Science in the free market

How to fund science

The myth that science needs government funding to flourish might as well be the Law of Gravity. It is taken as the Truth by the vast, vast majority of scientists. Libertarian academics in the sciences are almost like honest politicians. I would like to propose a case that government funding of science is wasteful and coercive, and that science can only truly flourish in a free market.

Before I dig into the topic, I should make a full disclosure. I’m a PhD student at a Russell Group university, and almost all my funding comes from the taxpayer at gunpoint. In this society, it is almost the only way to do science. Sure, some projects are funded by companies, but how many of these companies are not suckling at the government’s teat? I would love there to be a free market in science, but I’ll take what I can get.

The arguments statists usually make usually revolve around the idea that no one but public (stolen) money will fund basic science. They are convinced that if we were to stop government funding of science, we’d go straight back to bloodletting and geocentrism.

The idea that only government will fund basic science is, basically, wrong. The Rockefeller Institute (now University), privately funded has made more than 100 contributions to health sciences, including paying for the research that discovered DNA as the genetic code and for the research that brought penicillin to market. IBM is the second most cited organisation in scientific journals, after Harvard. Most businesses worth their salt invest in basic research in their field.

Excessive waste of money and resources is a staple of government-funded scientific progress. Just think of NASA, the ultimate example of stolen taxpayer money thrown into a black hole (pun intended). Sure, space travel is pretty cool and the only way for humanity to survive past our planet’s sell-by date. I’d be the first person to sign up for a one-way trip to Mars, which will undoubtedly be privately funded. But $20 billion-ish dollars a year so they can (fail to) put up a satellite to “monitor global warming” or add another digit to the cosmic constant? Sure, good things have come out of the organisation, like GPS and pretty space pictures hipsters can wear, but you tell me private initiatives could not have achieved that at a fraction of the cost! I’m not denying the value of spin-off companies or, heavens forbid, of space travel! I’m simply asserting the very small leap of faith that most of what NASA has achieved could have been done (and will be done, better, faster, cheaper) by private companies.

“But no!” the statist argues, “NASA’s funding is but a fraction of that of the Department of Defense!” She makes a good point - the DoD wastes closer to $1 trillion a year, most of it to kill innocent people or to develop shiny things that kill innocent people. Nevertheless, waste cannot be excused by further waste elsewhere. Again, benefits from military R&D, like the internet, are used by all. Again, in private hands the discovery may very well have been faster and would most certainly be less blood-stained.

As early as in 1959 Rothbard wrote about the detriments that increased government funding for science education will produce. Even today we hear about the “need for more scientists”, especially more [insert "underrepresented" group here] scientists. Initiatives such as STEM or Athena Swann push for more government funding to train future scientists. All this increased supply leads to fewer job opportunities and lower salaries. Only about 10 % of PhD graduates go on to academic careers, and many are left with jobs that do not require 3-10 years (depending on location/luck) of backbreaking training. Sure, nobody in their right mind does a PhD for the money (trust me, I know), but I can’t help but wonder when a PhD, thanks to “degree inflation” will become the new Bachelor’s.

Science is amazing, and vital for the betterment of humanity in more ways than I can describe. But ultimately, despite what venerable academics want you to think it is not an esoteric public good. Most of the scientific results published will in no way make our lives better, but will definitely give their discoverers a sense of personal satisfaction and a career boost. Which is perfectly fine - in good old Ayn Randian fashion, a scientist should primarily work out of self interest and passion for the subject. It is just extremely good fortune that sometimes discoveries benefit the wider society. Like the esteemed Professor Terrence Kealey, the libertarian diamond in the academic rough, asserts, science is an “invisible college good”, and different areas of science are only truly accessible by people who train for long years in their particular subjects. Of course, the valuable spillovers of scientific discovery are available for all, but who provides them? You know it - private companies!

