Capitalism and its proponents insist the market will take care of everything and everyone. If no one makes money from an activity such as research and development or social services, it should be discontinued.
Activities and institutions that are in the public interest go against the theology of capitalism and the “free” market (which is in fact highly regulated to advantage existing businesses). Many “conservatives” are interested in conserving the profits and advantages of existing industries (note the reaction to electric cars driven by investors in Big Oil).
Investors are especially critical of government services (social security, Medicare, FEMA, etc.) and those industries protected and encouraged by government. The goal of capitalists is to privatize everything so investors and owners can increase their wealth.
The argument for privatization is usually made in terms of efficiency but there are some strong counterexamples where government is far more efficient than business. For instance, it is estimated that the administration of Social Security (the largest government program) distributed $952B (2017 figure) but took only about .03 percent of the money to administer the program. Compare that to private equity fund administration costs of 1-2% and Mutual Funds that charge a minimum of .2 percent in management fees (and average much higher) for doing vastly less distribution work than is done by Social Security
George W. Bush spent much time and effort in his second term trying to privatize Social Security and that goal is still front and center in the Republican world today. Investors want Social Security to buy stock and bonds to pump up the value of their portfolios.
But in technology, “the market” has not led in terms of innovation, productivity, or efficiency. The most obvious example is the explosion of innovation that occurred at AT&T Bell Laboratories in the later half of the 20th century.
Bell Labs was a monopoly protected by the government from competition in the telecommunications industry which should have made it wasteful and inefficient. But its productivity far outstripped any and all private R&D companies.
In terms of basic research in electronics, Bell Labs was the Himalayan mountain range (40 peaks above 25,000 feet) and other for-profit companies were the Adirondacks with a highest peak being 5,300 feet.
In the early 20th century. Bell Labs had breakthroughs (US patents) for sound recording, “talkie” pictures (1926), stereophonic sound, raster TV tubes, transatlantic telephone service, quartz clocks, coaxial cables, SONAR, electronic telephone switching systems, information theory, and literally thousands of other innovations receiving US patents.
But the rapid, world-changing innovation period at Bell Labs began with the development of the transistor in 1947. This invention allowed for the computer and microchip revolution that followed. It has been accurately characterized as one of the greatest inventions of all time.
Other inventions following the transistor included the solar cells (generating electricity from sunlight) in1954 , computer generated music, the LASAR, MOS transistors (low power consumption electronics used in cell phones), the first communication satellite (TELSTAR), T1 digital multiplexing of voice/data signals, echo cancellation of international telephone signals, the LISP computer language, packet switched networks (similar to today’s Internet), the UNIX Computer Operating System, the C computer language, cellular telephone switching, 800 telephone service, Digital Signal Processing (widely used in cell phones), data sampling of voice signals (Pulse Code Modulation), and many thousands more.
Bells labs engineers obtained over 32,000 US patients and basically invented the modern digital world as we know it (Intel, Xerox, IBM, Motorola, Apple, and some university/government labs were also significant contributors).
But the Reagan era basically killed the greatest innovation engine in modern history and by far the most successful R&D institution which had “made America great”.
Republicans disliked AT&T and its research organization’s monopoly status for “market orientated” philosophical reasons. Though there were some technical reasons for the breakup due to the rapid convergence of digital telephone networks and computer networks, they seemed to have a death wish for America’s leadership in technology by “breaking up” and effectively killing its premiere research institution in the name of “competition.”
Bell Labs spread its innovations. After Bell Labs patents were issued, Bell Labs freely gave technical advice on the subject and low cost “rights to use” of the invention. They even called in college professors to educate them about new technology so that they could publish research papers and share it with other researchers and businesses.
This spawned a new electronic industry partly due to the low patent royalties which were similar to putting patents in the public domain. This is a similar model to the National Institute of Health which sponsors basic medical research that companies can modify and market to create their own intellectual property. They can then create new products and drugs that are profitable for them and of benefit to the community.
For-profit companies gained enormous benefits from this kind of model but at bottom it is a form of “socialism” where basic research and the associated intellectual property is used for the public good and freely shared rather than owned.
This model was shattered when Bell Labs lost its status as a protected monopoly in 1982 because of a lawsuit brought by the US government. The regional Bell Operating Companies were created as independent entities and Bell Labs was then required to compete in the for-profit marketplace with limited or no support from these companies. It became a shadow of its former self in the decades that followed. In 2006, the downsized company Bell Labs/Lucent was bought by Alcatel, a French telecommunications company.
Republicans are experts in shooting themselves in America’s collective foot as they try to create their version of an ideal “ownership society” of investors who gain wealth by buying and controlling stock, real estate, and intellectual property.
Seeking their capitalist ideal made America smaller and weaker and the havoc they created earlier continues today as they want to downsize the federal government and defund R&D organizations like the NIH, DARPA, and other government laboratories.
