The Economic Laws of Scientific Research

The Economic Laws of Scientific Research, by Terence Kealey. New York: St. Martin's Press, 1997, 388 pp.

Richard R. Nelson

The premise of Terence Kealey's book-that scientific research would do better without government support-has naturally attracted a lot of attention and generated a lot of emotion. Kealey is an impassioned advocate of market capitalism and laissez-faire. He believes that economies and societies do a fine job of self-organizing if left alone and that governments almost always are incompetent and often venal. His attitudes toward science policy strongly reflect these opinions.

He is fascinated by economic, technological, and scientific history; has read widely (if selectively) in these areas; and projects lessons he draws from history into the present. Yet Kealey, who is trained in biochemistry and medicine and teaches in the Department of Clinical Biochemistry at the University of Cambridge, presents a strangely limited view of the way modern science actually works and of the complex relationships between science and technology.

Kealey's reading of ancient and modern history leads him to articulate two major propositions about science and technology and their interaction. First, science that is nurtured by a state or a society and is isolated from the world of practice is fruitless. This almost surely is true. Second, free commerce virtually automatically generates technological innovation and economic growth. This leads, without government involvement, to the development of whatever science is necessary to support technology. Kealey argues that this natural state of affairs broke down after World War II, as government intervention increasingly stifled scientific, technological, and economic progress.

"Economic laws" unveiled

In the course of making this controversial argument, Kealey puts forth several "economic laws" of scientific research. The first law is that, in the modern world, the ratio of R&D to gross national product (GNP) tends to rise as GNP per capita increases. Kealey emphatically denies that a rise in R&D as a fraction of GNP results in an increase in GNP per capita. Rather, he holds that as per capita income grows, nations spend more on R&D partly because they can afford to do so and partly because their more complex economies draw more intensively from formal science and technology (S&T). Although Kealey's statement of this argument is somewhat crude, many economists would...