It's said in Objectivism that government is nto a productive entity. However, I'm not sure this is true. Specifically, the government necessarily must develop new technology. A proper role of the government is defense of the people (the police and military). In order to do this effectively, they have to maitain technological parity with, or ideally superiority to, its enemies. This requires technological innovation within the military. These technological developments can then be turned over to the private sector. A fantastic real-world example of this is CB radios, which were originally developed as top-secret military technology in World War II (they were used to remotely set off bombs placed by resistance fighters, using radio signals the Germans were unable to detect).
So, fundamentally, here's my question: What would be improper in the government holding the copyright to technology developed by the military or police? I don't see any use of force in this--the government would be acting in the same manner as any private enterpise. I don't see any violation of rights--no one paying royalties has any more right to the technology than they would if a private company made it. And I don't see how it violates the proper role of government--it's a side-effect of the government properly fullfilling that role. And it would allow the government to finance itself without taxation, or at least it would allow the government to supliment other methods of payment. Is there something I'm not seeing?
The question's main thesis is:
... the government necessarily must develop new technology ... to maitain [maintain] technological parity with, or ideally superiority to, its enemies.
This formulation stipulates a standing, prolonged existence of powerful enemies who pose a real threat to a free country. But a free country of the size and capabilities of the U.S., with a proper foreign policy, would eliminate such threats instead of continuing to tolerate them and trying to perpetuate either "peaceful coexistence" with them or "mutual assured destruction" if they attack. There would be extended periods of prolonged world peace, with little pressure on the nation's military forces to prepare for war. The military could let technology develop naturally in the free markets of the private sector, and invite and fund military applications of the technology only as needed in the unusual times of credible threats of war.
Given the nature of a free society and the radically different nature of potential enemies, it is highly unlikely that any real enemies would have a great technological advantage over a fully free country such as the U.S. could become. Enemy countries would be highly controlled systems seeking to remain in power through conquest and plunder (as Ayn Rand describes in "The Roots of War" in CUI, Chap. 2). A highly controlled country is inherently far less efficient and productive than a free country and far less able to keep up with a free country's continual technological advances.
The question also mentions domestic police forces, which normally already rely on private sector technology, often adapted for police use as needed and economically feasible. Police forces, like the military, are overwhelmingly buyers of privately developed technology, not sellers of technology to the private sector.
The basic thesis of the question has a "Part II":
These technological developments [by government] can then be turned over to the private sector ... [which] would allow the government to finance itself without taxation, or at least it would allow the government to supliment [supplement] other methods of payment.
Agencies like NASA might be cited as examples where government owned and run enterprises can lead to developments which have economic value for adaptation in the private sector, i.e., where government is a seller to the private sector. But NASA is not a proper function of government, not even as a supposedly revenue generating enterprise able to pay for itself and have additional funds left over the help pay for the rest of the government.
It is true that Ayn Rand expressed very high praise for the Apollo space program as a technological achievement. In "Apollo 11" (VOR Chap. 17, pp. 169-170) she wrote:
Is it proper for the government to engage in space projects? No, it is not—except insofar as space projects involve military aspects, in which case, and to that extent, it is not merely proper but mandatory. Scientific research as such, however, is not the proper province of the government.
Voluntary government funding in a free society would need to come primarily from sources such as Ayn Rand describes in VOS, Chap. 15 ("Government Financing in a Free Society"). It would not be proper for the government to attempt to engage in enterprises in competition with the private sector, even financially self-supporting enterprises, if any such government enterprises could actually exist. Any possible government revenue from government-developed technology would most likely be minuscule compared to the total revenue that the government would need to function, and the total revenue needed would be quite small compared to today's size of government if government were limited to its proper functions.
The question mentions a specific example:
A fantastic real-world example of this [technology innovation by government] is CB radios, which were originally developed as top-secret [during] World War II (they were used to remotely set off bombs placed by resistance fighters, using radio signals the Germans were unable to detect).
