Wednesday, July 23, 2014

As Google Energy Czar Argues For Public Funding of R&D, Salon Calls For the Nationalization of Google and Amazon (GOOG; AMZN)

The problem with centralized funding schemes boils down to who hands out the funding.
In the arts world you end up with cliques shoveling money to their in-clique buddies.
In the social-thought-leader world you end up with a daisy-chain of crony foundation folks funding crony NGO pals.

If you think it's any different with science you haven't spent enough time observing academics in their natural habitat.

It was ever thus when people hand out other people's money because you run into the same problem you encounter with representational democracy: the people who are attracted to the job are precisely those who are pathologically hooked on power and are thus eminently corruptible.

Fortunately, I'll be long dead before the worst of the ill-effects take root.
Go get 'em, kids.

From FT Alphaville:
Safeguarding the future with public endowments​ for research
This is a guest post by Arun Majumdar, former founding director of ARPA-E and undersecretary of energy (acting), US department of energy; Jay Precourt Professor, Stanford University (starting August 1, 2014); Vice President for Energy, Google (until July 31, 2014), in which he argues that a public endowment dedicated to transformational technology is essential for safeguarding the interests of our children and grandchildren in the future.
You can watch a livestream of today’s speakers, including Arun Majumdar, at the Mission-Oriented Finance Conference here.

We routinely use our smart phones without realizing the research and development that produced it: the transistor, integrated circuits, wireless communication, the laser and optical communication, the internet, the Unix operating system, and so on. None of these existed during World War II. But four decades of post-war research created the foundation for today’s products (as Mariana Mazzucato has shown in her book The Entrepreneurial State).

Can we learn any principles about research and how it should be funded as a result of this example?
Here are some observations.

Basic and applied research should not be separated.
Basic research, which tries to understand “how nature works”, is often inseparable from applied research, which is focused on “can we do something useful with it.” There isn’t one-way traffic between basic to applied, but rather a feedback loop in which applied research generates questions that stimulates basic research, and the cycle keeps on going.

Both basic and applied research take time to mature.
The first paper on the protocols used in today’s internet was published by Kahn and Cerf in 1974 and they were implemented on the ARPAnet in 1983, nine years later. It took another 9-10 years of persistent funding and advocacy for it to become the internet. Transformative technologies for which industries do not even exist at the early stages often take 15-20 years for new industries to be created.

R&D is not a straight line
While the development of the smart phone may seem obvious to some, its historical path was far from it. The first transistor was a point contact transistor made of germanium, which no one uses today. The idea of a field-effect transistor, the workhorse of the integrated circuit, and silicon as the material of choice, came much later. Did Kahn and Cerf ever think the internet would develop to take on the shape and form it is has today? I seriously doubt it. There is plenty of serendipity involved and the paths to successful technologies and products contain many twists and turns. Some humility regarding the ability to predict the direct business impact of research is much needed....MORE
And from Salon:

Let’s nationalize Amazon and Google: Publicly funded technology built Big Tech
They're huge and ruthless and define our lives. They're close to monopolies. Let's make them public utilities

Let's nationalize Amazon and Google: Publicly funded technology built Big Tech 
Jeff Bezos (Credit: AP/Reed Saxon/Pakhnyushcha via Shutterstock/Salon)
They’re huge, they’re ruthless, and they touch every aspect of our daily lives. Corporations like Amazon and Google keep expanding their reach and their power. Despite a history of abuses, so far the Justice Department has declined to take antitrust actions against them. But there’s another solution.
Is it time to manage and regulate these companies as public utilities?

That argument’s already been made about broadband access. In her book “Captive Justice,” law professor Susan Crawford argues that “high-speed wired Internet access is as basic to innovation, economic growth, social communication, and the country’s competitiveness as electricity was a century ago.”

Broadband as a public utility? If not for corporate corruption of our political process, that would seem like an obvious solution. Instead, our nation’s wireless access is the slowest and costliest in the world.
But why stop there? Policymakers have traditionally considered three elements when evaluating the need for a public utility: production, transmission, and distribution. Broadband is transmission. What about production and distribution?

The Big Tech mega-corporations have developed what Al Gore calls the “Stalker Economy,” manipulating and monitoring as they go. But consider: They were created with publicly funded technologies, and prospered as the result of indulgent policies and lax oversight. They’ve achieved monopoly or near-monopoly status, are spying on us to an extent that’s unprecedented in human history, and have the potential to alter each and every one of our economic, political, social and cultural transactions.
In fact, they’re already doing it.

Public utilities? It’s a thought experiment worth conducting.

Big Tech was created with publicly developed technology.
No matter how they spin it, these corporations were not created in garages or by inventive entrepreneurs. The core technology behind them is the Internet, a publicly funded platform for which they pay no users’ fee. In fact, they do everything they can to avoid paying their taxes.
Big Tech’s use of public technology means that it operates in a technological “commons,” which they are using solely for its own gain, without regard for the public interest. Meanwhile the United States government devotes considerable taxpayer resource to protecting them – from patent infringement, cyberterrorism and other external threats.
Big Tech’s services have become a necessity in modern society.
Businesses would be unable to participate in modern society without access to the services companies like Amazon, Google and Facebook provide. These services have become public marketplaces.
For individuals, these entities have become the public square where social interactions take place, as well as the marketplace where they purchase goods.

They’re at or near monopoly status – and moving fast.
Google has 80 percent of the search market in the United States, and an even larger share of key overseas markets. Google’s browsers have now surpassed Microsoft’s in usage across all devices. It has monopoly-like influence over online news, as William Baker noted in the Nation. Its YouTube subsidiary dominates the U.S. online-video market, with nearly double the views of its closest competitor. (Roughly 83 percent of the Americans who watched a video online in April went to YouTube.)...MORE
Salon is owned by the publicly traded Salon Media Group.
Finally, a lot of folks who would regurgitate the term 'military-industrial complex' at the drop of a lobbyist's hat haven't read the rest of the speech it came from:
...Akin to, and largely responsible for the sweeping changes in our industrial-military posture, has been the technological revolution during recent decades.
In this revolution, research has become central; it also becomes more formalized, complex, and costly. A steadily increasing share is conducted for, by, or at the direction of, the Federal government.
Today, the solitary inventor, tinkering in his shop, has been overshadowed by task forces of scientists in laboratories and testing fields. In the same fashion, the free university, historically the fountainhead of free ideas and scientific discovery, has experienced a revolution in the conduct of research. Partly because of the huge costs involved, a government contract becomes virtually a substitute for intellectual curiosity. For every old blackboard there are now hundreds of new electronic computers.
The prospect of domination of the nation's scholars by Federal employment, project allocations, and the power of money is ever present--and is gravely to be regarded.
Yet, in holding scientific research and discovery in respect, as we should, we must also be alert to the equal and opposite danger that public policy could itself become the captive of a scientific-technological elite....
-President Eisenhower's Farewell Address to the American People, January 17, 1961.