Advanced Logical Thinking
Terence Kealey, in The Economic Laws of Scientific Research, plotted GDP/capita on the X-axis and
research/GDP on the Y-axis across nations and found a rising straight line, meaning that public monies
for research merely displace (actually, a little less than displace) private monies. And private spending is
less prone than public spending to inefficiency. Kealey found this to be true of basic research, too. I
commend the book, not only for this principle finding but also for its enlivening account of many
instances of how practical businessmen have developed basic science in order to develop products and
make more profits.
Of course, one can always point to certain research and claim it would not have been done privately.
But this neglects the unseen research that was crowed out. Frederic Bastiat wrote about the seen vs.
the unseen in the 19th century, but our brains are so biased to the seen that his thoughts are virtually
unheeded.
Same is true of health spending and welfare spending, this displacement.
Also, we know from the Coleman report, and many studies since, that there is no relation between
education spending and education. Charles Phelps, Health Care Economics, surveyed the literature
and found no relationship between health care spending and health.
These are all highly non-intuitive beliefs, but that is why there is statistics: to uncover facts that oppose
intuition. Anyone who doubts these conclusions and can furnish sound *data-driven* studies that show
the opposite (as opposed to attacking the studies) will be warmly welcomed by all manner of
rent-seeking coalitions. These coalitions have both the incentive and wherewithal to conduct such
studies. So far, they haven't.
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Terence Kealey, in The Economic Laws of Scientific Research, plotted GDP/capita on the X-axis and
research/GDP on the Y-axis across nations and found a rising straight line, meaning that public monies
for research merely displace (actually, a little less than displace) private monies. And private spending is
less prone than public spending to inefficiency. Kealey found this to be true of basic research, too. I
commend the book, not only for this principle finding but also for its enlivening account of many
instances of how practical businessmen have developed basic science in order to develop products and
make more profits.
Of course, one can always point to certain research and claim it would not have been done privately.
But this neglects the unseen research that was crowed out. Frederic Bastiat wrote about the seen vs.
the unseen in the 19th century, but our brains are so biased to the seen that his thoughts are virtually
unheeded.
Same is true of health spending and welfare spending, this displacement.
Also, we know from the Coleman report, and many studies since, that there is no relation between
education spending and education. Charles Phelps, Health Care Economics, surveyed the literature
and found no relationship between health care spending and health.
These are all highly non-intuitive beliefs, but that is why there is statistics: to uncover facts that oppose
intuition. Anyone who doubts these conclusions and can furnish sound *data-driven* studies that show
the opposite (as opposed to attacking the studies) will be warmly welcomed by all manner of
rent-seeking coalitions. These coalitions have both the incentive and wherewithal to conduct such
studies. So far, they haven't.
Premise Checker
Go to next section.
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