Wednesday, February 01, 2006

Investing In Tomorrow

In the State of the Union Address Bush emphasized a need to reduce American reliance on foreign oil. He rightly pointed out that such a reduction should emphasize new technology, but the problem is that special interests and the politically powerful capture government interest in ways that are inefficient.

So how does government increase innovation in what is arguably a legitimate national interest without subsidizing ineffective solutions?

What the X-Prize has done for space travel, its founder, Peter Diamandis, wants it to do for automobiles. Diamandis asks why we still drive cars that can only do 30 miles per gallon and why we are clinging to the internal combustion engine. High-profile contests like the X-Prize not only draw attention to the issues at hand, but also show the private sector that there is a strong desire—essentially around the world—to accomplish these goals.

If government truly needs to invest in technology – whether it is environment, energy, medicine, whatever – this is how it should be done.

Define a goal – say a device that can “scrub” CO2 from the atmosphere that costs $X to clean X tons of CO2 and then put a purse up for the person or entity that can demonstrate the means first. If you put a prize out there of $1 billion dollars every person in the world with an ounce of scientific knowledge would be wetting themselves to solve the problem.

The beauty of such a solution is that government can’t use political power to favor the powerful over those without access, government can’t use ulterior motives to buy off their electorate at election time (like funding ethanol to keep farmers happy).

The current shortfall of the X-Prize is that a million dollars is serious money for amateur scientists and academics, it simply isn’t enough for corporations to weigh in. Leaving all of that intellectual capital out of the game means that some serious gains are being left on the table.

Honest people can disagree with what government’s role in technology should be, but if we are to try to push technological solutions for society’s ills then it should be done in a way to keep politicians’ greedy hands off the money.

Update: Professor Bainbridge provides more anecdotal evidence on how special interests hold Congress captive in the search for alternative fuels.

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