Our new fearless leader proclaimed in his inauguration speech that we need to “put science back in its rightful place.”  Political and religious leanings aside, the debate over this decree could start with considerations over how science and creativity is funded.  One of the obvious purposes for establishing intellectual property laws is to secure a method for incentivizing further creation.  That incentive, of course, is a monetary motive.  Creators continue to invent because they may own their creations and reap the rewards that result.  This system of incentive becomes complicated, however, in the context of scientists on staff at a university, for often patents and other IP is shared, or owned outright, by the university, and the scientist does not increase his own earning potential through creating more.   The issue becomes exacerbated, however, when we realize that scientists’ are usually on their own to find funding for their research through government grants and non-profit gifts.

A piece written for the New York Times today by guest columnist Stephen Quake, a professor of bioengineering at Standford University and developer of technologies to solve problems with human health, has reopened my eyes to a real example of the economic theory behind incentivizing creation.  He points out, quite cleverly, that mostly left-leaning Professors and Scientists are forced to accept a “brutal free-market approach” to their work and livelihood, in that their research depends on their own abilty to raise funds, much like a small-business owner.  Then Professor Quake raises the query,

“Could we stimulate more discovery if more scientists had the security of their own salary and a long-term commitment to a minimal level of research support? Would this encourage risk-taking and lead to an overall improvement in the quality of science?  As we consider the monumental challenges facing our generation - climate change, energy needs and health care - and look to science for solutions, it would behoove us to remember that it is almost impossible to predict where the next great discoveries will be made - and thus we should invest broadly and let scientists off their leashes.”

The question brings us back to the birth of copyright and patent law in the United States - Article 1, Section 8, Claus 8 of the U.S. Constitution - which instills in Congress the right “[t]o promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”  How forward looking our Founding Fathers were!  Some call this the Intellectual Property Clause, or the Copyright Clause, but I call it the “Incentive Clause”.  If we think about it logically, securing the “right” to creations is only meaningful if that “right” is exploited commercially.  Of course, the previous statement disregards those copyrights (specifically, artistic pieces) that hold sentimental value to the creator.  Moving forward, the economic theory behind the “Incentive Clause” can be attributed to the context of scientific discovery at universities, where rights are not always secured to the inventor, and funding can not always be found where research needs it.

Professor Quake’s article spoke volumes to me, for my father is a professor that has relied on grant money for research in the past.  Without it, his resources and research would have been very limited.  Nevertheless, while we should recognize the age-old “Incentive Clause” and its intuitive purpose, I will not go as far as to say that we should throw money at science blindly.  It is imperative that we incentivize creation, but I, like the government, am open to suggestions.  I have argued before that we will not find the optimal level of creation through absolute protection and subsidy schemes.  Still, Professor Quake has made his point.  It will be interesting to see if the new administration will heed the call.

This entry was posted on Wednesday, February 11th, 2009 at 4:23 pm.
Categories: Investment Intelligence ~ by Ian McClure.

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