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This is very misleading. US government heavily taxes people and organizations and spends on certain projects. But if people had more resources left to themselve

This is very misleading. US government heavily taxes people and organizations and spends on certain projects. But if people had more resources left to themselves, they could spend some of it on the same projects US gov spends it on. On top of that, US gov has all kinds of laws and regulations that make it difficult to do certain valuable things. For example, if companies in the same industry come together to do something valuable, they might break antitrust laws. Government might also make it prohibitively expensive to do something and then they step in to do it themselves - you see it with pharma research.

notahacker 6y ago
How many people would have used their tax cuts to fund a wide area packet-switching network or space program?
- xyzzyz 6y ago
  There are tons of people and companies currently investing in these things. The venture capital industry in the US is huge, and in fact you’re writing this on a website run by one of its representatives. The US Government has surely invested in some beneficial research, but so did the private sector.
  - Kbelicius 6y ago
    > There are tons of people and companies currently investing in these things. Yes, there are tons of people and companies currently investing in these things because earlier government investment proved those things possible. It would be irrational for a private company to invest time and money in something with knightian uncertainty. The private sector is good with scale and incremental improvements. Quite bad with fundamental research.
- njarboe 6y ago
  Elon Musk is funding a space program to put people on Mars via SpaceX. NASA has not improved rocket technology since the 1970's and SpaceX is on track to have a fully reusable rocket the size of the Saturn IV in the next few years and people to Mars not long after.
  - areoform 6y ago
    Except NASA funded and helped create SpaceX. Here are some of their contributions, > The injector at the heart of Merlin is of the pintle type that was first used in the Apollo Lunar Module landing engine (LMDE). > To meet that need, in 1994, just as Fastrac was getting underway, Majumdar began developing the Generalized Fluid System Simulation Program, or GFSSP, which was first used by the Agency’s analysts in October 1996. NASA employees used the software for the Fastrac turbopump, and even though the program was cancelled in the early 2000s, the turbopump became the predecessor for others like it, such as SpaceX’s Merlin rocket engines, which power the company’s Falcon 9 commercial launch vehicle. > The basic principles of the Fastrac design (namely, a pintle injector and ablatively cooled chamber) lived on in SpaceX's Merlin 1A engine, which used a turbopump from the same subcontractor.[18] The Merlin-1A was somewhat larger with a thrust of 77,000 lbf (340 kN) versus 60,000 lbf (270 kN) for Fastrac. The same basic design was capable of much higher thrust levels after upgrading the turbopump. Variants of the Merlin-1D achieve 190,000 lbf (850 kN) of thrust as of May, 2018,[19] though the combustion chamber is now regeneratively cooled.[20] https://en.wikipedia.org/wiki/Fastrac_(rocket_engine) https://en.wikipedia.org/wiki/Fastrac_(rocket_engine) > Hackler: Did NASA share any technological types of lessons learned that influenced your vehicle? > Giger: Yes, Mike Horkachuck and Warren Ruemmele were very good about looking at our system, seeing how it was similar or dissimilar to Shuttle, Apollo, Mercury, Gemini, any other program in history, and trying to share those lessons learned. For example, parachutes. We were able to get a lot of data from the Apollo Program, from the Orion Program even, and leverage lessons learned from them on that. > A lot of joint technologies, too. We learned about PICA, Phenolic Impregnated Carbon Ablator tiles that we use on our heat shield, which was originally developed in conjunction with NASA. We learned a lot from how they did that, and they helped us bring that technology in house, which was great. Now we build our own variant of that in-house. There were numerous kinds of examples of that, where they shared technology or lessons learned that we then either incorporated in the design, or took that technology to the next level here, which was great. Much of the materials technology, engine design, engineering simulations etc. at SpaceX were derived from NASA expertise and knowledge. Furthermore, this was all done largely on NASA's dime. NASA gave SpaceX an extremely favourable deal and is its single largest investor. > Fourth, we took no equity. The reason the decision was to take no equity was that in the world of venture capital, sometimes you make poor investment decisions and