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Low-hanging fruit and job creation



Tyler Cowen's The Great Stagnation (an excellent work that merits a longer post from me) argues persuasively that America's growth pre-1970s stagnation was a result of taking advantage of "low-hanging fruit" in technological and educational improvement; with the "low-hanging fruit" gone, growth is bound to be slower now and in the future, and the polity must adjust.

I would argue that not all the low-hanging fruit is gone. As we were growing rapidly, society adopted a number of public policies that had the effect of throttling growth. An obvious one is our overlawyered society: I've previously argued that we're costing ourselves hundreds of billions of dollars a year just from excessive litigation at the margin: this is wealth destruction, rather than wealth transfers. A smaller source of low-hanging fruit is the wealth destruction that occurs from overregulation, especially overregulation from special interest cartelization. The Institute for Justice's Chip Mellor has a good example of how Florida governor Rick Scott is proposing creating jobs by eliminating job-killing licensing requirements in twenty occupations ranging from auto repair to interior design.

In the Great Stagnation that Cowen suggests, we need to ask ourselves whether we as a society still want to buy these luxuries that our current menu of public policy provides. We clearly can't afford all of it: something—entitlements, defense spending, public-sector unionism—has to give way. Measures to end overlitigation and overregulation are the closest thing we have to low-hanging fruit. As public policy choices go, they're the easy ones: we can't litigate and regulate our way to prosperity.

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Isaac Gorodetski
Project Manager,
Center for Legal Policy at the
Manhattan Institute
igorodetski@manhattan-institute.org

Katherine Lazarski
Press Officer,
Manhattan Institute
klazarski@manhattan-institute.org

 

Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.