97 



Questions For the Record— McDougall* page 4 



which spencSs upward of 4 percent of its GNP on R&D, yet cannot 

 disseminate the most ordinary new technolDgy through its civilian sectors. A 

 free economy and politLcal stability seem to be the greatest prerequisites for 

 growth. In this regard, we must be careful that governmental efforts to 

 stimulate growth do not weaken entrepreneurial behavior! That would be the 

 most perverse of results. But as we know, whenever government starts giving 

 away miUions or biJlions of dollars, individuals and firms and universities wiU 

 adjust their behavior in order to cash in, and soon become wards of the 

 state, doing only what is necessary to receive grants and subsidies, and 

 avoiding the risks of innovative undertakings. The defense and electronics 

 industries are obvious examples, but the "knowLsdge" and "welEare" industries 

 may be just as afflicted. Government funding of "big science" is mandatory 

 in the present age, and has obvious short-run or middle-run advantages in 

 stimulating technological progress relevant to items on the polLtix:al agenda, 

 but if increasing bureaucratic funding (hence direction and regulation) of 

 industrial R&D saps the creativity of the private sector, the long-run effect 

 would be to kUl the golden goose. This was the real thrust of Eisenhower's 

 farewell address: it was not just a smear of the defense industry. 



The effect of international cooperation on the government- 

 science relationship is even more difficult to weigh. A sm aller country like 

 France has cLearLy acquired state-of-the-art technology more qixLckly than 

 she would otherwise because cf cooperative science in ^)ace, nuclear power, 

 and electronics. But the neo-mercantilist poUcies of such a country do not 

 ersure that the expense was "worth it." Even if Ariane does capture a large 

 chunk of the launch-vehicle market, was it a worthwhile investment? By free 

 market standards, probably not. The best way to ensure that cooperation 

 does not violate basic economic prindples is probably to encourage joint 

 ventures by private firms, but even there U.S. firms may choose to throw in 

 their lot with foreign systems, to the detriment of U.S. government or 

 ~^vate enterprise. 



5. What has been the relationship between development 

 (ecparjally during the 20th century with regard to Third World countries) and 

 R&D? What do you see as the policy implications of this for the United 

 States? 



This question tempts an historian to recount the whole debate 

 over the origins of the Industrial Revolution in England and its ^read around 

 the wodd. One of the crucial issues is the role of government: did England 

 industrialize first because her liberal government got out of the way of 

 private entrepreneurs, or was the British government a vital support for the 

 ^aread of the factory system and new technology? Conservatives stress 

 individual creativity and capital formation, a suppLy-side argument; Marxists 

 stress the role of the state in conquering world markets, and of West Indian 

 slavery in producing vast profits that financed industrialization, a 

 demand-side argument; while modemizationists like Walt Rostow stressed the 

 role of pcQirical infrastructure-^ unified home market freed from 

 mercantilist constraints, a free market in land and labor, triumph of middle 

 cQass values, contract law, etc.— and then a rising rate of national 

 investment. Historians of technology include individual craftsmanship and raw 

 materials, whUe dipilomatic historians point to the impetus given Britain by 



