Government funding of research, development, demonstration and initial deployment (RDD&D) needs to increase dramatically. We need real breakthroughs in a raft of areas. Energy, agriculture, medicine and new materials come immediately to mind.

The following post is from David McMullen* :

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The slowness of technological progress is an issue that a genuine left can grab and run with. This interview with Peter Thiel co-founder of PayPal in the MIT Technology Review entitled ‘Technology Stalled in 1970’ highlights some of capitalism’s failures in this regard. He believes that technological progress has been stagnant for decades, that we need technologies that take us to the next level. We need flying cars not just Twitter or Facebook.

He says that large successful companies benefit from things not changing:

“You have to think of companies like Microsoft or Oracle or Hewlett-Packard as fundamentally bets against technology. They keep throwing off profits as long as nothing changes. Microsoft was a technology company in the ’80s and ’90s; in this decade you invest because you’re betting on the world not changing. Pharma companies are bets against innovation because they’re mostly just figuring out ways to extend the lifetime of patents and block small companies. All these companies that start as technological companies become antitechnological in character. Whether the world changes or not might vary from company to company, but if it turns out that these antitechnology companies are going to be good investments, that’s quite bad for our society.”

Ted Nordhaus and Michael Shellenberger from the Breakthrough Institute in this article point to the overwhelming role that government has played when it comes to developing general purpose breakthrough technologies.

Examples include computers, the Internet, jet engines, satellite communications, fracking technology, nuclear power and gas turbines. Indeed, all the important feature of the Apple iPhone were the result of Department of Defense funded research. They also make the point that 80 per cent of economic growth comes from innovation.

They say that capitalists generally do research and development on the less important stuff:

“Firms still spend a lot on research and development in the aggregate, but it is mostly spent on incremental product or process innovations, not long-term research to develop new disruptive technologies with the potential to radically transform existing markets and create entirely new ones.”

Government funding of research, development, demonstration and initial deployment (RDD&D) needs to increase dramatically. We need real breakthroughs in a raft of areas. Energy, agriculture, medicine and new materials come immediately to mind.

Hammering this point should allow us to hit out at both the free-market utopian-capitalists who think that the market can deliver everything and the pseudo left who simply hate technology.

We can also point out how this extremely critical aspect of economic development and human progress is often undertaken wastefully in the current social order. There is always gaming and corruption among researchers as they scramble to get their slice of the funding cake and further their careers. Such important activity would be better performed in a society where people are sufficiently at one with the world to simply do the right thing.

* David’s blog is The Economics of Social Ownership.