Bowen McLaughlin.. TABLE 23 (a).—300 companies and institutions receiving largest amounts of military research and development contracts in the fiscal years 1954-561 (parent corporations and subsidiaries are no' consolidated)—Continued 1, 309 Washington University. 1, 263 Union Carbide & Carbon.. 1, 256 TABLE 23 (a).-300 companies and institutions receiving largest amounts of military research and development contracts in the fiscal years 1954-561 (parent corporations and subsidiaries are not consolidated)—Continued 1 Totals for the 3 fiscal years are comprised of "procurement actions" of $50,000 or more in fiscal 1954, and "procurement actions" of $10,000 or more in fiscal 1955 and 1956. Source: Department of Defense. Battelle Memorial Institute.. TABLE 23 (b).—Amount of Department of Defense research and development fund' awarded to nonprofit organizations, educational institutions, and Government agencies which were among the 300 largest recipients of such funds in the fiscal years 1954-56 Total (61 organizations and agencies): Massachusetts Institute of Technology.. Johns Hopkins University. Cornell Aeronautical Laboratory, Inc.. Rand Corp.. University of Michigan.. Columbia University Stanford University. University of California Amount (in thousands) $61, 169 50, 673 38, 695 24, 814 21, 462 16, 023 11, 576 10, 201 9, 865 University of Illinois_-_ 9, 794 Illinois Institute of Technology 9, 290 U. S. Atomic Energy Commission_ 9, 036 University of Chicago.. 8, 779 University of Minnesota___ 8, 135 Stanford Research Institute__ 8, 122 University of Texas... 7, 442 Ohio State University- 5, 996 University of Pennsylvania_ 5,760 George Washington University. 5, 251 Pennsylvania State College_ 5, 091 New York University. 5, 060 Princeton University.. 4, 569 Harvard University.. 4,388 Woods Hole Oceanographic Laboratory. 4, 201 Franklin Institute_ 3, 904 Armour Research Foundation_. 3, 741 Michigan State College.. 3, 424 Polytechnic Institute of Brooklyn. 3, 276 Armour Laboratories__ _ 3, 260 U. S. Department of Commerce_ 3, 231 National Academy of Sciences.. 3, 163 University of Denver.. 2, 796 Cornell University- 2, 795 University of Washington 2, 554 Southwest Research Institute_ 2, 519 Carnegie Institute of Technology New Mexico College of Agricultural and Mechanical Arts. 2, 244 2, 081 Georgetown University__ 2, 048 Midwest Research Institute... 1, 932 Yale University 1, 896 Purdue Research Foundation_ 1, 657 Boston University__ See footnote at end of table. 1, 607 1, 516 TABLE 23 (b).—Amount of Department of Defense research and development funds awarded to nonprofit organizations, educational institutions, and Government agencies which were among the 300 largest recipients of such funds in the fiscal years 1954-56-Continued University of Dayton. 'Syracuse University.. University of Maryland.. Amount (in thousands} Washington University 1, 267 University of Utah......... University of Southern California.. Total, 61 firms....... American Institute of Research__ 'Duke University. Georgia Institute of Technology Georgia Technical Research Institute_ University of Alaska___ University of Colorado.. 1, 256 New Mexico Institute of Mining and Technology. 1 Amounts for the 3 fiscal years are comprised of contracts awarded and other procurement actions, in amounts of $50,000 or more in the fiscal year 1954 and in amounts of $10,000 or more in the fiscal years 1955 and 1956. Source: Compiled from reports supplied by the Department of Defense. Senator LONG. The record will be kept open for a period of 2 weeks for the filing of additional statements with the committee. These will be included in the appendix. We will adjourn subject to the call of the Chair. (Whereupon, at 4:10 p.m., the subcommittee adjourned, subject to the call of the Chair.) APPENDIXES APPENDIX I SUPPLEMENTAL MATERIAL SUBMITTED BY PROF. DANIEL HAMBERG UNIVERSITY OF MARYLAND, COLLEGE OF BUSINESS AND PUBLIC ADMINISTRATION, Senator RUSSELL B. LONG, DEPARTMENT OF ECONOMICS, Chairman, Subcommittee on Monopoly, Senate Small Business Committee, Old Senate Office Building, Washington, D.C. DEAR SENATOR LONG: In compliance with your request at the hearings, Tuesday, December 8, I am enclosing a copy of the paper I presented to the Joint Economic Committee on September 24, and a table containing the most recent data on the proportion of industry research and development costs financed by the Federal Government. I am glad that I have been able to be of some assistance to you in your investigation of an extremely important problem. Cordially yours, D. HAMBERG, Professor, Economics Department. P.S.