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 Politics: Laissez Faire Capitalism
Should Government Fund Science?
Liberty Institute, India Tuesday, June 15, 2010

Shanu A
The government of India has decided to sanction grants to science departments of different colleges and universities in Bihar for strengthening their infrastructure, including laboratories.Contentious as the topic is, the libertarian position on the issue is clear-the government should have no business in funding science, writes Shanu A.

The government funding of science and research is a thorny topic, not just in India, but in all parts of the world. Though the issue is contentious, most people do not question the role of the state in funding research and development. The issue raised is often not whether the Government should get out of the sector, but how much of the Gross domestic product (GDP) the government should spend.

Recently, the department of science and technology (DST), government of India decided to sanction grants to science departments of different colleges and universities in Bihar for strengthening their infrastructure, including laboratories. DST advisor Arvind Mitra said that “the state universities must take maximum benefits of various schemes of the DST. There is no dearth of funds for research activities.” So, in short, state universities are encouraged to make maximum use of the situation. Yet, the cry is that there isn’t enough government funding for research.
The Nobel Prize for Chemistry, 2009 laureate, American-Indian Venkatraman Ramakrishnan opined months back: “My impression is that Indian Universities are underfunded. This is something that the government and scientific community in India need to look into if they want an improvement in the field.” Our planners don’t think any differently. Rajagopala Chidambaram, principal scientific advisor to the Government of India, said recently “For high Gross Domestic Product (GDP) growth rate to sustain over a long period, the country must lay a strong foundation for basic research while retaining its capacity to innovate.”

India spends around 0.8% of the GDP on research and development, whereas Japan spends less than 0.6%, United States 0.77% and United Kingdom 0.52 of the GDP. Yet, the success of India in research is pale by comparison. In 2007, 197,019 patents were granted in the United States and 185,827 in Japan, but in India, it was only 35,000. The patents granted to professors is in a typical IIT is meager in comparison to Institutions like MIT. It is certainly true that the other countries mentioned have much higher GDP’s, but it doesn’t change the fact that India spends more in proportion to its national income.

Is Government funding essential for development in science and technology? Theoretical and empirical arguments prove it is not. The primary argument, of course, is that the Government has no moral right to mulct the tax payer for arbitrary pursuits, no matter what the benefits. As an economist put it, “Any argument proclaiming the right and goodness of, say, three neighbors, who yearn to form a string quartet, forcing a forth neighbor at bayonet point to learn and play the viola, is hardly deserving of sober comment."

When we think that there are in fact no benefits at all and the result is misery and starvation, the fallacy of arguments in favor of government funding becomes all the more evident. The failure of Soviet Union in the past to supersede the west in science and technology is for all to see. Ayn Rand was accurate when she wrote decades back that, “Soviet Russia is still unable to feed her people— while the rulers scramble to copy, borrow, or steal the technological achievements of the West. Industrialization is not a static goal; it is a dynamic process with a rapid rate of obsolescence. So the wretched serfs of a planned tribal economy, who starved while waiting for electric generators and tractors, are now starving while waiting for atomic power and interplanetary travel. Thus, in a "people's state," the progress of science is a threat to the people, and every advance is taken out of the people's shrinking hides.”

Government funding in research is a relatively new development. There was science before government involvement, and there will be science without the Government. Today, even in the United States, government funding only forms less than one third of the funding for research. One of the most popular arguments in favor of Government funding is that the Government was instrumental in the development of the Internet. Granted. However, it doesn’t prove that there won’t be the internet without the Government. We simply do not know. It should also be said that the Internet showers great benefits on the common man. However, what such arguments evade is the fact that there is a huge opportunity cost involved.

A common error, known as the broken window fallacy in Economics is involved in such mode of reasoning. Everyone can see the internet and the enormous benefits which come with it. But, it takes more analysis to find that we could have lost more through diverting funds towards the defense department and engineers at Stanford. When the Government spends a lot of money on science and research, it should be obvious that something good will come out of it occasionally. It doesn’t, however, prove that such funding is essential. Most of the internet’s present applications were developed by the private sector and not the Government. Government has been involved in the computer industry from its beginning itself. But, all the Government can claim is their role in coming up with the Internet. Most of the problems associated with the internet could be blamed on the Government. In the words of Peter Klein: “Yes, the government was the founder of the internet. As a result, we are left with a panoply of lingering inefficiencies, misallocations, abuses, and political favoritism. In other words, government involvement accounts for the internet's continuing problems, while the market should get the credit for its glories.” Nothing can be more absurd than a partnership between mind and force, which are the opposites.





This article was published in the Liberty Institute on Tuesday, June 15, 2010.
Author : Shanu works as a research assistant with Liberty Institute. He blogs at http://austrianeconomist.net
Tags- Find more articles on - bihar | government funding | india | internet | science

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