Living near the home of a major state university, national collegiate rankings are a real source of pride. There are the typical sports rankings that make the headlines; those for football and basketball in particular. But lately, The Columbus Dispatch has reported and editorialized on a new ranking; research and development expenditures at U.S. universities and colleges (in reports such as this). Bursting with pride, the paper hails the increasing research expenditures made by The Ohio State University.
The university also stands proud. Like any government entity, OSU confounds expenditures with value. The greater the amount expended, the more value generated locally. Or, so the party line goes.
The university even applies the U.S. Department of Commerce’s Keynesian equation of 32 new jobs created for every $1 million spent on research. Based on this figure, the paper states that 21,000 jobs have been created in central Ohio given the $652 million spent by OSU on research in 2006.
Current figures (from 2005) show OSU ranked 12th on the amount spent by universities and colleges on research — Johns Hopkins University tops the list at $1.444 billion spent in 2005. With OSU moving up the rankings, the university and paper have been puffing their collective chests. Forgotten are the lessons of Bastiat and Hazlitt: It’s not simply the visible results of action that matter; just as important are the more remote consequences. For sake of argument, let’s assume that the 32 new jobs figure is correct. Unseen are the 33 jobs or more lost due to the level of taxation required to fund the research. Jobs lost in central Ohio and throughout the U.S.
According to the Dispatch, one simply has to spend $1 million on research in order to create 32 new jobs. It’s that simple, and the Commerce Department has the equations, models, and graphs to provide the proof. It’s as if the rules of scarcity do not apply when one speaks of government expenditures. Bastiat caught the foolishness in such statements over 100 years ago, yet such New Deal nonsense lives on at universities and in the press.
OSU has spent $2.3 billion over the last 5 years on research. What value have we (the collective we since federal tax dollars funded most of the research) gotten for this investment? Well, we know a little more about heartworms, positioning devises on Mars, and Ohio-grown tofu soybeans.
There are indeed two classes: the taxpayer, and the tax consumer. It appears that at some level, I may be living in a tax consuming area. Yet, I’m not happy. I’m simply watching others spend dollars picked from my wallet on goods and services — research, in this case — that will not satisfy my urgent wants. Unless, of course, I suffer from heartworms, get lost on Mars, or am in desperate need of Ohio-grown tofu soybeans.
F.A. Harper was correct when, in his book Why Wages Rise, he noted that whenever someone else spends your dollar for you, you get something less than a dollar of value in return. On the other hand, when you spend your dollar on your most pressing want, you get at least a dollar of value in return. Coerced funding of research cannot return value to the taxpayer. It’s a much different story for the tax consumer.
Anyway, thank you Florida! You may have won the national championship in football, but your taxes have raised our knowledge of locally grown tofu soybeans. And, your universities are not even ranked in the race to spend more on nothing.
Well, actually, you should be proud of your stature here also, you aren’t thieving my money, in net anyway. Congratulations. Keep up the good work.
