As I read a recent issue of New Scientist this morning, I very nearly skipped over an article titled "Falling Out of Love With Market Myths" with a photo on the fold of Ronald Reagan walking with Margaret Thatcher. The title and presentation leads one to expect the sort of thing one would expect from British academic types, and ditto, check... the article was written by an Oxford educated academic named Terence Kealey, now a Vice-Chancellor at the University of Buckingham.
I plowed on any way and was rewarded by a very surprising statement:
In fact, the evidence shows otherwise. In 2003, the Organisation for Economic Co-operation and Development published The Sources of Economic Growth in OECD Countries, reporting on a comprehensive regression analysis of the factors that might explain the different growth rates of the world's 21 leading economies between 1971 and 1998. This indicated that only privately funded R&D led to economic growth, and that publicly funded R&D did not. Worse, the public funding of R&D crowded out private funding, and thus slowed economic growth.
This would also seem to imply that if the government takes over the funding of health care, whatever R&D it carries out will be a lot less productive than what private industry was doing.
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