My co-author Steve Miller‘s comments on stagnation are not to be missed.  So I’m re-posting them in full.  Here’s Steve:


This
isn’t about ideology, for Tyler, Bryan, or anyone else except maybe the
progressives giving Tyler’s book such glowing reviews.

In a sense it would be nice for us, the free-marketers, if we could
make the case that growth in government spending has led to stagnation.
But it hasn’t, because there is no stagnation. Whether that’s because
of or despite of growth in government is a separate issue. The
stagnation hypothesis ONLY fits the income data. It does not the
purchasing power (in labor hours) data, not at all. It doesn’t fit with
the economists’ standard of greater choices, either. In the 1980s Robin
Williams’ character in Moscow on the Hudson collapsed in a small
grocery store because he was overwhelmed by the coffee selection. What
has happened to those choices since the 1980s?

Further, it doesn’t pass a basic sniff test. Forget the 1950s
kitchen, I have a 1980s kitchen, and it sucks. The modern microwave,
toaster oven, and dishwasher make it tolerable, but nowhere near as
nice as the 2005 kitchen in the house we rented a few years ago. Of
course that is in addition to HUGE growth in transportation,
entertainment, and communication since the 1980s or even 1990s. Wasn’t
it less than 15 years ago that we had to use an envelope and a stamp to
send someone a photo? In the past I have been skeptical about the
singularity and other Hansonian visions of accelerating progress in the
near future. But if the evidence in TGS is the only counter to it…
well then maybe I should be bracing myself for the singularity after
all.

Okay, maybe CPI-adjusted median household income is stagnating.
Consumer surplus isn’t — it’s accelerating. Some will argue that’s
because government spending is almost a third of GDP; I wouldn’t. But
that doesn’t change the fact that innovation accelerated throughout the
20th Century. It wasn’t constant, and it didn’t stagnate.

I mentioned this video on one of Arnold’s posts:

http://www.collegehumor.com/video:1788161

Between that video and Mark Perry’s post, I don’t see how stagnation holds up.