The of the prizes can be recouped from the extra economic activity such an advance generates or alternately, part of the prize requirements could be ceding the patent to the governments control directly.. The rationale for prizes is that private enterprise is much better at shortterm development and distribution than longterm basic research. This is better than the government picking and choosing which research to fund and also only requires payout once the advance has already been made.

Offering sufficiently large rewards for basic research transforms such work from longterm to shortterm, placing it in the area of capitalisms strengths. Just heard your story on McCains proposed million prize for more capable battery. This is better than the government picking and choosing which research to fund and also only requires payout once the advance has already been made. The rationale for prizes is that private enterprise is much better at shortterm development and distribution than longterm basic research.