Gary Becker and James Heckman Argue in Favor of Federal Subsidies for Social Scientific Research

by Reihan Salam

Given that Becker and Heckman are distinguished social scientists, this hardly comes as a tremendous surprise. But cynicism aside, they make a very strong case. I’m particularly keen on their conclusion:

In cutting out the considerable fat from the public diet we should not cut the muscle that has helped make our economy the largest and strongest in history.

The data commons is best understood as muscle, not fat. Improving data collection isn’t a panacea, in part because, as a friend recently observed, storage productivity is increasing faster than processing productivity. But improvements in data collection and analysis nevertheless promise to yield significant dividends.

John Cochrane offers a compelling counterargument to Becker and Heckman:

We need a grand bargain. I give up mine, you give up yours. If economists pushing for the grand bargain are the first to say, “you give up yours, but we’re an important public good,” we’re hardly credible. At a minimum, we need a uniform standard of proof of just who is a public good that really would not be produced without Federal support.

The largest subsidy for economic research — other than the tax exempt status of our employers — is the National Science Foundation. They give grants to economists. But they don’t pay for the one thing that would generate more research — they won’t buy out teaching. Instead, we operate under the fiction that the university pays us for 9 months, and the NSF can then pay “summer salary.” (The NIH, which supports some of the research cited by the OpEd, will buy out teaching as they do for real scientists.) One might defend this as a prize for good past research, which is how it works out in practice. Might.

Is this producing important research that would not be done otherwise? I’ve received a few NSF grants in the past. I can tell you the answer. I enjoyed the money. The institutions that took 60% “overhead” enjoyed the money. But I would have written exactly the same papers exactly as fast without it. (I don’t apply for NSF grants any more. Given my views on others taking federal money, even though the institutions I work for would appreciate the overhead, it seems inconsistent to do so.)

Moreover, Cochrane suggests that federally-funded research is subject to capture, i.e., publicly-funded research will tend to support the notion that the state has a valuable role to play in addressing various social problems, etc. Cochrane does agree with Becker and Heckman on the importance of publicly-funded data collection, which is also my point of agreement. So perhaps we’re not very far apart.

My friend Arpit Gupta adds that research supported by the federal government is not as a general rule required to be made publicly available, and so various academic publishers essentially profit at the expense of taxpayers. 

For Arpit, the question of public funding for research also raises the question of the purposes the modern university should serve. Does the system of having teaching cross-subsidize research make as much sense as we think it does, or is it simply so familiar that we ignore its deficiencies? There is a legitimate question as to whether or not we are overproducing research of low quality in many domains in institutions that should focus on skill-building. One can imagine a universe in which we have many more Institutes of Advanced Study, in which scholars are sequestered and permitted to get on with the hard work of producing breakthroughs, and the vast majority of higher education institutions devote themselves exclusively to high-quality instruction. The classic argument is that having teachers steeped in research can actually improve the quality of instruction. While I imagine this is true in some domains, it isn’t obvious to me that it is true in all domains. 

This is all very politically fraught, as the most influential voices in our political discourse are people with strong sentimental attachment to existing research universities and the people they draw on for expertise are often employed by them. The same can be said, of course, about other modern corporations, though universities, like hospitals, are defined by a form of “co-administration” that introduces unique challenges. 

The Agenda

NRO’s domestic-policy blog, by Reihan Salam.