The technology needed to develop a battery of this particular nature would probably be expensive enough to keep the companies small enough to be bought off from developing it. But if a larger company did buy it just to keep it off the market and reap profits, then the government could step in in its own way.

And immediate reward might be nice for the developer, but anyone should realize that the long term benefits of this battery would be large enough to make that government bonus unnecessary for the actual development of it. In this case, the benefit from all of that research and development money would be huge. McCain's support of this is most likely because of environmental reasons, not economic reasons, as government subsidies usually don't make much economic sense, while environmental factors can represent market failures.

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"It is extremely difficult for our contemporaries to conceive of the conditions of free banking because they take government interference with banking for granted and as necessary"

-- Ludwig von Mises

Subsidizing in this case is an ongoing payment regardless of the status.
IE -A company says it will make a battery you subsidize it with 300 million as it develops the battery ..whether it ever even makes one or not.





This is a company competes to make said battery and then if its battery is deemed to be the best its rewarded the payment. The battery exists. Its a reward not a subsidy.

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McCain/Palin 2008
"We make war that we may live in peace"
"Peace is the highest aspiration of the American People. We will negotiate for it, sacrifice for it, we will never surrender for it, now or ever."
"Keep that faith,keep your courage,stick together, stay strong,do not yield,do not flinch,stand up,we're Americans,we'll never surrender they will"
http://members.cox.net/neddy/bobhope_kerfuffles.wmv
http://youtube.com/watch?v=RnfflRNpwKA
http://youtube.com/watch?v=j-QYIP7o2-A

McCain proposes $300M prize for the energizer Bunny!!! But a good idea !! A diferent approach to R&D BUT it just may charge up auto industry !! It may give it a jolt and spark the Motor City area. It may transform our economy and surge auto sales.

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"I will not take the low road to the highest office in the land" - Guess Who? You go it !

But is this benefit being promised as a form of payment by the government as a way of encouraging economic activity that would otherwise not happen? If so, then it is a form of subsidy, whether it is exactly like your typical research and development funds or not. The government is still using its money to encourage economic activity that would otherwise not happen.

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"It is extremely difficult for our contemporaries to conceive of the conditions of free banking because they take government interference with banking for granted and as necessary"

-- Ludwig von Mises

a good idea, yes. But don't expect some huge impact out of this.

Something that will truly "transform" an economy would require massive investment. Kinda like what the German Federal govt did.. heavily invested in solar technology. Soup to nuts too.. from R&D, to factories, and subsidies for home owners.


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Germans invested nearly US$5 billion in new solar photovoltaic systems and in doing so employed nearly 35,000 in the solar industry. Germany now operates a solar-electric generating capacity of about 2,500 MW. Analysts estimate that solar cells in Germany now generate about 2 TWh of electricity per year, or about one-half of one percent of German electricity consumption.[1]
http://en.wikipedia.org/wiki/Solar_power_in_Germany
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"When I'm in command, every mission is a suicide mission!" -Capt. Zapp Branigan
The United Church of the Latter Day Tangential Tarts

its a gimmik but atleast he has a gimmik something that obama doesn't have.

We don't really know the expense of developing such a battery at this time. It is possible that a whole new type of battery, fairly inexpensive to develop, might be the answer. Someone just has to think of it and do the development.

But yeah, most likely it would be expensive. This doesn't necessarily exclude smaller companies. Just because larger companies have more money to spend on R&D doesn't mean they will put more into the development of a better battery. They are more likely to spread their risk out over several R&D projects. Smaller companies typically have fewer R&D projects at any one time and are more prone to risk.

Even if larger companies put more money into development of a better battery, it doesn't guarantee success. The research has be on the right track. Smaller companies may just take longer to develop the battery.

This is sort of a gray area, so let me throw out some really stupid numbers to try to illustrate my point. Please don't take the number too seriously.

Say you develop a batter that is 100 times more efficient than anything on the market today. Let's just say production costs are the same. Let's also say that you can't increase your profit margin on the sale of the batter by 100 times because people wouldn't buy it at that price. So now you are selling 1 battery for every 100 you used to sell and making less money.

Of course, you may say that you will increase your market share, but that still does not guarantee you will make more money. Let's say you quadruple your market share with the new battery. Now you would only have to increase your price to 25 times your original profit margin just to break even. You'll never recover initial investment costs.

Like I said, I know the number are stupid, but they do illustrate a point. Just because you have a better product does not automatically mean that you will make more money. And the companies main concern is to make money for its investors.

And to make it even more complicated, you have to weigh any potential profits of a better battery against those of other R&D projects. That's where the $300 million reward comes in.

I would say his support of the idea is most likely for political reasons. He is trying to reduce the dependence on foreign oil in an environmentally friendly way, a great position to take in this day and age.

I know you said not to take the numbers seriously, but think about this.

Your battery that you made is 100 times more efficient. EVERYONE would want this if it was that efficient, it would almost be too good to be true. Suppose you can make an extra dollar off of everyone who buys. Just one dollar. Just in the US, that would add up to just over 300 million dollars, not to mention worldwide. You would make a fortune if you had anything even close to being that much more efficient than what is on the market.

And I would say that McCain is supporting this for political reasons, but environmental political reasons.

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"It is extremely difficult for our contemporaries to conceive of the conditions of free banking because they take government interference with banking for granted and as necessary"

-- Ludwig von Mises

Yes, the 100 times was an exaggeration for illustrative purposes. It will probably be much lower to the point where not everyone will be willing to pay the extra money to buy the battery. But the point is still valid, you can have a better product and not make more money with it, which is why I like the reward.

Sure, you can say environmental political reasons, but I don't really see the point. Politics moves with public opinion, and at the moment the public is generally concerned with the environment. Same reason heathcare and the economy are such hot topics.