Why will academic R&D begin falling below the rate of inflation? I get that it can't outpace it forever without overtaking the economy.
Debt-to-GDP ratios and the cost of servicing existing debt together mean that there are difficult budgeting decisions on the horizon for many western governments. Academic R&D just doesn't have the constituency needed to save it from cuts.
I will be a bit astounded if NSF/NIH don't take nominal cuts during the debt ceiling negotiations, and they certainly won't get budget increases to keep up with inflation. Even defense spending, a massive sacred cow, might take a cut. There is just no way that base closures happen without DARPA et al. also taking it on the chin.
There may be one-time infusions into critical sectors here and there (CHIPS, probably energy, etc) and the STEM fields may benefit from a systematic defunding of humanities departments in certain states, but it's not enough to make up for secular headwinds.
The only saving grace for budgets might be if universities could create and capture the value that their R&D spend generates. But most research doesn't provide any value to society, and for the research that does capturing that value is often harder than creating the value in the first place. And even in that case, the change in management culture and workforce dynamics mean that the "relaxed tenured professor" is quickly going extinct.
The only thing academic hustle will get you in the 2030s and 2040s is a relatively low-paying job that requires even more hustle.
Wouldn't this be a plausible story immediately post-WWII?
1. The budgetary context in that case was the end of total warfare. Debt was high, yes, but a TON of the war expenditures from the last half decade were being unwound. So the place that the cuts would come from was very obvious and directly related to the reason for the high expenditures in the first place. You could unwind deficits while simultaneously increasing spending on everything except total warfare. Cf now: the US isn't going to cut SS or Medicare, and cuts to Defense would hit university funding streams hard.
2. The political environment is radically different. The success of the Manhattan Project, RADAR, etc. created a political environment that was amenable to shifting spending from wartime manufacturing to peacetime R&D. Cf now: there is an enormous amount of political animosity toward the academy coming from the political coalition holding most of the structural advantages. Even through the Bush presidency, Science funding was largely bipartisan. That isn't true now. At all. I think many academics under-appreciate just how toxic NSF/NIH/etc have become to roughly half of this country.
3. The GI bill infused tons of demand (and money) into the academic system, and was followed by the Baby Boom. Cf now: there's a massive demographic collapse on the horizon and people are seeking out alternatives to university education due to the cost.
https://en.m.wikipedia.org/wiki/Quaternary_sector_of_the_eco...
I don't see things going back towards the first and second sectors human labor wise, so it would have to all be taken up in the third sector (service sector)? I guess it is plausible with healthcare.
> "I feel I must remind you that it is an undeniable, and may I say a fundamental quality of man, that when faced with extinction, every alternative is preferable." - Dr. Leonard Church
It turns out that debt and money are no problem when your existence is threatened by an enemy who ideologically is committed to your total extermination. The Cold War made spending on military tech a non issue because the alternative was falling behind the Communists and possibly losing a war.
That's not at all how modern money and economics work. There is no transfer mechanism from Debt:GDP to economic productivity. That's not to say that a sovereign currency issuing government can't shoot itself in the foot any number of ways of course.
On an unrelated note, I'm not sure what modern money theories you're referring to, but the theories which purported that we didn't have to worry about inflation seem to be... slightly more out of favor than they were 1-2 years ago.
The R01, the workhorse grant of the NIH, has had the same "modular" budget since 1999.