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Interview: Tyler Cowen, economist and public intellectual
In which we discuss many of Tyler's big ideas from over the years
Tyler Cowen is one of the reasons I’m blogging today. His blog with Alex Tabarrok, Marginal Revolution, is one of the ones that inspired me to get into blogging, and he was one of the first people to notice and amplify my original Noahpinion blog. Over the years, Tyler has quietly been one of America’s foremost public intellectuals, repeatedly injecting interesting and important ideas into our discourse. He was among the first to conceive of the past few decades as a Great Stagnation, and one of the few “stagnationists” to predict a re-acceleration of technology-driven growth. He warned about the youth becoming complacent, and about the dangers of over-sorting in our society and economy. His book Stubborn Attachments is the best philosophical defense of economic growth that I know of. These are just a few examples.
Tyler is a highly eclectic thinker, drawing his ideas from a vast array of inspirations and stubbornly refusing to allow any particular ideology or school of thought to limit the scope of his theses. This is how I’ve also tried to be, though I think he still does it better. And of course, he manages his role as a public intellectual while maintaining a career in academia and the nonprofit world, and even a foray into venture capital. “Impressive” is an understatement!
Anyway, I thought it would be interesting to talk to Tyler about some of the ideas he’s had over the years, and how these ideas are holding up in the 2020s.
N.S.: We are currently in a very strange and confusing era, both socially and politically. In eras like this, I always find it useful to get the perspective of "foxes" -- i.e., people who assimilate and synthesize a large and diverse array of information and adjust their theses and conclusions accordingly, instead of sticking with one big thesis. I sort of see you as the consummate "fox" among modern thought leaders. Is that how you see yourself? How would you describe your general approach to identifying trends in society, economics, technology, politics, etc.?
T.C.: I sometimes think of myself as more fundamentally being an information collector rather than an economist or social scientist. It is a different method for sure. That probably means I am more parasitic on other economists and social scientists than other people might be. That is all the more reason to be nice to them!
Another part of my general toolbox is to expose myself to as many different cultures as possible. For one thing, this involves a lot of travel, both domestically and internationally (last three trips were Austin, TX, Boise Idaho, and Lexington, KY). But "cultures" has many meanings. It can be a real thrill to meet an articulate person from a sector of the economy I have never "encountered" before in the form of live discourse with a practitioner.
My approach is also more humanities-intensive than you would find from most other economists. So that means a lot of study of the arts, music, cinema, cuisine, and so on. And in fact I've written a number of books and journal articles about the economics of those areas.
N.S.: So how would you generally describe the zeitgeist of the moment, if you had to give a simple summary? What do you think are a couple of most important trends in culture and thought right now? My impression has been that we're sort of in a replay of the 70s -- a period of exhaustion after several years of intense social unrest, where people are looking around for new cultural and economic paradigms to replace the ones we just smashed. But maybe I've just been reading too many Rick Perlstein books?
T.C.: I view the 1970s as a materialistic time, sexually highly charged, and America running into some significant real resource constraints, at least initially stemming from high oil prices. Mainstream culture was often fairly crass -- just look at disco, or the ascendancy of mainstream network television. The current time I see as quite different. Sexually, we are withdrawing. Society is more feminized. America has far more immigrants. And we are obsessed with the virtual and with make-believe, to a degree the 1970s could not have imagined. Bruno Macaes is one author who is really on the right track here, with his emphasis on how America is building virtual and indeed often "unreal" fantasies.
I think today the variance of weirdness is increasing. Conformists can conform like never before, due say to social media and the Girardian desire to mimic others. But unusual people can connect with other unusual people, and make each other much weirder and more "niche." For instance, every possible variant of political views seems to be "out there" these days, and perhaps that is not entirely reassuring. A higher variance for weirdness probably encourages creativity. But is it a positive development on net? We are going to find out.
N.S.: Virtualization and the fragmentation of reality as the driving cultural forces of our time? I can see that. Though I think the degree to which that happened before the internet is perhaps underrated!
So here's a question. In September you wrote a Bloomberg column entitled "Why Wokeism Will Rule the World", in which you called it a "feminized, globalized version of U.S. triumphalism". Do you see wokeness as an expression of deep underlying traits in American culture, such as crusading Protestantism? Is it the continuation of the liberal approach of the post-WW2 America, or a break from that? And do you see things like Glenn Youngkin's victory in the Virginia gubernatorial election and the rise of "anti-woke" intellectuals as an incipient pushback that blunts the gains of wokeness?
T.C.: I view Wokeism as a direct descendant from 17th century British Protestantism, at least some of its more radical versions, such as Puritanism. And of course those versions came to the New World, in particular New England, which remains a bastion of Wokeism to this day.
Along the lines of your question, I would say that Wokeism is an *extension* of postwar liberalism. Arguments from "individual rights" (not necessarily in the libertarian sense!) tend to win in America. Obviously the immediate postwar American environment was far from perfect for blacks, women, and many other groups. We are now in rhetorical overdrive to try to fix those problems, though I do not predict we will succeed by more than a modest amount.
You might say the Youngkin victory in Virginia and anti-Woke intellectuals are pushback against Wokeism, and at the most superficial level that is obviously true. But I also view them as sealing Wokeism in, and allowing Wokeism to synthesize into the status quo establishment in what might be called a Hegelian manner. Wokeism won't go away, but we will be left with its most universal, least effective, and most socially acceptable features as a permanent part of virtually all of our institutions. We are now seeing the ability of (some parts of) Wokeism to survive the attacks by its opponents.
N.S.: I think you and I are pretty much agreed about wokeness, and it's interesting that we both independently picked up on the connection to 17th century Protestantism.
