Robert Gordon's The Rise and Fall of American Growth is the topic of libertarian (or classical liberal) law professor Richard Epstein's latest column. Professor Epstein faults Professor Gordon for failing to deal with how the rise of government has slowed growth. Professor Epstein writes:
Gordon attributes the decline in innovation to matters of demographics, education, debt, and inequality, ruefully noting the negative growth in income over the last few years in the United States. But at no point does he mention that the source of all these negative trends is an expansion in the size of government that outpaces the rise in GDP.
To be sure, the optimal government is not so small that Grover Norquist could "drag it into the bathroom and drown it in the bathtub," whatever that means. It should be large enough to deal with the protection of individuals and their property, the creation of infrastructure, and the regulation of monopoly. But over the last 50 years, most government growth has been unrelated to these ends and concentrates on a dangerous combination of redistributive policies, which do not help the poor, and excessive economic regulations that harm everyone. Is there any wonder that the rate of economic growth has slowed, and that median income has gone down as the size of government has gone up?
