>>STEVE: Thanks for joining us.
I'm Steve Hsu.
>>COREY: And I'm Corey Washington, and we're
your hosts for Manifold.
>>STEVE: Our guest today is Tyler Cowen.
Tyler is the Holbert Harris Professor of Economics
at George Mason University.
He's an author of the blog, Marginal Revolution,
as well as the New York Times column, Economic
Scene.
He's also the author of numerous books, which
communicate social science ideas to a broad
audience.
His most recent book, Big Business: A Love
Letter to an American Anti-Hero, is an impassioned
defense of corporations and their essential
role in a balanced, productive and progressive
society.
>>STEVE: Welcome, Tyler.
>>TYLER: Happy to be here.
By the way, I write for Bloomberg now, not
the New York Times.
>>STEVE: I'm sorry.
Okay.
>>TYLER: Don't worry.
>>STEVE: Everyone, switch your bookmark to
Bloomberg.
So it's great to have you, Tyler.
I think I first came to know you through your
blog which, if I'm not mistaken, you've been
writing for over 15 years now.
Does that sound right?
>>TYLER: It's going on 17 soon I believe.
>>STEVE: Yes, fantastic.
And I think you once told me over dinner last
time I saw you that of all the things you've
done, your many academic papers, the students
you've trained, the books ... popular books
you've written, that Marginal Revolution is
really the thing you're most ... maybe most
proud of or has had the most impact?
Is that true?
>>TYLER: I think it's had the most impact.
I find when I meet people now, they will mention
my podcast just as often, Conversations with
Tyler.
But we have about 50,000 readers a day and
they're very deeply dedicated.
And I think the idea that you enter another
person's mind for some number of years before
you stop reading and discussed perhaps is
more significant than a book because they
see how you tackle different problems and
there's some kind of mental triangulation
that goes on.
>>STEVE: Yes.
So I'm curious because you were, I would say,
early to the academic blogging game and had
a huge impact and still have a huge impact.
Where do you see it going now?
Do you see the torch being handed off to podcasting
or do you see both coexisting for a long time?
>>TYLER: I don't think blogs will come back
in a big way in areas of say, public policy.
There are many very particular economics blogs,
but the golden age of economics blogging was
during the financial crisis.
I think we've done quite well keeping readers
because we're also feeling the niche.
How many websites are there that you can go
to at least once a day and find something
interesting?
And there actually aren't that many for a
lot of people's interests, but we're one of
them even for non-economists.
>>TYLER: So of course, there's New York Times,
Financial Times, they have much more than
we do, but you get past that and a bunch of
others, there's a ... the internet has become
a desert in some funny ways and a lot of the
best conversations have gone private or they're
walled or gated gardens and Marginal Revolution
is still there and open and fresh content
every day.
>>STEVE: Is there any specific reason or cause
for the internet to have become a desert?
Why do you think that happened?
>>TYLER: Well, no one was ever paid to begin
with, right?
So if you're going back to 2006 or 2009, so
a lot of the best people were hired by media
outlets and they are paid and their work is
elsewhere like on Vox or New York Times upshot,
that's great.
They're still producing.
And the others have stopped.
So I work for Bloomberg but I also still keep
the blog and that's unusual.
It may reflect my unusual work habits, but
I think that's the core problem.
There was a kind of bubble.
And when everyone realized they were just
never going to get paid, it somewhat fell
apart.
>>TYLER: I wonder if podcasting will be the
same.
I suppose I think it will, though a lot of
my smartest friends think the podcast bubble
will prove eternal.
>>STEVE: In 2004, when I started my blog,
very much inspired by both you and by Brad
DeLong.
I thought, "Oh, there will be this brief window
before all professors start blogging", because
all professors are so interesting and want
to profess their ideas.
But of course, I was 100% wrong and even at
a giant university like Michigan State, which
has 50,000 students and thousands of faculty,
I think there probably only a handful of really
active blogs.
>>STEVE: I think it's really restricted to
people who are polymaths like yourself, who
are just incredibly interested in a broad
range of things and able to write quickly
and well.
>>TYLER: But there's also something about
the temperaments though, it's even more restricted.
