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Saturday, March 21, 2009


The Ernst & Young ITEM Club, which bases its forecasts on the UK finance ministry's economic model, said Britain's budget deficit would be 12.6 percent of GDP, far higher than Chancellor Alistair Darling had predicted.

In his pre-budget report in November, Darling announced a 20 billion pound stimulus and forecast that borrowing would rise to 118 billion pounds, or 8 percent of GDP, next year.

The report said public finances were deteriorating at an "alarming rate" with the recession easting into tax revenues and a surge in unemployment leading to a sharp increase in benefits payments...

That meant Darling had few options for injecting extra resources to jumpstart the economy, it added.

Official figures on Thursday showed Britain posted its record biggest February budget deficit on record with public sector net borrowing almost 9 billion pounds, more than eight times higher than a year ago.

Ernst & Young said it now predicted that total borrowing over the next five years will be 270 billion pounds higher than Darling's current forecasts, the report said.
"The Chancellor must provide some credible forecasts for the public finances and present an unambiguous medium-term plan for restoring them to health," Spencer said.

"This is essential to maintaining confidence in the government bond market."

Borrowing 12.5% of GNP every year is quite obviously unsustainable, particularly when the productive, non-governmental, part of the economy which has to pay it back is under 50%. By comparison Brown's "prudence" used to be that we should not allow government borrowing to exceed 40% of GNP - but that 40% was all the money ever borrowed & not repaid over 2 centuries.

At £180 billion borrowing is getting dangerously close to the £200 billion increase in the, after inflation, increase in the size of government spending under Labour. To get the economy back on an even keel the Conservatives are going to have to cut almost all of that spending & even so that only gets us back to solvent.

That leaves the only option, if we want to make the economy actually work, being to ALSO cut back the Luddite regulations that make our economy uncompetitive. I previously said that we can easily get out of recession* & that this is a wholly unnecessary recession caused by overgovernment. It still is but getting out of this hole is becoming more difficult with each new day & each new dollar borrowed.

Alastair Darling's whole approach of borrowing recklessly to smooth out the recession has clearly & unambiguously led us to the brink of disaster. In the November budgetette he said

"I, too, am forecasting that output will continue to fall in the UK, for the first two quarters of next year.

But then, because of decisions taken in this Pre-Budget Report, I expect it to start to recover.

GDP growth for 2009 is forecast to be between minus ¾ per cent and minus 1 ¼ per cent."

We have already declined 2% since then.

Which would have allowed us to stop borrowing before we were to maxed out. Nobody now believes we are going to end the recession by the end of the 2nd quarter (ie June 30th 2009) which means borrowing & our entire finances are out of control.

The Conservatives need to say now that every day this government stays is another day nearer disaster. That if Labour got back in they would undoubtedly bankrupt the country & that they actually intend to do something seriously different. That an awful lot of Labour's sacred cows (massive bureaucracy, feather bedding of civil servants, putting PCness first & economic success last, windmillery) are going to have to go. We simply cannot afford to keep them no matter how much kicking & squealing there is. We cannot avoid reality for the sake of peace anymore.

There is no technical reason why our economy should not be growing as fast as China's. Technological progress continues at a fantastic rate. However under the present government, or one very similar, there is no possibility of it.

* Though I sent copies of that article to party leaders & letters based on it to all newspapers only Nick Clegg's office replied - saying how nice it was to get novel ideas from outside the party & how he was passing it on to Vince - nonetheless nobody has found any fault with it so they cannot subsequently plead ignorance of how to get out of this purely political mess.

Friday, March 20, 2009


I was impressed by this comparison with Gordon Brown's repeated insistence that it is better of him to be doing something to end the recession than of the Conservatives alleged refusal to do anything. In fact they aren't that much better.

The problem is this: It’s hard to claim credit for the vitality of the market. Politicians claim credit for DOING things.

Imagine you had a six-year-old daughter, and that she has a high fever. It’s 1820, and we don’t understand germs or fevers very well. You call the doctor, and the doctor comes to the house. “Please, do something. DO SOMETHING, and help my daughter,” you say.

The doctor takes out a lancet, and makes a small incision in your daughter’s wrist. The theory was that the fever was in the blood itself, and “bleeding” was the only treatment that people in 1820 knew.

It doesn’t work. Your daughter’s fever is still very high. So, you tell the doctor, “DO SOMETHING! You are the doctor.”

