I don't think these kinds of long term, far-seeing projects would survive in the life-and-death contest of startups and the private sector either.
I dunno what the alternative is, other than political activism, pushing parties to support progressive tax policies, and educating our peers and family members. It's not only research on the line here.
The key is that money is, for most people, a negative need, not a positive one. The authors of seL4 didn't write it because they expected to get superrich — but they could have been prevented from doing it by needing a job to pay the rent. Remember that Bram Cohen wrote BitTorrent while couchsurfing on friends' couches and living off credit card balance transfers. YC was founded with the idea that three months of "ramen money" would be enough to get a lot of ideas off the ground.
I think there are a lot of things we can do:
1. Promote free software, peer-to-peer networking, cryptocurrencies, and privacy software like Tor. Don't forget, governments burn libraries. Free hardware like RISC-V will become extremely important once we have matter compilers.
2. Lobby against patent, copyright, trade secret, noncompete enforceability, and other legislation that make the contents of employees' minds the property of their employers and legally impose censorship. We don't need to eliminate these entirely, but the more we can reduce their scope, the better off we are. California's pioneering legislation in this area was probably a significant factor in the 1980s move of the computer world's center of gravity from Boston to Silicon Valley; China's nonenforcement was probably a significant factor in its 2000s move from California to China.
3. Remind people that the freedom to tinker is a human-rights issue, a government transparency and accountability issue, a consumer-protection issue. We need all the allies we can get.
4. Reduce people's dependency on employers and employment for what they need to survive, through programs like public libraries, public healthcare, retirement, public education, universal basic income, churches, widespread solar panel deployment, squatters' rights and easier adverse possession, homesteading, soup kitchens, the Rainbow Gathering, ashrams, food banks, police reform, volunteer mental health counseling, decent public housing like Britain's 1960s council housing, BeWelcome, Hospitality Club, and open borders. Our current society already produces so much that scarcity of basic goods need not imperil anybody's survival. (There are of course cases on the margin like funding Gilead's development of new drugs, and perhaps synthesizing some drugs that are especially difficult, but that's no reason for people to die on the streets of homelessness-induced hypothermia.)
5. Organize programs like GSoC, Patreon, and Kickstarter that can raise funds to the people working on public goods such as free software. Alex Tabarrok's "dominant assurance contracts" might provide an incentive structure for this that improves on Kickstarter's incentive structure.
6. Organize into collectives such as monasteries, Google, or universities — organizations like these, imperfect though they are, have often been very effective at protecting their members from the societal pressures of the "life-and-death contest of startups and the private sector", not to mention law enforcement, with constructs such as academic freedom, tenure, "Googliness", and 20% time. Today's Google, like today's universities, are unfortunately not as strong as it once was — hierarchical command relationships make them vulnerable to political takeovers. But a university is fundamentally a faculty senate organized around a library, and Google was at one time fundamentally a group of hackers organized around a search engine. Such things can be destroyed, but they can also be created. They can survive by receiving donations, as some monasteries do; by providing services to outside entities, as universities often have; or by earning rent from an endowment, as state land-grant universities and other monasteries do.
The housing issue is particularly bad because, in many places, legally housing a person costs hundreds of thousands of dollars, more than an average employee can earn in many years. I wrote a bit in https://news.ycombinator.com/item?id=23264786 about the underlying economics of the situation.
“ China's nonenforcement was probably a significant factor in its 2000s move from California to China.” one of the most anti-human organisation and arbitrary ruled organisation is the best to develop software because it is free. Are you joking.
I dunno what the alternative is, other than political activism, pushing parties to support progressive tax policies, and educating our peers and family members. It's not only research on the line here.