Robin Hanson links an NYT article about the history of scientific prizes, as opposed to grants, as the funding mechanism for scientific invention and progress.

Back in the 1700s, prizes were a fairly common way to reward innovation. ... Eventually, though, prizes began to be replaced by grants that awarded money upfront. Some of this was for good reason. As science became more advanced, scientists often needed to buy expensive equipment and hire a staff before having any chance of making a discovery.

But grants also became popular for a less worthy reason: they made life easier for the government bureaucrats who oversaw them and for the scientists who received them. . .

"Bureaucracies like a steady flow of money, not uncertainty," said Mr. Hanson, who worked as a physicist at NASA before becoming an economist. "But prizes are often more effective if what you want is scientific progress." ...

These are the two essential advantages of prizes. They pay for nothing but performance, and they ensure that anyone with a good idea — not just the usual experts — can take a crack at a tough problem.

The article uses the £20,000 longitude prize offered by the British Parliament - which was won by a clockmaker rather than the royal astronomers - and an ongoing competition for $1 million offered by Netflix for an algorithm that is 10 percent better than their Cinematch recommendation system. A hungarian team has already done almost 7% better and there are still over 4 of the 5 years of competition time left. It seems clear that the improved system will not only be cheaper than an in house effort, it will also arrive sooner.

But the article ends on a sour note.

Just look at how both political parties have so far tried to deal with global warming. They have handed out grants and subsidies for various alternative energy sources like ethanol, even though nobody knows what the best sources will ultimately be. A much smarter approach would be to mandate that the economy use less carbon. This would effectively set up a multibillion-dollar prize — in the form of new customers — for whichever companies came up with efficient energy sources.

No, it would not result in efficient energy sources. It's stuck-on-stupid like the biofuel advocates discussed in the previous post. It would result in another hide-the-pea game where emissions shifted to more congenial locations. There are many reasons to do so already and such a cap would be a final straw for many.

A regulation is not a prize. Repeat that until your brain dead paleo-socialist nonsense is stilled. Push is not the same as pull. Sticks are not the same as carrots. Punishment is not the same as reward.

This matters. Our needs seem real so we really do need to call out the whackos that continue to stifle the innovation needed to deal with the current problem set. A prize, rather than a huge bureaucracy that squandered huge wealth, while producing copious emissions, would be a swell thing. It might well perform as in the past, producing better answers more quickly and cheaply.

Of course, we'd need a program to retrain the army of unemployed bureaucrats made redundant by the prize. It seems a small price to pay.

Update:

Of course, for world class stupidity you must go to Europe, especially France.

President Jacques Chirac has demanded that the United States sign both the Kyoto climate protocol and a future agreement that will take effect when the Kyoto accord runs out in 2012. . .

he warned that if the United States did not sign the agreements, a carbon tax across Europe on imports from nations that have not signed the Kyoto treaty could be imposed to try to force compliance. . .

Mr. Chirac’s critics say that despite his comments in support of environmental measures, his record as president is far from green. . .

Most recently, France’s national plan for allocating carbon emission credits to businesses had to be revised after the European Union rejected it as too generous.

Europe has a far worse case of political disease, but the US seems to be catching up fast. Vile politicians speaking complete nonsense have huge constituencies in thrall. Some worry that current world conditions echo those of the start of the 20th century when political madness swept Europe and sucked in the US. It seems to happen every few decades in Europe. Hopefully that shameful record will deter current madmen.