We're setting sail
To the place on the map from which no one has ever returned
Torn by the promise of the joker and the fool
By the light of the crosses that bur-urn
Torn by the promise of the women and the lace
And the gold and the cotton and pearls
It's the place where they keep all the darkness you meet
You sail away from the light of the world

Listen baby - you will pay tomorrow
You're gonna pay tomorrow-ow-ow
You will pay tomorrow-ow-ow-ow-wow-ow-ow-ow-ow-ow

Save me, save me from tomor-orrow
I don't want to sail with this ship of foo-ools, no no
Oh-oh-oh, save me, save me from tomor-orrow
I don't want to sail with this ship of foo-ools, no no
I want put on the Meissner shield to run and hide

Avarice and greed are gonna drive you over the endless sea
They will leave you-ou drifting in the shallows
Drowning in the oceans of history-y-y-y
Travellin' the world, you're in search of no good
But I'm sure you're philosophic like I knew you would
Using all the good people for your galley slaves
As your little boat struggles through the the Second Law warning waves

Peter,

You haven't understood what I am proposing. If you look through you will find that what is being proposed is a decentralised market place in Research and Development where we give the R&D funds to every citizen to invest. It is not a government directed approach but governments do what they are supposed to do and provide the infrastructure and rules so that markets can operate successfully. I am as much against government control of R&D expenditure as you are but governments are the only ones who can set in place a framework to make a R&D market place operate.

At the moment there is no market place in Research and Development because the potential buyers are those that have the most to lose from innovation. The existing suppliers are also frightened of losing their strangle hold on funds. Governments like to be seen to be doing good things hence not very much happens.

There's not enough R&D- relative to what?

How do you know?

"...we give the R&D funds to every citizen to invest."

Who's "we"?

Where are you going to get the funds from?

How do you know that the benefit to society from what the funds would otherwise have been used for, would not be greater than the benefit to society from spending it on R&D?

There's no issue, is there, that if the funds went to loss-making projects, they would not increase productivity, and this would not be a justified use of funds.

Just because other people don't want to pay for what you think they should pay for, doesn't mean you're justified in forcing them, any more in R&D, than in any other field.

Peter

The method I am suggesting is called "the scientific method". In the scientific method we postulate a hypothesis and then we run an experiment to see if the hypothesis is FALSE.

The hypothesis is that R&D is a good thing for society. This hypothesis is based on good evidence that most advances in our well being have come because we better understand our world through the process of R&D.

We run the experiment as described and we measure the outcomes. If we find that R&D increases productivity then we continue the experiment if not we think of some other hypothesis to test.

So the answers to your questions are we make an educated guess as to how much everyone gets and I would start with $1,000 interest free loan to anyone in Australia who wants to participate. No one is forcing anyone to do anything. People do not have take up an interest free loan if they don't want to.

The method of issuing these loans is also an experiment but the hypothesis is that it will be non inflationary. The reason why this is an interesting experiment to run can be found at http://cscoxk.wordpress.com/2011/01/26/credit-as-a-tragedy-of-the-commons/

The objective of the R&D experiment is to answer the question if the benefits from the R&D outweigh the costs. The objective of the interest free loans experiment is to answer the question whether increasing the money supply with interest free loans for productive purposes will stabilise the monetary system.

Scientists do not believe they have "the answer". They have theories and they design experiments to test those theories. If the tests show the theories are wrong then they change the hypothesis. Scientists do not prove things are true. They show things are not false.

Both these hypothesis may be wrong but even if they are wrong there will be little harm done because we know that R&D does sometimes do good. We also know that creating a limited amount interest free loans will do little damage. It is certainly cheaper than giving tax dollars or getting interest bearing loans for R&D.

You said you’d answer my questions but you keep evading them.

For the scientific method to be valid, the hypothesis has to be logically coherent in the first place. Yours isn’t, because it contains an aggregative and a logical error.

The experiment as described is “that R&D is a good thing for society”.

It is *specific* R&D that produces good things for society, not R&D *in general* including R&D-that-produces-no-good-thing-for-society.

You essentially jump from the premise that “R&D” (in general) is a good thing for society (which as shown is fallacious) to the conclusion that THEREFORE government should promote it, which is a non sequitur, and therefore doubly fallacious.

The very issue is *how* to distinguish R&D that does produce good things, from R&D that doesn’t; and your experiment doesn’t distinguish between them.

The hypothesis is also logically fallacious because it can’t be falsified.

1. How could you prove false the proposition that R&D in general is a good thing for society?

“If we find that R&D increases productivity then we continue the experiment ....”

2. *How* would you measure the outcomes of your experiment without wrongly attributing to non-good-thing-producing-R&D, the benefits of good-thing-producing-R&D?

“So the answers to your questions are we make an educated guess as to how much everyone gets and I would start with $1,000 interest free loan…”

3. Who’s “we”?

“No one is forcing anyone to do anything.”

4. How are you getting the money? Are you going to lend me $1000 of your money interest-free are you?

“The objective of the R&D experiment is to answer the question if the benefits from the R&D outweigh the costs.”

5. How will the benefits and costs be determined if not by profit and loss?

6. How do you know that the benefit to society from what the funds would otherwise have been used for, would not be greater than the benefit to society from spending it on R&D?

Your reasoning is shot through with aggregative errors, and I will undertake to prove it, if you will be so good as to answer my numbered questions.

1. The definition of R&D that I will use that can be used to disprove the idea is that if the aggregate cost of R&D is less than the income received from the commercialisation of the R&D over the life of the innovation arising from the R&D then in aggregate R&D has failed. Under this definition aggregate R&D has not yet failed.

2. If the measures we use in (1) fail for the areas where we explicitly decide to spend on R&D then that R&D has failed - unless the other non monetary benefits are judged to be sufficient to justify the loss.

3. "We" are all members of our community which for this exercise can be all Australian Citizens.

4. The money comes where it all comes from - as a loan. There is no "law" that says loans cannot be given at zero interest and to give a historical reference the CBA gave zero interest loans to the Australian Government to pay for the First World War as well as build much of the post world war I physical infrastructure.

5. Yes I agree we measure cost benefits with costs and benefits. But I also believe that there are other valuations that do not involve putting a price on something. I believe it is wrong to subject someone to torture even though it may be the most cost effective way of getting information.

6. I don't know if R&D is the best use of funds and have never claimed it to be so. This is where you and I part company. You think value can be determined purely in terms of price people are willing to pay. Financial measures can be used to choose between different ways of doing a particular thing like the best way to say produce renewable energy. However, the decision on whether we should create energy from renewable sources or from burning finite resources is a judgement decision of which financial cost/benefit is but one (important) input.