Comment by tomrod
4 days ago
In economics discussions regarding public funding policy, the concern of "crowding out" commercial firms or nonprofits is a real concern. It's definitely an observed, measured, and reported phenomenon.
In the end, incentives matter.
There is no private market entity with an incentive to provide research to the public, so in this sense there is no crowding out. Providing research to the public enables the discovery of new products which would otherwise have not been created. Public research is a public good that makes our nation happier, healthier, and wealthier.
Let's ignore FOSS contributions for a moment, which very much contradict your claim that private companies don't contribute research to the public.
Outside software technology: there is a series of papers from Grossman (going back to the 80s!) that analyzes basic versus applied research in a macroeconomic framework. Basic research _can_ be a public good, applied research can be crowded out. Combined with microeconomic research that monopolies can be dynamically efficient (investing in applied and basic R&D, like Bell Labs) and you get several examples and theories that contradict your statement that "there is no private market entity with an incentive to provide research to the public."
Another real world example in hardware that contradicts this claim is the evolution of building control systems. Before the advent of IOT, so, circa 1980s - 2010s, you saw increasing sharing and harmonization of competing electronics standards because it turned out to be more efficient to be modular, not have to re-hire subcontractors at exorbitant rates to maintain or replace components that go haywire, etc.
Including FOSS software is so wild in this conversation that it's ridiculous. You mean creating a product as a loss leader to get people into an ecosystem, farm social capital, create a sales funnel, or get free labor from the community to provide QA? The creation and release of software is NOWHERE NEAR the same category as "doing actual real scientific research" that it just smells of incredibly bad faith argumentation.
Economic analysis? Another intelligence product that requires essentially no staff, no actual R&D, no equipment besides computers? Brother, you have to be kidding me.
The hardware thing is just companies evolving to a shared standard.
Do you have even a little bit of a clue how hard it is to do good pharmacological research? Toxicological? Biological? Chemical? Physical? You have mentioned intelligence products with 0 investment cost and 0 risk of failure.
This is perhaps one of the most fart-sniffing tech-centric perspectives I have ever been exposed to. Go read some actual research by actual scientists and come back when you can tell me why, for instance, Eli Lilley would ever make their data or internal R&D public.
Jonas Salk did it. He is an extremely rare exception, and his incentive was public health. Notice that his incentive was markedly not financial.
Market entities with a financial incentive, whose entire business model and success is predicated on their unique R&D results, have 0 incentive to release research to the public.
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You could argue that Bell Labs was essentially government funded, as the monopoly/concession of the entire US telephony infrastructure is what made it possible, and research at universities was not funded anywhere near current levels.
They were also forced in the 1950s to license all their innovations freely, as compensation for holding a monopoly. Which only strengthens the parent’s point that private institutions have little incentive to work for public benefit.
Galileo wants a word with you ... from heaven.
That whole discussion is based on the assumption that commercial firms or nonprofits are better in some way than publicly funded research. That is the stupid neoliberal dogma that private and market economy always are better than things that are run by our elected officials. That dogma has to die.
Price as a market signal precedes neoliberalism by several decades to several millennia, depending on which economic historian you speak with. Is your argument that basic research which has no immediately attributable applications is better handled by publicly funded research? I mostly agree to that. Applied research is definitely handled better by commercial firms and nonprofits when handling is defined by what people are willing to value (pay for).
If we're talking about applied technology in the public goods space, then it can be a toss up. Sustainability research, for example, can be quite blurry as to whether the market is pricing it in or not as applied or basic research -- really depends on how a government handles externalities and regulatory capture!
I'll 100% agree to government entities as well as some well-chartered public entities being absolutely awesome at setting up incentive structures for desired outcomes. There is actually a whole field of research dedicated to the topic of incentive structuring called mechanism design -- think of it as the converse to Game Theory and strategic behavioral analysis -- that policy design and analysis learn from.
I'll also note that governments aren't structured to efficiently provide benefits or just-in-time delivery in most situations. Though the discussion has made me more curious about how operationally efficient the DOD is for civilian goods distribution, given it supports a massive population.
I'm pointing out that there is an implied assumption that private always is better than public, and that assumption in many cases is just plain wrong. Not in all cases, market economy works great for many things, but there are also many cases it plainly sucks. When you warn that private initiatives might be crowded out, it is implicit that those are more desirable than public initiatives.
This kind of discussion is a bit off topic here, but I think it is important to remind people that the idea that private always is better than public is ideological dogma, not science. But your latest comment makes me believe you agree with that.
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Completely agree. Neoliberalism and its consequences have been a disaster for mankind.
I disagree. I think Neoliberalism has done a remarkable job bringing the majority of the world out of subsistence. I also think it is a target for hijack by neofeudalists as neoliberalism is realpolitick without self-reference.