The post is overall good but it misses one huge question and seems to implicitly assume something that is incorrect.
I agree growth is good, but shouldn't we then ask what causes growth or halts it? The post does not explore this, but Sam seems to assume that growth is caused by government investment in infrastructure, science and technology. This is false. What are real concrete examples of this abstract idea 'economic growth'. Many of the best examples are actually due to individuals acknowledged in the post such as Peter Thiel and Paul graham. Growth comes from individuals like these choosing to invest in entrepreneurs (at various stages) based on their judgment. Those investors who judge right enough accumulate more capital to reinvest and continue encouraging growth as long as their judgment about what should grow is good enough.
Sam seems to suggest that growth is achieved through government investment. I disagree. Every dollar the government spends comes from a Peter, a Paul or an Elon. Who is going to do a better job investing and causing growth? Elon or a government bureaucrat. Elon is one of those rare entrepreneurs who has plowed into areas of deep regulation such as space travel and transportation. Imagine if the government wasn't financing roads with money taken from those accumulating capital, then how much easier would it be for Elon to disrupt transportation and grow that industry through innovation? How many more entrepreneurs would be willing to work in that industry?
Each of the most broken and stagnant industries are most touched by government: education, healthcare, defense, finance, transport, and energy. Growth has happened in software/tech because government is far away meaning it is easier to work on problems free of intervention and more people are willing to. Growth has stagnated in these other areas because government has disincentivized entry (and often teamed with established inneffectivr big cos) by getting involved, regulating, giving away for free, and generally making it difficult to impossible for entrepreneurs to enter and thus undesirable.
So what has caused growth? Individual investors and entrepreneurs exercising good judgment. What has slowed it? Government regulation as government has grown its tendrils into more and more areas. What should we do to promote growth? Shrink government leaving investors their money to invest and opening more industries for potential private investment that won't have to face burdensome regulation or competition against public entities that don't try to profit.
There are also arguments that - at least in the U.S. - some of the money taken from Peter and Paul was used to fund technolgy R&D that then spurred investment by entrepreneurs and other private entities. . .DARPA, NASA. . .
Note that stagnation is often caused by high levels of risk-averseness. If a company is sued out the wazzoo for healthcare constantly, they jack up their prices to compensate, as well as upgrading their process, which increases prices.
Note also that government winds up loosely reflecting the will of the people. Popular pressure gets things done to some amount.
It's not all the government's fault is what I'm trying to say.
I actually say that government is bad at picking individual companies to invest in. I do think infrastructure investments by the government are important; go try to do business in a country where the roads are terrible and the trains don't run on time. If we had an efficient system for the private markets to do this, it might be better, but we don't right now.
Thanks Sam for the clarification. I think the likelihood of one developing is much greater with less government involvement (because now there is less incentive to start a competing infrastructure business since your competitor can lose money and not die). If government were not providing roads, we would have tolls (likely in aggregate costing us less than what we spend through bureaucracy) and a lot more people thinking creatively how to build infrastructure. It's such a 'schlep' problem (thanks pg) only bc you have to beat a competitor that can't die and can arbitrarily decree that you are not allowed to do certain things.
I agree growth is good, but shouldn't we then ask what causes growth or halts it? The post does not explore this, but Sam seems to assume that growth is caused by government investment in infrastructure, science and technology. This is false. What are real concrete examples of this abstract idea 'economic growth'. Many of the best examples are actually due to individuals acknowledged in the post such as Peter Thiel and Paul graham. Growth comes from individuals like these choosing to invest in entrepreneurs (at various stages) based on their judgment. Those investors who judge right enough accumulate more capital to reinvest and continue encouraging growth as long as their judgment about what should grow is good enough.
Sam seems to suggest that growth is achieved through government investment. I disagree. Every dollar the government spends comes from a Peter, a Paul or an Elon. Who is going to do a better job investing and causing growth? Elon or a government bureaucrat. Elon is one of those rare entrepreneurs who has plowed into areas of deep regulation such as space travel and transportation. Imagine if the government wasn't financing roads with money taken from those accumulating capital, then how much easier would it be for Elon to disrupt transportation and grow that industry through innovation? How many more entrepreneurs would be willing to work in that industry?
Each of the most broken and stagnant industries are most touched by government: education, healthcare, defense, finance, transport, and energy. Growth has happened in software/tech because government is far away meaning it is easier to work on problems free of intervention and more people are willing to. Growth has stagnated in these other areas because government has disincentivized entry (and often teamed with established inneffectivr big cos) by getting involved, regulating, giving away for free, and generally making it difficult to impossible for entrepreneurs to enter and thus undesirable.
So what has caused growth? Individual investors and entrepreneurs exercising good judgment. What has slowed it? Government regulation as government has grown its tendrils into more and more areas. What should we do to promote growth? Shrink government leaving investors their money to invest and opening more industries for potential private investment that won't have to face burdensome regulation or competition against public entities that don't try to profit.