Rafe Champion's summary of the leading ideas in The Economic Laws of Scientific Research by Terence Kealey

Summary

Terence Kealey

The Economic Laws of Scientific Research

Macmillan Press, London, 1996

There is a 1400 world summary followed by a more detailed summary.

Enjoy!

Rafe Champion, October, 2010

SHORT SUMMARY

The first chapter on Francis Bacon and Adam Smith spells out the two competing models of the optimum relationship between state funding, basic research, technology and human welfare.

The Baconian model is linear.

State support -> Basic Research -> Technology -> Progress in human welfare

Adam Smith

Old technology -> New Technology -> Wealth and Welfare

In this model, Basic Research has a give and take (arrows each way) relationship with New Technology. The State has no special role to play in the process.

Chapter 2. Research and Development in Antiquity.

The early development of technology by the Egyptians, Babylonians, Chinese, Greeks and even the Romans did not have any dynamism and remained arrested for long periods. In the case of the Greeks the leading philosophers such as Plato and Aristotle had contempt for trade and commerce, which is where practical developments in technology occur. The Roman empire degenerated into a tax-extraction machine and lost population by defection to the “barbarians” and by natural attrition as the productivity of nation declined.

The third chapter on The Dark Ages indicates that decline set in before the fall of the Roman empire and although arty types are scornful of this period it was a time when many economically important innovations occurred, notably the saddle, horse collar and tandem harness which increased the power from horses by a factor of four, and the crank which permitted many kinds of machines to be driven from a rotating shaft.

Chapter 4. The Commercial Revolution.

The small Italian states led the way with advances such as premium insurance, double-entry bookkeeping and the cheque. Merchants were the thin end of the wedge that opened up the way from feudalism towards more open and productive societies. Italy was located in a good climate on the cross-roads of many trade routes by land and sea. The small principalities, protected for some time by mountains and the sea, permitted merchants to thrive and become the leaders of the small republican states.

Chapter 5. The Agricultural Revolution.

The Italian states were eventually invaded from all sides and the area of innovation shifted to Holland and England. Vital innovations such as crop rotation and systematic improvement of crops and pastures were driven by gentleman farmers such as “Turnip” Townsend and associations such as the Lunar Society which consisted of a mix of scientists, engineers and industrialists. By 1850 agricultural productivity in Britain was increasing by 0.5% per annum, unprecedented in history. Laissez faire ruled (almost) and there was no state involvement in research or industry policy.

Chapter 6. The Industrial Revolution.

Between 1780 and 1860 the population of Britain tripled from 7.5M to 23M and the real per capita income double in real terms across all classes.

The drivers were increased productivity of machines and the movement of labour from the land (and Ireland) to the factories. The driver of machine technology was NOT science as predicted by the Bacon but the improvement of existing technology by ingenious artisans such as Newcomen, Watt, Trevithic and Stephenson. Amazingly, the scientists were struggling to keep up with the tradesmen! Hooke (the scientist) told Newcomen that his idea would not work while he was developing it (fortunately he persisted) and Carnot’s work on thermodynamics was prompted by Watt’s steam engine which could not work according to the laws of science as they were understood by leading scientists at the time.

France followed the Bacon model and set up glittering science laboratories and institutions of learning, while the state ran on the basis of taxes extorted by an army of Farmers-General (tax farmers) working on a commission basis with draconian powers of search, detention and confiscation. Hence the Revolution, while the science laboratories produced scientific advances without any impact on technology or the wealth of the French people.

Chapter 7. Economic History since 1870

This chapter is about the comparative economic performance of nations with some warnings about the valid and invalid comparisons that are often made. Invalid comparisons are often used to promote the Baconian approach to science with the aim of getting more state involvement by way of industry policy and public spending on science and education. A classic example is the comparison of Germany and Britain post 1870. Bismark’s warfare/welfare state sudsidised and protected local industries, especially steel. With the inflated cost of German steel it made sense for England to produce less and buy from Germany, still a lot of people just saw the decline of an industry, not wealth transfer from Germans to Britons. They also misread the play on technical education, being over-impressed by the network of state-funded technical colleges in Germany and forgetting about the 700+ industry-funded mechanics institutes that were established in Britain between 1820 and 1850.

There is a stunning table on the economic performance of the current (1980) 16 richest nations from 1870 to 1980. These figures indicate GDP per capita in 1870 adjusted to the $US in 1970.

Australia at 1393 leads the UK 972, Belgium 925, Holland 831, Switzerland 786, US 764.

On an index of productivity Australia scored 1.3 compared with UK 0.8, Holland US and Belgium 0.7. Australia was at the bottom in growth of productivity since that time.

Chapter 8. Science Policies of the Twentieth Century

In this chapter Kealey traced the evolution of science policy in the US and Britain. They both started with a substantially laissez faire economy and also minimal state involvement in science, then during the 20th century the Baconians and the Czars of science took over and they went for central funding and control in a big way. For those who have been receptive to Kealey’s argument thus far, the results are predictable (cw 18th century France).

Chapter 9. The Economics of Research: Why the Linear Model Fails

The purpose of the chapter is to test the linear (Baconian) model.

Government money -> academic science -> technology -> wealth

What about the benefits of state funding for basic research. Kealey provides evidence that (a) basic research contributes next to nothing to progress in industry, compared with the on-site modification of existing plant and (b) industry will fund basic research anyway.

Chapter 10. The Real Economics of Research

In this chapter Kealey looks at the economics of R&D and then the economics of academic science, in each case asking whether government funding is required to optimise spending.

He confirms three Laws of Funding for Civil R&D.

First Law. The % of national GDP spent increases with national DGP per capita.

Second Law. Public and private funding displace each other (compete). So public funds tend to displace private funds.

Third Law. The public/private displacement is not equal. Public funds displace a larger volume of private funds than the public input. (net loss)

Chapter 11. The So-called Decline of British and American Science

British boffins medaled in productivity and quality of publications! On papers per capita of population Britain took bronze behind the US and Canada. In the most cited papers Britain took silver behind the US in life sciences and total citations, and bronze behind the US and Canada in chemical science and physical science.

If Britain did that well in the Olympic Games there would not be a lot of talk about the decline of British sport.

CHAPTER 12. Dr Pangloss was Right

“If this book has a message, it is this: relax. Economic, technical and scientific growth are free lunches. Under laissez faire they just emerge, like grass after the rain, through the efforts of individual entrepreneurs and philanthropists. Once the State has initiated the rule of law and sensible commercial legislation, the goodies will flow – and laissez faire is morally superior to dirigism as it maximises the freedoms and responsibilities of the individual.”

Chapter 1

Francis Bacon and Adam Smith

This chapter sets out two competing models of the relationship between academic science, the growth of knowledge and human wellbeing . Superimposed on that model is the role of the state.

One is the linear model attributed to Bacon.

Academic science -> applied science/technology -> wealth

Inserting the state into the equation

Government funded research ->pure science -> technology -> wealth

Smith’s model is not linear and it does not have any essential place for the state. The non-linear part is academic science which sits in a give and take relationship with new technology. There should be arrows back and forth between them but formatting does not permit.

