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Quotation of the Day…

… is from page 95 of the May 9th, 2020, draft of the important monograph – forthcoming this month jointly from the Adam Smith Institute and AIER – by Deirdre McCloskey and Alberto Mingardi, The Myth of the Entrepreneurial State:

The wielders of the scatter gun declare earnestly that they are serving such needs [of promoting science to spur economic development] by lavishing financial buckshot on space telescopes and number theory and the particle accelerator at CERN in Geneva, and giving out subsidies to millions of students to master such subjects. They are mistaken. The target is in the other room, labeled Technology and Engineering, and is well funded, thank you very much, by profit-making companies. Not STEM, but TE.

DBx: It’s a common practice of those who make a case for U.S. government industrial policy to lament the flatness over the decades of funding directed toward research & development by the federal government. (Just why complaining about the performance of politicians is believed by industrial-policy proponents to help make the case for putting more of the economy under the control of politicians is a mystery, one that I’ll here ignore.) But as the above graph shows, and as Deirdre and Alberto note, the relevant picture looks quite different – specifically, much better – when we take into account expenditures on R&D by private businesses – you know, the short-sighted entities that industrial-policy advocates insist perform poorly unless controlled more tightly by politicians and bureaucrats.

The above graph is found in this 2018 article by St. Louis Fed economists Ana Maria Santacreu and Heting Zhu.