Academic Freedom Podcast on Rescinding Harvard's Tax Exempt Status

Can Trump do that, and what would it mean?

A new episode of the Academic Freedom Podcast has been released. The podcast is sponsored by the Academic Freedom Alliance and the Center for Academic Freedom and Free Speech at Yale Law School.

This episode features a conversation with Daniel Hemel on President Donald Trump's threat to rescind the tax exempt status of Harvard University. Hemel is a professor of law at New York University Law School, with an expertise in taxation, nonprofit organizations, and constitutional law.

On the podcast we discuss how private universities fit into the federal tax code, the legalities of altering the tax exempt status of a university, the implications for the future of a university subjected to such an action, the risks to other nonprofits beyond higher education if the administration were to take such a step, and the intricacies of the controversy over Bob Jones University and the legacy of Bob Jones University v. United States.

Comments

[Krayt]

I've long been virulently opposed to taxing religion because a preacher has the temerity to mention politics from the pulpit. It steps on two prongs of the First Amendment, and does so in a deliberately open way to shut people up. In both action and sentiment, it's violation stacked on violation.

And here it comes around, tax exempt status removed from Harvard for saying things those in power don't like. Worse, it just stomps on one of those First Amendment prongs, not two.

So the playbook is to facete about it's all ok.

Another case of "oh, no! They're doing to us what we've been doing to them! We are shocked! Shocked!"

This is the world you built.

But (some long-winded response) so there!

Yeah, though you did seem to miss the part you're taxing religion for the purpose of shutting them up. Thus you cannot even fraudulently hide behing arguments of general applicability. Literally, loudly, out in the openly, the purpose is to punish them and shut them up.

That shouldn't be done. This shouldn't be done to Harvard.

This is the world you built.

[Joe_dallas]

Krayt - the world that was built - by who?

Is one direction of discrimination bad, but the opposite direction of discrimination good?

It would appear that Harvard is good on 1A , but bad on 14A

[Supremacy Claus]

Harvard promised to provide "education" in exchange for its tax exempt status. In education, all sides of a subject are presented. If only one side is presented, that is called indoctrination. That violates the promise made in exchange for the exemption. Harvard is 95% Marxist, similar to its surrounding areas. Should an astronimy class be forced to provide a class on the ancient view that the sun went around the earth? The answer is yes because it will be educational to learn why one must stop believing one's eyes.

Harvard should lose its exemption and its accreditation for its biased Marxist indoctrination of students. It will not tolerate any dissent from its Commie indoctrination.

[Joe_dallas]

Krayt
"And here it comes around, tax exempt status removed from Harvard for saying things those in power don't like. Worse, it just stomps on one of those First Amendment prongs, not two."

look at 14A not 1A

[Krayt]

Several now have beaked off "14th Amendment". Not gonna get involved in arguments 14th therefore government gets the honor of taxing as punishment for speech it doesn't like. This is not a proud virtue signal.

[Joe_dallas]

14A remains the issue - contrary to public policy. See Bob Jones

Its the discrimination that is the problem, not free speech.

[Brett Bellmore]

I really don't think the problem with Harvard is "speech". It's that they're engaged in fairly open racial and ethnic/religious discrimination. Sure, in the course of that discrimination they do some speaking, but if it were all talk and no discriminate, they'd be fine.

Inside Harvard’s Discrimination Machine

"We’ve obtained a trove of internal documents that reveal Harvard’s racial favoritism in faculty and administrative hiring. The university’s DEI programs are more than “unconscious bias” training. They are vectors for systematic discrimination against disfavored groups: namely, white men. As one Harvard researcher told us, “endless evidence” suggests that the university continues to discriminate against the supposed oppressor class in hiring and promotions."

Here's their 'goals'. It's pretty impressive to see that even in departments that already have 70% females, they're still stating a goal of hiring in excess of 90% women. So much for wanting a diverse faculty. The actual goal appears to just be to minimize the number of white men, period, even if doing that makes the faculty LESS diverse.

[Joe_dallas]

Brett - yes the common deception/deflection
1A gives the schools wide latitude - very wide latitude - ecademic freedom. Thus the deflection to 1A

Yet the substantive issue is 14A.

