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I'm afraid that this simply does not hold on a logical level.
It's a bit like saying that because milk is essential for the development of strong bones, and strong bones are essential for a child's development, feeding a child on a diet of pure milk until the age of 10 must inevitably lay the foundations for his future physical well-being. The fallacy lies in the fact that while the young fellow may by then have very good bones, we don't know how his overall development would have compared had some milk been foregone in favour of other foodstuffs.
Likewise, the Rahn Curve only concerns itself with one ingredient of prosperity - it can only tell us (or, well, claim) that if our goal is to always grow as much as possible overall, we should set state expenditure at a whatever % of GDP. It gives no perspective on how or at at which point other factors in creating prosperity, such as those determining productivity and distribution, should be brought into the equation.
It may be that wider prosperity is best achieved after many decades in which growth has been perused above all else, or it may not. The Rahn Curve doesn't tell us, because it offers no holistic analysis of the factors on which prosperity depends.
Saying 'we did x, which has been shown to maximise y component of prosperity, therefore x laid the foundations of prosperity' does not work unless we also analyise what effect x has on the other components of prosperity, including the potential negative effects. The Rahn Curve simply doesn't go there.
That line of reasoning won't work either.
The Rahn Curve is not just one thesis, but a collective of different empirico-inductive theses using different quantitative criteria.
Likewise, the Rahn Curve only concerns itself with one ingredient of prosperity - it can only tell us (or, well, claim) that if our goal is to always grow as much as possible overall, we should set state expenditure at a whatever % of GDP. It gives no perspective on how or at at which point other factors in creating prosperity, such as those determining productivity and distribution, should be brought into the equation.
It may be that wider prosperity is best achieved after many decades in which growth has been perused above all else, or it may not. The Rahn Curve doesn't tell us, because it offers no holistic analysis of the factors on which prosperity depends.
Saying 'we did x, which has been shown to maximise y component of prosperity, therefore x laid the foundations of prosperity' does not work unless we also analyise what effect x has on the other components of prosperity, including the potential negative effects. The Rahn Curve simply doesn't go there.
Growth in productivity is a subset of economic growth.
The Rahn Curve is not just one thesis, but a collective of different empirico-inductive theses using different quantitative criteria.
Hmm, it's interesting how you were content to characterise the Rahn Curve as simply 'evidence of growth-optimizing factors' until I showed that this would not be sufficient to support your claim.
Your new claim as to the scope of this much-vaunted curve certainly sound fancy - I'm not sure exactly what it means, and it doesn't seem to be captured by the videos you were previously hanging upon.
Does this then mean we're now claiming that the Rahn Curve has managed to correlate not just growth, but also productivity and wealth distribution (the other factors on which prosperity is widely held to be contingent), to a given level of government spending as a % of GDP?
If so, I'd love to hear you explain this - and since in this case the curve should provide the basis not just for underlying growth on which to base prosperity, but also for the remainder of the bringing of that prosperity to fruition, I'd be interested to hear of the presumably numerous examples of societies which have reached historical high-points of prosperity while sticking to the levels of state spending the curve stipulates.
Hmm, it's interesting how you were content to characterise the Rahn Curve as simply 'evidence of growth-optimizing factors' until I showed that this would not be sufficient to support your claim.
Your new claim as to the scope of this much-vaunted curve certainly sound fancy - I'm not sure exactly what it means, and it doesn't seem to be captured by the videos you were previously hanging upon.
Does this then mean we're now claiming that the Rahn Curve has managed to correlate not just growth, but also productivity and wealth distribution (the other factors on which prosperity is widely held to be contingent), to a given level of government spending as a % of GDP?
Interesting that you didn't use the opportunity to take issue back after post 65, when I made it very clear, via my example of the US Golden Age, and the contrast I drew between an average worker and a typical worker, that distribution played a part in my definition of prosperity. Had you chosen to take issue with my definition back then, I might have taken it as an argument in good faith - now it just looks like everything else you've got has collapsed.
I'll repeat that for me, and I'd argue for a good many others, a meaningful definition of prosperity would hinge upon the economic situation of a typical member of society.
Contemporary real-world evidence would also point to a divergent effect on overall growth and productivity when measures are brought in to trim the size of the state. For example, the reduction in the scope of government spending as a % of GDP in the UK since 2009 has certainly been followed by a return to overall growth in the economy, but productivity, on a strong upward trend before 2008, has actually declined since then.
