Abundance and Growth Fund
Some of the policy changes we focus on at the Abundance and Growth Fund — spending more on R&D, making clinical trials data more widely available, expanding housing capacity in innovative cities — promise to boost the annual rate of progress by a couple of percent. Is that a big deal?
To be specific: imagine someone claims their policy could increase the annual rate of U.S. technological progress by 5% for one year. How much should we be willing to pay for that? We built a tool to help think it through.
The basic move is to benchmark the policy against a cash-transfer program that would leave people just as well off. Imagine two futures.
In one, we enact the pro-progress policy. For a year, the pace of progress quickens; after that it reverts to trend, but the gains echo on, because trend growth is now compounding from a higher base. A runner who briefly sprints and then settles back into pace remains permanently ahead.
In the other future, we do a cash transfer instead — one calibrated so that people are indifferent between the two worlds, year by year. If people are indifferent, the cash transfer measures the dollar value they place on the extra progress.
We then ask: how much money do we need today to fund that future stream of cash transfers, given a market interest rate? That's the policy's break-even cost.
Under default U.S. settings, a one-time relative 5% boost to the annual rate of growth has a break-even today in the low trillions of dollars. The calculator above lets you sweep the assumptions — growth rate, life-expectancy gain, the value placed on a statistical life-year, and the interest rate used to discount — to see how sensitive the headline number is to each.
The model behind the calculator includes plenty of detail we don't surface in the controls above: the timing of the shock, durable vs. transitory boosts, scenario toggles for US vs. global populations, full consumption and life-expectancy trajectories. Those choices matter for individual analyses, but they don't change the qualitative story: under any reasonable set of assumptions, even modest accelerations in the rate of progress are worth a lot.
If you want to dig further into the model — including the parts we didn't expose above — the full source is at github.com/mattclancy-cogi/valuing-progress-model.