Arnold Kling

Science and Markets

Arnold Kling, Great Questions of Economics
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An interview with Paul Romer by Reason Magazine's Ronald Bailey discusses economic growth, science, and markets. Romer is a Stanford economist and a proponent of "new growth theory," which emphasizes the accumulation and application of knowledge as a source of economic growth. One issue that Romer discusses in the interview is the tension between markets and science

To the extent that you're using the market system to refine and bring ideas into practical application, we have to create some kind of control over the idea. That could be through patents. It could be through copyright. It might even be through secrecy...

But there are other stages in the development of ideas. Think about the basic science that led to the discovery of the structure of DNA. There are some kinds of ideas where, once those ideas are uncovered, you'd like to make them as broadly available as possible, so everybody in the world can put them to good use. There we find it efficient to give those ideas away for free and encourage everybody to use them. If you're going to be giving things away for free, you're going to have to find some system to finance them, and that's where government support typically comes in.

In the next century we're going to be moving back and forth, experimenting with where to draw the line between institutions of science and institutions of the market.

Or, as I like to put it, "A central economic paradox of our time is that information wants to be free, but people need to get paid."

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