"We wanted flying cars, instead we got 140 characters." Peter Thiel's famous complaint hearkens back to the middle of the 20th century, when high economic growth seemed unstoppable and the future was filled with visions of moon bases, nuclear energy too cheap to meter, and yes flying cars.
I frequently see people praising Reaganomics for getting the US out of the 70s doldrums. But I don't understand what that substantially was. It doesn't seem that regulation was dramatically reduced.
During Reagan's eight years annual deficits averaged 4.0% of GDP, compared to a 2.2% average during the preceding eight years. So is it all down to marginal tax rates and shifting more of the tax burden from the rich to the poor?
There was important economic deregulation in the 70s and 80s -- airlines, trucking, oil and gas, telecoms. Most of it started during the Carter administration, but the Reagan administration did keep it going.
Good discussion and looking forward to reading the book.
Regarding public policy that can stimulate innovation, in addition to clearing away red tape we need to pay close attention to incentives. Take space exploration for example. Apollo incentivized some revolutionary technologies, but with no concern for cost. The Shuttle followed in that same tradition, as is Artemis now. What we end up with are impressive but extremely expensive (over $1Bn per launch) technologies, and no incentives in place for the companies involved to lower costs. (And if you're a Congressman from Alabama or Texas or Florida, those high costs are a feature not a bug.)
The regulatory innovation that made SpaceX – and the entire New Space industry – possible is unknown to most people: NASA's Commercial Orbital Transportation Services (COTS) program in 2006. This was a radically different approach that for the first time incentivized cost efficiency, which has directly led to much lower-cost access to space (and reusable rockets). The lack of progress for 30 years boils down to misaligned incentives, not a "lack of vision" or geopolitics.
Appreciate the response and thoughtful comment. I’ve always been fascinated by the “if we focus on optimism, people won’t see the urgency” vs “if we focus on pessimism, no one will believe anything can change” dichotomy. One answer to that might be “accuracy is important, whatever it is.”
I will generally not be the one to point out where things are getting better - I will be focused on the things that need to improve. And we can only hope that people will see both the wonderful and the awful as they are.
Only the smallest slice of people have any real concept of “futurism” or what it means to be “upwing” or “downwing” or any of these big picture concepts.
I suppose being willing to talk about clean energy and the value of immigration for the US is a victory in itself - maybe someone relevant will be inspired.
But my opinion on anyone willing to talk about optimism or the reduction in global poverty (which statistically is real, I know) is that they are ignoring the acute problems of those who are not seeing their lives get better and haven’t for decades.
Those solutions are difficult - and I agree the answer is not anti-growth - but let’s not pretend that optimism or viewing growth positively is going to help those in the worst shape. That requires a focus that few thought leaders possess today.
Max Roser at Our World in Data has summarized matters quite pithily: "The world is awful. The world is getting better. The world can be much better." I think that's pretty good, although I'd start less dismally with "The world is a mix of wonderful and awful." The main point, though, is that optimism is necessary but not sufficient. Optimism without recognition of the world's serious problems risks devolving into complacency and Pollyannaism. But once you face up to the huge challenges that confront us, it's vital to recognize that we have made enormous progress; otherwise we risk devolving into fatalism and demoralization. Just being realistic -- knowing that we live in a world full of pain but that we have made great progess -- makes you look like a cockeyed optimist in comparison to today's widespread pessimism, but I believe that pessimism is both unrealistic and self-defeating. https://ourworldindata.org/much-better-awful-can-be-better
"Evidence is mounting that just slowing population growth and slowing labor force growth are very bad for productivity growth, very bad for innovation."
It's a frequent claim, but evidence? And even if is is, how contingent is it? People don't have to plan careers that terminate at 65.
I believe you have one paragraph on aging as a cause of less dynamism. But maybe a lot of that is institutional. Our model is workers arrive with skills that deteriorate with age. Maybe if we expected workers to continually re-skill ourselves ... I don't deny that age has SOME effect -- Nobel prizes are not awarded for work done by 80 year olds but "very bad for productivity, very bad for innovation" seems exaggerated.
The problem with Reaganomics was he didn't just cut (high deadweight loss) taxes, he reduced revenue! Pure fiscal irresponsibility! And how much regulation was cut?
