I got a few interesting and thoughtful comments about my post regarding government funding of science, and many comments that were otherwise. I will, of course, answer only those that have been politely and sensibly put forward, rather than those who resort to ad hominem and so forth.
[Update: My rebuttal to Mike Dunford is here.]
1. Isn’t it relatively affordable?
Matt Springer left a comment at Questionable Authority saying that government funding of science is comparatively cheap. That’s certainly true, and if I were king, I would not put science funding at the top of my proscription list, by a long shot. Not only is it cheap, but it arguably has far greater rewards than most other government programs. Yet that only mitigates the size of the wrong; it doesn’t change the nature of the wrong. In addition, Springer says that the government should “maintain necessary infrastructure for which there’s no marginal market incentive.” I don’t think this is right. For government to do such things leads to all seven of the problems I raised in my original post: the Bridge to Nowhere is the prime example of how infrastructure funding leads to abuse.
2. Isn’t it just remedying a market failure?
But continuing with Springer's argument, what does it mean when we speak of “no marginal market incentive?” It means that to invest money in project X would not lead to returns sufficient to make it a wise investment: that is to say, it’s a waste of money. “No marginal market incentive” is a synonym for “costs more than it pays.” There is no marginal market incentive for me to make omelets out of Faberge eggs and burgers out of Kobe beef, for instance. That’s why it doesn’t get done. To say government should step in and do these things means that taxpayers should be forced to subsidize projects where they are guaranteed not to get a return. The proposition that government should fund projects for which there is “no marginal market incentive” means exactly that government ought to waste other people’s money.
Springer may have meant to say that government ought to fund projects that would have a return, but such a widely dispersed return that people won’t contribute to it—that is, where there is a collective action problem like free-riding. That’s the usual, and the strongest, argument for government to act as an assembler and director of capital: the Hoover Dam (hypothetically) is so big and expensive, and its benefits so widely dispersed that even though people would all benefit from the project if it were created, they aren’t willing to invest in it voluntarily. This is a respectable argument, and one that even prominent libertarians like Richard Epstein have made in some contexts.
If you’ll pardon a pun, I don’t buy it. The problem with this argument is that transaction costs are real costs. They cannot just be wished away by government. Transaction costs, like all prices, reflect the options and opportunities available to real people. If a transaction cost is too high for me to voluntarily engage in a transaction, that means that it really is not worth it for me to invest the time and money to obtain the necessary information for that transaction—which is to say, there are better uses for my money. If the government decides to step in and force me to engage in that transaction anyway, it is, again, overriding my personal list of priorities. And whenever government overrides my list of priorities, it is by definition engaging in economic inefficiency.
The basic problem here that because all economic value is inherently personal, it cannot be said that any coercive overriding of my personal prioritization is efficient. That’s a contradiction that necessarily renders all coercive taxation/investment schemes inherently economically inefficient.
3. Doesn’t the Constitution allow the federal government to spend money for the “general welfare”?
A few people raised this point. And the answer, according to the Supreme Court, is yes. But I disagree. The Constitution says that “all legislative powers herein granted” are vested in Congress—not all power, but only specific powers, and only those powers herein granted. If Congress had power to act for the “general welfare” there would be no need to list Congress’ powers in Article I section 8, since they would be redundant of Congressional authority to do whatever was in the general welfare. Thus the general welfare language cannot be seen as a separate grant of authority without committing the error of surplusage.
Moreover, we know from the founders that “general welfare” was not to be read this way. During the ratification debate, an opponent of the Constitution, “Brutus,” objected to the general welfare clause that
It is as absurd to say, that the power of Congress is limited by these general expressions, "to provide for the common safety, and general welfare," as it would be to say, that it would be limited, had the constitution said they should have power to lay taxes, &c. at will and pleasure. Were this authority given, it might be said, that under it the legislature could not do injustice, or pursue any measures, but such as were calculated to promote the public good, and happiness. For every man, rulers as well as others, are bound by the immutable laws of God and reason, always to will what is right. It is certainly right and fit, that the governors of every people should provide for the common defence and general welfare; every government, therefore, in the world, even the greatest despot, is limited in the exercise of his power. But however just this reasoning may be, it would be found, in practice, a most pitiful restriction. The government would always say, their measures were designed and calculated to promote the public good; and there being no judge between them and the people, the rulers themselves must, and would always, judge for themselves.
The Federalists responded that folks like Brutus did not need to worry, because the General Welfare Clause did not mean this and would not be interpreted this way (as it is, now). The General Welfare Clause, they pointed out, applies to the taxing power, not to spending—that is, Congress may raise money for the general welfare, but it may only spend it in pursuance of those powers specified in the Constitution. It reads, "The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States....") As Madison explained, this language cannot be read as a grant of independent spending authority:
Money cannot be applied to the general welfare, otherwise than by an application of it to some particular measures, conducive to the general welfare. Whenever, therefore, money has been raised by the General Authority, and is to be applied to a particular measure, a question arises whether the particular measure be within the enumerated authorities vested in Congress. If it be, the money requisite for it may be applied to it; if it be not, no such application can be made.
Again, if Congress could spend money on whatever it considered to be in the “general welfare” (and of course, it will always describe its actions in such terms) regardless of the specified powers in Article I section 8, then the Constitutional limitations on Congress inherent in that Article would be meaningless.
This is an important point because the Constitution is the instrument by which the American people (tacitly) agree to waive the fundamental moral objection to having their earnings taken from them through taxation. Taxation would be inexcusable where it not for this agreement, whereby the people have contracted that they will be taxed for certain purposes. It is essential, therefore, that we keep an eye on those purposes, to ensure that government does not abuse this limited permission to do whatever it wishes.
By the way, the first time someone sought federal subsidies for science was at the Constitutional Convention itself. There, the idea was broached about establishing a federal university. The idea was shot down, and after that, although even George Washington urged the establishment of such a university, it was considered unconstitutional. Believe me, I know that mine is not the prevailing view in the courts, which have basically closed their eyes in the past seventy years, and allowed Congress to do whatever it wants. But I continue to believe the Constitution should be either enforced as written or actually amended.
4. But what about constitutional authority to promote science?
One commenter cleverly said that the Constitution does give the federal government authority to subsidize scientific research because it says “To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.” I think that’s pretty silly—this provision gives power to Congress only to grant patents and copyrights, which is an issue I’ll get to later—but it obviously doesn’t give Congress authority to directly subsidize research. If it did, it would say “to promote the progress of science by directly subsidizing research!” As another commenter observed, the only other constitutional provision with a sentence structure like this also only grants the power or right specified in the second half, and does not grant authority through the first half: that is, in the second amendment, the right granted is to keep and bear arms—the first half of the sentence is precatory. The same with the patents clause.
6. Isn’t it just like a police force?
A commenter said that government funding of, for example, the National Institutes of Health was basically like providing a police force to protect people against being injured. There are two problems with this argument. First, there is no federal police power, and no Constitutional authority for a federal police force (except in federal territories). Second, police forces are liable to many of the same abuses that I listed in my first post—far worse ones, actually. Police have little incentive to actually protect the rights of individual people, and they routinely violate those rights; they’re often far less effective than private investigators and frequently corrupted. So saying that science funding is like the police doesn’t change the fundamental objections to the redistributive powers of government. In fact, I would say it’s to the credit of scientists that they have resisted the economic pressures I’ve mentioned far better than many police departments!