You need the kind of sturdiness and relentlessness,
maybe even a kind of humorlessness at some
level that you would just keep on doing this
thing.
And there is positive feedback, but it's weird
and indirect and it's striking to me how many
of the major bloggers started quite early,
like Brad DeLong, Matthew Yglesias, Ezra Klein,
Megan McArdle, Eugene Volokh and at some point,
there just weren't going to be that many more.
>>TYLER: And those people are in some way
or another, still going.
>>COREY: Sorry to interrupt.
I have to say that I think what happened to
blogging may just be what happened to other
forms of media, which a lot of the content
got captured by Facebook and Twitter.
And why would someone put a blog out when
they can tweet something and get immediate
responses and it's shorter, pithier, maybe
you have to put a little less effort in to
get positive feedback?
>>TYLER: I think Twitter has kept blogs down
but I think blogs were dwindling before Twitter
was a thing.
Facebook definitely, but I find Facebook conversations
just awful.
And maybe the lesson is, people never wanted
blogs from blogs, they wanted Facebook chat
from blogs.
Then once they could get Facebook chat, blogs
weren't needed.
That's depressing.
>>COREY: Yeah.
Could Facebook over exact the same sentiment
that you did.
I had found conversations there to be just
incredible eco chambers and just really difficult
to introduce any kind of topic that was substantive.
>>STEVE: Yeah.
I find Facebook and Twitter conversations
to be anti-intellectual or anti-rationalist.
People stake out strong positions and it's
very hard to have any kind of meaningful exchange.
>>TYLER: I'm a bigger fan of Twitter than
most people, I would say.
It can be awful but if you're careful about
whom you follow, like I just wrote a column
for Bloomberg.
The idea of doing zoning like on a street
by street or block by block basis, which is
a strange, bizarre idea.
I'm not sure it could work, but it's not an
idea that's really out there.
And I've read or scanned 20, 30 tweets today
with people who are urbanists giving feedback
on this idea.
>>TYLER: Well, how is it done in Houston?
What kind of selective exceptions have been
allowed in either cases?
And I've learned a lot from that.
I think Twitter, people don't use it properly
and I find Twitter search very useful and
very underrated.
>>STEVE: Yeah.
I think to get up to speed on what specialists
in a particular area are thinking, it's useful
to follow or look at their feeds and I think
it definitely can serve that purpose.
I wanted to mention a quote that I like from
Borges in which he talks about an invisible
circle of friends.
He says, "If you're a writer, you put your
deepest thoughts on the page", and of course
he was writing in an earlier era, before the
internet.
>>STEVE: "You put your deepest thoughts out
there and there are a bunch of people who
are invisible to you who may be very interested
in what you have to say, but you may never
meet them in your life."
And what I like is occasionally, I go to a
conference and some people come up to me and
say, "Oh Steve, I've been reading your blog
for many years."
And I'm sure this kind of thing happens to
you as well.
>>TYLER: Yes.
I try to meet a lot of people of course, and
that's gone pretty well for me, but that absolutely
exists.
And the privilege of being able to let out
a plea for help and have people in almost
every world city be somehow wanting to help
you, to me, that's pretty high value.
>>STEVE: Yeah.
It's a pretty amazing situation to be in actually.
>>TYLER: It doesn't work for North Korea,
but really, most of the world's GDP is covered.
And you show up somewhere, you just immediately
start having interesting conversations.
It was not that way in the good old days.
>>STEVE: Yeah.
I try to do that.
I think my blog doesn't have as many readers
as yours so it's sort of hit or miss for me
when I go to a random city.
But before I leave the blogging and podcasting
topic, I just want to ask mentally in your
own mind, how do you rank or relate the reach
or impact of these various media?
>>TYLER: Well, when you say various, what's
on your list?
>>STEVE: Books, podcasting and blogging.
>>TYLER: Well right now, a book is becoming
just a badge that gets you on to podcasts.
So if you're on a big podcast, way more people
will absorb your ideas than through the book
itself.
And data from Kindle suggests maybe 10% of
people even read the books they buy, which
is also depressing.
I think right now, podcasts rate very highly.
Books, much lower than they used to.
