McCain’s $300 Million Prize

by Ryan on June 23, 2008

in Culture,Election 2008,Politics

John McCain, if elected President, would offer a $300 million prize for any company or individual that produces a car battery which leapfrogs over the current wimpy ones on the market.  I like the approach.  Here’s my take:

Telling us that in order to eventually get away from gas, the government will encourage innovation by giving a huge financial reward for your product in a time of great need is great.  It was one of the few things I really liked about Mike Huckabee’s approach which John McCain has adopted.  Using the power of American innovation, the collective mind of the American people, and the free market, McCain’s idea will encourage us to get positively involved in the process on a national level, rather than keeping us as a powerless spectator wincing at the whims of almighty Washington dictates of conservation or diminution (you know, Jimmah Carter’s long-underpants speeches during the cold winters of 1977-78).

Telling us that gas prices will go up forever, so we must suck it up and wait around for a magic alternative energy source while we all suffer in the interim is a negative way of looking at things, and the solution the Dems have awaiting us if we become an Obama Nation this Fall.  No real answers, just accusations and more of the same.

I love capitalism. I also think that people are best motivated when positive reinforcement is used, and the best ideas arise from necessity, competition, and incentives to solve problems — I’m a conservative, hence I’m an optimist at heart. 

In my opinion, if government must get involved in something it should be in one of these four areas: defense, infrastructure, education and technology (DIET for short).  McCain’s proposal is a market-oriented way that the government is helping on the technology front.  I have no problem with contests of this sort.  In addition, I think McCain should also add that the designer of the super-battery be given sole rights to the patent for at least two decades to ensure a huge future cash windfall for the designer.

AP photo.

{ 6 comments… read them below or add one }

rightonoz June 23, 2008 at 8:19 pm

I like the concept – a bit of carrot can go a long way. Personally I’d like to see the patent owned by the government, though the designer getting a royalty for a substantial period. I know the UK govt does have some sort of system like this, where the navy guy who came up with the idea for the ski jump on their carriers for the Harrier jump jet received a substantial ‘bonus’.

This would go several steps further.

My reason for wanting to govt to own the patent is that they could license it to anyone they wished as opposed to private enterprise potentially limiting availability to make additional windfall profits. This is technology that needs to be widely applied if sucessful. The closest analogy I can come up with is the drug companies limiting avialability of HIV drugs and demanding excessive prices during what is an international health crisis. Also the govt could take a small royalty that could be used to fund further such incentives, as long as it could be kept away from the pork barrel politicians who would no doubt try to get it into consolidated revenue. I’m all in favour of private enterprise, where they use their own hard earned cash to develop technology, however there are some instances where the importance of government providing the incentive should also include a modicum of government involvement in the commercial end.

Full marks to McCain for what is original thinking. You guys may have the making of a great president.


Chris June 23, 2008 at 8:46 pm

Newt Gingrich has previously professed that government should offer financial rewards to someone in private enterprise who does something really important…and I like this. It gives Americans a chance to put their resourcefulness to test and possibly do something for the good of humanity.


Matt June 24, 2008 at 6:56 am

I have to disagree with everyone on this one. While energy independence is one of the most important issues facing our country today, I’m just not comfortable with the idea of the government assigning an arbitrary value to a product and giving away my tax dollars for an invention that hasn’t proven itself in the market. A few questions to those who support this idea…

1.) Why $300 million… why not $100 million? Why not $1 billion?
2.) What is “good enough” to qualify for the prize? Can it be a gas-electric hybrid that gets 100 mpg? How about 150 mpg? Could it be a hydrogen-powered car, or does it need to be an electric battery?
3.) What happens if this new battery seems great, we award the money, and then find out that it has a major safety flaw which makes the battery too dangerous to use? Do we ask for our money back?

My point is that any set of standards the government comes up with will be totally arbitrary. A great idea that actually solves the problem might not fit the requirements for the reward. At the same time, something that looks like it will work might fail in the long run. The free market takes care of all these things for you. Consumers will decide exactly how much a new invention is worth based on how much they are willing to pay for it. Believe me, if someone invents something that is leaps and bounds beyond existing technology for powering automobiles, $300 million will seem like nothing compared to the tens or hundreds of billions they’ll make in the market. Artificial incentive isn’t necessary here… There is more than enough real-world incentive.

I just don’t believe it’s the government’s job to redistribute wealth for any reason. Yes, this idea sounds a lot better than giving away my money for no particular reason (welfare, social security, etc), but what happens when I don’t find the invention very valuable? What will prevent a politician from awarding millions to someone who invents healthier peanut butter or a safer sex-change operation? When it comes down to it, is this really any different in principle than ethanol subsidies?

It seems to me that if you apply conservative principles, you need to oppose this idea. Am I way off base? I would be interested to see what Mike and Salinger’s thoughts are on this one too…


Chris June 24, 2008 at 5:58 pm


You make a few good points, but let’s face it…society is driven by the almighty buck and as Ryan had earlier stated, this move is capitalism at its best.

To answer your first point, I would say that this isn’t the only problem that the government is going to solve with a financial incentive…there will very likely be more, otherwise I think the amound would be higher.

