As part of a comment on a post on India’s Chandrayan mission on desicritics.org, I wrote
The government has no business pursuing scientific research.
Here are some responses
kerty: Unfortunately, many sectors can not rely on private commercial transactions. So tax payers have to pool their resources and create capital markets that can allow large scale projects to be undertaken. Unfortunately, capital markets run on profit motive. Lack of instant profit gratification can not help corpocracy or private sector to tackle fields of r&d and infra-structure that are key for economic development. So tax-payers have to pool money and assign such roles to government – roles that neither individual, private sector is capable of undertaking. Removing poverty is a function of economy – and that role is ideal for private sector – government need not dabble in it when empowerment of private sector can tackle it. R&D and economic infra-structure is a proper role of government and good use of tax money.
Morris: …a lot of other government activities are unjust to some people. I think the real question is; is this a proper activity for a government to engage into? If the answer is yes and I think it is then why not. The fact that India is poorer than the US is not relavent.
Chandra: It is increasingly debatable as to what the Govt should be or should not be in. The bottomline clearly is efficiency. Anybody who is able to use resources efficiently is good.
There are three aspects of this issue that I wish to comment on
1) The proper role of government
A government is an involuntary organization. Its involuntary nature makes it fundamentally different from other organizations such as companies, political parties, social groups etc. A voluntary organization is one which works on mutual consent. The individuals who are a part of such an organization, participate in it of their own choice. They (in whatever manner, democratic or otherwise) decide the rules by which the organization functions and the goals which the organization pursues. Any individual can leave a voluntary organization (subject to the rules to which he has already agreed) if he judges the rules or goals to be inappropriate. The only power a voluntary organization has over its members is the power of persuasion. It may not initiate physical force on its members and it may not violate its contracts with its members (the rules subject to which its members join the organization and stay in it). A voluntary organization cannot force a man to act against his judgement. A voluntary organization recognizes the principles that the individual is the unit of thought, choice and action; that the goals and interests of a group are merely the sum of the goals and interests of its members as determined by voluntary consensus; that the proper way to deal with men is persuasion and not force. A voluntary organization enables its members to work together in pursuit of their shared goals. No society can function without voluntary organizations.
But a voluntary organization cannot work without an arbiter. It cannot work if there is no authority to resolve and settle disputes. A voluntary organization cannot work in an anarchy. The role of government is to maintain a framework of individual rights within which individuals and voluntary organizations can work and interact with each other. The creation and maintenance of such a framework is the only proper role of government. This involves creating a system of laws and procedures in accordance with individual rights to adjudicate the resoluion and settlement of disputes (the law courts). It involves granting authority to certain individuals to implement laws (the police). It involves protecting its territory from outside interference (the army).
As a necessarily involuntary organization, a government can have no shared goals or purposes. Thought, choice, action, purpose, goal are all concepts which apply to individuals. Action, purpose and goal are concepts which can apply to groups if there is a consensus among its members and an agreement on the mechanism of estalishing a consensus. Shared goals can range from running a business to spreading a religion to landing on the moon to running a charity to achieving spiritual awakening. All such goals are legitimate. Individuals and voluntary groups have every right to spend their resources on pursuing these goals in any manner they see fit. No individual or group (and therefore the government) has any right to use the resources of some individuals to pursue the goals of others. For example a government may not subsidise a pilgrimage, may not sponser research, may not subsidise certain industries, may not provide social welfare etc. All such activities may properly be carried out by voluntary groups.
It is meaningless to talk of efficiency of resource allocation when one is talking of government activities. Is an efficient pilgrimage an efficient allocation of resources? Is a successful trip to the moon an efficient allocation of resources? Is a welfare scheme run without corruption an efficient allocation of resources? Is a subsidy or bailout granted to failing banks an efficient allocation of resources? Is the creation of a wildlife preserve an efficient allocation of resources? The concept of efficiency does not make sense without a purpose. And a government does not have a purpose beyond that of protecting individual rights.
2) The effects of government sponsored science
Since government funds come from taxation, government funding of research (whether by research institutes as in India, or grants to professors as in the U.S.) reduces the capacity of industry to conduct their own research. When industry conducts research and the research fails to yield any practical results, the industy’s profitability declines. When the research succeeds the industry makes greater profits and its capacity for research increases. Good research is rewarded and bad research is punished. That is not the case with government sponsored research. When research fails, the researcher(s) has nothing to lose. When it succeeds, he (they) receive a patent, commercialize the results and reap the rewards (out of taxpayer money). Profits are private and losses are public. This is true of any commercial activity by the government. Those favored individuals (or groups) who get government support are able to take higher risks since the upside is unlimited and there is no downside. (Just consider the current mortgage crisis for example.) In the American model of research grants to university professors, the university is turned into a research lab. The professors who are able to get the most grants and write the most papers succeed at the cost of the professors who are genuinely interested in teaching. In the Indian model of research institutes, there are labs all over the country engaged in carrying out meaningless research, little of which is ever commercialized.
More importantly, the quality of research suffers. Since the government has no specific goals for research and no ability to judge matters of science or the calibre of researchers or the potential of their proposals, the task of approving grants is taken over by favored panels of “scientists” whose primary skills are political rather than scientific. Obtaining research grants becomes a game of winning favors. Politically motivated projects often get funding. Consider the enormous amounts being spent on researching “climate change” as an example.
3) Private industry and large scale projects
Consider some numbers. The estimated cost of the Chandrayan mission is around $120 million. The annual profits of Exxon Mobil are $40 billion, of General Electric $21 billion, Reliance $2 billion, TCS $338 million. Private industry certainly has the sort of money required for large projects. The reason they do not engage in certain large scale projects is either that the projects are too risky or because under current laws (such as anti-trust), the projects are not profitable. Would a company spend billions on cancer or AIDS research when it knows that its intellectual property rights would immediately be confiscated? Would a company launch a satellite when it knows that government would demand control over its commercial uses? Would a company build a highway when it knows that toll-fares would be fixed by politicians eager to win the next election? Would a company setup a university when it knows that admissions and fees would be subject to vote-bank politics? Why do laws that prevent large scale projects from being profitable exist? Apparantly to “protect” “consumers” from the “greedy” private sector. These laws deliver the “consumer” to unprincipled politicians who do not care to look beyond the next election. If the road in front of my (am I a “consumer”?) house (which gets washed away every monsoon) had been laid by a private corporation, I (or some housing society) would have a contract and the corporation would be legally bound to implement it. The corporation would lay a concrete road that would last for 20 years. Instead the muncipal officers give the contract (for laying a 2-inch thick tar road which survives for about 8 months) to favored corporations, who in turn ensure that the muncipal officers will have adequate funds for political canvassing in the coming election. And if the muncipal officers decide that “public interest” will be better served by some other project, that is just too bad. I should learn to sacrifice my narrow selfish interests for a “larger purpose”. Or I can try going to court and proving that a road in front of my house is crucial to the “public interest”.
Note: This post is also available on desicritics.org with a separate comment thread.