Scott Adams Blog: Philosophy versus Plan 02/18/2011

Feb 18, 2011 General Nonsense | Notify

If you think government should reduce spending, that's a philosophy, not a plan.

If you think small government is good, that's a philosophy, not a plan.

If you think the government should provide a safety net for the poor, that's a philosophy, not a plan.

Somehow we elected a bunch of philosophers to run the country. I hope they find out how many angels are dancing on the head of the pin before the country goes broke.

Sometimes people think they have a plan when in reality they have half a plan. For example, a number of you forwarded me links to John Stossel's article in Reason that has specific suggestions for cutting the budget. I'm going to assume his numbers add up if you ignore wind-down costs and such. I'll even accept the notion that a number of government functions he suggests eliminating might work better in the private sector. But where he recommends elimination of the Energy Department (which I assume means the Department of Energy) I'm left wondering who would take over the job of radioactive waste disposal. That sounds kind of important. That's just one of the things they do.

Stossel also recommends eliminations of the Department of Education to save money. Admittedly, when I read a description of that department's function, I can't tell why they exist. But it doesn't pass the sniff test that you can eliminate a $94 billion per year function (per Stossel) without some sort of impact. Is there no downside whatsoever?

Some folks suggest simply reducing the rate of growth in social programs as an easy fix. But if the population of retirees is ballooning, a flat budget turns into a huge reduction of funds per person in a decade or two. It's not a plan unless you can describe what happens then. If your answer is "not my problem" you have a philosophy and not a plan. A plan is more along the lines of "25% of poor senior citizens will become homeless by 2030. The rest will move in with relatives and suck up the family's funds that would have gone toward leisure in some cases and educating the next generation in others." You might prefer that outcome over the alternative of government spending, but you don't have a plan until you acknowledge it.

Our Republican leaders have a philosophy and no plan that makes the math work. Obama and the Democrats have a philosophy and no plan that makes the math work. Stossel and the folks in the Libertarian camp have half a plan.

If you can describe your political position with one word, you're part of the problem. Political groups confuse philosophies with plans. When you identify with a group, you become a philosopher. I suppose everyone assumes the plan is someone else's job.

I'd like to see a Constitutional Amendment that makes anyone in federal office ineligible for another elected term if the budget isn't balanced during the current term.

I wonder how hard it is to amend the Constitution in the Internet age. Isn't that sort of thing easier now?

Votes: +228

Comments

Paddington

Feb 24, 2011

@tkwelge - the same to you. I would point out that the level of science knowledge to do cutting-edge basic research is above the typical scientist. Even most faculty can't do it.

Science research is, in most cases, definitely in the public good. Without an ever-increasing level of technology (derived from the science of previous decades), we all starve.

tkwelge

Feb 24, 2011

@tkwelge - I think we are coming to the end. I do not know your background, but most of the stuff that industry is willing to support is not what I would call 'basic science', which is primarily what the NSF does. Industry gets interested when it reaches the realm of applied science and technology.

tkwelge: I agree with a lot of this, but that's not the point. Companies still must use scientists who have to have knowledge of basic science even while focusing on applied science. I never made the argument that all science should be corporate or profit driven. Private foundations and universities are more than equipped to provide a pure science backing to profit driven applied science and this system works just fine.

"SS&P" describes science as neither a public nor a private good, but a "club" good. IT would take too long for me to go into all of the details right now. I would suggest reading the book. Even if you disagree with it, you should at least know the level of debate on an opposing side.

It's been nice talking to you, especially with all of the "You're a libertarian?!?!? Kochtapus, big oil, billionaires, destroying the middle class alhdsohaqp[hspohavopeolnpo!!!!!!!!!!!!?!!!??!##@$@#$" crap I've been having to debate with for the last couple of months.

Paddington

Feb 24, 2011

tkwelge

Feb 23, 2011

"I cannot disagree with much of what you say, but still hold to the primary contention - the government is the only group that can and will support the abstract research, and much of the early primary work, often for military applications."

