[breakyerself]

Those were all ultimately for profit companies. You can only get so far with basic science if some bean counter is looking for a return on investment in the near future.

What those companies did is notable, but I think you are overselling their contributions to science. We've gotten way more scientific advancement from publicly funded science. There are private companies allowed to do R&D all over the world. Publicly funded independed science research is what has set the US apart.

[turtletontine]

I’ve seen it claimed that higher taxes on corporate profits incentivized that lab model. Better to invest in risky research than have that money taxed away. When the regulatory environment changed, shareholders insisted they should get that money through dividends and stock buybacks, and goodbye Bell Labs. I don’t know how accurate that argument is, but it certainly sounds plausible.

[mdnahas]

My father worked at Bell Labs. He said the rules of the monopoly signed with the US govt drove innovation. AT&T, which operated Bell Labs, could charge cost plus a fixed percentage, but it was based on costs from N years earlier. I believe N=3. Anyway, if AT&T improved costs, it became more profitable.

The profits of the company depended on innovation. The employees knew that. And it innovated.

[mcmoor]

Sounds like this is what's still done in last decade Amazon who didn't report profit for so long. Though it's also stopped by another regulatory change that no longer regards S&W dev as R&D for tax purposes, but I don't remember the name.

[breakyerself]

I've heard that before and it makes a lot of sense.