you get no money back. Sometimes you make really good investment decisions, and you get five times your money back or ten times your money back. But you almost never get one time your money back. > I knew enough about the federal government to know that if you invested money and you got none of your money back, everybody would get angry. But it also turns out that if you invest money and you get five times your money back, everybody gets angry too, because then you’re competing with the private sector. There’s no way that when you’re doing innovation like this you could expect that you were going to get one times your money back. That’s just silly. It was better to take no equity at all. This is from the oral histories, https://historycollection.jsc.nasa.gov/JSCHistoryPortal/history/oral_histories/C3PO/MartyA/MartyA_1-18-13.htm https://historycollection.jsc.nasa.gov/JSCHistoryPortal/hist... So NASA gives them access to technological expertise + historical engineering data + designs + prior NASA IP, gives them cash for development, takes no equity, let's SpaceX retain IP, and provides a guaranteed market. SpaceX is doing incredible work and they're bringing these technologies to the market. They're making the sexy iPhone from the unsexy fundamental science done by NASA for them, and this development is being mostly funded by the tax payer, with nominal (up to 30% to 50%) private contribution. I would hold them up as a model for how to blend the best elements of public works & private enterprise, and a model on how to do public-private partnerships.
wavefunction 6y ago
>But if people had more resources left to themselves, they could spend some of it on the same projects US gov spends it on. With your assertion in mind: there were plenty of wealthy people in the US in the early 1990s so why didn't they fund the nascent Google project? You'd think anyone would love to be the likely majority owner of Google.
dbspin 6y ago
I'd strongly question the witch words 'heavily taxes'. The US federal government has some of the lowest income tax rates (both stated and effective) in the Western World [1]. And it's corporate tax rate is only slightly higher than the EU average [2], while in practice easily avoided [3] by large corporate entities like Google and Amazon. Sources: [1] https://taxfoundation.org/taxing-high-income-2019/ https://taxfoundation.org/taxing-high-income-2019/ [2] https://taxfoundation.org/publications/corporate-tax-rates-around-the-world/ https://taxfoundation.org/publications/corporate-tax-rates-a... [3] https://www.irishtimes.com/business/technology/big-six-tech-companies-accused-of-aggressive-tax-avoidance-1.4101815#:~:text=The%20report%20singles%20out%20Amazon,and%20profits%20of%20%2426.8%20billion https://www.irishtimes.com/business/technology/big-six-tech-....
- beagle3 6y ago
  But you have to add state taxes - in NYC and CA the state+federal is comparable to European taxes: and in Europe, those taxes include healthcare and academic education, which you pay for independently in the US.
  - fomine3 6y ago
    How US unique is that they have tax haven states inside the country.
    - beagle3 6y ago
      For companies. The same is not afforded for individuals. A minority of states have no state personal income tax - and in those states, the effective top bracket is indeed ~30% lower than the European average - but these cover a small percentage of the population. NY and CA have rates of 10-15%
bdauvergne 6y ago
> This is very misleading. US government heavily taxes people and organizations and spends on certain projects. But if people had more resources left to themselves, they could spend some of it on the same projects US gov spends it on. The burden of proof for that is on you. Where did it happen like that in recent history ? Even in Germany and Japan two other powerhouses of research in the world, it's greatly helped by the fact that public research (funded by the state) and corporations are intertwined. I'm French, our best years for innovation were during our glorious 30's when state was directing mainly state corporations (telecom, energy, aerospace) to do long term research. When it was privatized due to antitrust pressure by the EU, all that was killed (see how much telecom technology came from the CNET/Alcatel, even one of the Internet primary idea, packet switching, came from a French researcher of this era).
areoform 6y ago
