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Briggs, Vernon M., Jr.

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Briggs Volume III Briggs Papers and Speeches 
April 1986 
Science, Technology and U.S. Economic Policy 
Vernon M. Briggs Jr. 
vmb2@cornell.edu 
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Science, Technology and U.S. Economic Policy 
Keywords 
Science, technology, economic, industrial, government, policy, development, public 
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Volume 3 - Paper #44 
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#. ftjt
Keynote Address
Phi Kappa Phi Banquet
New Mexico State University
Las Cruces. N.M.
April 9. 1986
Science. Technology and U.S. Economic Policy
Vernon M. Briggs. Jr.
Cornell University
As the result of the confluence of an unlikely combination of
technical, intellectual, and political forces, the United States was "born
running" with the Industrial Revolution. In the eventful year of 1776,
James Watt finally perfected an efficient and workable steam engine that
would revolutionize the means of production; Adam Smith published his famous
treatise on The Nature and Causes of the Wealth of Nations that outlined
the incentives for production and the potential for economic growth that
a competitive and unrestricted market system could provide; and the
Declaration of Independence was signed and implemented in Philadelphia
which spawned a new nation that would soon link its future course of
economic development to the evolution of technology and the practice of
domestic (but not international) competition. Other nations, of course,
were also affected by these happenings. Britain in particular jumped off
to a faster start down the path of industrialization but it has been the
United States that has emerged over the long run to date as the
quintessential "industrial state." Other industrial leaders of today took
a longer time to shed their pre-industrial traditions. Japan is only now
making a mighty challenge for preeminence in this race after centuries
of delay.
It is of interest to note, however, that the momentum of the Industrial
2Revolution of the late-18th Century drew very little of its strength from
science. As has been frequently noted, science was far more indebted to
the perfection of the steam engine than the steam engine was to science.
Moreover, it is also likely that the interest that British scientists
quickly took in industrial questions during this formative period was more
a "result" of British industrial prominence than a "cause" of that
leadership.
As for economics, it is essential to see that Smith was writing before
the Industrial Revolution had taken hold. It was an era in which science
had no particular contribution to make to economic development or growth.
Science required little of society's inputs and contributed little to its
output. It is in this context that Smith's advocacy of laissez fa ire
economic policies must be evaluated. Smith's view that each individual
should be free to pursue his economic self-interest in a purely competitive
market environment that is guided by an "invisible hand" was a pre-
industrial concept. The same can be said for his policy conclusion that
inefficiency and distortions were caused entirely by governmental
interference with the natural workings of economic laws. Smith never
envisioned the rise of the private corporation or the coming of trade unions
or the emergence of economies that would be highly capitalized and dependent
upon science-based technologies. In a real sense, his writings were
obsolete at the time they were written. As I will discuss later, Smithian
economics has enjoyed great popularity in U.S. economics'academy but his
ideas were not the economic principles that were actually practiced during
the formative years of the nation's economic development. With regard
to its economic policy legacy, the nation owes a great intellectual debt
3to Alexander Hamilton and Henry Clay for setting the governmental
interventionist course early in the nation's history that has subsequently
been followed.
To return to the major theme, it is important to note that science
and technology in Western Societies in general and the United States in
particular developed along entirely separate streams. At times their
evolutionary paths crossed and at times they received support from each
other. But it was not until the last quarter of the Nineteenth Century
that the development of science and technology became intermeshed. It
was also during the last quarter of the 19th Century that the link of both
science and technology to economics was established. It was Thomas A.
Edison who first put together a team of researchers to study what was needed
to produce an electric light and power system. When he opened the first
electric power station in the world in New York City in 1882, he and his
associates had developed every aspect of the necessary system -- from the
generators, the cables, plugs, safety fuses to the incandescent lamp bulb.
Edison was an inventor -- a technologist with little formal training in
science. But through extensive self-study of the scientific literature,
he was able to exploit discoveries that others had made in pure science
for practical and commercial applications on a scale never before known
in the annals of technology. He set the research pattern of teamwork that
has now become common in the last half of the 20th Century.
But it was in the natural sciences where the importance and relevance
of science to daily life was most clearly demonstrated and where economics
and science first became intertwined. The circumstances were provided
by the publication of Charles Darwin's Origin of Species (1859) and, later,
4The Decent of Man (1871). Darwin attributed his reading for "amusement"
of the classic study by the economist Thomas Malthus of the constant
struggle of society to feed a growing population for cystalizing his
thoughts. The result was his theory of natural selection as the creative
force of evolution. The reaction to Darwin triggered an unprecedented
debate in the 1880s and 1890 over the relationship of science and economics
to each other and to public policy formulation. So pervasive was the
dialogue that the historian Henry Bamford Parkes has called it "the most
intellectually fruitful period in the whole of American history."
