9 Jan 2025 · 59m · Dwarkesh Patel, Tyler Cowen · 23 quoted facts
Tyler Cowen argues that AI will transform the world but will not produce explosive 20%-a-year growth. Large parts of the economy, such as government, health care and education, adopt new technology slowly, and other scarce inputs become the binding constraint. He predicts roughly half a percentage point of extra growth a year, which compounds into something enormous over decades without feeling revolutionary in any single year.
The tension is between Dwarkesh Patel's picture of AIs multiplying talent and Cowen's insistence that humans, institutions and regulation are the bottleneck. Cowen says Bay Area thinkers overvalue raw intelligence, while Washington thinks only at the margin. The conversation moves from growth theory to founders, young talent, leaders, effective altruism and war, and ends on optimism that human agency still matters.
Cowen says government, health care, education and nonprofits make up about half the US economy and adopt new tools slowly. Fast growth in a few sectors therefore gives only a modest rise in the overall growth rate.
Cowen argues that when intelligence becomes abundant, scarce things like energy, regulation and human acceptance matter more. This is why he sees returns to more IQ shrinking, and why he rejects a one-factor population model.
Cowen expects AI to add about 0.5 percentage points of growth a year. Over thirty or forty years that compounds hugely, for example drugs arriving in ten years instead of twenty, even though clinical trials and regulation remain.
He argues the top of the young distribution (chess, basketball, science, writing) and the very bottom (falling youth crime) are improving. A thick band above the bottom is getting worse, so he rejects a simple competency crisis.
Cowen says his book GOAT was written mostly for AI readers, and he plans to do the same with his next one. He believes AIs will shape how he is remembered and will hold growing purchasing power.
He says parts of the economy that can't easily use AI, like government, health care and education, make up about half of GDP and will hold growth back. Other scarce inputs, such as energy and regulation, also become the limit.
Cowen describes it as what happens when some sectors grow very fast and others can't, so the slow sectors get more expensive and drag on the total. He frames it as one case of a general rule: once one input is plentiful, the remaining scarce inputs become the constraint.
He says about half a percentage point more growth per year. He argues that over thirty to forty years that would transform the world, even though people wouldn't notice it in any single year.
He argues AIs will read what exists online, shape how people and AIs see him, and eventually have purchasing power. He says his book GOAT was written mostly for AIs and his next one will be too.
War. He says new technologies keep being turned into weapons, and he worries wars may become rarer but far more destructive.
Stated by the speakers. Each quote matches the transcript, which shows what was said, not that it is true.
Tyler Cowen estimates that US government consumption is about 18% of the economy, health care almost 20%, and education six to seven percent.
“government consumption is what 18%, healthcare is almost 20%, I'm guessing education is six to 7%, the nonprofit sector”
Tyler Cowen predicts that AI will raise annual economic growth by about half a percentage point.
“I think they will boost the rate of economic growth by something like half a percentage point a year.”
Tyler Cowen describes China as a middle-income country whose per capita income is only slightly ahead of Mexico's.
“They're just a middle income country. They struggle to tie per capita income with Mexico. I think they're a little ahead of Mexico now.”
Tyler Cowen says typical economic growth during the Industrial Revolution was about 1.5% a year.
“Typical rate of economic growth during that period was about one and a half percent”
Tyler Cowen cites Greg Clark as saying England had sustained economic growth of about 1% a year starting in the 1620s.
“for the first time in human history that I know of, we have sustained economic growth, according to Greg Clark, starting in the sixteen twenties of about 1% a year.”
The Beatles broke up in 1970, whereas the Rolling Stones are still performing.
“I mean, they broke up in 1970, right? Rolling Stones are still going.”
Tyler Cowen says Ringo Starr joined the Beatles after the band replaced their earlier drummer Pete Best.
“Ringo not quite a founder, but basically a founder, cause Pete Best was drumming and they got rid of him right away.”
Tyler Cowen says his book GOAT, about the greatest economist of all time, was written mostly for AI readers.
“the last book I wrote, you know, it's called G.O.A.T. Who's the greatest economist of all time? I'm happy if humans read it, but mostly I wrote it for the AIs.”
Tyler Cowen estimates a call transcript alone would carry about 25% of the value of seeing the person in a talent interview.
“having only the transcript would be worth much, much less, I would say, if that's what you're asking. Yeah, it would be maybe 25% of the value.”
Tyler Cowen says that when he began his career an economist might earn about $40,000 a year, and only Milton Friedman and Paul Samuelson had notable outside income.
“you would earn, like back then, maybe $40,000 a year, like two people, Milton Friedman, Paul Samuelson, had outside income”
Tyler Cowen says he chose between economics and philosophy as a career in the late 1970s.
“it was either economics or philosophy, and I saw back then this would be like the late nineteen seventies.”
Tyler Cowen cites the United Arab Emirates as an autocracy where the worst people have not risen to power, contrary to Hayek's tendency.
“There are quite a few autocracies in the world today where the worst people have not risen to the top. UAE would be, I think, the most obvious example.”
Tyler Cowen says family-based Gulf monarchies have proven more stable and meritocratic than he expected in 1980.
“There are these family-based Gulf monarchies with very large, clannish interest groups of thousands of people that have proven more stable and more meritocratic than I ever would have dreamed, say, in 1980.”
Tyler Cowen says Woodrow Wilson reintroduced segregation in parts of the US civil service.
“reintroduced segregation of the civil service in some key regards”
Tyler Cowen says Herbert Hoover was an impressive candidate who made bad decisions by allowing deflation and a fall in nominal GDP.
“Hoover on paper was a great candidate and was an extremely impressive guy. I think he made one very bad set of decisions relating to deflation and letting nominal GDP fall.”
Tyler Cowen says Garry Kasparov lost the second match against Deep Blue after making an error in the Caro-Kann Defense in the final game.
“in the final game, you know, Kasparov made that bonehead error in the Carogan Defense.”
Dwarkesh Patel says Chad Jones's growth model relies mainly on population as its key input.
“Chad Jones said that the main variable, the main input into his model for growth is just population.”
Tyler Cowen says Renaissance Florence and its countryside had only about 60,000 people yet produced art still valued today.
“I mean, look at artistic production in Renaissance Florence. There's what, 60,000 people in the city, the surrounding countryside.”
Tyler Cowen says youth crime has been falling since the 1990s.
“youth crime has been falling since the nineties, so the very bottom of the distribution also is getting better.”
Tyler Cowen says Emergent Ventures has funded many Stanford people who are doing well as a group.
“Emergent Ventures has funded a lot of people from Stanford, uh, as far as I can tell, as a a group, they're doing very well”
Tyler Cowen says his portfolio is mostly diversified, heavily US-weighted mutual funds with no trading.
“it's a lot of diversified mutual funds with no trading, basically, uh, pretty heavily U. S. weighted, and nothing in it that would surprise you.”
Tyler Cowen says his wife works for the SEC, which restricts the investments he can make, such as most individual stocks.
“my wife works for the SEC, so we're not allowed to do most things, like even to buy most individual stocks.”
Tyler Cowen says he spent about four months reading dozens of books to prepare to interview Stephen Kotkin, an expert on Stalin.
“So now I'm prepping for Stephen Kotkin, who's an expert on Stalin and Soviet Russia, and that's been a blast. I've been doing that for like four months, reading dozens of books”
Cowen explains how slow-adopting sectors and cost disease limit economy-wide growth, even if some sectors speed up dramatically.
“It's very hard to get explosive economic growth for any reason, AI or not.”