Except, they don't. Mostly because of the "incentives" that Eric Schmidt mentioned. Science has always happened at the public purse for a reason - the timeline for returns is so unclear, and the timespan for fruition is so long that most people don't want to invest in this kind of science, rightly so. Goddard's research, or heck even the Wright Brothers, to go from a smidgen to the Saturn V or Boeing 737, took decades of funding and research over time spans that are just too long for most investors and human beings. I know some contemporary investors are trying to be ambitious and change this, which is something I applaud them for. But their inputs are still focussed on bringing technologies to commercialization, not the greenfield research needed to produce the next paradigm. For example, during the US' Apollo Program, the necessity of a lightweight, power-efficient, and resilient navigation led to a radical design proposal that suggested a computer designed entirely out of Integrated Circuits (ICs). At the time, the IC industry had barely entered its cradle, with the "monolithic concept" having been invented less than 2 years before the proposed design. The Apollo Guidance Computer was the technology's first major application and became the first computer built from Integrated Circuits. But the technology was too immature. They just didn't have production processes that could produce ICs at any level of reliability. It took nearly 5 years of collaboration between NASA, MIT, Fairchild Semiconductors, Texas Instruments, and others to create scalable and reliable processes to bring the Integrated Circuit concept to the mass production. During this time, the Apollo Program consumed nearly 60% of all production capacity in the world. Without this effort, the advent of the personal computer would likely have been pushed back by a decade or more, due to low general interest in the risky new technology. https://twitter.com/_areoform/status/1319694832311304192 https://twitter.com/_areoform/status/1319694832311304192 --- Testing this assumption. There is an easy test for this assumption. Apple has $192.8 billion in cash on hand. What exactly is it doing with this money? Is it spending it on fundamental research in optics, laser communication, optical computing, and other stuff? No, it's not. Apple invests about $16bn a year on "R&D" which includes new product development and seeking marginal gains for production processes. Even here they do so with the help of Government funding. Yes, Apple applies for Government grants and R&D tax incentives. What about Google? They had Google X, but it was short-lived, and they've broken up their most ambitious projects (which now seem to be withering). These projects will be dead far short of the multi-decade timeline needed to bring things to fruition. And they have $120 billion in cash lying around. Google's pattern seems to be, they make a flashy announcement, and then they bail from putting long-term, significant capital where their mouth is. Take Calico for example, what's going on there? It seems to have a foot in the grave, and it's less than a decade old. This isn't Google's fault, it's what investors want. They just aren't patient enough for Google to deploy the unproductive capital they already have into long-term research; https://realmoney.thestreet.com/investing/technology/alphabet-s-leadership-change-could-be-good-news-for-other-bets--15190010 https://realmoney.thestreet.com/investing/technology/alphabe... https://www.engadget.com/2020-02-20-alphabet-makani-chronicle-jigsaw-other-bets.html https://www.engadget.com/2020-02-20-alphabet-makani-chronicl... https://www.nasdaq.com/articles/is-alphabet-thinking-of-its-other-bets-all-wrong-2020-10-11 https://www.nasdaq.com/articles/is-alphabet-thinking-of-its-... They don't see it as an investment into the future. They see it as a "money losing segment". There will never be groundbreaking photonics Google research or a Google particle accelerator, simply because the "incentive structure" won't allow it. --- This fact translates geographies. Furthermore, do people in low-tax jurisdictions and countries do more groundbreaking R&D? Places like Singapore and Hong Kong? As far as I can tell, no, they don't. Even there, what little research that gets done is on the taxpayer's dime. This pattern has repeated itself across history & geography. There must be a reason for it. Saying that it's because Government takes away money and creates pressure on corporations + individuals which forfeits such private efforts denies the reality; With few exceptions, almost every single breakthrough from the discovery of the Americas to the first computers has occurred on the taxpayer's dime. Or, more accurately, it has been performed by organizations who can afford to have some goals on decades-to-centuries long time horizons. It is important to realize this dichotomy to understand why public funding matters, and why even today, for the pharma industry, the vast majority of targets and agents being tested have been/were funded/identified with public money.
roughly 6y ago
That is indeed the libertarian argument against public spending on research and innovation. The book I linked to provides a compelling counterargument to it. I suggest you read it, if you're interested in this sort of thing, as it's a good read on the matter of public funding for innovation.

