8/10/2012

Gary Becker and Jim Heckman's strange, self-serving argument for more government funds for economists

Gary Becker and Jim Heckman's piece in today's WSJ makes a very strange argument.  Anecdotal stories of benefits doesn't show that those benefits wouldn't have been obtained anyway.  It also doesn't address or deal with any of the problems of government funded research, such as political biases or wealth transfers.  Nor do they even mention any evidence showing that government is particularly good at picking which projects to back.  Surely Gary at least would argue that with regard to government picking investments in general.

Given that people write op-eds for free, is there any reason to suspect that this research is going to be underproduced?  There are also obviously a lot of politically connected think tanks that have an incentive to produce research.  In addition, with all the huge subsidies given to research through public universities, even if there is a net benefit from subsidies, there could already be too much research being produced.  Subsidies are also already available in terms of the data the federal government provides.  

In any case, it is not like the vast majority of economic research requires much money.  I personally have done studies on crime after compiling the largest data sets used to study the subject, but it never dawned on me to get government subsidies.

The claim about the health care savings from reduced smoking are also wrong.  People have to die at some point.  Smokers die earlier and their illnesses are shorter before they die.  That saves Social Security payments for the government as well as medical costs.

The argument surely comes across as economists appearing self-serving.  It also shows how the temptation to get government money warps people's perspectives, and it provides a reason why the government should stay out of education.  From today's WSJ:
The federal deficit has ballooned in recent years, and even larger deficits are coming due to the expected growth of entitlement spending. There is little disagreement among members of both political parties that federal spending should be reduced. In such an environment it is crucial that the right criteria guide the cuts that will be made. Across-the-board cuts are not a thoughtful way to make choices. . . .
We cannot expect the market alone to support basic economic and social research, including data collection, since they are public goods that are difficult to appropriate privately. In cutting out the considerable fat from the public diet we should not cut the muscle that has helped make our economy the largest and strongest in history.

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