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About the Author
Dan Greenberg is a longtime observer of science policy and politics. He is the author of "Science for Sale: The Perils, Rewards, and Delusions of Campus Capitalism" (University of Chicago Press), as well as other books, and has published widely in newspapers and popular and professional magazines.
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Recent Posts
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Obama Outlines Changes for Science Policy | Comment [4]
Featured Articles By the Author
Prizes Won't Beat the Energy Crunch ...
Partisan scoffing has inevitably greeted John McCain’s proposal for a $300-million prize for a super battery to propel cars.
It is kind of gimmicky, as Barack Obama says. The prize amount simply represents $1 per head of the American population, with no relation to the costs of research or the commercial, political, or social worth of success. Moreover, at present, there’s no lack of effort on battery research, given the bonanza that a winner will reap in the ordinary marketplace. Plenty of smart people and rich organizations have been working on the battery conundrum for years, with limited success in appealing the laws of physics.
On the other hand, history shows that prizes can fire up the creative neurons. Jim Watson was sniffing the Nobel Prize as he and Francis Crick doped out the double helix, a step ahead of Linus Pauling. In 1714, the British Longitude Act provided a prize of twenty-thousand pounds (about $1-million today) for development of an accurate seagoing clock for determining longitude. In intense competition, the winner was a carpenter turned clockmaker, and Britain was on its way to maritime supremacy.
The prize lure is highly unlikely to rouse from idleness any inventor or organization already in possession of a bright idea for creating a battery that can match the performance of today’s liquid fuels. If they knew how to do it, they’d be doing it. Assuming there are some promising ideas going unexploited, a prize at the end of the race is gratifying, but money for research is needed before the race starts. The well-heeled can handle it, but if newcomers are to get into the race, provision must be made for staking the needy. That brings us back to the present system of competitively awarded research grants and contracts from federal agencies.
The runaway rise in gasoline prices that we’re now experiencing is painful, but also instructive. With frugality now a necessity, fuel use is dropping, ridership on public transport is rising, and auto manufacturers are scrambling to produce better mileage.
McCain’s prize option can do no harm. It will delude no one into thinking that, at last, we’re confronting the energy menace. And — remote possibility — it might produce a winner.
Meanwhile, drawing a lesson from the present energy crunch, we can easily and simply produce a winner, without any prize. Raise the federal tax on gas by one dollar a year for each of the next five years, thus allowing ample warning for what’s to come. At $9 a gallon, super-efficient cars will pour off the assembly lines, public transit will flourish, traffic jams will subside, and environmental pollution will decline.
All that’s needed to attain that happy condition is political will. No prize is necessary.
(Image from Photobucket.com)
Posted at 01:12:43 PM on June 25, 2008 | All postings by Dan GreenbergComments
Commenting is closed for this article.
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Although I always admire a radical answer to tough questions. But, really this one is a bity too flip even for me. The toll on the lives of decent lower to middle income Americans in the time of transition from the when 9 bucks a gallon hits the pumps and when transportational-“ananda” Greenberg describes (frankly it will take a while) is not to be in any way ignored. People now are selling off property to buy gas so that they can get to work. I personally think that cost too high. I think that we need apply to a tougher hand with the oil magnates and tax them ever more heavily on the “gross” profits and profiteering. That might actulally bring this back onto a platform where Greenberg’s method could have its effect and not starve out the workforce of the good old USA.
— Dan Primozic · Jun 25, 04:09 PM · #
There’s no doubt in my mind that McCain’s idea is dumb. Just as there’s no doubt in my mind that he would be a terribly ineffective president, and almost as dangerous as B. Hussein would be if elected. But why is it that the liberal answer to all the world’s problems is to increase taxation?
— Joseph Spretnjak · Jun 27, 09:01 AM · #
Whilst I agree with Dan Primozic’s (#1) sentiments, —- And, appreciate your insight in stating “GROSS PROFITS & NOT PROFITS —- I would like to present a different take on the same.
Apropos, fundamental problem in my opine is rooted in the concept of taxing profits —- for the concept of determining profits (even gross profits), are nebulous at best. The actual profits of a corporation are in general not the same as the profits declared for tax purposes. Hence in my opine:
Businesses should be subjected to flat tax on sales revenues (the issue of gross or net sales merits consideration) with deductions limited to compensations paid to U.S. citizens/residents up to a maximum of say 5 times the median wage (This is not wage restriction —- Pay your CEO $100 million or a Billion, But ask not the taxpayer to subsidize it via a deduction) —- The issue of how a entity runs its business should be left to the business (it chooses to fly people first class or coach has no tax consequences, nor are the other taxpayers, inclusive of individual taxpayers compensating the former via deductions of costs allowed, —- the same runs the entire gambit —- rent space or own, spend lavishly or frugally on entertainment, advertising, sky boxes, etc. —- none of it is business decision based on taxation consequences (since no deductions are allowed). The aforesaid certainly has no bearing on Health, Safety, Environmental, Or Consumer Protection Laws (which remain applicable).
