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Yes, Apple runs the largest hedge fund in the world, but the question isn't whether they're getting some return on their investment (I'm assured that their hedg

Yes, Apple runs the largest hedge fund in the world, but the question isn't whether they're getting some return on their investment (I'm assured that their hedge fund is). But rather, where's the long-term research that's necessary for future growth and human prosperity? If the logic of the comment I was replying to held, then Apple would be investing a commiserate amount into fundamental research. They're not. They'd rather seek a return (however, meagre) by buying bonds than fund research.

xyzzyz 6y ago
These bonds do fund growth and research, though. Why do you think the companies issue bonds in the first place? Same with governments: if you think buying government bonds is such a waste of money, why don’t you blame more the government for wasting it instead?
- areoform 6y ago
  I do not wish to dismiss your arguments and concerns. But the argument that you’re making is a circular one. I have attempted to demonstrate how prima facie “corporate R&D” is often product development, process improvement, or other marginal improvements to preexisting technologies. For example, Apple invests in metallurgy, it has the world’s largest private metallurgical lab, but Apple isn’t seeking to create metamaterials but rather to gain marginal improvements in glass manufacturing. These improvements matter, but they aren’t the ones that drive our technology forward. Iterating on better compound bows wouldn’t have led to gun powder. The places where Apple buys corporate bonds and assets from use those assets not to research breakthrough, but rather fund their growth. This money goes into advertising and other more mundane activities. This does not diminish the value of these activities, but it is a simple statement that humans can’t progress if we keep our gaze focused on such narrow gains. AFAICT, no private or publicly traded corporation has created and ran a particle accelerator to investigate new principles of physics and improve our models of reality. Why not? Because the ROI for that wouldn’t accrue to the discoverer, but rather some future generation. The aristocracy i.e. the feudal form of government + tax collection, the Duke of Devonshire, funded the creation of the Cavendish Laboratory, which funded J.J. Thompson’s discovery of the electron. The Cavendish Lab revolutionized our understanding of matter before the start of the 20th century, and laid the theoretical foundations for the electronics revolution to come. Where is today’s corporate equivalent?
  - xyzzyz 6y ago
    Many corporation do in fact perform basic research. Maybe not of the "particle accelerator" form that you ask for, and most likely less than what you'd want, but it does happen. I don't think a list of examples would change your opinion, so let's just leave it at that. You are of course right that most of the benefits of new discoveries is of the form of externalities that don't get captured by the discoverer, or patent holder. Moreover, as you point out, we haven't seen too many fundamental, revolutionary discoveries as we've seen in first half of 20th century, to come from private labs recently. That's all true, but my response is that we haven't seen much of those recently from state-funded labs either. Science productivity per dollar is falling all around the globe, even as research spendings keep growing. Maybe there simply aren't too many science revolutions left to have? If you don't agree with the above, and believe that there's a huge research opportunity with great ROI for society at large, why focus your ire on Apple? Why not blame the government that in your view is supposed to be funding that? Why not reduce hundreds of billions US government is spending on, say, healthcare, and instead spend that on fundamental research if it's as huge ROI as you believe it is? California has great history of publicly funded research institutions, why not just tax Apple more and spend the proceeds on fundamental research? The answer is, of course, that if California did actually tax Apple more, the resulting revenue would fund teacher's pensions and some other high speed rail to nowhere, and even less of the Apple's pile of cash would get used for research than it is when Apple is buying corporate bonds. The truth is that fundamental research is hard, and spending more money would not necessarily bring better results. The incentive structure of doing science on public dime is already broken as it is, and there's no clear way to fix it. Focusing on that would bring bigger ROI than throwing some of Apple's cash pile into fire.
