Tuesday , December 10 2019
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The difference between 2% and 3% growth is not 1% and other vexing puzzles of progress

Summary:
George Will is the author of this particular challenge to the innumeracy and economic illiteracy of the political class.  "Washington," he states, "is run by people who think that there's a 1% difference between 2% growth and 3% growth." It reflects an inability to understand the critical importance of economic growth for the betterment of humanity.  My brilliant colleague Tyler Cowen this past summer published an article with Patrick Collison in The Atlantic making the case for the need for a science of progress.  Tyler's book Stubborn Attachments makes the argument that we should weight long term economic growth and progress more than what we currently do in public policy discourse.  Rosolino Candela and I have a paper in the political philosophy journal, Social Philosophy & Policy

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George Will is the author of this particular challenge to the innumeracy and economic illiteracy of the political class.  "Washington," he states, "is run by people who think that there's a 1% difference between 2% growth and 3% growth." It reflects an inability to understand the critical importance of economic growth for the betterment of humanity.  My brilliant colleague Tyler Cowen this past summer published an article with Patrick Collison in The Atlantic making the case for the need for a science of progress.  Tyler's book Stubborn Attachments makes the argument that we should weight long term economic growth and progress more than what we currently do in public policy discourse.  Rosolino Candela and I have a paper in the political philosophy journal, Social Philosophy & Policy providing our own argument for the "Liberty of Progress."

One of the most important developments in the history of economic and political thought was the demonstration in the period between 1870-1930 that the processes of valuation, exchange and production cannot be separated from the processes of distribution.  We do not pick particular distributions of resources, but always choose among alternative sets of governing rules that engender the pattern of exchange, production and distribution. Much of the popular and professional discourse proceeds as if J. S. Mill's proclamations weren't corrected by subsequent developments in political economy, or that economists haven't worked through the logic of factor pricing and marginal productivity theory.  This should be the starting point for any analysis of the economic system and the discussion of justice.  If we want to make progress in political and economic thought, we must never forget the logic of choice, situational logic, and how alternative institutional arrangements will either hinder or facilitate the ability of individuals to pursue productive specialization and to realize peaceful social cooperation through exchange.  And, it is this adoption of those institutional arrangements that so significantly ease the costs of deepening the division of labor that results in the great material progress that serves as the foundation for generalized human betterment.  Yup, definitely we need Stubborn Attachments to long term growth, and to be blunt to see the sources of that growth in the expansion of trade and unleashing the creative impulse through entrepreneurship and technological innovation.

Watch this conversation between Mark Zukerberg, Tyler Cowen and Patrick Collison.

As a side note, check out roughly minute 31:30-33:00 for the case study of creative cultures of Vienna of Mises and Hayek and Edinburgh and Adam Smith.

Peter Boettke
Peter Joseph Boettke (January 3, 1960) is an American economist of the Austrian School. He is currently a University Professor of Economics and Philosophy at George Mason University; the BB&T Professor for the Study of Capitalism, Vice President for Research, and Director of the F.A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics at the Mercatus Center at GMU.

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