4 ms·

In my opinion, the Big Question in politics is: what are corporations not doing well, and how do we do the best job of doing that? (if not directly, then by pro

In my opinion, the Big Question in politics is: what are corporations not doing well, and how do we do the best job of doing that? (if not directly, then by proxy/with incentives) Structurally, corporations tend to underinvest in R&D with big future payoffs and societal benefits/positive externalities that are hard to capture. That's where the government should step in, and it has been slacking on that front for the last 20 years. Another job of government is to ensure the proper functioning of markets. Anti-trust is an important part of that. The government has been slacking on that front for the last 40 years. That's without getting into education, transportation, and inequality, all of which are very important problems that are either unaddressed by or exacerbated by corporations. I don't think we have a major problem with identifying existing talent, and if we do it is a comparatively lesser issue.

nradov 6y ago
What is the basis for claiming that corporations underinvest in R&D? How do you calculate the right level of R&D investment?
- keenmaster 6y ago
  The disproportionate share of paradigm-shift innovation coming directly or indirectly from the government is a testament to that fact.
  - nradov 6y ago
    Which paradigm-shifting innovations are you counting there and what was the ROI on the programs which produced those innovations? Why would it be better to have corporations doing that R&D instead of government?
    - czzr 6y ago
      Basic research is a public good, and corporations will not provide enough of it.
  - notahacker 6y ago
    There's a simple explanation for that though: the government has more money, and socialises the profits. At one point the US government was spending 4% of GDP on NASA. Not everything NASA did was possible to commercialise, but entire industries from satellite communications and air purifiers to baby formula and memory foam were created based on solving difficult problems for spacemen. All of these now mass market industries pay tax on their US operations. Even if a corporation could spend that sort of money on a space program it couldn't hope to collect a return from every industry that grew up out of that space program.
AlexTWithBeard 6y ago
> what are corporations not doing well? This is a fair question, but it should be accompanied with another one: what do the corporations do well? Will our alternative option make some things worse? What's our criteria of success and what's our backout plan if the criteria of success is not met by a certain timeframe?
- keenmaster 6y ago
  I don't disagree with any of that. Corporations do many more things much better than government. That is always a premise of mine, and I usually don't state it explicitly in these kinds of debates. If anything, corporations themselves should be begging the government to spend more on basic research. If it doesn't, it will not reduce taxes by the amount that it doesn't spend. It will merely reallocate research funds to pure defense or some other lower return endeavor. There is a symbiosis between capitalism, innovation, and government. Capitalism without good governance turns into crony capitalism. Innovation would decline without adequate and competent* government expenditure (*historically there's no reason to believe that the government is incapable of profound basic research - quite the opposite). Good governance without a culture which appreciates market economies can slowly devolve into bad governance and a basket case country.
  - bergstromm466 6y ago
    > Capitalism without good governance turns into crony capitalism What are some signals you watch out for, with this?
    - keenmaster 6y ago
      - Antitrust enforcement - Industry concentration - Degree of divergence between popular will and policy (thanks Citizens United) - Level and direction of inequality - Bargaining power of labor (automation does not fully explain the cratering of this bargaining power) - Level of corporate profits (compared to the past) Generally, I'd also look at the correlation between increased productivity and happiness. If, in aggregate, we're producing more year by year, and yet people are becoming more miserable and anxious, something is wrong.

nradov 6y ago

What is the basis for claiming that corporations underinvest in R&D? How do you calculate the right level of R&D investment?

keenmaster 6y ago
The disproportionate share of paradigm-shift innovation coming directly or indirectly from the government is a testament to that fact.
- nradov 6y ago
  Which paradigm-shifting innovations are you counting there and what was the ROI on the programs which produced those innovations? Why would it be better to have corporations doing that R&D instead of government?
  - czzr 6y ago
    Basic research is a public good, and corporations will not provide enough of it.
- notahacker 6y ago
  There's a simple explanation for that though: the government has more money, and socialises the profits. At one point the US government was spending 4% of GDP on NASA. Not everything NASA did was possible to commercialise, but entire industries from satellite communications and air purifiers to baby formula and memory foam were created based on solving difficult problems for spacemen. All of these now mass market industries pay tax on their US operations. Even if a corporation could spend that sort of money on a space program it couldn't hope to collect a return from every industry that grew up out of that space program.

AlexTWithBeard 6y ago

> what are corporations not doing well? This is a fair question, but it should be accompanied with another one: what do the corporations do well? Will our alternative option make some things worse? What's our criteria of success and what's our backout plan if the criteria of success is not met by a certain timeframe?

keenmaster 6y ago
I don't disagree with any of that. Corporations do many more things much better than government. That is always a premise of mine, and I usually don't state it explicitly in these kinds of debates. If anything, corporations themselves should be begging the government to spend more on basic research. If it doesn't, it will not reduce taxes by the amount that it doesn't spend. It will merely reallocate research funds to pure defense or some other lower return endeavor. There is a symbiosis between capitalism, innovation, and government. Capitalism without good governance turns into crony capitalism. Innovation would decline without adequate and competent* government expenditure (*historically there's no reason to believe that the government is incapable of profound basic research - quite the opposite). Good governance without a culture which appreciates market economies can slowly devolve into bad governance and a basket case country.
- bergstromm466 6y ago
  > Capitalism without good governance turns into crony capitalism What are some signals you watch out for, with this?
  - keenmaster 6y ago
    - Antitrust enforcement - Industry concentration - Degree of divergence between popular will and policy (thanks Citizens United) - Level and direction of inequality - Bargaining power of labor (automation does not fully explain the cratering of this bargaining power) - Level of corporate profits (compared to the past) Generally, I'd also look at the correlation between increased productivity and happiness. If, in aggregate, we're producing more year by year, and yet people are becoming more miserable and anxious, something is wrong.