The Origins of National Technological Advantage
This chapter addresses how big government is also responsible for countries achieving strategic technological advantages. Strategic technological advantage is the key to gaining from unequal terms of trade. If your country has invented something and controls proprietary technology, your nation has a monopoly and can charge monopoly prices. Other countries have to compete with other vendors to sell their goods and sell at low competitive prices. But how do countries get technological monopolies? America's scientific and engineering dominance comes from the superiority of its higher education. The United States was the only country to create large public universities with cheap tuition in every state or province in the nation. The chapter then looks at the Morrill Acts of 1862 and 1890; the Hatch Act of 1914; and the GI Bill. It also considers the founding of the National Science Foundation. The plan was that not only would the United States have stronger armed forces due to military technology, but it would also have a better economy due to civilian technology and would be better able to solve social problems with the use of social technology.