A couple of weeks back, DougT won this year's Nobel betting pool, and requested a post on the subject of funding of wacky ieas:
could you comment on this: http://www.space.com/22344-elon-musk-hyperloop-technology-revealed.html and the phenomenon of the uber-rich funding science in general. It seems to me that there used to be more private funding of science, and there still is a lot. But is government funding crowding out private funding (political question), is government funding necessary for Apollo and CERN b/c it’s so huge, is private funding more “out there” and therefore on the tails of the distribution curve—more wacky, gee-whiz science, but also more breakthroughs.
This is an interesting question, but I'm not sure I have very coherent views on the matter. I'll bang away on this for a little while, though, and see what emerges.
On the specific question of the "hyperloop," I didn't really comment back when it was announced in August because it seemed to require a lot of information to say anything sensible about the idea of the project. From a basic physics standpoint, it didn't seem utterly ludicrous like a lot of such things do, but there's an awful lot of engineering required to make it work. And I'm very much a "basic research" guy by nature and training, with little interest in all the fiddly details needed to take something from "proof-of-principle" to "product." Could it work? Maybe. I don't really have the necessary technical background to judge. Even when it comes to reading other peoples commentary about whether it might work or not, I'm stuck relying on general tone and the presence or absence of kook signifiers. This sounds reasonably fair, for example, but that could easily be an illusion.
Regarding the general phenomenon of rich dudes funding wacky research projects, I'm pretty ambivalent. I mean, I'm happy to see Elon Musk throwing money at some wild science-y things, rather than deciding to become a Bond villain or build a gigantic castle of solid gold bricks, or whatever. If we're going to have individuals with a net worth greater than small countries, I'd rather see them spend money on funding scientific research than being gigantic assholes.
I don't think this is really a substitute for public funding, though, because it's not especially reliable or comprehensive. I mean, if you happen to already be working in a field that seems sexy to a gazillionaire, that's great, but it's not much comfort to people whose work is in solid but non-sexy fields. It's a little like international philanthropy-- lots of people have written about how charity dollars flow readily for relatively charismatic diseases or technological gimmickry, but it's harder to get people to pony up cash for initiatives that could make a huge difference for relatively little money. Providing reliable clean drinking water for poor people would make a vast reduction in the aggregate amount of human misery, but it's not as glamorous as fighting AIDS. Lead abatement and universal preschool would give you the most educational reform back for the buck, but handing out laptops and iPads is much sexier, and will get you invited to speak at the best conferences.
In the same way, scientific philanthropy seems mostly to head toward fields that already have a lot of cachet-- private space flight and other things that have an air of bold exploration about them. The "hyperloop" thing is actually a bit of an outlier here, in that intercity transport is relatively mundane compared to a lot of the other scientific diversions of the obscenely wealthy. But the fact that those fields have some glamour already means that you can probably direct public funding that way without too much trouble. The really basic foundational stuff, though, isn't likely to draw much in the way or rich-guy dollars.
Public funding agencies like the NSF and NIH end up being a bit like Churchill's famous line about democracy: the worst possible system except for all the others. The Federal grant system is overextended, and if you throw a virtual rock in the air, it'll probably land on a blogger eager to tell you how it's rife with cronyism and support for professional mediocrity, etc. And there's an element of truth to all that.
On the other hand, though, there's a lot to be said for a system whose funding priorities are set not by the whims of a handful of quirky individuals with gobs of cash, but a deliberate decision made by working scientists attempting to evaluate work on the merits. Yes, that leads to an element of conservatism, and will often fail to support long-shot paradigm-breaking research. But what it does get you is a broad base of funding for solid, relatively unglamorous work that provides the foundation for bolder work down the line.
The best role for the crazy-rich-guy (whichever of the other two words you want to have "crazy" modify) funding model is as a sort of adjunct to a more general public tax-based system. I think it's great that we have things like FQXI out there to throw money at some wild ideas, and I'd be happy to see more of the ultra-rich contributing to that kind of thing. But that works mostly because we already have the NSF to support basic stuff that everybody more or less agrees is likely to work.
As for the question of whether public funding has "crowded out" private funding, I don't think that's really the case. I think there are two factors at work, here: one is that science has simply become a lot more expensive than it used to be. When even relatively cheap stuff like AMO physics is a million-dollar enterprise, and high-energy physics costs billions, there just aren't that many individuals who can fund top-of-the-line research.
