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Who Should Fund Science?

Patrick J. Michaels

According to the latest annual survey conducted by the National
Science Foundation (NSF), the federal government funded less than
half of all basic research in the country for the first time since
World War II.

As for whether this is a good thing, it depends on who you ask.
Francis Bacon some 400 years ago claimed that science is a public
good and must be funded by governments for discovery to proceed.
Today, scientific research as a public good is a societal value few
question.

Perhaps we should start questioning. As my Cato colleague
Terence Kealey notes, objective indicators show that scientific
progress is actually slowed by public funding, as it crowds out
support from philanthropic sources and industry.

While some are not liking
the gradual withdrawal of the government from funding basic
science, the rest of us should be singing praise.

Basic research is often called “knowledge for knowledge’s sake,”
with no immediate practical application in mind. Prior to the war
most funding for basic research in the United States came from
foundations, philanthropists, university endowments, and
industry.

Other countries, like France and Germany, had publicly funded
science for over a hundred years, yet in the United States science
was not federalized until World War II, via the Manhattan Project.
Even before its explosive success, Franklin Roosevelt wrote to its
director, Vannevar Bush, asking him to design a national science
enterprise to replace the bomb project after the war. In a few
months, Bush produced a booklet called “Science: The Endless
Frontier.” By the 1970s, over 70 percent of basic research was
federally funded.

It appears we are now gradually moving back toward the way basic
science was funded prior to its nationalization. Kealey’s research
predicts that this will be associated with greater economic
growth.

With government’s withdrawal, we will have an opportunity to
test Kealey’s hypothesis.

As the federal share declines, corporate support for science is
dramatically increasing. According to the NSF, in 2005, the federal
outlay was some $37 billion, while the corporate contribution was a
bit under $10 billion. Ten years later, taxpayers contributed about
$38 billion, a 2.7 percent increase, while corporations chipped in
around $24 billion, an increase of a whopping 240 percent. The
share and the amount contributed by philanthropy and university
endowments also rose in the last decade, much more than the
government’s portion and much less than the corporate sector.

These cuts comes at the expense of universities as, in Bush’s
plan, scientists were not to be paid directly by government.
Instead, universities would apply for government funding, with
research proposals written by their faculty. For this
administration, schools may charge overhead, a 50 percent vigorish
the feds allow to be tacked on to research proposals. Research
universities became dependent upon this large stream of funds.

Universities support this because money is fungible – within
some broad limits. The government wasn’t happy that some of its
overhead paid for paneling on Stanford University’s yacht. But it
hasn’t the same moral qualms when that money buys, say, computers
for the Germanic Language department. In fact, it’s a general rule
that the massive overhead generated by the science and engineering
departments of a Tier-1 research university (think Stanford,
Berkeley, Wisconsin) is what helps the many other departments that
simply cannot support themselves with tuition revenue. By
comparison, almost all corporate funding for basic research is
spent in-house rather than being farmed out, which means that
overhead revenues should decline.

This is probably good news for science. As it stands now, many
students of science, such as University of Virginia’s Brian Nosek,
note that the current incentive structure, wherein university
faculty are under intense pressure to publish research that
maintains the flow of federal dollars, is causing demonstrable harm
to science.

This structure has also led to a skewing of the canon of
scientific knowledge away from objective truth. If one’s research
does not support a funded hypothesis, it puts the funding in
jeopardy, and it is therefore dangerous to publish such “negative”
results. This has led to a massive increase in the percent of
positive results. Often these hypotheses are being supported by
public funding. In an extremely influential 2012 paper, Stanford’s
Daniele Fanelli showed that an increase of nearly 20 percent in
such findings from 1990 to 2007.

While some are not liking the gradual withdrawal of the
government from funding basic science, the rest of us should be
singing praise. This may be the best way to right the ship of
science, currently wallowing in an ocean of shoddy research, where
the incentives for professional advancement are impeding the search
for truth, and slowing prosperity for all.

Patrick J.
Michaels
is the director of the Center for the Study of Science
at the Cato Institute.