Tell me this. Did the George Floyd protests convince you that the young American generations have at least somewhat abandoned their attitude of complacency? In your book The Complacent Class, you argue that the lack of riots and other civil disorder in recent decades was evidence that young Americans were becoming more passive. Has that reversed at all? Will Covid and/or our age of unrest change Millennials and Gen Z, as the Depression changed the Greatest generation? Will it make them more independent, more active, more self-starting? New business formation is way up as well, I notice.
T.C.: I think statements about our current time should be statements about *the variance*. The complacent are ever more complacent. The entrepreneurial and independent-minded are all the more so. We even saw this in the pandemic. Many people retreated in fear, or had mental health problems, or simply shut down. Others responded with great efforts and energy, for instance the people and companies behind the vaccines.
Do we really have a general "spirit of the age" right now. I am skeptical. A major impact of the internet seems to be to increase variance. Arguably the same is true for racism, sexism, and many others isms, both good and bad. The variance is going up. The good get better, the bad get worse.
A world like that may be exciting, but it is always going to make us feel nervous and unsettled, and for good reason.
N.S.: That's a good observation about the pandemic. The people who made and distributed the vaccines are heroes, and we haven't celebrated them enough. But anyway, that gives me a good opportunity to segue into my next question. You famously labeled and identified the Great Stagnation before others did. But unlike other stagnationists like Robert Gordon, you were more optimistic; you predicted that the stagnation would end fairly soon, with a burst of new technological innovation. Are we seeing that now, with the sudden flowering of solar, batteries, biotech, cheap space launch, remote work, A.I., and so on? And if so, will that burst of innovation be enough to overcome the headwinds of educational achievement top-out, population aging, etc.?
T.C.: Yes, I fully agree. I think we are most likely seeing an end to the Great Stagnation. Perhaps access to stronger computing power is the fundamental development driving many of the advances you list?
I would stress that the potential end to the Great Stagnation remains uncertain, and that we still might lose the opportunity through bad institutions and bad decisions. Technological progress does not simply get on an automatic track. Still, I see so many positive signs of new tech breakthroughs and in significant areas, not just in particular corners of internet life.
I am less worried about the headwinds of educational achievement topping out, or population aging. Both of those are potential problems with human capital. Yet it is obvious to me that there is more active talent in the world today than ever before.
N.S.: What are a few things that make you most optimistic about the world right now?
T.C.: By far the most optimistic feature of today's world is that there is more mobilized talent than ever before, and by a long mile.
A mere few decades ago, or less in many cases, if you were born into India, China, or Nigeria, the chance you could make a positive contribution to the world on a significant scale was quite low. It is now much, much higher, largely because of increases in wealth and also because of the internet.
I also see the greater scope and speed of scientific communication -- also because of the internet -- as another force for optimism.
That said, many pessimistic forces seem to be on the rise. I am not sure the world will maintain geopolitical stability and avoid further wars. Politically, some of the most significant African nations seem to be doing worse than five or ten years ago. Our various responses to the pandemic, across the world, were far from uniformly high in quality.
So today you could argue a case for either optimism or pessimism. But no doubt there are some very strong "optimist-friendly" forces at work right now.
N.S.: I'm choosing to remain optimistic for the moment! Anyway, let's talk about some of the economic issues facing the country right now. The Fed is ending QE soon and planning to raise rates. Was that the right move with respect to inflation? Should they be doing more? How much of this inflation do you think was caused by supply chain snarls, and how much by Covid relief spending?
Also, you know I'm a fan of your book Stubborn Attachments, which is about the importance of long-term growth. What policies should we be doing right now to accelerate our long-term growth trajectory?
T.C.: I don't think I have very definite answers to your questions on inflation. The Fed is moving in the proper direction, but how can we judge whether they are disinflating too fast or too slowly? Where is the database on recoveries from pandemics? This is quite an unusual recession, as durable goods boomed, the opposite of the usual scenario. And it is services that proved super-cyclical, again in an exceptional way. I think about your questions a good deal, but any answer would be a stab in the dark.
As for boosting growth, my number one recommendation would be much more high-skilled immigration. And then more low-skilled immigration to take care of their kids and help run their errands.
I also would deregulate most of the American economy, starting with occupational licensing. I would however keep air pollution and climate change regulations in place and in fact I would toughen them. But most of our "penny ante" regulations simply should be abolished, in the interests of boosting business activity.
N.S.: What do you think are the most interesting areas of economics research right now?
T.C.: Most of all, I am excited to see economists turn at least a small portion of their attention to the economics of science. Each year I follow the new job market papers, and for the last few years I've been seeing a batch in this area. In my perspective, at least ten percent of the discipline of economics should be "the economics of science"! As you know, and have written yourself, science is an important driver of productivity growth. And yet we study science so little.
Pierre Azoulay is one of the better-established names in this area, if you are looking for someplace to start.
My hope and dream is that every year there will be a significant field conference, focusing on the economics of science. I think it is only a matter of time.
N.S.: Yes, let me second the recommendation of Azoulay; he is really awesome. Nick Bloom is now doing a lot of good stuff in this area as well! And Matt Clancy's Substack has a lot of very readable writeups of a lot of these papers.
OK, final question. Nine years ago you recommended that I move back to Japan. I didn't take that advice, but in retrospect I should have (and I am planning to do so now). So I view you as a good giver of advice! Thus, my question is: What advice would you give to young Americans right now, especially to young Americans in the technology field and/or the economics profession?
T.C.: I am not sure I have a lot of general advice for people, even economists. Can I tell everyone to move to Japan? Or somewhere else for a year?
Live abroad if you never have before. Pretty much anywhere, though Canada counts for less. It will change your life and your outlook on the world.