Lets say it is a hypothetical telescope that has no other use than banana/orange arbitrage. If you don't think that addition makes the analogy more accurate, you haven't seen market-data parsing FFPGAs.
And don't forget this:
"By March 2009 Spread was moving dirt. Soon it had 125 construction crews working at once. [...] At 825 miles and 13.3 milliseconds, Spread's circuit shaves 100 miles and 3 milliseconds off of the previous route of lowest latency. [...] Spread won't disclose cost, but Jason Cohen, the chief operating officer of Allied Fiber, which is building a nationwide network, says laying cable through easy terrain runs $200,000 per mile. Half of Spread's route, however, is through tough virgin terrain, pushing forbes' estimate of its cost toward $300 million."
"One day a man invents a telescope .... He provides no net-wealth to society as a whole"
Financial incentive drives creation. Programable gate arrays that can keep a limit order book drive sales of the cards. If more cards are sold, they get cheaper. If they are cheaper, they are more accessible for medical imaging.
What impact on the national fiber network has the Spread line had? What has it taught us?
Sometimes the Randian suggestion doesn't meaningfully differ from the caricature of Keynes: "dump a portion of production into the ocean to help the economy."
World War II spurred development of new metal alloys, better vehicles, and thousands of other innovations. Does that make Hitler a hero? Was war the only path?
(Sorry, I had to Godwin it before this thread got too long; the more general war analogy isn't too far off though: $300-million in heavy-equipment laden fiber laying probably resulted in some injury--is it too much to ask that we both get the beneficial externalities of R&D and put in the fiber for a useful purpose in the first place?)
The company I work for (Red Hat) has made a ton of contributions to the Linux kernel to improve real time performance. The driver and money for these contributions is high-frequency traders, but the benefits accrue to all sorts of areas and kernel users.
