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I own a PhD and I do research since around 10 years now, and I'm convinced that intellectual freedom is important, and even indispensable in carrying on a research program. Especially, really good ideas cannot be pursued by means of only a short -term agenda, and the long-term plan you must build for this purpose is never guaranteed to succeed (otherwise it would not be research).
I bring back these very simple basics of how to do research for the sake of making these explicit, and to notice that nowadays, lots of people seem to neglect this aspect of science: and especially in corporate environments, it seems that people really don't get it.
Thus I see no evidence that corporate funding ever has been better for science, especially not from the point of view of fundamental research, i.e. the kind of thing that usually brings no direct benefits in a forseeable future. In my experience, state-funded research brings more freedom to researchers, although of course, there have been environments like bell labs in the past, but such kind of quality tends to remain an exception in the corporate world.
Closer to a real explanation for the problem of science decline in the west would rather be the fact that during the cold war, the west was fighting a power (the USSR) which (at least that's what they claimed) was somehow built on the idea that progress is the most fundamental force in human history (they were even claiming that there are "laws of history" which completely determine the historical future).
The point is: now that USSR has been put down, it seems to me that (especially in the US), intellectual tendencies are going in a direction where everything which is related to USSR (or to "socialism") is blindly rejected in a way that was not practiced in previous times. And of course, this is because in these previous times, our own survival was called into question, thus it would have been foolish to despise science.
Nowadays, things are different, and our lack of willingness to criticize our own culture and to see our weaknesses leads us to a very unwise and appalling path.
To quote only one example mentioned above: in the 70's, the idea of a public, widely respected attack on evolution (aka "intelligent design") could only have been written in a science fiction book, or perhaps in charlatanic science works like Lyssenko's.
Since several years now, from the point of view of progress and the simple fact that science should be part of our culture, it regularly seems to me that we are living in a nightmare. It's exacly like that: the real situation and lack of concern is in fact appalling: science (i.e.: rigour in science, and the related belief in human progress) is being silently erased from the public culture. But exacly like it is in a nightmare, we act like if nothing was that dangerous, because we feel we sleep, and that for sure, we will awake at the end of the night.
But as far as I know, nobody is sleeping here, and redressing the situation will not happen without a lot of effort. And currently, it seems to me that we don't really believe in the current reality, we believe "of course, it's temporary". But it's not, although step by step, we unwise dreamers surrender without even a fight.
Henri