Pre-existing technology -> new technology -> wealth

academic/pure science

“In as much as advances in technology did emerge from pure science, Smith did not believe that this justified government spending. Smith feared the economic consequences of the increased taxation…he distrusted any measure that increased the power of politicians, and he distrusted the capacity of academics to work without immediate goads.” (11)

I assume “goads” is correct, you could say goals, especially the practical aim of applications outside the laboratory and the study.

Chapter 2

Research and Development in Antiquity

Settled agriculture started about 20,000 years ago and during this time many of the domestic crafts came into being – pottery, bricks, spinning and weaving, storing grain, dyeing , fermenting and distilling, the sail, dams, water mills and irrigation canals.

Smelting started about 5000 years ago, starting with gold, silver and then the miracle of bronz (copper and tin). The Late Neolithic (Stone Age) spawned the Sumerians, the Assyrians, the Babylonians, then the Bronz Age produced the Egyptians, the Hittites, the Medes, the Persians and the Jews, also the Indian, Chinese and Japanese civilisations. Then on Kealey’s account nothing much changed in the way of social or technological developments for very long periods.

Kealey speculates that some of the early Bronz Age societies may have been pleasant places but competition ensured that the most aggressive of the early societies conquered the others. “Thus did the Bronz Age witness the triumph of the most unpleasant people”. Then to maintain control the unpleasant leaders kept a tight rein on any kind of freedom and innovation (with the exception of skills and crafts useful in war). Futhermore, the great empires were isolated by mountains, deserts and distances, so the Egyptians, the Babylonians, the Indians, the Chinese and the Japanese, for long periods, did not even have war as the incentive for progress and “the great ancient Bronz Age civilisations settled into totalitarian rigidity”. (21)

In contrast the small mediterranean peoples scattered around the coast had different incentives and opportunities. The sea offered three advantages, first transport and trade was cheaper, second trade by sea was more free (being harder to police) and third, sailors had the opportunity to be relatively free and cosmopolitan.

“Curiously, howeve, first the Greeks and then the Romans did what the Bronz Age empires had done; having prospered through the technology that flowed out of trade, they then abjured trade for imperialism. From around 500 BC the Greeks increasingly turned to plunder.” (21)

The Greek philosophers turned their faces resolutely away from trade and industry, and denigrated the banausoi who worked for a living. Popper has a long note in his commentary on Aristotle, pointing out that “Every professional, for example a flute player, and of course every artisan or labourer, is ‘banausic’, that is to say, not a free man, not a citizen, even though he is not a real slave; the status of a ‘banausic’ man is one of ‘partial or limited slavery’…Plato used the word in the same sense as Aristotle. In the Laws (7416 and 743d), the term ‘banausia’ is used to describe the depraved state of a man who makes money by means other than the hereditary possession of land.”

Popper also noted how that attitude towards work and trade was cultivated in the English idea of the gentleman who did not engage in commerce or trade or work with his hands. If he played sport he was an amateur (a “gentleman”), unlike the grubby professional “players” and it was only in 1962 that the gentlemen and the players came onto first class cricket grounds through the same gate.

For some time the Romans were great law makers, conquerors and administrators but the spirit of trade and enterprise waned and some of the Emperors actively suppressed technolocal innovations. Petronius destroyed a workshop where someone developed a flexible glass, for fear that the precious metals would lose value and Vespasian rejected a machine to transport large pillars for fear that the men displaced by the machine would have nothing to do.

The Empire became a giant tax-extraction machine and the origins of medieval feudalism emerged as the farmworkers were tied to the estates and guilds were set up to lock people into hereditary trades. Freedoms of all kinds were restricted. “

"The fall of the Graeco-Roman hegemony teaches that the government funding of academic science will not generate useful technology in the absence of an appropriate, capitalist economy. This is so different from the conventional history that we must underline it. A standard textbook like Buchanan’s Technology and Social Progress emphasises in the author’s own italics, on the very second page, that ‘A strong state, in short, is a necessary precondition of industrialization‘, but we have shown that, historically, the reverse is true. In antiquity, it was the strong states that suppressed technology, and the weak ones that fostered it, because the weak ones were too weak to rob individuals of their freedom. As we shall see, it took the Dark Ages and their attendant chaos to liberate the human spirit and so fructify commerce, technology and a healthy science." (28)

Chapter 3

The Dark Ages

We reached the fall of the Roman empire which declined from 70 million to 50 million during its final centuries due to economic decline, with the death of inhabitants and desertion to the less regulated “barbarian” lands outside the empire. Arty types like Petrarch deplored the decline of Greek and Roman civilisation. ”Disdaining what he believed to be the ignorance of the centuries preceding the era in which he lived, Petrarch is credited with creating the concept of a historical “Dark Ages” [Wik]. But Kealey pointed out that the decline set in long before the so-called Dark Ages and during this time there was real progress in technology, unlike the declining centuries of Roman “civilization”.

“The Dark Ages produced wonderful improvements in technology. In addition to the saddle, the stirrup, the horse collar, the tandem harness, the water mill, the fore and aft sail, soap, and, perhaps most important, the crank…also felt, trousers, skis, butter, rye, hops and the making of barrels. In consequence, men entered the fourteenth century with a greater mastery of animals and machines than ever before”. (32)

Chapter 4

The Commercial Revolution

Kealey has an amazing table based on a 1688 survey of living standards in England. Gregory King, Secretary to the C0mmissioners for the Public Accounts had access to statistics such as the Hearth Tax and excise returns, plus surveys that he conducted himself.

Of the 5.8M people in Britain he estimated that 2.8M were starving. Above the starvation line were Aristocrats and gentry (150,000 people), Professionals and officers (300K), Freholder and farmers (1.7M), Tradesmen and craftsmen (500K).

Below the line were Common soldiers and sailors (200K), Labourers (1.3M), Cottagers (1.2M)and Vagrants (30K). Don’t ask me how he counted the vagrants. The 2.8M below the line survived on charity and poor relief (as though welfare only started with Bismark and the modern welfare state).

Even so, Kealy points out that England was richer than modern day Africa for two reasons, they had all the technology described in the previous chapter, while most of Africa at the time of writing (1995) was yet to leave the Iron Age. And second, “Europe had acquired a crucial social discipline – the control of fertility” (as though that started in the 1960s with the Pill).

But this chapter is not about birth control, it is about the rise of commerce and the fall of the feudal system which perpetuated the rigid and immobile social and economic struture of the declining Greek and Roman empires.

Merchants were the thin end of the wedge that opened up feudalism, often, regrettably, in the service of war, so the king and the feudal lords on their estates could be self-sufficent for subsistence but not for the iron to make swords and armour, or to engage fleets or build seige equipment. Rich merchants became a source of loans and kings found out the hard way that if trade did not prosper their war chests would be empty and they would tend to lose.

The first European country to break away from feudalism was Italy and Kealey pointed out some of the legacies – the Bank of England was established near Lombard Street, the pre-decimal two shilling coin was the florin and the symbol of the pound, no longer on the keyboard, was the ‘l’ of lira.