Radio, much lower than it used to.
>>TYLER: Radio used to be our internet and
ideas would be carried not by tweets or blog
posts or Facebook debates but by songs.
That was a free access system and the Beatles
would sing Revolution or All You Need is Love
and you'd talk about that.
That was actually a pretty neat system.
It worked better than people realized in some
ways.
>>TYLER: But right now, I'm bullish on podcasts
short term for influence.
>>STEVE: Corey, there's hope for us if we
can just get our numbers up?
>>COREY: We just got to lift through the bubble.
We might be one of the survivors.
>>TYLER: Returns to persistence and all of
these media I strongly believe.
Alex and I were blogging at Marginal Revolution
for a few years and we were, "Why are we doing
this?"
And we just kept on doing it.
And then it took off.
>>STEVE: I just want to mention the story
about a guy called Evan Williams who's a well-known
startup founder.
I think he runs medium now in San Francisco.
But his first startup was blogger which he
sold to Google.
>>TYLER: Right.
>>STEVE: And I met him soon after that and
I said, "What are you working on?"
And he said, "I'm working on something called
Odeo."
This was 2005.
I said, "What's that?"
He said, "It's a toolset for podcasting."
Podcasting is about to take off and it's going
to be huge.
This was 2005.
So his timing was wrong, but out of Odeo came
Twitter.
Twitter was actually a side project of people
in startup Odeo.
So he was involved in early blogging, Twitter
and podcasting which he mistimed.
>>TYLER: I hadn't known that.
And it's interesting, why did podcasting take
so long?
Obviously, the technology is simple, to say
the least.
>>STEVE: I think smartphones played a big
role in it because it was just more cumbersome
to get podcasts back when Odeo was trying
to do it.
Now, it's very easy to get them.
>>TYLER: And traffic congestion helped and
the rise of the [inaudible 00:10:47].
>>STEVE: Yes.
>>COREY: I think you can't ignore content
though.
The rise of serial where they go track a lot
of people because they had really strong narrative
content.
People like stories.
Guys like us are addicted to information,
but people need good stories to really get
excited about podcasts.
>>TYLER: I taught serial to my class once
in the law school and they all started off
thinking the guy must be innocent.
And they all finished serial thinking, "He
must be guilty."
>>STEVE: I have to admit I haven't listened
to it.
You guys recommend it I guess.
Okay.
>>TYLER: It gets repetitive.
The first, maybe five episodes are great and
perhaps worth listening to, but to listen
all the way through is a fool's errand.
>>STEVE: Great.
>>COREY: I went in that errand.
>>TYLER: So did I.
>>COREY: It paid back.
So can we move to-
>>STEVE: I want to talk about his book which
does interact I think with some of the themes
that you want to discuss.
So your new book, and at least I think it's
your latest book because you're so prolific
I can't always keep track.
So your latest book called Big Business as
I mentioned is an impassioned defense of corporations
and their central role in a balanced, productive
and progressive society.
I feel that you're rowing against the zeitgeist
here because I seem to detect resurgent support
for socialism, perhaps driven by inequality.
And also, resistance to the concentration
of power in big tech.
>>STEVE: So I'm curious how you feel your
book has been received and how it interacts
with the current zeitgeist.
>>TYLER: I'm a contrarian by nature and I
would note the right wing is also pushing
back against big business.
Tucker Carlson of Fox News, he just gave talk
in D.C. and the title was, Big Business Hates
Your Family.
While I wasn't at the talk, from the title,
I have a sense of what he might have said.
The book has been reviewed in most major media
outlets.
I would say respectfully and no one has found
mistakes in the argument.
>>TYLER: But that said, people are simply
not willing to start believing it, that in
their view, the correct emotional stands toward
big business simply has to be one of hostility.
So I'm not sure what impact my book will end
up having.
I think right now, it's something people don't
quite know what to do with.
It's gotten a lot of attention, for that,
I'm grateful.
I'm not convinced that I'm changing people's
minds.
>>COREY: Can you, Tyler, lay out your argument
supporting big business and defending against
its most common criticisms?
The common criticisms made of it.
>>TYLER: Well most of the book just goes through
the facts in a very sober manner.
