The WSJ took a short break from advocating 4% GNP growth and offering political advice to Mitt Romney by publishing a piece by two of the great Nobel Laureates in Economics. Gary Becker's and James Heckman's piece is posted here.
University of Chicago economists do not always have nice things to say about government investment but this piece stays positive. They argue that there is a high social return to investing in basic social science research and collecting new data. Such data are public goods and they argue that the free market will under provide it.
In the case of closing military bases, the Congressional Rep for the area where the base at risk to close is located goes wild yelling that his constituents need jobs. Will the Congressional Reps for Cambridge, MA, Hyde Park, IL and Berkeley, CA stand up to protect the researchers associated with the great academic campuses located within their spatial jurisdiction? Unfortunately, I doubt it. So, who is the interest group within Congress who will fight for Becker and Heckman's vision?
Who do they think they are reaching with their piece today? I already agreed with them. But, there is proposed legislation to stop funding political science research using NSF $ and to stop funding social science research with NIH $. I bet that there are many "real medical school scientists" at my UCLA who would agree with this proposal to shift the NIH's budget.
During a time of scarcity, who is providing good "value" for tax payers? Have economists done a good job explaining why we are valuable members of society? When I was a student at Chicago, I was told that Milton Friedman's work on hyperinflation (by teaching us how to prevent it) was valuable enough for the world that this contribution alone justified NSF grants for economists into the indefinite future.
If Federal funding for basic social science research dries up, what happens next? Do only rich private universities subsidize data creation? Do private firms create quasi-consulting firms with leading applied economists and place sharp limits on what the nerds can publish vs. what results will be used "in-house"?
Will economic theory enjoy a renaissance as researchers will have less access to data? In a recent presentation, Raj Chetty argued that this is a great time in economics for access to unique data.
