Could you please answer my specific questions?

Who is the “we” and “our” you refer to?

I myself favour increased productivity, yes. But there are lots of people who don’t. Many people on OLO complain bitterly about an economic system predicated on endless growth. They don’t agree with it. You haven't established that it's any business of government, just because you think it's a good idea. Why should the anti-growth types be forced to fund it? Why shouldn’t growth be funded by those who want to fund it, and not by those who don’t?

The argument you make is based on “our” credit system. But you and I don’t own or control the credit system. The manipulation of it that you refer to is done by *the state*, not by “us”.

your whole argument turns on the supposed need of credit to fund R&D.
Yet there is nothing about innovation, or R&D, that intrinsically requires funding by debt rather than by savings.

Thus
a) your argument doesn’t explain why debt funding is necessary
b) since the problem is state manipulation of the supply of money and credit, your argument doesn’t explain why the solution shouldn’t be to stop the government intervention that's causing the problem in the first place, rather than to start new, unjust and uneconomical interventions
c) you still haven’t proved that productivity would be greater with government funding R&D
d) even if you had, you haven’t proved that the total benefits would outweigh the total costs considered in their widest sense
e) you have disregarded the ethical dimension. Just because you, or I, want something doesn’t mean we're justified in forcing others to pay – the dancing girls argument.
f) If your assumption of government's superior knowledge were correct, it would mean that government could exercise total control of every productive activity in the whole economy, and we’d all be better off. This assumption is flatly incorrect

Peter,

Find me a person who does not agree with doing more with less. This is different from an economic system predicated on endless consumption of finite resources. We can have growth with reduced consumption of finite resources.

You and I (as members of a community) DO own the credit system and it is time we took responsibility for its proper functioning. Credit is a promise to pay and credit only exists in communities that uphold that promise.

My argument is that R&D brings about productivity improvements and productivity improvements increase wealth. I am very much in favour of increasing wealth. To do R&D we have to have funding.

The current method of funding R&D through savings (or interest bearing money) is very very expensive. The existing system does not allow funding of R&D through loans. You cannot go to a bank and get a loan for R&D. Loans are a much cheaper way of funding particularly if the loans are interest free:)

My suggestion is not forcing anyone to do anything. You don't have to take out an interest free loan if you don't want to. If I repay my loans then who is paying? It is me not someone else so whom am I forcing to pay?

The proposal is a free market that decides where and how money is invested. The amount is decided by the outcomes of the investments.

It is innovative and it will get fierce opposition from those who have access to credit simply because they already possess assets.

Nothing in what is suggested changes the existing system except it makes the R&D activities of the government redundant. It eliminates the need for tax concessions and other attempts by governments to encourage R&D. Even better it will cost the government next to nothing to implement.

It requires the government to set in place the policies to make it happen. It is just that the policies are a little different to those currently in place.

BTW when I put this forward to get an innovation grant to explore the idea further it was rejected:)

Fickle Pickle,

Well I quite like your ideas.

As well, if superannuation payments are compulsory, then government policy could be that a certain % of the money invested by superannuation companies must be spent on R&D in Australia.

This would help to stimulate or resurrect public interest in innovation in Australia, which I believe has been killed off by government policy and the education system.

Fickle Pickle
Well you asked for my questions and promised to answer them, I asked them, you didn’t answer them, then I asked you to answer them and you still didn’t answer them.

I suspect that the reason you didn’t answer them is because you can see that if you do, they will show that your policy proposal is indefensible in its own terms.

Could you please answer my numbered questions specifically.

All your reply only begs my questions: there’s not enough R&D: relative to what? How do you know the scarce resources necessary to fund it would not be better applied to some other end?

“Find me a person who does not agree with doing more with less. This is different from an economic system predicated on endless consumption of finite resources. We can have growth with reduced consumption of finite resources.”

True.

But
a) if everyone agreed, there would be no need of policy to force the issue in the first place, so obviously there are people who disagree
b) many people oppose economic growth
c) they can do so consistent with the fact that people intrinsically want to do more with less, because you have not shown how the policy you advocate would distinguish between 1. doing more with less, and 2. doing more with more
d) you still haven’t established any justification for government funding of it.

“You and I (as members of a community) DO own the credit system and it is time we took responsibility for its proper functioning.”

No we don’t. Society is not the state, nor vice versa. You and I have, in practice, NO control over monetary policy.

There is no issue, is there, that loss-making projects don’t increase productivity? Losses don’t increase productivity – they reduce it.

Therefore government funding of R&D would only make sense if the projects produced a net benefit. But government is in a *worse* position than private capitalists to identify those projects.

Thus you haven’t even begun to establish a case for government funding of R&D.

“The proposal is a free market that decides where and how money is invested. The amount is decided by the outcomes of the investments.”

I’m all in favour of that, but that is not an argument in favour of government funding innovation – it’s an argument against.

“It requires the government to set in place the policies to make it happen. It is just that the policies are a little different to those currently in place.”

What is the difference between what you are suggesting, and the abolition of all governmental policy and interference whatsoever to do with R&D?

“BTW when I put this forward to get an innovation grant to explore the idea further it was rejected:)”

LOL

“BTW when I put The Second Law of Thermodynamics forward to get an innovation grant to explore the idea of its "application to optimise human endeavours" further,
it was rejected on the grounds that the Second Law was now generally accepted to be false, to be replaced by the upcoming Theory of Divine Human Capitalist Intervention. :)”

Funny huh?

Now that's Humer for you!

LOL