them in prison if they don’t pay you to do worthless research, and your rationalizations for that ethically disgraceful behavior are horseshit. No wonder you hate libertarian capitalism so. If this were a free and capitalist society, you’d be forced to find some profitable activity–that’s of value to someone–or starve to death. I have more respect for janitors.

          1. You morons also do not understand that there is much research that is valuable, but not enough to any one person or company to make it worth it. Say there is a project that will net $100M in savings or profit, and cost $1M, but to any one business only $100k. It is very much worth doing, but who in your small mind would pay for it?

            There is also national security or defense research that is undeniable important but also not profitable. You might like living a life of ignorance, but the rest of us don’t.

            1. “You morons also do not understand that there is much research that is valuable, but not enough to any one person or company to make it worth it. Say there is a project that will net $100M in savings or profit, and cost $1M, but to any one business only $100k. It is very much worth doing, but who in your small mind would pay for it?”

              The idea that this is a problem that requires a government solution is ludicrous. Private entrepreneurs have been setting up businesses to specialize and charging customers, financiers, and/or investors to solve that problem in myriad ways since the dawn of history. Jesus Christ.

              You don’t seem to understand some really basic stuff!

              “There is also national security or defense research that is undeniable important but also not profitable.”

              Actually, the Aerospace and Defense ETFs seem to be doing quite well. I’m seeing a ten year annualized return of 17% for the S&P Aerospace & Defense Select Industry Index, which means they’re doing just fine–with their research–right?

              https://www.spglobal.com/spdji/en/indices/equity/sp-aerospace-defense-select-industry-index/#overview

              Right.

  12. “research projects that governments funded had failed, on average, to generate profits: in contrast, the research projects that the private sector funded were, overall, highly profitable”, Well, duh. That’s why it’s essential for government to fund pure science. We’d still be living in caves if we relied on the private sector to fund things that advance humanity instead of creating new ways to separate consumers from their money.

    1. “We’d still be living in caves if we relied on the private sector to fund things that advance humanity instead of creating new ways to separate consumers from their money.”

      Can’t tell if sarcasm.

      If you’re serious, among all the other problems with what you wrote, you don’t seem to know anything about some really fundamental stuff about how the standard of living improves–which has a lot to do with entrepreneurs driving the cost of things down for consumers and consumers becoming able to afford things they couldn’t afford otherwise as a result of declining costs.

      https://www.investopedia.com/ask/answers/040615/why-productivity-important-concept-economics.asp

      There was a time when only extremely wealthy people could afford to buy color monitors, smart phones, wide screen televisions, or to fly to Hawaii on vacation. Those days are over.

      Unprofitable government spending puts downward pressure on both productivity and efficiency, and that hurts the standard of living. Make it less than it would be otherwise–as the consumer economy and living standards need to improve despite the extra downward pressure of unprofitable activity from government spending and increased taxation. If you’re not accounting for that, then you’re a blind man in a dark room telling us about a black cat that isn’t there.

      It used to be that there was no treatment for impotence–until a Pfizer came along and made a pill for a few dollars a pop. It used to be that poor people everywhere were hungry. Nowadays, there’s an epidemic of obesity among the poor. It used to be that video conferencing was something you only saw on Star Trek. Now it’s free of charge–thanks to private enterprise. Refrigeration, transportation, sanitation, etc., etc. I can’t think of a single advance that hasn’t been driven by separating eager consumers from their money.

      1. Good God KS, ultra-doctrinaire libertarians like you are the enemies of a free market society – just like extreme environmentalists are enemies of the environment. Real life is messy and contradictory and there are things markets can’t do. Markets themselves rest on enforcement of laws that protect property rights.
        Like most of the electorate, you seem to have no grasp of the level of effort involved in scientific research (thank you, public schools). The days of the unfunded garage putterer vanished a century ago.
        Your Pfizer narrative is a perfect example. Pfizer DID NOT miraculously come up with a cure for erectile dysfunction – they commercialized the outcome of academic research. The scientific work involved (smooth-cell relaxation mediation by nitrous oxide) covered most of a decade (’85-’92), done with public funding at UCLA and UCSF.

        Come in from the cold – the most serious assault on freedom in US history is occurring right now. Republicans, as usual, are tongue-tied and lead-footed, and fragmentation from extremism is just what they don’t need.

  13. I’m a retired scientist and the level of knowledge on here is not very high, including the author.
    First, research and development are two different activities. The former, the pursuit of knowledge, is the province of scientists and is a longer term, less focused activity, generally mismatched to shorter term commercialization. The latter, development, is the province of engineers and is a shorter term effort generally with a particular goal, such as a product to go to market.

