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When Private Pleasures Lead to Public Goods

Why would anyone pay millions of dollars to fund Titanic research? This was the question that came to mind as I watched a crew of scholars and explorers on television, attempting to add more pieces to the puzzle of what happened on that cold April night in 1912. It is an interesting subject, no doubt, but we know the story. With the exception of the most subtle details, we understand the problems that caused the Titanic’s demise and how to avoid them. Moreover, shipbuilding has advanced by leaps and bounds over a hundred years. What, then, is the value of further exploration, and who is supporting it? Though we are constantly made to believe that funding research and other “public goods” is part of the essential role of government on which progress depends, most research is supported by the private sector—sometimes in very creative ways, as this case demonstrates. Titanic expeditions have been primarily funded by private investors and entertainment industry corporations such as IMAX, National Geographic, CBS and Walt Disney. Even most of the individual investment, from entrepreneurs like James Cameron and Jack Grimm, was made with the express intention of publishing books, films and other media. In short, we found and explored Titanic because the entertainment industry knew enough people would be fascinated by it. They turned that fascination into dollars. For those on the research team, and for those participating from their homes and movie theaters, these endeavors are about gaining a better understanding of the story of Titanic, with all of its science, beauty and tragedy; a very noble enterprise. What has made much of this economically feasible, however, is the market. We think of the market as having no beauty—no capacity for emotion and inspiration—but as markets are driven by thinking and feeling individuals, they reflect the full spectrum of human interests. There are many people who believe that the market is incapable or unwilling to pursue public goods—things that benefit all of us, not just those who pay up. They believe that if government does not provide these goods, no one will. But these critics underestimate the flexibility and creativity of actors in a market, and overstate their greed. Capitalism is about capitalizing on opportunities to bridge the gap between the desire for goods and their attainment. These goods can be anything, including research. There is always a price that must be paid by someone, but markets are extremely creative in finding new ways around obstacles to provide access to more goods at a lower cost. For example, Wikipedia and Google are two of the most visited websites on the internet, providing services to billions of people all over the world, yet they are free for the user. That would have been unimaginable 15 years ago, around the time James Cameron released his hugely successful “Titanic.” When discussing the mysterious ways of the market, I am frequently reminded of the scene in another film, “Jurassic Park,” where Jeff Goldblum’s character insists that though all dinosaurs in the park are female, “life finds a way.” Biology is a useful analogue to economics. The market, composed of a complex network of rational and empathic parts, adapts to new challenges and opportunities to maximize value. If there is a need out there—one where there is actual value to be gained—entrepreneurs will find a way to meet it. They just need the freedom to do so.