Michael Teitelbaum, an Alfred F. Sloan Foundation demographer and senior research associate at Harvard Law School, examines the relationship between government and science and technology in his new book, Falling Behind? The result is a good book—though it leaves unaddressed some fundamental questions about the status quo.
High flying, hard landings / Teitelbaum shows how the U.S. government’s science and technology policy has been marked by groundless scares, nonsensical rhetoric, interest-group politics, stop-and-go instability, and misaligned incentives. He does this in a well-documented, restrained, academic way, which gives much weight to his stringent criticisms.
Since the end of World War II, politicians and various “experts” have periodically instigated scares to the effect that the United States is falling behind other nations in the science and technology “race,” with dire predicted consequences. Perhaps the greatest scare came in 1957 when the Soviet Union launched the first satellite (a space race the U.S. government may have intentionally lost in order to establish the legal principle that surveillance satellites do not violate national airspace). The Sputnik scare was met by the Mercury manned flight program and later by the Apollo moon landing program. Apollo cost $145 billion (in today’s dollars); at its peak, it employed 400,000 Americans. So, for a time, it could be thought that the United States government had closed the alleged science and technology gap.
The lull did not last long. Another big spurge in federal science and technology expenditures was fueled by Richard Nixon’s “war on cancer,” and yet another by Ronald Reagan’s defense spending. In 1983, a Reagan administration commission tried hard to provoke a “Sputnik-type occurrence,” in the words of then–education secretary Terrell Bell. Schools and colleges, wrote the commission (among other nonsense), are producing “a rising tide of mediocrity that threatens our very future as a Nation and a people.” Fortunately, the scare subsided, and the scene became quiet again—for a time.
From the 1990s through the middle of the first decade of the 2000s, a new federal funding explosion benefited biomedical sciences and the National Institutes of Health (NIH), whose budget doubled between 1998 and 2003. Teitelbaum writes:
[T]he episode encapsulates many (if not all) of the elements central to this book: a well-intentioned and passionately written report produced by an eminent scientist that sounds the alarm about prospective deterioration of U.S. leadership in science and technology and its implications for U.S. competitiveness; invocation of forecasts of looming shortfalls of scientists and engineers in the decades ahead; a clarion call for federal funding increases to the levels of the peak years of the Apollo program; successful lobbying efforts contributing to booming but short-lived increases in federal research support for science…, and the emergence of serious funding crises once the years of rapid budget increases ended.
As Teitelbaum eloquently argues, this process of scare-induced spending led to recurrent booms and busts in government funding of science and technology. After each episode, the mere stabilization of federal funding meant that newly trained scientists saw their career opportunities compromised, and universities found themselves with investments and appointments they could not finance. After the doubling of the NIH budget in five years, the subsidies stopped increasing, and biomedical research suffered what was called a “hard landing.”
One consequence of the stop-and-go funding was the increasing flow of freshly minted PhDs into low-paying postdoctoral assignments instead of faculty positions. Once the manna stopped, the universities had little money to hire tenured faculty. So postdocs were stuck in the low-paying jobs into their 30s, well past the age when independent and secure scientists often make their seminal discoveries. As James Watson, the discoverer of the structure of DNA, put it with humor, now “you’re supposed to wait until you’re virtually senile” to begin your own independent research. This is just one way that government science and technology funding has created perverse incentives.
No shortage of lobbying / Contrary to the scary claims, Teitelbaum argues there is little evidence that the United States was ever falling behind anybody in science and technology. The scares were fakes, justified by simplistic prediction models. The American K–12 education system was producing many top-notch students capable of advanced scientific studies, even if the democratization of education lowered the average level of student achievement. Scientists were produced in larger numbers than in any other country. As the second part of the 20th century progressed, the relative position of America receded, because European countries recovered from World War II and, more recently, a few underdeveloped countries—especially China—took off. But the absolute American leadership in science in technology continued.
Teitelbaum perceptively notes that the very idea of a supposed shortage of science and technology workers is misleading. If a shortage of scientists develops, it will show in their remunerations, which will be bid up relative to other occupations. As the book well documents, this never happened.
There is no shortage of lobbying for increased science and technology spending, though. Many individuals and institutions have material incentives to launch baseless scares. University departments, where most of the federally funded research is done, have a clear interest in enriching their research budgets and their faculty salaries. “Disease interest groups” (including the public health movement, which Teitelbaum barely mentions) wants money for everything from antismoking programs to obesity prevention campaigns. Bureaucrats themselves have an interest in seeing their budgets and power increase—although perhaps Teitelbaum is too soft on them. Finally, businesses are motivated to scare politicians into providing more visas for the international talents they want to bring to America. Many of the scary “falling behind” reports were produced by committees manned by both university presidents and business executives.
Politicians have a vested interest in generating or riding scares that will increase their power and give them the appearance of being white knights. Teitelbaum quotes a 2010 speech by President Obama: “In the race for the future, America is in danger of falling behind.… [O]ur generation’s Sputnik moment is back.” The history of science funding is littered with such nonsense. No political party has a monopoly on it.
