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an excerpt:
Posted on: April 30, 2022 at 22:09:48 CT
JeffB MU
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The U.S. economy, it states, "is among the most powerful forces for good in the history of humankind." The authors credit the "micro-foundations of the economy" for having driven living standards "to heights unimaginable at the nation's founding."
Those foundations -- Mr. Cogan's first principles -- are private property rights, the rule of law, free and competitive markets, and limited government. The last includes "subsidiarity," meaning that no central authority should do what can be done by a more local body, and no public institution should do what can be left to private enterprise.
"When you think about what drives America's GDP," Mr. Cogan says, "it's millions of individuals working, investing, saving and making allocative decisions with these microfoundations in place."
The pair aim to stir debate and perhaps shape policy platforms before the next presidential campaign: "We are far enough from campaigning," Mr. Warsh says, "for it to be an incubator, a laboratory, of the next ideas that can motivate a series of candidates." He insists it isn't merely a "messaging exercise" but an attempt to "make relevant and resonant the lessons of history and apply them to the challenges of today."
Mr. Cogan says the paper is aimed at "one, the general American public; two, informed citizens; and three, policy makers. I guess I'd put them in that order." Mr. Warsh adds that they're "trying to distill a whole lot of intellectual history and make it accessible. If we can't convince the man on the street, then good luck convincing the man in Washington."
The authors identify as the "sine qua non" of American prosperity the "three I's" -- ideas, individuals and institutions... Their paper states that "a sound economic governance framework liberates the individual, encourages the promulgation of new ideas, and ensures the proper functioning of institutions." A policy that offends any of these elements -- by restricting the individual, stifling ideas or letting institutions stray beyond their proper limits -- is likely to harm the economy.
"This isn't a model-centric view of how to maximize prosperity," Mr. Warsh says, "but one based on experience, history and intuition." Individuals who enjoy the fruits of their talents, ideas that enhance human welfare, and accountable institutions that don't get in the way have "motivated this incredibly successful experiment in prosperity over 150 years. We're trying to connect economic results to culture, to the Founding Fathers, so that we enact policies that ensure that the 21st century is as good for American prosperity as the 20th century was."
In their paper, Mr. Cogan and Mr. Warsh write that "America's constitutional design and civil order were designed to incline the individual toward good." The nation's commitment to its foundational principles, they say, "has yielded unrivaled economic gains."
A major challenge to this worldview comes from China, which has achieved growth despite Communist Party control of much of the economy and the lack of political freedom. The Chinese model may look less attractive in light of Xi Jinping's heavy-handed rule and his brutal and economically repressive zero-Covid policy, yet Mr. Warsh says there's still a tendency in the U.S. to "want to adopt a set of industrial policies, to ensure that certain institutions are too big to fail, to make some private institutions quasi-public so that they'll take their orders from central command."
Those foundations -- Mr. Cogan's first principles -- are private property rights, the rule of law, free and competitive markets, and limited government. The last includes "subsidiarity," meaning that no central authority should do what can be done by a more local body, and no public institution should do what can be left to private enterprise.
"When you think about what drives America's GDP," Mr. Cogan says, "it's millions of individuals working, investing, saving and making allocative decisions with these microfoundations in place."
The pair aim to stir debate and perhaps shape policy platforms before the next presidential campaign: "We are far enough from campaigning," Mr. Warsh says, "for it to be an incubator, a laboratory, of the next ideas that can motivate a series of candidates." He insists it isn't merely a "messaging exercise" but an attempt to "make relevant and resonant the lessons of history and apply them to the challenges of today."
Mr. Cogan says the paper is aimed at "one, the general American public; two, informed citizens; and three, policy makers. I guess I'd put them in that order." Mr. Warsh adds that they're "trying to distill a whole lot of intellectual history and make it accessible. If we can't convince the man on the street, then good luck convincing the man in Washington."
The authors identify as the "sine qua non" of American prosperity the "three I's" -- ideas, individuals and institutions... Their paper states that "a sound economic governance framework liberates the individual, encourages the promulgation of new ideas, and ensures the proper functioning of institutions." A policy that offends any of these elements -- by restricting the individual, stifling ideas or letting institutions stray beyond their proper limits -- is likely to harm the economy.
"This isn't a model-centric view of how to maximize prosperity," Mr. Warsh says, "but one based on experience, history and intuition." Individuals who enjoy the fruits of their talents, ideas that enhance human welfare, and accountable institutions that don't get in the way have "motivated this incredibly successful experiment in prosperity over 150 years. We're trying to connect economic results to culture, to the Founding Fathers, so that we enact policies that ensure that the 21st century is as good for American prosperity as the 20th century was."
In their paper, Mr. Cogan and Mr. Warsh write that "America's constitutional design and civil order were designed to incline the individual toward good." The nation's commitment to its foundational principles, they say, "has yielded unrivaled economic gains."
A major challenge to this worldview comes from China, which has achieved growth despite Communist Party control of much of the economy and the lack of political freedom. The Chinese model may look less attractive in light of Xi Jinping's heavy-handed rule and his brutal and economically repressive zero-Covid policy, yet Mr. Warsh says there's still a tendency in the U.S. to "want to adopt a set of industrial policies, to ensure that certain institutions are too big to fail, to make some private institutions quasi-public so that they'll take their orders from central command."
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an excerpt: - JeffB MU - 4/30 22:09:48