But there's also a problem at an institutional level, namely the relentless focus on short-term profits. Back in the day, Bell Labs was an enormous driver of innovation, with an astonishing array of foundational discoveries to its credit-- the transistor, the laser, the whole field of radio astronomy-- but the structure that produced those breakthroughs was gutted a couple of decades ago, because it was bad for the balance sheet. Decisions are made and priorities set on the basis of stock prices right now, not potential for the future, and that cuts off funding for a lot of stuff that might pay off hugely in the future. If the goal is to maximize your profit this quarter, one of the easiest ways to do that is to not invest in long-term research. It's also one of the stupidest ways to invest your money in the long term, but in the long term the people making those decisions are dead and buried in gigantic pyramids carved from diamond, so, you know, to hell with Bell Labs.
So, like I said: ambivalent. I'm generally in favor of rich people throwing money at science, but I'd kind of prefer to have it channeled through strong institutions like well-funded research labs and Federal granting agencies. Which isn't to say that I'd turn down $10 million that Elon Musk fished out of his couch cushions, of course, but as a society, I'd like us to have broader and more stable funding for basic science than you're going to get from rich individuals.
Thank you for your thoughtful response to my question. And posted on Bill Gates's birthday, no less!
And Gates seems the exception that proves the rule: someone focused on outcomes and not necessarily funding sexy projects. Like mosquito netting to abate malaria.
But I like your mixed-funding model. And--not to belabor the point--perhaps there is less private funding in physics these days because the research costs have gone up and the potential ROI has gone down. By contrast, there's quite a lot of private research being done in health care and IT, it seems to me.
Thanks again for the opportunity to pose the question.
I've banged away on this earlier this year here. I realize that I'm representing the European stereotype, but I don't think it's a good idea if wealthy people get to pick what kind of science is worth doing. There is just zero evidence they'll make good decisions.
By contrast, there’s quite a lot of private research being done in health care and IT, it seems to me.
Those two fields have something in common which physics does not currently share: private companies in those areas always need to have innovative products in the pipeline, or investors who actually know something about those fields will tank their stock prices. Pharmaceutical companies, for instance, need to be working on the next blockbuster drug. Another thing that biotech and IT share that physics does not is a high concentration of companies that either have or need venture capital funding. I know a few VC types, and they have longer time horizons than fund managers who have to hit a quarterly target, as well as a willingness to lose a few bets (you are usually considered successful as a VC if one out of ten of your investments pays off, because that payoff will more than cover your losses on the other nine).
Often rich people will fund research to try to protect their interests. We saw this with the tobacco industry's efforts to downplay the link between cigarette smoking and lung cancer, and we see this with oil and coal companies who want to believe that using their products does not contribute substantially to global climate change. This is one reason why, as Bee says above, we don't want rich people choosing the directions of research.
Even in IT and health care, though, you see a shortening of the time scale. Or at least that's the impression I get from things like Derek Lowe's excellent blog. He's written about a lot of examples of drug companies shutting down whole research divisions that might have someday produced a new breakthrough in order to concentrate on tiny tweaks to existing products-- adding a new, largely pointless, group to the end of some molecule that's about to come out of patent protection thus making a "new" expensive treatment that can be milked for a few more years.
I don't think time scale is the only reason for the lack of industry funding (especially for basic research) these days. I think a lack of dominant players in markets (which is generally a good thing for consumers) is also an important factor.
One might think of Bell Labs bringing many benefits to AT&T, but, on the other hand Xerox PARC benefited everyone other than Xerox. Most basic research generates knowledge that does not specifically help the company doing the research but helps the entire industry.
When a company IS the entire industry, or close to it, incurring costs for benefits to the whole industry is worth it. Hence Bell Labs, since AT&T not only was virtually its entire industry but expected to be for the foreseeable future. Hence Microsoft funds a decent amount of research. General Motors used to fund a significant amount but hardly does anymore.
If a company is one of many in a competitive market, the results of any basic research it sponsors will go not only to itself but also to its competitors, so if it sponsors basic research, it spends money without gaining any advantage.
Bell Labs, IBM and Xerox were funded by regulated monopolies that were required to fund research more or less as a way of avoiding anti-trust prosecution. You get this with power utilities which are generally required to fund research, often through organizations like ESEERCO (in NY) or EPRI (nationwide). Modern economic theory is based on the theory that nothing tastes as good as seed corn, so AT&T, IBM and Bell Labs would have faced shareholder lawsuits demanding a proper consideration of shareholders. (You'll notice that the automotive industry was an oligopoly, so it concentrated on short term research and shareholder value in the 1960s and did really well in the 1970s and beyond.)