notahacker 6y ago

How many people would have used their tax cuts to fund a wide area packet-switching network or space program?

xyzzyz 6y ago
There are tons of people and companies currently investing in these things. The venture capital industry in the US is huge, and in fact you’re writing this on a website run by one of its representatives. The US Government has surely invested in some beneficial research, but so did the private sector.
- Kbelicius 6y ago
  > There are tons of people and companies currently investing in these things. Yes, there are tons of people and companies currently investing in these things because earlier government investment proved those things possible. It would be irrational for a private company to invest time and money in something with knightian uncertainty. The private sector is good with scale and incremental improvements. Quite bad with fundamental research.
njarboe 6y ago
Elon Musk is funding a space program to put people on Mars via SpaceX. NASA has not improved rocket technology since the 1970's and SpaceX is on track to have a fully reusable rocket the size of the Saturn IV in the next few years and people to Mars not long after.
- areoform 6y ago
  Except NASA funded and helped create SpaceX. Here are some of their contributions, > The injector at the heart of Merlin is of the pintle type that was first used in the Apollo Lunar Module landing engine (LMDE). > To meet that need, in 1994, just as Fastrac was getting underway, Majumdar began developing the Generalized Fluid System Simulation Program, or GFSSP, which was first used by the Agency’s analysts in October 1996. NASA employees used the software for the Fastrac turbopump, and even though the program was cancelled in the early 2000s, the turbopump became the predecessor for others like it, such as SpaceX’s Merlin rocket engines, which power the company’s Falcon 9 commercial launch vehicle. > The basic principles of the Fastrac design (namely, a pintle injector and ablatively cooled chamber) lived on in SpaceX's Merlin 1A engine, which used a turbopump from the same subcontractor.[18] The Merlin-1A was somewhat larger with a thrust of 77,000 lbf (340 kN) versus 60,000 lbf (270 kN) for Fastrac. The same basic design was capable of much higher thrust levels after upgrading the turbopump. Variants of the Merlin-1D achieve 190,000 lbf (850 kN) of thrust as of May, 2018,[19] though the combustion chamber is now regeneratively cooled.[20] https://en.wikipedia.org/wiki/Fastrac_(rocket_engine) https://en.wikipedia.org/wiki/Fastrac_(rocket_engine) > Hackler: Did NASA share any technological types of lessons learned that influenced your vehicle? > Giger: Yes, Mike Horkachuck and Warren Ruemmele were very good about looking at our system, seeing how it was similar or dissimilar to Shuttle, Apollo, Mercury, Gemini, any other program in history, and trying to share those lessons learned. For example, parachutes. We were able to get a lot of data from the Apollo Program, from the Orion Program even, and leverage lessons learned from them on that. > A lot of joint technologies, too. We learned about PICA, Phenolic Impregnated Carbon Ablator tiles that we use on our heat shield, which was originally developed in conjunction with NASA. We learned a lot from how they did that, and they helped us bring that technology in house, which was great. Now we build our own variant of that in-house. There were numerous kinds of examples of that, where they shared technology or lessons learned that we then either incorporated in the design, or took that technology to the next level here, which was great. Much of the materials technology, engine design, engineering simulations etc. at SpaceX were derived from NASA expertise and knowledge. Furthermore, this was all done largely on NASA's dime. NASA gave SpaceX an extremely favourable deal and is its single largest investor. > Fourth, we took no equity. The reason the decision was to take no equity was that in the world of venture capital, sometimes you make poor investment decisions and you get no money back. Sometimes you make really good investment decisions, and you get five times your money back or ten times your money back. But you almost never get one time your money back. > I knew enough about the federal government to know that if you invested money and you got none of your money back, everybody would get angry. But it also turns out that if you invest money and you get five times your money back, everybody gets angry too, because then you’re competing with the private sector. There’s no way that when you’re doing innovation like this you could expect that you were going to get one times your money back. That’s just silly. It was better to take no equity at all. This is from the oral histories, https://historycollection.jsc.nasa.gov/JSCHistoryPortal/history/oral_histories/C3PO/MartyA/MartyA_1-18-13.htm https://historycollection.jsc.nasa.gov/JSCHistoryPortal/hist... So NASA gives them access to technological expertise + historical engineering data + designs + prior NASA IP, gives them cash for development, takes no equity, let's SpaceX retain IP, and provides a guaranteed market. SpaceX is doing incredible work and they're bringing these technologies to the market. They're making the sexy iPhone from the unsexy fundamental science done by NASA for them, and this development is being mostly funded by the tax payer, with nominal (up to 30% to 50%) private contribution. I would hold them up as a model for how to blend the best elements of public works & private enterprise, and a model on how to do public-private partnerships.

