NCPA - National Center for Policy Analysis


August 12, 2008

According to Newt Gingrich, a former speaker of the House of Representatives, the best way to help improve the state of world is to spend $10 billion of American resources, over the next four years, on large tax-free prizes.

Historically, the greatest improvements in the quality of life have come from two patterns -- the extension of the rule of law and the development and diffusion of technology.  Unfortunately, the former is a complex and difficult process; therefore, it would be better to focus on the development and diffusion of technology, and rewarding such efforts with tax-free prizes, says Gingrich.

Favoring large tax-free prizes would send signals to everyone that they can compete, and they are payable on achievement rather than on application.  Moreover, prizes would be a useful experiment in large-scale breakthroughs. 

For example, scientists could be awarded between $1 and $2 billion tax-free prize for developing:

  • A low-cost vaccine or preventive intervention for malaria -- possibly the single biggest potential improvement in the quality of life in poor tropical countries.
  • A modestly priced, mass-manufacturable hydrogen engine for cars, which would be the biggest single contribution to reducing carbon loading of the atmosphere and reducing subsidies through high oil prices to dictatorships.
  • The first privately financed permanent lunar base.
  • A method of learning math and science that kids like and would enable us to replace "No Child Left Behind" with a more effective education model.

However, the modern emphasis on peer-reviewed research has three bad side effects, says Gingrich:

  • It leads people to spend an amazing amount of time on the paperwork of application rather than on actually doing the experiment or undertaking the research.
  • It limits the applications to credentialed people.
  • It is a very cautious process that emphasizes relying on the approval of peers who tend to be cautious.

Source: Newt Gingrich, "Prizes to Improve Life," Wall Street Journal, August 11, 2008.

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