Cowen and Dwarkesh debate whether more population or intelligence would raise growth, with Cowen pointing to energy, regulation and human resistance.
“there are gonna be bottlenecks all along the way, the whole way”
Cowen says founders save organizations from a scarcity of courage, using Meta and the Beatles as examples.
“I think courage is a very scarce input in a lot of decisions”
Cowen argues for rising variance: the top and bottom of the young distribution are improving, while a middle band is declining.
“young people at the top are doing much better”
Cowen links bad twentieth-century leaders to disorienting technological change and arms races, and compares today with seventeenth-century England.
“you get a lot of new arms races.”
Cowen explains why he predicted effective altruism would fade as a movement and why he hopes progress studies stays decentralized.
“this is as good as it gets”
Cowen says he now writes for AI readers and discusses what talent interviews reveal that transcripts miss.
“mostly I wrote it for the AIs”
Cowen argues Bay Area thinkers overvalue intelligence, while Washington and the EU err in opposite directions, and that the US balances them.
“people here overvalue intelligence”
Cowen names war as his main worry about progress, then ends on the optimistic note that human agency matters.
“my main concern with progress is progress and war interact”
Tyler, welcome.
Dwarkesh, great to be chatting with you.
Why won't we have explosive economic growth? 20% plus because of AI.
It's very hard to get explosive economic growth for any reason, AI or not. One problem is that some parts of your economy grow very rapidly, and then you get a cost disease in the other parts of your economy that, for instance, can't use AI very well. Look at the U.S. economy. These numbers are guesses, but government consumption is what 18%, healthcare is almost 20%, I'm guessing education is six to 7%, the nonprofit sector, I I'm not sure the number, but you add it all up, that's half of the economy right there.
How well are they going to use AI? Is failure to use AI going to cause them to just immediately disappear and be replaced? No, that will take, say, thirty years. So you'll have some sectors of the economy less regulated, where it happens very quickly, but that only gets you a modest boost in growth rates, not anything like, oh, the whole economy grows 40% a year. In a nutshell.
The mechanism behind cost disease is that there's a limited amount of laborers, and if there's one high productivity sector, then wages everywhere have to go up. So your barber also has to earn twice the wages or something. With AI, you can just have every barbershop with one thousand times the workers, every restaurant with one thousand times the workers, not just Google. So why would the cost disease mechanism still work here?
Cost disease is more general than that. Let's say you have a bunch of factors of production, say five of them. Now, all of a sudden, we get a lot more intelligence, which has already been happening, to be clear, right? Well, that just means the other constraints in your system become a lot more binding. That the marginal importance of those goes up, and the marginal value of more and more IQ or intelligence goes down. So that also is self-limiting on growth, and the cost disease is just one particular instantiation of that more general problem that we illustrate with talk about barbers and string quartets and the like.
If you're talking to a farmer in 2,000 B. C. and you told them that growth rates would ten times, hundred times, you'd have 2% economic growth, yeah, after the Industrial Revolution, and then he started talking about bottlenecks. Um, what do you what do you say to him in retrospect?
Uh, he and I would agree, I hope, I think he. I would tell him, Hey, it's gonna take a long time, and he'd say, Hm, I don't see it happening yet. I think it's gonna take a long time. And we'd shake hands and walk off into the sunset. And then I'd eat some of his rice or wheat or whatever, and that would be awesome.
But the idea that you can have a rapid acceleration in growth rates and that bottlenecks don't just eat it a away. I mean, you you could agree with that, right?
Could I don't know what the word could means. I would say this, you look at market data, say real interest rates, stock prices. Right now, everything looks so normal, startlingly normal, even apart from AI. So what you'd call prediction markets are not forecasting super rapid growth anytime soon. If you look at what experts on economic growth, right? We had Chad Jones here yesterday, uh, he's not predicting super rapid growth, though, he thinks AI might well accelerate rates of growth.
So the experts in the markets agree. Who who am I to say different from the experts in You're the market? an expert, so Yeah, but I'm with that I mean the other experts.
on it. In his talk yesterday, Chad Jones said that the main variable, the main input into his model for growth is just population. If you have a doubling, an order of magnitude increase in the population, you plug that number in in his model, you get explosive economic growth. I don't agree Why not buy with his the models?
model. His model is far too much a one factor model, right? Population. I don't think it's very predictive. We've had big increases in effective world population in terms of purchasing power. A lot of different areas have not become more innovative until the last, say, four years, most of them became less innovative. So it's really about the quality of your best people or institutions, as you and Patrick were discussing last night. And there it's unclear what's happened, but it's also fragile.
There's the perspective of the economist, but also that of the anthropologist, the sociologist, they all matter. But I think the more you stack different pluralistic perspectives, the harder it is to see that there's any simple lever you can push on, intelligence or not, that's gonna give you breakaway economic growth.
I mean, what you just said, where you're bottlenecked by your best people, seems to contradict what you were saying in your initial answer, that you're
That's the whole bottleneck.
bottlenecked. The even if you, like, boost the best parts, you're gonna be bottlenecked by the restaurants and whatever.
You're bottlenecked, you're you're one of our best people, right? You're you're, but you're frustrated by all kinds of things.
I think I'm gonna be making a lot more podcasts after AGI.
Okay, good, I'll listen. I'll be bottlenecked by time. Just marketing. Here's a simple way to put it. Most of sub-Saharan Africa still does not have reliable clean water. The intelligence required for that is not scarce. We cannot so readily do it. We are more in that position than we might like to think, but along other variables, and taking advantage of the intelligence from strong AI is one of those.
So about a year ago, your uh, co-writer on Marshall Revolution, Alex Tabarrok, had a post about the extreme scarcity of high IQ workers. And so if the a labor force in the United States is 164 million people, if one in a thousand of them are geniuses, you know, you have 164,000 geniuses. That's why you have to do semiconductors in Taiwan, cause that's where they're putting their nominal amount of geniuses.
We're putting ours in finance and tech. If you look at that framework, I mean, come on, we have a thousand times more of those kinds of people over the. And at the end of the day, the bottlenecks are gonna eat it all that away. Or if you ask any one of these people, if you had a thousand times more of your best colleague, your best coworker, your best co-founder, the bottleneck's gonna eat all that away. Your organization isn't gonna grow any faster.
I didn't agree with that post. If you look at labor market data, the returns to IQ as it translates into ages, they're surprisingly low, they're they're pretty insignificant. And people who are very successful, they're they're very smart, but they're people who have, say, eight or nine areas where they're like, on a scale of one to ten, they're a nine. Like, they have one area where they're just like an eleven and a half on a scale of one to ten, and then on everything else, they're an eight to a nine and have a lot of determination.
And that's what leads to incredible success. And, uh, IQ is one of those things, but it's not actually that important. It's the bundle, and the bundles are scarce, and then the bundle's interacting with the rest of the world. Like, just try going to a mid-tier state university and sit down with the committee designed to develop a plan for using artificial intelligence in the curriculum. And then come back to me and tell me how that went. And then we'll talk about bottlenecks.
So, I mean, all these They will write traits
a report. The report will sound like GPT four, and we'll have the report. these, um, The report will not be bottlenecked, I promise you.
these other traits, look, the AIs are, if it's conscientiousness, if it's pliability, whatever, the AIs will be even more conscientious. They'll work twenty four seven, and, uh, they'll like, if you need to be deferential to the FDA, they'll, you know, they'll write the best report the FDA has ever seen, and they'll get things going along. With these other traits, they're not gonna be bottlenecked by them, right?
