Does government startup funding crowd out private venture capital?
Core argument: Government entrepreneurial finance programs averaged $156bn in annual budgets over the past decade, roughly matching the $153bn disbursed by the venture capital industry.
Over the past decade, government entrepreneurial finance programs globally have matched the venture capital (VC) industry in scale, with an average annual budget of $156bn compared to $153bn in VC disbursements. Analysis of 755 programs across 66 countries from 1995 to 2019 shows no evidence of crowding out; instead, state funding complements VC investment. These programs are more frequent in regions with active private venture activity and are particularly effective when targeting early-stage companies. The initiation of government programs correlates with increased patent filings, indicating a beneficial synergy between public and private sectors. The positive correlation between private and public funding is more pronounced when governments are effective, suggesting that public entrepreneurial finance can enhance innovation without displacing private capital.
Ed Comment“Sad stuff. Cynical or stupid? Cynical. I dont think kids are better off if their mother marries their bad father or if their bad father actively raises them, quite the contrary. I believe they are better off if they have a father worth marrying or who is willing to marry their mother and raise them. The problem is bad fathers not single motherhood. On line dating and pornography reduce the need for man to marry and behave well to have sex. Government benefits and work reduce the need for women and mothers to put up with bad behavior. Both hurt parenting. There might be less crime, but there is also less work, less parenting, more drug use, and fewer fathers worth having. Crime shows motivation. Except in recession, I believe anyone can have a job who wants one. So maybe he has the causation backward. As the economy has grown more prosperous, it's the poorest people who have stopped participating. Consumption is growing cheaper and better. Work has a harder time competing. From time use studies, guys who don't work basically goof off. "If you believe that Leave it to Beaver families are the bedrock of social order, you must believe that modern America is in deep trouble." Yes! "It seems perfunctory: they’re mumbling jobkillingbiggovernmentsocialist because it’s expected of them, but their hearts don’t seem to be in it." Yes because libtards control so there is nothing we can do to persuade them otherwise. "Only 32 percent of babies are born to unmarried mothers in liberal Massachusetts; in deep red Kentucky the number is 42 percent."...because MA has significantly higher test scores”
Krugman endorses “when work disappears,” “…What’s actually happening in family-decline regions of America is clearly economic distress: these are the parts of the nation that have been left behind as prosperity increasingly concentrates in big metropolitan areas with highly educated work forces. All of this amounts to a confirmation of the famous thesis of the sociologist William Julius Wilson, who was in effect the anti-Himmelfarb, and who argued that social decay in inner cities was the result, not of culture, but of declining economic opportunity. Imagine that you were an evil social scientist who wanted to test Wilson’s thesis. What would you do?You would destroy economic opportunities for a large number of rural white people, and see what happened to their families. Well, that’s more or less what transpired — and lack of opportunity turns out to be just as socially disruptive for rural white Americans as it was for Black Americans in urban areas….”
The return of “family values”
As I noted in today’s column, Republican attacks on Bidenomics as an economic policy seem very low energy. Yes, the usual people are saying the usual things, but it seems perfunctory: they’re mumbling jobkillingbiggovernmentsocialist because it’s expected of them, but their hearts don’t seem to be in it.
All the passion is instead coming from the attempt to reframe economic policy debates as battles in a culture war, with Democrats pursuing lefty social engineering while the G.O.P. stands up as the defender of traditional values. Republicans clearly want to revisit the early 1990s, when conservative intellectuals like Gertrude Himmelfarb were insisting that our social ills could be attributed to the decline of family life, not economic forces — and politicians like Dan Quayle were campaigning not against progressive economics but against TV shows that normalized single motherhood.
But 2021 isn’t 1992. A lot has happened to our society over the past generation, some of it bad, some of it good, and all of it undermining the once dominant narrative about “family values.”
If you believe that Leave it to Beaver families are the bedrock of social order, you must believe that modern America is in deep trouble. Take one indicator of family decline, births out of wedlock. (Whether such births are necessarily an indicator of trouble is a question I’ll come back to.) Here’s a table from Child Trends showing the huge rise in such births, especially among less educated white Americans:
The geography of family decline is particularly interesting. While out-of-wedlock births have been rising everywhere, their surge has been especially intense in the South and the eastern heartland. And yes, there’s a strong correlation between family decline and a state’s politics, with Trump-voting states having higher rates of unmarried motherhood. “Only” 32 percent of babies are born to unmarried mothers in liberal Massachusetts; in deep red Kentucky the number is 42 percent.
Obviously voting for Donald Trump doesn’t cause unmarried pregnancies — or “deaths of despair,” that is, deaths from drugs, alcohol or suicide, which have surged in pretty much the same places. What’s actually happening in family-decline regions of America is clearly economic distress: these are the parts of the nation that have been left behind as prosperity increasingly concentrates in big metropolitan areas with highly educated work forces.
All of this amounts to a confirmation of the famous thesis of the sociologist William Julius Wilson, who was in effect the anti-Himmelfarb, and who argued that social decay in inner cities was the result, not of culture, but of declining economic opportunity.
Imagine that you were an evil social scientist who wanted to test Wilson’s thesis. What would you do? You would destroy economic opportunities for a large number of rural white people, and see what happened to their families. Well, that’s more or less what transpired — and lack of opportunity turns out to be just as socially disruptive for rural white Americans as it was for Black Americans in urban areas.
But is the decline of traditional families a cause as well as an effect? Does the shift away from male-breadwinner households point to social catastrophe? Much of the doomsaying about family values in the early 1990s was motivated by fears that the changing American family was behind skyrocketing crime, and that things would get even worse in the decades ahead. But a funny thing happened on the way to social collapse: families headed by male breadwinners continued to disappear, but our cities got much safer:
It turns out that Victorian family values aren’t as essential to society as many thought. Indeed, a number of European countries have very high rates of unmarried motherhood but thanks to strong safety nets seem to do just fine on other measures of social cohesion.
Now, if there’s one thing we’ve learned about modern U.S. politics it is that conservatives won’t stop trying to wage culture war because of facts that don’t fit their narrative. But I do wonder whether the disconnect between their vision and the realities of American life, both good and bad, will limit the culture war’s effectiveness. Who, besides people already deeply committed to a Trumpist view of the world, will be convinced that Joe Biden is waging war on families?