wavefunction 6y ago

>But if people had more resources left to themselves, they could spend some of it on the same projects US gov spends it on. With your assertion in mind: there were plenty of wealthy people in the US in the early 1990s so why didn't they fund the nascent Google project? You'd think anyone would love to be the likely majority owner of Google.

dbspin 6y ago

I'd strongly question the witch words 'heavily taxes'. The US federal government has some of the lowest income tax rates (both stated and effective) in the Western World [1]. And it's corporate tax rate is only slightly higher than the EU average [2], while in practice easily avoided [3] by large corporate entities like Google and Amazon. Sources: [1] https://taxfoundation.org/taxing-high-income-2019/ https://taxfoundation.org/taxing-high-income-2019/ [2] https://taxfoundation.org/publications/corporate-tax-rates-around-the-world/ https://taxfoundation.org/publications/corporate-tax-rates-a... [3] https://www.irishtimes.com/business/technology/big-six-tech-companies-accused-of-aggressive-tax-avoidance-1.4101815#:~:text=The%20report%20singles%20out%20Amazon,and%20profits%20of%20%2426.8%20billion https://www.irishtimes.com/business/technology/big-six-tech-....

beagle3 6y ago
But you have to add state taxes - in NYC and CA the state+federal is comparable to European taxes: and in Europe, those taxes include healthcare and academic education, which you pay for independently in the US.
- fomine3 6y ago
  How US unique is that they have tax haven states inside the country.
  - beagle3 6y ago
    For companies. The same is not afforded for individuals. A minority of states have no state personal income tax - and in those states, the effective top bracket is indeed ~30% lower than the European average - but these cover a small percentage of the population. NY and CA have rates of 10-15%

bdauvergne 6y ago

> This is very misleading. US government heavily taxes people and organizations and spends on certain projects. But if people had more resources left to themselves, they could spend some of it on the same projects US gov spends it on. The burden of proof for that is on you. Where did it happen like that in recent history ? Even in Germany and Japan two other powerhouses of research in the world, it's greatly helped by the fact that public research (funded by the state) and corporations are intertwined. I'm French, our best years for innovation were during our glorious 30's when state was directing mainly state corporations (telecom, energy, aerospace) to do long term research. When it was privatized due to antitrust pressure by the EU, all that was killed (see how much telecom technology came from the CNET/Alcatel, even one of the Internet primary idea, packet switching, came from a French researcher of this era).