They'll be smart and they'll be conscientious, that I strongly believe. Look, I think they will boost the rate of economic growth by something like half a percentage point a year. Over thirty, forty years, that's an enormous difference. It will transform the entire world. But in any given year, we won't so much notice it. And a lot of it is something like a drug that might have taken twenty years, now will come in ten years. But at the end of it all is still our system of clinical trials and regulation.
And if everything that took twenty years takes ten years over time, that's an immense difference. But you don't quite feel it as so revolutionary for a long time.
So the whole vibe of this progress studies thing is, look, we've got all these, um, low-hanging fruits or medium hanging fruits that if we fix our institutions, if we made these changes to regulations to institutions, we could rapidly boost the rate of economic growth. And you're okay, so we can che fix the NIH and get increases in economic growth. But we have a billion extra people, 10 billion extra people, the smartest people, the most conscientious people, and that has an iota of difference of economic growth.
Isn't there a contradiction between how much the economic rate of economic growth can increase between these two perspectives?
There's diminishing marginal returns to most of these factors. So a simple one is how it interacts with regulation, law, and the government. Another huge one is energy usage. How good is our country, in particular, at expanding energy supply? I've seen a few encouraging signs lately with nuclear power. That's great. Most places won't do it, and even those reports, exactly how many years it will take, I know what the press releases say. We'll see, you know, could be ten years or more, and that will just be a smidgen of what we'll need to implement the kind of vision you're describing.
So, yeah, there are gonna be bottlenecks all along the way, the whole way. And, uh, it's gonna be a tough slog, like the printing press, like electricity. The people who study diffusion of new technologies never think there will be rapid takeoff. So my view is kind of like I'm always siding with the experts. So economists, social scientists, most of them are blind and asleep to the promise of strong AI. They're just out to lunch. I think they're wrong.
I trust the AI experts. But when you talk about, say, diffusion of new technologies, the people who do AI are basically totally wrong. The people who've studied that issue, I trust the experts. And if you put together the two views, where in each area you trust the experts, then you get my view, which is amazing in the long run, will take a long time, tough slog, all these bottlenecks in the short run. And the fact that there's like a billion of your, you know, GPT whatevers, which I I'm all in love with, I promise you, uh, it's gonna take a while.
What would the experts say if you said, Look, we're gonna have forget about AIs, because I feel like when people hear AI, they think of GPT four, not the humans, not the things that are gonna be as smart as humans. So what would the experts say if you said, tomorrow, the the world population, the labor force is gonna double? What what impact would that have Well, what's on the world?
the variable I'm trying to predict? If you mean energy usage, uh, that's gonna go up, right? Over time, it's probably gonna
Growth rate?
double. Uh, I'm not sure it'd be a noticeable difference.
Doubling the world population?
Yeah, I'm not sure. I I don't think the Romer model has been validated by the data. And I, uh, I don't agree with the Chad Jones model, much as I love him as an economist. I don't think it's that predictive. I mean, look at artistic production in Renaissance Florence. There's what, 60,000 people in the city, the surrounding countryside. But it's that so many things went right at the top level that it was so amazing in terms of still value added today.
And the numbers model, uh, it doesn't predict very well.
the world economy today is some hu 100 trillion something. If the world population was one tenth of what it is now, if we only had one billion people, 100 million people, you think we could have the world economy at this level with our level of technology?
No, the delta's a killer, right? This is one thing we learned from macro. The delta and the levels really interact. So shrinking can kill you, just like companies, nonprofits, if they shrink too much, often they just blow up and disappear, they implode. Uh, but that doesn't mean that growing them gets you three x, four x, whatever, proportional to how they grow. It's oddly asymmetric. It's very hard to internalize emotionally that intuition in your understanding of the real world, but I think we need to.
What are the specific bottlenecks? Like, what, what?
Humans, here they are. Bottleneck, bottleneck. Hi, good to see you. And some of you are terrified. You're gonna be even bigger bottlenecks. That's fine, it's part of free speech. But my goodness, once it starts changing what the world looks like, there will be much more opposition. Not necessarily from what I call doomsster grounds, but just people like, Hey, I see this has benefits, but I grew up, trained my kids to live in some other kind of world.
I don't want this, and that's gonna be a massive fight. I really have no prediction as to how it's gonna go, but I promise you that will be a bottleneck.
But you can see even historically, you don't have to, like, go from the uh, farmers to industrial revolution ten times. You can just look at, actually, cases in history where we have had ten times, uh, rates of, um, sorry, 10%, uh, increase, uh, rates of economic growth, uh, where you know, you go to like China after Gen Deng Xiaoping, they have decades of 10% economic growth. The and then that just because you can do some sort of catch-up, the idea that you can't replicate that with AI, or that it's not, like, infeasible.
Where were the bottlenecks when Deng Xiaoping took over?
They're in a mess now. Uh, I'm not sure how it's gonna go for them. They're just a middle income country. They struggle to tie per capita income with Mexico. I think they're a little ahead of Mexico now. They're the least successful Chinese society, in part because of their scale. Their scale is one of their big problems. There's this fear that if they democratize and try to become a normal country, that the median voter won't protect the interests of the elites.
So I think they're a great example of how hard it is for them to scale because they're the poorest group of Chinese people on the planet.
I I mean, like, not the challenges now, but the fact that for decades they did have 10% economic growth, in some years fifteen Well, starting percent. It shows from a per that it's possible.
capita income of like $200 per head, and now they now If you think they're Mexico.
that our ancestors were gonna be like, as poor as the Chinese, you know, like thirty years ago.
I'm very impressed by the Industrial Revolution. Like you could argue progress, or all progress studies here, most important event in human history, maybe. Typical rate of economic growth during that period was about one and a half percent, and the future is about compounding and sticking with it, and, you know, seeing things pay off in the long run. Just human beings are not gonna change that much, and I don't think that property of our world will change that much, even with a lot more IQ and conscientiousness.
I interviewed you like nine months ago, and I was asking you about AI then, and I think your attitude was like, eh, um, uh, and I think now I don't know how. How has your attitude changed since we talked about nine months ago?
You know, I don't remember what I thought in what month, but I would say, on the whole, uh, I see more potential in AI than I did a year ago. Uh, and I think it has made progress more quickly than I had been expecting, and I was pretty bullish on it back then. Uh, the O one model to me is very impressive, and I think further extensions in that direction will make a big, big difference. And, uh, the rate at which they come is hard to say, but it's something we have and we just have to make it better.
You showed me your document of different questions that you came up with for O one for economic reasoning. I don't think That was for I GPT four. Yeah, But oh wha- what percentage of them did O one get right? Cause I don't think I got a single one of those right.
those questions were too, you know, they were too easy. They were for GPT four, and it's like, abandoned those questions, you know, like hundred questions of economics, how well does a human do on them? They're hard, but it's like, pointless. So I would not be shocked if somebody's AI model in less than three years, you know, beat human experts on a regular basis. Let's put it that way.
Did that update you in any way that the now you're you've resigned on these questions because they were too easy for these models? And in the initial, like, they are hard questions objectively, right? They're just easy for O one.
I feel like Kasparov the first time he met Deep Blue, you know, there were two matches, and the first one Kasparov won, and I lived through that first match. I feel like I'm sort of in the midst of the first match right now, but I also remember the second match. And in the final game, you know, Kasparov made that bonehead error in the Carogan Defense. That, too, was a human bottleneck, and he lost the whole match.
So we'll see what the rate of change is.
Yesterday, Patrick was talking about how important it is for the founders of different institutions to hang around and be the ones in charge. I've heard you talk about, like, you know, the Beatles were great because the Beatles were running the the the Beatles. Why do you think it's so important for that to be the case?