Secondly, you state, what would be considered good enough…I think that once something is created, others will definitely want to join in once the patent time period ends so they will be in the market as well. And during that patent time, competitors can spend that year doing R&D to come up with something even better. As a consumerist society, this is what drives our economy…improvements, building on what you have, etc. Some refer to it as planned obsolesence, but in a capitalist system where technologies are ever changing and improving, this is a way of life. This is why we have cell phones that aren’t the size of tissue boxes anymore, this is why Steve Jobs is starting to cut a big piece of pie out of Bill Gates’s industry (and with more Apple Stores opening up around the country, he has the potential to grow his customer base even more).

I take your 3rd comment to heart and think of the rush to get air bags out on the market and into every car. Because of the rush, many overlooked the damage and harm they cause to small children. As a result, all small children must sit in the back seats of cars so as to not risk injury from the air bag. However that’s the purpose of R&D…to get the product to work the best and to get rid of all the bugs. I would think that someone from the government would be involved in this R&D.

Matt, you make some very good points about what the definition of conservatism is and I do agree that government is encroaching on our freedoms and for years, they have encroached on the business world, but for this purpose, they can do some good. Those in science, industry and business haev done great things in the past (cure for Polio, the automobile, splitting the atom, the computer, etc), but when there has been a significant growth of new technologies coming from OUTSIDE the United States (especially in the areas of automobiles, computers and electronic equipment), the government must come in and rekindle the American ingenuity to keep the United States the center of new ideas and thinking.


Matt June 24, 2008 at 9:44 pm


1.) I would disagree that this is capitalism at its best. In my opinion, capitalism at its best is letting the market drive innovation without any outside influence from the government.

2.) RE: “this isn’t the only problem that the government is going to solve with a financial incentive… there will very likely be more” — That’s exactly what I’m afraid of. Before you know it, politicians will be awarding cash to their friends or donors for just about anything. I’m worried that, if you know the right people, you’ll be able to get a cash reward from the government for inventing a softer toilet paper.

3.) My point of asking “What would be good enough for the reward?” was that any standards set by the government would be totally arbitrary. Who decides what is a big enough innovation to warrant the reward? If you define the criteria too narrowly, you could hamper innovation in other (potentially more promising) areas. For example, if you say the invention should be an electric car that meets certain energy efficiency standards, you may be inadvertently diverting research dollars away from hydrogen powered vehicles. If you keep the government out of it, the free market will drive research toward the most promising technologies.

4.) While I agree that it is possible that some good could come from this particular proposal, I must object to the principle behind it, and therefore I can’t support the proposal. Let’s take welfare for example. Suppose there is an intelligent, motivated guy who came upon hard times. If we just gave him a government handout to get him back on his feet, he may start up a business someday and give back to society more than we ever gave him. Giving this particular guy a handout will quite possibly result in very good things. However, I must object to the idea of government forcibly taking money from some people to give it to others. What right does the government have to decide that one person needs that money more than another? Since I don’t believe in that general principle, it would be hypocritical of me to support the handout in this particular instance. (In this example, I think the correct solution is privately funded charities. When the money is given willingly by private donors, helping this guy out would be a wonderful thing, but I digress…)

5.) Finally, I can’t totally agree with your implication that there has been a lack of ingenuity coming from the United States in recent years… Look at the biggest drivers of innovation in the high-tech industry over the past two decades. IBM, Apple, Microsoft, Google, HP, Oracle, Intel, Amazon, eBay, MySpace, YouTube, Facebook, etc. While most (or all) of these examples are international companies, they are all based in the US, and (I believe) US workers make up the largest percentage of their work forces. I agree that there has been more innovation in the automobile industry in other countries, especially in terms of energy efficiency, but I would argue that was driven by market forces. As of 2007, gas prices were $6.06 / gallon in Japan and $9.20 / gallon in Germany ( These countries have been worrying about energy-efficient cars for a while now, and for good reason!

As prices rise in the US, more and more American intellectual capital will be dedicated to finding a solution to this problem. I really don’t believe artificial market influences are appropriate or necessary to drive innovation in this area. (Chevy, for example, has already begun:


Mike June 25, 2008 at 5:38 pm

I agree with Matt on this one. The free market is perfectly capable of solving this situation.

Any person, firm, corporation, or organization that comes up with a battery that McCain envisions will not need one dime of a government subsidy because the profits they make will dwarf such a reward to such a degree that it becomes meaningless.

What troubles me more about McCain’s idea is that it is based on a false premise that government is necessary to solve a problem when nothing could be further than the truth. One of the reasons we are in such a mess with gas prices is precisely because of government involvement. The government is prohibiting private companies from drilling for more domestic oil to increase the supply. The federal and state governments continue to rob people blind through higher than necessary taxes on the product.

That’s not to say McCain’s idea is as bad as the two above-mentioned policies, but it only lends the appearance of credibility to the idea that government action is a pre-requisite to innovation.

Unfortunately our nation and party has no conservative leadership right now. Give me a a candidate that recognizes the fact that the government cannot and will not solve our problems. Give me a candidate who recognizes the abilities of our free markets and our people. In the meantime, I’ll settle for McCain. In the future, our party needs to do alot better than this.

Matt, getting Salinger involved may take more than a comment. Try a phone call or two.


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