[Sarcastr0]

We've pointed you to the letter to Harvard. It's not framed as a 'don't discriminate' it's framed as a 'Instantiate our ideology.'

Over and over you claim some persecuted institution did a discrimination against white people, when the executive is making it evidence their really thing is hostility to the institution.

You're replacing Trump's grudges with your own white resentment to make it good in your mind.
Trump sucks in a whole different way from you.

[jb]

Are there examples of churches actually having their tax exempt status revoked due to a preacher mentioning politics from the pulpit?

Seems like you are comparing a thing that some people from the left called for versus a thing that the President of the United States is actually trying to do.

[Speaking for normal people]

Jb, see how many times he uses 'seems' rather than getting off his butt to actually find out.

[Krayt]

I used "seems" once, in a proper sarcastic context of criticism. Not sure what you're getting at.

[y81]

What we're getting at is, did the thing you are ranting about (the revocation of a church's tax exemption due to political activity) ever actually happen? The answer is no.

[Bubba Jones]

Why should universities be tax exempt?

[David Nieporent]

Why should any not-for-profit be tax exempt?

[Tallman]

Most non-profits don't (shouldn't) have net income to tax, so the tax status should be largely irrelevant. A few universities are kinda unique in having large endowments.

Ending the tax deductibility of donations is a slightly different issue.
Most blue-ribbon reform commissions recommend it... but the idea is a non-starter politically.

[Joe_dallas]

Bob Jones University ran afoul of Revenue ruling 71-447 which stated that the racially discriminatory policy was contrary to public policy. (14A). "All charitable trusts, educational or otherwise, are subject to the requirement that the purpose of the trust may not be illegal or contrary to public policy."

Rev ruling 71-447 was in reaction to the school busing that started in the late 1960's.

Harvard continues to discriminate in their admissions process, and likley in some of their hiring programs. As such, their policies would be contrary to public policy - at least as held in Bob Jones University.

[y81]

Fine, have an audit and make a determination, and litigate successfully. I don't expect some guy spouting on the internet to do any of that, but the problem is that it seems also to be too much for the Trump administration, which prefers provocative tweets to actual work.

[mulched]

Done. The Supreme Court found in SFFA that they discriminate.

[Joe_dallas]

Agreed - not much of an audit and or further investigation required to determine the facts.

[Sarcastr0]

That's not what they found (since it wasn't retroactive), and also that was years ago; they've changed their policies accordingly.

I know the usual answer to this is to stamp your foot and say they're still doing it in secret.

That's something you need to prove. In court. Under the laws you claim they're still violating.

[mulched]

Nah. It's already been proven. Let them prove they stopped.

[Lee Moore]

Weaning all institutions of higher education from the public teat, would :

(a) allow those who wish to discriminate on grounds of race, sex etc to do so unmolested by the preferences of politicians
(b) save the taxpayers some money

Let's not discriminate against Harvard. Pull them all off that teat.

[Sarcastr0]

Federal grants are not 'the public teat' they are funding foundational research.

The US has done quite well by our research enterprise in the past 100 years.

So has the world.

[Joe_dallas]

Quite a few of those research grants are "public teat" and not funding quality research. USAID as I recall indirectly funded the junk science study of the gas stove causes asthma study.

[Sarcastr0]

USAID doesn't fund research.

Certainly you and your 'I'm an expert in everything' wouldn't know good research if it bit you in the ass.

[Joe_dallas]

Did you miss the word - "indirectly"

work on resolving your Reading and honesty deficiency.

[Sarcastr0]

So you brought something up that was off the topic of research grants.
And call me a liar for pointing it out.

How tedious of you.

[Joe_dallas]

you were the one raising the topic of research grants with the implication that all were of value -

So you get pissed off being wrong
Nice

[y81]

Down with junk science! Bring us real, anti-vax science! Bring back measles and smallpox!

[Joe_dallas]

I am very much in favor of effective vaccination.
smallpox, polio, measles, etc.

[Sarcastr0]

Glad you'e done the hard work to decide which vaccinations are legit.