That is a valid point, and I'd admit that government research does have a role in one respect. It is good to have the government do at least some research in order to create a diversity of opinion. IF all research was corporate, you'd have to worry at least a little bit that money was distorting scientific truth, so government research can act as a check on the power of some big businesses. To what degree is the government necessary in this regard is largely debatable, but the principle is still sound.

"As for copying versus invention, a lot of companies use university faculty as an intermediary to do reverse engineering, making it much cheaper, and legal."

The companies that do the creating can use the same resources. I have no problem with private !$%*!$%* offering free support to other private !$%*!$%*. TO the extent that universities are publicly funded, this does create some issues, but overall, its not a game changer.

tkwelge

Feb 23, 2011

"Scientists of the 18th and 19th centuries were almost always 'gentlemen', who supported their own work."

Okay, that might be true of certain "scientists" but James Watt was a small business owner (his small business was a machine shop for a university). Richard Trevithick, who created a steam engine that pushed rather than sucked, was a self taught child of a mining family. George Stephenson was "an ill educated, barely literate, barely numerate, self-taught artisan." George Stephenson invented the first steam engine capable of propelling a locomotive full of people at 15 mph. He later invented an engine that reached a speed of 30 mph. He spoke with a "Geordie brogue" that was so thick, that they actually had to hire an interpreter when he spoke to the English nobles. These are almost direct quotes from pages 177 to 179 of "SS&P."

Much of the work of "scientists" in the 1800's was actually funded by private foundations. Colleges, which also did science, received the bulk of their money from tuition and endowments.

Paddington

Feb 23, 2011

@tkwelge -
I cannot disagree with much of what you say, but still hold to the primary contention - the government is the only group that can and will support the abstract research, and much of the early primary work, often for military applications.

The Japanese example is a bit bogus. They have always been a bit player in the basic work, including my own field of mathematics. Their research is much more on applied technology, the same kind of stuff that businesses do support.

Scientists of the 18th and 19th centuries were almost always 'gentlemen', who supported their own work. It is just too expensive to do that in the physical sciences now.

As for copying versus invention, a lot of companies use university faculty as an intermediary to do reverse engineering, making it much cheaper, and legal.

tkwelge

Feb 23, 2011

I still believe that the overwhelming evidence is that economic growth in the 90's was primarily due to run of the mill, boring monetary policy. Hyperinflation was killed by the extraordinarily high real interest rates of the early 80's, which declined up until the end of that decade until the early 90's recession. After that recession, the FR dropped the real interest rate to zero or below zero until 1994 where it stabilized at about 3% until the dot com bubble burst. THe dot com bubble was a low interest rate bubble, pure and simple. Did the modern exchange capabilities play a role? Sure they did, but we know for a fact that the federal reserve set the interest rate where it was deliberately. The Fed is also the source of economic velocity and liquidity, so arguing that new technology increased velocity is ridiculous.

tkwelge

Feb 23, 2011

"In fact, there is quite a bit of evidence that the computing actually made possible those low interest rates - in the late 70's/early 80's, money transfers became electronic, thus increasing the velocity of the money supply. "

Whoops, I guess you weren't talking about inflation here, but this point still doesn't capture the whole story. I never argued that R&D contributed nothing to the economy. I simply take issue with the idea that such technology depends on government investment. Yes, the government has invented a lot of nice things, that is not what we are arguing about. The point "SS&P" tries to make is that government investment in pure science crowds out private and philanthropic research, so yes, it will look like the government is contributing a lot, but they are simply duplicating research that could have been done elsewhere, and they spend more money doing it (thanks to government inefficiency). Also, for every technology the government creates that increases economic growth, they spend a lot of taxpayer funds on research of little value. Once again, this shotgun approach increases the real cost of every achievement. When all of the costs and benefits are tallied, there is probably a net return of 0 compared to the government doing nothing at all. True, this argument is not ironclad, but it fits the statistical data that we have far better than the "lots of public R&D=flying car utopia" argument.

I also skipped other parts of your argument without responding, so I apologize.