areoform 6y ago

Except, they don't. Mostly because of the "incentives" that Eric Schmidt mentioned. Science has always happened at the public purse for a reason - the timeline for returns is so unclear, and the timespan for fruition is so long that most people don't want to invest in this kind of science, rightly so. Goddard's research, or heck even the Wright Brothers, to go from a smidgen to the Saturn V or Boeing 737, took decades of funding and research over time spans that are just too long for most investors and human beings. I know some contemporary investors are trying to be ambitious and change this, which is something I applaud them for. But their inputs are still focussed on bringing technologies to commercialization, not the greenfield research needed to produce the next paradigm. For example, during the US' Apollo Program, the necessity of a lightweight, power-efficient, and resilient navigation led to a radical design proposal that suggested a computer designed entirely out of Integrated Circuits (ICs). At the time, the IC industry had barely entered its cradle, with the "monolithic concept" having been invented less than 2 years before the proposed design. The Apollo Guidance Computer was the technology's first major application and became the first computer built from Integrated Circuits. But the technology was too immature. They just didn't have production processes that could produce ICs at any level of reliability. It took nearly 5 years of collaboration between NASA, MIT, Fairchild Semiconductors, Texas Instruments, and others to create scalable and reliable processes to bring the Integrated Circuit concept to the mass production. During this time, the Apollo Program consumed nearly 60% of all production capacity in the world. Without this effort, the advent of the personal computer would likely have been pushed back by a decade or more, due to low general interest in the risky new technology. https://twitter.com/_areoform/status/1319694832311304192 https://twitter.com/_areoform/status/1319694832311304192 --- Testing this assumption. There is an easy test for this assumption. Apple has $192.8 billion in cash on hand. What exactly is it doing with this money? Is it spending it on fundamental research in optics, laser communication, optical computing, and other stuff? No, it's not. Apple invests about $16bn a year on "R&D" which includes new product development and seeking marginal gains for production processes. Even here they do so with the help of Government funding. Yes, Apple applies for Government grants and R&D tax incentives. What about Google? They had Google X, but it was short-lived, and they've broken up their most ambitious projects (which now seem to be withering). These projects will be dead far short of the multi-decade timeline needed to bring things to fruition. And they have $120 billion in cash lying around. Google's pattern seems to be, they make a flashy announcement, and then they bail from putting long-term, significant capital where their mouth is. Take Calico for example, what's going on there? It seems to have a foot in the grave, and it's less than a decade old. This isn't Google's fault, it's what investors want. They just aren't patient enough for Google to deploy the unproductive capital they already have into long-term research; https://realmoney.thestreet.com/investing/technology/alphabet-s-leadership-change-could-be-good-news-for-other-bets--15190010 https://realmoney.thestreet.com/investing/technology/alphabe... https://www.engadget.com/2020-02-20-alphabet-makani-chronicle-jigsaw-other-bets.html https://www.engadget.com/2020-02-20-alphabet-makani-chronicl... https://www.nasdaq.com/articles/is-alphabet-thinking-of-its-other-bets-all-wrong-2020-10-11 https://www.nasdaq.com/articles/is-alphabet-thinking-of-its-... They don't see it as an investment into the future. They see it as a "money losing segment". There will never be groundbreaking photonics Google research or a Google particle accelerator, simply because the "incentive structure" won't allow it. --- This fact translates geographies. Furthermore, do people in low-tax jurisdictions and countries do more groundbreaking R&D? Places like Singapore and Hong Kong? As far as I can tell, no, they don't. Even there, what little research that gets done is on the taxpayer's dime. This pattern has repeated itself across history & geography. There must be a reason for it. Saying that it's because Government takes away money and creates pressure on corporations + individuals which forfeits such private efforts denies the reality; With few exceptions, almost every single breakthrough from the discovery of the Americas to the first computers has occurred on the taxpayer's dime. Or, more accurately, it has been performed by organizations who can afford to have some goals on decades-to-centuries long time horizons. It is important to realize this dichotomy to understand why public funding matters, and why even today, for the pharma industry, the vast majority of targets and agents being tested have been/were funded/identified with public money.

roughly 6y ago

That is indeed the libertarian argument against public spending on research and innovation. The book I linked to provides a compelling counterargument to it. I suggest you read it, if you're interested in this sort of thing, as it's a good read on the matter of public funding for innovation.