Part 2: The Role of the Public Sector in Innovation 

One of the primary justifications for Capitalism is that it is the cause behind our modern world, creating the comforts and health benefits we all enjoy. This is the second part of an essay that critically examines that claim. In this part, I will be focusing on the impact of research and innovation that has come from the public sector. 

The term “public sector” means any sort of research funded by public money, whether through federal, state, or local governance. This means the military, public universities, and governmental agencies such as NASA and the National Institute of Health. 

Starting with the US military, there have been a multitude of innovations that have come from the Defense Department. Maybe one of the most profound innovations is that of the internet. The prototype for this was developed by DARPA, a highly innovative research arm of the US military. In addition, most of the developments in computer technology and science in the early years of computing were from publicly funded universities.

So much of our modern world is based upon this foundational development of computing and the internet. Over one trillion dollars of US retail commerce happens online each year. Social networking sites such as Facebook and Twitter exist because of the US military’s invention of the internet in the late 1960s.

Add to the internet the following list of items that the US military either invented or substantially helped in the development of; the microwave, GPS, jet engines, canned food for mass production, synthetic rubber and fabrics, superglue, jeeps, EpiPens, WD-40, and many other items. The list is pretty exhaustive. And that is just for the US military, not to mention other militaries around the world.

Another major source of public sector innovation is NASA. Maybe even more than the military, NASA has contributed greatly to our modern way of life. Public funding put a human on the moon and developed most of the technology to put satellites in orbit. Satellites are a critical component of our interconnected world, allowing almost instantaneous communication from almost anywhere on the globe. 

Beyond satellite and rocket technology, NASA has created or been a major part in the development of the following items: scratch-resistant lenses, memory foam, cochlear implants, freeze-drying, digital cameras, ear thermometers, wireless headphones, advancements in baby formula, cordless power tools, artificial limbs, housing insulation, and solar cells…to name just a few. 

In the field of medicine, the federal government has played a massive role through agencies such as the NIH, public universities, and research institutions. One of the most notable achievements of publicly funded research is that of the human genome project. Achieved in only 13 years versus the 15 years it was projected to take, this cracking of the human genome has transformed medical research. 

Beyond this, public funds have funded much of the basic research for medical advancements that is not viable in the capitalist market. A good example is the Nobel Prize winning research of Julian Axelrod at the NIH on neurotransmitters in the brain. This research has led to the development of a wide range of drugs to treat depression. 

Another major discovery that altered the modern world is that of penicillin. It was discovered by Alexander Fleming, a researcher working on a publicly funded project at a publicly funded hospital in the UK. This discovery is arguably the most significant medical breakthrough in modern history. It allowed for the creation of antibiotics that have saved millions upon millions of lives. The infant mortality rate has seriously decreased because of penicillin, as well as post-surgery deaths from bacterial infections. All in all, the discovery of penicillin has extended the average life expectancy by 23 years. 

Cancer research is another area where public funding has driven a large share of the innovation. Add to this the fact that insulin was discovered at a public university in Toronto, Canada. Beyond this, I could list a whole host of drugs and medicines discovered from publicly-funded research that benefit people everyday.

All this shows something very impressive. That we, as a people, have come together and through our elected officials have hired some of the most talented researchers in the world. Researchers who often toil in obscurity, and without the compensation researchers in the corporate world receive, to make all of our lives better. It’s an amazing thing, and it has nothing to do with Capitalism. 

This doesn’t mean that Capitalism has not come up with innovations and inventions. It has, the automobile is a primary example. But it’s hard to argue that Capitalism is the cause behind innovation when so much of our modern lives was developed through publicly-funded research. 

In conclusion to this two part series, Capitalism is an economic system where innovation does happen. But it is not the cause of it, and it is not the sole reason that we in the modern world live in comfort and relative prosperity. Humankind has been inventive since we first entered the scene 200,000 years ago. Technology builds upon itself, upon the accumulated skills, experience, and knowledge of millions of unnamed people in the past. 

That drive for bettering ourselves and our situation is not going to change if we build a new economic system. In fact, a cooperative economy still fosters innovation, and still involves competitive forces. The difference is that the profit from that innovation is not concentrated among the executives and shareholders at the top. 

All this goes to show that we do not have anything to lose if we give up Capitalism. We can go about our modern lives with the same amount of comfort. But with a lot less poverty around us and a whole lot healthier and wealthier communities. A better future is possible, we just have to build it.