Wednesday “The Education Scam” Open Comments

The late William A. Niskanen, a member of President Reagan’s Council of Economic Advisers, began a 1997 book chapter titled “R&D and Economic Growth: Cautionary Thoughts” with this quote from President Bill Clinton about his proposed federal budget.

American history clearly demonstrates the importance of American leadership in science and technology to the future of our nation. Investments in science and technology drive economic growth, generate new knowledge, create new jobs, build new industries, ensure sustained national security, and improve our quality of life.

Niskanen then commented, “I wonder to which American history President Clinton was referring.” His point was that Clinton’s claim had no connection to what really happened in America and what really accounted for economic growth. Possibly the reason this chapter has received so little attention is that it was in a book rather than an economic journal. That’s too bad, because Niskanen made some devastating points.

The reason William Niskanen questioned the Clinton quote is because it is not true and has been used to fleece American taxpayers out hundreds of billions (trillions ?) of dollars ever since WWII.  The mind-boggling amounts of wealth spent by American families to send their children to colleges and universities each year can probably never be accurately calculated.

Don’t get me wrong.  Most Americans of all ages, including politicians and economists, would innocently and ignorantly agree with Bill Clinton’s assertion and they have for generations now.  I am sure Bill believes it.  Every university president and administrator cannot countenance any doubt in it.  The bizarre thing is no one ever asked it it was true.  Was it provable ?  It seems nice and solid and unassailable, doesn’t it ?  Who would object ?

Bacon’s chain, according to Niskanen, goes as follows (I’ve edited his statement a little):

Government financing is necessary to provide the adequate level of basic research. Basic research is necessary to provide the scientific foundation for advanced technology. Finally, advanced technology accounts for a large part of economic growth.

By sifting through the evidence, Niskanen throws strong doubt on each of these three links in Bacon’s chain.

and,

What about the middle link in the Bacon chain: the dependence of advanced technology on basic research? It turns out that there’s almost no dependence. Niskanen pointed to multiple studies that made that point. I’ll highlight two. In 1969, the Department of Defense produced “Project Hindsight.” Thirteen teams of scientists and engineers were tasked with identifying “the key research events that contributed to twenty weapon systems.” They found seven hundred such events. How many came from basic research? Two.

and this study,

In a 1991 study, University of Pennsylvania economist Edwin Mansfield, whose specialty was studying technology, reported the results of a survey he conducted on seventy-six firms in seven manufacturing industries. His goal, wrote Niskanen, was to “determine the share of the firms’ new products and processes that could not have been developed without academic research conducted within the prior fifteen years.” Only 11 percent of new products and 9 percent of new processes, Mansfield found, “could not have been developed, without substantial delay, in the absence of recent academic research.” Moreover, the products and processes that depended on academic research, pointed out Niskanen, “accounted for only 3 percent of sales and 1 percent of the industry savings attributable to technological innovation.”

Everyone everywhere had been lied to by their government.  Many of the lies are deliberate, but some of them are simply myths handed down from generation to generation.

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President John F. Kennedy was assassinated on this day, November 22nd, sixty years ago in 1963.

America has never been the same.