[Joe_dallas]

another leftist who praises junk science. a hallmark of activists.

[Sarcastr0]

you were the one raising the topic of research grants with the implication that all were of value

And you brought up an organization that doesn't do research grants. As you knew, hence using the word "indirect."

So I wasn't wrong, you were, and you responded to this being shown to you with your usual insults.

[Joe_dallas]

As i stated - USAID indirectly funded the academic fraud level junk science study claiming gas stove cause asthma.
in your embarrasment, you chose to throw insults due to your inability to recognize even the most blatant of crap science.

[halbax]

It is a fact that gas stoves generate pollution. Especially poorly maintained stoves. I have a gas stove but I wouldn’t want to sit there all day breathing in the combustion products. Do you really think burning a fuel indoors could not exacerbate asthma?

[David Nieporent]

You stated it, but since "indirectly funded" has no actual meaning, it's a worthless statement. And of course you — as is your wont 150% of the time — provided exactly no evidence for your claim.

[Armchair]

No, you were wrong. As normal.

[Armchair]

"USAID doesn't fund research."

Well, actually.....

"What Kind Of University Research Does USAID Fund? Here Are 3 Examples"

"A major funding initiative, involving dozens of colleges and universities, is USAID’s Feed The Future project (its website has also been taken down). According to a recent fact sheet from the Association of Public and Land Grant Universities, as of 2021, 21 Feed the Future Innovation Labs had been established at 13 universities that were investigating a variety of agricultural and food issues."

"Research On International Democracy
Vanderbilt University’s Center for Global Democracy was recently awarded $12.5 million from USAID to conduct research on democratic governance in Latin America and the Caribbean.

The five-year grant was intended to help support the work of the Americas Barometer survey, a biennial study of social and political attitudes in more than two dozen countries in the Western Hemisphere. The grant would also fund other surveys of public attitudes about democracy and governance across those regions."

Sounds like research to me.

https://www.forbes.com/sites/michaeltnietzel/2025/02/07/what-kind-of-university-research-does-usaid-fund-here-are-3-examples/

[David Nieporent]

1) You're not qualified or smart enough to judge the study. You're. A. Bookkeeper.
2) "Indirectly funded" is weasel language.
3) That a particular study is designed badly or came back with unreliable results or just didn't lead to the conclusion one wanted is utterly irrelevant to the point anyway. The grant isn't given for the results; it's awarded ex ante, not ex post.

[Bob from Ohio]

Plenty of bookkeepers are smart. Most I'd say.

You might try engaging with his arguments, not going ad hominem every single response.

[Joe_dallas]

Bob - its a case of their embarrassment of lacking basic level of science. Its easier to throw insults than engage intellectually.

[David Nieporent]

I mean, I suppose bookkeepers are generally above median in IQ; that hardly makes them smart. But bookkeeper_joe isn't, and he has no relevant SME in any of the topics he opines on.

[Bob from Ohio]

Please show me on this doll where a bookkeeper touched you.

"no relevant SME in any of the topics he opines on"

Doesn't stop you.

[Joe_dallas]

Still cant engage intellectually in the topic.

Same guy that continued to argue Biden was sharp as a tack
Same guy the regularly argued the covid vax remained strong and effective
Same guy that continued to argue remote learning did not hurt childrens education

Same guy that has gotten virtually every science topic dead wrong

[Stella Link's Ghost]

"Same guy the regularly argued the covid vax remained strong and effective"

https://www.cdc.gov/mmwr/volumes/74/wr/mm7406a1.htm

Vaccine effectiveness (VE) of 2024–2025 COVID-19 vaccine was 33% against COVID-19–associated emergency department (ED) or urgent care (UC) visits among adults aged ≥18 years and 45%–46% against hospitalizations among immunocompetent adults aged ≥65 years, compared with not receiving a 2024–2025 vaccine dose. VE against hospitalizations in immunocompromised adults aged ≥65 years was 40%.

What are the implications for public health practice?

