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Economic Growth

6 min read

Part of Markets and money.

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Every episode (7)

Who argued it

Edward Conard ×2 · Daniel Di Martino · Kevin Vallier · Stephen Moore · Sterling Burnett · Will Wilkinson

Immigration · Welfare State · Venezuela · National Security · Tax Policy · Labor Markets · Big Tech · Political Polarization

Background

Growth as the product of people and freedom

Economic growth, in the episodes of The Bob Zadek Show surveyed here, is discussed chiefly as a consequence of free people, open movement, and lightly taxed earnings rather than as a target to be administered. Alex Nowrasteh, addressing the economic impact of mass deportation, states that removing all illegal immigrants would shrink the size of the US economy by about 5% initially and make it more difficult to grow after that. He adds that reducing the supply of high-skilled workers would reduce growth in high-skilled industries, and that reaching 4% annual growth is virtually impossible without a rapidly growing population of workers and consumers. Alex Nowrasteh: How Prop. 187 Turned California Blue (2016)

Nowrasteh identifies the beneficiaries of such a program as government employees and the unions representing them, and perhaps private prison corporations and government contractors. He cites estimates that some Americans over 25 without a high school degree might see nominal wage increases of about 3% to 8%, a group he puts at 8% to 9% of the population, while every other group of workers would lose. Bob Zadek connects this to Frédéric Bastiat’s concept of the unseen: the small benefits are seen and visible, while the profound detriments are dispersed and invisible. Nowrasteh agrees, adding that businesses would lose customer bases and be forced to let other workers go, concluding that there is no path to prosperity by decreasing the supply of people in the country. Alex Nowrasteh: How Prop. 187 Turned California Blue (2016)

Free cities and zone-based reform

Mark Lutter defines a free city as a city with substantial legal autonomy from a host country or an independent city-state, citing Singapore, Hong Kong, Dubai, and Shenzhen as modern examples. The rationale he gives is one of political economy: national-level reforms are difficult to implement because interest groups must be assembled into coalitions, whereas a free city on an unoccupied Greenfield site can achieve deeper reforms because special interest groups lack a vested interest there. The End of Nation-States? (2018)

Lutter’s central historical example is China, which in 1980 designated Shenzhen a special economic zone. At the time it was a fishing village of 30,000 residents; it now has about 18 million residents and is, in his description, the manufacturing capital of the world. He states that China has lifted about 800 million people out of poverty over roughly 40 years, largely through zone-based reforms that could not have passed nationally, and that the model can be replicated in low and middle-income countries in Africa and Latin America. The End of Nation-States? (2018)

Taxation and the punishment of earning

In two episodes on the Internal Revenue Service, Bob Zadek argues that the income tax is the tool by which people who are successful get punished, and invites listeners to imagine the country without one. He notes that the country had a period of great economic growth after the Civil War and until the income tax, and in the first few years after the income tax was introduced. He states the core principle of taxation as: the more you tax something, the less you have of it, and therefore the more that you tax income, the less income that is produced. What the IRS’s Hiring Spree Means for You (2023)

Zadek describes the IRS as the only federal agency whose goal is taking property from people who did nothing wrong, and contrasts it with sales tax, which he calls a tax on activity that the payer chooses to incur. He criticizes the Biden administration’s allocation of more than $80 billion to the agency. Ashley Varner adds that the taxes raised to pay for 87,000 new IRS agents will be funneled to government employee unions, and that the government does not create money—it takes it from taxpayers. What the IRS’s Hiring Spree Means for You (2023)

Inequality, information, and the value of a life

Ed Conard’s episode is described as a discussion of the causes and misconceptions surrounding economic inequality, covering how market forces, regulation, and immigration policies affect the middle class, and arguing that the success of top earners often drives broader growth rather than hindering it. Debunking Inequality Myths with Ed Conard (2017)

John Tamny, discussing policy trade-offs during the virus, declines to offer a plan and says people should be free to put their own values on life. He argues that freedom produces the information that makes us most able to limit lethality, and that those who do not take the virus seriously are as crucial to combating it as those who do, because their actions reveal how easily it is transmitted. He notes that in the 1940s the biggest expense for hospitals was bedsheets and bandages, and that massive economic growth matched with scientists has since allowed hospitals and doctors to elongate lives. John Tamny on Experts vs. the Wisdom of Markets (2020)

Across episodes

The topic recurs across the 2016, 2018, 2020, 2021, and 2023 episodes, but the episodes show no development in the argument: Nowrasteh, Lutter, Tamny, and Zadek each treat growth as a product of freedom, and the later tax episodes restate Zadek’s position rather than advancing it.

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