Skip to comments.Does Government R&D Policy Mainly Benefit Scientists and Engineers? ( corruption alert )
Posted on 05/26/2009 2:50:41 PM PDT by Halfmanhalfamazing
Conventional wisdom holds that the social rate of return to R&D significantly exceeds the private rate of return and, therefore, R&D should be subsidized. In the U.S., the government has directly funded a large fraction of total R&D spending. This paper shows that there is a serious problem with such government efforts to increase inventive activity. The majority of R&D spending is actually just salary payments for R&D workers. Their labor supply, however, is quite inelastic so when the government funds R&D, a significant fraction of the increased spending goes directly into higher wages. Using CPS data on wages of scientific personnel, this paper shows that government R&D spending raises wages significantly, particularly for scientists related to defense such as physicists and aeronautical engineers. Because of the higher wages, conventional estimates of the effectiveness of R&D policy may be 30 to 50% too high. The results also imply that by altering the wages of scientists and engineers even for firms not receiving federal support, government funding directly crowds out private inventive activity.
I don't think anybody around here would be surprised by this, that "federal research" is nothing more than a form of kick backs and reach arounds. That's usually how it goes. Claim you are doing something good for the people when you are only helping out your unionista friends and consolidating power.
And this from someone who is a member of team obama!
None of the scientists and engineers I know are union.
Perhaps in universities they are teachers union?
Do you know any who work directly for government?
In universities they probably are, but either way ‘federal research’ is somewhat of a myth. In reality it would seem that it’s nothing more than a way to get more dollars for your friends.
Since I work in a field that does ‘pure’ research, I would only note that there is some research that only the government can prod. I tend to think specifically of military applications and innovations. I agree that the best innovation comes from the private sector. Not every company has a large R&D budget ( or any at all for that matter). What you have is places like Bell Labs, various university labs, and some larger private companies that invest in pure research. Much of that is paid for with or subsidized by government funds. I ask a simple question, what single company would have provdied funding for the initial Mercury? Gemini? Apollo? or Shuttle programs?
I am still angry over something I saw in Commerce Business Daily years ago.
Request For Proposal:
"STUDY OF THE THREE TOED DESERT TORTOISE: $110,000
(Only Dr. Congressmancousin Jobsworth is an authority on the Three-Toed Desert Tortoise)."
"I'll bet you're the kind of guy who would........."
This claim that salaries don't influence which fields people go into proves one of two things:
1. The author is a moron, or
2. The author believes that YOU are a moron.
No government types all private industry, but of course I
personally want my friends to make more money. O’s friends
not so much.
This is socially beneficial -- better that the next generation are drawn to physics and aeronautics than into financial Ponzi-scheming or legal red-tape-generation.
I agree with you. The headline was amusing as if those
doing R&D would be other than scientists and engineers.
Indeed. Why do I have this hunch that the “think tank” behind this study is also a shill for issuing H1B visas as fast at the government printing presses can crank them out?
Could be, I’m inclined to believe that the motivation for
the article would be to cut funding from R&D as evil people
know as scientists and engineers are making to much money!
-———This claim that salaries don’t influence which fields people go into-—————
I didn’t realize this discussion was about income influencing which fields are chosen.
I thought it was about the fallacy that federal research meant a thing with regards to R&D.
Perhaps you should read what was posted again?
Maybe. But the point of what’s written is still an interesting concept.
I’d say that’s a safe bet.
But look at what’s written. In shilling they’ve admitted to something they shouldn’t have.
R&D funds aren’t really R&D funds. It’s payoff dollars for friends.
That IS important to the study, though. Based on the article presented, the study builds on the premise that the labor supply is "quite inelastic." If salaries influence which fields people go into (and they most certainly seem to), then the labor supply is NOT "quite inelastic" and the entire study becomes invalid.
As someone who used to work in a federally funded research lab, I'd argue the author was completely looking at the wrong side of the equation. Low salaries cause a lot of people to leave research, but lots of money is wasted on getting fancy equipment that really doesn't have much impact on the advancement of the field.
-————That IS important to the study, though.-—————
Sure. I don’t want to completely discount that, I’m sorry If I gave that impression.
But be the labor supply elastic or otherwise, the real point of asking for increased R&D dollars on part of politicians can’t be ignored.
It has nothing to do with increasing research as claimed or promised by said campaigning politician.
It’s all about returning favors.
That’s(at least partly) why government research is slower than private sector research. It’s improperly allocated.
You could even make an argument that it’s not allocated at all. It’s simply siphoned off out of the research budget and it’s doled out to political supporters. Just like that money from the gas tax trust fund.
Seems to be no different to me. The key word in both instances is ‘diversion’. In one hand you have what the money is requested(or taxed) for. In the other hand you have it’s actual usage.
————but lots of money is wasted on getting fancy equipment that really doesn’t have much impact on the advancement of the field.—————
Haha, you mean like 700 dollar hammers and 3000 dollar toilet seats?
Also, keep in mind that this from the year 2000, way before goulsbee joined team obama. I caught wind of it the other day flipping through channels.
I suggest that you take your own advise:
Their labor supply, however, is quite inelasticTo assert that the labor supply is "inelastic" with respect to salary is to assert that changes in scientific/engineering pay will not affect the propensity of people to enter those fields. The absurdity of this notion is obvious to anyone who is not a cloud-cuckooland academic or a paid shill.
If people don’t have the promise of a decent level of comfort how can they justify the opportunity cost of getting a Phd?
On the same note if spending in R&D gets gutted the rest of the world will step up to the plate and the USA will lose more of our lead in science. I’m not for wasteful spending I would argue there is more accountability to federal granting agencies than for earmarks, farm subsidies, special programs, entitlements, etc. We have plenty of places to improve the way we spend and cut waste but science isn’t close to the worst offenders.
nice tag btw.
Yes, I saw that line. I didn’t miss it with small text, nor with big text.
-————To assert that the labor supply is “inelastic” with respect to salary is to assert that changes in scientific/engineering pay will not affect the propensity of people to enter those fields.——————
I would suggest that getting political payoffs depending on who is running for office at that specific time will also affect the propensity of people who enter those fields.
—————The absurdity of this notion is obvious to anyone who is not a cloud-cuckooland academic or a paid shill.—————
A paid shill for.......... ? Exposing how big government R&D dollars are nothing but payoff dollars for allies and friends?
You really think that? Who do you think is paying me? Rush?
Or are you trying to convince yourself that left wing academics are invading FR here to point out how the friends of ideology get paid?
Put the puzzle together and get back to me.
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