And, why?

a clear example of why corporations do basic research:

For [Bill Gates] this is a triumphant visit to China, a victory lap of sorts, on which I've been invited to tag along. The country is his. No other Fortune 500 CEO gets quite the same treatment in China. ... It was not always so. Microsoft bumbled for years after entering China in 1992, and its business was a disaster there for a decade. ... But it was a relatively small step in 1998 - the opening of a research center in Beijing - that proved a turning point. "We just started it here because we thought they'd do great research," says Gates, who raves about the quality of the country's computer scientists. The lab was what Gates calls a "windfall" for Microsoft's image. It began accumulating an impressive record of academic publications, helped lure back smart migr scientists, and contributed key components to globally released products like the Vista operating system. The lab soon became, according to polls, the most desirable place in the country for computer scientists to work.

Basic research would go on even with no government or charity funding. Its main function is not research progress, however, but signaling impressive abilities.

There's truth in this, but not the whole truth. Research would go on, but it seems unlikely that it would continue at the same level. It seems unlikely that some research that has little profit potential would happen. But, funds would likely be more productive since less unproductive bureaucracy and crapola studies would be funded. Less, not none. There would likely be less bone-headed defensive fortifications built by senior but unproductive scientists. Less, not none.

It isn't perfectly clear what the long term consequences of this would be. Would bright young things choose different fields to toil in? Perhaps the opposite? How would private orgs seek to leverage their enlarged research roles? You know they would, they'd be foolish not to do so. Would this all be for the better, or worse?

I'd like to find out, but it seems a risky experiment. I'd prefer multiple funding streams, including some government and foundation funding, for the same type of reasons that I don't want too much funding to come from government.