I frequently see people praising Reaganomics for getting the US out of the 70s doldrums. But I don't understand what that substantially was. It doesn't seem that regulation was dramatically reduced.
During Reagan's eight years annual deficits averaged 4.0% of GDP, compared to a 2.2% average during the preceding eight years. So is it all down to marginal tax rates and shifting more of the tax burden from the rich to the poor?
There was important economic deregulation in the 70s and 80s -- airlines, trucking, oil and gas, telecoms. Most of it started during the Carter administration, but the Reagan administration did keep it going.
Good discussion and looking forward to reading the book.
Regarding public policy that can stimulate innovation, in addition to clearing away red tape we need to pay close attention to incentives. Take space exploration for example. Apollo incentivized some revolutionary technologies, but with no concern for cost. The Shuttle followed in that same tradition, as is Artemis now. What we end up with are impressive but extremely expensive (over $1Bn per launch) technologies, and no incentives in place for the companies involved to lower costs. (And if you're a Congressman from Alabama or Texas or Florida, those high costs are a feature not a bug.)
The regulatory innovation that made SpaceX – and the entire New Space industry – possible is unknown to most people: NASA's Commercial Orbital Transportation Services (COTS) program in 2006. This was a radically different approach that for the first time incentivized cost efficiency, which has directly led to much lower-cost access to space (and reusable rockets). The lack of progress for 30 years boils down to misaligned incentives, not a "lack of vision" or geopolitics.
We'll see how far the private spaceflight revolution goes, but already COTS is a standout in its ratio of benefits conferred to attention received.
Appreciate the response and thoughtful comment. I’ve always been fascinated by the “if we focus on optimism, people won’t see the urgency” vs “if we focus on pessimism, no one will believe anything can change” dichotomy. One answer to that might be “accuracy is important, whatever it is.”
I will generally not be the one to point out where things are getting better - I will be focused on the things that need to improve. And we can only hope that people will see both the wonderful and the awful as they are.
Only the smallest slice of people have any real concept of “futurism” or what it means to be “upwing” or “downwing” or any of these big picture concepts.
I suppose being willing to talk about clean energy and the value of immigration for the US is a victory in itself - maybe someone relevant will be inspired.
But my opinion on anyone willing to talk about optimism or the reduction in global poverty (which statistically is real, I know) is that they are ignoring the acute problems of those who are not seeing their lives get better and haven’t for decades.
Those solutions are difficult - and I agree the answer is not anti-growth - but let’s not pretend that optimism or viewing growth positively is going to help those in the worst shape. That requires a focus that few thought leaders possess today.
Max Roser at Our World in Data has summarized matters quite pithily: "The world is awful. The world is getting better. The world can be much better." I think that's pretty good, although I'd start less dismally with "The world is a mix of wonderful and awful." The main point, though, is that optimism is necessary but not sufficient. Optimism without recognition of the world's serious problems risks devolving into complacency and Pollyannaism. But once you face up to the huge challenges that confront us, it's vital to recognize that we have made enormous progress; otherwise we risk devolving into fatalism and demoralization. Just being realistic -- knowing that we live in a world full of pain but that we have made great progess -- makes you look like a cockeyed optimist in comparison to today's widespread pessimism, but I believe that pessimism is both unrealistic and self-defeating. https://ourworldindata.org/much-better-awful-can-be-better
"Evidence is mounting that just slowing population growth and slowing labor force growth are very bad for productivity growth, very bad for innovation."
It's a frequent claim, but evidence? And even if is is, how contingent is it? People don't have to plan careers that terminate at 65.
Read my essays, starting with "The Global Fertility Collapse." https://brinklindsey.substack.com/p/the-global-fertility-collapse
I believe you have one paragraph on aging as a cause of less dynamism. But maybe a lot of that is institutional. Our model is workers arrive with skills that deteriorate with age. Maybe if we expected workers to continually re-skill ourselves ... I don't deny that age has SOME effect -- Nobel prizes are not awarded for work done by 80 year olds but "very bad for productivity, very bad for innovation" seems exaggerated.
The problem with Reaganomics was he didn't just cut (high deadweight loss) taxes, he reduced revenue! Pure fiscal irresponsibility! And how much regulation was cut?