Economics of Science – Page 9 – artdiamondblog.com

“Economics of Science” Published Today in The New Palgrave Dictionary of Economics (2nd ed.)

Source of image of the books: http://www.buy.com/prod/the-new-palgrave-dictionary-of-economics-second-edition/q/loc/106/204470936.html

Today (May 30, 2008) is the publication date of the second edition of The New Palgrave Dictionary of Economics, which includes my “Economics of Science” article. The article surveys the history and current status of research on the economics of science, and the relationship of the economics of science to the economics of technology.
For a much earlier, and much longer, take on some of the same issues, see “The Economics of Science.”

References to both articles:
Diamond, Arthur M., Jr. “Economics of Science.” In The New Palgrave Dictionary of Economics, 2nd Edition, edited by Steven N. Durlauf and Lawrence E.Blume. Basingstoke and New York: Palgrave Macmillan, 2008.
Diamond, Arthur M., Jr. “The Economics of Science.” Knowledge and Policy 9, no. 2 & 3 (1996): 6-49.

Government Post-Doc Funding Creates “Glut” of Scientists

The quotes below from a WSJ summary of a Nov. 16, 2007 The Chronicle of Higher Education article, suggests that we do not need to worry about the sometimes-alleged “shortage” of scientists and engineers:

(p. B14) The federal dollars pumped into university science departments has created more scientists and engineers than the market wants, said Michael S. Teitelbaum, vice president of Alfred P. Sloan Foundation, which sponsors research, at a hearing in Congress last week. Mr. Teitelbaum said the federal government should find a way to adjust how it funds university research so that university departments don’t end up using the extra money to add graduate students and postdoctoral fellows

For the full summary, see:
“The Informed Reader; Science; U.S. Faces a Glut (Really) of Scientists, Engineers.” The Wall Street Journal (Tues., November 13, 2007): B14.

Private Money Supports Quest for Dinosaur DNA

Source of graphic: the online version of the WSJ article quoted and cited below.

(p. A1) JORDAN, Mont. — Prospecting in Montana’s badlands, rock ax in hand, paleontologist Jack Horner picks up a piece of the jawbone of a dinosaur. He examines the splinter, then puts it back and moves on. It isn’t the kind of bone he is looking for.

Prof. Horner is searching for something that many scientists believe no longer exists: dinosaur bones that harbor blood cells, protein and, perhaps, even DNA.

"Most people looking for dinosaurs are looking for beautiful skeletons," he says. "We are looking for information."

. . .

Prof. Horner, a curator at the Museum of the Rockies in Bozeman, is among the world’s most influential and offbeat paleontologists. He pioneered studies of dinosaur parent-(p. A12)ing behavior, species variation and bone cells. He is dyslexic, a former Special Forces operative of the Vietnam War era, a MacArthur Foundation "genius" fellow, and a chaired professor of Montana State University who never finished a formal college degree.

"The lenses that people normally use to look at stuff are broken in Jack," says Mary Schweitzer, an assistant professor of paleontology at North Carolina State University, who has worked with him for years. "That’s what makes Jack such a good scientist. Every now and then, every field should get a renegade weirdo in it who challenges assumptions."

. . .

"The chances of finding any [dinosaur] DNA are pretty low," Prof. Horner acknowledges. "I am still hopeful."

In a field mostly outside the mainstream of federal research funding, Prof. Horner has a knack for attracting private grants. Star Wars producer George Lucas, Qualcomm co-founder Klein Gilhousen and Wade Dokken, a developer of Montana real estate, have contributed toward his research, the university says. Nathan Myhrvold, formerly chief technology officer at Microsoft Corp. and co-founder of Intellectual Ventures LLC, is helping to underwrite this season’s fieldwork.

This summer, in Montana’s Hell Creek Formation, Prof. Horner is searching the last landscape inhabited by dinosaurs. More than 65 million years ago, this plain was a wetland where herds of horned Triceratops watered. Today, it is an arid outwash of boulders, cactus and sage. The red and gray soil is littered with white shards of petrified wood that ring like bone china when tapped together and countless crumbs of dinosaur bone.

. . .