So I'm not setting out to defend big business
against all criticisms.
I think actually, a lot of the criticisms
are correct.
So there's a pretty high degree of fraud in
many sectors.
Our healthcare establishment is guilty of
some pretty sins and so on, but I found the
dialog is ... becomes so slanted in the opposite
direction that you will hear claims like the
American economy is simply filled with monopoly
and it's getting worse every year.
>>TYLER: That does not seem to be true, that
big tech is destroying our democracy or ruining
our lives.
There are problems in our democracy, but that
does not seem to be true.
People talk about big tech and privacy.
It does not seem to be the biggest threat
to our privacy by any means.
There's plenty of talk about big business
being corrupt or fraudulent.
>>TYLER: Again, much of that is correct but
if you look at how corrupt or fraudulent people
are in nonbusiness settings, if anything that
seems to be worse.
So I just take what are a lot of the current
extant criticisms and go through them one
by one and say, "What do the facts actually
show?"
And the verdict comes out much more for big
business than what you hear.
But I don't think we should defend big business
per se, right?
It screws up a lot.
>>STEVE: One of the striking arguments that
you made which I think ran counter to my priors
but your argument was pretty convincing, was
about CEO pay.
So prior to hearing your arguments, and I
think Corey probably agrees with me.
I was thinking CEOs are overpaid, their performance
is quite irregular and hard to measure.
Relative to the lowest paid workers in their
company, they're paid ... the ratio has just
grown enormously in the past 20, 30 years.
>>STEVE: But maybe you can go through your
argument for why CEO pay isn't out of line?
>>TYLER: Well, CEO pay has risen roughly in
lockstep with the overall stock market.
And essentially, if you take CEOs and you
pay them with some mix of stock in their company
and/or options, that's going to be the case,
right?
And in fact, you pay them with stock and/or
options to motivate them and align their incentives
to those of the company.
Now, the stock market has done very well.
CEO pay in turn has done very well.
>>TYLER: I don't think I can arrive at a final
judgment and say that's morally correct as
an outcome, but it's not that mysterious,
it's not based on CEOs somehow ripping off
the rest of the economy.
Most of the rise in inequality in this country
has come across firms.
That is at some firms like Google or Walmart
have pulled away from other firms in terms
of their productivity.
>>TYLER: And what we really want are more
super firms, not fewer.
>>STEVE: In your argument in the book, I think
you make a point which undermines my position.
So as a guy who has done startups, and I've
seen how difficult it is to go from zero to
one, I am fully onboard with the founder and
initial team of a company or even somebody
who joined a little bit later and scaled it
up with them making say, huge hundred million,
billion dollar fortunes.
But to us, it seems, to entrepreneurs, it
seems like sometimes, the business is running
just fine.
Some guy parachutes in, runs it for five years
and that guy makes $100 million for doing
what seems to us, as the startup guys, pretty
kind of easy job relatively speaking.
>>STEVE: But then, you point out that envy
is local, that probably I just don't like
these CEOs who come in later because I'm more
on the side of the startup guys and we're
envious of the guys who come later and run
the company.
>>TYLER: I would point out and indeed, emphasize
a lot of CEOs will end up being overpaid,
but that's a pretty general mechanism.
A lot of journalists or sports athletes, they
also end up being overpaid.
Any market where you have some number of superstars
and everyone is chasing after the next big
thing, you bid up the wages of a lot of people
and they don't all come through with the next
Michael Jordan or the next Taylor Swift.
A lot of book contracts, music contracts,
they're overpaying people because not everyone
is the next superstar CEO.
>>TYLER: Again, I don't think it's anything
sinister.
I do think in a sense, you might consider
it unfair that some people are getting so
much.
But again, it's the rising out of some pretty
natural processes that in the broad sense,
make a good deal of sense.
>>STEVE: I think you made the point that the
average worker isn't really that upset that
the CEO maybe gets paid tens of millions of
dollars a year.
It's people that are maybe academics or journalists
or what have you that are really mad about
it.
Is that really true?
>>TYLER: That has been my personal experience.
I don't think I have a way of proving that.
