Dan Kuehn points us to DARPA:
Facts & other stubborn things: The Defense Advanced Research Projects Agency (DARPA) has initiated a study to inspire the first steps in the next era of space exploration—a journey between the stars. Neither the vagaries of the modern fiscal cycle, nor net-present-value calculations over reasonably foreseeable futures, have lent themselves to the kinds of century-long patronage and persistence needed to definitively transform mankind into a space-faring species.... We are seeking ideas for an organization, business model and approach appropriate for a self-sustaining investment vehicle. The respondent must focus on flexible yet robust mechanisms by which an endowment can be created and sustained, wholly devoid of government subsidy or control, and by which worthwhile undertakings—in the sciences, engineering, humanities, or the arts—may be awarded in pursuit of the vision of interstellar flight...I kinda think this problem has already been solved: all you need to do is draw the corporate charter to insulate the corporation's decisions from speculative short-termism, and you are there.
I disagree with Prof. DeLong, I dont think it can be solved (Kuehn seems to agree with me). Here is Keynes (General Theory; Ch12) on why the problem is deeper than corporate structure:
Investment based on genuine long-term expectation is so difficult to-day as to be scarcely practicable. He who attempts it must surely lead much more laborious days and run greater risks than he who tries to guess better than the crowd how the crowd will behave; and, given equal intelligence, he may make more disastrous mistakes. There is no clear evidence from experience that the investment policy which is socially advantageous coincides with that which is most profitable. It needs more intelligence to defeat the forces of time and our ignorance of the future than to beat the gun.
It is particularly heart breaking--though not unsurprising--that this is the direction DARPA is so explicitly moving in. It was the public/private/academic long term goal oriented partnerships fostered by DARPA that... well... gave us virtually everything that has made this blog possible (except the transistor,which was developed by another unique mid-20th century institution).
I have an underdeveloped theory about this. My argument essentially runs that there is a class of "public goods" that the market either cannot deliver as efficiently as possible or even at all because they are "outcome" (or quantity) goods and not "price" goods. That is, they are things that are goals that have to be met irrespective of price or rather that their social benefits outweigh their private benefits (ala Keynes).
The development of the computer was only made possible because both the Census Bureau and the military were "outcome" oriented organizations (with relatively deep pockets) that were willing to finance failures. Had were relied on the "price" (rate of return) mechanism in a world of uncertainty it seems highly unlikely that any one private firm would have thought it worth it's while. In fact, the poster child of the mid-century computer IBM essentially only picked up the computer in any real way after it had been proven profitable and IBM's success with the computer had more to do with the way it the marketed and combined the various aspect of the computer than anything else.
I also think medical care and higher education fall into this class of "outcome" goods, but their problems are demand side problems and not supply side problems like the one DARPA seems no longer willing to help solve.
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