Ways Science can get Around Trump
The Present Day
The Trump Administration has made some recent cuts to the federal government’s grant system for scientific research. The 2018 budget request includes $1 billion from the National Cancer Institute, a $575 million cut to the National Heart, Lung and Blood Institute, $838 million from the National Institute of Allergy and Infectious Diseases, $776 million from the National Science Foundation, and the CDC by $1.2 billion. The total budget cut will take out 17% of the federal R&D budget managed by the Obama Administration. Many claim that this is a right-wing attack on science and not an effort to balance the budget. While President Trump has made significant cuts to many research programs, he has also proposed to increase military spending by 10%.
Results
It is not clear where congress will stand on the proposal. With most of the public backlash; they very well may not approve it. Congress has already pushed for $2 billion dollars to go to the NIH (one third of what they will lose next year). But what if the cuts do go through? Our country currently has $20 trillion dollars in national debt and $67 trillion in total debt. (Please keep in mind that there are 1,000 billions in a trillion… it’s a huge number). And with or without Trump; if interest rates go up someday, we will have to make real budget cuts. Interest rates going up is not a political statement, it is a mathematical one. So with his recent proposals, it may be time to explore alternative methods for funding scientific research. All of human progress shouldn’t depend on one man, should it? This article is not to debate the merits of public versus private financing of science; but more to explore the other options our country has if the budget cuts do get approved.
Not just Republicans…
Donald Trump is not the first president to be against federal funding for science. Hall of fame Democrats like Lyndon B. Johnson and Franklin Delano Roosevelt were in the same boat. LBJ invested a huge amount of capital into the National Institute of Health and afterwards considered much of it to be a wasted effort with little return on investment. In Project Hindsight, LBJ concluded that of the Department of Defense’s 710 research projects, only 20 had developed key weapon systems and only 2 could be identified as coming from basic science.
Roosevelt believed that science was a guise for crony capitalism and a hobby of the rich. FDR halved the federal funding for science over a 5 year period. Then, between 1931 and 1938, the number of industrial laboratories increased from 1,600 to 2,200; an absolutely staggering figure… during the Great Depression!
Some regulatory organizations have had similarly pessimistic attitudes. The US Bureau of Labor Statistics concluded in 2007 that privately funded R&D is much more effective at accelerating technology than federal efforts. The OECD found the same thing in 2003. Over a 27 year study, the OECD determined that publicly funded research actually causes a crowding-out of privately funded research and its focus on consumer’s needs.
These anecdotes are not to disprove the mechanisms for federal grants but to show that both those on the left and right have had issues with government funding science at one time or another.
The Early Days
In the 18th and 19th century, much of science was developed by wealthy hobbyists or corporate research divisions. A common argument against corporate financing is that federal grants are the only mechanism for basic research. And you need basic research because it acts as a catalyst for applied research. But all of Britain’s basic research was privately funded up until WWI. In fact, the invention of the steam engine (applied research), forced scientists to reconsider the laws of thermodynamics (basic research). Britain had no government funding for science at all until World War I. It was corporate research that kept Britain ahead of the centralized France and Germany economies during the 18th and 19th century.
One area in particular that experienced great technological innovation was agriculture. Over the course of the 18th century, Britain’s agricultural output increased 61% (double the rate that the previous two centuries experienced). And yet, the work force in agriculture only increased 8%. Aristocrats in privately funded community groups, such as the Highland and Agricultural Society of Ireland and the Royal Agricultural Society of England (“royal” is merely an honorary title), performed incredible research on their own to help improve crop yield and nutrition. These social clubs even started employing chemists to test new types of fertilizer. While small amounts of funding did come from federal grants; the vast majority was through wealthy patrons, memberships and even crowd-funding! In the December 1788 edition of The Country Magazine an advertisement offered to publicize a new means for feeding sheep during the winter that could increase profits by 50% if one thousand subscribers paid 20 guineas each. Perhaps this was the first kickstarter campaign? Either way, individuals were able to collaborate together on practical issues that they were personally experiencing and, limited by their own bank accounts, developed a new phenomena called “hobby farming”.
Corporate Research
Between 1890 and 1940, America had the highest GDP per capita in the world. At the time, the federal government only provided very small grants for agriculture and military applications. Some of the incredible inventions that were commercialized at this time included the Babcock test, tesla coils, Dow process, zippers, nickel-zinc battery, air conditioning, crystal oscillators, duct tape, power steering and the reed switch. Before the United States, the country that held the highest GDP per capita was, of course, Great Britain. And unlike the technologically lagging countries such as Germany and France (GDP ¾ and ⅔ of Britain), Britain had done this all under a laissez-faire policy (which is not Donald Trump).
