IBM, by the early ’60s, was finally able to produce its own computer. They had learned enough at the government-funded laboratories to do it. It was the world’s fastest computer at the time, but it was way too expensive for business, they couldn’t buy it, so the government purchased it—I think it was for Los Alamos. In fact, procurement—and not just for computers, but also over the whole economy—has been a huge form of subsidy and it continues.[68]
That’s the way the economy developed. Now we’re screaming at China because they’re doing much the same with green technology, and we’re not doing it. We’ve regressed to the extent that this isn’t done very much anymore, although it still is plenty. If you take a walk around MIT, you’ll see big buildings of drug companies and genetic engineering. The reason is they’re feeding off the government-funded ideas, technology, and development that’s being done at the research labs and research universities like MIT. If you strolled around campus fifty years ago, you’d see small start-ups of electronic firms. Actually, on what’s now Route 128, that became Raytheon, and a high-tech corridor.[69]
There’s nothing new about this. This is the way economies develop. If there is an exception, I haven’t come across it. British development was like this, based on huge state intervention from the early eighteenth century. The same is true for the US, Germany, France, Japan, the East Asian miracles—all of them—China, of course. Market systems don’t yield fundamental innovation and development for obvious reasons. Innovation and development are long-term projects. They don’t give you profits tomorrow. In fact, they give you costs. So the state takes it over; the taxpayer, in other words, pays for it. It’s a system of essentially public subsidy, private profit. And it’s called capitalism, but has little resemblance to capitalism.
And Koch Industries?
You can look right out the window, that’s the Koch building.
So taxpayers’ money goes in, and there’s a mingling of industrial interests with university resources—resources meaning the intellectual capital—
And that’s publicly funded, substantially—
Then innovation goes out but it’s filtered through intellectual property rights—
Which is another form of government subsidy, and a major form. Take a look at the World Trade Organization rules. They’ve imposed patent conditions for the developing countries, which would have killed off industrial development in the rich countries if they had ever had to adhere to them.[70] The United States, for example, relied substantially on technology transfer—what’s now called piracy—from England, which was more advanced. In fact, England did the same for more advanced technology from India and Ireland, and from more skilled workers from the Lowlands, Belgium, and Holland. We did it then to England, and other countries are trying to do it too, but they’re barred from it by what are called free-trade rules, meaning: we protect what we want and we impose a market rigor on you.
There have been some good studies of this. Among the main beneficiaries of the World Trade Organization’s rigorous patent restrictions are the pharmaceutical corporations. They claim that they need it for research and development. This was investigated carefully by, among others, Dean Baker, a very good economist. He went through the records and found that the corporations themselves fund only a minority of their own R&D, and that’s misleading because it tends to be oriented toward the marketing side, copycat drugs, and so on. The basic funding comes from either the government or from foundations. He calculated that if funding for R&D for the big pharmaceutical corporations was raised to 100 percent public, and they were then compelled to sell their goods on the market, there’d be a colossal saving to consumers and no patent rights.[71] But that’s unthinkable; anything that interferes with profit is unthinkable. It can’t be discussed.
What role do politicians play in the distribution of federal funding for R&D, subsidy, and procurement?
Congress of course provides the funds, and the executive is deeply involved in decisions and implementation, with close involvement of industry lobbyists throughout. That aside, the decision makers in government have intimate ties with the corporate beneficiaries of subsidy and procurement in many other ways, ranging from campaign funding to privileged positions in the private sector if they play the game by the corporate rules.[72]
What factors in addition to massive investment have put China in the lead in green technology?
The business press and technology journals describe many factors, among them providing the required infrastructure. In the case of green technology, China began fairly modestly, and has been steadily advancing.
Take solar panels. China began manufacturing them in conventional ways and gained a large market share. A good deal of innovation and development comes directly out of manufacturing experience. This is not labor-intensive industry, so low labor costs were apparently not a major factor. Over time China has taken the lead in advanced solar panel technology, and now substantially dominates the international market. To illustrate how the US is falling behind in advanced manufacturing, US Secretary of Energy Steven Chu described Suntech power, after an on-site investigation, as a high-tech, automated factory that has developed a type of solar cell with world-record efficiencies. That is the result of careful planning in a framework of state industrial policy. It has its failures, but also real successes.[73]
6.
