Do political actions affect economic growth?

Last week, Steven Landsburg pointed to a striking chart that shows remarkable stability in the growth rate of US GDP per capita over two centuries. I've pointed to a version of this chart myself as a source of rational confidence about our economic future, at least in the long-term. But I think that Landsburg was bit Panglossian when he explains the cause of this as:

It's the way the modern world works. Things improve. Incomes rise, work hours fall, the quality of goods improves. 

Consider the growth of computational power per year over the past 50 years or so. It has followed a path of consistent exponential growth that is remarkably similar:


This is just a graphical representation of Moore's Law, the famous observation that the number of transistors per integrated circuit doubles roughly every two years. This is the foundation for the iPhones and Kindles that Landsburg references, and one important driver of growth in GDP per capita over the past few decades.

This hasn't just happened. It has taken tens of thousands of lifetimes of work by some of the world's smartest engineers, constant business model changes, disruptions to lives and communities, and so on. All of the intellectual work, corporate policy changes and so on that have created this have not just been sound and light around the "real" process of innovation; they have been what has created the growth.

In the same way, it's not so obvious that all of the political turmoil, changes to institutions, laws and mores, and so on that have constituted the substance of modern politics are just sound and light around the "real" process of economic growth.

What I think Landsburg fails to address is the level of abstraction at which some hypothetical stable process operates that generates this stable growth rate. By example, one could argue that something like "entrepreneurial capitalism with deep investment in research universities" is the stable process that creates Moore's Law. In this way, the changes like "Andy Grove replaces the Intel manufacturing head and institutes a new manufacturing strategy" or "Stanford changes its rules for faculty ownership of patent rights" aren't empty and unimportant, but are in fact the necessary changes that the stable underlying process forces in order to maintain growth in processing power.

In the same way, if the underlying process that has generated stable growth in GDP per capita is something like "modern capitalism, rule of law and a high-trust society" (or whatever - I'm not claiming I have a succinct definition of this underlying process), and the mechanisms that this process uses to maintain economic growth are things like changes in levels of presidential authority or types of business regulation or tax rates and so on, it doesn't follow at all that "the last president didn't have much to do with" economic growth.

In other words, success of broad politico-economic system doesn't imply that all of the actual work that goes on within it is pointless.