Darwinism teaches that evolution has no particular purpose. Evolution
means only that organisms struggle to pass on their genes to future
generations. There is no harmony or order implied by the process. It
is, as the biologist Stephen Jay Gould of Harvard has recently written,
"the economy of Adam Smith transferred to nature." Evolution is not the
process of executing the unfit nor does it necessarily mean that there
is any higher or better results that spring from the adaptation process.
Surviving organisms in science are simply those that are better able to
adapt to their local environment.
Social scientists, however, picked up Darwin's teaching and applied
them to the economic world in a context that was completely counter to
Darwin's message. It was the English sociologist Herbert Spencer who coined
the phrase "survival of the fittest" -- not Darwin. It was Spencer and
his American disciple, the political scientist William Graham Sumner, who
applied Darwin's principles to an understanding of the social and economic
order of society. They equated progress with struggle as a way to interpret
human history. Competition between individuals and business enterprises
5could provide economic advancement for society. Any interference by
government, they argued, would hinder this natural process. This
interpretation of the economic world also had a dire political implication
as well. It meant, if true, that all men were not created equal despite
what the Declaration of Independence proclaimed. Sumner, in fact, once
called democracy "the pet superstition of the age." The conclusion that
they drew was that any effort by the government to interfere in the economy
by trying to regulate business practices or to help the poor to improve
health and safety for workers was positively harmful. Sumner went so far
as to complain that such reform policies would result only in the "survival
of the unfit." Hence, Darwinism was used as a means of support for laissez
faire economic principles. Business and conservative political groups
revered these views and their proponents because they glorified their
personal conduct and pursuit of self-interest. But when Sumner later
extended his views to their logical conclusion to include international
competition by actively promoting free trade, many of these same
conservative interest groups tried to have him fired from the Yale faculty.
The U.S. economy since its founding had been built behind the protective
walls of high tariffs and it continued to adhere to such policies until
well into the 1960s.
The point is that the concept of evolution in science does not mean
progress. For if "survival of the fittest" actually meant that only the
fittest survive, it would be a tautology. A statement that survivors are
the fittest because only the fittest survive does not say anything. But
this is not what Darwin said. His theory of natural selection is simply
a statement of local adaptation to a changing environment. There is
6absolutely no perfecting principle involved or any implication that nature
provides a mechanism for natural progress if left alone. Evolution only
means that those organisms which can adapt to changing environmental
conditions are the ones that survive. Those that cannot adapt, perish.
It does not mean that those that survive are in any way qualitatively
better. In fact, biologists in Darwin's time and today have shown
repeatedly that artificial interventions by man into the developmental
processes of organisms can frequently produce better results than if left
to natural development alone. In the world of science, there is no belief
in any automatic benefits that can be derived from laissez faire principles.
Unfortunately, the damage to economic thinking had already been done.
Adam Smith's pre-industrial concepts of the alleged benefits of a
competitive world with its laissez faire and free trade policy conclusions
had been wedded intellectually to a misinterpretation of Darwin's teachings.
An unregulated economy guided by the "invisible hand" of the market place
was linked to a notion that adherence to such policies would assure economic
progress. Any interventions by government to regulate business practices,
or to protect workers, or to assure a more equitable distribution of income
were alleged to be not only counterproductive but actually harmful to
progress.
Yet it is exactly this false notion that continues to be perpetuated
in the way in which economics is taught and public policy options are
discussed in the United States. Its lasting effects are simply devastating
to any quest for actual understanding of the domestic and international
economy in which we currently live in the last years of the 20th Century.
As the social critic Robert Kuttner recently wrote:
7The modern economics profession is surprisingly aloof from
the institutions of economic life. As their methods have become
more abstract, economists have disdained study of the gritty
details of production, the organization of markets and the march
of technology. Rather it is simply assumed that Henry Ford's
assembly line of the 1920 or the rise of computerized production
in the 1980s are natural processes that reflect the changing
tastes of the sovereign consumer and the survival of the fittest
entrepreneur.