These findings indicate that 2024–2025 COVID-19 vaccination provides additional protection against COVID-19–associated ED/UC encounters and hospitalization, versus no 2024–2025 vaccination and support CDC and ACIP recommendations that all persons aged ≥6 months receive 2024–2025 COVID-19 vaccination.

Exactly what is wrong with the "science" upon which those claims are based. Please show your work so that all of us who wallow in blissful ignorance can elevate our understanding.

[David Nieporent]

bookkeeper_joe is very very good at supporting his claims.

[Stella Link's Ghost]

"You might try engaging with his arguments,"

Are there actual coherent arguments being made or is Mr Dallas just making unsubstantiated declarations? What is the basis by which he declares study conclusions that he disagrees with to be junk? What methodology did he use to arrive at his conclusions?

[Speaking for normal people]

"quite well' Comparted to what ?
We have done quite badly if you consider cancer, diabetes, autism and similar. So compared to what. I saw this kind of thinking in the computer industry. What should and could be running 100 times faster runs 2 or even 5 times as fast and people rave. Think of Teradata vs IBM in regard to databases. Often underused but people rave that it is better.

[halbax]

You can now get a pill that will cure hepatitis, make you loose weight without being on a diet, prevent HIV from causing AIDS, and immune therapy to cure many cancers that would have previously been a death sentence, to name just a few recent medical advances.

[Brett Bellmore]

Sarcastr0, a "teat" is not defined in terms of what what it suckles, but by the fact that it suckles.

[Sarcastr0]

Sure, and if a calf suckling made the momma cow smarter and better, we might have an actual analogous situation on our hands.

Otherwise, it's not even ideology; it's just reactionary bullshit.

[Bob from Ohio]

Someone on the "public teat" just wrote: "Federal grants are not 'the public teat' they are funding foundational research."

A calf is not on the teat, the cow is providing foundational nourishment.

[Sarcastr0]

Exactly wrong.

The funding for grants is not to build or grow the institution, it's for the institution to do some specific project whose proposal won a competition.

We do have capacity building grants, but those are a seperate area.
They tend to go to institutions in red states, since they have the greatest capacity gap to their peers.

You don't need to build the capacity of Harvard.

[David Nieporent]

This has ventured a bit off topic from the tax exemption issue that sparked this thread, but:

The funding for grants is not to build or grow the institution, it's for the institution to do some specific project whose proposal won a competition.

I keep trying to make this point, but the ignoramii keep wanting to flaunt their own ignorance. When a government agency provides funds for a museum or orchestra or the like, it is giving money to that institution for operations, so the museum can keep its lights on and the orchestra can keep its doors open and such. They're not giving money to Harvard. They're awarding research grants to Harvard. It's fee-for-service.

[Squirrelloid]

Eh... sort of.

Some of the money goes to research. Not even most, just some. Most of the money goes to the university to 'keep the lights on'. The majority of most research grants go to 'university overhead', rather than the research itself.

This isn't the way it should be. The university should already be keeping the lights on. Doing research doesn't actually cost the university a noticeable amount of additional overhead. But you wouldn't know it from looking at a typical research grant proposal.

[David Nieporent]

Doing research doesn't actually cost the university a noticeable amount of additional overhead.

I mean, maybe not if one is researching the history of medieval French poetry. But scientific research requires labs, and labs require equipment, and cutting edge research requires expensive labs and expensive equipment.

[Joe_dallas]

Those items you described are not "overhead"

[halbax]

Yes they are part of overhead. For example, some of the overhead received is commonly used to pay off bonds or mortgages issued to pay to build lab space, as well as to maintain lab space and provide necessary services like electricity, trash pickup, and maintenance. And if research requires expensive equipment like a $1 million MRI machine or a $200K confocal microscope, indirect funds are often used to support those purchases.

[halbax]

No you have no idea what you are talking about. IDC rates of 60% are common for many universities. So out of every dollar spent, about 37 cents goes to the institution. That isn’t anywhere near most of the money like you are claiming.

It costs hundreds of millions of dollars to build a building, fill every room with things like benches and hoods, clean the floors and fix things that break, provide electricity, water, deionized water, internet, natural gas, vacuum, pick up and dispose of hazardous waste, provide security, etc. All of those things are part of the cost of running a research project.

