⤴ America can grow faster than China. Let's make it happen!
Also: 5 Quick Questions for … economist Adam Ozimek on the geography of remote work
In This Issue
The Long Essay: America can grow faster than China. Let's make it happen!
5QQ: 5 Quick Questions for … economist Adam Ozimek on the geography of remote work
Micro Reads: state capacity, cryonics, self-driving vehicles
Quote of the Issue
“Nations stumble upon establishments, which are indeed the result of human action, but not the execution of any human design.”- Adam Ferguson, An Essay on the History of Civil Science
America can grow faster than China. Let's make it happen!
Item: President Xi Jinping said in his report to the Communist Party congress on Sunday that per-capita gross domestic product will take a “new, giant leap” to reach the level of a medium-developed country by 2035. His renewed pledge implies a doubling in the size of the economy from 2020 levels, a challenging goal given the nation’s slower growth path. That would require an annual average GDP growth rate of around 4.7% in the period, which would be difficult to achieve, economists said. - “China’s Economy Needs to Double in Size to Meet Xi’s Ambitious Plans” (Bloomberg, 10/17/2022)
Item: Chinese markets tumbled on Monday after Beijing rolled out a party leadership packed with Xi Jinping loyalists, and the government said China’s economy expanded by 3.9% in the third quarter of 2022. While above economists’ forecasts, that left growth for the first nine months of the year at 3.0%, putting China on pace to miss its official full-year target of 5.5% by a large margin. … Excluding 2020, this year is almost certain to be the country’s slowest year of growth in a generation. … Many economists believe Xi will [give] priority to political objectives—including bigger roles for inefficient state-owned enterprises in the economy and a continued emphasis on strict Covid-control measures—instead of more pragmatic steps to ensure a strong recovery. - “China’s Xi Jinping, Secure in Power, Faces Deepening Economic Challenges” (WSJ, 10/24/2022)
I’ve long argued that a key long-term benchmark for successful US economic policy should GDP growth that’s as fast in the future as in the past — or, more specifically, the post-World War II era. To be even more specific: real GDP growth in excess of 3 percent annually. That’s no easy task given the size of the American economy and its changed nature over the decades. Slower post-baby boom workforce growth means faster productivity growth is needed to hit that 3 percent target. Then again, the whole point of this newsletter is to argue that better public policy combined with a Big Wave of discovery/invention/innovation makes hitting or exceeding that goal a realistic possibility. You know, faster, please!
Now let me add an additional goal that I think is both worthwhile and possible: Growing faster than China over the course of the 21st century.