The doctor bleeds her some more. And she dies.

And the next day you blame the doctor for not bleeding her MORE and SOONER. But bleeding was the wrong thing to do.

This stimulus is the wrong thing to do. The fact that the first round didn’t work leads me to think we need to stop! But all the desperate economic parents out there say, DO IT MORE! DO IT LONGER! DO IT FAST!
Bloodletting as medicinal practice lasted from at least ancient Mesopotamian times to the mid 19thC, at which point modern medicine started developing procedures that actually worked. Not a cheerful precedent.

Thursday, March 19, 2009


Seven years after Osama bin Laden's last verifiable appearance among the living, there is more evidence for Elvis's presence among us than for his. Hence there is reason to ask whether the paradigm of Osama bin Laden as terrorism's deus ex machina and of al Qaeda as the prototype of terrorism may be an artifact of our Best and Brightest's imagination, and whether investment in this paradigm has kept our national security establishment from thinking seriously about our troubles' sources.

The main problem with that theory is that it would be awful nice if it was true. We humans are pretty good at self deception. The strongest evidence is:

Nor does the tapes' Osama sound like Osama. In 2007 Switzerland's Dalle Molle Institute for Artificial Intelligence, which does computer voice recognition for bank security, compared the voices on 15 undisputed recordings of Osama with the voices on 15 subsequent ones attributed to Osama, to which they added two by native Arab speakers who had trained to imitate him and were reading his writings. All of the purported Osama recordings (with one falling into a gray area) differed clearly from one another as well as from the genuine ones.

Also Since October 2001, when Al Jazeera's Tayseer Alouni interviewed him, no reputable person reports having seen him—not even after multiple-blind journeys through intermediaries.

There are also numerous reports of his death, though I grant 1 would do On December 26, 2001, Fox News interviewed a Taliban source who claimed that he had attended Osama's funeral, along with some 30 associates. The cause of death, he said, had been pulmonary infection. The New York Times on July 11, 2002, reported the consensus of a story widespread in Pakistan that Osama had succumbed the previous year to his long-standing nephritis. Then, Benazir Bhutto—as well connected as anyone with sources of information on the Afghan-Pakistani border—mentioned casually in a BBC interview that Osama had been murdered by his associates. Murder is as likely as natural death. Osama's deputy, Ayman al-Zawahiri, is said to have murdered his own predecessor, Abdullah Azzam, Osama's original mentor. Also, because Osama's capture by the Americans would have endangered everyone with whom he had ever associated, any and all intelligence services who had ever worked with him had an interest in his death.

There is also the fact that he had been on kidney dialysis & whatever sacrifices he might be will to make to live in a cave in northern Pakistan that is not something he could do without.

Confirmation of this - "According to French newspaper Le Figaro, Bin Laden was on a kidney dialysis machine after he had one shipped to his base in Kandahar Afghanistan in 2000, and when the CIA personally visited him in a Dubai hospital. Other accounts suggest he was also suffering from Hepatitis C at the time and had only two years left to live."

The main article then goes on to damn the CIA for, well, incompetence. Having continuously got its assessments wrong, confirming the prejudgements of its political masters:

The CIA had as much basis for deeming Osama the world's terror master "game, set, and match" in 2001 as it had in 2003 for verifying as a "slam dunk" the presence of weapons of mass destruction in Iraq, and as it had in 2007 for determining that Iran had stopped its nuclear weapons program. Mutatis mutandis, it was on such bases that the CIA determined in 1962 that the Soviets would not put missiles in Cuba; that the CIA was certain from 1963 to 1978 that the USSR would not build the first strike missile force that it was building before its very eyes; that the CIA convinced Bush 41 that the Soviet Union was not falling apart and that he should help hold it together; that the CIA assured the U.S. government in 1990 that Iraq would not invade Kuwait, and in 1996 that neither India nor Pakistan would test nuclear weapons. In these and countless other instances, the CIA has provided the US government and the media with authoritative bases for denying realities over which America was tripping.

The force of the CIA's judgments, its authority, has always come from the congruence between its prejudices and those of America's ruling class. When you tell people what they want to hear, you don't have to be too careful about premises, facts, and conclusions.

I doubt if our own intelligence services are better. Captain Scarlet gave Blair the advice that Iraqui WMDS existed & posed a real threat & after this was proven a lie he got promoted.

