Sunday, November 07, 2010
I read this in Adam Smith's Wealth of Nations.
Public services are never better performed than when their reward comes only in consequence of their being performed & is proportional to the diligence employed in performing themBook V Chapter 1 Of the expenses of the sovereign or Commonwealth
He is specifically discussing how courts should be paid for but the remark fits X-Prizes even more effectively than it does courts.
I have discussed here how prizes were, before the rise of big government, a common method of encouraging research - at the time funded by individuals rather than government. The practice of governments switching to grant giving appears to be a local proof of Pournelle's law that "the primary purpose of government is to pay government employees" & their friends & the official purpose is secondary at best. As previously calculated prizes appear to be at least 33-100 times more effective at promoting the development of new technology than grants (infinitely better if they don't work because no money is awarded). Use of grants in circumstances where prizes are appropriate cannot be consistent with attempting to maximise technological achievement.
Prizes are not always appropriate, for example if given for "proof" of the global warming hypothesis such proof would certainly emerge, whatever the actualite, but where they can work they should normally replace grants.
Always useful to be able to quote the father of economics in support of your proposal.