Do you think that the buildings just fall out if the sky and the Universities get to use them for free? In reality, a new building happens because there are funded research projects that require infrastructure to do the work. So they get built because there is research money coming in to use the space and cover the infastructure costs.

Do you think when the military contracts to buy a new plane that they expect contractors to pay for some of the costs out of their own pocket, so the contractor looses money?

The alternative way to manage grants would be to include the infrastructure costs as part of the direct costs in the budget, but that would require a lot of accounting and would waste a lot of money. That is how grants used to work but the current system works better.

[Bob from Ohio]

"new building happens because there are funded research projects that require infrastructure to do the work"

Or rich people give money for for the building.

For instance:

"Penny Pritzker ’81 Donates $100 Million for New Economics Department Building" By Andy Z. Wang, Crimson Staff Writer September 21, 2021

[halbax]

So you think that rich people donate enough money to cover the cost of every building in every department at Harvard and every other university? Harvard has about 24 buildings where they do research.

[Bob from Ohio]

June 3, 2015
6 min read
John A. Paulson gives $400 million to endow School of Engineering and Applied Sciences, securing vision for Allston-based innovation

Updated 10.18.2023
Hansjörg Wyss Gives $350 Million to Bioengineering Institute
The philanthropist makes a fourth gift to support basic and translational research.
by John S. Rosenberg

Should I go on?

[halbax]

I don’t really understand what point you think you are making. Universities across the country have hundreds of research buildings and maybe 10% are constructed using gift funds. The fact that a few buildings are gifts doesn’t change the economics and the fact that research generates associated infrastructure costs that someone has to pay for.

[Sarcastr0]

Bob, seems to be describing a patronage system for our university infrastructure.

Don't worry, he's not really that dumb; he's just committed to shitposting all the time.

[Stella Link's Ghost]

"Don't worry, he's not really that dumb; he's just committed to shitposting all the time."

So you think he's pretending to be dumb? How do you determine whether someone is dumb or just pretending to be?

[Toranth]

According to public reports from last year, Harvard spent 69% of NIH grant money on overhead costs not directly related to research.

As a federal defense contractor, our overhead costs were limited to about 10%. Businesses in general run from 10% to 30%, depending on industry - service industries average higher, tech and manufacturing lower.

More than two out of every three dollars sent to Harvard is spent on items not related to research.

[Joe_dallas]

good point on the overhead. Seems most of defense of the research "grants" comes from leftists who earn their livelihoods from various teats.

[halbax]

That is a dumb take. We have medical treatments like GLP-1 inhibitors, HIV medications, and immunotherapy for cancer because our government funded most of the research that led to those discoveries. You are damn right that people would be upset if our government built up that infrastructure for the last five decades and then decides to completely dismantle it going forward. Its not just new treatments that we would loose but our country would literally be turning over science and medicine to China. Even
if we increase defense spending, that money is not going to do much good if we don’t invest in advancing science and technology.

[halbax]

No that isn’t how indirect costs are calculated. The IDC rate for Harvard is 69%. That means if a Harvard gets a grant with a budget of $100,000 to do the research, they also receive an additional $69,000 in indirect costs. So out of the total $169,000 awarded, Harvard receives $69,000 indirect costs, which is 40.8% of the total. So about 60% of the total is spent on research.

The idea that most of the money in grants goes to the institution simply isn’t true. So if you think overhead normally goes up to 30%…well 40% isn’t much higher.

[Sarcastr0]

not directly related to research.

No; not directly related to *any one research project* that's what makes it indirect!

[bernard11]

Weaning all institutions of higher education from the public teat, would :

(a) allow those who wish to discriminate on grounds of race, sex etc to do so unmolested by the preferences of politicians

Unlikely.

(b) save the taxpayers some money

(b) save the taxpayers some money

Not proven, and very likely to be wrong. What do you think the rate of return, including positive externalities, is on federal expenditures on research?

The fierce anti-intellectualism of MAGA, and conservatives in general, is highly destructive.

[Krayt]

As a libertarian I want government to do a lot less. But when I line up things to address first, feeding starving babies and scientific research are last on the list.