But if your next-door neighbor or your in-laws,
the people you went to high school with, your
colleague down the hall, maybe they got a
6% raise, you got a 4% raise, you've got nothing,
that seems very unjust to you.
Maybe it is unjust.
That's what's actually causing people anguish
in my experience.
>>COREY: I think there's actually a fair amount
of research on people's attitudes towards
income inequality, and I think it's a fairly
potent issue in ... as far as polling goes.
So I don't think we have to go on our personal
experience here.
We should just try to figure out what the
facts are.
I don't have them right now but I'm a little
bit comfortable when we [inaudible 00:18:35]
fact be found.
>>TYLER: But if you ask people about some
ostensible problem, they will always say they're
concerned with it.
I don't find those polls very reliable.
There are some polls where people will say
... you ask them, "Is income equality a social
problem?"
And they'll say yes.
They've heard on TV it is, they feel they're
supposed to say yes.
>>TYLER: But I wouldn't at all infer from
that that this actually what people are worried
about.
>>COREY: You want some sort of ordinal rank
of topics they're concerned about rather than
just asking a single topic an abstract.
So I'm just urging that we should maybe do
a little Googling to try to see if there's
any data on this.
>>STEVE: Yeah, it's a pretty complicated question
because of course, if I just read an article
and I see some guys making like 100 or 1,000
times more money per year than I am, of course,
my initial reaction might be pretty negative.
But then if you ask me, "Well, does the existence
of this class of people really enhance my
overall wellbeing and the growth of the company?"
I might actually be convinced that it's actually
okay, just like I don't mind LeBron James
getting paid a lot of money.
>>COREY: I think you're reasonable, Steve,
that to take the criticism, you may be acting
out of envy, but I think part of the question
is ... Unfortunately, Tyler, I didn't have
a chance to read your book.
I will hopefully over the weekend, but I really
... I think you're concerned about the question
of whether these people have particular skills
that warrant that kind of pay whether they
are in fact like top flight athletes or just
happen to be people who like many others,
could probably run this company and just got
lucky enough.
>>COREY: You and I have talked about the benefits
of luck in extraordinary economic success.
>>STEVE: Yes.
I think one of the reasons the startup guys
get so mad about this is that we're measured
very precisely on success.
So if your startup fails, it's very obvious.
And if you scale it to something which becomes
huge, you obviously succeeded.
Whereas with the CEOs, it's quite hard at
least for us to know to what extent they influence
the success.
The short-term success or failure of their-
>>COREY: And recall your theory which you
stated a while ago, but I don't know if Tyler
or whoever ... Steve's view is that the quality
of people in a company is inversely proportional
to the size of the company.
So thus, that the quality of people in startups,
many of the founders are incredibly talented.
And as companies get larger, the mean level
of talent goes down.
>>COREY: And these large companies ... I think
Steve, your view which these driving your
skepticism about their pay is that the CEOs
of these very large companies are not actually
that talented.
>>STEVE: I guess it's certainly much ... In
my view, it's certainly much harder to measure
performance for ... in a going concern than
in the very unique situation where you're
trying to go from zero to one.
So when you have a going concern like our
university, you can actually have a lot of
people that aren't really generating that
much value, but for some reason, they're in
their job and there isn't that much turnover
so they stay in their job.
>>STEVE: CEOs aren't quite in that situation,
but in actually observing some board which
actually review public company CEOs, it doesn't
seem like they are really tracking that well
either, how well or poorly that CEO is doing
sometimes.
>>TYLER: I think if you look at what CEOs
have to do today, it's much more than what
they had to do in the past.
So there's some abstract activity called managing,
that they have to understand tech, they have
to be able to upgrade the level of technology
in their company.
They probably need to understand mobile supply
chains which is not at all easy to do.
They may have to be social media.
Media mistakes are much more important than
they used to be.
>>TYLER: They need to know much more about
the law and government relations and possibly
lobby in Washington.
I'm not saying that was absent say, in 1958,
but it's much more significant today because
there's much more regulation, many more lawsuits.
So I wouldn't suggest they are also talented,
but the demands placed on them are much higher.
The stakes are higher than before.