"As long as you are not bound by preconceived ideas of what you can find," Prof. Horner says, "there are an awful lot of things you can discover."

For the full story, see:

ROBERT LEE HOTZ. "Dinosaur Hunter Seeks More Than Just Bare Bones; Prof. Horner Searches For Traces of Blood, DNA; Lucky Break From T. Rex." The Wall Street Journal (Fri., August 24, 2007): A1 & A12.

(Note: ellipses added.)

At top, Prof. Horner; at bottom: "Sarah Keenan, 21, an undergraduate at the University of St. Andrews in Scotland who is working this summer for Prof. Horner, covers the fossilized triceratops frill in a protective jacket of plaster." Source of caption and photos: the online version of the WSJ article quoted and cited above.

Marconi Matters

Source of book image: http://palmaddict.typepad.com/photos/uncategorized/big_larsonthunderstruckdrm_1.jpg

Larson’s book plays off a murder mystery against Marconi as the innovator who brought us communication through the air.

I’m most enthused about hte Marconi part. It shows how he proceeded against the theorists of the day, whose theories told them that what he was trying to do was impossible. He was more entrepreneur, than scientist. And it turned out that it was a good thing that the theoretical scientists did not rule, as they might if all decisions about technology were made by the government.

What happened here is an example of what Taleb would call a Black Swan.

Source:

Larson, Erik. Thunderstruck. New York: Crown, 2006.

Scientists at Private Firms Publish More Research Than Expected

Dr. Terence Kealey is currently Vice-Chancellor at England’s only private university, the University of Buckingham. Source of photo: http://www.buckingham.ac.uk/publicity/academics/vc.html

Terence Kealey argues that science would be better done if it were all privately done, without government support. As you might expect, Kealey has not won any popularity contests among those receiving government support.

At the January American Economic Association (AEA) meetings in New Orleans, I heard a paper by Belenzon and Patacconi that presented evidence that scientists at private firms publish more research than Belenzon and Patacconi had expected to find.

Sounds like a bit of grist for Kealey’s mill?

The reference to the AEA paper is:

Belenzon, Sharon, and Andrea Patacconi. "Firm Size and Innovation: Evidence from European Panel Data." Presented at meetings of the American Economic Association. New Orleans, Jan., 4, 2008.

The reference to Kealey’s book is:

Kealey, Terence. The Economic Laws of Scientific Research. New York: St. Martin’s Press, 1996.

Academic Entrepreneurs in a Toxic Wasteland

The Berkeley Pit was once a copper mine, and now holds a lake of toxic waste. Source of photo: online version of the NYT article quoted and cited below.

Here are a few paragraphs from a fascinating story about a couple of people who seem to be practicing what Taleb is preaching in The Black Swan:

BUTTE, Mont. — Death sits on the east side of this city, a 40-billion-gallon pit filled with corrosive water the color of a scab. On the opposite side sits the small laboratory of Don and Andrea Stierle, whose stacks of plastic Petri dishes are smeared with organisms pulled from the pit. Early tests indicate that some of those organisms may help produce the next generation of cancer drugs.

From death’s soup, the Stierles hope to coax life.

“I love the idea of looking at toxic waste and finding something of value,” said Ms. Stierle, 52, a chemistry researcher at Montana Tech of the University of Montana.

For decades, scientists assumed that nothing could live in the Berkeley Pit, a hole 1,780 feet deep and a mile and a half wide that was one of the world’s largest copper mines until 1982, when the Atlantic Richfield Company suspended work there. The pit filled with water that turned as acidic as vinegar, laced with high concentrations of arsenic, aluminum, cadmium and zinc.

. . .

Mr. Stierle is a tenured professor at Montana Tech, but his wife gets paid only for teaching an occasional class or if there is a grant to finance her research. From 1996 to 2001 they applied for dozens of grants, but received only rejection letters. So they financed their own research, using personal savings and $12,000 in annual patent royalty payments. In 2001, they won a six-year, $800,000 grant from the United States Geological Survey.

“Their work is considered a very high-risk approach,” said Matthew D. Kane, a program director at the National Science Foundation. “It takes a long time to get funding, and some luck to find active compounds.”