This reads like a misstatement of what "CB radio" refers to. Radio technology was certainly adapted and utilized vigorously during World War II, not only for remotely detonating bombs but also in developments such as radar. The general technology of radio signaling dated back much earlier, even preceding World War I. "CB," in turn, simply means "Citizens Band," a specific band of radio frequencies allocated by the FCC for civilian use. For additional details, refer to the Wikipedia article on "Citizens band radio." Other related Wikipedia articles include "History of radio," "History of mobile phones," "Superheterodyne receiver," and "Radar." I could not find anything specifically linking "CB radio" to World War II, other than a loose connection in the origination date of CB radio (1945) under FCC regulations. Perhaps the questioner can provide a more definitive reference for his claims concerning the origins of CB radio.
I did find one related historical point in the Wikipedia article on "Superheterodyne receiver":
The superheterodyne principle was devised in 1918 by U.S. Army Major Edwin Armstrong in France during World War I. He invented this receiver as a means of overcoming the deficiencies of early vacuum tube triodes used as high-frequency amplifiers in radio direction finding equipment.... Armstrong was able to put his ideas into practice, and the technique was soon adopted by the military.... Armstrong eventually sold his superheterodyne patent to Westinghouse, who then sold it to RCA, the latter monopolizing the market for superheterodyne receivers until 1930.
Apparently Maj. Armstrong's original work was for the benefit of, and funded by, the U.S. Army, but he apparently also qualified for a patent on the technique which he evidently owned and later sold to Westinghouse. The question, then, is: in such a case, where a member of the military develops a technological innovation initially for the military and funded by the military, who properly owns any patent that might be obtained on the innovation? The custom in the 1918 era may have been different than it would be today, but I don't see any clear reason why such a patent could not be held by the government and sold to private industry as soon as the demands of military secrecy allow. Such a sale would not be intended as a revenue-generator for the government, but merely as a means to getting commercially useful technology into the hands of commercial developers in an orderly manner, letting the market (e.g., highest bidder) determine the sale price. The resulting revenue could be appropriately used to benefit governmental costs. Perhaps someone who is more familiar with the actual history of Maj. Armstrong's work can comment further on this point. Note that this example apparently originated in wartime, although the same innovation might well have occurred within a few years after 1918 as commercial interests sought improvements in radio technology.
Update: Armstrong and Commerce
I found a biographical article on Edwin H. Armstrong on Wikipedia that explains the patent battles he had to fight, and which ultimately left him financially ruined and deeply demoralized to such an extent that he ended up committing suicide in 1954 at age 63. The article is titled, simply, "Edwin Howard Armstrong."
The article also explains:
During his service in both world wars, Armstrong gave the U.S. military free use of his patents. Use of these was critical to the Allied victories.
And actually, to this day, I believe patents are issued to the individual inventors, not to corporations. But corporations acquire ownership rights through separate contracts with their employees, as conditions of employment, in which employees agree to "assign" any patents to their employers. Armstrong, however, never did that (and was never a corporate employee). His life might make a fascinating movie (if it hasn't been made into a movie already).
In a comment, the questioner also asks why government ought to turn any governmental discoveries and inventions over to private ownership instead of trying to develop them commercially (perhaps as ongoing revenue sources through royalties) within the government (subject to potential secrecy needs for military purposes). Objectivism's answer is that commercial enterprises of any kind are not part of the proper purpose of government, not even as alleged "corollaries" of the police and/or military functions of the government. Commercial activities are best performed by commercial enterprises without hindrance by the government, and commercial activities on the part of the government would distract the government from its main purpose of protecting individual rights and acting as man's agent of retaliatory physical force against criminals and foreign invaders. Furthermore, very few commercial "spinoff" activities performed by the government would be self-supporting, necessitating an improper use of governmental funding sources for expenses not essential to the government's basic reason for existing at all.
(The comments also mention Amateur Radio, but this is different from Citizen's Band radio, as the Wikipedia article on the latter topic briefly points out. For reference, CB radio uses the 11 meter band, i.e., 27 MHz, unlike Amateur Radio. Licensing requirements for Amateur Radio are more stringent, as well.)