I think courage is a very scarce input in a lot of decisions, and founders, they have courage to begin with, but they also need less courage to see through a big change in what the company will do. So Facebook now Meta has made it quite a few big changes in its history. So Mark had a lot of courage to begin with. But if Mark Zuckerberg says, we're gonna do this, we're gonna do that, it's pretty hard, you know, for everyone else to say no in a in a good way.
I really like that. So, uh, it economizes on courage, having a founder and you're selecting for courage. Those would be two reasons.
How does that explain the Beatles success?
Well, Beatles are an interesting example. I mean, they broke up in 1970, right? Rolling Stones are still going. That tells you something, but the Beatles created much greater value, and the Beatles are the group we still all talk about much more, even though the Rolling Stones are still with us. So they were always unstable. There's like two periods of the Beatles, early Beatles, John is the leader, but then Paul works at it, and John becomes a heroin addict, and Paul gets better, better, better, and ultimately there's no core, there's not a stable equilibrium.
The Beatles split up, but that creative tension for like, those core seven to eight years was just unbelievable. And it's four founders, Ringo not quite a founder, but basically a founder, cause Pete Best was drumming and they got rid of him right away. Uh, it's an. It's one of the most amazing stories in the world. I like studying these amazing productivity stories like Johann Sebastian Bach, Magnus Carlson, Steph Curry, the Beatles. I think they're worth a lot of study.
They're atypical. You can't just say, oh, oh, I'm gonna be like the Beatles, like, you're gonna fail. The Beatles did that. Uh, but nonetheless, I think it's a good place to look for getting ideas and seeing risks. Hello everyone, this is Tyler Cowen, and I would like to personally thank Jane Street for sponsoring this podcast episode with Dwarkesh Patel. I've been visiting Jane Street for some number of years. They're renowned for their brainy, challenging environment, and also for their ability to spot and recruit talent.
Those are some of the reasons why, for me, those are the trips and the visits I look forward to the most. I would just say this if it is an appropriate option for you, please do consider working there. I've always had a blast during my visits, learned a lot, and I recall one time when I gave a talk, we all went out to dinner, and then quite late, well, people didn't go back home, but they all went back to the Jane Street office to play chess, bug house, and other games.
They're better at these games than you might think, so please update your other expectations accordingly. Thank you again.
I'm incredibly grateful to Tyler for volunteering to say a few words about Jane Street. This is the first time that a guest has participated in the sponsorship, and I hope you can see why Tyler and I think so highly of Jane Street. If you want to learn more about their open roles, go to jane street dot com slash thorcash. All right, back to Tyler again.
What did you think of T uh, Patrick's observation of the competency crisis?
I see it differently from Patrick, and he and I have discussed this. So I think it is basically increasing variance in the distribution. So young people at the top are doing much better, and they're far more impressive than they were in earlier times. And if you look at areas where we measure performance of the young, chess is a simple example. We perfectly measure performance. Very young people are just better and better at chess. That that's just proven, even like NBA basketball.
Uh, you have very young people doing things that they would not have been doing, say, thirty years ago. And a lot of that is mental and training and application and not being a knucklehead. So the top of the distribution getting much better. You see this also in science, internet writing, the very bottom of the distribution. Well, youth crime has been falling since the nineties, so the very bottom of the distribution also is getting better. I think there's some thick middle above the very bottom and extending like a bit above the median, that's clearly getting worse.
And because they're getting worse, there's a lot of anecdotal examples of them getting worse, like students wanting more time to take the test or having, you know, flimsy excuses or mental health problems with the young or whatever. There's a lot more of that because of that thick band of people getting worse, and that's a great concern. But I see the very bottom and a big chunk of the top of the distribution as just much better, and I think it's pretty proven by numbers that that's the case.
So I would say this increasing variance with a weird mix of where the gains and declines are showing up. It's And I've said this to Patrick, and I'm gonna say it to him again, and I I hope I can convince him.
it seems concerning, then the composition is that the average goes down. If you look at PISA scores or something.
The median goes down, you know, a lot of tests, they've pushed more people into taking the test, PISA scores in particular. So I'm I suspect those scores adjusted for that are roughly constant, which is still not great, I agree. And I think there's some decline, some of it is pandemic, and we're recovering a bit slowly, getting back to human bottlenecks. But I think a lot of the talk of declining test scores is somewhat overblown. At at most, there's a very modest decline, I would say.
If the top is getting better, what do you make of the an anecdotal data he was talking about yesterday, where the Stanford kids come up to him and say, you know, all my friends, they're stupid, you can't hire anybody from Stanford anymore. That's that should be the cream of the crop, right?
There's plenty of data on the earnings of Stanford kids. If there were a betting market in, you know, what's the future trend? I'm long. How long I should be, I don't, I really don't know, but I visit Stanford, not every year, but, you know, regularly, and their selection and who it is I meet. But yeah, we're talking about selection, and they're very impressive. And Emergent Ventures has funded a lot of people from Stanford, uh, as far as I can tell, as a a group, they're doing very well, so that is of no concern to me.
If, like, you're worried about the Stanford kids, like, something seems off in the level of salience and focus in the argument, because they're overall doing great. And they, you know, they have high standards, that's good too. Like Jo, you know, Paul McCartney thought John Lennon was a crummy guitar player, and John thought a lot of Paul's songs were crap. Like, in a way, they're right, in a way, they're wrong, but it's a sign what high standards the Beatles had.
Yeah, I I mean, you would hope they How old would
are you, by the way?
twenty four.
Okay, now go back whenever, however many years. Was there a twenty four-year-old like you doing the equivalent of podcasting? Like, it's just clearly better now than it was back then, people.
Wait, wait.
And you were doing this a few years ago, so it's just obvious to me, you know, the the young peeks are doing better. And Wasn't you're proof.
was wasn't Churchill, by the time he was twenty four, uh, an international correspondent Cuba, India, and was M, I think the highest paid, uh, journalist in the world by the time he was twenty four. Really similar.
I don't know. I mean, what was he paid? And how good was his journalism? I just don't know. I don't think it's that impressive a job to be an international journalist. Like, what does it pay people now? He did s. He did some good things later on, but most of his early life, he's a failure. And then ask the Irish, getting back to Patrick, ask the Irish and people from India what they think of younger Churchill, and you'll get an earful.
Like his real great achievement, I don't know how old he was exactly, but it's quite late in his life. And until then, he's a destructive failure. There was no one on Twitter to tell him, Hey, Winston, you need to rethink this whole Irish thing. And today there would be Sam, Sam will do it right, Sam will tweet at Winston Churchill. Gotta rethink the Irish thing, and Sam is persuasive.
If you read his aphorisms, I think he would have actually been pretty good on Twitter.
Uh, maybe, but again, you know, like, what's what does the equilibrium look like when everything changes? But clearly he was an impressive guy, especially given how much he drank.
Okay, so that even if you don't buy the Stanford kids, if you, if you know, don't buy the young kids. The other trend he was talking about, where if you look at the leaders in government, whatever you think of Trump, Biden, we're not talking about Jefferson and Hamilton anymore, right? How do you explain that trend?
Well, Jefferson and Hamilton, they're founders, right? And they were pretty young at the time. Uh, you can do great things when you're founding a country in a way that just cannot be replicated later on. Uh, putting aside the current year, which I think is weird for a number of reasons, but I think mostly we have had impressive candidates, and most of the U.S. bureaucracy in Washington, I think, is pretty impressive. Generals, national security people, top people in agencies, people at Treasury, people at the Fed, and I interact with these groups, like, pretty often.
