This morning the President of Princeton University, Christopher Eisgruber, published his defense of Federal funding for research universities in The Atlantic: The Cost of the Government’s attack on Colombia. What are his arguments?

Eisgruber claims that the success of the American University system hinged on two factors. First, “the development of strong principles of academic freedom” before World War Two fostered scientific progress through competition over ideas. Second, Federal funding of research universities after World War Two fueled academic progress.

I see no reason to challenge Eisgruber’s first claim, in principle.

Eisgruber’s second claim has no rational or moral basis. Government subsidies may improve the supply of a good in cases where private sector systematically underfunds its’ production. The economic explanation for this problem is that some goods are “public goods”. There are some goods that automatically benefit everybody once they are provided to only one or a few people. Two classic examples of public goods are national defense and radio broadcasts. If some people pay for defending the borders of a nation, the free riders who don’t pay still benefit. If some people pay for radio broadcasts, the free riders who tune in at no charge still benefit. Collectively, we would all be better off if everybody chipped in. However, free rider problems lead to under-financing and under-supply of public goods. Taxation forces free riders to pay for public goods, provided that the government efficiently spends this money in the provision of these goods….

There are two obvious questions in this debate over public funding for universities. First, is university research really a public good? Second, does Federal funding fund the right amount of university research, if we assume that it is a public good?