Such notions as to how technology and science have reshaped the economy
of our nation are, of course, patently false. From the construction of
the original vacuum tube computer; to the creation of the transistor; to
the perfection of silicon logic; to the current experimentation with gallium
arsenide as the next step in electronic revolution, the development of
the computer has been financed by massive governmental research support
at every step. As matters now stand, more than one out of every two dollars
spent on research and development in the United States are provided by
the federal government. The recognition of the essential role of research
and development to economic development along with the corollary that the
federal government must underwrite most of these costs was first recognized
during World War I. Support for this view accelerated during World War
II and, since that time, it has become one of the principle driving forces
of the economy. It is the key to understanding the economic transformation
that is occurring within our life time. Science has become the principle
source of invention. Its imprint is to be found in virtually every aspect
of our lives -- whether it be in food and fiber production, computerized
manufacturing, nuclear power generation, laser based defense systems, space
exploration, information processing, toxic waste management, the content
of educational instruction, or genetic engineeri~g to mention only a few
of its contemporary ramifications. The United States has become a science-
8based, technologically-oriented society. Many other nations
-- both our
friends and adversaries -- in the world community have put their economies
on the same track. The industrial and occupational structures which
constitute the substance of our economy are being rapidly transformed and
the ensuing alterations are not the product of responses to changing
consumer tastes or entrepreneurial competition between little business
enterprises. In today's economic environment, inventions and discoveries
come largely from the scientific laboratories of our universities,
corporations, and governmental institutions. In these laboratories,
research is organized and systematized by scientists who usually have pre-
determined objectives in mind. Most of the work is subsidized by the highly
"visible hand" of public funds although the support provided by private
sources is also significant. As a consequence, we have had a veritable
explosion of knowledge that has triggered a race between business firms
both within our country and those of other nations to apply this knowledge.
The scale of the enterprises and the degree of governmental involvement
in the economy of today are such that Adam Smith must be having fits of
convulsions in his grave. The world of Adam Smith is not descriptive of
the economy of today nor is it a vision of an economy that many of us would
long to be a part of.
The issue is not really whether or not the nation adheres to laissez
faire principles. Obviously it does not. Each daily session of Congress
since the nation was founded has amply proven that the fully free market
economy is an illusion. Subsidies, tariff protections, bailouts, and tax
loopholes to various business enterprises are the essence of the political
process. As Michael Reich of Berkeley has succinctly pointed-out, "because
9neither government nor business can admit the intimacy of the relationship,
both sides treat it as an illicit affair, hiding it from public view and
thereby thwarting any attempt to give institutional legitimacy to those
aspects of the relationship that promote adjustment."
Nonetheless, by going through the motions that somehow the Smithian
competitive world is an ideal world, it was possible to continue to teach
economic principles that treat science and technology as exogenous variables
that do not impinge upon the way the economy functions. This is decidedly
not a depiction of reality today. As Nathan Rosenberg of Stanford has
pointedly observed, "far from being exogenous forces to the economic arena,
the content and direction of the scientific enterprise are heavily shaped
by technological considerations that are, in turn, deeply embedded in the
structure of industrial societies." Far too much attention is paid in
the economics profession to the consequences of economic change and far
too little to understanding the determining forces. It is time for a change
in perspective. The formation of contemporary economic policy is too
important to be based on reminiscences of a past that probably never was.
Likewise, the principles of laissez faire are still spouted by
opportunistic politicians who believe they can be elected by mouthing such
cliches to an uninformed public. As a result, the ability to discuss and
to implement the measures that are urgently needed to facilitate the
structural adjustments of the economy and its labor force to rapid
technological change are seriously hampered. The economic policy agenda
should be focussed upon the formulation of a national industrial policy
with its commitment to national economic planning; increasing public support
for research and development expenditures; establishing a tax system that
10
rewards saving for investment and not borrowing for consumption; providing
quality education for our future workers and citizens; establishing a
national system of re-training for workers who are the accidental victims
of rapidly changing technology; the adoption of a national relocation policy
to facilitate the movement of workers from surplus to shortage regions;
and a commitment to the creation of public service jobs for those workers
who, for whatever reason, cannot be retrained, reeducated, or relocated
to find employment in these changing times.
Here in the 1980s and 1990s it is essential that there be another
intellectual debate as there was a century ago on the subject of economics
and science. In the process, it can be hoped that this time the rhetoric
of laissez faire can be abandoned and that economic policy making can be
brought into step with the dynamic forces of science and technology that
are shaping our economic destiny.


Science, Technology and U.S. Economic Policy

Briggs, Vernon M. Jr.

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