[Lee Moore]

As Nieporent pointed out, Sarcastro redirected the point away from tax exemption - which is what this particular OP and thread is about. (And then had the chutzpah to complain that Joe Dallas was dragging the discussion "off topic" 🙂 )

Tax exemptions are ineluctably the public teat and have diddley squat to do with research grants. And of course they fund a whole pile of stuff of zero - or probably negative - value to the community.

Moving on to research grants, the history of the last 100 years demonstrates conclusively that you can spend a ton of money on research without practical benefit (step forward the CCCP.) What actually benefits humans is the development, implementation and distribution of the fruits of research. So we could do with a lot less research, and a lot more development, implementation and distribution - which is what the USA does well, because the "DID" is done by capitalist businesses with a profit motive.

So let's try cutting the federal research budget by say 70%, focussing the 30% remaining on defense priorities; cut business taxes, and see how things go.

[TwelveInchPianist]

Well, soon there'll be a thread on Trump cancing Harvard's ability to enroll foreign students. That should be lit.

[Bob from Ohio]

Good Trump!

An inevitable reaction to giving foreign students full 1A rights, just like citizens. Hope letting those Hamaniks out of immigration jail was worth it!

[bernard11]

the history of the last 100 years demonstrates conclusively that you can spend a ton of money on research without practical benefit (step forward the CCCP.)

Of course you can. So what. The issue is not the success of any individual project, but the total performance of the entire portfolio of projects. It's just like an investment portfolio. Venture capitalists, for example, live with the majority of their investments not producing much, so long as one or two hit it big.

What actually benefits humans is the development, implementation and distribution of the fruits of research.

No trees. No fruit.

[Lee Moore]

No government funding. No trees ?

We obviously need to research the Carboniferous more carefully !

[Sarcastr0]

Yes.

No government funding, no trees.

There is insufficient ROI for basic research to make a business case for it.

Grants are not the government paying for research - grants are given to a recipient for a charitable public purpose or for the public good.
Add in an ROI and you're doing applied research. Great stuff; needs a basic research foundation to get going.

[halbax]

Scientific grants pay for specific research to be performed. They are not for the general public good. The grant application states exactly what work will be done. After the funds are awarded, at the end of each year, a progress report has to be submitted. If you don’t do what was proposed, or if there is insufficient progress, the remaining years will be canceled and they can potentially take the money back.

[Sarcastr0]

From my science policy guy end, this isn't true - it is not a fee for service and the service is the research.

That's pretty in the weeds for most folks. But it does change what the performance looks like.

The research is allowed to meander; there are no specific deliverables other than progress reports; there is no pace of delivery or cost-plus. Breach of grant isn't a thing.

If you don’t do what was proposed, or if there is insufficient progress, the remaining years will be canceled and they can potentially take the money back.
This is not quite right, at least from my end. There are option years where you can quit for failure to technically perform. But 1) that is not necessarily every year, and 2) if it's about progress, the grant is being administered wrong, at least if it's research. Performance yes; progress no.

Basic research programs that aren't failing more often than not are not good research.

FWIW I've seen 2 grants where the option wasn't exercised - one was a STEM internship program that wasn't taking in nearly as many students as it proposed; the other was a PI that lied about their past funding sources.
I have seen the option used to yank a PI that wasn't delivering their annual reports.

[halbax]

The research is allowed to meander; there are no specific deliverables other than progress reports; there is no pace of delivery or cost-plus. Breach of grant isn't a thing.

Of course, the research can meander. A grant is not a contract. But every grant proposal outlines specific aims that the grant is designed to accomplish. The researcher has to actively perform research that is designed to try to accomplish the specific aims that were proposed in the application, even if the project is ultimately not successful.

This is not quite right, at least from my end. There are option years where you can quit for failure to technically perform

As someone who currently has three NIH grants, I can tell you that is simply not true. You are required to spend the grant funding on research. What is not required is that there is a specific outcome. The research might fail in a given year and that is OK. But what is important is that you have to spend the money on research relevant to the aims of the grant.