I think the CIA & SIS should be broken up & the different sections get the chance to report independently. It would quickly become clear which parts are reliable. Britain's GCHQ has long been a world leader at interception & deciphering & their ability reflected on the whole British service - to the considerable benefit of Kim Philby who had been hired to run Britain's anti-Soviet Section by people of considerably leaser intellect.

Before that, however, the US should ask some friendly but independent & competent security service to do a review of ALL the information available on bin Laden & declare whether his is likely to be dead or alive. Britain, Canada & Australia's intelligence services are too closely linked to the US's. I would suggest Mossad, Japan's, South Korea's, Taiwan's or Singapore's.

The whole purpose of our war in Afghanistan is to convince the world that things like 9/11 will be avenged. If bin Laden is dead it has been. "Nation building" was not why we went in & if the natives aren't happy to have us do so it is not a reason to stay. We could simply recognise the non-Pathan parts run by the Northern alliance as separately independent & maintain enough air power to flatten poppy fields & anybody threatening the north & leave it.

History records many leaders who disappeared & of whom "pretenders" kept appearing.

Henry VII had Lambert Simnel & Perkin Warbeck who, for years, pretended to be the princes in the Tower.

At least 10 women claimed to be the Duchess Anastasia, last of the Romanovs.

In the early 17thC Russia was plagued by number of "false Dimitris" - the son of Ivan the Terrible having died in what was probably an assassination.

The voyages of the Chinese admiral Cheng Ho in the early 1400s started because the last prince of the previous royal family had escaped by sea southwards. Though they discovered Africa & brought home a giraffe & may even have reached the Atlantic they never found him - nor did anybody else.

The soul counter example is that the Caliphate of Spain was founded by Abd al-Rahman the alleged grandson of the Baghdad Caliph last seen fleeing the city. He may well have been the real deal. Nonetheless the record of missing leaders returning leans heavily towards them not actually doing so.

I think the strong probability is that bin Laden is dead. If so we should stop spending lives & treasure trying to defeat him.

Here is an article from Spiked which does not intentionally suggest he is dead but points to the way "his" current agenda is different from his initial one & looks very much like a mish mash of of currently PC western influenced views of what a Muslim agenda should be - this would certainly fit if it that is what it is, put together by a committee using his name. The very inadvertence of that observation makes it more credible.

Wednesday, March 18, 2009


Many years ago I read a copy (my father's - he was a prominent member of the Liberal Party back when liberals were still allowed in) of Milton Friedman's book Free to Choose & though not a Thatcherite I did recognise that he was making many valid points about the inherent inefficiencies that entrenched government bureaucracies lead to. I still think anybody interested in traditional liberal values should read it.

His solution to overgovernment was a set of constitutional amendments limiting the power of government. The best known of them was the balanced budget amendment. I must admit to being astonished that I could find only 1 link on the net which gives it. It certainly still deserves far wider consideration. You can skip everything about the highlighted bit - the rest is just to stop the lawyers weaseling around it.

A PROPOSED CONSTITUTIONAL AMENDMENT TO LIMIT FEDERAL SPENDING 3±Prepared by the Federal Amendment Drafting CommitteeW. C. Stubblebine, ChairmanConvened by The National Tax Limitation CommitteeWm. F. Rickenbacker, Chairman; Lewis K. Uhler, President

Section 1. To protect the people against excessive governmental burdens and to promote sound fiscal and monetary policies, total outlays of the Government of the United States shall be limited.

(a) Total outlays in any fiscal year shall not increase by a percentage greater than the percentage increase in nominal gross national product in the last calendar year ending prior to the beginning of said fiscal year. Total outlays shall include budget and off-budget outlays, and exclude redemptions of the public debt and emergency outlays.

(b) If inflation for the last calendar year ending prior to the beginning of any fiscal year is more than three per cent, the permissible percentage increase in total outlays for that fiscal year shall be reduced by one-fourth of the excess of inflation over three per cent. Inflation shall be measured by the difference between the percentage increase in nominal gross national product and the percentage increase in real gross national product.

Section 2. When, for any fiscal year, total revenues received by the Government of the United States exceed total outlays, the surplus shall be used to reduce the public debt of the United States until such debt is eliminated.

Section 3. Following declaration of an emergency by the President, Congress may author-ize, by a two-thirds vote of both Houses, a specified amount of emergency outlays in excess of the limit for the current fiscal year.

