Timothy Taylor summarizes trends in R&D spending. A slice:
Finally, one concern sometimes expresses is that when it comes to R&D, business-funded spending can be more focused on the “D” of developing products for near-term sales in the market, and less on the “basic” research that can be so important for longer-term progress. On this point, here’s a figure from the “Analysis of Federal Funding for Research and Development in 2022: Basic Research” (National Science Foundation, August 15, 2024).
As the figure shows, government used to dominate funding for basic research, accounting for 70% of the total in the 1960s and 1970s, and for 60% of the total as recently as the early 2000s. But the rise in overall US business R&D spending has “basic” research spending by business as well. Now, it looks as if basic R&D spending by business is about to exceed that from the federal government.
One of the recent puzzles of the global economy is that the US economy seems to just keep growing, albeit at a moderate rate, while many other high-income economies like those in Europe, as well as Japan and Canada, seem stuck in slower growth patterns. My guess is that the surge in US R&D spending is part of the explanation for that pattern. Moreover, a higher level of R&D spending by business suggests that US firms are seeing opportunities to capitalize on their R&D efforts in the ever-changing and evolving US economy, while many European firms may not be seeing the same willingness and opportunity for change within their national markets.
Norberg then noted that in the classical liberal tradition it is a given that “we don’t know everything – nobody does,” and therefore it takes trial and error, a discovery processs, to find out what works and what doesn’t. And this is risky and costly but necessary. Unfortunately, a risk-averse culture dominates “in many businesses and certainly in government,” said Norberg. “Many are so conservative they wouldn’t let anyone do anything for the first time.”
In the debates over Brexit almost a decade ago, it was periodically suggested that Britain’s higher trade barriers with the EU could lead to a beneficial upsurge in foreign direct investment, to serve the British market. So far Britain continues to languish in stagnation, and foreign direct investment into the country has fallen. To the extent a nation is not part of the world’s free-trade system, it may be less desirable to invest there.
Now consider the US. It is a much bigger market than Britain, yet a Trumpian trade war will not in every way reassure foreign investors. “America First” is a big part of the core Trump message, and foreign investors may fear their longer-term rights will not be fully respected under such a regime.
John O. McGinnis warns of “the progressive threat to constitutionalism.” A slice:
Progressivism’s challenge to the American legal order arises not from misunderstanding but from a deep-rooted opposition to the Constitution’s original design. The Constitution’s separation of powers and its layered legislative process are deliberate impediments to the rapid societal changes progressives desire. Progressives rally behind the banner of equality and have come to see rights, such as property and even free speech, as pretexts for inequality, because individuals possess varying abilities to wield them. They fear these rights can act like levees holding back the flow of political transformation, empowering citizens to resist the sweeping reforms that progressives advocate.
Here’s the abstract of a new paper by GMU Econ alum Jon Murphy:
I build on my earlier Cascading Expert Failure model (Murphy 2023) by introducing uncertainty to show how expert failure can arise through the opinion transmission process. Using the Tullock/Downs authority leakage model, I construct a simple probability model and apply it to Cascading Failure to answer the question: how likely is it that an expert’s message gets scrambled in the process of communication from the expert to the nonexpert? Furthermore, I discuss what institutional structures can reduce this likelihood.
GMU Econ alum Paul Mueller writes insightfully about housing in the U.S.
Wall Street Journal columnist Daniel Henninger is correct:
It is conventional wisdom that Trump-supporting voters are complicit in an assault on “democracy.” But most of these voters are conservative traditionalists or right-leaning centrists who are mainly opposed to the political and social disruptions caused by what they call “wokeness.” For them, Mr. Trump aligns with their notions of stability.
George Will reports on a tight race in Michigan for a seat in the U.S. Senate. A slice:
Michigan’s numerous and largely anti-Israel Muslims are, however, interested in foreign policy. And 145,000 of them voted in 2020, when Biden carried the state by 154,000 votes. This community harbors sympathy for Hamas and fury against the Biden administration. Biden’s vice president worries about this — and it might trickle down the ballot to other Democrats.
In the 1980s, when the domestic auto industry hit hard times, Texans spoke of many arriving “black tag people” — job-seeking migrants with black Michigan license plates. Dark memories make Michigan unhappy about Democrats’ adoration of electric vehicles.