"2. As I said above, how does one figure in the decades-long lag between science research and usable technology? Given that, how does one attract private money given the uncertain payoff and long term involved? "

"SS&P" discusses this point too. It does seem illogical that any corporation would spend anything on R&D in the absence of patents. It seems illogical most of the time even with patents in place. However, most companies do, probably because even just copying a competitors invention requires expertise. In fact, as the book points out, copying is almost as expensive as inventing something on your own in many cases. Because of this, companies that want to be competitive will still need a bunch of scientists working around the clock. These scientists will inevitably stumble upon new discoveries of their own, even while copying somebody else's research. This process repeats itself again and again creating economically driven technological progress, as opposed to technologically driven economic progress. Technological progress is an effect of economic progress rather than the other way around.

tkwelge

Feb 23, 2011

@Paddington

Your argument about interest rates might make sense if we were talking only about nominal interest rates, and you were implying that the improved technologies led to lower inflation, but I am talking about real interest rates here. The federal reserve controls the interest rate pure and simple. The lack of inflation in the 90's was due to the commodity situation. Trying to isolate technological growth as a factor for economic growth is impossible anyway.

We could go back in forth for hours talking about what could have been or what should have been, but that is simply anecdotal. As I said before, much of the evidence points to the fact that public sector research simply crowds out private research. Why would I spend a bunch of money, as a corporation, on R&D when a competitor who can simply fleece tax payers for money is already doing that research? Also, people are MUCH less likely to donate money towards philanthropic research if they know that the government is already paying a large share. Philanthropic research also creates more value than public research according to "SS&P."

I have to say that the biggest political fallacy of all is the "If the government doesn't do it, than nobody will do it" line of thinking. The "Sex,Science,and Profits" chapter on the Japanese economic story is pretty revealing as far as anecdotes of technological progress are concerned. According to the chapter, the Japanese economy flourished when most R&D was corporate and stagnated around the time that the Japanese government became more involved. True, we could argue back and forth about what actually caused the Japanese economy to stagnate, as there were certainly PLENTY of other factors, but the point remains that public R&D does not cause a great economy to spring forth.

Paddington

Feb 23, 2011

From an unrelated thread on Usenet, by an electrical engineer: "So the space program accelerated the development of solid state electronics. We all benefit from that. In 2011 we would surely have computers with transistors, but without government funded research into solid state electronics for the space program we might still be using something like DOS on 80386 processors. "

Paddington

-1

Feb 23, 2011

@tkwelge

I wasn't thinking only of the .com bubble, more of the productivity that scientists and others were able to gain through small-scale computing and communication.

In fact, there is quite a bit of evidence that the computing actually made possible those low interest rates - in the late 70's/early 80's, money transfers became electronic, thus increasing the velocity of the money supply.

tkwelge

Feb 22, 2011

The whole "Dotcom" explanation for the economic growth of the nineties is a lot less compelling than the argument that the economy grew quickly largely due to the fact that interest rates were the lowest that they had been in decades, and the hyperinflation of the 70's was officially over. Basically, the 90's were the first low inflation/low interest rate decade in two decades. Also, China had yet to start consuming every available resource or every available manufacturing job, so commodities were cheap, and jobs were more secure.

I'm not arguing that China's growth is bad for the US economy. Just that it is changing the way we live in the temporary until demand from China begins to power further US growth. China's currency is appreciating, and the average Chinese consumer is becoming wealthier and developing diverse interests. By 2030, the US will be relying on Chinese demand for a large amount of its economic growth.

Paddington

Feb 22, 2011

I'm not arguing with statistics, except in the most trivial sense. It is undeniable that there was an enormous amount of activity when the internet and personal computing became mainstream.

It is also a fact that privtae investment in these things was non-existent until serious money was to be made. The basic work was on the taxpayer's money. The same is true of many medical advances.

I will have to read up on the OECD.

tkwelge

Feb 22, 2011

@Paddington

We still haven't even scratched the surface of the full OECD study which included several countries in the data.

tkwelge

Feb 22, 2011

@Paddington

You're still forming an opinion and trying to rationalize it after the fact. Lots of things happened in the economy over the last 50 years. It would be impossible to isolate any one variable. I'm not arguing that the lack of correlation is "proof" that public science doesn't improve the economy, I'm simply arguing that the lack of any obvious correlation is telling.

