There is no necessary connection between leadership in basic science and leadership in the applications of science, because scientific progress is a cooperative endeavour and not a competitive game; indeed, there may be a conflict between basic research and applied science. The notion of “a position of leadership”; in science raises questions of what leadership consists in and what its value is to the nation. The two main arguments for government support of science are cultural-social, and economic. The cultural-social argument (...) stresses scientific activity as a form of social consumption of wealth and raises the question of whether other uses of the resources employed would contribute more to the greatness of the society. The economic argument stresses basic scientific research as a form of investment for the future, and raises the questions of what the rate of return on such investment is and whether and to what extent government support is called for. Relevant economic research results bearing on this problem are scarce. Economic theory suggests that competition in the market will supply less than the optimal amount of basic research; but our society substantially supplements the market through private contributions to and government support of science, and the question is whether this supplementation is deficient or excessive. Here difficult problems arise, on which more economic research is needed; one of these concerns the relative merits of government and private support of science. The rule-of-thumb procedures generally recommended for determining the volume and allocation of government support to basic scientific research generally ignore these problems, and amount to endorsing the present level of government support or recommending that it be increased. Allocation of federal support of science should take account of the possibility of stimulating the economic development of poor regions of the country by locating scientific research facilities in them. (shrink)