This comes to us by way of Yahoo News. It begins:
PHOENIX - John McCain hopes to solve the country’s energy crisis with cold hard cash.
The presumed Republican nominee is proposing a $300 million government prize to whoever can develop an automobile battery that far surpasses existing technology. The bounty would equate to $1 for every man, woman and child in the country, “a small price to pay for helping to break the back of our oil dependency,” McCain said in remarks prepared for delivery Monday at Fresno State University in California.
McCain said such a device should deliver power at 30 percent of current costs and have “the size, capacity, cost and power to leapfrog the commercially available plug-in hybrids or electric cars.”
This is the kind of proposal that usually plays well politically because first, he sounds like a man with a plan. He is going to “solve the energy crisis!” (For more about men with plans, watch the brief video The Road to Serfdom. Second, the plan won’t cost much - only one dollar! Who can disagree with spending a mere dollar to solve the energy crisis? If you argue, you risk being branded a “cheapskate.” And third, it almost sounds like a “free market” solution, because he is offering an incentive - and one that sounds pretty big. After all, $300 million is a lot of money, right?
What is important is what the article does not say: The free market already provides ample incentive for innovation and development. Any individual or company that perfected such a device would reap far more than $300 million in profits from the free market, as customers would line up to buy the new product. Last year Toyota had a profit of close to $14 Billion dollars. After the success of their Prius, you can be certain that their engineers are already hard at work on such a battery - not because they want to win a $300 million prize from the government, but because they want to increase their profits.
And what if Toyota were to invent such a battery? Should the government award a foreign firm the prize for something they’re working on already? And even though it would “only” cost one dollar per American, who gave the government the right to confiscate our earnings for ill conceived ideas that are already being tended to by the free market? Finally, the last time I checked, the current national debt was 9,370,288,314,000.78. So who are they going to borrow the prize money from?