And if you look slightly at General Electric,
which seems to have had bad senior management,
the company essentially has fallen apart.
>>TYLER: But if you look say, at Walmart or
Koch Industries or a lot of companies that
... they're pretty old by now but they're
still doing very well, or Amazon for that
matter.
What you need to do to keep a big company
great for the reasons you mentioned can, in
a sense, be harder.
>>STEVE: Amazon of course is quite different
because its founder is still running it.
So you could argue this person is already
vetted for extraordinary talent and vision
and built and basically revolutionized an
industry.
>>TYLER: Sure, but then it's not just the
size is the main determinant of how well a
company will do in terms of smarts or talent.
And you look say, at Apple even after it was
run by Steve Jobs, they made a lot of very
good decisions.
Tim Cook and others not as innovative, but
really kept the company on track.
>>COREY: Until now.
It looks like ... that maybe the lack of innovation
is catching up with them.
>>TYLER: Well we'll see, but it's an incredible
run.
Their best products are still insanely profitable.
They sell to the whole world.
Maybe that's simply what they should be doing,
that how much better the iPhone 23 will be
someday.
Well, I stopped paying attention at iPhone
6.
I don't even know.
But that don't even seem different to me anymore.
So there's a kind of ... iPhone great stagnation
has set in.
>>STEVE: So Tyler, I think in my generation,
which I guess is almost the same as your generation,
there was quite a lot of scrutiny on socialist
ideas.
So anytime in a discussion, except maybe in
a few academic departments, if somebody endorsed
Marxist or socialist view on economy or the
way society should be organized, people are
very quick to retort and you would get into
a very vigorous debate.
>>STEVE: But it seems to me now that a huge
chunk of our political class, et cetera, et
cetera are able to just talk about socialism
as if we had just completely forgotten all
the negative aspects of it.
Do you think my perception is right or-
>>TYLER: Your perception is correct.
And on the right wing, people won't use the
word socialism, but it will be some kind of
corporatism and they will be actually related
ideas.
And in some ways, that's more dangerous because
the other conservatives, Republicans won't
speak up and oppose it the way they might
go crazy say, if Elizabeth Warren said something.
>>STEVE: I want to jump in here a little bit
because I think there's actually a terminological
problem to discourse.
What people are calling socialism in many
debates in these days is actually a kind of
social democracy.
So it's somewhere to the left of the democratic
party.
Bernie Sanders is not a socialist by any stretch
of imagination.
He's a left-wing Democrat.
So I think [inaudible 00:25:12] are talking
about state takeovers of mostly economy.
>>STEVE: Some of them are floating the idea
of have Medicare for all, but the majority
of people are floating some kind of public
option.
But they're not talking about large state
takeovers apart to the economy and they're
not talking about massive price controls.
Look, I think people have forgotten the history
of socialism, but also may have forgotten
what socialism actually involves because what
they're calling socialists didn't really resemble
what exist in those socialist countries is
my two cents.
>>TYLER: I agree people have forgotten, but
I think some of what is advocated is really
quite bad.
You mentioned Bernie Sanders.
In the 1980s, he did call for the nationalization
of all major U.S. industries and he was very
close to the Soviet Union and anyone who was
alive and around back then knows what that
means.
I'm not suggesting those are still his views
but basically, we're considering electing
a man who was a literal socialist and sympathetic
to communism.
>>TYLER: And he's moved a bit more toward
the center and when he was actually mayor,
he was somewhat pragmatic.
I know all of that.
But at the end of the day, that's his core
worldview and I think it's still with him
and I find that horrifying.
And I think we should respond to that in the
same way we would respond if say, a former
Nazi were running for office.
>>COREY: I have to say I disagree with that.
I'm not sure being a socialist qualifies the
same as being a Nazi.
I don't think you can hold someone responsible
for views they held 30 years ago if they've
changed.
Sanders is not advocating anything like large-scale
nationalization.
>>TYLER: Well not now, but keep in mind, he
was ... seems to have been sympathetic to
a government that killed large numbers of
people, right?
That was a common thing on the American left
to be an apologist for communism and to overlook
those truths.
And again, I think he's evolved away from
that but he's a pretty stubborn guy, he's
not that flexible.