Section 4. The limit on total outlays may be changed by a specified amount by a three-fourths vote of both Houses of Congress when approved by the Legislatures of a majority of the several States. The change shall become effective for the fiscal year following approval.

Section 5. For each of the first six fiscal years after ratification of this article, total grants to States and local governments shall not be a smaller fraction of total outlays than in the three fiscal years prior to the ratification of this article. Thereafter, if grants are less than that fraction of total outlays, the limit on total outlays shall be decreased by an equivalent amount.

Section 6. The Government of the United States shall not require, directly or indirectly,that States or local governments engage in additional or expanded activities without compensation equal to the necessary additional costs.

Section 7. This article may be enforced by one or more members of the Congress in an action brought in the United States District Court for the District of Columbia, and by no other persons. The action shall name as defendant the Treasurer of the United States, who shall have authority over outlays by any unit or agency of the Government of the United States when required by a court order enforcing the provisions of this article. The order of the court shall not specify the particular outlays to be made or reduced. Changes in outlays necessary to comply with the order of the court shall be made no later than the end of the third full fiscal year following the court order.


That both prevents monetary inflation & also prevents the expansion of government. In a growing economy that thereby means government would become a declining proportion of total GNP.

It would not prevent President & Congress overturning it by Bush/Obama declaring that there is an emergency requiring a government bailout of banks or whatever if the majority in favour was sufficient, in the end no constitution can be foolproof, but even then the need to declare a state of emergency would slow it down & give heads a chance to cool.

Britain has no written constitution except as provided by the EU. Instead we rely on centuries of precedent. I think that is a very serious weakness & we should provide ourselves with a Basic Law or Constitution. The most important part of such a document is not about the power of government but about what it is not allowed to do. Again this doesn't always prevent government doing it. The US one prevents making war without Congressional approval & subsequent law prevents him undertaking "police actions" for longer than 3 months but got broken to let Clinton bomb Yugoslavia. Nonetheless written laws do provide brakes on government authoritarianism & lines in the sand that let the people be sure when their rights are being infringed.

I would like to see a British Basic Law & would incorporate this.

Tuesday, March 17, 2009


An engineering contract was signed last week towards building the Sanmen AP1000s. Real construction work should begin within one month on the nuclear power reactors.

That's how the Chinese do it.

Blair officially reversed his government's anti-nuclear policy in a speech to the CBI on 16th May 2006. Since a nuclear power station can, according to Westinghouse (formerly a subsidiary of BNFL until the anti-nuclear Labour government sold it off - now owned by Toshiba & a bidder to built new British reactors), be built in 3.5 years we could now have been within a few months of knowing we could keep the lights on.

Instead the ONLY real progress is that the French have bought our nuclear sites - a requirement simply because it is politically less brave to say that a new reactor be built on a site used for 40 years than on a new one rather than for any engineering purpose.

Meanwhile our surviving reactors are fewer & older & the 2015 EU emission rules which will close many of our coal powered generators is 3 years closer & China’s economy, built on electricity 1/3rd the cost of ours is over 30% bigger.

And the excess winter deaths because of fuel poverty over 3 years total 72,000. These deaths were unnecessary & entirely preventable a few years before they happened. Deaths from winter 2012 onwards, as well as the increase from blackouts, are also preventable. Deaths before that aren't. We have another 72,000 walking dead pensioners killed by our political masters. Maybe Stalin wasn't a bad guy - at least the people he killed mostly died trying to create a better future while our leaders are doing it to prevent one.

Anybody wanting to express an opinion on nuclear should know the facts not the deliberate lies the BBC feed us. I recommend Professor John McCarthy's FAQs

Monday, March 16, 2009


This is a review of a paper read by Molly Macaulay at a House Science Committee Hearing on X-Prizes:

"Prizes, although not a silver bullet for invigorating enthusiasm for space or elevating its priority in spending decisions, could nonetheless complement government's existing approaches to inducing innovation -- procurement contracts and peer- reviewed grants. Even if an offered prize is never awarded because competitors fail all attempts to win, the outcome can shed light on the state of technology maturation. In particular, an unawarded prize can signal that even the best technological efforts aren't quite ripe at the proffered level of monetary reward. Such a result is important information for government

History apart from historical prizes i have mentioned previously she gives a few more examples

Prizes also figured prominently in the development of the automobile, with dozens of popular, well-publicized auto races beginning in the 1890s, mostly in Europe. One of the notable contests in the United States - the "Great Chicago Auto Race " -- is credited with giving birth to the American auto industry. In 1895, H.H. Kohlstaat, publisher of the Chicago Times- Herald, sponsored this competition to test the overall utility, cost, speed, economy of operation, and general appearance of cars.3 Kohlstaat was surprised at the number of letters and telegrams he received expressing interest in participating in the contest. The auto business had seemed centered in Europe, yet he found that there were widespread efforts underway in the U.S.