“Italy was well placed. It enjoyed a good climate, it straddled the trading crossroads between the Mediterranean and the North, and its mountains fostered the autonomy of the city states…many of which became republics…generally ruled by the leading merchants as mercantile oligarchies.” (40)

Kealey stated that trade enriches in two ways, the short-term profit from individual transactions and the long-term gains by providing incentives for innovation of all kinds. He listed some of the commercial innovations – premium insurance, double-entry bookkeeping, the cheque (first written in Pisa) and the patent.

Science and art gained from the wealth of the merchant princes. Some of the early universities were in Italy and the patronage of the great artists is of course legendary.

“Feudalism was believed to embody the highest morality. Ever since Plato, people had understood that society needed to be divided into rulers, guardians and peasants and it seemed natural for the peasants to provide food in exchange for defence and spiritual guidance. [The problem of avoiding class war is solved, not by abolishing classes, but by giving the ruling class a superiority which cannot be challenged - the Platonic utopia]. But, for all the theory of mutual obligations, in practice the lords exploited their peasants…Moreover, the knights rarely came to the peasant’s defence if their own interests dictated otherwise…Time and again, just when they were needed at home, English knights left for more lucrative battles abroad.The Abbott of Battle Abbey, Hastings, led his own men to the defence of Winchelsea (from the French) in 1377 while John Phillpot, a wealthy London grocer, equipped his own fleet to capture a notorious Scottish pirate in 1378.” (44-45).

In the interests of fairness and the “just price” the price of a loaf of bread was fixed but in deference to market forces the size changed depending on the harvest (supply and demand).

“The transition from a feudal to a capitalist society required a vast moral and ethical shift as people moved from a world rooted in personal bonds to one regulated by contract. Many people, even within capitalist societies, have not fully made the shift, and many cultures have yet to embark on it.” (45)

Chapter 5

The Agricultural Revolution

Lets hear it for “Turnip” Townsend!

Commercial and technical leadership soon shifted from Italy to Holland and then England. The small principalities could not resist the Spanish from the West, the French from the NW and the Austrians from the NE.

“The commercial and technical leadership of Europe did not, however, settle on any of the conquerors. For all of their power, neither Spain, nor France nor Austria advanced standards of living very much. It was sixteenth century Holland and seveneenth and eighteenth century England that led the way through the Agricultural Revolution”. (47)

Commercial leadership was dominated by republics, the Italian states, Holland, Britain (practically a republic after 1649 and 1688) then later the US and more recently the Swiss (and now China?).

The feudal system was hard to shift, for example the British Statute of Labourers (1350) forced servants and labourers to stay put despite the temptation of better offers elsewhere. One of the wedges was the introduction of money wages for farmworkers. For Kealey the real dynamite under the system was a collection of technological advances that constituted the Agricultural Revolution. “The greatest of the technological changes was the rotation of crops…Thus no years were wasted to fallow, and crops that impoverished the soil were rotated with crops that both enriched it and also sustained cattle…British agriculture was a ferment of ‘improvements’ as they were called”. (50)

New cattle such as the Herefords, new fodder crops, Jethro Tull’s seed drill, and there were agricultural heroes like ‘Turnip’ Townsend, Thomas Coke and Arthur Young. They boosted productivity, even if they did not generate an English haute cuisine (hands up everyone who loves turnips, and why did greens have to be boiled to a colourless mush?). Agricultural shows became a fixture, spreading news of improved breeds and practices. By the mid-nineteenth century existing scientific societies such as the Royal Society and the Lunar Sciety were producing learned studies and new societies formed – the Royal College of Vets (1844) and the Royal Ag College (1845). The Lunar Society of scientists, engineers and industrialsts (note the mix) was so-called because it met every full moon so the members could travel home by moonlight.

In 1843 the farmers Lawes and Gilbert at Rothamstead turned their farm into a laboratory for long-term studies in soils and pasture management which was still a world leader when I was in the Ag research game a few years ago. And so by 1850 agricultural productivity in Britain was increasing by 0.5% per year, unprecedented in history and the period 1850 to 1875 was called called the Golden Age of British Agriculture. All of this without government funding, discussion papers and policy documents, central planning or coordination.

“Eighteenth and nineteenth century England subscribed to laissez faire. Taxes were minimal (there was no tax in peacetime, for example) and governments rarely intervened in the economy. There was no support for agricultural research and development. For a short time, the government did create a Board of Agriculture, but all that did was to sponsor between 1803 and 1813 an annual course of lectures by Humprey Davy on agricultural chemistry. So dwarfed was the Board by activities of the privately funded societies for agricultural research and development that in 1822 it was disbanded.” (52).

Kealey pointed out that Britain was predominantly rural with about 70% of the workforce in the fields, so any taxes to support agriculture would have fallen predominently on the rural landowners themselves. And if anyone suggests that “disinterested” or “coordinated” government research might have been more effective than the efforts of the farmers themselves, Kealey posed the question, who would have advised the government and provided better directions than the people closest to the action who were already producing striking progress.

The rise of hobby farming by the gentry was very important for generating innovations and Kealey noted that some historians found this hard to explain. Kealey advanced two reasons, the first being the improved returns to the innovators, even when others could make similar gains by playing “follow the leader” without doing the research. [Actually farmers can be very resistant to innovations, hence the study of "diffusion of innovations" pioneered by Rogers and Shoemaker, starting with studies on the adoption of hybrid corn in the US].

“Another [reason] is altruism…to be comprehensively discussed in later chapters…in post-renaissance Europe whenever a class of persons have possessed economic power – either because they have inherited money, or they have made it, or because as bureacrats and politicians they have taxed the populace – then that class will spend money on research and development. The desire to support research appears to be as basic to humans as the desire for art, say.” (55)

Kealey noted a difference between art and science. Because governments are comparativey parsimonious in supporting art, we are accustomed to private patronage, but since science began to receive massive public support, the idea of private patronage in science seems odd [even though there is quite a deal of it]. Kealey’s point is that the combination of high taxes in the 20th century and generous state funding of science had tended to displace private funding compared with the time when virtually all research funding was private.

Kealey has a postscript on the enclosure of farmlands, the process whereby the common land was resumed by larger lanholders. This was an essential step towards efficient farming and the displaced workers were rapidly absorbed in the expanding industries and support services of the Industrial Revolution. However for a lot of people this was a time of great dislocation (there are some echoes of this in one of the books of the Master and Commander series) and there was a lot of sentimental yearning for the “good old times” by poets and Romantics who had no experience of rural life.

Chapter 6

The Industrial Revolution

Lets hear it for the brewers!

He notes that Holland should have continued to lead the way with England (taking over from Italy) but she suffered the same fate as Italy due to war with Spain and internal religious divisions. Protected from external foes by the channel, England was free to proceed with the Agricultural and Industrial Revolutions.

The IR in Britain is usually located in the period 1780 to 1860. During this time the population trippled from 7.5M to 23M and the per capita income doubled in real terms (across all classes, in your face Karl). And that despite the ruinous and protracted Napoleonic wars. That contrasts with the European growth rates from about AD 500 to 1500 when per capita wealth did not increase because the increase in wealth, in the order of 0.1% per year was matched by population growth at the same rate.

