Should the government subsidize Research and Development?

[ChinoCoug]

http://faculty.chicagobooth.edu/aust...rch/r&daer.pdf

This study shows that :

1. Government subsidies mostly end up in the salaries of scientists and engineers, and not in inventive activity.
2. Government subsidies also crowd out private innovation, as non-subsidized companies have to raise their wages to compete with subsidized ones, and spend less on inventive activity.
3. Because of the large amount of training it takes to become a researcher, subsidies do not increase the supply of researchers.

What I think the study is missing is a more long-run examination of whether the increased salaries will make science and engineering careers more attractive, and make more researchers.

[MikeWaters]

are you asking if the USA would be better off if the NIH did not exist, for example?

[ChinoCoug]

Originally Posted by MikeWaters

are you asking if the USA would be better off if the NIH did not exist, for example?

Should we increase/decrease public funding for R&D?

[MikeWaters]

Originally Posted by ChinoCoug

Should we increase/decrease public funding for R&D?

I'm not a neutral party here.

I see the private sector having a role, and the public sector having a role as well.

I am strongly in favor of robust publicly funded research. For one, public research goes into areas that private research is unwilling to tackle. Specifically, areas that do not have a high financial incentive. For example, if there is a class of medications that are making big pharma billions of dollars, but are of questionable efficacy above generic, cheap medications, who is going to do the research showing that the new, expensive medications are not what they are claimed to be? I will tell you--it will not be private researchers. Much of the private research is built on the shoulders of a lot of public work. In other words, applied science on the back of basic science.

Having said that, there is a lot of research going on that is of questionable value. There is also a lot of questionable research that is proposed, and never funded. There are a lot of good researchers who are now finding other careers because there is no money in research, and the funding is as tight now as it has ever been.

As to the argument that wages are inflated--if I gave up research, I could double my wages. I would hate to see how low wages would go for medical research if you are arguing that they should be lower!

One more point--there is A LOT of non-inventive activity going on in private research. There is a lot of gaming of patents that requires millions of dollars. For example--you have a blockbuster drug whose patent is running out. You do a study showing that maybe an isomer of your blockbuster drug has less side effects and is equally effective (essentially you have purified your drug). Now you patent this isomer and get another 8 years or whatever out of the same product. And you have spent millions and millions of dollars and years of time on this, and you stand to make billions of dollars for a product that is more a creature of marketing than actual benefit to science. This is happening a lot.