Aviation. Another notable and frequent use of prizes - and much of the inspiration for the X-prize -- was in the early history of aviation. Between roughly 1908 and 1915, the heyday of privately sponsored competitions for distance, elevation, and speed jumpstarted the aviation industry. Three dozen or so individual prizes during this period - at roughly the rate of four or more annually - fostered innovations that decidedly gave birth to the industry. Some general observations about aviation prizes include:

1. Prizes were usually offered for incremental improvements. For example, the first couple of prizes were for flights of 25 meters and 100 meters, then for over 1000 feet in elevation. Subsequent prizes were for longer distances, higher elevation, and faster time.

2. Prizes were almost without exception offered by private individuals and companies, not by governments. Sponsors were mostly wealthy entrepreneurs such as Raymond Orteig, a New York hotel owner; Jacques Schneider, a wealthy French industrialist; Ralph Pulitzer, the son of newspaper publisher Joseph Pulitzer; James D. Dole, a Hawaiian planter; Eduoard and Andre Michelin, executives of what was to become the Michelin Tire Company; and James Gordon Bennett, the publisher of the New York Herald. Prizes were also offered by the French Aero Club, which undertook private fundraising to obtain the prize money; the French Champagne industry; the Harvard Aeronautical Society; the Daniel Guggenheim Fund; the Daily Mail of London; and the New York World. Governments funded military planes to race in competitions after World War I but didn't supply the prize money.

3. Big air meets were popular during 1909 - 1911 but then they either continued without much publicity or became less profitable. Many meets continued as annual races into the 1930s - the meets were not competitions for "be the first to…" but were for speed and demonstrations of skill.

4. There were prizes that were never awarded or that were awarded only after a long extension of the competition deadline. For example, the Orteig prize, awarded to Charles Lindbergh in 1927, was originally offered in 1919 for a period of up to five years, but the deadline was extended.

5. Prizes were offered for generally specified objectives like distance, speed, or minimum number of refueling and maintenance stops. Prize guidelines typically did not include stipulations about the technological approach or other engineering characteristics.

6. In at least one documented instance, a company underwrote a competitor in exchange for advertising the company's product (consumer soft drinks) on his plane.

7. Prize amounts varied widely - in 2004 dollars, the amounts ranged from about $200,000 to over $1 million. The typical amount was around $300,000. Later prizes were almost always for more difficult achievements, but prize monies didn't increase accordingly. The amounts do not seem correlated with the difficulty of the achievement required to win - but this observation may be biased by the paucity of detailed information about the prizes.

8. Accidents and fatalities were common - but did not lead to standdowns in holding competitions.

9. Whether contestants sought commercial gain from their innovation is not clear from the available records about the prizes. Some winners - but by far the minority -- became founding fathers of a product line of aircraft - such as Louis Bleriot, Glenn Curtiss, Henri Farman, and Igor Sigorsky.

Rocketry. With one exception, the earliest efforts in rocket development never attracted prize money. Research grants rather than prizes typically financed studies of rockets -

One reason for a lack of prizes may be the media attitude - something we see today as well"talk of rockets and space travel was viewed as crackpot by the public and as unscientific by most scientists." Newspaper reporters, seizing upon some of Goddard's writing about how rockets could get to the Moon, sensationalized the statements and referred sarcastically to Goddard as the "moon man." The American Interplanetary Society—a professional organization that was a forerunner of the American Institute of Aeronautics and Astronautics - - changed its name to the American Rocket Society because interplanetary travel was so ridiculed. the linear ancestors of so many today - you would think we never got there

Some observations. These experiences show the usefulness of prizes in fundamental research (soda alkali) and in advancing technology (autos and aviation). Of course, the counterfactual question of "would innovation have come about in the absence of prizes," and if so how fast and at what cost, is equally important -- but hard to answer. These experiences also took place before the rise of government's heavy hand in R&D (more on this in a later section below).

