Thursday, February 3, 2011

Koch Economist Calls for More National Planning in Medical Research

Tyler Cowen is probably the most heavily Koch funded economist. He is a a professor of economics at Koch-funded George Mason University and the general director of the Koch-funded Mercatus Center at George Mason University.

There are plenty of whispers at GMU among some of the other economics professors that Cowen can not in any way be considered an Austrian economist in that he does not subscribe to Austrian business cycle theory. But, I'm wondering if Cowen should even be considered anything close to a  free market economist.

In an interview with NYT, Cowen calls for more government intervention in medical research:
The N.I.H. has done a very good job in promoting medical innovation and this is in large part because it allocates funds on a relatively meritocratic basis; Congress doesn’t control particular grants and on many important fronts the N.I.H. has autonomy. It is one reason why the United States is the world leader in medical research and development and I would expand its funding, provided it retains this autonomy. Basic research is often what economists call a “public good” and it offers economic and health returns for many years to come.
This strikes at a complete failure of understanding of how free markets work versus a bureaucracy and a failure to understand the nature of innovation.

Government directed research in any field has to be considered misdirected money flows. The money flows left to the private sector keep money in the hands of those who will directly choose based on their desires. There is simply no way taking by force (taxes) from some and giving to others can be claimed as benefit for those from whom money is taken. Once you start down that slippery slope, where can you justifiably say it ends?  And this is not even allowing for the moral question of the coercion involved in taking money from individuals and directing it to others, in the first place

The decision where and when to conduct research can like any other research be determined by entrepreneurs as they weigh the cost of research versus the eventual revenue generated by any successful results of the research.

If Cowen wants to argue about situations where important research can not be structured in a way to capture the proper revenue to conduct research (His raising of the so-called, "public good" problem), one needs only to point to the existence of the American Heart Association, Diabetes Association and on and on, to show that research can be conducted via voluntary contributions, which eliminates the political and bureaucratic problems that occur when money goes through the government grinding machine, which Cowen clearly appears to be aware of and concerned about when he writes:

I would expand its funding, provided it retains this autonomy
Yeah, right. Let's see the NIH start attempting research that moves research toward herbals and away from pharmaceutical concoctions, and we will see how much autonomy the NIH has. And if Cowen thinks NIH research is pure, he needs to read a bit more. Here's a report on one NIH research program:
The government’s research on using an AIDS drug to protect African babies was so flawed that health officials had to use blood tests after the fact to confirm patients got the medicine. Ultimately, they had to acknowledge the study broke federal patient protection rules.

But the National Institutes of Health never told the White House about problems it found in 2002 with its research on the drug nevirapine before President Bush unveiled a $500 million plan to distribute the medicine across Africa, documents obtained by The Associated Press show...A professional auditor hired by NIH who first helped disclose the problems said in an interview that most of the problems with the research were fixable but NIH officials were in a rush to declare that things were OK.
Here's a note on NIH vaccine work:
The vaccine adjuvant, MF59, that NIH proposes to add to flu vaccine given
to the frail elderly, is not licensed in the U.S. as safe for human use.
MF59 contains squalene, which can cause autoimmunity. Some ill Gulf War
veterans, who were given anthrax vaccine and other experimental vaccines,
have tested positive for squalene antibodies even though the U.S. Department
of Defense denies putting the adjuvant MF59 in anthrax and other vaccines
given to soldiers.

The tragic consequences of experimenting on America's elderly population by
giving them annual flu vaccinations laced with MF59 will be that, when they
develop lupus, rheumatorid arthritis, asthma or die, it will be written off
as old age and unrelated to the squalene injected into their bodies via flu
Further, the proper direction of innovation can not always be determined in advance. Thus, the best option is to have many different approaches to research, just as there are different approaches to the technologies developed, for example, by cell phone manufacturers.

For Cowen to not understand the significant differences between government sponsored research versus free market research is a tragedy. It marks Cowen's further move into support of the state, and one wonders where it will stop.

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