The factors in economic production are usually listed as land, labour, capital and other, where the most significant other is productivity. Kealey has a table that partitions growth over the critical period between these factors, in a selection of industries. The industries with the greatest growth rates were those where technology was on the move and the productivity factor was the major component in their growth.

Cotton is a striking example and he listed a series of inventions which increased productivity. He then returned to the main theme of the book to consider how these things happened: what was the source of the intellectual impetus?

You will recall the Bacon vs Smith model.

In the conventional wisdom of the Bacon model, technological progress is supposed to follow scientific research. Did this happen in the cotton industry. No.

Well what about the steam engine, for many people the symbol of industrialisation? No again.

“The first commercial steam engine, Thomas Newcomen’s, was at work in 1712 at Dudley Castle, Worchestser. It was huge, inefficient and expensive, but it clearly met a need because by 1781 about 360 had been builst in Britan, most of them devoted to pumping water out of coal mines…Whence did Newcomen get his idea? The Encyclopedia Britannica has apparently has no doubt. Kealey quotes the encyclopedia as follows:

The researches of a number of scientists, especially those of Robert Boyle of England with atmospheric pressure, of Otto Von Guericke with a vacuum, and of the French Huegenot Denis Papin with vessels, helped to equip practical technologisgts with the theoretical basis of steam power. Distressingly little is known about the manner in which this knowledge was assimilated by pioneers such as …Thomas Newcomen, but it is inconceivable that they could have been ignorant of it.

Kealey explains that they were ignorant of those scientific advances that were being made far away, some of them in other lands. Newcomen was a country blacksmith and ironmonger. He knew no science but he knew about the mines and he knew about pumps, pistons and cylinders which were his stock in trade. The principle of the steam engine that he designed was the reverse of the pumps with which he was familiar.

“Newcomen’s idea was the stuff of intuitive genius (although it took him ten years of exhaustive experimentation to create it) but it was not more than that: the intuition of a natural genius familiar with pumps and the domestic steam kettle. No theoretical science was involved, nor was it necessary”. (64)

Kealey reports that the influence worked in the opposite direction to the Encyclopedia Britannica model . Denis Papin, the leading gas scientist at the time, used to explain that Newcomen’s success prompted his own research.

Kealey then explored whether science could be credited with the improvements that were made after the initial invention of the steam engine. He reports that the first major advance was James Watt’s invention of the separate condenser, a massive improvement in efficiency. J D Bernal, the Marxist historian of science, thought that Watt was applying Black’s discovery of latent heat, indeed they both lived and worked in Glasgow but Watt strenuously denied any knowledge of the fundamental research, he was working on the long-established observation that steam condenses on cold surfaces.

The next development, the high pressure steam engine came from Richard Trevithick who came from a mining family and at primary school was described as “disobedient, slow and obstinate”. George Stephenson was in the same mould, a self-taught artisan who learned to read (just) at 19 when he attended night school. He built the Liverpool to Manchester railway line and the famous “Rocket” which could get up to 35 mph. “So unsophisticated was Stephenson, and so dense was his Geordie brogue, that he needed an interpreter when talking to educated men from London. Yet it was the educated men, from all over Europe, who consulted with him, not the other way around”. (68)

Through that period the scientists were struggling to catch up with the artisans and engineers. Indeed, Kealey asks, what did the practical men have to learn from chemists who subscribed to the phlogiston theory, or the theory that heat was a substance, or from people trying to design perpetual motion machines? Carnot’s work on thermodynamics was prompted by Watt’s steam engine which appeared to break the laws of physics, as understood at the time, so Carnot had to revise the theory. Toricelli was trying to improve the pump when he demonstrated the weight of air in the atmosphere.

Getting back to the brewers, Joule was trying to improve power generation in his father’s brewery when he discovered the law of conservation of energy and Pasteur’s work for brewers led to the science of microbiology. In fact Pasteur’s progress is exemplary to demonstrate the synergy between practical and fundamental work, with the practical problems coming first. [As an aside, something the same could be said for Einstein, the patent clerk. People often think that his work in the patent office was a waste of his talents but in fact he was constantly working with devices to measure time for the new railways that were being built at the time, and other technical applications, so he had to know the theory of the discipline, the law of patents and he had to work out whether each design submitted was actually different and original]. The doctor who invented percussion (tapping your chest) was inspired by watching his father, a publican, tapping the sides of his barrels to see how full they were. “Brewing was so important to the development of science that at the end of the nineteenth century there were more biochemists working in Burton on Trent, the capital of the British beer industry, than in the rest of Great Britain”. (69)

He could have also mentioined that rural industries developed the young science of biometry, statistical analysis, you know, t tests and analysis of variance. He did mention Mendel, who attempted to systematise the rules of thumb that plant and animal breeders developed by trial and error for centuries.

Comparing Britain and France.

During the IR the universities in Britain were not known as centres of learning. The brawls between town and gown at Oxbridge may have been things of the past but scholarship did not thrive even when brawling declined. The Scottish univesities were supposed to be better but when Dr Johnson visited St Andews in 1773 one of the three colleges was being demolished because nobody attended and at another the key to the library could not be found.

France was a striking contrast with generously funded institutions for research and schlarship which produced a stream of great scientists. Lavoisier, Berthhollet, Leblanc, Carnot, Monge, Coulomb, Lamark, Cuvier, Saint-Hilaire, Gay-Lussac, Ampere, Laplace. You don’t need to be a Rhodes Scholar to recognise ssome of them because they are immortalised in the terminology of science.

Their institutions, the Ecole des Ponts et Chausses, the Ecole du Corps Royal du Genie, and after the Revolution the Ecole Polytechnique, provided the best-equipped scientific research laboratories in the world. By the early nineteenth century, when it was still only a skilled craft in England, France had established engineering as a profession [beware the two-edged sword of professionalism!], with schools, formal examinations, and, after 1853, its own research laboratories in the Conservatoire. Yet it was Britain, not France, that produced the Industrial Revolution. (70)

Why?

On the state (public) funding of science, both the English and the French started off in the same way at the same time. The king established the Royal Society in London in 1622 and a different king started the Academie des Sciences in Paris (France) in 1666 (not a great year in London). On Kealey’s account the English took the laissez fair road, abolishing whole classes of taxes and withdrawing the central government from almost every function apart from defence and law and order. [I think that is a bit rosy, there were Corn Laws and other duties and tariffs but still they were going in the appropriate direction]. The Royal Society was left to sink or swim.

Over the searoad the French took on full-blooded dirigism. Under Chief Minister Colbert (1661-83) the state attempted to control every aspect of society, including trade, industry, education and science. This was very expensive and tax was collected by Farmers-General ( tax farmers?) who were contracted to collect the tax on a commission basis. In 1760 there were over 30,00 Farmers-General (for 25M people) and 22,000 of them were paramilitary police, uniformed, armed, and given vast powers of search, detention and confiscation. Of course the tax revenue was wasted and the tax collectors abused their powers and created massive ill-will. Who can be surprised by the Revolution? Given the high duties (tariffs) smuggling was rampant, which of course had to be policed at great expense (additional deadweight costs). Kealy reports that in four years, in just one region (Angers), 2300 men, 896 women and 201 children were convicted of smuggling SALT and five times as many were arrested and released for lack of evidence. Why salt? Because it was ten times the price that it could have been. The primary producers had to sell at a fixed price to the Farmers and then it passed through several levels of distribution with mark-ups for tax at each stage.