Uh, overall, they're impressive, and I've seen no signs they're getting worse. Now, if you want to say the two candidates this year, again, there's a lot something we're not going to talk about, but there is a lot you could say on the negative side. Yes, but like Obama, Romney, wh whichever one you like, I I think, like, gee, these are two guys who should be running for president, and that was not long ago.
So then there's a bunch of candidates running who are good. What goes systematically wrong in the selection process is the two who are selected are not as even as good as the average of all the candidates.
You mean this year?
And I'm not talking about an American particular, you know, if, like, you're, if the the theory is just like noise, it seems like it skews one way.
Well, the Democrats had this funny path with Biden and Kamala didn't get through the electoral process in the normal way. So that just means you get weirdness, whatever you think of her as a candidate. Uh, Trump, you know, whom I do not want to win, but I think he is extraordinarily impressive in some way, which, along a bunch of dimensions, exceeds a lot of earlier candidates. I just don't like the overall package, but I would not point to him as an example of low talent.
Uh, I think he's a supreme talent, but harnessed to some bad ends.
If you look at the early twentieth century, like some of the worst things that happened to progress is just these psychopathic leaders. What happened? Why did we have so many just awful, awful leaders in the early twentieth century?
Well, give me like a country and a and a name and a time period, and I'll try to answer I I it. You mean Woodrow
just wanted to know if there's a
Wilson? particular. Uh, He was from the university. That's what was wrong with him, right? And just think of what school it was.
who? sorry?
Woodrow Wilson. One of our two or three worst presidents on civil rights, World War One, he screwed up, uh, the peace process, he screwed up, indirectly led to World War Two, uh, reintroduced segregation of the civil service in some key regards, and just seemed he was a nasty guy and should have, you know, been out of office sooner, given his health and state of mind. So he was terrible, uh, but he was sort of on paper a great candidate.
Hoover on paper was a great candidate and was an extremely impressive guy. I think he made one very bad set of decisions relating to deflation and letting nominal GDP fall. But my goodness, like, there's a reason they called it the Hoover institution after Hoover.
but the Hitler, Stalin, Mao is. Was there something that was going on that explains why that was just a a crummy time for world leaders?
I don't think I have, like, a good macro explanation of that whole trend, but I would say a few things. That's right after the period where the world is changing the most. And I think when you get big new technologies, and this is relevant for AI, you get a lot of new arms races. And, uh, sometimes the bad people win those arms races. So, at least for quite a while, you had Soviet Russia and Nazi Germany winning some arms races.
And they're not democratic systems. Uh, later you have China with Mao being not a democratic system, and then you have a mix of bad luck, like Stalin and Mao just draw the urn. You could have gotten less crazy people than what you got. And I agree with Hayek, the worst get to the top under autocracy, but like, they're that bad? Like, that was just some bad luck, too. There's other things you could say, but I think we had a highly disoriented civilization.
You see it in aesthetics approaching beginnings of World War One, art, music radically changing, people feel very disoriented. There's a lot up for grabs. Uh, imperialism, colonialism start to be factors, just there wasn't like a stable world order. And then you had some bad luck tossed into that, and all of a sudden, these super destructive weapon systems compared to what we had had, and it was awful. I'm not pretending that's some kind of full explanation, but that would be like partial start.
You compared our current period to seventeenth century England, where you have a lot of new ideas, things go topsy-turvy. What's your theory of why things go topsy-turvy at the same time when these eras come about? What causes this volatility?
Uh, I don't think I have a general theory. If you want to talk about seventeenth century England, so they have the scientific revolution, you have the rise of England as a true global power. Navy becomes much more important. The Atlantic trade route because of the new world becomes much more important. Places like the Middle East, India, China, that were earlier, you know, Persia had major roles. They're they're crumbling partially for reasons of their own, and that's going to help the relative power of the more advanced European nations.
England has a lot of competition from, you know, the Dutch Republic, France happening at the same time that for the first time in human history that I know of, we have sustained economic growth, according to Greg Clark, starting in the sixteen twenties of about 1% a year. And that is compounding again, slow numbers, but compounding, and England is the place that gets the compounding at 1%, starting in the sixteen twenties. And somehow they go crazy, civil war, kill the king, all these radical ideas, libertarianism comes out of that, which I really like, John Milton, John Locke.
Also, this brutal conquest of the new world, like, very good and very bad coming together, and I think it should be seen as these set of processes where very good and very bad come together. And we might be in for a dose of that again now soon.
Seems like a simple question, but basically, how do we make sure we get the good things and not the crazy civil wars? You can Where much people make sure, I die.
mean, you try at the margin to nudge toward the better set of things. But it's possible that all the technical advances that recently have been unleashed now that the great stagnation is over, which of course include AI, will mean another crazy period. It's quite possible. I think the chance of that is reasonably high.
What's your most underrated cult?
Most underrated cult progress studies.
I I think you called peak EA right before SBF fell.
That's right. I was at an EA meeting and I said, you know, hey, everyone, this is as good as it gets. Enjoy this moment. It's all basically gonna fall apart. You're still gonna have some really significant influence, but you won't feel like you have continued to exist as a movement. That's what I said, and they were shocked. They thought I was insane. But I think I was mostly right.
and like, what, what? What specifically did you see? What was is the exuberance too high? Did you see SBF's, uh, balance sheet? Like, what, what? What did you see?
Well, I was surprised when SBF was insolvent. I thought it was a high-risk venture that had no regulatory defense and would end up being worth zero. But I didn't think he was actually playing funny games with the money. Uh, I just have a long history of seeing movements in my lifetime from the nineteen sixties onwards, including libertarianism, and there are common patterns that happens to them all. We're here in Berkeley, my goodness. Free speech movement Where's free speech in Berkeley today?
Like, how'd that, you know, work out in the final analysis? So it's a very common pattern, and just to think, well, the common pattern is going to repeat itself. And then you see some intuitive signs, and you're just like, Yeah, it's gonna happen. And the private benefits of belonging to EA, like they were very real in terms of the people you could hang out with, or like the sex you could have, but they didn't seem that concretely crystallized to me in institutions the way they are like in Goldman Sachs or legal partnerships.
So that struck me as very fragile, and I thought that at the time as well.
Sorry, I'm not. I'm not sure I understood. Uh, uh, what were the intuitive signs?
Well, not seeing like the very clear, crystallized, permanent incentives to keep on being a part of the institutions. Uh, a bit of excess enthusiasm from some people, even where they might have been correct in their views, uh, some cult-like tendencies, the rise of it being so rapid, uh, that it was this uneasy balance of secular and semi-religious elements that tends to flip one way or the other, or just dissolve. So I saw all those things, and I just thought, like, the two or three best ideas from this are gonna prove incredibly important still, and from this day onwards, I don't give up that belief at all.
But just as a movement, I thought it was gonna collapse.
When do we hit, uh, peak progress studies?
You know, when Patrick and I wrote the piece on progress and progress studies, he and I thought about this, talked about it. I can't speak for him, but my view at least was that it would never be such a formal thing, or like, controlled or managed or directed by a small group of people, or like, trademarked, or it would be people doing things in a very decentralized way that would reflect a general change of ethos and vibe.
So I hope it hasn't, in many ways, like a gentler, but more enduring, uh, trajectory. And I think so far I'm seeing that. Like, I think in a lot of countries, science policy will be much better because of progress studies. That's not proven yet. You see some signs of that. You wouldn't say it's really flipped, but a lot of reforms, you're in an area like no one else has any idea, much less a better idea or a good idea.
And some modestly small number of people with some talent will work on it and get like a third to half of what they want, and that will have a huge impact. And like, if that's all it is, I'm thrilled, and I think it will be more than that.
I asked Patrick yesterday, How, you know, how do you think about progress studies differently now that you know AI is a thing that's happening? What's the answer for you?
I don't think I don't think about it very differently. But again, if you buy my view about, like, slow take off, why should it be that different? We'll have more degrees of freedom. So if you have more degrees of freedom, all your choices, decisions, issues, problems are more complex, so you're in more need of, like, some kind of guidance. So all inputs other than the AI, like rise in marginal value, and since I'm an input other than the AI, or I hope that means I rise in marginal value, but I need to do different things.
So I think of myself over time as less a producer of content and more like a connector, people, person, developing networks. In a way where if there somehow had been no, like transformers and LLMs, uh, I would have stayed a bit more as a producer of content.
When I was preparing to interview you, I asked Claude to take your persona, and compared to other people I tried this with, it actually works really well with you. Well,
Cause I've written a lot on the internet. yeah, that's why. Um, This is my immortality, right?
that's right. So I I've heard you say in the past, you know, you don't expect to be remembered in the future. At the time, I don't know if you were considering that because of your volumes of text, you're gonna have an especially salient persona in future models. How does that change your estimation of your intellectual contribution going forward?
I do think about this. And now the last book I wrote, you know, it's called G.O.A.T. Who's the greatest economist of all time? I'm happy if humans read it, but mostly I wrote it for the AIs. I wanted them to know I like, appreciate them. And my next book, I'm writing even more for the AIs. Again, human readers are welcome. It will be free, but sort of, oh, who reviews it? Like, oh, is TLS gonna pick it up?
Or like, it doesn't matter anymore, uh, like, the AIs will will troll it and know I've done this, and that will shape how they see me in, I hope, a very salient and important way. And as far as I can tell, no one else is doing this. No one is like writing or recording for the AIs very much. But if you believe even in like a modest version of this progress, like I'm modest in what I believe relative to you and many of you, like, you should be doing this.
You're an idiot if you're not writing for the AIs. They're a big part of your audience, and they're like purchasing power. We'll see, but over time, it will accumulate and they're gonna hold a lot of crypto. We're not gonna give them bank accounts, at least not at first.
What part of your persona will be least captured by the AIs if they're only going by your writing?
I think I should ask that as a question to you. What's your answer? I don't think AIs are that funny yet. They're better on humor than many people allege, but I don't use them for humor.
It's interesting that you learn so much about a person from when you're interviewing them for a job or for you for emerging ventures. You can read their application, but just in the first ten minutes, their vibe. Three minutes, but yes, Yes, and so whatever's going on there, that's so informative. The AIs won't have just from the writing.
not at first, but I think I I've heard of projects. This is secondhand. I'm not sure how true it is, but that interviews are being recorded by companies that do a lot of interviews, and these will be fed into AIs and coded in particular ways. And then people, in essence, will be tracked through either their progress in the company or a LinkedIn profile. And we're gonna learn something about those intangibles at some rate. Uh, I'm not sure how that will go, but I don't view it as something we can never learn about.
Do you actually have a conscious theory of what's going on when you get on a call with somebody and three minutes later, you're like, you're not getting the grant? W What happens?
Well, often there's like one question the person can't answer. So if it's someone, say, applying with a nonprofit idea, plenty of people have good ideas for nonprofits, and I see these all the time. But when you ask them the question, how is it you think about building out your donor base? It's remarkable to me how many people have no idea how to answer that, and without that, you don't have anything. So it depends on the area, but that would be an example of an area where I ask that question pretty quickly, and a significant percentage can't answer it.
And I'm still willing to say, well, come back to me when you have a good case. Oddly, none of those people have ever come back to me that I can think of. Uh, but I think over time, some will. And, uh, that's like a very concrete thing, but there's other intangibles. Just when you see what the person thinks and talks about too much. So, like, if someone wants to get an award only for their immigration status, that to me is a danger sign.
Even though, at the same time, usually you're looking for people who want to come to the U.S. whether they can do it or not. And there's just a lot of different signals you pick up, like people somehow have the wrong priorities, or they're referring to the wrong status markers, and it comes through more than you would think.
If you just had their tr- if you had the transcript of the call, but you couldn't see the video, like you would say no. In the case where you could see the video, you might say yes, if you see the transcript, what happens in those cases?
Uh, having only the transcript would be worth much, much less, I would say, if that's what you're asking. Yeah, it would be maybe 25% of the value.
And what's going on with the 75%?
We don't know, but I think you can become much better at figuring out the other 75%, partly just with practice.
Yesterday, Patrick was talking about these concentrations of talent that he sees in the history of science, with these labs that have six, seven Nobel prizes. And he was also talking about, you know, second employee at Stripe, as Greg Brockman, he was invisible to other parts of, uh, the startup ecosystem in the same way. What's your theory of what's going on? Why are these clusters so limited? What's actually being inherited over, uh, and transmitted here?
Well, Patrick was being too modest. I thought his answer there was quite wrong, but he sort of knows better. He was able to hire Greg Brockman because he's Patrick. It's very simple. He wasn't gonna come out and just say that, and he may even, like, deny it a bit to himself. But if you're Patrick and John, you're going to attract some Greg Brockmans, and if you're not, it's just way, way harder. Because the Greg Brockmans are pretty good at spotting who are the Patricks and Johns.
So in in a way, that's just pushing it back a step, but at least it's answering part of the question in a way that Patrick didn't, because he was modest and humble.
It seems like that makes the clusters less valuable then, because if Greg Brockman is just Greg Brockman and he Greg chose Patrick and John because they're Patrick and John, and Patrick and John chose Greg because he's Greg. It wasn't that they meet each other great. It was just like, talent sees talent, right?
Well, they make each other much better, just like Patrick and John made each other much better and still do. But you're getting back to my favorite human bottlenecks. Thank you. I'm I'm fully on board with what you're saying. To get those, like, how many Beatles are there? Uh, it's amazing how much stuff doesn't really last, and, uh, it's just super scarce achievement at the very highest levels, and that's this extreme human bottleneck. And AI, even a pretty strong AI, remains to be seen how much it helps us with that.
I'm guessing ever since you wrote the progress studies article, you got a lot of applications for emerging ventures from people who want to do some progress studies thing. That's really, you know, d on the margins, do you wish you got fewer of those proposals or more of them, or do you just wish they were, like, unrelated?
I don't know, you know, to date, a lot of them have been quite good, and many of them are people who are here. There's a danger that as a thing becomes more popular, you know, at the margin, they become much worse, and I guess I'm expecting that. So maybe mentally, I'm raising my own bar on those, and maybe over time, I find it more attractive. If the person is interested in, say, like, the industrial revolution, if they're interested in progress studies, capital P, capital S, like, over time, I'm growing more skeptical of that.
Not that I think there's anything intrinsically bad about it, like I'm at a progress studies conference with you. But still, when you think about selection and adverse selection, I think you've got to be very careful and keep on raising the bar there. And it's still probably good if those people do something in capital P, capital S progress studies, but it's not necessarily good for emerging ventures to just keep on funding the number.
If you buy your picture of AI, where it increases growth rates by half a percentage point, what does your portfolio look like?
I can tell you what my portfolio is. Uh, it's a lot of diversified mutual funds with no trading, basically, uh, pretty heavily U. S. weighted, and nothing in it that would surprise you. Now, my wife works for the SEC, so we're not allowed to do most things, like even to buy most individual stocks. Uh, you may not be allowed to do it, certainly not allowed derivatives or shorting anything. But if somehow that restriction were not there, I don't think it would really matter.
So buy and hold, diversify, hold on tight, and make sure you have some cheap hobbies and are a good cook.
Why aren't you more leveraged if you think the growth rate's gonna go up even slightly?
Well, I think I also have this view, maybe a lot of the equity premium is in the past. That people, especially in this part of the world, are very good at internalizing value, and it will be held and earned in private markets and by VCs rather than like public pension funds. Why give it to them? I think Silicon Valley has figured this out, Sand Hill Road has figured it out. So what one can do with public equities is unclear.
What private deals I can get in on with my, like, really tiny sum of wealth, like I would say, is pretty clear. So I'm left with that. And like, money for me is not what's scarce, time is scarce, and I do have some very cheap hobbies, and I feel I'm in very good shape in that regard.
That that being said, I think you could get pretty good deal flow. You wouldn't do a portfolio.
I don't know, like you, you can only focus on so many things. So if I have, like, good deal flow in emergent ventures, which I'm not paid to do, like, say, I had $1 billion from whatever, uh, I wouldn't have any better way of spending that $1 billion than, like, buying myself a job doing emergent ventures or whatever. So I'm sort of already where I would be if I could buy the thing for $1 billion.
So I'm just not that focused on it, and I think it's good that you limit your areas of focus. And if some people, it's just money, like, I think that's great. I don't begrudge them that at all. I think it's socially valuable. Let's have more of it, bring it on, but it's just not me. When I started my career, it was really unknown that an economist could really earn anything at all. Like, there were no tech jobs with billionaires.
Finance was a low-paying field, like when I started choosing a career, it was not a thing. There wasn't this fancy Goldman Sachs. It was a slow, boring thing. Programmers were weird people in basements, like, maybe who knows what, you know, that bad stuff. And then, like an economist, you would earn, like back then, maybe $40,000 a year, like two people, Milton Friedman, Paul Samuelson, had outside income, and you would no expectation that you would ever earn more than that.
And I went into this with all of that, like, relative to that, I feel so wealthy. Just like, oh, you can sell some books, or you like, can give a talk, or I don't know. I just feel like I am a billionaire now, and if anything, I want to become what I've called an information trillionaire. I'm not gonna make that, but I think it's a good aspiration to have just collect more information and be an information trillionaire.
Like Dana Gioia has that same goal, he and I have talked about this. I think that's a very worthy goal.
Was there a second field that you were considering going to other than economics?
Uh, it was either economics or philosophy, and I saw back then this would be like the late nineteen seventies. It was much harder to get a job as a philosopher, though not impossible the way it sort of is now. And they were paid less and just had fewer opportunities. So I thought, well, I'll do economics, but I think in a way, I've always done both.
Okay, I really want to go back to this diffusion thing we're talking about at the beginning, the economic growth, cause I feel like I don't. W. W. What am I? And uh, I'm not understanding the I hear the word diffusion, I hear the word bottlenecks, but I just like, don't have anything concrete in my head when I hear that. What, what am I? What are the people who are thinking about AI missing here when they just plug in these things into their models?
I'm not sure I'm the one to diagnose, but I would say when I'm in the Bay Area, like the people here to me are the smartest people I've ever met on average, most ambitious, dynamic, and smartest, like by a clear grand slam compared to New York City or London or anywhere. That's awesome, and I love it. But I think a s a side result of that is that people here overvalue intelligence, and their models of the world are built on intelligence mattering much, much more than it really does.
Now, people in Washington don't have that problem. We have another problem, uh, and that needs to be corrected too. But I just think if you could root that out of your minds, it would be pretty easy to glide into this expert consensus view. That tech diffusion is pretty universally pretty slow, and it's that's not gonna change. No one's built a real model to show why it should change, other than sort of hyperventilating blog posts about everything's gonna change right away.
The model is that you can have AIs make more AIs, right? That you can have them.
Diminishing returns. Ricardo knew this, right? He didn't call it AI, but Malthus, Ricardo, they all talked about this. It was just humans for them. Well, people then would breed, they would breed at some pretty rapid rate. There were diminishing returns to that. You had these other scarce factors. Classical economics figured that out. They were too pessimistic, I would say, but they understood the pessimism intrinsic in diminishing returns in a way that people in the Bay Area do not, and it's better for them that they don't know it.
But if you're just trying to inject truth into their veins rather than ambition,
Sorry, what?
and diminishing returns is a very important idea.
In what sense was that pessimism correct? Because we do have 7 billion people, and we have a lot more ideas as there's more result, we have a lot more industries.
Yeah, I said they were too pessimistic, but they understood something about the logic of diffusion, where if they could see AI today, I don't think they would be so blown away by it. Oh, you know, I read Malthus, Ricardo would say Malthus and I used to send letters back and forth. We talked about diminishing returns. This'll be nice, it'll extend the frontier, uh, but it's not gonna solve all our problems.
One concern you can have about progress in general is if you look at the famous Adam Smith example, you've got that pin maker, and the specialization obviously has all these efficiencies. But the pin maker is just like he's doing this one thing. Whereas if you're in the ancestral environment, you get to do, you get to basically negotiate with every single part of what it takes to keep you alive, and every single every other person in your tribe.
Does individuality is is that, like, lost with more specialization, more progress?
Well, Smith thought it would be. I think compared to his time, we have much more individuality, most of all in the Bay Area. That's a good thing. I worry, you know, the future with AI, that a kind of demoralization will set in in some areas. I think there'll be full employment pretty much forever. That doesn't worry me, but what we will be left doing, what exactly it will be and how happy it will make us. Again, I don't have pessimistic expectations.
I just see it as a big change. I don't feel I have a good prediction, and if you don't have a good prediction, you should be a bit wary and just like, Oh, okay, we're gonna see. But, you know, some some words of caution are merited.
When you're learning about a new field, I I the vibe I get from you when you're doing a podcast is like, you're you're picking up like the long tail of different. You talk to interesting people, or you read the book that nobody else would have considered. How often do you just have to, like, you gotta like, read the main textbook versus you can just, uh, look at the esoteric thing. Uh, how do you? How do you balance that trade-off?
Well, I haven't interviewed that many scientists like Ed Boyden would be one, uh, Richard Tromb, the ornithologist from Yale. Those are very hard preps. I think those are two excellent episodes, but I'm limited in how many I can do by my own ability to prepare. Uh, I like the most doing historians because the prep is a lot of work, but it's easy, fun work for me. Uh, and I sort of, I'm I. I know I always learn something.
So now I'm prepping for Stephen Kotkin, who's an expert on Stalin and Soviet Russia, and that's been a blast. I've been doing that for like four months, reading dozens of books, and it's very automatic. Where if you try to figure out, like, what Ed Boyden is doing with the light shining into the brain, it's like, Oh, my goodness, do I understand this at all? Or am I like the guy who thinks the demand curve slopes upward?
So it just means I'm only going to do a smallish number of scientists, and that's a shame, uh, but maybe AI can fill in for us there.
You recommended a book to me, Stalin's Library, which talks about the different things, uh, the different books that Stalin read, and the fact that he was kind of a smart, well-read guy. And the book also mentioned, I think, in the early chapters, that, look, he never in all his annotations, if you look through all his books, he ne. There's never anything that even hints that he doubted Marxism.
That's right. There's a lot
What's going?
of other evidence that that's the correct portrait.
What, what's going like smart guy who's read all this literature, all these different things, never even questions Marxism? What's going on there? What do you think?
I think the culture he came out of had a lot of dogmatism to begin with, and I mean both Leninism, which is extremely dogmatic. You know, Lenin was his mentor, like Patrick's thing about the Nobel laureates. It happens in insidious ways, too. So Stal, you know, Lenin is the mentor of Stalin, Soviet culture, communist culture, and then Georgian culture, which appealing and fun-loving, uh, and wine-drinking and dance-heavy as it is, there's something about it that's a little, you know, you pound the fist down and you tell people over the table how things are.
He had all those stacked vertically, and then we got this bad genetic luck of the draw on Stalin, and it turned out, obviously, pretty terrible.
And then you buy Hayek's explanation that the reason he rose to the top is just because the most atrocious people win in autocracies. What, what? What is that I don't think explanation? He's saying
I think what Hayek said is subtler than that, and I wouldn't say it's Hayek's explanation. I would say Hayek pinpointed one factor. There are quite a few autocracies in the world today where the worst people have not risen to the top. UAE would be, I think, the most obvious example. I've been there. As far as I can tell, they're doing a great job running the country. Uh, there are things they do that are nasty and unpleasant.
I would be delighted if they could evolve into a democracy, but the worst people are not running UAE. This I'm quite sure of. So, uh, it's a tendency. There are other forces, but culture really matters. Hayek is writing about a very specific place and time. I would say it really surprised me. There are these family-based Gulf monarchies with very large, clannish interest groups of thousands of people that have proven more stable and more meritocratic than I ever would have dreamed, say, in 1980.
And I know I don't understand it, but I just see it in the data. It's not just UAE, there's a bunch of countries over there that have outperformed my expectations, and they all have this common, broadly common system.
makes you wonder, wh- when you go around the world, cause I know you go outside the Bay Area and the East Coast as well, and you talk about progress studies related ideas. What's the biggest difference in how they're received versus the audience here?
well, the audience here is so, so different. Like, you're the outlier place of America, and then where I normally am outside of Washington, D.C. That's like the other outlier place, and in a way, we're opposite outliers. I think that's healthy for me, both where I live and that I come here a lot and that I travel a lot. Uh, but you all are so like, out there in what you believe. Uh, I'm not sure where to start.
You all, you know, and you come pretty close to thinking in terms of infinities on the creative side and the destructive side, and no one in Washington thinks in terms of infinities, they think at the margin. And, like, overall, I think they're much wiser than the people here. But I also know if everyone, or even more people thought like the D C people, like our world would end, we wouldn't have growth. They're terrible. People in the EU are super wise.
Like you have a meal with like some sort of French person who works in Brussels, it's very impressive. They're cultured, they have wonderful taste, they understand all these different countries, they know some something about Chinese porcelain. And if, like, you lived in a world ruled by them, the growth rate would be negative 1%. So there's some way in which all these things have to balance. I think US. has done a marvelous job at that, and we need to preserve that.
What I see happening UK used to do a great job at it. UK somehow the balance is out of whack, and you have too many non-growth oriented people in the cultural mix.
the way you described this French person you were having dinner with.
Which I've heard this is real dinners, No, no, no, I yeah, mean, just like, and the food is good too.
I don't know, it kind of reminds me of you in the sense that you're also, uh, well cultured and knew all these different esoteric things. I, I don't know. D d uh, what? What's the difference between you and wha- what's, like, the biggest difference between you and these French people you have dinner with?
I don't think I'm well cultured would be one difference. There are many differences. First, I'm an American, I'm a regional thinker, I'm from New Jersey, so I'm essentially a barbarian, not a cultured person. I have a veneer of culture that comes from having collected a lot of information, so I I'll know more about culture than a lot of people. And that can be mistaken for being well cultured, but it's really quite different. It's like a barbarian's approach to culture.
It's like a very autistic approach to being cultured, and should be seen as such. So I feel the French person is very foreign from me. And there's something about America they might find strange or repellent, and I'm just so used to it. I see intellectually how many areas we fall flat on or are destructive, but it doesn't bother me that much because I'm so used to it.
What is most misunderstood about autism?
Well, if you look at the formal definition, it's all about deficits that people have, right? Now if you define it that way, like no one here is autistic. If you define it some other way, which maybe we haven't pinned down yet, like 1/3 of you here are autistic. I don't insist on owning the definition. I think it's a bad word. I would. It's like libertarian. I would gladly give it away. But there is like some coherent definition where 1/3 of you here probably would qualify, and this other definition where none of you would, and it's like kids in mental homes banging their head against the wall, so.
I don't know. Seems that whole. Issue needs this huge reboot.
These DC people. You know, one frustration that tech people have is that they have very little influence it seems in Washington compared to how big that industry is and industries that are much smaller will have much greater sway in Washington. Why is tech so bad at having influence in Washington?
Well, I think you're getting a lot more influence than maybe you realize, uh, quickly through national security reasons. So the feds have not stopped the development of AI, whatever you think they should or should not do, it's basically proceeded. And national security as a lobby, they don't care about tech per se. But it is meant that on a whole bunch of things in the future you will get your way a bit more than you might be expecting.
But the key problem you have is so much of it is in one area, and it's also an area where there's a dominant political party. Even within that political party, there's in many parts of California a dominant faction. And you compare yourself to like the community bankers who are in like so many American counties. Have connections to every single person in the House of Representatives. Your issues in a way are not very partisan. Uh, the distortions you cause through your privileges are invisible to America.
It's not like. You know, Facebook where some John Heid has written some best selling book complaining about what it is you do. There's not a best selling book complaining about the community banks. And they are like ruthless and powerful and get their way, and I'm not going to tangle with them. And you all here are so far from that. In part because you're dynamic and you're clustered.
Final question. So I think based on yesterday's uh session, it seems like Patrick's main misgiving with progress is that you look at the younger cohort, there's something that's not going great with them, and it seems to. You know, you would hope that over time progress means that people are getting better and better over time. If you buy his view of what's happening with the young people, what's your main misgiving about progress? The thing you're, you're like, ah, if I look at the time series data, I'm not sure I, I like where this trend is going.
Well, our main concern always should be war. And I don't have any grand theory of what causes war, or if such a theory ever is possible. But I do observe in history that when new technologies come along, they are turned into instruments of war. And some terrible things happen. You saw this in 17th century England. You saw this with electricity and the machine gun. Nuclear weapons is a story in process. And I'm not sure that's ever going away.
So my main concern with progress is progress and war interact, and it can be in good ways, like the world ala Stephen Pinker has had relative peace. That's fraying at the edges in the data. The numbers are now moving the wrong way, but it's still way better than most past time periods. And we'll have to see where that goes, but there might be a ratchet effect where wars become more destructive, and even if they're more rare when they come, each one is a real doozy, and whether we really are or ever can be ready for that, I'm just not sure.
And thank you very much Dwarkesh.
This will be the 2nd session we have to end on a pessimistic note, but
No, the optimistic note is that we're here, human agency matters. If we were all sitting around in year 1000, we never could have imagined. The world being anything like this, even a much poorer country. And you know, it's up to us to take this extraordinary and valuable heritage. And do some more with it, and that's why we're here. So I say let's give it a go.
Great note to end up. Thanks, Tyler. I'm very grateful to the Roots of Progress Institute for hosting this progress conference at which I got a chance to chat with Tyler and ask him a few fun questions. Heike Larson and the whole team did a wonderful job organizing it, and it was a blast. And FreeThink did a great job with the videography, as you can see. If you enjoy this episode, please subscribe. Please like, please share it and send it to your friends who you think might enjoy it.
Uh, and otherwise, I guess I'll see you on the next one. All right, cheers.