Note that this is what I was responding to:

Grants are not the government paying for research

That is absolutely untrue. The money awarded as part of a NIH grant has to be used to conduct research. The money awarded as direct costs can’t be used to pay for a football stadium or a new car, or any other non-research related expenses.. If the money has to be spent on research, then the government is literally paying for research.

[halbax]

That argument makes no sense. If there is no research then there is nothing to develop, implement, and distribute. Basically, you just want everything to stay exactly the way it is now and never improve. Think about the development of the transistor. Someone had to make the decision to spend money on the research that led to the development of that technology. It basically now fuels the world economy. Without that research, we would still be using vacuum tubes.

Yes, sometimes companies cover research costs. But not always. If there are promising scientific advances in the US that can improve our lives and make our country more competitive then we need to fund that work. How do you think the US will compete with China if they put a lot of money into research and we do the opposite? Maybe we should stick with vacuum tubes?

[Bob from Ohio]

Bell Labs, part of a for profit company, invented the transistor.

[Sarcastr0]

Just of the toppa their dome!

We're not in an era of low hanging fruit; that model won't work. Didn't work - Bell Labs shut down because it was no longer profitable.

I'm all for non-profit an industry funding research. But counting on them to do the lift is magical thinking.

[David Nieporent]

Bell Labs shut down because it was no longer profitable.

Strictly speaking, it didn't shut down, but it became no longer Bell Labs. And that was the result of the breakup of the phone system, which ended the ability of Bell/AT&T to subsidize it with monopoly profits.

[Sarcastr0]

Sure, but none of that would have been needed if the market hadn't moved on.

[halbax]

I know Bell Labs invented the transistor. That is my point. It shows why it is dumb to think that “what actually benefits humans is the development, implementation and distribution of the fruits of research”

If Bell Labs did not invest in that research, there would be no transistor to develop. So thinking that what is important is development rather than discovery is dumb. They are linked and you can’t develop a technology without first discovering it. Often times the discovery that fuels innovation like the transistor has no apparent commercial use. The work at Bell labs was based on research done by Julius Lilienfeld and Oskar Heil at universities.

[bernard11]

Bell Labs, part of a for profit company, invented the transistor.

Part of a huge monopoly with government-guaranteed rates of return. Hardly the example you are looking for.

Sarcastro says:

There is insufficient ROI for basic research to make a business case for it.

I'd quibble with. that just a bit. In order for a project to be profitable to a private company, it not only has to generate sufficient ROI, the company has to be able to capture a lot of the return. Often, they can't do that, but there is plenty of return to society at large.

There is also the issue of risk and capital constraints. A company may think a project has high expected profitability, but also a high probability of failure. Undertaking it might be a good bet in the abstract, but if you are risking the company you might well pass.

IOW, the whole "private companies can/will do it" argument is full of holes.

[Lee Moore]

As I mentioned the USSR put a lot of money into research, and had some truly excellent scientists. But came up with roughly squat in terms of usable product. Because the nutty socialist system struggled with development, implementation and distribution.

So the useful products from government funding of research, is not a simple function of that funding.

As Bob indicates, even if the federal government spent NOTHING on research, that does not mean there would be no research.

I would not be against giving NOTHING a go , but because I am very moderate and reasonable, I’m happy to go with 30% of what we currently spend.

You can call that “research”

[Sarcastr0]

The USSR did all their research in-house, classified, siloed from one another to the point of competing between research shops.

It has jack to do with the mere funding by the government, and a ton to do with the structure.

Killing the free inquiry and culture of open collaboration that exists in our current university grants structure is a great way to assure a more USSR model.

[bernard11]

the USSR put a lot of money into research, and had some truly excellent scientists. But came up with roughly squat in terms of usable product. Because the nutty socialist system struggled with development, implementation and distribution.

I don't disagree that development, implementation and distribution are critical. But with nothing to develop, implement and distribute you've got bupkes.

[Jmaie]

"Without that research, we would still be using vacuum tubes."

At least electric guitars sounded better back then...

[Tallman]

IIRC, Bob Jones University didn't take federal money. The feds went after the student loan flow.