    Basic science is simply unsuited for commercial funding. It is lengthy, can be expensive and has uncertain outcome – pretty much the opposite of the quarterly profit fast buck mentality of business. As far as government funding goes, the public largely supports science, understands the importance of research and is willing to pay the small amount that supports it. It is also one of the few real bargains from government, at least in the long term.

    Development is the essence of commercial activity – short term, aimed at a product for a particular need or market, done for the purpose of generating earnings. There is no reason it should be funded by public money or favored by public policy.

    Government research funding is scarce and has become heavily politicized. Commercial funding is controlled by MBAs wielding spreadsheets, both filled with bs, who would sack every engineer in the company to save money. And big money, as always, buys what it wants from our Congress of whores.

    Got it?

    1. Basic science is simply unsuited for commercial funding.

      If the results don’t justify the costs, then it shouldn’t be funded.

      Because consumers won’t squander their hard earned money on the results of “basic science” isn’t a problem that needs a solution.

      Go find something useful to do instead. Do you know how to find out whether what you’re doing is useful? If it’s useful, people will pay you to do it–willingly.

      P.S. Market forces are people making choices. The reason we know that laying around on the beach and drinking beer all day isn’t especially useful isn’t because a scientist somewhere did a study and found it not to be useful. The reason we know that laying around on the beach and drinking beer all day isn’t useful is because no one is willing to pay you to do it. Scientists doing research that no one will willingly pay for isn’t any different. If becoming a scientist takes more effort than laying around on the beach, then doesn’t change the equation. It just means that the scientist made a very foolish investment.

      1. You prove your own ignorance with every character you type.

        1. Care to be specific?

          The things I wrote are true (or false) regardless of the names you call me. When you were studying to be a scientist, didn’t they teach you anything about critical thinking?

      2. Justify the costs? On what time scale? The same scale that businesses operate? You don’t know what the fuck you’re talking about.

        Except you do. You know a scientifically literate population will never install Donald Trump dictator, and that’s all that really matters to you at this point.

      3. If the results don’t justify the costs, then it shouldn’t be funded.

        Are you going to measure the benefit of the results like the author of this piece does, based on how much profit is generated? So you don’t support exploring the solar system? No Voyager probes, or Mars rovers, certainly no point in landing on the Moon again if we aren’t going to be mining it for resources within the next few decades, at least. Astronomy, astrophysics, and cosmology are wastes of time, as that’s not going to result in anything marketable. Seriously, what good is knowing how galaxies form or what quasars are? Studying Earth’s climate, ecology, and biodiversity can be done by agribusiness and commercial fishing companies if they find any value in knowing about that stuff, right?

        Scientists doing research that no one will willingly pay for isn’t any different. If becoming a scientist takes more effort than laying around on the beach, then doesn’t change the equation. It just means that the scientist made a very foolish investment.

        The whole point here is that people are willingly paying for it. They vote for legislators that appropriate taxes to pay for that research. If you think that is foolish, you are welcome to argue that point and try and convince enough voters to join you in calling for government to stop funding basic science. I, for my part, will counter those arguments. Your narrow view that the only research worth funding is when people will fund it in hopes of getting a personal return on that investment is so short sighted as to be ridiculous.

        Who paid Isaac Newton to study mathematics and physics hoping that what he learned would make them money? Most of the scientific revolution was brought about by people that just wanted to understand how things worked on a fundamental level, not by people trying to invent things to sell. And advancing theory in that way is still a huge necessity in all technological and medical fields. Maybe you think engineers working on quantum computers will figure out how to make something that is useful without all of the knowledge of quantum theory gained by physicists over the last century. They did basic research that never directly made anyone any profit, but without what they learned, so much of the technology we take for granted now, let alone what we might yet invent, would simply not be possible.

  14. This is practically parody. Basic scientific research isn’t supposed to provide a quarterly return. You can’t really calculate the dollar value of the internet or space travel or foundations of physics or climate science.

    There has, however, been a fuck ton of a lot of profits to be made from the funding of anti-science propaganda, for oil companies.

    You do away with government funding of basic research and you do away with the modern technological world.

    I told you to stop believing in stupid dogmas, yet you persist.

    1. STEVE SMITH SAY TONY CAN’T READ, BUT STEVE SMITH STILL LIKE FIND TONY IN WOODS AND TONY LOVE MORE!

  15. Then why does Reason love big government so much?

    STEVE SMITH LIKE BIG GOVERNMENT TOO, SAME STEVE SMITH LIKE FIND REASONOIDS IN WOODS!

  16. STEVE SMITH ALSO LIKE FIND TONY IN WOODS, AND TONY LOVE TOO!

  17. I generally like Reason articles a lot, but this one is pernicious nonsense. Where do we think that all those private-sector scientists learned to do research? They learned at universities working on government-funded research projects, and they carried the ideas from that research to the private sector, where they figured out how to make a profit from it.

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