In spite of the advances and declines on Wall Street, technology
continues to drive this "new economy." As with economies of the
past, we must stoke the fires to keep this one running at an
efficient pace. That means we should not overdo it, nor should we
Opinions vary as to the efficacy of the federal government
spending tax dollars on research and development.
After all, the government that governs least governs best and the
level of our personal freedom, some say, is in direct proportion to
our government's ability to tax.
Regardless of political philosophy, none of us want our
government to spend in a wasteful manner.
That said, the questions go begging, "should not the private
sector pay for R&D and at what level, if any, should government
The private sector should pay for R&D. Having said that, now
consider the private inducement to spend. If you or I, as owner of a
private company, need research done, by definition we will be very
focused, and targeted with our research dollars. This occurs because
(1) we have relatively few of them and (2) if we pay for R&D, it
will be a specific regime of R&D expected to produce findings to
enhance our financial position.
On the other hand, government has a funding mechanism for R&D,
can be less targeted thereby opening up other possibilities for
research findings and has a history of empowerment for such
Government can do this because (1) government has more dollars
due to its ability to tax and (2) government profit is measured in
service to its citizens and not in financial gain.
Let's look at examples.
How can we quantify the level of R&D that went into the
development of laser-guided weaponry used to defeat Iraq in the Gulf
Much, if not most, of the research that produced such weapons
capability came from a blending of private-sector research funded
with government money.
In this example, the private sector alone would have had to rely
on profit from sales of weapons if the federal government had not
sponsored the research. The only market for such weapons is our
military. U.S. citizens are prohibited from selling such weapons to
foreign buyers without government oversight and approval. This is a
case of limitations placed on an activity in the interest of
Much of the research being performed at health research centers
is paid for with federal dollars. Why? Because healthy citizens are
more productive, less expensive to care for and they are a vital
part of our society, the service of which is why we have government
in the first place. They vote and they want their loved ones to be
healthy -- and vote.
How about developing a new elixir that eliminates wrinkles in
your skin, grows hair on your head, and makes you appear to be 20
years younger than you really are?
Not much need for government investment here. There are no issues
of national security or public health. This type of R&D is purely
private sector with all the profits going to the developer of the
new technology. Government does have a role to play but that is
through the Food and Drug Administration charged with ensuring the
safety of such products. …