The Shape of Regulatory Capture

Yesterday, I wrote about the problem of regulatory capture:

Ultimately, the people chosen as central planners have a track record of enacting policies that enrich themselves more than everybody else. The people lining up at Davos calling for a new system, i.e. more government, are the same elite who have ruined the old one. As Jonathan Weill writes: “It’s becoming hard not to suspect that the annual gathering in Davos has become a conclave for global elites to promote crony capitalism and state-backed enterprise, ensuring that national coffers remain available to be tapped for private gain.”

Here’s a chart that illustrates the shape of that:

Plenty of money for bureaucracy, welfare, warfare and weapons contractors. But for basic science?

Not so much.

And that’s sad — because basic science seems to be one of the few arenas where government investment really does pay for itself.

From Nature:

A report by Families USA, a Washington DC-based health-advocacy group, found that every US$1 spent by the NIH typically generates $2.21 in additional economic output within 12 months.

Not as good as the Apollo program, but much better than war spending, which not only yields less output, but then goes and destroys the things it produces.