Thread by @interfluidity

@UpdatedPriors I don't have time to review these in detail, but (just reading abstracts) these papers seem not to address the question at issue, I don't "need to" dismiss any of these to make my case. I think it quite plausible that tax rates affect the geographic distribution of people who

@UpdatedPriors mean to capitalize on innovation, that the kind of "inventors" who would show up in patent data would migrate to the lower-top-tax-rate jurisdictions under conditions of relatively free migration. But the geographic distribution of such inventors and the overall rate of

@UpdatedPriors production of nonrival new ideas are distinct phenomena. Even within the commercial sphere, patent data doesn't correlate well w/other putative markers of innovation (eg IIRC Scandinavian countries have high startup rates including in "tech" fields but lower patent rates). More

@UpdatedPriors importantly, a great deal of innovation happens within the small, informal commercial sphere (the patent system has a large-firm bias, as patents are expensive to pursue and enforce), in academic sectors (which may or may not yield patents), and in the public sector (see

@UpdatedPriors @MazzucatoM's oeuvre). Plus, innovation intended for commercialization is often _not_ new nonrival ideas that enrich the broad public after patent expiry. CEOs are often innovative in finding ways of gaining and protecting market powers. Traders often innovate in ways that are

@UpdatedPriors @MazzucatoM the epitome of rival: mere revelation of their innovations would render them invalid. Even what are genuinely technical innovations may not be useful outside of rival contexts: There is a lot of innovation (to what degree reflected by patents? i've no idea.) embedded in AWS, but

@UpdatedPriors @MazzucatoM it is innovation primarily about how to operate at scales where operators for the foreseeable future are likely to be inherently rival. As with trading, a large multitude of actors could not freely exploit the innovation. One can be "innovative" at producing customer lock-in, but

@UpdatedPriors @MazzucatoM again, these do not add to the stock of ideas that enrich us, to "total factor productivity" in any meaningful sense. I find it very plausible that the geographic distribution of the commercialization of innovation (which may correlate to some degree with non-rival idea

@UpdatedPriors @MazzucatoM generation) may be excruciatingly sensitive to top-tax rates. I find it completely implausible given broad historical experience and the experiment we've conducted for the last forty years that the _rate of overall innovation_, nonrival and so portable, is sensitive to top rates.