A burden too great

Glenn Harlan Reynolds has an oped, Politicos put past before progress, with which I broadly agree. His argument is that politicians are overwhelmingly interested in getting re-elected and in order to do so they need money and power, usually obtained through the regulatory process. They are not interested in how their decisions affect their constituencies except in-so-far as that affects their accumulation of power and money. Sad, but I think substantially true.

Or, as he puts it:

Even so — and here’s the key point — politicians don’t care, except to the extent that we make them care. Whatever they say when they’re running for office, their top priority once elected is to build a coalition that will keep them in power, and accumulating money and influence, regardless of whether the interests of that coalition coincide with the public’s.

While not disagreeing with the substance of the argument, Reynolds has a line that I think is factually suspect.

One of the reasons that America enjoyed such tremendous growth over the past century was that technology outran regulators’ ability to keep up.

Is that true? It is a logically attractive hypothesis but I think there is good cause to consider that empirically unsupported.

Innovation in general and technological change in particular is notoriously difficult to quantify but I would argue that the pace of technological change has speeded up since 1915 but started from a low base and the fastest pace is in the past couple or three decades. Look at the difficulties from both a regulatory and a legal perspective we have with things ranging from simple patent law (think biological copyrights), copyright (music and books), and most currently, drones. Think about the intrusiveness of the internet of everything and what it means to privacy and safety. To me, that is evidence that our regulatory processes are being outstripped by technological change. But earlier? I am not so sure.

I would argue that we got a huge boost to the economy post-World War II by being the last industrial giant left standing. Then in the 1960s we got a boost from the growth in world trade which we had helped foster. In the 1970s and early 1980s we got a boost by removing many of the regulations left over from WWII (telephones, trucking, rail, banking, airlines, etc.). In the 1990s this culminated with the technological boom and continued expansion of global trade involving ever more countries in the world.

The pace of technological change and corresponding regulatory change is in the mix somewhere but I don't think that our growth was driven by change occurring so fast that we weren't able to keep up from a regulatory view. In fact, I think the stronger argument is that for a long time we had a more principled class who were committed to the welfare of the commonweal by pursuing greater trade and lesser regulation. I think we are on pretty safe ground making the argument that we have a much worse political class than we did in the past, more interested in their political careers than in the welfare of the nation as a whole. That, combined with the prolonged Great Recession, perhaps all that has happened is that the benefits of past pro-growth policies are sputtering and politicians are more blatantly interested in simply taxing anything that can benefit their power and money equation. As long as the economy was generating its own growth, they could afford to be at least somewhat principled. When faced with the constraining consequences of low growth, they probably now consider principles a burden too great.