What's different now -an era of government-sponsored R&D

The climate for aviation prizes to reward technological advance pre-dated today's complex relationship between the private and government sectors in general and in space-related R&D in particular. The heyday of prizes was about 1900 to 1917 - two decades in which aviation feats made the news for an attentive public interested in the new technology, thrilled by its daredevils, and newly enamored of all modes of transportation as the era of the auto began. The period was undoubtedly one of the most distinctive periods in the history of innovation. The private sector reigned in almost all economic sectors. For instance, almost 100 % of public transit systems—street railroads and trolleys -- were privately owned, and individuals or private syndicates held about 85% of electric companies and 50% of water companies.

Economic growth was also rapid. Per capita income roughly doubled just after the turn of the century due to an economy-wide increase in output. Actually doubling over a 17 year period is only just over 45 a year - high then but less than the world average today - this is a sign of how, even despite our Luddite culture, we are on a rising growth trend ie still at the lower end of an S curve It was the era of modernization in steel mills, the beginning of skyscrapers, and rapid urbanization. It was also the chapter of the great industrialists - Andrew Carnegie in steel, John D. Rockefeller in oil, J.P. Morgan in finance, and railroad magnates like Jay Gould, Edward Harriman, Collis Huntington, and Cornelius Vanderbilt These entrepreneurs and their companies did the bulk of R&D.

Not surprisingly, government began to grow rapidly with the advent of personal and corporate income taxes in 1913 and a corporate excise tax enacted in 1909. Government spending increased from about $500 million in 1902, to about $900 million in 1913, then to $1.8 billion in 1922 (all amounts are adjusted for inflation). Per capita government spending increased 2 1/2 times from its level in 1902 to its level in 1922. World War I, the Depression, and World War II brought further large increases in federal spending. Most expenditures before 1915 were for defense, the postal service, and veterans services; by 1920, expenditures included these activities plus growing interest on debt and financing of air and water transportation.

Government stepped in to fund and manage civilian space activity in response to Sputnik and the Cold War - putting a "government in charge" imprimatur on space activities. Government involvement continues -- of all federal R&D money flowing to industry, about a third goes to the aerospace sector, and of that, 98% goes to nine companies.

Also the Wolfskehl Prize for proving Fermat's last theorem.

Much of the preceding discussion has emphasized the historical success of prizes but they have some disadvantages. These include:

no provision for up-front cash flow to defray expenses;
duplication of research effort if many individuals or groups compete;
uncertainty about whether the innovation can succeed; and
delays in the pace of innovation if a lot of time elapses before it is determined that there are no winners. I actively disagree with the last - such delays are clearly not going to be greater than those if there were no prize in the first place, nor will the cost whereas the cost to government of putting up research money for something that is beyond current technological maturity - at worst, as stated earlier "Such a result is important information for government"

In addition, prizes are unlikely to meet other social objectives that government sponsorship in general, or NASA sponsorship in particular, has traditionally pursued. For example, prizes do not necessarily further these goals that NASA has frequently set forth as success measures in its R&D policy:

increase the number of academic researchers;
increase the number of scientists and engineers;
create jobs;
influence political support by way of job creation;
broaden the participation of traditionally underrepresented groups in science and technology; and
prop up a particular supplier or group of suppliers to ensure choice (say, to ensure that a range of capacities is available in space transportation by dividing business among companies that offer different classes of vehicle lift)

Indeed - these are all pork barrel goals & evidence that the purpose of government spending is to employ government employees & their allies, the official purpose being secondary - I submit that the fact the prize money doesn't go on that is a strong point in its favour

In addition, there are some disadvantages of government-sponsored prizes compared with privately sponsored prizes:

- Government typically cannot commit to funding beyond a fiscal year, thus limiting the timing of the prize competition and cutting short the time that might be required for the technical achievement it awards.

- Any uncertainty about whether the prize will actually be awarded due to government budgets or changes in administration will weaken if not eliminate incentives to compete.

Both of these can be addressed by setting up a foundation separate from government who hold the money & with whom government has a legal contract to provide a certain amount of money (the same annually, or rising with growth & inflation or with growth, inflation & the taxable income of companies registering an interest) - theoretically government can still break any contract & renationalise the foundation without compensation but not quite as easily as it can grab absolutely any private asset

- Intellectual property rights to the achievement may need to reside with the competitor to induce participation, even though the taxpayer, by financing the prize, could fairly claim rights. It is interesting to note that after contentious deliberations, in 1960 the U.S. government awarded the Guggenheim Foundation and Robert Goddard's widow $1 million in settlement for government use of more than 200 of Goddard's patents (Goddard died in 1945).

