Government Funded Research vs. Free Market Funded Research

 With the debate over Stem Cell Research being Adult Stem Cells vs. Embryonic Stem Cells seems to force people to take sides in a black and white issue or is it?  The issue is the destruction of the embryo to obtain embryonic stem cells vs. using adult stem cells.    In doing some research on different stocks to buy I ran across a small company (Advanced Cell Technology, Inc web site http://www.advancedcell.com/)   that does Stem Cell Research and has developed a process where they can extract a small number of stem cells from a live embryo, using the procedure they use for pre natal testing.  Using their process they can develop a line of embryonic stem cells using one or two cells and at the same time using a safe procedure to harvest the cells from the embryo with out causing any harm to the embryo.   It appears that this was developed using private money and investment capital.  This is the free market working.

When you have government money you have strings attached and you have to show results that work. Often when you read about a great break through in medical science it will be in the early stages and it shows great promise and it may hold the answer to curing some disease.  This is done to get more government money.  The government will fund such studies but they want it done in a certain way or using certain products or companies.  The best example is the Ethanol solution.  The Government decided that we need to have an alternative fuel to run our cars.  Brazil uses ethanol and is nearing energy independence as far as cars are concerned.  In the law passed funding the research it stated that it had to be corn based ethanol.  Look at the problems that this caused world wide and after the fact we find out that it takes at least 1 gallon of gasoline to make one gallon of ethanol and it is not as efficient as gasoline. 

If this problem had been left to the free market, which there were some companies working on the problem and found that Sweet Grass would be cheaper and better than corn based ethanol we might have a solution by now.   The government decided to use corn to get votes from the farmers.   When the government does something they do it to please one or more special interest groups and the political people gain power.  When the Free Market is working some one is working on an idea or product with the hope of making money and improving their standard of living. 

There is a story that is told about ATT and Bell Labs.  It seems that during the depression Bell Labs started a research project that would hire a certain number of Mathematicians and Scientist in both the pure and applied science fields.  When asked what they were to do or what they were to produce they were told to just do what they wanted and have fun.  For the next five years they worked in their world and did all sorts of things.  The end result was the development of the Transistor, which Bell Labs got a patent on and made more money the first years than they spent the pervious five years.  This launched a whole new era in product development and advances in technology.  The Company’s motivation was to make a profit where as the governments motivation is to get reelected. 

One of the problems with most government funded research is that they have an outcome expectation.  For example one of the big successes in government funded research I was always told about was the NASA space program.  There were many consumer products that came out of the program but, was it done with government funding?  In most cases the answer is NO.  The way the government works is they put out a Request for Proposal (RFP) on a project and the business develops a model or prototype and the government selects the one they want.  The winner receives the funding and the loser gets nothing.  Companies continue to do this because they understand that research is important.  In the case of the NASA project private companies developed many different ways to monitor health information of the Astronauts and the companies that did not get the contract took the research and looked for civilian uses.  Some of the non medical products that have come out of the NASA project failed projects were Pyrex cook ware, Velcro, Computers small enough to fit in the space capsule (leading to the development of the computer for personal use), miniature cameras which lead to digital cameras to name a few. 

If we go back and look at the Stem Cell Debate it comes down to which area is going to be funded by the government.  President Bush said that government would fund Adult Stem Cell research and embryonic stem cell research using the existing embryonic cell stem lines.  President Obama has said that government funding would be used to develop new embryonic stem cell lines.  Shouldn’t the money spent on research be based what might work as opposed to here is the money but do it this way and use these raw materials from these people, so that I get reelected and keep my power.  Everyone would be better off if the money for research was not tainted with political strings.  Private money will follow those researchers who promise and success and not those who get government money to “Study the relationship between consuming Alcohol casual sex between gay couples in South American Bars.”  This study is being funded by the government in the stimulus package.