Now I pay less than a hundred per million, and yet I have done nothing to deserve or help pay for this windfall. If the government confiscated most of the oil from major discoveries and gave it to consumers, oil companies would do much less exploration. Some oil would still be found serendipitously, but many promising opportunities for exploration would be bypassed. Both oil companies and consumers would be worse off. The leakage of benefits such as those from improvements in the transistor acts just like this kind of confiscatory tax and has the some effect on incentives for exploration.
Economists also recognize.
Stimulated in part by the dramatic and continuing success of the Japanese in catching and then surpassing North American firms in many areas of manufacturing, policymakers in the United States are now considering additional ways to stimulate the production of ideas. We should not attempt to transplant institutions from Japan into the very different social and political climate of North America, but we should learn from Japan's experience. In the construction industry, for example, Japanese firms spend more than five times as much on research as comparable firms in the United States. None of the top North American firms maintains a similar institute. In a further contrast with the United States, very little of the research done by firms in Japan is funded directly or indirectly by the government or conducted in universities.