Economists Do It With Models

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Well It Just Seems Silly When Others Do It, Shutdown Edition…

October 5th, 2013 · 2 Comments
Markets · Policy

From PhD Comics:

Jorge Cham is not alone in his opinion…Emily Oster, for example:

Or John Whitehead:

I’m actually trying to write something up and I need to figure out how my precipitation data is measured. So I go try to go to the source… and I’m redirected here: Nice touch NOAA!

Taken very literally, it’s hard to argue with the sentiment that research should be separate from politics. Slightly more broadly, however, there are economic reasons for research to not be entirely separate from government. In general, companies have incentives to produce things that cost money to make because they can then sell those things and make a profit. If everyone could get a company’s output for free, then, well, that company would be in the music industry…but the larger point is that that company wouldn’t have an incentive to invest in such a product. In economic terms, goods that are reasonably costless to replicate and distribute to more people and that are not limited to paying customers are known as public goods. As their name suggests, public goods are often provided by the government because it can coordinate the funding for such goods, whereas private markets for such goods would at least partially result in everyone trying to free ride off of one another and things not getting produced as a result.

As a society, we seem to have decided that basic scientific research (as opposed to research that results in a patented product) should not be restricted to paying customers. As such, open scientific research has the features of a public good, and, as a result, would likely be underprovided by private markets. In addition, the research agendas in private markets are set by those funding the research, and such funders don’t necessarily have have a goal of helping society overall as opposed to furthering their own specific interests. (Yes, I realize that government isn’t perfect on this dimension either, but it’s at the very least less bad. Maybe that can be the government’s new slogan.)

So let’s put some creative thought towards separating scientific research from politics without separating it from government. *insert sarcastic comment about asking the Federal Reserve for advice on this topic here*

Tags: Markets · Policy

2 responses so far ↓

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