I think it helps your argument to include the consideration of tariffs in the discussion of the History of the growth of U.S. wealth over time. The 72 million were attracted by a national tax system that subsidized wages and taxed foreign capital and labor. We now have a system that taxes domestic labor and allows capital to avoid taxation by nominally living offshore.
What gets measured gets managed... and that is why the students in classrooms often leave without anything except enough points to earn the necessary/desired grade. The dreaded "Will this be on the test?" interrogative from students will ever be voiced as predictably as the sunrise. Also predictable, the avoidance by political leaders of measuring anything in a way that would be negative for their paychecks and power positions. Given that bit of venting as emotional asides, the idea that we collectively, through governmental entities, might invest in something that cannot be provided well without that collective action reminds me of Mancur Olson's work as detailed in "The Logic of Collective Action". Good book. Sometimes the market has problems providing what is required to advance the collective welfare of a community/region/nation/world. And of course, people take that bit of truth and stretch it until it becomes counterproductive. Hey, will this FIG essay stuff be on the test?
I read Gordon's magnum opus and posted a review of it a few months ago. I found the book to be persuasive and I've let it influence my thinking. His thesis seems to make sense, and we could even bring it back to Thiel: we wanted flying cars, but instead we got 140 characters.
Up until this point I've found it difficult to get onboard with your idea of a bright future, but ChatGPT was a big change for me. That's the first bit of technology I've seen in forever?? That I've felt represents an actual sea change. The future, not just a 4th camera on the iPhone. So it's actually gotten me more excited about what's to come. I hope we can prove Gordon wrong.
I like this a lot. There is something to be said about the temperament of a population, lost or gained through immigration which, I believe has been and will continue to be a key contributing factor to our success and shouldn’t be overlooked. A 2008 joint study among the University of Helsinki and the University College of London entitled ‘On the Move: Personality Influences Migration Patterns’ concluded: “Temperament-related self-selection may also modify population structures, and in the long run, genetic variation underlying temperament differences may become differentially distributed across geographic regions,”. An interesting takeaway: ‘The authors suggest that emotional people may prefer shorter moves because they are less stressful compared to long distance moves and that “emotionality appears to have a dual role in migration by increasing migration probability but decreasing migration distance.”’
Goodhart’s Law: when a measure becomes a target it ceases to be a good measure. This is also why the Historical School of economics has been a failure, and why benchmarking is an act of futility.
Solow’s production function worked in an era of cheap surplus energy - that is no longer. I suggest you check out the revised production function from Prof Steve Keen.
It's funny that in closing you trip over what is arguably the most important consideration in setting tax policy but appear not to notice that on which you stubbed your toe: sovereigns (tax jurisdictions in this context) compete to attract capital and labor:
"We can ATTRACT people from OTHER states, and fuel the economic engine that will drive it all even faster".
So capital and (to a much lesser degree) labor will arbitrage differences in rates and structures to maximize after-tax returns; which in the absence of agreement among sovereigns results in a race to the bottom and a huge collective net loss to global society. With all the attendant absurdities ranging from uneconomic local development grants to double Irishes with Dutch sandwiches on the side.
Competition between sovereigns is the problem not the solution which renders any discussion of optimal rates or structures entirely moot.
Competing purely on tax shows a lack of imagination imho. Offer attractive quality of life, lots of top notch services, etc and watch the organic growth.
Thank you for such a unique and wonderful opportunity to chat with Richard Duncan to discuss his book as well as process big ideas. You keep hosting... I'll keep doing the homework and digging in. :)
Re your article today... a tiny tangent thought: have we ever really (really...) looked at the long-range implications of fostering environments to support optimized executive functioning brain health/growth in children under five years of age as our true north in how to deploy government funding in children's programs? To do so, we need to intervene under five years of age where SO MUCH development is happening. Stated differently and directly, our ROI on government spending is not optimized if we ignore children's brain development. Kiddos need unstructured play, not pedantic programs. Money demands pedantic programs. How do we get around this inherent conflict. I think about this a great deal. Maybe... if we can connect the reality that today's children are tomorrow's inventors, then can we not ask for corporations to participate in that investment via taxation?
Will we ever operate the federal government as the big business that it is? Eliminate waste, pay a competitive wage to get top talent, hold people accountable (although it appears that minimum wage line workers are more accountable than top management- another story for another day), figure out what doesn’t work and eliminate, outsource or change it. Of course it’s not simple at all, but what we are doing needs work! Think bloated! One step at a time in a process that should never end.
I agree that the future is bright but I think improvements/change will be a product of the pain that results from our current path.
I think it helps your argument to include the consideration of tariffs in the discussion of the History of the growth of U.S. wealth over time. The 72 million were attracted by a national tax system that subsidized wages and taxed foreign capital and labor. We now have a system that taxes domestic labor and allows capital to avoid taxation by nominally living offshore.