    - areoform 6y ago
      > I don't think a list of examples would change your opinion, so let's just leave it at that. They would actually, and it would be of significant interest to me as I've been involved with SME/corporate R&D incentives in the past. > If you don't agree with the above, and believe that there's a huge research opportunity with great ROI for society at large, why focus your ire on Apple? You have misjudged my tone. I am not angry with Apple. I'm using them and Google, with their large cash piles as practical proof points. I don't blame them for what they're doing. Do I wish that people were more responsible, over all, in giving back to the system? Yes, absolutely. But I don't feel particularly angry over it. It would be a waste of my energy. > Why not blame the government that in your view is supposed to be funding that? Except I'm not looking for anyone to blame. It feels like to me, and I might be wrong, that you're approaching this from the perspective of someone trying to find fault. That's not my goal here. My goal is to point out what works and what doesn't. We've found that, historically, the public purse has furthered the long-term goals of humanity. And that private enterprise has helped to mature technologies from the lab and turn them into usable products. It is clear that one cannot function without the other. Sadly, in the US, right now, there's a preference to overstate the achievements of the latter over the former. > Why not reduce hundreds of billions US government is spending on, say, healthcare, and instead spend that on fundamental research if it's as huge ROI as you believe it is? Once again, this is a false dichotomy, and it feels - again this is subjective - like another way to find blame. First off, healthcare is important too! We can think of this as the Eisenhower Matrix, Healthcare is Urgent & Important. I'd say it's absolutely critical for the functioning of a broader free-market economy, as people dying from disease usually don't have the cash to spend on apps, new TVs, and nights out. Can the US healthcare system be reformed? Absolutely. Should it be reformed? Yes. Does that mean we should stop doing it? No, of course not. Not only would it be cruel, it would be counter-productive and would send us back the dark ages. Fundamental Research is Not Urgent & Important. There needs to be a balance between it and the rest of the concerns. Where this balance exists is a question that requires further analysis and careful study. It's not something I'm qualified to do alone. > that if California did actually tax Apple more, the resulting revenue would fund teacher's pensions and some other high speed rail to nowhere, and even less of the Apple's pile of cash would get used for research than it is when Apple is buying corporate bonds. [Citation Needed] That being said, the "pensions" that you talk about are just another bond holding entity, exactly like Apple with payouts based on returns. As for the high-speed rail fiasco, yes, that's troubling and a significant issue to solve. It's one of many issues to solve, but saying that we should underfund our public institutions because we the citizens didn't hold them to account doesn't make any sense. The answer isn't either/or. I don't understand the split you're trying to make here. > The truth is that fundamental research is hard, and spending more money would not necessarily bring better results. The incentive structure of doing science on public dime is already broken as it is, and there's no clear way to fix it. Sure there is, - Open access to research + data - Reinstatement of Tenure - Providing "Carte Blanche" grants for tenured professors - Using one of the trillions of proposals on how to reform the grants system - Making institutions such as the NIH more independent from Congress - Shifting appropriations from a line-item model to a CERN-styled model where organizations like DARPA, the NIH, NSF etc receive a fixed amount per year, indexed to inflation that they can spend however they like to their expert discretion. Will it be easy? No. But it's worth trying.

