Conservatism and Innovation

It was with great pleasure that I read another insightful piece of commentary from James Pethokoukis at the AEI entitled The most important economic chart in Western civilization — and how it happened. After showing how growth has accelerated since 1750, he quotes from Economic Growth: Unleashing the Potential of Human Flourishing, which states that the qualities necessary for growth are an impartial judicial system, a relatively corruption-free government, and a financial system modestly regulated by the government. These are all things which I thought even the Chomskeyites would not have trouble accepting. But I do not have Mr. Pethokoukis’ insightfulness. These things boil down to “respecting and rewarding innovators and innovation.” The left, Mr. Pethokoukis explains, admires a historically early mentality which sees “innovation as an occasion to go looking for its victims.” This is why innovation cannot take place in left coast fiefdoms like Mountain View in California, the Boston area in the most liberal state in America, or liberal enclaves like Austin. For innovation, we need to turn to staunchly conservative locales like Oklahoma, Wichita, and Mobile that honor and value innovators. Mr. Pethokoukis’ analysis fits well with another take on economic growth, 100 Years Old & Still Killing Us: America Was Much Better Off Before The Income Tax by Michael Snyder of the The Economic Collapse blog. Noting that the income tax was instituted in 1913 and turns 100 this year, Mr. Snyder details how well the economy thrived in the 4 decades between 1870 and 1910, and how poorly it has done since. Some analysis at US Real Per Capita GDP from 1870–2001, using data from Angus Maddison and from Balke and Gordon, lists economic growth by year and by decade since 1870, and shows that in the 13 decades between 1870 and 2001, fully half of the decades between 1870 and 1910 fall in the top half of decades for most economic growth, and the other two decades squarely in the middle of the second half. In fact, except for 4 of the 5 decades since 1951, the decades of 1891 – 1910 were the top scorers. Facts and insights tell us how valuable it would be to return the the economy of the late 19th century, with the economic growth that less government and low taxes brought.