-Enclosed also is a slightly expanded version of my opening statement at the December 8 hearings which I am having inserted into the record in place of my original opening statement.-D. H. APPENDIX I (A) Percent of industrial research and development costs financed by the Federal NOTE.-Total research and development costs in industry, 1957, $7.2 billion. Federal research and development disbursements to industry, 1957, $3.7 billion. Source: National Science Foundation. 397 APPENDIX I(B) SIZE OF FIRM, MONOPOLY, AND ECONOMIC GROWTH (D. Hamberg, University of Maryland) (Statement presented to the Joint Economic Committee on September 24, 1959, in connection with the committee's study of employment, growth and price levels.) For a number of years we used to be treated to the defense of giant, pluralunit corporations, with monopoly powers, on the grounds that these were needed to achieve the economies of mass production made possible by modern technology. This argument always suffered from a certain lack of conviction, though, if for no other reason than the fact that in numerous cases the giant firms represented amalgamations of other firms that by any measure had been large and efficient corporations unto themselves-witness, for example, the absorption of Carnegie Steel by United States Steel. Empirical support for this argument was also hard to obtain. Other reasons centered on the widespread belief that most of the economies of mass production were to be found in the large-scale plant, as opposed to the large firm. This belief seemed to gain support from the efforts of some of the largest firms to decentralize many of their operations to the point where individual plants or subdivisions were encouraged to compete with one another. Failing to carry the day on "cost" grounds, the defenders of giant corporations and monopoly power have more recently been treating us to another brand of argument. Starting with the pronouncements of the late Professor Schumpeter in the thirties and forties, we have been told that monopoly, far from being undesirable, is actually advantageous when economic progress is taken into consideration. In general, the case rested on the thesis that substantial monopoly power created an environment propitious to both capacities and incentives for innovation. We shall examine this argument in the second half of the present paper. First, however, we want to deal with another form of sanction of big business and monopoly power that has captured the popular imagination. This comparatively new apologia may be set forth as follows: The independent inventor is now passé. In his place has come the giant corporations as the cradles of invention; only these great firms possess the resources to finance the skilled teams of scientists and engineers, working in splendidly equipped laboratories, that are now the providers of new production methods and new products. In short, inventions are believed no longer to originate in cold, barren garrets; instead, they are now the product of institutionalized research carried on by teams of experts working on preassigned projects whose results are preordained. Not only has the independent inventor been swept aside by the invention of new ways of inventing, the argument continues, but the small and mediumsize firms are also losing out in this process. Those who may be concerned about the monopoly powers of the giant corporations are assured that this is a small price to pay for the contributions to technology, and consequent improvements in our living standards and overall power, that the corporate giants are now making. The above is an important and influential line of thought, and no doubt many readers will find themselves in agreement with it. Nevertheless, although there is undeniably a basic element of truth in this view, it is easily, and indeed has been, greatly exaggerated. It will be my task in the first half of this paper to try to place some perspective on this issue and to sound some warning notes against too-ready acceptance of the argument of the two preceding paragraphs, both on the grounds of what is and what ought to be. A good way to go about this task is to seek the answer to four related questions: (1) Is it true, really, that technical development is now the exclusive preserve of the teams of scietists and engineers working in the research laboratories of the giant concerns? (2) Do the large corporations in fact finance the bulk of modern research activity? (3) Has large size per se been a guarantee of serious interest in research, so that we have reason to look to an important effset in the form of progress to the monopoly powers of the giant firms? |