Research and Religion (or, The Invisible Hand)
Laray Polk: Forty percent of the electorate in most states identify as evangelical. Pew Research indicates evangelical Christians largely reject anthropogenic climate change and are skeptical there is even solid evidence that the earth is warming.[74] So I think the extreme beliefs of the religious right benefit business interests and vice versa.
Noam Chomsky: That’s an interesting combination because the business leadership tends to be secular. On social issues, they’re what are called liberals. They’re perfectly happy to mobilize and support, by what are world standards, extremist religious organizations as their sort of storm troops and they kind of have to do it. Take a look at recent American history: it’s always been a very religious country, but until the past thirty years or so, there wasn’t much political mobilization of the religious right. It took off pretty much in the ’80s, and I think it’s correlated with the fact that the Republicans, who were in the lead on this, began to take positions that are so hostile to interests of the public that they were going to lose any possible votes. They had to mobilize some kind of constituency, so they turned to what are called “social issues.” The CEO of a corporation doesn’t care that much if there’s a law against, say, abortion. Their stratum of society is going to get it anyway, whatever the laws are. They’ll have everything they want.
68
See John Tirman, ed.,
69
The cofounder of Raytheon, Vannevar Bush, joined MIT’s Electrical Engineering Department in 1919, eventually serving as dean and vice president. During World War II, he was the chief administrator of the Manhattan Project and served as director of the OSRD, a department he helped initiate during the Roosevelt administration. Bush is credited with codifying the relationship between federally funded science, industry, and the military (i.e., the military-industrial complex). For the blueprint, see
70
India amended its patent law to comply with the WTO Agreement on TRIPS in 2005, though legal battles over medicine patents continue into the present, most notably with Novartis, a Swiss pharmaceutical company with subsidiaries in India. According to Section 3(d) of the Indian Patent Act, “incremental or frivolous innovation is non-patentable.” NGOs believe a weakening of Section 3(d) could jeopardize India’s capacity to provide affordable generics to the developing world. Rachel Marusak Hermann, “Novartis before India’s Supreme Court: What’s Really at Stake?,” Intellectual Property Watch (IP-Watch.org), March 2, 2012.
71
“The government already spends more than $30 billion a year on bio-medical research through the national institutes of health. It would make much more sense to directly finance the research by the industry, eliminate the tax breaks and let all drugs be sold as generics at Wal-Mart for $4 per prescription.” Dean Baker, “Start with the Drug Companies,”
72
According to Michael J. Graetz, one of the greatest challenges to implementing a successful US energy policy is the “tendency for Congress to place geographic considerations above technological and economic prospects…. Members of Congress frequently have insisted on their own personal priorities, directing funds to individual projects, locations, or institutions by earmarking projects…. Clearly, many members of Congress have been more concerned with rewarding well-connected constituents and contributors than advancing science or promising technologies.” “Energy Policy: Past or Prologue?,”
73
Problems with the United States’ “innovation ecosystem” were pointed out by Pres. Bush’s scientific advisors in 2004: “Design, product development, and process evolution all benefit from proximity to manufacturing, so that new ideas can be tested and discussed with those working ‘on the ground.’ …The interdependency between new research and manufacturing becomes vitally important, and those linkages are provided by people.” President’s Council of Advisors on Science and Technology, “Sustaining the Nation’s Innovation Ecosystems,” January 2004. The Bureau of Labor Statistics projects US employment in manufacturing will continue to trend as an area of rapid decline. Richard Henderson, “Industry Employment and Output Projections to 2020,”
74
Pew’s analysis found that among religious groups, the unaffiliated are the most likely to say the earth is warming due to human activities; white evangelical Protestants are the most likely to say there is no solid evidence the earth is warming or that humans play a role; and black Protestants are the least likely to deny global warming is occurring. Another Pew study found views on climate change break along discernible party lines. Pew Research Center (PewResearch.org), “Faith in Global Warming: Religious Groups’ Views on Earth Warming Evidence,” April 16, 2009; “Wide Partisan Divide over Global Warming: Few Tea Party Republicans See Evidence,” October 27, 2010. See also, Aaron M. McCright and Riley E. Dunlap, “The Politicization of Climate Change and Polarization in the American Public’s Views of Global Warming, 2001–2010,”