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I didn't blog about John McCain's $300 million prize for a better car battery yesterday because it seemed too banal. But as Tom Lee points out, it also suggests a basic ignorance of the economic rationale for "prize" proposals:
I should be able to avoid saying anything as dumb as McCain's battery-prize proposal. Not that I don't like batteries, mind you! But if someone were to invent a better one they'd already be poised to make a huge amount of money through its commercialization. Offering prizes for innovation isn't always a terrible idea — for pharmaceuticals with a limited market of potential users it can make sense due to the huge costs associated with developing and testing a new drug. But everyone in the developed world needs better energy storage technology, and they need it right now. And while it's important to make sure your new batteries are safe and robust (e.g. they don't explode too much), that's still much easier and cheaper to do than it is to conduct a set of double-blind human trials. So sweetening the pot is unnecessary. Anyone who has a good idea about how to build a better battery is already working on the problem.Over the past couple of days, McCain has come out with a couple of these small bore proposals. Today he promised to make the government use more fuel efficient cars. Call it creeping Mark Pennism: A bunch of micropolicies meant to demonstrate attention to the issue without, you know, solving it. The problem is climate change is actually a huge problem, and if disaster is to be averted, the response needs to be proportionate to the amount of carbon being emitted into the atmosphere. McCain, by contrast, is wrapping himself in policies that sound like a response without actually being a response. To the average person, a $300 million prize for a better car battery sounds like a lot of money. But it's a big pot of nothing in the face of climate change.
