[ExI] Private and government R&D

[Dan]

--- On Wed, 7/1/09, Stathis Papaioannou <stathisp at gmail.com> wrote:
> 2009/7/2 Dan <dan_ust at yahoo.com>:
>> There is also the problem that under the coercive
>> system, some people are forced to pay for others' pet
>> projects.  Some might find no problem with this, but I
>> think that's relevant to the discussion because coercion
>> introduces certain features that wouldn't be found under a
>> voluntary system.
> 
> That will always be the case unless the funding is sourced
> from an
> individual or a unanimous group of individuals. There will
> be
> shareholders in a company who prefer that some of the
> R&D money be
> spent on other things, but don't feel strongly about this
> to sell their shares.

In that case -- where they don't feel strongly enough to leave -- the option is still there.  In any voluntary group, assuming a normal group where people don't all agree but don't all disagree, there will decisions made that won't be so bad that anyone will leave -- even though they don't like the decision.  However, with voluntary groups -- as opposed to coercive ones -- that there's always an exit option, IMO, makes this more bearable.  And such undesirable decisions, in any dynamic market (i.e., in any market:), are opportunities from entrepreneurship.  If, say, there's only one grocery store in town and you like collards (let's leave aside why anyone would like them for the moment: this is a purely fantastic example:) and that store doesn't and won't carry them, but you are unwilling to go to another town or order them shipped in, you might seem stuck with not having collards.  However, that won't stop another store from opening up in town that
 carries collards.

(Granted, this can happen with coercive systems too.  Political entrepreneurs do exist.  Thus voice systems*, while they foreclose the exit option, aren't completely rigid.  Yet, empirically, what we see with voice systems -- like democracies -- is that in order to change anything, a coalition has to be created and power seized.  This is why exit systems tend to change incrementally while voice systems tend to change episodically.   In the former, changes can happen rapidly as people leave relationships they no longer find fulfilling; in the latter, pressure must be built and enough people or enough people in the elite must be sold on the change.)

I'm also not sure why this is a big deal.  Almost all R&D projects do not require all of society's wealth to pursue.  Where all projects of the "We need $100 trillion to do this in the next year," then there'd be a big problem of having any R&D at all -- as I presume most people would prefer not to live in abject poverty for the sake of some R&D gamble coming through.  Most research seems of a much smaller scale -- of the kind not requiring huge budgets and lots of support.  If, e.g., a particular project costs $1 million to fund over the next year, you don't need to get 300 million Americans or 400 million Europeans or 6 billion humans to agree to it.  In a free society, assuming that it's as wealthy as any modern Western society**, you nearly need to get $1 million and that could be had from one person or a small group of people.

Regards,

Dan

*  I originally read of this distinction between voice and exit systems many years ago in _Privatization and Educational Choice_ by Myron Lieberman.  Not sure if anyone here would care to read it, but just wanted to give credit where credit is due.  Not sure if Lieberman originated the idea...

**  The lesson of history seems to be that the more free a society is, the more wealth it tends to have.  Of course, this is contextual.