Additionally taxing of sales rather than profits —- eliminates the shell game of transfer pricing whereby the firm has a profit in say Ireland with a tax holiday, and a loss in the U.S. (Example Widget A is bought in China at $1 by Irish Subsidiary which packages it for $0.10, and sell it to the U.S. subsidiary for $2.10, the U.S. subsidiary then sells packaged Widget A for $1.50 and declares a loss $0.60, for U.S. taxes, and the Irish subsidiary makes a profit of $1.00 while paying no taxes based on agreement with Irish govt. or at a far lower rate based on Irish Taxes).
Furthermore the very notion that the real income of a transnational entity can be tracked within a national framework and thus taxed is a dream at best —- simply put it is analogous to saying to a FL cop that you have jurisdiction over the autos with FL plates and as such are responsible for all autos with FL plates —- What can the FL cop realistically do when the autos with FL plates drive in MA, CA, MS —- Local jurisdiction and laws apply, which vary
Now on the Topic On Hand:
Let us see $300 million prize is a bigger incentive then what can be gained financially in the marketplace —- At 10% the value of what Bill Gates created, such a product would be worth $5 Billion.
And, Oh! Yes, Lets Not Forget McCain’s New Found Interest In Oil Drlling —- To Lower Prices.
Drilling/Gas Price? —- Here we go again —- why do the people fall for the red-herrings? The prices are up at this juncture primarily due to speculation in the markets (a benefit of deregulated markets), not supply shortages —- this is no different than the Dotcom speculative bubble, or the housing/credit speculation, or the 17th Century (or was it 18th?) Tulips in Holland, or … (Speculation also entails speculation of a falling dollar, and its impact on oil pricing)
The Oil companies don’t plan to drill off the coast-line or in Alaska any time soon —- what they want is the drilling rights, period. This gives them more reserves to sit on. If they were interested in drilling, domestically, they would be doing so already on the 83 million plus acres for which they already have the drilling rights (the oil companies are in actuality drilling on less than 20% of the total land which is currently available for drilling in the Gulf of Mexico).
Furthermore, the actual, refined oil resulting from the drilling rights secured today, would be available around the year 2020. Wow, that would send today’s gasoline prices into a downward spiral, Right? Repeat The Oil Companies primary objective is securing drilling rights not drilling. —- ergo, this is; simply put – a giant land-grab attempt by the oil companies, aided & abetted by the lobbyist/politicians
— zahid · Jun 27, 09:59 AM · #
Why is it that the conservative answer to all the world’s problems is to lessen taxation…especially on the rich, to give them “incentives” to make the world a better place by giving the kleptocracy even freer reign?
P.S. The “invisible hand” of the marketplace usually has its middle finger extended to the working class.
— Mr. Wiki · Jun 27, 10:01 AM · #
Dan, you’re right on the mark this time. We should have raised taxes on energy consumption long ago.
— greenblue · Jun 27, 10:21 AM · #
Just a prediction: The Israelis will develop a cheap method of producing energy from an unlimited and portable supply source. The downside will be its inability to produce as many BTUs as fossil and nuclear fuels. It will require massive steam turbine electrical generating plants (operated by the US Department of Energy) that will be built in the western deserts and will power a national grid. One of these desert locations will become the site of the largest city in the US. With this abundant electrical energy, everything from cars to barbeques will run on electricity. Israel’s patented technology will make it the richest country in the world by deriving a trillionth of a cent from every KWH generated.
— Rezel T. Orloff · Jun 27, 11:19 AM · #
To: Rezel T. Orloff (#6):
Interesting “Desert Location,” as population growth —- wonder who will develop the technology to convert “Whatever It Maybe” to the “Needed Water,” —- For, this “Largest U.S. Desret City” will need “Water.”
Guess may not be an issue —- one of the then presidential candidates will probabily propose a trillion dollar prize —- for what better isolution mechanism can there be to address such issues?
— zahid · Jun 27, 01:01 PM · #
In the past hour gasoline at the pumps rose 30 cents in Columbus, Ohio. Let the free market control prices? Well, this is a market out of control and on steroids. Major contributors? Not Big Oil, not the Saudis… but universities and university retirement funds. A lot of their money moved out of the stock market and into the commodities futures market – specifically the oil market. But they are not buying and trading futures. They are sitting on their holdings and creating the big demand that is driving the prices way up. We have met the enemy, and it is us.
— Robert · Jun 27, 03:31 PM · #