Intellectual property rights bloody well ought to if one wishes to maximise incentive at minimum cost. This is why patents exist & nobody contends that the increased value to society of invention is not greater than what the patent holder gets - usually many orders of magnitude greater

Safety risk. The early history of aviation is replete with accidents and fatalities in pursuit of innovation, but efforts continued with scarcely a hiccup. The government's approach to safety risk is wholly different, as illustrated by the lengthy standdown of U.S. human spaceflight activities in the wake of the Apollo 1, Challenger, and Columbia fatalities. Indeed wholly different as the Shuttle history shows

Duplication of effort. A prize rather than a research grant made to one firm may have the advantage that "two (or more) chances are better than one" if there are several independent research programs. On the other hand, from a broad view of the nation's resources as a whole, there may be wasteful duplication of effort if there are simultaneous research programs all pursuing the same goal.

In theory a good argument, in practice it omits the spur competition always provides

It is hard to outline a formula for determining the size of the prizes- awards set too low may just miss inducing an innovation; awards set too high result in taxpayers paying more than necessary to induce the innovation. Not all competitors will necessarily be pursuing commercialization or an ongoing supplier relationship, if the history of aviation prizes is a guide to motives for participation. This argument applies even more strongly to grants & contracts where it is not only possible to set payment to high but, unlike prizes, there is no negative feedback to show whether it is too high or low For this reason, potential commercial profitability may not figure in competitors' participation decisions or be relevant to government's procedures for determining the size of the prize.

In any case, if a prize is offered but not awarded, the outcome may signal that the technology is simply not yet mature enough at that price - important information for government R&D managers. For "tent pole" technology development - that is, technology that is essential in furthering a goal - the uncertainty of success in a prize competition weakens the usefulness of prizes (although grants and contracts do not necessarily guarantee success either).


The history of prizes is attractive enough to warrant experimenting with their use in NASA activities. Further review of the structure of previous contests (their guidelines, funding, and results) and in particular, their assignment of property rights would provide helpful "lessons learned" as plans proceed. But prizes cannot fully substitute for peer-reviewed grants and procurement contracts. Even though these funding mechanisms are far from perfect, they balance some of the disadvantages of prizes. Taken together, all of these forms of financial support make up a portfolio of tools for encouraging innovation.

MacAuley has, in my opinion, understandably downplayed prizes (she is talking to Congresscritters about something which could severely intrude on or entirely replace NASA & limit the pork barreling potential) as shown by the fact that she has mentioned as disadvantages, things which equally apply to grants & contracts & has omitted one of the major advantages - that grants go only to the respectable & connected. The head of the Smithsonian, a highly reputable scientist, got $50,000 from Congress to develop an airplane & ran out of it just before the Wright Brothers, who were not on peer-reviewed lists, got airborne.

Nonetheless, bearing in mind that nobody is expecting the immediate ending of all research grants & contracts this is a very favourable review. X-Prizes should certainly be one leg of the 3 legged stool of national support for science. Whether it would then turn out to be the strongest leg is something we can only find out by doing it - its known as the scientific method.


MacAuley's point about aviation prizes reminds me of a suggestion I made previously:

Organise & put up prize money for an annual Road from The Isles hovercraft race - starting from Portree in Skye & going by sea to Blackwater reservoir, Loch Rannoch, Loch Tummell to end at Pitlochry. I personally think such a race, apart from encouraging individual engineering & Highland tourism has the potential to be more exciting than Grand prix racing.

I think investment of £250,000 in a prize like that would have technological & indeed social & tourist benefits far in excess of many much larger government pay outs. Wouldn't buy you 1/4 of a windmill. I also think that Grand Prix is pretty boring today because all the cars look & sound the same & that this would produce a far better spectacle.

Sunday, March 15, 2009


1. You must write.
2. You must finish what you write.
3. You must refrain from rewriting, except to editorial order.
4. You must put the work on the market.
5. You must keep the work on the market until it is sold.

These rules appeared in the 1947 essay "On the Writing of Speculative Fiction."
We believe that they are as true today for all would-be published writers, whatever the field, as they were for writers in the golden age of science fiction magazine pulps.

The Heinlein Society

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