His core view of corporations and labor unions
and how economies work, it's still coming
from that period.
>>TYLER: And if someone were a former Nazi
and simply evolved into being some kind of
strange corporatist, right wing Republican,
I completely think we should all find that
totally unacceptable.
I don't really see the difference.
>>COREY: I'm just not sure Evans has for his
core views.
I'm not sure the guy, like many politicians
actually has core views.
I think he adapts to the political context
and he's realized that those kind of views
are no longer acceptable.
Maybe he's completely rejected them, it's
hard to say, but he's a pragmatist like most
politicians are.
He simply doesn't have deep core principles,
which I'm not sure anybody should have actually.
>>COREY: You guys are wrong.
>>TYLER: That might be true of the former
Nazi as well.
>>COREY: Yeah.
People learn.
You have this discussion about segregations
right now with Biden.
I'm sure there's quite a few people who are
still ... who are probably former segregationists
whether we know it or not who have evolved
into being some version of conservative.
I personally don't have a problem with that.
People's views change.
They realize they're wrong, and they are now
adopting moral acceptable outlooks.
>>TYLER: Was Biden never a segregationist
or he just worked with them?
[crosstalk 00:28:18].
>>COREY: No, I'm not saying Biden ... We're
talking about if there were segregation, [crosstalk
00:28:22] working with them, right?
But I'm saying personally for me, right, you
might find someone who's a segregationist
in the past and later realize that their views
are wrong and they evolve out of them.
Now, I don't see any reason to say that segregation
must be that person's core position if they
no longer hold it.
They may have just realized that it wasn't
correct and they adopted something else.
>>COREY: I think that's a sign of open-mindedness
which we should probably be encouraged.
>>STEVE: So I agree with Tyler that one should
look at what Sanders thought about, the Soviet
Union long ago, but of course, people can
evolve in their views.
I was more thinking when I raised this topic
about people like AOC or even Andrew Yang
who's proposing universal basic income.
Some of their proposals in the past would
have been met with the political death penalty.
Like if you said some of those things that
they're saying now in America 30 years ago,
your political career would be over.
>>STEVE: But now, it seems like at least in
their base, it's completely uncritical, the
response to these kinds of things.
>>COREY: But I think they're also responding
to very different kind of environments.
As you know, the basic income is actually
driven in part by developments in tech.
At least, the fear of what may happen in the
future as more jobs are essentially eaten
by tech as AI pervades all society.
They're basically thinking that some people
may not be ... like jobs in the interest of
social stability.
You might want to advocate universal basic
income.
>>COREY: I think there are other arguments
against it but I think it's sort from a very
different motivation than the socialism in
the past.
It's actually not argument, everybody should
be paid the same amount.
It's a certain kind of-
>>TYLER: Keep in mind.
Bernie Sanders to this day, he favors a law
that would forbid me from buying private health
insurance.
So if I had a child with some kind of medical
condition not covered by the government system,
I would be forbidden by law under threat of
imprisonment backed up by physical violence
from buying an insurance policy that would
help me help my child get the care he or she
needs.
And I think that really is still close to
the ideas of communism.
>>TYLER: So I think we should find that so
grossly objectionable that a person who believes
that should not be a viable candidate.
I think it's anti-American in the worst sense
and it's still a residue of his former views.
And yet, two-thirds of the democratic party
has endorsed this bill.
I think a lot of them don't even know what's
in it.
>>STEVE: Let me switch ... move a little bit
away from politics because obviously-
>>TYLER: That's fine.
>>STEVE: Yeah.
It's hard to converge on something like that.
But I want to ask you about Piketty.
So the thesis that inequality is increasing
because in general, the rich can invest their
money in such a way as to earn a return which
is systematically better than the rate of
inflation or the rate of GDP growth and therefore,
you end up with these concentrations.
How strong do you feel is the empirical support
for that kind of thesis?
>>TYLER: Matt Rognlie who then was a graduate
student at MIT, he's now at Northwestern,
he went back and worked through all the numbers
for a current period and he found that the
increase in inequality really had from gains
in the value of land rather than superior
capital returns.
