The science of economics?  

I don't know if Scientific American generally thinks of economics as a science, but they don't seem to have very scientific standards when it comes to their economics contributions. They've showcased Terrence Healey, a biochemist and administrator at the University of Buckingham who apparently dabbles in economics, in an interview about the economics of science funding.

He has this to say about the growth of the Japanese economy:

I very rapidly discovered that, of all the lead industrial countries, Japan--the country investing least in science--was growing fastest. Japanese science grew spectacularly under laissez-faire. Its science was actually purer than that of the U.K. or the U.S. The countries with the next least investment were France and Germany, and were growing next fastest. And the countries with the maximum investment were the U.S., Canada and U.K., all of which were doing very badly at the time.

This is about as far from a scientific argument as one could imagine. There's an incredible number of inputs to GDP growth, and I can't imagine that government-funded scientific reasearch, as a tiny, tiny fraction of GDP, has a controlling influence on growth. Then there's the problem of whether scientific research conducted today would be relevant to growth today or growth tomorrow. And then there's the whole issue of scientific research as a public good, which he apparently has left for an upcoming book.

George Solow showed that in the long run, technological change is the only source of growth for an economy. But that doesn't mean that all growth is related to scientific research, especially in the rapidly growing economies of East Asia. Japan or Korea's impressive growth may have had something to do with technical change, but the kinds of technologies we're talking about here are not new science. Rather, they're things like better infrastructure and human capital, and the already existing technlogies that come with those things. For countries like the UK and US (and by now, the Japanese as well), introducing better education or infrastructure alone may not produce the same miracle results, because it's no longer possible to pull in technical changes that have worked elsewhere. Finding better technologies instead becomes a matter for scientists.

Ill be the first to concede that in free markets (as long as they have decent patent laws and enforcement) private firms have incentives to provide some new science. But no matter how you look at it, certain kinds of research will be left up to the government. The first example that comes to mind is the internet, which started out as a military and scientific research platform. Ultimately, we have seen and will continue to see huge productivity growth, but a single firm, or even a coalition, would've had no reason to build it.

MORE: Here's an unforgiving review of Kealey's first book, also via Scientific American.