We need to be reminded occasionally that nothing matters but long-run growth, and long-run growth all comes from productivity, better knowledge of how to better serve human needs and desires. Yet economic policy is almost all not about growth, but rather about redistribution, and in particular propping up old ways of doing things and the ...
John H. Cochrane considers the following as important: Commentary, economists, growth, Regulation, Taxes
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We need to be reminded occasionally that nothing matters but long-run growth, and long-run growth all comes from productivity, better knowledge of how to better serve human needs and desires. Yet economic policy is almost all not about growth, but rather about redistribution, and in particular propping up old ways of doing things and the rents associated with them.
Courtesy Marginal Revolution, the Institute for Progress is a noteworthy new effort to produce growth-oriented policy. Institutions are important, to spread the word and create a constituency for tending the golden goose.
..productivity growth has been in long-term decline since the 1970s. This is supposed to be the age of ambitious infrastructure investments in the battle to fight climate change, but we can’t even build new solar plants without being vetoed by conservation groups. Hyperloops and supersonic airplanes promise to revolutionize transportation, but building a simple subway extension in NYC costs up to 15 times more per kilometer than it does in other cities around the world. ...The pace of scientific progress has been slowing....
(Here and elsewhere see the original for links.) Why?
Over the last 50 years, we’ve increased the number of veto points at nearly every governmental level, failed to invest in state capacity, and raised the stakes of the debate through polarization. So it perhaps shouldn’t be a surprise that the federal government that went to the moon in 1969 botched production of simple diagnostic tests during a once-in-a-century pandemic.
But the potential is there. Maybe we are not running out of ideas after all, but merely on the edge of technical revolutions, like changing from rail to airplanes:
...there are genuinely exciting — potentially game-changing — discoveries on the horizon.
New biotech innovations...may finally deliver cures to some cancers, HIV, malaria, influenza, and EBV. New AI models are unfolding the secrets of the molecular world before our eyes. Electric vehicles are poised for a massive breakout. Commercial rocket launches are becoming such a regular occurrence that they hardly merit news coverage. And record investments are pouring into enhanced geothermal systems, advanced nuclear, and long-duration energy storage, which together could provide the globe with near-limitless clean energy capable of meeting baseload demand.
What to do?
to do the most good in the world, prioritize issues that are important, neglected, and tractable. When it comes to public policy, that means working on issues that matter a lot, that have only a few individuals or groups working on them, and that are within the realm of political feasibility. Applying this framework to the U.S. context leads to the perhaps surprising conclusion that a lot of the topics that dominate the headlines are not actually the most valuable policies to be working on.
I'll forgive them the electric cars which have no lack of highly visible boosters in the government, and soon, the Fed. But what are the big questions nobody is thinking about? Just asking the question is praiseworthy. Their answers:
Metascience – How can we change the incentives within science to produce more breakthrough research?
The U.S. federal government is the single largest source of science funding in the world. Despite how much we’re spending, we know surprisingly little about how the structures, incentives, and organizational models within science impact the results we get. But there are signs that something has gone wrong. Principal investigators report spending 44% of their time doing grant-related paperwork and maintenance (as opposed to active research). The average age of a principal investigator working at the National Institutes of Health rose from 39 years old in 1980 to 51 years old in 2008. And our scientific discoveries today appear to be less fundamental than previous advances as we continue to spend more resources. The researcher Pierre Azoulay has argued that we need to “turn the scientific method on ourselves”, and this is the direction we want to push public policy.
Absolutely! Economists tend to jump to "Science is a public good, subsidize it," but the mechanisms of that subsidy matter. It is possible to pay people to waste time, and for a bureaucracy to become self-rewarding and sclerotic. The science bureaucracy is going woke fast. (The latest: Chemistry journals) At least study what works. Study science funding as we study all bureaucracy and regulation, as a case of public choice theory. Tyler Cowen's fast grants initiative is eye opening as to how much low hanging fruit seems out there.
Immigration – How can we attract and retain superstar talent from around the globe?
For decades, the U.S.’s asymmetric advantage has been that many of the most ambitious individuals from all around the world desperately want to live and work here...... high-skilled immigration remains a vitally important, yet neglected policy topic. In particular, reforms that leverage the wide scope of executive action are underrated. ... Through both legislation and executive action, the U.S. urgently needs to start taking a proactive approach to recruiting global talent.
While I absolutely agree on the policy, two warnings. First, counting on "executive action" is dangerous. Parties change every 4 years and the next executive can undo it. Second, knowledge is non-rival. From the point of view of progress, all innovation can happen in China or Europe, and the US can become the following nation. All that matters for growth is that innovation happen somewhere. I'd rather it happen here, and we have for the moment the best place in the world to do it. But this is still about raising the US relative to the rest of the world.
That immigrants are key to innovation -- even Chinese doctoral students at US universitities, that it is fashionable to disparage, is also not particularly news. But high skill immigration does need a broader political constituency.
– How can we prevent future pandemics and accelerate progress in the life sciences?
...the pandemic exposed how weak and ineffectual our public health systems are at controlling highly contagious airborne respiratory diseases. On the other hand, the urgency of the moment — combined with decades of previous investment — enabled us to deliver mRNA vaccines in less than nine months.
... it’s entirely possible, if not probable, that future pandemics will be even more infectious and deadly than COVID.
In the news today, antibiotic resistant bacteria are on the rise. It might not even be viruses. And I don't know why our enemies are putting so much money into nuclear weapons, when designed viruses could cripple us so cheaply.
We need to advance metagenomic sequencing capabilities that can quickly detect new viruses. We need to invest in wastewater surveillance systems so we can scale those virus detection capacities across the US. We need to build mRNA vaccine manufacturing capacity so we can rapidly respond when new viruses attack. We need to leverage these systems to fight existing diseases like malaria, HIV, and influenza, which collectively kill millions of people a year. The pandemic has revealed that the life sciences contain much more low-hanging fruit — if we can only implement the right public policies.
Maybe. But we first need to start asking the questions. And then not let it languish, as all the answers to these questions did after the last SARS/ /
There is lots to add. I would add
Political Economy. How can we reform the US regulatory and administrative state to remove all those veto points, roadblocks, and stifling red tape?
But I'm here to cheer asking the question, not necessarily the answers that come up in such a preliminary document.
Perhaps some of this is reflected in
Policy as roadblock or catalyst
...Regulation can unintentionally block new innovations from reaching the market and rob society of their benefits. Why do we give regulatory special treatment to oil and gas drilling on public land over geothermal drilling? Why hasn’t a single new nuclear power plant opened in the U.S. since the Nuclear Regulatory Commission was created in 1975? Why has the FDA been so slow to approve new therapeutics, tests, and so many other essential goods during the pandemic? In these cases, regulation is the bottleneck holding back private companies from making investments.
They note some successes of federal R&D. The utter failure of NASA's heavy-lift relative to Space-X seems like useful caution. They suggest "pull mechanisms," like prizes. But the deeper question is, why do agencies not use pull mechanisms.