It's not difficult to see why this could be the case: if a government cuts payroll taxes, for example, then it will create an incentive to employ more people and thus quite possibly boost overall growth, but it will weaken the incentive to for companies to make investments that would make each hour of a worker's time more productive. Conversely, if payroll taxes are increased or minimum wage thresholds brought up, overall growth may be dampened, but employers will have a clear incentive to extract more value from what they already have.
Interesting that you didn't use the opportunity to take issue back after post 65, when I made it very clear, via my example of the US Golden Age, and the contrast I drew between an average worker and a typical worker, that distribution played a part in my definition of prosperity. Had you chosen to take issue with my definition back then, I might have taken it as an argument in good faith - now it just looks like everything else you've got has collapsed.
I'll repeat that for me, and I'd argue for a good many others, a meaningful definition of prosperity would hinge upon the economic situation of a typical member of society.
Contemporary real-world evidence would also point to a divergent effect on overall growth and productivity when measures are brought in to trim the size of the state. For example, the reduction in the scope of government spending as a % of GDP in the UK since 2009 has certainly been followed by a return to overall growth in the economy, but productivity, on a strong upward trend before 2008, has actually declined since then.
It's not difficult to see why this could be the case: if a government cuts payroll taxes, for example, then it will create an incentive to employ more people and thus quite possibly boost overall growth, but it will weaken the incentive to for companies to make investments that would make each hour of a worker's time more productive. Conversely, if payroll taxes are increased or minimum wage thresholds brought up, overall growth may be dampened, but employers will have a clear incentive to extract more value from what they already have.
You're still not paying attention. What does the abstract of the very first reference state?
"This analysis validates the classical supply-side paradigm and shows that maximum productivity growth occurs when government expenditures represent about 20% of GNP, far less than the 35% which existed in 1986." Peden E, "Productivity in the United States and its Relationship to Government Activity: An Analysis of 57 years, 1929-1986," Public Choice, 69:153-173
You can argue your own semantics on what you consider "prosperity" to be, but human development is generally not factored in as part of the neoclassical growth model.
You're still not paying attention. What does the abstract of the very first reference state?
"This analysis validates the classical supply-side paradigm and shows that maximum productivity growth occurs when government expenditures represent about 20% of GNP, far less than the 35% which existed in 1986." Peden E, "Productivity in the United States and its Relationship to Government Activity: An Analysis of 57 years, 1929-1986," Public Choice, 69:153-173
You can argue your own semantics on what you consider "prosperity" to be, but human development is generally not factored in as part of the neoclassical growth model.
Could you kindly repeat for me the name of the study from which that abstract is taken? That's right: it's a study (just one study - have you read it, by the way?) of relationships in one country over a period of 57 years.
At no point have I suggested that 'human development is ... factored in as part of the neoclassical growth model' - I think it would be fair to say that nothing I have said has been predicated on 'the neoclassical growth model'. I defined my terms very clearly at the outset of this dialogue. My arguments are on the basis of the definitions I clearly set out. Why are you quibbling over the terms I set out back in that much earlier post after all this time?
Contemporary real-world evidence would also point to a divergent effect on overall growth and productivity when measures are brought in to trim the size of the state. For example, the reduction in the scope of government spending as a % of GDP in the UK since 2009 has certainly been followed by a return to overall growth in the economy, but productivity, on a strong upward trend before 2008, has actually declined since then.
The post-2009 world is not going to be a good case study for this kind of argument with its panoply of central bank interventions and manipulated data.
Could you kindly repeat for me the name of the study from which that abstract is taken? That's right: it's a study (just one study - have you read it, by the way?) of relationships in one country over a period of 57 years.
At no point have I suggested that 'human development is ... factored in as part of the neoclassical growth model' - I think it would be fair to say that nothing I have said has been predicated on 'the neoclassical growth model'. I defined my terms very clearly at the outset of this dialogue. My arguments are on the basis of the definitions I clearly set out. Why are you quibbling over the terms I set out back in that much earlier post after all this time?
1. There is more than one study, not that you really need more than one. I don't think you're even trying now, and just knee-jerking in order to maintain the mere semblance of rebutting these points.
2. You can call "economic prosperity" whatever you like. However, if standardized models of economic growth do not factor in human development, you are in no position to dismiss someone else's definition which excludes it.
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