How are we going to produce all of the basic research that is non-excludable & non-rival? What incentive do companies have to produce results like this?
The biotech industry is already tricky, with long lag times and a low probability of success. More risk just increases the discount rate and lowers the present value, making it an even less appealing investment.
Capital will seek the best opportunities, let's keep the incentive structure sane. Which means first tackling the biggest problems, with the highest probability of success, for the most people. As the opportunity space is explored or saturated, we'll move on to lower EROI opportunities. By getting the highest EROI initially we'l be richer still for chasing down philanthropic spaces (for the opportunities which do not make economic sense, but make moral, humanitarian sense)
Capital didn’t seek quantum mechanics which led to semi conductors which led to computers. Capital didn’t seek weather prediction which led to chaos theory which led to modern control systems for basically everything. And it certainly didn’t seek neural networks for the first half dozen decades they existed. So it seems like capital may have a poor nose for long term reach investment.
What capital seems to be doing right now is funding products that will create an AI replacement of my grandmother so I can continue to talk to her after she dies. Not exactly a good look.
"There will be so much money to go around for philanthropy" is also rich given that the world's richest man is going online to actively tell people not to give to the poor.
I ask again: How are we going to produce all of the basic research that is non-excludable & non-rival? What incentive do companies have to produce results like this?
Capital seeks the best opportunities, like deliberately lying about asbestos in baby powder, producing fraudulent research and continuing to profit off poisoning individuals.
Capital doesn't seek the best opportunity, it can only seek the best monetary opportunity and that can involve fraud or products that are bad for society.
Without market-independent research you often wouldn't even realize that is what's going on.
Who got punished for the J&J asbestos issue? Who got punished for cigarettes and their deceptive advertising? And how badly did the Sacklers get slapped for causing the opioid epidemic?
If you're making the argument that they should be punished proportionally to their effects then all of these cases should result in the individuals being jailed for life at bare minimum and their assets forfeited. Yet this hasn't happened. Why?
I can't answer why, but I would suggest it has very little to do with the government spending on research, or in the way it allocates it annually vs 4 year blocks.
I have noted in the past that I do enjoy how intense the FTC and other consumer protection style agencies get when Democrats run the whitehouse, ideally companies would behave because if they dont the institution that has a monopoly on violence will club em really good, so to speak. IMO Citizens united and the way we fund the political game has broken the incentives to being a company on good merit rather than on legalized corruption.
Yet you ignore that when the Republicans are in power (they are very well supported by capitalist interests) they try to slash all the regulations - because money only cares about money and wants more money. And the money LOVES corruption because it gets you more money.
Capitalism without regulation is gangsterism. With regulation it's barely-controlled gangsterism.
I would particularly agree with you when it comes to money's influence in the political process. Definitely need limitations on spending, or something like Andrew Yang's idea (i heard it from him) -- give every American $N to give to their political candidate of choice, it would wash out the EROI of non democratically backed interest groups
The biotech industry is already tricky, with long lag times and a low probability of success. More risk just increases the discount rate and lowers the present value, making it an even less appealing investment.