I don't believe in using statistics to prove anything. Statistics can only be used to loosely disprove a "fact" by pointing out a lack of correlation.

Paddington

-1

Feb 22, 2011

@tkwelge

With regards to the economic growth that 'should' have taken place in the 1980's and 1990's, it did. Just consider the massive amount of money that was made in the internet (another government-funded invention), and computing in general. However, this was confounded a great deal by things like the fact that the US reached peak oil in the mid-1960's, and had vastly overspent on social programs.

Zume

Feb 22, 2011

>>the budget isn't balanced during the current term

balancing the budget is a philosophy.

I'm planning on spending $400,000 more than i earn this year. Sounds terrible. But how else am i going to afford to buy a house. I will never be in debt less than four times my salary for the rest of my life.

Many well-run companies like to have a 1:1 debt to equity ratio. Since companies can easily be worth 5 times their annual revenue that means their debt is 5 times their annual revenue...

Debt is good. It allows using your potential to realize your potential. Otherwise you're stuck building houses out of mud bricks you make in your garden and massively reducing spending when the economy tanks.

tkwelge

Feb 21, 2011

I agree that funding of "pure" science increased at a much faster rate in the fifties and sixties than it has in recent decades. That's not really what I'm debating. I'm arguing that Public R&D contributes little to overall economic growth. Plus, your source still isn't giving me anything useful, such as a year by year chart on public R&D spending. Arguing that scientific achievement contributes to economic growth after a "delay" makes calculation impossible.

This is what measuring worth says about economic growth:

US
1950 to 1960
1960 to 1970
1970 to 1980
1980 to 1990
1990 to 2000
2000 to 2009
Consumer Price Index 2.09% 2.75% 7.81% 4.72% 2.80% 2.47%
Unskilled Wage 5.26% 4.34% 8.21% 4.04% 3.25% 2.61%
Real GDP per capita 1.71% 2.89% 2.10% 2.28% 2.16% 0.58%

The decades go from left to right. Yes, we are experiencing a decade of low economic growth right now, but that is primarily because the data ends in the year 2009, right in the middle of the crash. IT is really hard to see any long term trend showing any correlation between spending on "pure" research delay or no delay. If the "delay" theory were correct, we'd expect to see the economy take off in the eighties and nineties, but economic growth was slightly slower than it was during the sixties, and only slightly faster than the 70's. Economic growth in the fifties was fairly flat, because all of the WW2 spending had waned. I'd argue that there are a plethora of economic factors that had a MUCH MUCH bigger impact on overall economic performance than anything having to do with public spending on "pure" research.

Also, the OECD study used cross country comparisons as well as internal comparisons of different time periods.

Paddington

Feb 21, 2011

tkwelge - a quick cite, http://www.rbs0.com/funding.pdf, which explains why the end of the Vietnam War, the collapse of the USSR and the Gramm-Rudman-Hollings Act caused the slashing of government R&D spending in the 1970's, 1980's and 1990.

As for the second point,

1. saying that 'government money displaces private investment' is easy to say, but hard to actually justify, especially given the short-term track record of all to many companies. Case in point, when Fiat took over Chrysler, they discovered that there had been no research investment for over a decade, to 'save money'.

2. As I said above, how does one figure in the decades-long lag between science research and usable technology? Given that, how does one attract private money given the uncertain payoff and long term involved?

tkwelge

Feb 21, 2011

@ Paddington

Once again, Source????

I'd like to see something like a graph showing the rise and fall of total R and D spending. Simply giving me footnotes does not count as evidence of anything.

"Sex, Science, and Profits" actually looks specifically at the amount of government funding for basic or pure science, so that eliminates the amounts spent on military research etc. There is a nice little graph on page 249 that shows that funding of "basic" science exploded between 1940 and 1960, plateaued, and then began increasing again in the 1980's. Personally, I'd like to see a better source with more information, too, but SS and P directly references a 2003 OECD study that came to the conclusion that there is no proof that PUBLIC funding of R & D contributes to higher economic growth. And yes, that does focus on pure science.

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