Grad student here. I have thought about this a lot. I think governmental funding sources have problems similar to those from companies. They may not be as explicitly biased, but agendas will exist. There's also the problem that the people approving the funding don't necessarily make good choices. I might prefer an explicit lottery to the current system.
My plan right now is to save money, retire early, and then doing whatever research I want that fits my budget. This avoids many of the problems with the current system, but is not possible for many.
This would allow me to pursue more risky research (in the sense that the research may fail to produce useful results) than an assistant professor trying to get tenure could. I also wouldn't have to raise funds, so I could focus on projects I believe are important, not just what can get funded.
In the book "Invention" by Norbert Weiner, as I recall, he suggests that the government could fund independent researchers to encourage better research. I don't think that will happen, so I have a DIY solution instead.
You're plan sounds very appealing, but is unfortunately very limited to non-wet-lab sciences, such as CS. The amount of set-up and running costs for just a barebones functioning laboratory, e.g. in biochemistry, is in the multi-million dollar range, so there you will still be needing some sort of funding or a very large savings account.
I suspect some corruption going on when I hear something like this. I have no experience with biochemistry, but in my university they showed us a (selfbuild) 3D equipment consisting of one or a couple of computers, 3 (good) beamers and a gauntlet to control the scene. I couldn't believe the price-tag: 300k €. I think the problem is the same for many institutions. They get budget and need to spend it somehow (if they don't then they get less the next year).
My plan right now is to save money, retire early, and then doing whatever research I want that fits my budget. This avoids many of the problems with the current system, but is not possible for many.
This would allow me to pursue more risky research (in the sense that the research may fail to produce useful results) than an assistant professor trying to get tenure could. I also wouldn't have to raise funds, so I could focus on projects I believe are important, not just what can get funded.
In the book "Invention" by Norbert Weiner, as I recall, he suggests that the government could fund independent researchers to encourage better research. I don't think that will happen, so I have a DIY solution instead.