What gets measured gets managed... and that is why the students in classrooms often leave without anything except enough points to earn the necessary/desired grade. The dreaded "Will this be on the test?" interrogative from students will ever be voiced as predictably as the sunrise. Also predictable, the avoidance by political leaders of measuring anything in a way that would be negative for their paychecks and power positions. Given that bit of venting as emotional asides, the idea that we collectively, through governmental entities, might invest in something that cannot be provided well without that collective action reminds me of Mancur Olson's work as detailed in "The Logic of Collective Action". Good book. Sometimes the market has problems providing what is required to advance the collective welfare of a community/region/nation/world. And of course, people take that bit of truth and stretch it until it becomes counterproductive. Hey, will this FIG essay stuff be on the test?
Great comment. I debated how much to include on the educational "credentialism" dynamic in an increasingly long piece. Definitely a future subject.
I read Gordon's magnum opus and posted a review of it a few months ago. I found the book to be persuasive and I've let it influence my thinking. His thesis seems to make sense, and we could even bring it back to Thiel: we wanted flying cars, but instead we got 140 characters.
Up until this point I've found it difficult to get onboard with your idea of a bright future, but ChatGPT was a big change for me. That's the first bit of technology I've seen in forever?? That I've felt represents an actual sea change. The future, not just a 4th camera on the iPhone. So it's actually gotten me more excited about what's to come. I hope we can prove Gordon wrong.
I"ll say the obvious...let's start by stopping "Tax Havens" for Corp and Individuals. Good common sense read and solution. Thanks
I like this a lot. There is something to be said about the temperament of a population, lost or gained through immigration which, I believe has been and will continue to be a key contributing factor to our success and shouldn’t be overlooked. A 2008 joint study among the University of Helsinki and the University College of London entitled ‘On the Move: Personality Influences Migration Patterns’ concluded: “Temperament-related self-selection may also modify population structures, and in the long run, genetic variation underlying temperament differences may become differentially distributed across geographic regions,”. An interesting takeaway: ‘The authors suggest that emotional people may prefer shorter moves because they are less stressful compared to long distance moves and that “emotionality appears to have a dual role in migration by increasing migration probability but decreasing migration distance.”’
I 100% agree. Was unaware of this study. Thank you!
Goodhart’s Law: when a measure becomes a target it ceases to be a good measure. This is also why the Historical School of economics has been a failure, and why benchmarking is an act of futility.
https://en.m.wikipedia.org/wiki/Goodhart%27s_law
Solow’s production function worked in an era of cheap surplus energy - that is no longer. I suggest you check out the revised production function from Prof Steve Keen.
Didn't Liz Truss and Kwasi Kwarteng propose something similar?
It's funny that in closing you trip over what is arguably the most important consideration in setting tax policy but appear not to notice that on which you stubbed your toe: sovereigns (tax jurisdictions in this context) compete to attract capital and labor:
"We can ATTRACT people from OTHER states, and fuel the economic engine that will drive it all even faster".
So capital and (to a much lesser degree) labor will arbitrage differences in rates and structures to maximize after-tax returns; which in the absence of agreement among sovereigns results in a race to the bottom and a huge collective net loss to global society. With all the attendant absurdities ranging from uneconomic local development grants to double Irishes with Dutch sandwiches on the side.
Competition between sovereigns is the problem not the solution which renders any discussion of optimal rates or structures entirely moot.
Competing purely on tax shows a lack of imagination imho. Offer attractive quality of life, lots of top notch services, etc and watch the organic growth.
Thank you for such a unique and wonderful opportunity to chat with Richard Duncan to discuss his book as well as process big ideas. You keep hosting... I'll keep doing the homework and digging in. :)
Re your article today... a tiny tangent thought: have we ever really (really...) looked at the long-range implications of fostering environments to support optimized executive functioning brain health/growth in children under five years of age as our true north in how to deploy government funding in children's programs? To do so, we need to intervene under five years of age where SO MUCH development is happening. Stated differently and directly, our ROI on government spending is not optimized if we ignore children's brain development. Kiddos need unstructured play, not pedantic programs. Money demands pedantic programs. How do we get around this inherent conflict. I think about this a great deal. Maybe... if we can connect the reality that today's children are tomorrow's inventors, then can we not ask for corporations to participate in that investment via taxation?
Will we ever operate the federal government as the big business that it is? Eliminate waste, pay a competitive wage to get top talent, hold people accountable (although it appears that minimum wage line workers are more accountable than top management- another story for another day), figure out what doesn’t work and eliminate, outsource or change it. Of course it’s not simple at all, but what we are doing needs work! Think bloated! One step at a time in a process that should never end.
I agree that the future is bright but I think improvements/change will be a product of the pain that results from our current path.
It feels as though culture should somehow be measured and be on the balance sheet. Dangerous topic but seems somehow essential to economic prosperity?
Runs into the measurement issue, but agree we are undervaluing the institutions (including culture) that have defined our prior success