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235  House Subcommittee on Public Health and Environment
     Statement of Joshua Lederberg, Ph.D., regarding the
     National Health Research Fellowship and Traineeship Act of 1973
     H.R. 5640                      March 22, 1973

     I am grateful for the opportunity to record my strong support for
Mr. Roger's Bill, the National Health Research Fellowship Act of 1973.
At the conclusion of my remarks I have some technical drafting 
suggestions which should be taken as any blunting of that support.

     In principle, one could accept the potential merits of any number
of alternative methods of financing graduate education.  My point of
departure is one of great confidence in the free market as a method 
of efficient allocation of resources.  Perhaps we should be
considering some gradual steps to enhance free market mechanisms in
this field.  However, I must emphasize that only disaster will follow
from efforts to revolutionize the system by a fiat which takes no
account of the other governmental stresses on the market nor of the
social needs that underlie them; and which imposes the implementation
of a sudden, capricious shift to a new system.  Yet, this is precisely
the implication of the administration's sudden revocation of the NIH
training grants--an executive fiat applied in sweeping fashion on the
entire system, without discrimination or regard for the special 
circumstances of some of its parts.  Thus, the allegation that many 
trainees actually pursued careers in medical practice specialties of 
higher earning potential is put forward as an argument to abolish 
research training support in basic sciences like biochemistry and 
genetics!

     At the same time we are told there will be a new emphasis on
health research having well-defined missions like the conquest of cancer
and of heart disease--missions which simply cannot be accomplished
without a continuous flow of new young ideas from basic investigators.
(This is not the place to discuss in more detail the futile strategy
of deploying most of one's resources in attacking a problem like cancer
in a narrowly goal-directed fashion, at a time when we have only a
glimmer of the basic scientific insight required for such a formidable
task.)

     I could resonate with the steps intended to improve the quality
of scientific training and performance if this in some way were in
competition with the overall extent of training support.  In fact,
quality is now generally very high in many areas and is improving
rapidly in specialty areas like obstetrics, ophthamology, urology and
anesthesia--a trend that has been frustrated by the program termination.
Candidly one must admit that graduates of some of these programs
have often strayed away from research, testimony of the power of
the marketplace and to the difficulties of mounting innovative research
in some traditional areas.  The contingent obligations in the
present bill if applied to such programs also would redress the 
possibility of exploitative diversion of research training funds and 
help ensure that they achieved their intended purpose.

     In fact, it is self-evident that the marketplace has not done
very well to equilibrate the supply and demand for specialties like
radiology and pathology, judging from the price (income level) that
the market has placed on their services.  More, rather than fewer, 
specialty training programs in such high demand areas are needed to read
- just that balance.  The government can properly and effectively 
intervene just in this way, by further subsidies, if it wishes to avoid
the brunt of market valuations for such services in government sponsored
or insured health service programs.  But the clinical specialties are
a very different matter from basic science.

     If I place such an emphasis on market allocation, it is in
direct response to the administration's assertions that this is the 
mechanism that should govern career choice and investment in graduate
education!

     I can visualize an economic system that followed such Friedmanian
prescriptions, though I doubt that any economists would pursue them to
their logical conclusion in this particular field.  For one thing, to
do so would overturn our moral sense, evolved over centuries, about
the limits to which one demands all the traffic will bear when life
and limb are at stake.  We can fantasize a system in which a 
Sabin-Salk Corporation would sell a polio vaccine at $100 per shot, and
recover the Research and Development costs by benefiting only the more
affluent sector of the public.  Penicillin doses at $10,000 per 
treatment would have been a bargain in a manifest confrontation with 
life-threatening septic disease.  But the basic scientist would have to
be incorporated into the reward structure also, for his basic studies on
growing viruses in cell culture were a necessary prerequisite to the
vaccines.  And the pyramid would extend much further, of course.

