Public funding of science

We get the usual \”scientists should get tax money\” argument rolled out at The Guardian. My comment left there:

Scientist in doesn\’t understand economics shocker!

The argument in favour of tax funding for science is that science is a public good. This means that it is non rivalrous and non excludable. If Mr (sorry, Professor? Dr.?) Khan discovers anti-gravity then we can\’t a) stop other people from using it nor b) does other people using it mean that we cannot.

Because science is a public good economists agree that it\’s something which a pure market system won\’t provide enough of: if you cannot profit from it directly, other people being able to take your results and use them for free, why would you invest in it? Thus we subsidise it from taxes.

However, this very same argument which tells us that there should be tax subsidy also tells us that it doesn\’t matter which country the science is done in. If a German, a Chinee, a Portugee or an American discovers anti-gravity then we are all able to use the discovery as well. Because science is a public good.

So, because science is a public good we should subsidise it, but because science is a public good it doesn\’t matter which country does it.

Now, as soon as you start saying \”Ah, but what about patents\”, what about things that are invented which are then protected, which people can make money out of and thus we really might want to make sure they are invented in the UK….well, when you\’re talking about things which are protected, which people can make money out of, then we\’re no longer talking about a public good, are we? Because this is now excludable. We\’ve a patent on anti-gravity and you can only use it if you pay us.

If it\’s not a public good then there\’s no reason for the tax subsidy.

So, you can either argue that science should be British, because we can make money from it, which has the side effect of destroying the argument for tax subsidy, or you can say that science is a public good and should have a tax subsidy….but you cannot then argue that science must be British.

One or the other please, not both. Trying to argue both just shows that you don\’t understand the science of economics: not a good thing for a scientist trying to make an economic argument.

14 thoughts on “Public funding of science”

  1. There is the bonus of having lot’s of clever bods hanging around the UK though if we do tax subsidise it, and those clever bods may do other things for the UK.

    Though as an economic argument i concede it’s pretty flimsy (?)

  2. same point: the result may be a public good, and just as valuable if found in china or bristol, but the process of getting to that result, all the trials and errors and training and learning and teaching and employing and spending and the benefits from all that is mostly local. There’s huge indirect benefit in having the collection of brains together that form a silicon valley or glen or whatever it is. too theoretical, i think, tim.

  3. It all depends what you mean by public.

    When nation A funds science because it is a public good, they mean, it’s for the good of the public of nation A. There is no obligation to share that science with the public of nation B who didn’t pay for it.

  4. unless there are some localized externalities, that benefit the UK economy. Then you can argue for tax subsidy on the basis of making moolah.

  5. Scientists don’t understand economics? But I thought that being a climatologist gave you the right to determine future economic policy?

  6. So if a govt funded scientist at a university somewhere in the UK invents a new widget, am I allowed to have a complete set of designs so I can make one (or thousands) myself? Because as a taxpayer I have helped fund said scientist?

    Or will they license the patent to various manufacturers, and the university pocket the money, and I get sued if I try to make the widgets without a license?

  7. Brian, follower of Deornoth

    “There is the bonus of having lot’s of clever bods hanging around the UK”

    That may be so, but there’s also an opportunity cost: all those clever bods could be doing something that pays the rent, were we not subsidising them to produce public goods.

  8. Sobers: it’s often not inventing new widgets, but doing the basic research which leads to the invention of new widgets. As Tim says, it’s non-excludable and all that stuff, which basically means that once we’ve done a bit of basic research there’s no way of stopping the whole world taking advantage of the new knowledge. That’s precisely true, and a good thing too. But it does mean that we really couldn’t care less whether that basic research gets done here or anywhere else, from the point of view of the research itself.

    Patentable widgets are an entirely different matter, and there are normally contractual arrangements between academics and their employing institutions concerning what you do if you produce something which is commercially viable. Certainly my own institution owns shares in a number of spin-off companies, and I imagine the same is true in places like Cambridge.

  9. Remember that after 20 years anyone can use the technology described in a patent. A patent just defers use by others.

  10. So Much For Subtlety

    ambrose murphy – “the result may be a public good, and just as valuable if found in china or bristol, but the process of getting to that result, all the trials and errors and training and learning and teaching and employing and spending and the benefits from all that is mostly local.”

    But if the government is paying for it, the costs are all local as well. The benefits may or may not outweigh the costs. After all, we pay large numbers of underclass women to sit around all day producing nothing but feral children. I do not see the immediate benefit of that. If the Swedish government is willing to pay both groups to do that in Sweden, why not take them up on the offer?

    “There’s huge indirect benefit in having the collection of brains together that form a silicon valley or glen or whatever it is.”

    Really? What? What is worth the cost? There is a huge benefit from having private industry create a silicon valley. There is less benefit in having the government try to guess what the next best technology is going to be. But some one else is doing this experiment. Singapore is investing massively in biotechnology. Now is a great time to be looking for work if you are in this field and want to live in Singapore. You think the Singaporean government will get it right and profits will flow?

  11. Continuing on the “bonus of having lot’s of clever bods hanging around the UK” theme, should we have saved money in the late 30’s/early 40’s by leaving the development of radar, computers etc to the Germans? There are national security advantages to have a large pool of science and engineering talent in your country so that you can recruit the people you need for the jobs you don’t want to leave to foreigners (e.g. AWE, GCHQ).

    One also needs to train the scientists and engineers that will go on to work in the science-based for-profit industries that we presumable do want to have here. Some would point out that these companies should be financing the training of their own staff, or could recruit from abroad. However, the cost to the treasury of funding scientific education and research is small compared to the taxes paid by the oil, pharma, IT, aerospace etc industries, so they already are paying for it, not to mention the number of UK science graduates who go to work in the finance industry.

    I’d also note that the argument that because basic science is a public good, we can leave it all to others assumes that:
    * The others are economically rational agents who won’t try to restrict this scientific knowledge for other political purposes (see comment #3).
    * The others are not economically rational enough to follow this argument themselves.

    Disclaimer 1: I’m well aware that “national security” can be used by government to justify anything.

    Disclaimer 2: My employer gets a considerable percentage of its annual revenue from the government to support UK academic research, so I am clearly biased on this subject.

  12. There is a national good in something being invented here. It gives this country a head start in developing it. The engineering rules by which atrcraft fly are the same everywhere but aircraft manufacture is heavily concentrated in the US because they made most of the first advances there. It may well be that our government, by intorducing regulatory restrictions on new technologies have an even greater negative effect on progress than any positive effect of supporting research (forcing people who want to research GM to move to Singapore or the deliberate regulatory destruction of the British nuclear industry being examples) but this, while an argument against Luddite regulation, is not an argument against also promoting research.

    The main problem is that money is given not for achieving something but as research grants to those & such as those. At worst that means government gets the “research” results it wants irrespective of the science (eg global warming) but even at its best it is not cost effective.
    http://www.financialpost.com/analysis/columnists/story.html?id=0a545dbe-1ce4-467b-8220-d63f14046b83

    Technology X-prizes work probably about 30 times better . Being open to all they don’t provide political patronage & thus are less popular.

  13. Pingback: Tim Worstall's Mighty Chopper - Charles Crawford

Leave a Reply

Your email address will not be published. Required fields are marked *