Bryan Caplan  

Tabarrok's Roadmap Out of the Slight Stagnation

Betty Friedman Nails It... Thinking About CEO Pay...
Alex Tabarrok's gem of an e-book, Launching the Innovation Renaissance, releases today.  It's a TED book, but don't mistake it for a mere transcription of a TED talk.  It's an original and powerful work of popular scholarship that aims to reverse America's Slight Stagnation with a handful of big evidence-based reforms.  Especially:

1. Drastically narrow patent protection.  Patent propaganda and reality are far apart.  Patents, especially recent vague patents, stifle innovation rather than encourage it.  Tabarrok's patent litigation diagram alone is worth the price of admission; it genuinely pushed me over the edge to extreme patent skepticism.

2. Drastically increase (abolish?) high-skilled immigration quotas.  At minimum, it should be easy for high-skilled foreign students to join the U.S. economy after graduation:

We educate some of the best and brightest students in the world in our universities and then on graduation day we tell them, "Thanks for visiting. Now go home!" It's hard to imagine a more short-sighted policy to reduce America's capacity for innovation.

Increasing high-skill immigration is such a win-win policy for increasing innovation that it's tempting to call it a no-brainer except for the fact that "no-brainer" is a better description of our current policy.

3. Increase school choice, curtail the power of teachers' unions, and stop pretending that non-STEM majors produce significant positive externalities.

Sometimes I give Alex a hard time for being too moderate and too nice.  But his heart - and his head - are in the right place.  He's earnestly trying to show well-meaning people across the political spectrum a better way - and my theory of politics notwithstanding, he just might succeed.

COMMENTS (8 to date)
mike shupp writes:

I won't argue with all this, but I'll note that most of these ideas involve cost cutting of some sort. That doesn't solve the basic problem: the US spends about today as much on R&D (slightly less than 3% of GNP) as it did in the 1960's, but most R&D then was funded by the federal government, while today it's funded by corporations. Corporate R&D is focused on a shorter term than federal; it's more D than R, so to speak, and provides shorter term payoffs -- improved batteries rather than fusion power generation, for example.

I don't think there's a cure to Tyler Cowen's technological stagnation problem until we start spending substantial sums again on long term R&D, probably by the federal government. Space flight, nano technology, particle physics, pure mathematics, exotic chemistry .... My observation is that most Americans -- economists in particular -- really hate federal R&D programs, so there's a difficulty here.

KM writes:

What are the major (empirical) papers showing positive effects of school choice? I would say school choice increases the risk of producing even more of education that is non-STEM with no positive externalities.

In Sweden we have had considerable school choice since the 1990s (voucher system where students can choose freely between both public and charter schools). And, we have got all the "good" things at an increasing rate: (i) massive grade inflation when schools use "easy grading" in competing for students, (ii) explosion in "fun" schools focusing on media, sports and cultural issues, (iii) intense focus on making the "customer" happy, which unfortunatley only rarely is the same thing as high demands and a focus on relevant curricula. Altough the latter may work well for families with highly educated parents that choose the small set of schools that focus on putting high demansd on the students.

For a long time I was very positive to school choice, seeing the effect in Sweden I have, lately, changed my mind on this. I do not think school choice is the main reason for the decay in our school system here, but there is no good evidence that it has been beneficial either.

Cliff writes:

Isn't the parent the customer and not the student? Why would a parent send their children to a bad school because it is fun?

KM writes:

@Cliff: When the child is 15 and heads for upper secondary school ("high school"), I would assume (in many families) that the student has significant influence on the decision on where to go to school. Further, many parents don't care enough, or do not have the educational background themselves to make informed decisions. We also see that the effect of having highly educated parents have become more important for performing well in school over the last 15 years (educated parents make more informed choices).

The same happens at the university level as well.

tribsantos writes:

Bought the book yesterday, finished it today. It's great. I think it should be used as a real guide to anybody involved in policy making.

Marcus writes:

I'll read it, I want to know about the "evidence based reforms" to find out the evidence that STEM is a bright and shining future.

A roundabout way of saying, the ideology in this list is as thick as molasses... oops, that's a metaphor, quick, STEM must stamp that out!

Peter Schaeffer writes:

Slight stagnation?

Per-worker real GDP growth from 1950 to 1973 was 2.33% per year. From 1973 to 2007 it was 1.33%. That a substantial stagnation.

GDP growth after 1973 was sustained by rising female entry into the labor force. LFP peaked around 2000 and started to fall. It has crashed since 2008 and shows no sign of recovering.

Will writes:

Increasing highskill immigration will ONLY help with innovation if we can find ways to actually employ them.

Right now, most science phds leave their field of study after the phd because they can't find a job- demand for scientists has NOT been increasing to match the supply. We already have lots of scientists employed at banks and insurance companies where they aren't innovating in the traditional sense.

The question is- how do we employ the surplus of phd scientists in a more useful way?

Comments for this entry have been closed
Return to top