Many of the inventions previously listed were designed by at-home tinkerers and corporate giants like Bell Labs, Motorola, General Electric and Kodak. IBM is now over 100 years old and has invested in foundational basic research without needing to focus on profit. Lasik surgery was developed within IBM. The ultraviolet excimer laser the company had acquired was first tested by 3 scientists on a leftover Thanksgiving turkey, vaporising only the point of contact and going no deeper into the turkey’s flesh. Additional inventions include ubiquitous “novelties” such as RAM, hard drives and barcodes.
Google has used its fun-filled atmosphere to give employees spare time to pursue their own basic research. This has included products like Gmail, Google Transit, Google Talk, Google News and AdSense. Google has also committed huge amounts of money to continuing research in quantum computing, machine intelligence, and self-driving cars.
Key Takeaways
All these companies are the creme of the crop. They were not mentioned to create a biased or inaccurate argument but to provide inspirational examples for your organization. Since government funding for science is likely to continue to decrease over the next 20 years; scientists, entrepreneurs, and engineers need to see the bright side of corporate and hobbyist research.
Diversity
One of the key benefits of corporate research is diversity. Public funding can be a very powerful tool but comes from one large funnel. This means that the odd balls and eccentrics who get muted out by political buzzwords and trends could have more opportunities to fund their basic or applied research. There is a reason the Wright brothers, Satoshi Nakamoto and Alexander Fleming didn’t get grants… their ideas were really weird! But since they had alternative funding routes (including personal disposable income), they were able to pursue their strange ideas and find new ways to help people. If we decentralize scientific research between smaller organizations, instead of channeling it all through Washington DC, we are going to have a greater diversity of new ideas, innovations and subsequent products that might not have happened otherwise.
Timing
Another benefit that corporate financing provides is timing. There is a best time for new innovations: the time when you can use resources most efficiently. And if a bureau or enterprise is not using resources efficiently, then resources will be wasted. And if resources are wasted, that is going to put a greater burden on the environment. Corporations have to consider profit and loss, so certain innovations only make sense at certain times.
Xanadu was an internet platform invented in the 1960’s. At the time, it was too early for a program like this to take off. Pursuing it would have drained huge amounts of resources that could have been more wisely spent elsewhere in the economy. Xanadu may have accelerated the internet if it had a billion dollar grant, but that money would have had to come from somewhere else where there was immediate need. This idea is most well publicized as Frederic Bastiat’s Broken Window Fallacy:
Let us take a view of industry in general, as affected by this circumstance. The window being broken, the glazier’s trade is encouraged to the amount of six francs: this is that which is seen.
If the window had not been broken, the shoemaker’s trade (or some other) would have been encouraged to the amount of six francs: this is that which is not seen.
The space program is another great example. If America had tried to send a space shuttle into orbit in the 1940’s, our capital structure would not have yet reached the correct inflection point. You could (controversially) argue the same thing for the 1969 mission to the moon. We were doing crazy things through from 1969 to 1971 and then in 1972, it all started to fizzle out. It wasn’t until 40 years later that going to space made sense from a capital efficiency standpoint.
Over-leveraging our resources is bad for the environment and bad for consumers. But with a bit of patience… the timing can be right. We now see a diversity of great companies with diverse perspectives and diverse objectives like Blue Origin, SpaceX and Bigelow Aerospace.
Accountability
Another benefit of working through corporate funding is accountability. Public grants are based on results that are not immediately tied to consumers and helping people. This is not to say that public financing is evil. But only at a private company are people going to say “Hey, that [Gmail, Velcro, Sticky Note) thing is really cool, how can we commercialize it?”
Sometimes grants might incentivize researchers to keep doing in vitro studies; these are easy small wins. Many biomedical researchers lament the lack of focus for producing cures in our top universities. Scientists have discovered hundreds of new treatments for wound healing in mice but are not taking the entrepreneurial next step of commercializing these into products that can help people. Medical tests on mice are a much lower risk and provides greater opportunities for winning grants and furthering an academic career. Perhaps with corporate-university partnerships, scientists can better understand how to get their great discoveries into the marketplace and heal people from diseases sooner?
Conclusion
My respectful suggestion to those who are concerned about the future of science is to not put your hope in President Trump. Help decentralize science through financing models such as corporate grants, crowdfunding, venture funding, and patronage. This diversity of sourcing will lead to a diversity of new ideas. It will also provide creative constraints on scientists that will spur greater efficiency and focus on helping people. I believe these recent cuts will not be the end of science but could be a new beginning for technological innovation.
