From the Institute for Progress, here’s the link, the participants were Caleb Watney, Dylan Matthews, Alexander Berger, and myself. Quote:
Tyler Cowen: I would emphasize how science funding is divided in the United States. Public universities are run at the state level. We have tax incentives for donations where you have to give to a nonprofit, but there is little control over what counts as an active nonprofit.
One issue that I think has become a big issue is how much we run our universities with the overhead system. For government grants and many other types of grants, an additional fee is charged. The overhead rates are very high, and are much higher than the actual overhead costs.
You might think it’s a crazy plan, and in some ways it is. It means that there is a lot of pressure on professors to deliver contracts, regardless of the level of work. That is obviously a huge negative. Everyone complains about this.
But what is hidden is that when universities are highly funded, there is a kind of indirect free speech right because they can use the excess money as they want. Now, I actually think they’re breaking the now vague social contract by spending so much money. But in the long run, that’s why our system works so well. You had a very indirect federal budget: some parts of it went to science, some to education. It is done on the basis of free speech.
But like most good plans, it doesn’t last forever. It is abused. If we try to clean up the mess – now in my opinion it’s obviously a mess – yes, I’m afraid we’re going to get a system where Congress or somebody else is trying to dictate all the time how the money should be allocated. .
That’s a question I’ve thought about a good amount: how should we fix or should we fix the top system? I feel like we kind of painted ourselves into a corner where there’s no good way out either way. But I think you will find in each case that the details will really matter.
Dylan Matthews: Let’s get into some specifics. Do you have an example of a system breakdown that inspires you here?
Tyler Cowen: However, universities are spending huge amounts of money on staff and facilities – for the purposes of whether you think you can defend yourself in some deep sense like “Oh, we need this building,” it’s about the university. It is about what leads to long-term contributions, but is seen as a breach of public trust.
The money is not used for potentially useful research, or for teaching students. The decline in universities is large, especially in Florida, Texas, and North Carolina. It seems to me that where we are is not stable. The way we fund science through universities is, in some ways, collapsing in bad ways. Complaints are often forgiven, but chances are we’ll end up with something worse.
Recommended, interesting throughout.
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