An open question.... Are the scientific and philanthropic directions of wealthy individuals that much worse than our government? Remember - the US government doesn't fund stem cell research.
'The world's largest project to unravel the mysteries of the human brain has been thrown into crisis with more than 100 leading researchers threatening to boycott the effort amid accusations of mismanagement and fears that it is doomed to failure.'
And.
'But it proved controversial from the start. Many researchers refused to join on the grounds that it was far too premature to attempt a simulation of the entire human brain in a computer. Now some claim the project is taking the wrong approach, wastes money and risks a backlash against neuroscience if it fails to deliver.'
€1.2bn could solve any number of problems. And in a free market that's how the resources would be put to use. Solving human problems. Instead, there's a grand spectacle.
Many wealthy individuals got that way via judicious resource allocation. The same can't be said of the monumental leaders of our fine countries. They got that way via looking good in public. To expect them to excel at speech giving and resource allocation is quite the ask!
> €1.2bn could solve any number of problems. And in a free market that's how the resources would be put to use. Solving human problems. Instead, there's a grand spectacle.
I think this argument idealizes the "free market".
* There is plenty of waste and spectacle there too -- look at other news headlines, or just remember our recent financial crisis
* The 'free market' doesn't exist. First, it's an amalgam of an incredible number and diversity of people and organizations. Second, it's not free; I was trying to think of examples of social goods not funded at all by taxpayers (for the point below), but it's hard to name any. And many 'free market' companies get tax breaks and other support from government (EDIT: including laws and regulations made in their favor).
* The marketplace does not care prioritize solving human problems; it prioritizes money and power. Sometimes that happens to solve problems (discovering a new vaccine, clean energy), sometimes it happens to cause them (increasing the cost of vaccines, climate change), sometimes it's just money for money's sake (slashing a ms off response time in computerized securities trading).
Financial crisis == moral hazard. And, come on! There's an economic theory that predicted the crisis, and explains it. I.e. ABCT (Austrian business cycle theory). My point being, it's not as clear cut when there's 'crony capitalism' and other market distortions.
'Free', as in freedom!
Everyone knows the 'free market' is made up of individuals. Or groups of individuals, such as a firm, which is formed to reduce transaction costs -- as per Coase's description in his Nobel winning (1991) The Nature of the Firm (1937).
Money is a medium of exchange. We use it to trade. And by definition: when people trade freely, they are both better off (otherwise they wouldn't trade!).
Money also has the functions of 1) store of wealth 2) unit of account. But that's by the by.
Problems are always going to occur, but because humans are motivated to solve the problems, solutions are found. And a profound way to facilitate such solutions is a market-based economy.
Without subjectivity, there's no marginal utility. And that takes us back to classical economics. I.e pre-marginal revolution.
The information, or the lack thereof is also reflected in the price.
No. People who like the theory saw real world events that kind of sort of looks like ABCT could explain them, and then made a post facto observation.
Unless Mises et al. made some sort of prediction based upon at the time non-existent financial instruments, ABCT did not predict the 2008 sub-prime financial collapse. Period.
To the extent that ABCT predicted anything, it was a "something bad will happen; not sure when!" with the preconditions in play since about 1980. Color me unimpressed; I bet some random fortune teller got more accurate than that on accident.
Now, maybe some economic philosophers who likes the model applied it, which provided the basis their prediction of actual real world events. I don't know.
But then, proponents of regulation predicted the collapse as well. In fact, a lot of people accurately predicted the (actual) collapse, and to various degrees the cascade effects.
> it's not as clear cut when there's 'crony capitalism' and other market distortions.
"Oh yes, if only the world met all of our Axioms. Then everything would be grand!" said every failed political economic project ever.
> Problems are always going to occur, but because humans are motivated to solve the problems, solutions are found.
And as it turns out, lots of times those people are working in government funded research labs and universities, or applying research funded in those labs and universities.
You'll excuse us mere mortals for drawing such wildly wrong conclusions from something as banal as observation! You see, it's just that we've lost our list Axioms and now our only reference point is reality... perhaps you could lend us your map to drill on?
Like Mark Spitznagel, who took a billion dollar derivatives position on the 2008 stock market crash!
>Unless Mises et al. made some sort of prediction based upon at the time non-existent financial instruments, ABCT did not predict the 2008 sub-prime financial collapse. Period.
Here's an article from the Mises Institute on the subject. Period. http://mises.org/daily/4072
> "Oh yes, if only the world met all of our Axioms. Then everything would be grand!" said every failed political economic project ever.
Politicians must come up with excuses of some sort.
> And as it turns out, lots of times those people are working in government funded research labs and universities, or applying research funded in those labs and universities.
And those resources may be more effective in an alternate configuration.
> You see, it's just that we've lost our list Axioms and now our only reference point is reality... perhaps you could lend us your map to drill on?
My map (in reference to the Alfred Korzybski quote 'the map is not the territory') consists of any economic school, or any other information I happen across. Empirical is fine with me. But it depends on the circle I'm talking to. If one was to mention vanilla observation to a group interested in medicine, then there'd be a combination of recoil and disgust (in most cases), for example.
But in this case, Praxeology suits me fine!
The article to you link to is much more clear headed about the role of the model. It's a useful tool, not a glass ball.
There's a hell of a huge difference between a model predicting something, and people applying/adopting the model -- together with a LOT of other tools and insights -- to predict something.
It's as stark as the difference between executing a program and getting an exact output, and using a programming language, together with some bits of math, to write a program which computes a result for you.
Back to the point: since lots and lots others made similar predictions about the housing market (and beyond), I'm much more inclined to believe that it was a strong focus on data and observation -- not any particular model per say -- that allowed smart people to accurate predictions.
I don't believe the Austrian school has any such formal models.
A free market would be perfectly OK spending that money on dating apps, more ads for "alternative medicines" that sell well but never shown to work, or disinformation campaign against (government-funded) scientists pointing out that your product causes cancer. Free market sometimes works, but it's no silver bullet.
At least the messaging app would work!
I think the bigger issue is that private philanthropy of science is at least ~2 orders of magnitude smaller than yearly philanthropic donations. The US spends ~$100B/year, while I would be surprised if private philanthropy totals $1B/year to R&D. Commercial R&D expenditures on the other hand are probably higher in aggregate. Thus the role of private philanthropy on a lot of research has been catalytic funding for new ideas.
Of course, educating taxpayers would be helpful, so they can make better decisions. Along with educating Congress critters, and as far as K Street goes, either finding sympathy (unlikely) or planning to send some of your money there (more likely to work).
Compared to those 3 challenges, finding a benefactor sounds a whole lot easier!
Also, I don't know that 'benefactors' are any less corrupt than politicians or lobbyists (if we can paint any group with such a broad brush).