The research with the largest long-term returns is the research no company will pay for

The argument

Proponents of this position begin from a distinction between research aimed at a product and research aimed at understanding. A firm funds the first because it can expect to own and sell the result. Proponents argue that the second is systematically underfunded by firms, not through short-sightedness but because its characteristics make it a poor private investment: the payoff is distant, the chance of any particular line of enquiry working is low, and whatever is discovered becomes knowledge that competitors can use as freely as the funder. Proponents argue that these are precisely the features that make a state the right funder. A government does not need to own a discovery to benefit from it, since the gains show up across the whole economy it taxes rather than on one balance sheet. It can also hold a portfolio large enough that the many failed lines of enquiry are paid for by the few that succeed, which no single firm can do. And it can wait, because its horizon is not a reporting period. They add that the most consequential technologies are usually built on understanding acquired long before anyone could see a use for it, so the research that eventually produces treatments, materials and machines was done by people who could not have justified it commercially at the time. On this account a country that funds only what has a visible application is living off a stock of understanding it has stopped replenishing, and the shortfall appears a generation later when there is nothing left to apply. The argument concludes that because the most valuable research is the kind markets will not fund, governments should fund more of it.

Premises

Counter-arguments

Critics reply that the argument establishes a role for public funding without showing that the current amount is too small, which is the actual question. They add that philanthropic foundations, endowed universities and corporate laboratories do fund open-ended work, so the gap is narrower than the premises assume. Critics also argue that the premise about a state's patience describes an ideal rather than a practice, since public research budgets are set annually, are among the first cut in a downturn, and are steered towards whatever the current administration wants to be seen funding, which is not the long horizon the argument relies on.

Rejecting the premises

[Rejecting P1] Philanthropic foundations, endowed universities and corporate laboratories do fund open-ended work with no owned product in view, so the gap the premise describes is narrower than it claims. [Rejecting P2] Public research budgets are set annually, are among the first cut in a downturn, and are steered towards what the current administration wants to be seen funding, so the patience attributed to the state is an ideal rather than a practice. [Rejecting P3] That past discoveries came from curiosity-driven work shows such work should continue, not that the present level of it is too low. [Rejecting C] At most it follows that governments should fund research of this kind, which they already do, rather than that they should fund more of it.