“The apalling social and economic costs that France bore as it raised its taxes might not have mattered had the money been well spent, but unfortunately it was not. That is the trouble with dirigism; a centrally planned economy can only work as well as the plans, and France subscribed to the wrong plans.” (72)

In science, this was the Bacon model of pure research; Kealey refers to the French as a nati0n of Cartesians ( constructivist rationalists in Hayek’s language), including the dissidents of course, so nothing improved after the Revolution. Kealey noted that the consequence of this for science is that a free market (England at the time) will permit some companies to put money into pure science, and some will opt for applied science, while others may opt for both or neither. In any case, experience (trial and error) will permit adjustments to be made in the appropriate direction. Anticipating a point that Kealey made later in the chapter, research in England moved in the “pure” direction late in the 19th century by the decision of private sector funders when it seemed that the payoff from “on the job” development was running down and more fundamental work was required.

“But a centrally planned economy can only make one choice: the French opted for a huge investment in pure science because all the intellectuals recommended it, yet it was the wrong decision”. (73)

That also represents a case for Federalism in Australia with some appropriate diversity in services between states.

Funding British Science under Laissez-Faire

You will recall the impressive roll call of French names in science, but British science was not backward at that level, as witness the names of Davy, Faraday, Maxwell, Dalton, Kelvin, Darwin, Huxley, Lyell, Cavendish and Rosse. Kealey listed five sources of funding (1) hobby science, (2) industrial science, (3) university science funded by industry, (4) universitys science funded by individuals and (5) university science funded by fees or commissions. The detail that he provided under each of these heading is fascinating but it is not necessary to spell it all out, merely to insist that private funding was up to the task of allocating resources in ways that were cost-effective from a commercial point of view and also allowed for fundamental research. That is the synergy of research and practice that I have described in Australian rural research.

Chapter 7

Economic History since 1870

This chapter is about the comparative economic performance of nations with some warnings about the valid and invalid comparisons that are often made. Invalid comparisons are often used to promote the Baconian approach to science with the aim of getting more state involvement by way of industry policy and public spending on science and education. A classic example is the comparison of Germany and Britain post 1870 which is generally supposed to show Britain in a bad light due to rapid German progress in heavy industry, without noticing the inflated cost of German steel (for example) that was made behing tariff walls with the aid of state subsidies. [This has a recent counterpart regarding the progress of the Soviet economy after WW2, measured by the "output" of heavy industry which prompted Paul Samuelson to write in his long-running and best-selling economics text that the Soviet economy was rapidly overhauling the US].

Kealey’s first example of misleading comparisons refers to the first and second Exhibitions of the Industry of All Nations. The first was in London, in 1851, and the second in Paris, in 1867. The idea was conceived in Britain to demonstrate that she was the Top Dog and the workshop of the world. It received the backing of Queen Victoria’s consort, Prince Albert, who loved that kind of thing and it was a massive success for England which won practically all the awards. The Paris exhibition was even grander, covering 40 acres compared with 20 acres in London, and – shock horror, Britain only won 10 out of 90 awards, being overtaken by France, Belguim, Germany and the US. This sent a shockwave through the British educational establishment, rather like the impact of the Russian Sputnik of 1957 (and with equally little justification).

Kealey pointed out that there are two explanations for Britain’s “dismal” performance in Paris, one related to the number of exhibits and the judging, the other related to the dynamics of comparative performance. On home turf Britain dominated the number of exhibits and probably got some ”home town” decisions in the judging. In Paris other nations dominated in numbers (France alone had more than twice as many exhibits as Britain) and France got the home town decisions.

More significant than the vagaries of awards is the comparative dynamics. A nation that is far ahead cannot be expected to maintain the lead over others that are starting from a low baseline, especially when knowledge and technology are more or less freely shared, purchased, borrowed, copied and pirated. The parallel with economic development is obvious.

Kealey produced pages of figures and graphs to demonstrate the phases of development that all progressive nations follow (some do not, remaining stuck at the pre-takeoff stage, and that is a matter of political economy of course). His point is that the leading nations are made to look bad in comparison with the ones that are cathing up, even though the leaders are making the same or better progress in absolute terms, it just looks smaller as a percentage. The larger point is that the defective analysis is always used by aspiring state planners (would-be Czars of various kinds) to justify more Baconian public control and spending.

There is a stunning table on the economic performance of the current (1980) 16 richest nations from 1870 to 1980. Guess who was Top Dog in GDP per capita in 1870! The figures are all adjusted to the $US in 1970.

Australia at 1393 led UK 972, Belgium 925, Holland 831, Switzerland 786, US 764.

At the other end, Japan 251, Finland 384, Sweden 415, Denmark 572.

The table also indicates the average annual % of growth in GDP per capita, productivity (GDP/man hour) in 1870 and the average annual compound growth in productivity.

The table shows that the top dogs had high productivity at that time but lower rates of increase in both GDP/capita and productivity over the long haul. Australia’s productivity in 1870 was phenomenal, 1.3 compared with UK 0.8, Holland US and Belgium 0.7.

Australia was at the bottom on both the growth rates since that time. Of course this is not just the way things work for leaders (noted above) it is also a function of certain policies introduced at the start of the20th century, but Kealey did not pursue that (though it supports the argument of the book).

He has a lot to say about the way British people learned the wrong lessons from the comparison with Germany after 1870. That was the start of the Bismarkian warfare/welfare state and people were tricked by the apparent success of German industry and education policies. The inflated cost of German steel was noted above, so it made sense for England to produce less steel and buy it cheaper from German, still a lot of people just saw the decline of an industry, not wealth transfer from Germans to Britons. They also misread the play on technical education, being over-impressed by the network of state-funded technical colleges in Germany and forgetting about the industry-funded mechanics institutes in Britain. On the tech colleges, a team of British high school inspectors checked out the German system in 1991 and found that the content of the training was very poor, but was covered up by the Master Craftsman award which did not have an equivalent in Britain. “This qualification has high status in a nation obsessed with qualifications but the actual products are in practice no better than their British equivalents with their modest diplomas.” (116)

“Because the British Government did not create technical schools, it is often assumed that Britain lacked them, but the free market is perfectly capable of supplying education if it is needed. Between the 1820s and the 1840s no fewer than 700 Mechanic’s Institutes were set up, privately, in Britain to offer technical instruction but of course their costs were fully met by industry, because the artisan’s fees (or loans to meet the fees) were ultimately translated into higher wages”. (117)

Chapter 8

Science Policies of the Twentieth Century

There are few activities more important than research and development, but how to make it effective? Kealey reported that Paul Kennedy in The Rise and Fall of the Great Powers is schizophrenic about that issue because he heaped praise on the state-funded research and education effort in Germany in the late nineteenth century and in another chapter he was equally impressed by the way modern Japanese did so well with most of its R&D funded or actually done by industry.

Prima facie is should be ok whichever way you go with the funding, unless you think there is something special about a dollar that has passed through the hands of the government, but of course it is not just the dollars that count but the way the decisions are made about the work and especially the way the work is linked to the commercial world.

