Government should spend nanodollars on nanotechnology

by on February 11, 2010 · 0 comments

At least that’s how my former colleague Tom Miller, now at the American Enterprise Institute, used to put it. Still another government/business funded report, this one called “Nanotechnology: a UK Industry View” reaches yet again the same conclusions about nanotechnology as the ones that pop out occasionally like the U.S. Environmental Protection Agency’s “Nanotechnology White Paper” or the Food and Drug Administration’s “Nanotechnology.”

The conclusions always secure an open-ended role for political bodies to govern private endeavors, and since the business parties are so dependent on political funding, they have to go along with it, cut off from envisioning an alternative approach.

The reports say–brace for it–that governments should fund nanotechnology and study nanotechnology’s risks; and that they should then regulate the technology’s undefined and unknown risks besides. This approach, so different from, say, the way software is produced and marketed, assures that there will never be a “Bill Gates of nanotechnology” (or in another sector, a Bill Gates of biotechnology, as CEI’s Fred Smith often puts it). If every single new advance requires FDA medical-device-style approvals, this is an industry that cannot begin to reach its potential.

As for nanotech’s genuine risks, government exacerbates them since it pushes technology in lurching, non-market directions, all subject to future political rug-pulls, and since its funding model tends to indemnify companies for the hazards they create. Free enterprise actually requires disciplinary institutions like liability and insurance to evolve alongside to assuage investors and the public. Markets and capitalism should and do bring risky products to the fore (finanacial instruments, electricity, nuclear energy, behavioral advertising, cybersecurity for sensitive-information networking, emergent low-earth-orbit space touring), but government subsidies and indemnification can short circuit the disciplines that must emerge alongside.

As for the gray goo catastrophe scenario, in every other instance, enviromentalists say an organism needs an eco-system to survive, so I’ll leave it at that, since the scenarios are silly anyway, and since there’s no shortage of proposed solutions to the problem were it genuine anyway.

The govennment-picking-technologies model undermines economic liberty, innovation, wealth creation, national competitiveness (the endless and tiresome rationale for government R&D) and consumer benefits, and is itself the source of most risk, no matter how many white papers produced. Rather than picking the winning horses (or worse, as is the case now, actually being one of the horses), government’s legitimate role is to improve the track on which all the horses run; that means liberalizing the tax and regulatory environment within which nanotech entrepreneurs operate, for starters.

I remember debating these points over the pre-requisites for risk management and over governement’s stance toward technology with the Nanobusiness Alliance in Congressional Quarterly. Government’s proper stance is one of indifference or neutrality, since nanotech is one of many technologies competing for investment dollars; indeed we used to call it “chemistry.” To the extent it insists upon “promoting” technology, government should work tirelessly to remove barriers to private research. A recent Financial Times article noted that over 800 research institutes are involved. And that’s only in the UK. What this reveals is an industry crying out for consolidation into perhaps a few large-scale research enterprises. So antitrust liberalization should occur to political authories, for example, but you may rest assured that it has not. The same government-steers-while-the-market-rows dominates in the U.S.; nanotech funding is spread out not according to market pressures, but across dozens of congressional districts on purpose.

SHARE: 0 comments

Wayne Crews / Wayne Crews is vice president for policy and director of technology studies at the Competitive Enterprise Institute, and an adjunct scholar at the Cato Institute. He started the Dysfunction Network as a side project. He is a dad of four. Wayne's work explores the impact of government regulation of private activity: Areas of interest include antitrust and competition policy, safety and environmental issues, and information age concerns like privacy, online security, broadband policy, and intellectual property. Wayne is the author of the yearly report, Ten Thousand Commandments: An Annual Snapshot of the Federal Regulatory State, and he co-authored the recent reports This Liberal Congress Went to Market? a Bipartisan Policy Agenda for the 110th Congress and Communications without Commissions: A National Plan for Reforming Telecom Regulation. Prior to the assorted government bailouts now taking place, he wrote the report Still Stimulating Like It’s 1999: Time to Rethink Bipartisan Collusion on Economic Stimulus Packages. Wayne is co-editor of the books Who Rules the Net: Internet Governance and Jurisdiction (2003) and Copy Fights: The Future of Intellectual Property In the Information Age (2002). He is co-author of What’s Yours Is Mine: Open Access and the Rise of Infrastructure Socialism (2003), and a contributing author to others. He has published in the Wall Street Journal, Chicago Tribune, Forbes, Communications Lawyer, the International Herald Tribune and others. He has made various TV appearances on Fox, CNN, ABC, CNBC and the Lehrer NewsHour, and his regulatory reform ideas have been featured prominently in such publications as the Washington Post, Forbes and Investor’s Business Daily. He is frequently invited to speak, and has testified before congressional committees on various issues. Earlier Wayne was a legislative aide in the United States Senate to Sen. Phil Gramm, covering regulatory and welfare reform issues. He was an Economist and Policy Analyst at Citizens for a Sound Economy Foundation, and has worked as an economist at the U.S. Food and Drug Administration and as a Research Assistant at the Center for the Study of Public Choice at George Mason University. He holds an M.B.A. from William and Mary and a B.S. from Lander College in Greenwood, South Carolina. He was a candidate for state senate as a libertarian while at Lander.

Previous post:

Next post: