Tyler Cowen - The Great Reset

Tyler Cowen is Holbert L. Harris Professor of Economics at George Mason University and also Director of the Mercatus Center.

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Timestamps

(0:00) - The Great Reset 

(2:58) - Growth and the cyclical view of history 

(4:00) - Time horizons, growth, and sustainability 

(5:30) - Space travel 

(8:11) - WMDs and end of humanity 

(10:57) - Common sense morality 

(12:20) - China and authoritarianism 

(13:45) - Are big businesses complacent?

(17:15) - Online education vs university 

(20:45) - Aesthetic decline in West Virginia 

(23:20) - Advice for young people 

(25:18) - Mentors 

(27:15) - Identifying talent 

(29:50) - Can adults change? 

(31:45) - Capacity to change men vs women 

(33:10 ) - Are effeminate societies better? 

(35:15) - Conservatives and progress 

(36:50) - Biggest mistake in history 

(39:05) - Nuke in my lifetime 

(40:35) - Age and learning 

(42:45) - Pessimistic future 

(43:50) - Optimistic future 

(46:28) - Closing

Transcript:

The Great Reset

Dwarkesh Patel (00:00):

Tyler Cowen needs no introduction, so we'll just begin. I want to ask you about the great reset. You wrote a book in 2017 called The Complacent Class and in it, you predicted a great reset. You wrote, "At some point, our country will face an immediate crisis and there won't be the resources or more fundamentally the flexibility to handle it." Now, how were you so prophetic, and is this the great reset?

Tyler Cowen (00:24):

I think I need to reread that book. I didn't quite think The Great Reset was coming as soon as it did. It struck me as something five to 10 years away, but I do think it's here now. We can still borrow at low rates of interest, but we haven't shown the flexibility to adopt mask-wearing or set up a serious enough test and trace regime, and the American regulatory state and executive branch, and also Congress, it's failed.

Tyler Cowen (00:50):

The Fed and Supreme Court in my view have been quite good, whether you agree with every decision or not, but just as institutions they're fully up and running and the rest is rotting. Our willingness to just let things happen has finally caught up with us a little more quickly than I was thinking.

Dwarkesh Patel (01:09):

In The Complacent Class, you predicted that after the great reset, dynamism would be with us again. Are you predicting that we'll be dynamic again following this crisis?

Tyler Cowen (01:18):

Well, predictions probably ought to be conditional. I think in the biomedical area, we will be incredibly dynamic. There's been so much research activity into coronavirus and associated problems, which involve virology, immunology. I mean, even the common cold, how to fight the next pandemic, how to do vaccines. I think this will go down in history as a phenomenal blast of innovation in a very important area.

Tyler Cowen (01:45):

The tech sector is still innovative, but has been for quite some time. Other sectors, I'm not sure about. I'm heartened by seeing Tesla stocks so high. I guess I ought to side with the market there though I don't quite see why it should be worth more than General Motors, Ford, and a few other auto companies put together. But again, I'll defer to the market. I think that the chance of that burst of dynamism has never looked better, but of course we're still capable of blowing it, right?

Dwarkesh Patel (02:14):

Other than how quickly it happened, what surprised you the most about how the great reset has occurred?

Tyler Cowen (02:19):

Well, you may recall also in The Complacent Class, I predict that racial issues and segregation-

Dwarkesh Patel (02:24):

Yes. Exactly.

Tyler Cowen (02:25):

... segregation will be a central part of it because American Blacks are so often among the most vulnerable members of our society and trouble will flare there early as a warning signal. That looks like a pretty good prediction, I have to say. I don't think I ever predict that will solve this segregation problem. Just that it will be a real signal we should look for. Like I said, I need to reread the book, but it's sounding pretty good right now.

Growth and the cyclical view of history

Dwarkesh Patel (02:53):

Oh, yeah, for sure. It was almost cathartic when I was reading it. At the same time I was reading Stubborn Attachments and there seemed to be a contradiction between the two books, because Stubborn Attachments advocates for economic growth due to the stupendous returns it has over the long term, as long as it's continuous. But The Complacent Class advocates for a cyclical view of history where ongoing progress and growth are not possible. Isn't the argument for economic growth much weaker under a cyclical view of history?

Tyler Cowen (03:25):

Well, it may depend on your time horizon. There will be periods of slower and more rapid economic growth, but if you keep reasonably liberal institutions, I think over quite a long run, let's say centuries, you can have steadily advancing economic growth. I would favor that knowing you're going to have periods of time like the one that probably started in 1973.

Tyler Cowen (03:49):

Maybe I'm cyclical in the short run, but I believe in a fair amount of persistence in culture and institutions, so I think the recipe of Stubborn Attachments over the much longer run still can be true.

Time horizons, growth, and sustainability

Dwarkesh Patel (04:02):

Let's talk about the really long run. You give a really interesting lecture at Stanford where you're talking about how time horizons influence how we should weigh sustainability and economic growth. Before I ask you about that, can you just recapture the argument for us? I'll prompt you by giving a quote from Greta Thunberg, "The myth of eternal economic growth is a perverse fairytale." To which you respond?

Tyler Cowen (04:24):

Well, let me first be clear. My episodic memory is extremely weak. I have a good memory for facts, but a very poor memory for narrative and stories, so I actually don't remember what I did at Stanford. I'm sure the ideas in that talk would be familiar to me if you presented them. I mean, they were mine, right? I don't think I've repudiated them, but if I had to write an essay on what I said, it would be close to a complete blank.

Tyler Cowen (04:50):

I think it said something about the argument for Stubborn Attachments requiring the time horizon neither be too long nor too short. That if the time horizon for successful growth is too long, you just become completely risk-averse because you just don't want the world to end. Things can run on for so long and you end up not caring much about growth at all. You just care about safety.

Tyler Cowen (05:11):

I think I estimated off the top of my head, in semi-joking, but also semi-serious fashion, that I thought we had another good 700 or 800 years left in us. I remember that because I read someone saying it on Twitter and I recognized it, but I don't really remember saying it. It's back to this difference in memory problems.

Space travel

Dwarkesh Patel (05:32):

I want to ask you about that because I think maybe your argument for economic growth would even continue in the long term. I mean, isn't there an assumption there that the most risk-averse thing to do is to be static for the long term when in fact it could be the case that only through economic growth, you can solve the problems that are guaranteed to hit your civilization over the long term?

Tyler Cowen (05:52):

That's correct. I probably said something like that in the talk. I think there's a big qualifier here. If you're what I would call a space optimist, you can believe in a very long-term horizon without getting obsessed with safety. Because humans are the successors, the humans can colonize galaxies or go further and the multiplicative gains from that can just be enormous, but I'm not a space optimist.

Tyler Cowen (06:16):

I think the speed of light, the difficulties of travel are really binding constraints and maybe there'll be vacations on the moon or something but basically what we have to work with is earth. Again, if you are a space optimist, you can escape a lot of that risk-aversion and obsession with safety and replace it by an obsession with settling galaxies. That to me also is a weirdness I want to avoid because it also means something about the world we live in no longer matters very much.

Tyler Cowen (06:49):

You get trapped in this other funny kind of Pascal's wager where it's just all about space and NASA and fuck everyone else. I mean, if that's right, it's right. But somehow my intuition is that Pascal's wager or arguments, they both don't apply and shouldn't apply here. That we need something that works for humans on earth. Am I allowed to use that word on your podcast?

Dwarkesh Patel (07:14):

Oh, yeah. You're allowed to use anything.

Tyler Cowen (07:15):

Okay. I'm sorry.

Dwarkesh Patel (07:17):

No, you definitely are.

Tyler Cowen (07:18):

Okay.

Dwarkesh Patel (07:19):

Yeah. If we're going to have growth for centuries, doesn't that at some point require us to escape earth? Is there a finite limit of growth we can have just on earth?

Tyler Cowen (07:32):

I don't know. I mean, I think it's finite as opposed to infinite, but it could be quite a long run. If you look at earth and ask, what are really the binding constraints? It doesn't seem to me that living space is one and it doesn't seem to me that energy is one. Human conflict might be one, and that's indeed what I worry about the most. In the short run, carbon emissions are one, but I think we'll fix that at some point.

Tyler Cowen (07:58):

My goodness, there's ocean platforms, there's living underground, there's Castle in the sky, Miyazaki, and so on. I think there's a lot we can do here on earth. I often joke like I'll go to Mars once they fill up Nevada.

WMDs and end of humanity

Dwarkesh Patel (08:17):

If it's so great here on earth, why do you think we're going to be gone in 800 years?

Tyler Cowen (08:17):

Weapons of mass destruction. I think in any year, the chance of a war is quite small, but if you just let the clock tick for long enough, a major war will happen. I don't think you have to believe literally every single human will die, but that what we know is civilization may not really persist just because of war.

Dwarkesh Patel (08:37):

You're not persuaded by Steven Pinker's arguments that violence and war has been going down and is likely to stay down?

Tyler Cowen (08:43):

As I read his data, it's at least as equally compatible with a ratchet hypothesis. That major war is each one worse than the last, so they do come less frequently, right? World War II was a while ago, but World War III is going to be quite a doozy. To seriously believe, oh, there'll never be a World War III, that seems obviously wrong to me. I just think it's probably not soon-

Dwarkesh Patel (09:07):

Do you see-

Tyler Cowen (09:08):

... but it's going to happen. What about when a nuclear weapon costs $50,000, right? How's that going to be?

Dwarkesh Patel (09:14):

Well, so-

Tyler Cowen (09:15):

I asked Pinker this in my podcast with him and he didn't say fuck.

Dwarkesh Patel (09:18):

Yeah. I heard it.

Tyler Cowen (09:18):

But he didn't have a decent answer either. He collapsed. He said, "Oh, I'm not doing a predictive thing here." Of course, you are Steven, come on, you conceded.

Dwarkesh Patel (09:28):

Yeah. There would be no point to the book if it wasn't predictive.

Tyler Cowen (09:30):

That's right. He collapsed on that. The fact that he couldn't answer the question made me revise in Bayesian terms to think I'm more right.

Dwarkesh Patel (09:40):

Okay. How about this argument which I heard from David Deutsch, who Pinker is heavily influenced by? I think. The argument is that the people in free and open societies will innovate faster than the ones in closed societies, so the enemies of civilization are at a disadvantage when it comes to innovation. We'll figure out ways to innovate and to stop their possibility of killing us all faster than they'll figure out how to kill us all.

Tyler Cowen (10:05):

That's possibly true but the counterargument is that the cost of destruction is so much lower than the cost of building, and it may not be some totalitarian enemy that does us in, but just some wacky general or an insane president or a mistake in measuring whether nuclear weapons are coming over. I think those are the likely scenarios. Not that somehow there's this Nazi power of the future that has better bombs than we do. I would bet against that.

Dwarkesh Patel (10:35):

Do you see a warning sign for a war in this crisis?

Tyler Cowen (10:40):

I don't see any evidence of a major war in this crisis or indeed at all in 2020, maybe the single biggest problem would be China, Taiwan, South China Sea, possibly North Korea. Those are very real issues. I don't see that they've gotten worse necessarily.

Common sense morality

Dwarkesh Patel (10:58):

As I was reading Stubborn Attachments, you pointed out again and again in the book that your views end up aligning with common sense morality a lot. Now, is there a deeper reason why common sense morality is so often right about these issues or is it just a coincidence?

Tyler Cowen (11:13):

Well, common sense morality evolves and I really wouldn't want to argue, it evolves to exactly the socially optimal point, but at some very gross level, there's some kind of group selection. I don't mean in the strong sense, but societies that had uncommon sense morality like commit suicide when you're five, every family should either have 20 children or zero children, be unwilling to talk to your grandparents. That's the opposite of common sense morality. Those societies won't do well.

Tyler Cowen (11:44):

The ones that in some way reproduce, they're not going to be too far from something that's at least workable, I think. Again, you don't have to be some kind of extreme believer in group selection to buy into that. Also, across individuals, across families, across clubs, there are competitive pressures. People observe what's relatively successful, again, not an optimum process, but if your philosophy totally contradicts common sense morality as say Peter Singer sometimes does, I think you should start worrying that maybe it won't actually fare that well if you try it.

China and authoritarianism

Dwarkesh Patel (12:23):

That argument points to the equilibrium being with free and prosperous societies. Do you think that then there's almost something inevitable about the successful societies in the future being free and prosperous?

Tyler Cowen (12:36):

I mean, I want to say yes, but to many people, those words, free especially, would be question-begging, like what does it mean exactly free and what will it mean in say 50 years when surveillance is far more advanced than it is now? I'll give you a very qualified yes, but I'd want to fill in those boxes much more. I don't think totalitarianism is a long-run winning strategy. I think autocracy has proven to be a much better competitor than we all thought 20 years ago. We should take that seriously. That's where I am right now.

Dwarkesh Patel (13:11):

In the long term do you think China will remain autocratic?

Tyler Cowen (13:17):

Depends what you mean by long term, but I don't see any particular reason to think they have to change. Obviously long enough with drift, anything can happen, but the naive thesis that as they get wealthier, they'll be more democratic, there's no evidence for that. They've become less democratic. The much wealthier Chinese potential median voter doesn't even seem to want democracy, that could all change, but right now those are the facts on the ground.

Are big businesses complacent?

Dwarkesh Patel (13:46):

Let's talk about your most recent book, Big Business. Now, I think I also see a contradiction between The Complacent Class and Big Business. Big Business almost reads like a love letter to The Complacent Class. I mean, for example, you point out that startup formation is down in The Complacent Class, but if the existing big businesses are so great, why does it matter that startups are less common?

Tyler Cowen (14:08):

Well, it depends on the area you look at. If you look at the decline in startups, it's actually remarkably concentrated in retail. I don't think I knew that when I wrote The Complacent Class, so I'm less pessimistic about that fact than I was when I wrote Complacent Class. There were fewer mom and pop department stores trying to sell clothing to compete against Nordstrom. I mean, that may or may not be a bad thing, but it's hardly a worrying development.

Tyler Cowen (14:41):

I think the startups that will carry dynamism... Again, COVID aside, that's obviously damaging startups. It's not clear to me they're doing worse than they were doing 10 years ago. I would just say this, if you want to look at who are the innovators right now who are fighting against complacency, it is big business to a considerable extent, and we should appreciate big business for that.

Tyler Cowen (15:07):

Yes, I also want it to be more dynamic, but big business has far higher productivity than small-to-medium sized enterprise, so the productivity problem in America is definitely not with big business. I'll still write them a love letter, but bitch about the bigger picture.

Dwarkesh Patel (15:24):

Ah, interesting. Is there then something complacent about the fact that big business is especially efficient and productive and that newer firms aren't as productive or smaller firms aren't as productive?

Tyler Cowen (15:37):

Well, it depends on the degree of contestability. I think big businesses today face a lot of contestability and don't just have a perpetual axe over their markets. We'll see how well that prediction pans out, but also our big businesses are extremely innovative. If you take Alphabet/Google, it's incredible how many different ideas and products they've come up with, and that's big business. Look at Amazon. They were this weird crummy website selling books. Now they help keep us alive.

Tyler Cowen (16:06):

They send me Rainier cherries whenever I click on the thing and they're on my front doorstep. Now they're a leader in cloud computing services, who would've thought that? That's wonderful dynamism.

Dwarkesh Patel (16:17):

Have you then changed your mind about the Great Stagnation Thesis if you think that these big companies that are very powerful are also very innovative?

Tyler Cowen (16:25):

Not at all. So much of the great stagnation is about education and healthcare and services, non-tech, non-internet services, and those are still stagnating. Healthcare is one area where we might make major breakthroughs through biomedical research and on that I'm much more optimistic. In education, it seems to me the sector is getting hammered and it's pretty low productivity.

Tyler Cowen (16:54):

Then there's the government, it's hard to measure the productivity of the government, but the American response to the pandemic has been pathetic. The key areas where there was stagnation still fall under it, but it's neither the tech companies nor big business. It's the other stuff.

Online education vs university

Dwarkesh Patel (17:14):

Speaking of the education sector, you created Marginal Revolution University, which is like an online college for economics courses.

Tyler Cowen (17:19):

Yeah.

Dwarkesh Patel (17:20):

How did that turn out? I mean, in terms of maybe trying to replace existing institutions, what lessons did you guys learn?

Tyler Cowen (17:29):

Well, I've never viewed it as a replacement for existing institutions. For me, it's a supplement. We have hundreds of economics videos. We have complete micro and macro principles classes, which include problem exercises, not just the lectures, not just the material. I've taught principles with these fully online, so has my co-blogger, co-creator, Alex Tabarrok, and it works great. The students really like it. This is done within George Mason University.

Tyler Cowen (18:00):

It will not make George Mason bankrupt. But the simple hypothesis, like ask any human, take the education you had and replace the worst 20% of it with things you choose online from a wonderful menu, is that a good deal for you? Obviously, in my view, the answer is yes. We've helped lead that revolution, but to me, it's 20% of the sector. It's not a replacement. Face to face will always be there as the center of the educational experience.

Dwarkesh Patel (18:31):

Tell me what we can't replace. Because Marginal Revolution University is great, and if I was a young person interested in economics, what am I getting from going to college and paying tens of thousands of dollars a year that I can't get by just watching your YouTube videos?

Tyler Cowen (18:44):

You are a young person interested in economics, right?

Dwarkesh Patel (18:46):

Yeah.

Tyler Cowen (18:46):

And you go to UT Austin, which is a great school. You could tell me better than I could tell you what you get there, but you interact with different personality types. You learn how hierarchies work. You meet mentors who inspire you, you meet mentors who help get you jobs and you socialize and you figure out how a lot of things work. My guess is the best 10% of your face-to-face classes are really pretty awesome. What would you say the percent is that's really great?

Dwarkesh Patel (19:15):

Well, it's not just about how many of them are awesome, but how many of them are irreplaceably awesome. In a way that could not be... For example, I mean, I can talk to you and maybe this is not scalable, but I'm talking to you right now. Not only did I find your books and videos really informative, but now I can get to ask you questions and in some way, this is a replacement for a university education. I get the privilege of Tyler Cowen without going to George Mason.

Tyler Cowen (19:45):

Well, sure, but that's why you want to sub in the 20%, right? If you want to argue for 30%, I mean, we can bargain. I'm not fixated on the number 20, but think how good your best 20% at UT Austin has been, and I'm not informed on that. But for most people, it's really quite good at most schools. You can have both and this is part of it. That's my vision. Again, we can have competition and figure out if 20% is the right number, 15, 30, whatever.

Tyler Cowen (20:14):

But the people who think it's somehow all Khan Academy, or... I don't know, I've never seen real-world institutions work that way for extended periods of time. People decide to get together. We've been in quarantine, lockdown, everyone's antsy and restless. They're going crazy on Twitter. They're all pissed off, depressed, whatever. They need to see other people. Maybe it's not rational, but I think education is always going to cater to that and not try to fight against it.

Aesthetic decline in West Virginia

Dwarkesh Patel (20:44):

Okay. On a lighter note, you visited Parkersburg this summer.

Tyler Cowen (20:48):

West Virginia. Absolutely. I was so excited.

Dwarkesh Patel (20:51):

Yeah. I lived there for three years between the age of 12 to 15. My dad worked at a hospital in Marietta, which you also visited. Now, you noticed some things about Parkersburg that I never noticed in three years of living there. Can you talk about your experience there?

Tyler Cowen (21:08):

Well, it's an old West Virginia town that has a background in oil and gas money and some parts of it are... At least for its time, they were quite fancy, early 20th century homes. I wouldn't quite call them Victorian, but there's some kind of West Virginian take on Victorian. They're lovely to look at. Downtown itself is like half excellent architecture and half the ugliest stuff you've ever seen.

Tyler Cowen (21:36):

It was an area that was very innovative with suspension bridges. It was like central to American Ohio River culture, which in these limping along ways is still there. There's a minor theater district and some arts, but it's also in a way pathetic and very rundown. To see that blend, that's glory historicism, right? It not that far from where I live, so my daughter and I, we drove there.

Dwarkesh Patel (22:06):

What happened? Why did the aesthetics get so much worse? Because I mean, I didn't even think about this before I read your column about this, but I don't know if you got to see Parkersburg High School while you were in Parkersburg.

Tyler Cowen (22:18):

Probably not. No.

Dwarkesh Patel (22:19):

But it's-

Tyler Cowen (22:19):

It's good or bad?

Dwarkesh Patel (22:21):

It looks like a castle. I mean, it's really interesting architecture and I just didn't think about how great the architecture was and I didn't notice how bad the other architecture was around it. What happened to the aesthetics? Why did they decline?

Tyler Cowen (22:32):

I don't know enough about the history to say, but you see something similar under extreme forms of communism like Prague. Incredible for centuries and then those apartment blocks they put in are just awful, but we know why that was, right? Communism. Now you could say, "Well, there was economic decline in West Virginia, Ohio River Valley."

Tyler Cowen (22:51):

I mean, I'm pretty sure that it's true, but it's still the case, like absolute wealth in Parkersburg is much higher today than when they built these wonderful homes in 1910, 1890, when they were built. Why don't people give a damn? So there's some loss of cultural self-confidence, notion of centrality, ethos importance. I'm quite sure I don't understand it, but that's the direction my thoughts ran in.

Dwarkesh Patel (23:18):

Interesting. Okay. I want to ask you about your advice for young people. Can you tell us about what you were like when you were 19 and what advice you would give to a generic 19-year-old?

Advice for young people

Tyler Cowen (23:29):

When I was 19, I had more hair. I was younger. I didn't eat as many different kinds of food, but I think I was recognizably Tyler Cowen, and I was already doing things like giving talks and writing. I mean, it's remarkable how much-

Dwarkesh Patel (23:48):

You were giving talks when you're 19?

Tyler Cowen (23:50):

Yes, I was just starting, but I had a summer job. I gave talks to high schoolers, high school debaters, teaching them how to use economics to understand high school debate topics. I barnstormed around the U.S. very early, got this love for travel. Saw many parts of the nation I never would've gotten to, just like Grand Rapids or like Eastern Kansas, all sorts of places. I've been multiple times. That was great, and they paid me and I learned how to give talks. But the point is, what I do now, what I did then, now there's the internet, but it's the same. I'm the same kind of, for better or the worse.

Dwarkesh Patel (24:29):

I mean, it sounds like you didn't need much advice when you were 19, but what advice would you give some other 19-year-old then?

Tyler Cowen (24:34):

Well, I think I needed a lot of advice when I was 19. I don't know how much of it I took in a literal way, but I think the collective impact of it made me wiser and more prudent. I eventually was able to do things like manage projects that I certainly would not have been able to do at 19, and that came through listening to advice. But my classic advice for young people, or even older people, the first is get at least one really good mentor, preferably two or three. Second, get a small group of good friends that you love talking to, hanging out with. Maybe WhatsApping, emailing, however you're going to do it. Small group theory and mentors, that's my generic advice.

Mentors

Dwarkesh Patel (25:19):

Why are mentors so important?

Tyler Cowen (25:23):

I think they only teach you a few things, but those few things are so important. They give you a glimpse of what you can be and you are oddly blind to that in the absence of those mentors, even if you're very, very smart. I think rate of return to good mentors is just enormous. You don't need many. More than one is ideal. Choose them wisely. Actually ignore most of what they say, but what you get from them will be so important.

Dwarkesh Patel (25:52):

When you say they give you a glimpse of what you can be, do you mean that you get to see what they are and you get some inspiration by that, or they explicitly give you some actual possibilities?

Tyler Cowen (26:02):

I think usually it has nothing to do with them telling you. They might tell you whatever BS, who knows? It's what you see. I don't know that you listen to them that much or even ought to. Like there was one fellow I met when I was young, his name is Walter Grinder. He had just tried to read as many books as possible. Just the notion that you could be a human and try to read as many books as possible, I got from him. That was incredible. Huge influence.

Dwarkesh Patel (26:28):

Yeah. It seems like you've been on that path for a while.

Tyler Cowen (26:32):

Yeah. I think I was 14 when I met him. That was just amazing. Now, did he once tell me, "Read as many books as possible." Who knows? But I got that lesson in any case.

Dwarkesh Patel (26:46):

Do you get anything by knowing them personally? Like if I just listen to you on different podcasts, talk about how many books you read and your depth and your breadth, can I just osmotically gather that ambition just by listening to you elsewhere?

Tyler Cowen (27:00):

Well, maybe you should tell me. I mean, I think to some extent, but having flesh and blood mentors is still, I think, very important. Again, it's a portfolio approach. You want both and now you can get both.

Identifying talent

Dwarkesh Patel (27:14):

Okay. This is very interesting because it goes to the topic of the new book you're writing, which is on identifying talent.

Tyler Cowen (27:22):

Yes.

Dwarkesh Patel (27:23):

Are you ready to give some sneak peek of that book?

Tyler Cowen (27:25):

Absolutely not, but I'm co-authoring it with Daniel Gross. I'm to deliver a manuscript, July 20th. No problem meeting that deadline. It's about 70,000 words and it's, to me, all fascinating is what I'll say. But I don't want to give away any of the content and it won't come out on Marginal Revolution. When the book appears it will be 98% fresh material, as I try for all of my books to be.

Dwarkesh Patel (27:56):

I mean, that's fair. I'm curious. Is there a reasoning behind that?

Tyler Cowen (28:00):

Well, I write a lot. I've blogged every day for 17 years. I write for Bloomberg. I try not to have overlap, so if people are buying my book, I don't want them to think, "Oh, I've read this guy's blog, whatever. I've heard this." It's like, why do that? You owe it to your readers or people who hear your podcast, that the different parts of what you're doing stand independently.

Dwarkesh Patel (28:27):

Aren't you repeating the theme of your book when you go on a podcast and then discuss and promote it?

Tyler Cowen (28:34):

You do it because you have to, and I'll put some of the book on the blog when the book comes out, but that's marketing. I'm not pretending it's some other thing you want to buy. People demand that you do it, but like my Bloomberg columns, they won't just be from the book. They won't just be from the blog. The blog will still mostly be fresh posts, not just excerpts from the book. You try as much as possible.

Dwarkesh Patel (29:03):

Yeah. I'm very excited to-

Tyler Cowen (29:04):

When you market your book, you can't just talk about [inaudible 00:29:07] or something. You might actually want to, in fact, I do, but they won't let you.

Dwarkesh Patel (29:12):

I'm very excited to read it. Oh, let's go back to the great stagnation and-

Tyler Cowen (29:16):

It's a very practical book. It's both for talent searchers and for people being searched for.

Dwarkesh Patel (29:23):

Maybe you don't want to answer this question, but is it going to tell the people who want to be searched for how to signal their talent or how to develop it?

Tyler Cowen (29:33):

Both.

Dwarkesh Patel (29:33):

Okay. Good. Good.

Tyler Cowen (29:34):

I would say it's more about spotting and signaling than about developing it. It's not about how to go into the weight room, but I think once you understand the signaling aspect and the spotting aspect, you'll learn a lot about what to develop.

Can adults change?

Dwarkesh Patel (29:51):

I want to ask you, when it comes to developing talent, are you an optimist about people's capacity to develop talents after the age of 18, or do you think that you can be-

Tyler Cowen (30:03):

Absolutely. After 18 is the best time to do it, because before 18 you're much less able. I mean, clearly there are some areas where that's not true. Like some areas in sports, if you start tennis at 19 these days, you're just not going to be that good. It seems like a lot of evidence, but for most actual jobs, after 18 is the best time to develop.

Dwarkesh Patel (30:29):

Then you were reading some book before your teens and then giving talks when you were 19.

Tyler Cowen (30:35):

I was very lucky and I had a huge head start. I'm all for that head start, but people who don't have it should not write themselves off. In fact, they will have done other things and may come at the whole field with fresh perspectives, having done other things. I just hope at age 13, they were not a slug on the ground, right? Maybe they were playing tennis and they learned something about competition or merit or efficacy, I hope.

Dwarkesh Patel (31:00):

Do you think temperaments can change significantly after 18 or just interests and skills I guess?

Tyler Cowen (31:07):

I tend to think temperament is relatively stable. I mean, when you're very, very old, it's different, and when you're very, very young, it's different. Terrible twos, whatever. But from like 18 through 70, I think temperament is fairly stable for most people that I've known. I think there are exceptions.There can even be what are sometimes called mental illnesses, not a word I like, but just as a catch-all, where people's temperament changes a lot in short periods of time, I would fully grant that. But for the normal range of variation, I don't think people change that much from 18 to 70.

Dwarkesh Patel (31:44):

Okay. Going back to-

Capacity to change men vs women

Tyler Cowen (31:45):

Especially men. Women are more likely to change.

Dwarkesh Patel (31:49):

Why do you think that is?

Tyler Cowen (31:53):

They have a more formative experience with childbearing for many, not all women. I think they are more disadvantaged by society in terms of being able to do things and it may take them longer to lift or fight through those barriers and their change can come later and be more radical. If you're just a smart nerdy white guy at 18, if there's something you can be really good at, you're going to get your chance. I'm not saying you might not hit some bad luck, but you will get your chance, odds are.

Dwarkesh Patel (32:28):

My intuition would've been the opposite on the gender issue because I heard somewhere that men develop... The complete development of their frontal cortex happens later. Then I would figure they have more room to grow because they develop later than women.

Tyler Cowen (32:45):

I think male risk-taking declines later than female risk-taking and male risk-taking is more extreme, so doing really stupid stuff a male might do at age 21 in a way that a woman on average would not. That's a change, but again, you just need to rejigger when you start the age count for personality not changing that much. Maybe for some people it's a little after 18.

Are effeminate societies better?

Dwarkesh Patel (33:10):

Speaking of the gender distinctions here, you've mentioned when you're talking about the great stagnation thesis that society has grown more feminine and that that is on balance a good thing. Is there a reason you think getting safer and less restless is a good thing on average?

Tyler Cowen (33:28):

Well, safety's a good thing. Less restless may or may not be a good thing, but the chance that say an American dies in combat for decades has been very, very low. That's the upside. Our safety here in the territory of the 50 states, I know there are some terror attacks, but it's still very, very, very high, and that's a significant upside from feminization and we should be thankful for it every day.

Dwarkesh Patel (33:57):

If I take seriously the concept of the Crusonia plant... Sorry if I'm mispronouncing that from-

Tyler Cowen (34:02):

Crusonia. Yeah.

Dwarkesh Patel (34:03):

Okay. From Stubborn Attachments, isn't the claim then that economic growth is more important... Because of its returns over a long period of time, it's more important than any small thing today, so that even for safety today, we should rather prefer growth instead of safety because of its impacts in the long run?

Tyler Cowen (34:20):

Well, if you feminize, you'll have higher safety. Let's say you'll have lower growth. I'm not even sure that's true. That would depend then on your potential time horizon. If you think there is a long future stretching out there is possible, that's a good trade-off. I would just say, look, feminization is inevitable. Once you have something even vaguely approaching equal rights, what you would need to do to fight it off would be highly destructive and unfair and violate rights.

Tyler Cowen (34:54):

So let's make the best of it and let's build a more dynamic, highly feminized society. I think we can do that. I mean, I view myself as a part of trying to do that. Somehow thinking reversing feminization will get the rate of growth high again, it's a myth. It's not really there.

Dwarkesh Patel (35:13):

Fair enough. By the way, is there a reason that it's... I mean, it's especially conservatives and people on the right of the spectrum, like you Ross [inaudible 00:35:23], Peter Thiel, that are concerned about the lack of change in progress. Because my intuition says it should be the opposite. The progressive should be concerned about not enough dynamism.

Conservatives and progress

Tyler Cowen (35:34):

Well, I think they would define progress differently. That they view certain parts of society as having seen so much progress and they think what's holding society as a holdback is the restrictions on the opportunities to the least privileged members and that that just has to be this absolute priority for us to take the next steps and that if we don't, our politics will be so toxic it'll be terrible for almost everyone. We shouldn't reject that out of hand. You might disagree with particular things they'll argue, but that's not a crazy view.

Dwarkesh Patel (36:11):

You disagree with it because redistribution is not as strong as economic growth to help the least privileged?

Tyler Cowen (36:18):

Well, the way I stated it, I don't think I disagree with it, in fact, at all. I just find when you go out and meet these people, they believe a bunch of other things that aren't true. What I just outlined for you, I'm completely on board with. Economic growth over time, even when the gains are unequally distributed, over time, it does raise all boats. That's an insight we've lost sight of because of our own impatience. I get you can go quite a while and not see that happening, but it's nonetheless true.

Biggest mistake in history

Dwarkesh Patel (36:53):

Okay. This is a question I asked Bryan Caplan when he was on. What's the biggest mistake in human history? What was the single decision that just had the biggest downside to it?

Tyler Cowen (37:02):

I don't think we know yet. Very hard to say. Most of human history, I'll put on my Steven Pinker hat, has worked out well relative to where we started, even for a poor country such as Laos. Laos compared to the Stone Age is doing remarkably well. Just like agriculture works, right? Public health measures have gone up in almost every country over the last 20 years. A lot of great things happened.

Tyler Cowen (37:31):

It's very hard to isolate this one big mistake, even something like World War II, which is one of the worst events in human history, possibly the worst. The right side did win and the right side did get nuclear weapons first. To want to rerun world history, I mean, I would do it, but don't be so sure you're going to always like what you see.

Dwarkesh Patel (37:59):

Bryan Caplan proposed World War I. Would you be tempted to agree?

Tyler Cowen (38:03):

I don't think there's a better answer, but look, say World War I had been circumvented, which could have happened, right? There were a lot of contingencies behind World War I, and then say by the time you get to 1942, some very large aggressive, but non-Nazified Germany develops atomic weapons first, I don't know what that's going to work out. Is the world as a whole going to be better than what we have? I'm just reluctant to make the comparison. I don't know is the answer. I don't think we understand historical contingency very well.

Dwarkesh Patel (38:43):

This goes back to your argument against Pinker, which is that it would've just built up potential energy that could be released in a stronger way.

Tyler Cowen (38:51):

Correct. Whereas as it's gone now, we've had... Well, it depends what you count, but really 70 plus years of mostly peace in many, many parts of the world, and that was hardly to have been expected.

Nuke in my lifetime

Dwarkesh Patel (39:07):

Do you think a nuke's going to go off in my lifetime?

Tyler Cowen (39:10):

A non-tested nuke? Yes, absolutely. A nuke used to kill people. Yes.

Dwarkesh Patel (39:16):

Enough to pose an existential threat or just a few?

Tyler Cowen (39:22):

Just a few and it could be an accident. It could be like trade a city for a city. Most likely a terror attack. I would say the chance is over 70% that a nuke goes off in your lifetime.

Dwarkesh Patel (39:33):

Oh, gosh. I'll try to be in the wrong city then.

Tyler Cowen (39:38):

The chance of a nuclear war in the sense of that old movie book, like on the beach and there's just a few people left somewhere on like Stewart Island of New Zealand and they're wandering around trying to get a radio to work or something, I think chance of that is pretty low for quite a while.

Dwarkesh Patel (39:57):

I don't understand how mutually assured destruction works in the sense that isn't the guarantee that if you nuke us it will destroy you, but if your country's already destroyed, I mean, isn't it almost psychopathic to then go ahead and destroy another half of the world?

Tyler Cowen (40:11):

Thomas Schelling was my doctoral advisor and he was the person who first in a serious way, pondered these possibilities in print in an academic manner. I think we don't know what any of these leaders would do if they saw the missiles coming. I think the evidence we have indicates they would retaliate, but I'm genuinely not sure.

Age and learning

Dwarkesh Patel (40:35):

Okay. Going back to your advice for young people or at least how you were molded, did you learn more between, let's say the ages of 15 to 25 than you have in the last 10 years?