The US experience.

One of the maxims of dirigists is ”never to waste a good crisis”. This is spectacularly exemplified by the progress of science policy in the US, starting with the Civil War. Federal involvement had to push against doughty resistance from defenders of laissez faire and also people who were strong on States Rights, so the would-be Czars of Science made little headway in peacetime.

Alexander Dallas Bache started as the Superintendent of Coastal Survey. During the Civil War he gathered a group of scientists to lobby the Union/Federal Congress to set up a National Academy of Sciences with himself as the President. Nothing much happened after the war but the ball of dirigism was in play.

The next ball carrier was George Ellery Hale, a distinguished astronomer and Foreign Secretary of the National Academy (see how he colonised the niche created by Bache). In 1915 he published a book National Academies and the Progress of Research with all the Baconian stuff about pure science leading the way to advance civilisation. He seized his opportunity the very day after President Wilson delivered his ultimatum to Germany (18 April 1916) with an emergency meeting of the National Academy to prepare a submission to the President, and by June the President agreed to form the National Research Council. When peace broke out there was some doubt about the ongoing role of the Council but Hale rallied his forces to play all the Baconian tunes about the absolutely critical role of fundamental research for industrial progress and the Council became a permanent fixture. Still the flow of funds was meagre through the 1920s and into the 1930s until one of the New Deal Works Projects Administsration agencies was committed to provide jobs for skilled people, including scientists. Then RDR decided to spend up and the science budget inreased.

The next major player was Vannevar Bush, a trained electrical engineer, ex Dean of Engineering at MIT and President of the (private) Carnegie Institution, at that time the largest single science-funding agency in the nation. During the war he found receptive for the message that the Federal Government had a duty to drive a national science policy with massive financial backing. Actually he was pushing this barrow for many years before the war but he achieved nothing until Pearl Harbour, then all barriers fell away and he soon found himself the chair of the National Defense Research Committee which mobilised a whole infrastructure of coordination committees for all kinds of research that contributed to the war effort.

After the war his efforts to achieve a major and permanent presence in the national science effort did not bear fruit until the Korean War provided the impetus required for Congress to create the National Science Foundation. Even this did not produce the necessary financial support until another windfall turned up in October 1957 when the USSR launched Sputnik, the first artificial satellite which electrified the whole community from the President down to expand education and science as a matter of the greatest urgency.

Britain.

Kealey traced the similar progress in Britain during the 20th century where the end of laissez fair in economic policy was matched by the rise of state control in education and science. All with the very best Baconian intentions (and arguments) but ignoring the advice that came from studies that could have and should have guided policy.

“Since the turn of the century, the Board of Education (1909), the Balfour Committee (1929), the Malcolm Committee (1929) and the Under-Secretary of the Board of Education (1942) reported that the supply of scientists and technologists had fully met and even exceeded industrial demand. But neither the Government nor the universities were intereseted in industry’s objective needs. Obsessed with Bacon’s linear model, and with Germany and Russia, they believed they knew better than mere industrialists. By 1961 the UGC was spending 40M pounds per year in recurrent grants, as well as spending 12M pounds a year on capital expansion. And then the system expanded again!”

A side comment on the obsession with Russia. This was twofold, one with their booming economy, no less a commentor than the Nobel Prize winner Paul Samuelson reported regularly through the 1950s and 1960s that the Soviets were rapidly overhauling the US. And with their amazing performance in scientific R&D (remember Sputnik, and their Bomb, admittedly developed with help from friends in the West). Somewhere in this book it is written that towards the end of the empire the Soviets had half the working R&D scientists in the world! C P Snow, the polymathic guru who knew the first law of thermodynamics and also wrote novels advised in the famous Two Cultures of 1959 that “The Russians have a deeper insight into the scientific revolution than anyone else”. Hence the scramble in the west to build more universities.

Kealey reports that in 1958 the UGC initiated the universities of East Anglia (1963), Essex (1964), Kent (1965), Lancaster (1965), York (1963), Sussex (1961), and Warwick (1965). Then the Robbins Report, released in 1963 spawned another fourteen universities. So between 1962 and 1976 the number of academics and students doubled. It is interesting that Robbins turned from Hayek to Keynes in the 1930s and to see how he did so much damage to higher education in his dotage.

Australia was on the same road, if a little further back, and the lessons of the massive postwar university expansion in the US were not learned, despite the best efforts of people like Jacques Barzun to indicate that the process was never going to achieve the desired objectives.

In addition to the historical material Kealey provided statistics to show that the upward graph of education and R&D was not matched (or followed) by any measurable impact on the econonomic indicators.

Chapter 9

The Economics of Research: Why the Linear Model Fails

"Everyone agrees that governments have the crucial role of maintaining the legal infrastructure within which capitalism prospers, but capitalism should be entrusted to the experts - the capitalists".

"Wealth is created by industry, not by governments. Governments can only raise money through taxation, and taxation is an unmitagated evil for industry, either because industry is taxed directly (which reduces its capital, profits and economic freedom) or because its customers are taxed, which reduces demand for industry's products" (206).

This chapter has some case studies of Government projects to develop and implement high tech systems and infrastructure. These include the European Community plan to develop High Definition TV, the Japanese fifth generation supercomputer program, the European Airbus project. In each case the lesson is clear. Massive sums of taxpayers money was wasted, or would have been wasted if the TV project had gone ahead. This result is rather significant for Australia at present, as we count the cost of Pink Bats (not even high tech actually), then we observe the implementation of the Education Revolution and now we contemplate the impending Broadband Plan.

The purpose of the chapter is to test the linear (Baconian) model.

Government money -> academic science -> technology -> wealth

The chapter examines each of the connections indicated by the arrows, and an extra one, the proposition that Government money should be directed into technology.

The argument proceeds in three sections:

Does New Technology Breed Economic Growth? Does Academic Science Breed Technology? Would the Free Market Supply Enough Basic Science?

DOES NEW TECHNOLOGY BREED ECONOMIC GROWTH

Kealey established in Chapter 7 that technology essentially is wealth although the amount of wealth that is generated depend on the insitutional context (incentives, disincentives, regulations and cultural factors). So the next issue is the role of government in promoting process, in brief, should the state either run industries or subsidise them? He runs through the four reasons for subsidies.

1. Social. "It is not unreasonable for governments to facilitate the gradual closure of redundant technologies to minimise local unemployment, but no one should assume that such subsidies are economic investments." (207)

2. Defence. This may be essential but it should not be confused with wealth creation.

3. The support of manufacture. There is a widespread refrain in Australia and the US "we are not making things any more". This is not always true, it may just be that we are making different things (high tech and value added). In any case there is no valid economic case for subsidies which only tend to delay the adjustment and movement of people into the service industries.

4. Countersubsidies (other people are doing it). See 3.

DOES ACADEMIC SCIENCE BREED TECHNOLOGY?

Keale first poses the question: Where does new technology come from?

The answer is, overwhelmingly, not from academic science. It comes from the industrial development of old technology. He cites surveys (one by Mansfield covering 76 major firms over a decade) which found that only 10% of new products and processes came from recent academic research. He cited the US Defence Dept study Project Hindsight which found that only two (2) out of 700 research "events" in the development of 20 weapons systems between 1945 and 1965 came from basic research.

