The Visible Hand, At Rest

Here's Bill Gates, talking about public and private investment in alternative energy:

'(Energy's) a big enough market that if you come up with cheap ways of making electricity, then that should be done with typical big-firm risk taking, small-firm risk taking. On the other hand, the way capitalism works is that it systematically underfunds innovation, because the innovators can’t reap the full benefits. But there’s actually a net benefit to society being more R&D-oriented. And that’s why in health research, governments do fund R&D.'

http://dotearth.blogs.nytimes.com/2010/08/24/the-gates-path-to-an-energy-revolution/

Er, yup. The man's noticed externalities can be positive as well as negative.

The right, of course, gets appalled when the jackbooted thugs of socialist tyranny confiscate from the virtuous rich even a portion of their profits by forcing them to clean up their messes, or prevent them (negative externalities). Were the right to admit that business in fact benefits, sometimes mightily, from government actions like R&D (or many others, some less attractive to yr obdt. svt.), that'd contradict their endlessly repeated assertion that All Government Action Is Wrong. After all, if the Invisible Hand is doing all the necessary actual work, the Visible Hands attached to the arms of living human beings have no responsibility other than to make kiloshitloads of money trading third-tranche derivatives.