Re: ECON: Private Research Dollars

Lee Daniel Crocker (
Wed, 28 Jan 1998 21:52:52 -0800 (PST)

>> Point 1. The laser was not `invented' from the need for new surgical
>> instruments, nor the nanotube from the need of new fibres, nor radar
>> from the need to detect enemy aircraft, nor the chip for the purpose
>> of miniaturization, nor, nor, .....
>> Most fundamental advances have emerged from `pure' curiosity-driven
>> research, not from goal-directed pursuits. The rapid publication of
>> unfettered research in the open literature leads to its free use for
>> technological development by business, industry, government or
>> individual entrepreneurs.

(a) He's trying to slip in the presupposition that private
research is goal-directed while public research is basic. This
is simply false. A large amount of basic researh is funded by
visionary companies and individuals, and a large factor in the
process of getting a government grant is the ability to show a
goal for one's research. Indeed, the private sector can
speculate /more/ freely on research, because one only has to
justify the expense to a few investors rather than to all voters.
(b) The naked assertion that most fundamental advances came from
basic research rather than goal-directed research is simply false.
The transistor was invented on Bell Labs' dime by a goal-directed
project; packet-switched networking (the foundation of modern
communications, including the Internet) was a product of goal-
directed research at MIT. Darwin worked unpaid aboard the
Beagle, and was supported by his father while he wrote. Florey,
Chain, and Flemings development of penicillin, for which they
received the Nobel prize, was funded by the Rockefeller Founda-
tion. Are these not the "fundament advances" he talks about?
If all he can offer is scattered anecdotes, then hit him back
with some of those.

>> Point 2. The Private Sector is inefficient at producing basic advances
>> because of the proprietary secrecy and patenting which accompanies
>> it. This secrecy leads to considerable duplication of research effort
>> across an industry, such as pharmaceuticals. It is because such research
>> is not openly published for all to take advantage of, that I think such
>> research has no place at a university. [Suppose the laser had been
>> invented by Laser Corporation: they would have kept silent about it
>> until all THEIR ideas were patented, and we would have missed-out on
>> most of the developments of the laser these past 38 years.]

(a) While non-directed research might be good at discovery, it's
lousy at /development/, and undeveloped discoveries never go anywhere.
Edison never made any discoveries about electricity, but the fact
that he produced a practical application, and got electric lights
installed in millions of homes, made further research cheaper and
easier to do.
(b) The parenthetical here is pure speculation, and beneath the
dignity of honest debate. Any practical invention such as the
laser will find itself being applied wherever a profit can be made
by either production by the inventor or licensing. Companies
actually prefer licensing inventions, because it's less work than
production and distribution. Duplication of research (not a bad
thing itself, really) only happens when the discoveries are not
well developed and well known, and the best way to develop and
spread anything is to make a profitable product.
(c) Patents are not part of the free market; they are government-
imposed restrictions.

>> 3. Industry tends to be short on altruism: the CEO of a major
>> automobile manufacturer said recently, "we are not here to make cars
>> or employ people, but simply to make money for our shareholders,
>> whatever it takes". And just this week, MacBlo closed its R & D
>> centre in Burnaby because of short-term bottom-line myopia.

Wow, what a wonderful thing for a CEO to say--name that company,
and I'll start investing. A short-sighted company will suffer
at its own hand, and good riddance. IBM and AT&T will be around
and funding research for centuries. Altruism is not industry's
job; so what? If the goal is to do research that benefits
people's lives, what better incentive to do that than that of
selling those things at a profit? What incentive does some lab
rat at NIH really have to do a good job compared to the chemist
whose stock option values depend on it?

>> 4. We, the public, pay for Government operations through `tax'
>> dollars and for the Private Sector with `after-tax' dollars (as
>> consumers). Why do we seem to get so hot under the collar about a few
>> dollars spent by governments on pure research at universities, while
>> shrugging our shoulders at the excesses and extravagances of major
>> businesses and industries -- whose costs we absorb on the ticket of
>> items such as food, housing, travel, hair-dying and E-mailing.

I have a choice about which car to drive (if any at all), which
hair dye to buy (not very useful in my case:), and which e-mail
system to use. Give me a choice of which government to pay for,
and I'll consider that argument valid.

Lee Daniel Crocker <> <>
"All inventions or works of authorship original to me, herein and past,
are placed irrevocably in the public domain, and may be used or modified
for any purpose, without permission, attribution, or notification."--LDC