Tyler Cowen (40:48):

Oh, of course, but that's just diminishing marginal something or rather. I mean, 15, I didn't even know how to drive. I'd never been to any other country. I had left New Jersey to visit New York City and Philadelphia. That was it.

Dwarkesh Patel (41:03):

If I take seriously the idea that knowledge compounds, then shouldn't I expect people to by a large margin, learn more, the older they are and the more they already know?

Tyler Cowen (41:13):

Well, there's an asymptote and then there's a period of very high increasing returns. I think I started high returns at around age 14 and up through my late 20s, my learning returns were just very, very high per year. Since that time they've been somewhat lower, but I think still pretty high, but not as high as they had been.

Dwarkesh Patel (41:41):

If you were exposed to left-wing economics, when you were a teenager instead of Austrian stuff, is there a high likelihood you would be more to the left or would you have [inaudible 00:41:52]-

Tyler Cowen (41:52):

I was exposed to left-wing economics when I was 13/14. It was most of what was out there. I retained [inaudible 00:41:54] Lekachman quite early. Robert Heilbroner, Walter Heller when I was like 14. Karl Marx probably I was 15 so here I am.

Dwarkesh Patel (42:12):

Fair enough. What field do you wish you'd learn more about when you were younger?

Tyler Cowen (42:20):

If I could type really well on a smartphone, I would feel better about things, and you always want more math and stats. I tried programming in high school when it was basic in Fortran and then to me it was very boring, and I have no regrets about not taking that path, but I just don't know much about it, and maybe that is some kind of huge gap.

Pessimistic future

Dwarkesh Patel (42:46):

Let's close on a pessimistic note. What contingency are you most worried about following this crisis?

Tyler Cowen (42:54):

You mean coming out of the crisis?

Dwarkesh Patel (42:55):

Mm-hmm.

Tyler Cowen (42:58):

Well, first of all, I'm not convinced when the crisis will end. There's a chance it drags on for years. I think the chance of a vaccine in early 2021 is quite high, but how good a vaccine it will be is not certain. There's even a chance it harms some people and lowers the credibility of vaccines.

Tyler Cowen (43:19):

If this were to run on for two years or more, just the psychological scarring, the unemployment, the collapse of international cooperation, ongoing collapse of migration and immigration. I worry about all those things, and I think those quite possibly are plausible outcomes. They're not like tail scenarios. They're happening right now.

Dwarkesh Patel (43:44):

Okay. Let's not close on the-

Tyler Cowen (43:45):

People think somehow Trump not being president will undo it and I think that's wrong.

Optimistic future

Dwarkesh Patel (43:51):

Let's close on the optimistic scenario then. What's the best case then?

Tyler Cowen (43:54):

Maybe that was the optimistic scenario.

Dwarkesh Patel (43:56):

Really? [inaudible 00:43:57]-

Tyler Cowen (43:56):

Well, I'm joking.

Dwarkesh Patel (43:58):

Okay.

Tyler Cowen (43:59):

The real pessimistic scenario is a war starts and you have a war and pandemic together, which historically has not been that uncommon, right? May not be causal, but that's a doozy. The optimistic scenario is, well, the death rate in the U.S. is already about a quarter to a fifth of what it was just a few months ago, and that's great. It's better than almost anyone had predicted. When I was doing podcasts in April, I talked of by the time we get to August, I think the death rate will be a third of what it is and no one is seeing that. It turns out it's like a quarter or a fifth to what it was, which is really good. Think of that process continuing. We have more remedies, not just a vaccine, and then kind of a 40% or 60% quality vaccine by early 2021 and then a V-shaped recovery by March. Then we open up borders again and the world resumes. That's also quite plausible.

Dwarkesh Patel (45:06):

Is it possible that we'll see an increase in productivity growth, economic growth, higher than it would've been otherwise?

Tyler Cowen (45:12):

Well, I don't think in the short run. I think when you have an extreme recovery from a weird event, for one thing, productivity measures don't mean anything, like a lot of other economic statistics. Like how much of the output gains, people working more versus working smarter. I don't think we'll ever know.

Tyler Cowen (45:30):

But I think it is not just plausible, but likely to believe that biomedicine five to 10 years from now will be really much, much better because we had this pandemic. Doesn't mean it was worth it, but I think that's extremely likely, and that's the silver lining in the cloud. It's not a guarantee, but it's like well over 50% probability, in my opinion.

Dwarkesh Patel (45:54):

Awesome.

Tyler Cowen (45:54):

We'll be better prepared for the next pandemic when it comes, which it will, and that will be a huge gain. However terrible this feels, we're getting off lightly, I'm sorry to say. Is that the good news, the bad news? I'm not sure, but next time we'll be ready. Let's be happy that at least so far, this time has only been as bad as it's been. It's been terrible, but it could have been much worse.

Dwarkesh Patel (46:18):

Okay. We'll call that optimistic and we'll end there.

Tyler Cowen (46:21):

Call it optimistic. Okay. Thank you very much for doing this podcast.

Dwarkesh Patel (46:25):

Thank you so much for being on. That's really nice of you to give us your time.

Dwarkesh Patel (46:29):

I hope you enjoyed this episode of The Lunar Society. If you did, please consider telling your friends about the podcast and sharing it on social media. There's nothing more helpful to a new podcast like this one than your recommendation.