elidourado

Senior Research Fellow at the Center for Growth and Opportunity. Really into this whole progress thing.

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Draft for comment: Ideas getting harder to find does not imply stagnation

Not to be a double contrarian, but I am also skeptical of a lot of econ research on institutions. Ha!

Draft for comment: Ideas getting harder to find does not imply stagnation

I think TFP is not really ideas. It is deployment of production methods. New ideas give us new production methods, but they don't really help us deploy them. For deployment, we need a lot of effort (1% inspiration, 99% perspiration) and also high-quality institutions.

How do you explain the TFP drop in Venezuela? Did they suddenly lose a bunch of ideas? No, their institutions deteriorated and their deployed production methods declined in quality.

Same in the US. The creation of the NRC reduced the quality of the production methods we could deploy. NEPA too. Lots of other things one could cite. Simply letting us use the ideas we already have as effectively as possible would increase TFP significantly.

So explaining your three data points:

  • Institutions really improved pretty significantly over the last 1000 years (Magna Carta, reductions in violence), leading to superexponential growth.
  • At a very crude level, the basic framework of economic institutions have been mostly static over your second period, leading to plain exponential growth. (NB: to make this fit, I would start counting after the end of slavery, and still would not wish to deny the importance of improvements in social institutions leading to greater racial and gender equality).
  • Since 1970, our legal and economic institutions have declined in quality somewhat, leading to slower TFP growth. Mystery solved.

Another way to put it is: are ideas getting harder to use? We know that if we put the magic rocks together, they get hot and can be used to generate steam and electricity. But if we're not allowed to make effective use of that information, it screws us almost as much as if we didn't have it in the first place.

How can we be objective?

Stuart, I'm not seeing how it is a conflict per se to prescribe actions that would generate progress and also study what has worked to generate progress.

In the example you give, certain advocates of charter or public schools skew research on what creates valuable opportunities for children when they give advice. But the problem is that their true objective function isn't aligned with their stated objective function. They claim their goal is to advance opportunities for children, but what they really want is to promote or impede charter schools. So they skew their advice in service of their real motive while couching it in terms of their stated motive.

This could happen in progress studies as well. Suppose a progress studier's true commitment is not really to progress, but rather to libertarianism or leftism. Then they might put forward policy solutions in the language of progress studies that actually advance their other political commitment at the expense of progress. We should be wary of this.

Yet to fully separate the functions of research and advocacy will never work. It may be fine if there are at least a few people working in ivory towers who are solely studying what works to produce progress. But things immediately get muddier when you introduce any advocacy at all. Suppose I tried to be a pure advocate, and that my true goal is to advocate for policies that advance progress. Where am I supposed to find these policies? Probably I will need to read a lot of stuff on what works to drive progress. Even if there is a well-functioning pure academic progress studies community, I would at minimum need to read a lot of the papers and evaluate the literature, essentially doing my own meta-analysis. That's basically research. Given the current state of the field, advocates probably have to go even deeper than just this minimum level of research.

I think I could accept some softer claims.

1. It would be good if there were at least a few people who as pure academics study what works to produce social progress. These people could serve as a check on advocates misconstruing research to advance some other agenda.
2. We should be attentive to the fact that as a movement becomes politically successful people might use the language of that movement to push for other goals. This matches the charter schools example, using the language of opportunities for children to drive an ideological victory for or against charter schools.

Curious to know if you or anyone thinks I'm missing anything important here.