Could anyone enlighten me as to whether or to what extent governments make revenue from investments in financing/venture capital, currency markets, stock markets, etc.?
I’m curious about this case in particular: say the United States federal government partly funds science research with a private corporation, and this project results in a very profitable product. Does any of that come back?
Government pension plans are some of the largest institutional investors in the land, accounting for trillions (with a T) of dollars of investment capital.
Governments own many public service corporations, for example, Amtrak. These are often money-losers which are supported with cheap loans or occasional bailouts from the treasury because they’re seen as a public service.
Just editing my post to note that it’s sort of tangential to the question posed by the OP. Not that that ever stops me.
In Canada, companies owned by the government are called Crown Corporations. Most lose money, as friedo notes, but are part of what the government considers valuable contributions to the public weal. In Ontario, liquor is sold through a Crown Corporation called the LCBO (“Liquor Control Board of Ontario” – don’t let the name fool you, it’s run as a conventional company). Although much of the distribution and warehousing is now privatized, the LCBO still operates the retail stores at a staggering profit*. And it’s a very difficult vice to give up for politicians; of all of the promises made by the Harris Conservative government in their [in]famous “blue book,” privatizing the LCBO is the only one they didn’t keep (just go with me that that’s a significant fact, despite the fact that you likely have no idea who I’m talking about). It’s just too difficult for any government to accommodate the huge decrease in revenue that privatizing this company would mean, regardless of any moral philosophy they have about the LCBO.
Another consideration in government-run businesses is policy, rather than profit. Both the Japanese and Canadian governments (and I imagine most industrialized nations) run banks that are policy-motivated rather than profit-driven, for instance.
Historically the UK Post Office made a substantial contribution to Government revenue, then they managed to screw it up.
Another example in the US is the various mortgage backing companies: Fannie Mae, Freddie Mac, etc. These are quasi-private companies run with some government oversight whose job it is to buy mortgages from banks that issue them. This frees up capital at the banks, who then use the money to issue new mortgages. The result being that mortgages are cheap and plentiful for more people. (In theory, anyway.) These ventures remain consistently profitable. But the corporations are self-sustaining and don’t share their profits with the treasury. (However they do pay income taxes.)
In general, no. The federal government usually funds science by grants, not equity investments. At most the grant agreement may contain a clause that the government gets to use any resulting technology without paying royalties. Other than that, the main return on commercialization of government-sponsored research is tax revenue.