xyzzyz 6y ago

These bonds do fund growth and research, though. Why do you think the companies issue bonds in the first place? Same with governments: if you think buying government bonds is such a waste of money, why don’t you blame more the government for wasting it instead?

areoform 6y ago
I do not wish to dismiss your arguments and concerns. But the argument that you’re making is a circular one. I have attempted to demonstrate how prima facie “corporate R&D” is often product development, process improvement, or other marginal improvements to preexisting technologies. For example, Apple invests in metallurgy, it has the world’s largest private metallurgical lab, but Apple isn’t seeking to create metamaterials but rather to gain marginal improvements in glass manufacturing. These improvements matter, but they aren’t the ones that drive our technology forward. Iterating on better compound bows wouldn’t have led to gun powder. The places where Apple buys corporate bonds and assets from use those assets not to research breakthrough, but rather fund their growth. This money goes into advertising and other more mundane activities. This does not diminish the value of these activities, but it is a simple statement that humans can’t progress if we keep our gaze focused on such narrow gains. AFAICT, no private or publicly traded corporation has created and ran a particle accelerator to investigate new principles of physics and improve our models of reality. Why not? Because the ROI for that wouldn’t accrue to the discoverer, but rather some future generation. The aristocracy i.e. the feudal form of government + tax collection, the Duke of Devonshire, funded the creation of the Cavendish Laboratory, which funded J.J. Thompson’s discovery of the electron. The Cavendish Lab revolutionized our understanding of matter before the start of the 20th century, and laid the theoretical foundations for the electronics revolution to come. Where is today’s corporate equivalent?
- xyzzyz 6y ago
  Many corporation do in fact perform basic research. Maybe not of the "particle accelerator" form that you ask for, and most likely less than what you'd want, but it does happen. I don't think a list of examples would change your opinion, so let's just leave it at that. You are of course right that most of the benefits of new discoveries is of the form of externalities that don't get captured by the discoverer, or patent holder. Moreover, as you point out, we haven't seen too many fundamental, revolutionary discoveries as we've seen in first half of 20th century, to come from private labs recently. That's all true, but my response is that we haven't seen much of those recently from state-funded labs either. Science productivity per dollar is falling all around the globe, even as research spendings keep growing. Maybe there simply aren't too many science revolutions left to have? If you don't agree with the above, and believe that there's a huge research opportunity with great ROI for society at large, why focus your ire on Apple? Why not blame the government that in your view is supposed to be funding that? Why not reduce hundreds of billions US government is spending on, say, healthcare, and instead spend that on fundamental research if it's as huge ROI as you believe it is? California has great history of publicly funded research institutions, why not just tax Apple more and spend the proceeds on fundamental research? The answer is, of course, that if California did actually tax Apple more, the resulting revenue would fund teacher's pensions and some other high speed rail to nowhere, and even less of the Apple's pile of cash would get used for research than it is when Apple is buying corporate bonds. The truth is that fundamental research is hard, and spending more money would not necessarily bring better results. The incentive structure of doing science on public dime is already broken as it is, and there's no clear way to fix it. Focusing on that would bring bigger ROI than throwing some of Apple's cash pile into fire.
  - areoform 6y ago
    > I don't think a list of examples would change your opinion, so let's just leave it at that. They would actually, and it would be of significant interest to me as I've been involved with SME/corporate R&D incentives in the past. > If you don't agree with the above, and believe that there's a huge research opportunity with great ROI for society at large, why focus your ire on Apple? You have misjudged my tone. I am not angry with Apple. I'm using them and Google, with their large cash piles as practical proof points. I don't blame them for what they're doing. Do I wish that people were more responsible, over all, in giving back to the system? Yes, absolutely. But I don't feel particularly angry over it. It would be a waste of my energy. > Why not blame the government that in your view is supposed to be funding that? Except I'm not looking for anyone to blame. It feels like to me, and I might be wrong, that you're approaching this from the perspective of someone trying to find fault. That's not my goal here. My goal is to point out what works and what doesn't. We've found that, historically, the public purse has furthered the long-term goals of humanity. And that private enterprise has helped to mature technologies from the lab and turn them into usable products. It is clear that one cannot function without the other. Sadly, in the US, right now, there's a preference to overstate the achievements of the latter over the former. > Why not reduce hundreds of billions US government is spending on, say, healthcare, and instead spend that on fundamental research if it's as huge ROI as you believe it is? Once again, this is a false dichotomy, and it feels - again this is subjective - like another way to find blame. First off, healthcare is important too! We can think of this as the Eisenhower Matrix, Healthcare is Urgent & Important. I'd say it's absolutely critical for the functioning of a broader free-market economy, as people dying from disease usually don't have the cash to spend on apps, new TVs, and nights out. Can the US healthcare system be reformed? Absolutely. Should it be reformed? Yes. Does that mean we should stop doing it? No, of course not. Not only would it be cruel, it would be counter-productive and would send us back the dark ages. Fundamental Research is Not Urgent & Important. There needs to be a balance between it and the rest of the concerns. Where this balance exists is a question that requires further analysis and careful study. It's not something I'm qualified to do alone. > that if California did actually tax Apple more, the resulting revenue would fund teacher's pensions and some other high speed rail to nowhere, and even less of the Apple's pile of cash would get used for research than it is when Apple is buying corporate bonds. [Citation Needed] That being said, the "pensions" that you talk about are just another bond holding entity, exactly like Apple with payouts based on returns. As for the high-speed rail fiasco, yes, that's troubling and a significant issue to solve. It's one of many issues to solve, but saying that we should underfund our public institutions because we the citizens didn't hold them to account doesn't make any sense. The answer isn't either/or. I don't understand the split you're trying to make here. > The truth is that fundamental research is hard, and spending more money would not necessarily bring better results. The incentive structure of doing science on public dime is already broken as it is, and there's no clear way to fix it. Sure there is, - Open access to research + data - Reinstatement of Tenure - Providing "Carte Blanche" grants for tenured professors - Using one of the trillions of proposals on how to reform the grants system - Making institutions such as the NIH more independent from Congress - Shifting appropriations from a line-item model to a CERN-styled model where organizations like DARPA, the NIH, NSF etc receive a fixed amount per year, indexed to inflation that they can spend however they like to their expert discretion. Will it be easy? No. But it's worth trying.