The America Competes Act vs Separation of State and Economics

22 Pages Posted: 24 Mar 2022

Date Written: January 26, 2022


Most of America’s wealth has not been created yet. But to fulfill the nation's potential, recognizing the limitations of today's dominant politically driven research and development approach compared to what capital markets and economic liberalization can achieve is vital. Most politicians defend a significant, even pivotal, governmental role such as that seen in the America Competes Act, various iterations of which appear periodically, most recently in the second session of the 117th Congress. When it comes to the creation of knowledge and infrastructure wealth, better alternatives exist. Competitive approaches to creating scientific wealth will be more nimble and effective than political ones at boosting innovation, enhancing consumer well-being and safety, facilitating commerce, and contributing to the rise of an unprecedented prosperity and global competitive prominence for the United States. A three-part outline follows.

“COMPETE”ing Visions: Avoid Having Government Steer While the Market Rows

Today, we see examples of artificially created conflicts rooted in governmental funding of business, techology and science policy. These disputes include disagreements over:

*The fundamental merit of basic vs. applied research
*The impact of private vs. public funding on discovery and well-being
*The alleged objectivity of government vs. “industry” science and the chastisement of industry *science in the marketplace of ideas
*Potential confusions over the ownership or intellectual property status of federally funded discoveries (for example does the Genome belong in the public domain, or are components patentable?)
*Related information commons vs. proprietary views of information; that is, the “information wants to be free” ethic that permeates Internet policy but can threaten scientific endeavors
*Public access to scientific data upon which regulations are based
*The right to not fund science with which one disagrees
*Purported (but often exaggerated) conflicts of interest among federally funded scientists

Second, Subsidies and Steering Will Mean Can Mean Suboptimal Compeition, Trade and Technology Policy

*Government Steering can create artificial booms
*Government funding comes with strings attached
*Political failure overwhelms “market failure” in basic research investment
*Politicians can’t choose rationally (no offense)
*International competition is not zero sum
*Taxpayer Funding Misdirects Resources
*Taxpayer funding can create a glut of or the wrong kind of graduates
*Taxpayer funding artificially complicates intellectual property disputes
*Taxpayer funding may confront a “Regulatory Bias Problem”
*Substituting Government Funding For Competitive Discipline Can Undermine Safety

Third, Move the Rocks So the Grass Can Grow: “COMPETE” by Separating State and Economics

*First, Avoid Picking Favorites Among Technologies
*Minimize Tax Burdens and Implement Rational Tax Policy
*Allow freer “trade” in skilled labor in the US
*Avoid Safety Regulation that Makes Us Less Safe
*Liberalize Capital Markets
*Privatize: (Remember That?)
*Award Prizes for the time being during the transition to full privatization of research
*Enlarge regulatory flexibility to bolster small business
*Avoid New Regulatory Mandates in Service and Manufacturing Sectors
*Liberalize the Nation’s Communications Networks and Infrastructure
*Abolish Counter-Productive Antitrust Laws
*Emphasize Rational Intellectual Property Policy
*Sunset Regulations and Implement a Regulatory Reduction Commission
*Halt Regulation Without Representation” by Requiring Congressional Approval for Major Business Regulations*
Perform Basic Deregulatory Housekeeping (A series of steps ranging from restoring federalism and local decisionmaking to regulatory budgeting to issuing and acting upon an annual Regulatory Report Card to Accompany the federal fiscal budget.

In conclusion, compete for real, and let taxpayers call the shots with their own money. That too takes work; work that is avoided by the current central-government-centric approach.

Keywords: America Competes, Build Back Better, infrastructure, regulation, technology,

JEL Classification: A1, K2, k21, k23, k32, H10, H12, H13, H4, H50, H60, L1, L12, L4, L5, L50, L51, L52, O3, O4, O43

Suggested Citation

Crews Jr., Clyde Wayne, The America Competes Act vs Separation of State and Economics (January 26, 2022). Available at SSRN: or

Clyde Wayne Crews Jr. (Contact Author)

Competitive Enterprise Institute ( email )

1310 L St,
7th Floor
Washington, DC 20005
United States


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