Not quite critical enough / But as sharp as Teitelbaum’s criticism is, it fails to dig deep enough. It does not challenge the very fundamentals of U.S. financing of science and technology.
Take the concept of scientist shortage. The real economic notion of shortage is simply a temporary disequilibrium that will be corrected by changes in quantity supplied and quantity demanded. In value-free economics, a shortage means that other valued uses are bidding up the price of, say, talented people—instead of becoming lawyers or managers, they will pursue a career as scientists. Economic efficiency requires that the market (not politicians and bureaucrats) handle this shift.
Despite his vast knowledge of his topic and his analytical brio, Teitelbaum may not be as objective and value-free as he appears to be. His argument often looks like a discrete plea for his own preferences—for scientists, especially American scientists. His veiled criticism of immigration, his observation that foreign scientists coming to America depress the remuneration of native scientists, his amalgamation of special interest groups who lobby for subsidies with those who just want more liberty to hire who they want, all suggest that he values the welfare of American scientists—which of course means the welfare of some Americans—more than the welfare of all people. For all his iconoclastic criticism of the political-scientific complex, he still thinks of the market for scientists in terms of an American market, not a world market. At least, that is how I read him.
Looking at the problem in terms of world markets and equal weight of all individuals in world welfare suggests a much more radical criticism than Teitelbaum’s. Even supposing that the United States somehow is “falling behind,” who exactly is it that is falling behind? It can only be some American residents. The real remuneration of U.S. academic mathematicians fell by 8 percent after the immigration of former Soviet mathematicians in the 1990s. Foreign postdocs push down the remuneration of American postdocs. But so what? Other Americans, who are every bit as American as the “falling” scientists, benefit from the inflow of foreign talent.
Public good? / Teitelbaum borrows from economists the concept of public good to justify government subsidization of research and especially basic research. It is not easy for somebody who loves knowledge to argue against that. Even Ayn Rand hailed the success of the Apollo moon shot—though she probably thought the program could have been financed privately, ignoring the free-rider problem. But precisely because public goods are good (for a large number of people), shouldn’t we be happy if they are produced by inexpensive foreigners instead of “our” expensive scientists?
Claims about public goods are often a smoke screen for policies that are really about the good of the state. Why does the state want scientists and engineers? A famous report, produced in 1945 by a science adviser to Franklin Roosevelt, defended government investment in science because the scientists would be “on call in national emergencies.” Science and technology, it seems, are the health of the state.
Once we look at economic and political phenomena from the point of view of the individuals involved, instead of invoking holist entities like “the United States” or “the Soviet Union,” we are led to a deeper criticism than the one Teitelbaum offers. We realize, for example, that international “competitiveness” is not much more than a simplistic mantra. Why finance some individuals’ competitiveness at the cost of depriving taxpayers and consumers of money that they could use for their own competitiveness? This sort of question puts us on a different track: why not simply recommend that the state not put obstacles in the path of competitive individuals, rather than fund some competitive individuals at the expense of others?
Absentees / Teitelbaum does incorporate into his book an elementary Public Choice analysis of federal funding of science and technology, but more such analysis would have been welcome. There is a mountain of subsidies to be explained. Despite the stop-and-go federal subsidies, “the overall trend has been one of substantial increase that is well in excess of inflation.” But Teitelbaum is concerned with the way the funding is done, not with its continuous growth and current level. He is comfortable with science depending on federal politicians and bureaucrats. He is not blind to the natural mission creep of government programs, but he tends to underplay the logic of institutions.
Take the problem of lobbying. Teitelbaum does not seem to understand that the problem does not lie in the interests of the lobbyists, but in the big pot of gold that the U.S. government flashes before their eyes. As long as the federal government has hundreds of billions of dollars to give away, special interest groups will go treasure hunting. There is no good analysis or pure intention that will change that. Another important point: we should distinguish lobbyists who are trying to put their hands in the public treasury from those who just want to produce goods that people want at the lowest possible cost.
The incremental solutions that Teitelbaum proposes are very much in continuity with the current system. He argues that federal funding should be smoothed over time so as to avoid booms and busts. Incentives should be tweaked to gain some efficiency. A prediction mechanism should be devised to alert scientists about their future career prospects. In two words, “smart interventions” are needed, as if the designers of the previous ones were stupid.
Overall, the book is interesting, but it has little to say about two very important groups: taxpayers and consumers. They are the ones who have fallen behind because of American science and technology policy. Teitelbaum would reply that the public-good nature of the science produced by federal funding over the past half century has brought net benefits to taxpayers and consumers. As a result, the system is good and everybody should be happy. But given the presence of extended government failures that are much worse than market failures, and given that restraining Leviathan is itself a public good (at least for a large group of Americans), this approach is unsatisfactory.
Teitelbaum would probably reply that those broader issues were not part of his topic. But he could at least have recognized them. He could also have disclosed his own value judgments. His criticism of so much nonsense would have been more complete and more interesting.
