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In fact, this is a really common thing we see in the market/government dichotomy: the market doesn't, and shouldn't, have a stomach for long term, high risk plays that could possibly benefit all of society. That's not the point. The government handles those levels of investments on a much longer time scale, allowing the market to exploit the technological platforms made by our government. We see this pattern with the space race, the internet etc.: government does the big heavy lifting in the 20-40 year time frame, then VC and the market comes along and "digests" those changes for the marketplace.

Here is an excellent book that describes this relationship in far greater detail: https://www.amazon.com/Doing-Capitalism-Innovation-Economy-S...

Thanks very much for this - I'm excited for the book, since I've believed the general outline of this concept for a while now.

Despite all the outrage over this memo, all I can really think is "yes, what a great argument for state-sponsored medical R&D." Questioning the profitability of a market doesn't determine the profitability of that market, and if something socially-valuable turns out not to be market-friendly, that's an obvious case for state intervention.

(If someone made me Emperor, I'd probably pick a deregulated, free-market approach but increase state research spending by an order of magnitude.)

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