Intel's CEO endorses Libertarian Platform! (sorta)

An excellent interview with Intel's soon-to-retire CEO, Craig Barret. He says some interesting things about how America is losing its edge in the tech industry. Seems we're not producing tech workers that are a cut above the rest of the world, as we once did. Why you ask? Surprise surprise, it's the government!

There are four things you can do in the United States to be competitive, and none of them is easy. The education system is first and foremost.

You need to fix the K-12 education system and have a higher influx of kids into college in the technical areas.

For about two years plus, I was a member of the Glenn Commission. [...] The Glenn Commission addresses this issue of what to do with math and science education in K-12 as a series of recommendations. Everything from: Treat teachers as professionals, use technology, put meritocracy into the system, pay for performance, make it easier for people to become math and science teachers, etc. I signed off on the report.

[...] It was a classic government report. You have a problem, you assign a commission to study it, you get the commission's report, you accept it with open arms, tie a red ribbon around it, put it on the bookshelf and you never look at it again. Then you continue to ask the question, "So what shall we do?"

From my very simple standpoint, I would put some competition in the system, and I would quantify the system.

The second one is research and development, because R&D is the seed corn for products and services of the future.

How much does the U.S. invest annually in agricultural subsidies, the industry of the 19th century? If you put food stamps in, you can get to a figure of $30 billion or $35 billion. If you keep food stamps out, you get $20 billion to $25 billion.

How much does the United States invest annually in basic R&D in physical sciences? About $5 billion.

Depending on how you count it, you spend four to six times more on agricultural subsidies, the industry of the 19th century, than you invest in producing the ideas for the industries of the 21st century. So, R&D spending is critical. It's also infrastructure. It's not bridges or roads. It's communications infrastructure, information technology infrastructure. You know that the United States is a laggard in broadband. We're kind of a third-world country from a wireless standpoint.

And the last thing that you can worry about is the Hippocratic oath of "Do no harm," but not applying to doctors, applying to governments. California (is) a wonderful example of where government rules, (and) regulations and policies are not only restrictive, but detrimental, in driving business away. Other countries are aggressively pursuing investment, much more than the United States.

As for the second point, regarding R&D, the government would inevitably subvert the process of handing out the money to the appropriate researchers. How do I know this? Nobel Laureate Milton Freidman says:

There are four ways in which you can spend money. You can spend your own money on yourself. When you do that, why then you really watch out what you're doing, and you try to get the most for your money.

Then you can spend your own money on somebody else. For example, I buy a birthday present for someone. Well, then I'm not so careful about the content of the present, but I'm very careful about the cost.

Then, I can spend somebody else's money on myself. And if I spend somebody else's money on myself, then I'm sure going to have a good lunch!

Finally, I can spend somebody else's money on somebody else. And if I spend somebody else's money on somebody else, I'm not concerned about how much it is, and I'm not concerned about what I get. And that's government. And that's close to 40% of our national income.

Because lawmakers aren't personally invested in the outcome, it can easily be subverted by other interests. This of course brings us to another fundamental problem with government finances. The problem of concentrated benefits vs. decentralized costs. That is, if I'm a farmer lobbying for millions in subsidies, I'm going to work hard at it, perhaps spending money to entertain the lawmaker, while taxpayers, who will lose pay for the subsidies, but at just cents a piece, won't have reason to work as hard to prevent that from happening. If a hundred thousand special interests exploit this flaw, suddenly government is 40% of the GDP... Sad story.

If government wasn't so big, there most likely would be a lot more R&D spending, because there would be more money going around, as it would be spent more efficiently in the private sector (see ol' Milt, above).

As for the educational criticism, they look remarkably like reforms any market would impose on its participants (think higher ed.). Unfortunately, public education quashes that.