A bit late but I think the discussion can still be quite fruitful.
I agree, and as you can see, I am also quite late in responding-- it's exam period, so I have a lot of grading to do. It eats up time, so writing out detailed, well-considered responses only happens whenever i can find a few moments for it.
It's less about them having limited understanding those laws of economics than me and other AH readers and writers not exactly having the same kind of societal understanding of any given pre-modern society to the point where we can somehow rationalize every invention through the same capitalist-entrepreneurial model.
My point is, ultimately, that what I have described is about universal and timeless incentives. It's not a "capitalist-entrepreneurial model", except to the extent that this model is (to some extent, and in a rudimentary state) the natural and default baseline for all human interaction. So, certain things will just always be true, and one of those things is that (exceptions notwithstanding) most humans under most conditions only ever take any action because they believe it will benefit them and/or others towards whome they are sympathetic. This benefit is the broadest definition of the term "profit" (as in "what does it profit me to do [x]"), and as such we may simply say that profit is the fundamental motivator of all human action.
This leads me to the conclusion that any would-be innovation has the best chance of gaining support or interest if it can be shown to profit people in some way. What form that profit takes is inconsequential, of course. Can be anything. What matters is that if someone believes that something will benefit him, he'll do it, and otherwise, he'll spend his time, energy and capital in another -- more
profitable -- way. This was true in 10,000 BC, it's true now, and it will be true always. (Unless human nature is fundamentally altered that makes us more different from our current nature than we are presently different from animals-- because animals operate accorsding to that same principle. A tiger hunts because he is hungry, and because he values anding his hunger over the comfort of lazing about. He perceives, no matter how crudely and unconsciously, that hunting will
profit him. His situation after the hunt will be more to his liking than his situation beforehand.)
Because of these considerations, it surprises me that you consider the profit motive to be somehow exclusive to a modern, capitalist-entrepreneurial model. I re-iterate that the opposite is true: the profit motive is so utterly fundamental that almost every even vaguely conscious organism on Earth operates in accordance with it. As far as motivations go... everything else is basically just window-dressing.
But if financing education for a given amount of people means that you can't provide any of them the same kind of support that would help them invent a given thing, would it really be always more advantageous?
It wouldn't always be more advantageous in every case. But the thing is that specific, planned allocation of means can very easily be
mis-allocated. If you spread out the investment, some people who could do far more with extra investment will miss out and fail to live up to their full potential, but the chances of mis-allocating the bulk of your investment fall away. Also, once people have basic skills (particularly literacy), their capacity to invest in
themselves (without your support being needed) expands vastly. They can educate themselves by reading.
All in all, if you can educate fifty guys to an academic standard, or teach a thousand how to read (and fund a public library where they can look stuff up)... do the latter. Always do the latter. Naturally, if you can do both-- so much the better. But the more you target your investment, the bigger the chance your taking an unwise gamble. This is simply the information problem at work. You don't
know whether the thing you're investing in is going to pan out, and there may be a lot of possibilities you're not even aware of. Investing broadly in a basic education that allows large number of people to access and record vast amounts of information has an exponential effect. Most of them may not do anything of use, but by broadening the base of potential 'innovators', you will inevitably cause the emergence of innovations that you hadn't even
considered.
But it's as modern as it can get, how do I explain using that model why the Polynesians were able to do what they did? Or Vikings? Or why did X crop spread in medieval Europe while Y crop didn't? Why did some retroactively basic but really advantageous farming techiniques take so long to spread or get discovered? I don't see how this models helps me at all, it approaches some kind of tech type of "great man history" almost.
I have already explained why it isn't modern at all. You see to assume here that
only education can lead to innovation. That itsn't what I'm saying at all. I'm saying that a desire to gain some form of profit leads people to do things (including new things), and that education is one of the most efficient ways of ensuring that successful 'experiments' get recorded, become replicable, don't have to be redundantly 'inevent and re-invented' by an array of independent tinkerers, and can be efficiently taught to large numbers of people. That doesn't mean that innovation
doesn't happen without education, but that education is a vast boon to the efficiency of the process.
It is for this reason that I argue that in general, investing in education is ultimately more efficient that investing in any given 'innovation project'. That doesn't mean that there aren't times when the latter isn't more efficient in the
short term, by the way. I speak of general principles here.
But I think we should discriminate then between what people are literate in this situation, I'd say not all groups of people being literate would bring necessarily a similar amount of benefit to X field.
This is obviously true. There are cases when literacy is far more useful than in other cases. Nevertheless, it is always a net positive.