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Originally Posted by punkworld
In my opinion, government funding for "research for the sake of research" can work out extremely well, as long as the government doesn't try to get involved with the research itself.
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In pre-capitalism times this was absolutely necessary, as it is still in many countries who haven't truly reached that form of goverment. Without it, we wouldn't have had the Industrial Revolution, much less the Renaissance. Leading up to this time, Kings made patrons out of artists and scientists. Of course, there wasn't much economic incentive to innovate back then.
Look at what government programs in non-capitalist countries have produced: we're typing on the results right now, as a matter of fact. Without CERN, would we have an Internet?
Good points all through your post, although I didn't quote the majority of it.