Adding further insult, the Mansfield study showed that the 10% of research-based innovations only accounted for 3% of sales.

This explains why the British achieved the Industrial Revolution based on the tinkering of artisans while France stagnated despite her investment in higher education and research.

The next question is Can Government Funding Help Industry Develop New Technology From Old?

The answer would appear to be NO, unless you want to suggest across the board subsidies, because a yes would assume that the Government has the capacity to "pick winners".

WILL THE FREE MARKET SUPPLY ENOUGH BASIC SCIENCE?

The overwhelming majority opinion is No, including Arthur Seldon, a passionate free marketeer who advocated the privatisation of schools, hospitals and social security, but not science! Seminal academic studies by Nelson and Arrow also say No, because individual firms can't capture all the benefits.

Even Nobel Laureates can be wrong (see Samuelson, P) and Arrow is wrong on this. Surveys by Mansfield (again) and Griliches show that companies defy the conventional wisdom by doing basic research, and the more they do, the better they perform in the marketplace.

The story gets really interesting here as Kealey describes "First Mover Advantages" and "Second Mover Advantages".

The "first mover" advantage from a significant discovery can expand a company to dominate an industry but these are rare and unpredictable, so the second-mover advantages are more important in the normal course of events.

The second-mover advantage is achieved by making more effective use of the R&D performed by other people (including state funded agencies). A classic case described by Kealey is Glaxo's drug Zantac (for stomach ulcers). James Black at SmithKline discovered the role of histamine blockers for treating ulcersand he spent years doing first-mover research to develop Tagmet, the first commercial blocker. This won him a Nobel but the success of Tagmet was dwarfed by the performance of Zantac, developed at Glaxo after the head of their research team, David Jack, went to a lecture by Black on his new blocker, then returned to his laboratory at Glaxo and made a better one.

Further research on the ten major Japanese pharmaceutical companies found that this is happening all the time, they are all doing basic research and they occasionally get some first-mover gains and they all benefit from each other's research to achieve second-mover gains.

So why bother with first-order gains at all, why not just be a second-move all the time? Kealey's answer is that second-mover development does not come cheap, you have to employ people who understand first-mover research, and these people have to allowed to do some first-order research or they will be grumpy and their coats will lose their sheen, like household pets that are kept inside all the time.

Chapter 10

The Real Economics of Research

In this chapter Kealey looks at the economics of R&D and then the economics of academic science, in each case asking whether government funding is required to optimise spending.

He confirms three Laws of Funding for Civil R&D.

First Law. The % of national GDP spent increases with national DGP per capita.

Second Law. Public and private funding displace each other (compete). So public funds tend to displace private funds.

Third Law. The public/private displacement is not equal. Public funds displace a larger volume of private funds than the public input. (net loss)

THE ECONOMICS OF CIVIL RESEARCH AND DEVELOPMENT

He first examined the OECD statistics to satisfy himself that there is a clear correlation between the national GDP per capita and the percentage of GDP spent on civil R&D. He regards this as the First Law of Research Funding.

He then proceeds to the impact of government funding on the total spent on R&D. Obviously you would expect a positive relationship.

“We can address this question with relative ease because the different governments of the OECD have, god bless them, followed very different policies. Some, such as the governments of NZ, Australia, Greece and Portugal, have effectively nationalised R&D, and the state may pay up to 80% of it; other governments such as those of Japan and Switzerland, have neglected it, and only pay for some 20% (and at least half of that 20% is spent on academic science rather than on industrial R&D.

He then showed two regression lines, one indicating that the countries where the state spends the most end up with less in total. The second regression used data on the industry/state split for civil R&D spending (conveniently collated by the OECD) . This shows that a higher ratio of state to private spending correlates with a smaller total expenditure, the same result by a different calculation.

That is the basis of the Second and Third Laws of Research Funding, but he took care to examine alternative explanations of the correlations before deciding that there was indeed a causal relationship. I suppose I should explain his reasoning but other duties call and Terence would like you to buy a copy of the book (from a shop).

He draws an optimistic conclusion from the First Law. Expenditure on R&D will increase in all nations as they grow richer until both R&D spending and also total GPD plateau near the end of this century after somewhere between four to nine successive doublings of GDP per capita. This will make us richer but not necessarily wiser or happier because on his reading of the evidence, once people clear the breadline they don’t get any happier with more personal wealth. What makes us happier is relative wealth (getting ahead of the Joneses) “but now that the Third World is catching up rapidly economically, the West will grow more and more hysterical as it contemplates another 20, or even 100, countries like Japan” (246). [That was written before Japan went into recession, although he saw some warning signs when he examined the extent of dirigism in their economy. But still, after more than a decade in recession, the Japanese are not noticeably getting around with the seat out of their pants.]

CHAPTER 11

The So-called Decline of British and American Science

In this chapter Kealey describes the regular explosions of anger by British scientists over the last three decades and the way they some of them regularly fudged the figures to give the impression that science is going down the drain for want of public funds. This kind of behaviour by scientists probably seemed shocking and unlikely when the book was first published in 1996 but lately the advocates of Climate Change have signaled that people in white coats can be just as shifty as anyone else when there is some financial, professional or political advantage to be gained.

"During the 1960s, Quinton Hogg, the Tory Minister with responsibility for science, was nearly refused an honourary degree at Cambridge, and in 1984 Mrs Thatcher really was refused an honourary degree at Oxford, a public rejection which Oxford had only made once before, over Zulfikan Ali Bhutto of Pakistan, a known fixer of cricket matches." [Kealey wrote "a known murderer"]

The prime mover in the Thatcher ban was Professor Dennis Noble FRS who founded the pressure group Save British Science (SBS) and promulgated the view that among his colleagues in almost every discipline "the talk is less about how to save the situation, but whether it is possible to do so". SBS claims that reduced support for science has caused the production of British scientific papers to shrink, likewise citations, and there is a brain drain. SBS has not done its own research and relies on the work of two academics, Mr Ben Martin and Mr John Irvine, in the Science Policy Research Unit at Sussex University.

Kealey reports that, contrary to the claims of SBS and other angry scientists, British science grew massively in the 1980s and continued to do so during the 1990s. Martin and Irvine did two pieces of research, bibliometric and financial, and then misinterpreted their own data. Amazingly, if Kealey is correct, these academics only bothered to count the funds provided by the Government, which were indeed reduced. But this only demonstrated Kealey's Third Law of Science Funding. As State funding went down, funding from the private sector went up, moreover it went up MORE than public funding went down. Result: more funding for science. The two sectors which stepped up were the medical charities and industry.

Martin and Irvine produced some figures over the period 1973-82 to show that Britain's share of scientific publications delined by 10% while Japan increased her share by 40% and the rest of the world increased its share by 9%. Shock and Horror!

But wait, they only counted publications in journals that actually existed in 1973. Over the decade the number of journals increased by some 50% and if the Brits published in them at the same rate as the others, their actual output of papers probably increased by 30 to 40%. So much for the value of stats based on proporti0ns of the total while other nations are growing rapidly off a low base.