Unlike scientists at large research universities, who commonly teach only one class a year and employ graduate students to run their laboratories, Mr. Stierle teaches four classes each semester at a college with 2,000 undergraduates and no major research presence.

. . .

The couple said they were negotiating privately with a pharmaceutical company to test some of the compounds they have discovered and possibly turn them into drugs. As they wait, they open another Mason jar filled with murky pit water, draw a sample and return to work.

“The pit very easily could have been a complete waste of time,” Mr. Stierle said. “We just had luck and worked our butts off. We take that first walk into the dark.”

For the full story, see:

CHRISTOPHER MAAG. "In the Battle Against Cancer, Researchers Find Hope in a Toxic Wasteland." The New York Times (Tues., October 9, 2007): A21.

(Note: ellipses added.)

In the photo immediately above, Don and Andrea Steirle work in their lab. The map to the left shows the location of the Berkeley Pit. Source of the photo and map: online version of the NYT article quoted and cited above.

Thales of Miletus Lives

Source of book image: http://store.43folders.com/books-3-1400063515-The_Black_Swan_The_Impact_of_the_Highly_Improbable

This is part entertaining rant and part serious epistemology. I’ve finished 9 of 19 chapters so far–almost all of my reading time spent smiling.

Historians of Greek philosophy used to tell the story of one of the first philosophers, Thales of Miletus, that he once was watching the stars, and fell into a well. The citizens of Miletus made fun of him being an impractical philosopher. To prove them wrong, he used his knowledge to corner the market in something, and made a fortune.

Not a very plausible story, but appealing to us philosophers. (Like Thales, we like to think we could all be rich, if we didn’t have higher goals.)

Well apparently Taleb is the real Thales. He wanted to be a philosopher, got rich on Wall Street using his epistemological insights, and is now using his wealth to finance his musings on whatever he cares to muse on.

Beautiful!

Here’s an amusing sentence that broadened my grin. (It was even more amusing, and profound, in context, but I don’t have time to type in the context for you.)

(p. 87) If you are a researcher, you will have to publish inconsequential articles in "prestigious" publications so that others say hello to you once in a while when you run into them at conferences.

Reference for the book:

Taleb, Nassim Nicholas. The Black Swan: The Impact of the Highly Improbable. New York: Random House, 2007.

“We’re Not Looking to Achieve Incremental Advances”

Genentech CEO Dr. Arthur D. Levinson. Source of image: online version of the WSJ article cited below.

(p. B1) WSJ: You have multiple blockbuster biotech drugs on the market and more on the way. In such an uncertain business, how do you manage scientists to achieve that kind of success?

Dr. Levinson: We are first and foremost committed to doing great science. If a drug can’t be the first in class or the best in class, we’re just not interested. We’re not looking to achieve incremental advances or extend patents or do X, Y, Z unless it is going to really matter for patients. That allows us to bring in phenomenal scientists and encourage them to do the basic and translational research.

We decided 15 years ago that we would be committing (p. B2) to oncology, which at the time for us was new. We are now the leading producer of anticancer drugs in the United States. We took a lot of risks. In many cases, those risks paid off. We are now also in immunology. Again, the role of management here is to set the broad direction and then hire absolutely the best scientists and bring them in and say, ‘Do your stuff.’

For the full interview, see:

MARILYN CHASE. The Wall Street Journal "How Genentech Wins At Blockbuster Drugs CEO to Critics of Prices: ‘Give Me a Break’." The Wall Street Journal (Tues., June 5, 2007): B1 & B2.

Source of graph: online version of the WSJ article cited above.

Nonprofits Often Fund Risky, but Useful, Research that is Shunned by Government

The following excerpt from a summary of a May 17th Nature article, has a message that complements what I found in a paper published a couple of years ago (see the reference at the bottom of this entry).

Do charities like the Bill & Melinda Gates Foundation produce better medical research than institutions supported by the government?

. . .

. . . , some scientists believe philanthropies make better use of that $5 billion than corporations or governments, says Nature’s Meredith Wadman. Many researchers have stories about nonprofits who rescued risky but useful projects that had been shunned by government-backed institutions. Charities can make decisions more quickly and can take bigger risks. Philanthropists also tend to closely monitor their investments and want the satisfaction of a mission accomplished.