It may seem mind-blowing to the average liberal, but exclusively privately-funded science would be far more productive, efficient and streamlined. And it would certainly not be any less free: the US government keeps making viral research harder and harder. Sure, we may not know how long a shrimp can run on a treadmill (I’m not kidding), but we would most likely have all the benefits (and more!) of free and voluntary contribution to the development of human knowledge.

  • Chris Hassall

    I think you’re presenting a naive view of the “value of science”. Privately-funded research will only generate those outputs that produce results in the short term, which constrains research to a narrow set of industrial applications. It is the blue-sky research that provides a small number of large-scale successes and that really drives innovation. The outputs of blue sky work are the building blocks of privately-funded work.

    As for Rockefeller, it’s 36% funded by US Federal grants so there is still a substantial amount of tax-payer funded work going on there. I don’t know which of the projects you cite were publicly-funded. I’m not sure what that figure is for my university (which is the same as yours), but I would expect that it is not massively higher.

    Finally, specifically on NASA, NASA produces substantial R&D output including a wide array of products that are commonplace today (insoles, cordless tools, transparent braces, water filters…). This is anything but a black hole, and estimated returns on investment could be as high as 14-1. As for why private companies aren’t doing it - isn’t that because the market has decided that it isn’t worthwhile? Or maybe it’s because they couldn’t do it better…? Libertarianism isn’t my area.

    I enjoy your writing style, but the content needs to be more balanced…

    • Gabrielė Stakaitytė

      Thank you for your feedback. I know Rockerfeller is partly funded by federal grants - nowadays, it’s almost impossible to find anywhere that the federal state has not sunk its claws in. I also know that a lot research at our university is funded by companies (much to the outrage of the Trotskys at the SU). But the findings I stressed, to my knowledge, were paid for completely by voluntary donations. Just like the polio vaccine, by the way :)

      I don’t agree that privately-funded research is short-termist and myopic. After all you should know that bodies like the Wellcome Trust fund a lot of basic research.

      I know NASA is a contentious issue, and that it has produced a lot of useful technologies, but as far as its original goals are, it is a complete failure. Is that because of lack of federal funding? Maybe. Or maybe the state just cannot commit to these long-term goals. In addition, private companies ARE doing it, Virgin Galactic and Space X included - and they could do more if not taxed. And don’t get me wrong, I don’t think that space exploration is “frivolous”, I think it’s extremely important.

      Anyway, I recommend some “light” reading by people smarter than me, including and (old, but still relevant!). Terence Kealy, a biochemist, is a great defender of the free market and has a lot of convincing arguments too. But thanks again for your interest :)

      • Chris Hassall

        I’m interested that you see federal agencies as having “sunk their claws” into research organisations, as opposed to providing much needed support for research for the betterment of society. Privately-funded research certainly has a role, and we would do well to bear in mind proximate societal needs when designing our research. For example, I would very much like to apply to aviation companies for small amounts of money to work on insect flight, or water companies to look at sustainable drainage.

        The Wellcome Trust is a charitable organisation which is “independent of commercial interests”. There are better examples of companies funding basic research. Unilever is perhaps one. They fund a lot of work into human psychology and smell, for example. Tangentially-related to their perfume line but providing a lot of data for psychologists as well.

        NASA is certainly an interesting one. If you define “putting people into space” as the end goal, then they have had limited success. However, if it is developing our understanding of space, aviation, and associated technologies then I think we can at least give them a passing grade…? It will be interesting to see how private companies do. And how much of what SpaceX and Virgin Galactic are doing is based on the fundamental work done by NASA?

        I wouldn’t suggest that scientific research requires government funding in all areas. However, having tax-payer dollars to plug gaps and drive interest in topics with little commercial application (wildlife conservation springs to mind) is a good thing.

        • Gabrielė Stakaitytė

          Well, when I say private companies, I don’t necessarily mean for-profit companies, so charities suit as well. I can understand that in the current system government funding is inevitable - after all, my PhD is funded by the BBSRC, which gets state funding. However, that does not stop me making the case for private, or, perhaps “voluntary”, funding for science as being more effective in addition to not being morally wrong from a libertarian standpoint :)

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