Moreover, British boffins medalled in productivity and quality of publications! On papers per capita of population Britain took bronze behind the US and Canada in 1982 and in the most cited papers Britain took silver behind the US in life sciences and total citations, and bronze behind the US and Canada in chemical science and physical science.

If Britain did that well in the Olympic Games there would not be a lot of talk about the decline of British sport.

It seems that Martin, Irvine and Noble have difficulty with statistics. While dons in Oxford were invoking the magic name of Hitler in relation to Thatcher and the travails of British science, Kealey records that the number of full-time academic scientists increased from 40,000 to 47,000 in the decade from 1976 to 1986. The expansion occurred in the ranks of fulltime researchers "not wholly university funded", meaning that they were supported by the medical charities and industry, etc and they were not burdened by teaching and administration like the tenured professors and lecturers. No wonder the output of papers increased. For the record, the total number of staff in British universities and polytechnics increased by more than 10,000 to 110,000 between 1987 and 1993 (less than a decade).

"But the intriguing question is: why did the academics not see the 1980s expansion at the time? The UGC data, after all, is published annually, and Martin and Irvine only had to look out of their office. Their own unit, the Science Policy Research Unit, is the largest science policy unit in the world. It was only funded 25 years ago, but it has grown fantastically. It now boasts four professors, 20 readers or senior fellows, 24 lecturers or fellows and 11 research officers. Professor Noble's own Department of Physiology in Oxford is also huge (over 110 scientists in 1989 to say nothing of technical and support staff) and it continues to expand, yet these distinguised academics seem incapable of counting their colleagues down the corridor." (283)

GOLD FOR THE US IN R&D (Rhetoric & Dirigism)?

We have seen that Britain picked up some silver and bronze medals in production and quality of scientific papers so the British boys and girls in white must have been doing something right. But of course in the US it was Gold, Gold, Gold!!!

You would have thought that the Brits, led by Noble, Martin and Irvine would be a good thing for gold in Figure Fudging and Misleading the Public but the US will take them to the wire (extra time?)

Stossel and Stossel (yes, two of them) have warned that "the US may become a consumer rather than a producer of medical research...if subsidies for the national biomedical enterprise do not improve". They get bonus points for Rhetoric & Dirigism with the resonant and collectivst turn of phrase 'the national biomedical enterprise'. J B Wyngaarden wrote a paper titled 'The Clinical Investigator as an Endangered Species' and B Healey wrote 'Innovators for the 21st Century: Will We Face a Crisis in Biomedical Research Manpower?".

Mendacity extends to high levels where you would expect the white coats to perform at their best.

"In 1992 the Investigation Subcommittee of the House (US Congress) Science Committee reprimanded the National Science Foundation for publishing a report that was 'pseudoscience and nonsense'. In 1987 the NSF had claimed that a study by one of its policy analysts, Peter House, predicted that by the year 2005 the US would be short of 675,000 scientists. But the House Subcommittee found that the so-called shortfall amounted to no more than unwarranted extrapolations of inadequate statistics. Damningly, NSF statisticians had already exposed the study's faults privately [not all asleep at wheel] but internal NSF memoranda had tried to cover up those faults, referring to the need to 'protect the foundation from damage' and worrying about 'losing this discussion' [lying for Science?]. The Chairman of the US Congress Subcommittee, Rep. H Wolfe (D, Michigan) found that NSF officials had peddled misleading statistics to obtain federal funds. He commented 'nobody expects NSF to play that game. Everyone around here assumes that NSF's numbers are good science'". (300)

Sorry Brits, more gold for the US.

CHAPTER 12

Dr Pangloss was Right

So who did Dr Pangloss play for? OK, he was a character created by Voltaire. (Another goddam google search). He was the tutor of a naive youth called Candide (what sort of a name is that for a bloke?). Dr Pangloss is a Leibnizian optimist and the book is a picaresque novel with a story similar to that of a more serious bildungsroman. Give me a break, how many more google searches…

Dr Pangloss thought that we live in the best of all possible worlds. He was an optimist? Pessimists think like that too! What has this to do with the economics of scientific research? I didn’t pay three dollars to get sent off to google to find out about bildungstsroman. Does it matter, perhaps he only wanted to write ten chapters but the publishers twisted his arm to write another. Getting back to bildungsroman…we are in a regress here, what if we just read the chapter.

“We have constructed this book as a debate between Francis Bacon and Adam Smith. Who won?…The governments of all the industrial countries now support their universities and their science much as Bacon prescribed…To paraphrase, modern science policy is a series of footnotes to Bacon”. (303)

Kealey first addressed three specific Baconian propositions: that academic science breeds wealth, that governments have to fund academic science, and academic science is morally ennobling. The case against the first and second propositions would appear to be established in the previous chapters. In this one he takes a dig at the third which leads into a discourse about the self-serving tendencies of intellectuals and also the idea of science, art and culture as social escalators.

He has some adverse comments on Rousseau whose ideas about the “national will” have had a corrosive influence by undermining personal responsibility in favour of collectivism and what we now call the Nanny State. Rousseau in person was one of the most obnoxious people on record, apart from the great criminals of history. He believed in the pathological selfishness of individuals, and demonstrated it in his own life. For example he sired five children with a long term partner and deposited them all at the State’s Foundling Hospital within 24 hours of birth, despite knowing that the hospital was inundated with children it could not look after properly. Only 5% survived childhood and they were not equipped for anything but begging, prostitiution and crime. (Marx also sacrificed the child that he fathered with a housemaid). Contrast that with Carl Menger who produced a son with a maid; he raised young Karl in the household, acknowledged him, educated him and he became a pillar of the logical positivists.

There are two reasons for dwelling on Rousseau; the first is to underline his intellectual contribution to collectivism, the second is to show how some aspects of university life and nationalised science feed egotistical, mean and selfish behaviour. He writes that success in biochemistry calls for years of hard work with 60-hour weaks the norm rather than the exception. Peter Medawar told his wife when they married that she had first call on his love but not on his time.

“Professional science, therefore, is an isolating experience…Nationalisation has aggravated scientists’ isolation. Under laissez faire scientists have to straddle more than one world. They have to penetrate and understand the worlds of industry or medicine or of charitable trusts. But under nationalisation, scientists need only relate to other scientists.” (332)

“This artificial, self-referential, government funded system has bred a horrible competitiveness that has helped to destroy science as a civilised activity…Such frenetic competitiveness cannot be blamed solely on the nationalisation of science.It derives from scientists’ values, which are a mixture of the Jedaeo-Christian desire to make a permanent, individual contribution to society, coupled to a Baconian/Marxist materialism. Thus scientists are obsessed with publishing first: what else do they have?…Being pathologically competitive, many scientists just love the State funding of research because it provides yet another forum for recognition…Non-national or specialised funding bodies, which frustrate the scientists’ need for universal ranking, are now considered second rate.” (336-38)

That denigrates the contribution from industry and disease-specific charities in favour of the Research Councils and national, general charities such as the Welcome Foundation.

Finally there is an addendum on education and the free market, describing among other things how the state drove the affordable private schools out of business.

THE CONCLUSION