For the full summary, see:

"Informed Reader; PHILANTHROPY; Do Charities Outdo Research By Federal-Backed Agencies?" The Wall Street Journal (May 18, 2007): B6.

(Note: ellipses added.)

The reference to the Nature article is:

Meredith Wadman. "Biomedical philanthropy: State of the donation." Nature 447, (May 17, 2007): 248 – 250.

My related paper is:

Diamond, Arthur M., Jr. "The Relative Success of Private Funders and Government Funders in Funding Important Science." The European Journal of Law and Economics 21, no. 2 (April 2006): 149-61.

Medical Cures Going First to the Dogs

One of the dogs cured of melanoma by a new vaccine. Source of photo: screen capture from NBC news report.

Melanoma has taken many human lives, including my father’s on April 15, 2000. Government licensing and regulations reduce competition in medicine and slow the pace of medical innovation. Animal health care is less regulated. Is it an accident that dogs are being cured for melanoma before humans?

Vet Philip Bergman remembers the first time he tried the vaccine in a dog.

"That was a dog that thankfully underwent complete disappearance of his tumor," says Bergman. "It was remarkable, obviously, to us."

Since then, more than 100 dogs have been treated, including Lawana Hart’s Lucky, who last June appeared to have only a few months to live.

For the full report, see:

Robert Bazell. "Treatment for canines with cancer raises hopes; Researchers encouraged by melanoma vaccine’s success on dogs." NBC Evening News Report; online print version updated: 6:36 p.m. CT Oct 26, 2006.

For the video version, go to:

http://video.msn.com/v/us/msnbc.htm?g=d7f603e0-86bb-44db-bad0-524ec79b02c8&f=00&fg=copy

Sulfa: First Antibiotic Was Pursued for Profit

Source of the book image: http://ec1.images-amazon.com/images/P/1400082137.01._SS500_SCLZZZZZZZ_V52133117_.jpg

Economists have debated whether patents mainly provide incentives, or obstacles, to innovation. In the story of the development of sulfa, the first powerful antibiotic, the desire for profit, through patents, was one motive that drove an important part of the development process; this, even though, in the end, sulfa turned out not to be patentable:

(p. P9) Mr. Hager follows a group of doctors into postwar German industry — specifically into the dye conglomerate IG Farben. These men, having witnessed horrible deaths by infection on the battlefield, picked up on Ehrlich’s hypothesis by trying to synthesize a dye that specifically stained and killed bacteria. Led by the physician-scientist Gerhard Domagk, they brought German know-how, regimentation and industry to the enterprise.

Year after year the team infected mice with streptococci, the bacteria responsible for so many deadly infections in humans. The researchers then treated the mice with various dyes but had to watch as thousands upon thousands of them died despite such treatment. Nothing seemed to work. The 1920s turned into the ’30s, and still Domagk and his team held to Ehrlich’s idea. There was simply no better idea around.

Then one of the old hands at IG Farben mentioned that he could get dyes to stick to wool and to fade less by attaching molecular side-chains containing sulfur to them. Maybe what worked for wool would work for bacteria by making the dye adhere to the bacteria long enough to kill it.

. . .

The IG Farben conglomerate expected huge profits from Prontosil. But then French scientists at the Pasteur Institute in Paris dashed these dreams. The German scientists — all of them Ehrlich disciples — thought that the power to cure infection rested in the dye, with the sulfa side-chain merely holding the killer dye to the bacteria. The scientists at the Pasteur Institute, though, showed that the sulfa side-chain alone worked against infection just as well as the Prontosil compound. In fact, the dye fraction of the compound was useless. You could have Ehrlich’s magic bullet without Ehrlich’s big idea! This bombshell rendered the German patents worthless. The life-saver "drug" turned out to be a simple, unpatentable chemical available in bulk everywhere.

For the full review, see:

PAUL MCHUGH. "BOOKS; Medicine’s First Miracle Drug." The Wall Street Journal (Sat., September 30, 2006): P9.

(Note: ellipsis added.)

The reference for the book is:

Thomas Hager. The Demon Under The Microscope. Harmony, 340 pages, $24.95