     In fact, the structure would never be built; if it did, it would
collapse under the weight of bargaining over every intellectual 
transaction.  At present, all new basic scientific knowledge is quickly
added to the common pool, available for free access and prompt 
elaboration.  Contention among scientists for recognition of priority 
adds to the incentive for rapid publication.  It does little damage and 
some good by reminding us of our human frailties.  For a market-based
system we would either face costly walls and edifices of trade secrets,
or have to augment the patent system to recognize a new marketable
property right in scientific discovery and basic knowledge.  As 
justified as this may be for inventions whose exploitation typically 
requires large capital investments towards a previsible target, such 
property rights in facts and ideas, the substance of discovery would 
create such difficulties in communication that I hardly need elaborate
any further.  Long ago, the most doctrinaire ideologues of capitalism
recognized the need to socialize knowledge and to put limits on 
property rights that bear on life and health.  If there are still 
arguments for a free market in the latter arena, which I would by no 
means advocate, except as intellectual exercises to illuminate the 
policies we do choose, they have been joined in no way to the 
administration's actions in terminating the subsidy of graduate 
education.  The Ph.D. who has invested in his own education is
still expected to submit to confiscation, to subsidize the social
pool of knowledge by freely entering all of his discoveries without
specific reimbursement.  And without private or corporate property
rights in that knowledge, his later salary can only dimly reflect
the social value of his contributions!

     Even if you believed a scientist's education was worth your 
venture capital, you would face further deterrents.  We frown upon 
long-term indentures that might assure the investor of gaining a return:
bond service is a relic of another century.  (This impairment of the
right to contract one's life services, the free enterprise doctrinaire
will say, unfairly raises the cost of venture capital to the investee!)
Any practical system of enforced repayment--and I apply this re-
mark also to the present bill--has to be related to later income and for
efficiency to the system of collection of income tax.

     And reference to taxes reminds us finally that the IRS simply
does not accept the expense of graduate education as a capital 
investment--not even tuition paid, much less the costs of subsistence 
and of lost income from employment, during the training period.

     Also ignored are the consequences of sudden change.  The 
administration knows that faculty reward structures include tenure, in 
direct compensation for giving up other economic advantages in industry.
To break the tenure system now would be a retroactive confiscation; 
institutions that in good faith, and in a socially encouraged pursuit of
their own ideals, have enlarged their teaching faculty over the years,
are now smitten simultaneously with the abrogation of training funds
and with the shrinkage of research support.  These weighty steps 
deserve the most thoughtful exploration in legislative hearings to
determine if they are, in fact, consistent with sound and properly
determined national policy.

     Even if the policy direction were less faulty than it is, the
peace of its implementation should have attended such issues as:

     1.  The impact of abrupt cut-offs on aspiring students who have 
already invested a great deal in their undergraduate training plans.

     2.  The actual establishment of alternative patterns of 
educational financing and revision of tax laws.

     3.  Responsibilities to non-profit, educational institutions
which have undertaken long-term contractual obligations to their
faculty--in lieu of a higher salary structure--and which unlike
profit-making firms have no earnings with which to secure capital
resources.

     4.  The time required to solicit private philanthropy which has
been displaced by immensely larger public investments in training and
research.  The equivalent of years of accumulated endowments is now
lost to scholarship funds, over an interval in which the demand has
grown enormously.

     But from both a short-term and long-range standpoint, federal
responsibility for basic research training is a logical corollary of
what government and the people expect from those graduates.  That 
expectation is a crucial necessity if we are to sustain progress in
health as in other technologies where we may soon lose world
leadership.

     Finally, "health progress" is not just a progressive decrease in
sickness and mortality.  As the world grows more crowded, more 
complex, more polluted, and more babies have been saved from early
deaths, just keeping up to our present standards will take every in-
creasing efforts.


     TECHNICAL COMMENTS:

     434. (b).  The three-year limit is not realistic, especially for
the most intricate sciences.  It would be better to allow the secretary
to establish limits, or to extend them, at least, to three years 
predoctoral plus the possibility of two years postdoctoral, and 
occasional special years thereafter under well controlled programs.  
Three years at one institution would be an acceptable, but not uniformly
advantageous limitation.
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