An Unscientific Case for More Government Funding of Science

by Don Boudreaux on September 12, 2012

in Other People's Money, Science, Seen and Unseen

Here’s a letter to the Washington Post:

Jim Cooper and Alan Leshner assert that cutting “federal support for basic science” puts science at risk in America (“It’s time to get serious about science,” Sept. 10).  Their essay, though, isn’t very scientific.

Messrs. Cooper and Leshner, for example, unscientifically assume that every dollar spent by government on science is a dollar that would not have been spent by the private sector on science (or by the private sector on something else of equal, or of even greater, value).  Worse, their claim that “We are already investing a smaller share of our economy in science as compared with seven other countries” reveals their presumption that the only investments in science that “we” undertake are those made by government.  But that presumption is invalid: investments in scientific research are also made by private institutions.  Indeed, as The Economist reported recently about the U.S., “private firms have upped their innovation efforts, so that there are lots of businesses … that will soon spend over $10 billion on R&D each year.”*

Finally, Messrs. Cooper and Leshner write as if the return to government-funded science research is unambiguously positive.  But this presumption is questionable.  As B.L.S. economist Leo Sveikaukas found in a 2007 review of the literature, “The overall rate of return to R&D is very large….  However, these returns apply only to privately financed R&D in industry.  Returns to many forms of publicly financed R&D are near zero.”**

Sincerely,
Donald J. Boudreaux
Professor of Economics
George Mason University
Fairfax, VA  22030

* “R&D: how low can you go?” Aug. 24, 2012.

** ”R&D Productivity Growth: A Review of the Literature,” U.S. Bureau of Labor Statistics, Working paper #408, September 2007.

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