And that Piketty's hypothesis was not correct
for the current day.
>>TYLER: It may be a good account of the late
19th century on continental Europe but it's
not a good theory of inequality as we know
it.
It's an impressive book in many ways and there's
a lot of work in it, a lot of insight but
the core message doesn't seem to be correct.
>>COREY: So I just want to follow up to get
an explanation.
The thesis is the recent rise in wealth is
largely due to the value of land?
Is that the reanalysis-
>>TYLER: That's not Piketty's thesis.
That's what Matt Rognlie found.
>>COREY: So can you elaborate on that one?
>>TYLER: Piketty's view is well, if the economy
is say, growing at 2% and capital yields you
4%, that over time, people who own capital
will get wealthier and wealthier relative
to everyone else.
And that is a possibility but also, capital
has diminishing returns.
Capital in general is risky.
And when you just look at the actual numbers,
there is an increase in wealth inequality
but virtually, all of it stems from the value
of landholdings.
>>TYLER: So a bunch of people bought real
estate and land in San Francisco or wherever,
that made them wealthier, wealth inequality
is up.
Others were denied those opportunities or
didn't have the foresight and it seems to
be land is the culprit, not capital income.
And that's been accepted and that's work has
held up.
It's interesting.
Originally, Matt came up with that idea.
He wrote a Marginal Revolution comment.
I covered something from Piketty and Matt
was one of the writers in our comment section
and he later turned it into this study.
>>TYLER: So very indirectly, I'm happy to
have had a minor hand in that.
>>COREY: It's funny Steve, you and I had discussion
about this actually because I think a few
years ago, I had a couple of properties.
One in D.C. and one in New York.
And I actually like real estate quite a lot
and you were very skeptical of real estate
because you thought it just was liquid enough.
>>STEVE: My complaint against real estate
is that there are certain hot markets which
maybe you can predict what they'll be and
then investing there gives you outsize returns.
But if you average over the whole country,
I think actually returns from real estate,
aside from the tax fraud and various other
strategies that are involved in real estate
in terms of depreciating your property and
things like that, just the flat out sale price
increases.
That tends to actually underperform the stock
market as far as I understand.
>>TYLER: This is a longstanding debate.
I would say amongst researchers, it's not
resolved.
But in this dataset, it's unlikely that people
who got wealthy through land were buying homes
in Akron, Ohio.
>>STEVE: Right.
>>TYLER: It's not disaggregated but it's highly
plausible to believe it's well-off people
buying land in well-off coastal regions or
London, wherever.
>>STEVE: So unlike some kind of forward-looking
dynamical problems in economics, this one
seems like it's actually resolvable.
So are you optimistic that there will be a
consensus in economics as to whether Piketty
was right and if he is right, what the cost
was for the increase in inequality?
>>TYLER: I think there is a consensus.
There's not a consensus in what I would call
popular economics or media economics, but
amongst actual researchers, people have stopped
talking about Piketty.
It's seen as an interesting work in economic
history, but still it lives on, it was the
best seller.
It looks and feels like an academic book.
Indeed, it is one with a lot of valuable material
in it.
But if you just ran a Twitter poll, this is
not what people would tell you.
But economic historians would support what
I'm saying.
>>STEVE: Does that mean no Nobel for Piketty
for this work?
>>TYLER: Probably not.
>>STEVE: Okay.
>>TYLER: But stranger things have happened,
right?
Elections can be funny.
>>COREY: Does this consensus cross ideological
lines with economics?
>>TYLER: Yes.
>>COREY: So left wing economists also think
that it's inaccurate?
>>TYLER: It's a tricky term, left wing economists.
No one should be like left wing or right wing
per se.
I think you would find some people on Twitter
with PhDs in economics who would ... if not,
quite defend Piketty on this exact question,
just say, "Well, it was valuable for drawing
our attention to the problem", and not be
quite willing to admit that it's wrong.
And that would be a kind of defense.
Ideologically motivated.
>>TYLER: But I've never heard anyone [inaudible
00:35:50] say, "No, Matt Rognlie is wrong
and Piketty is right", on that exact matter.
I've never heard anyone say that because I
think it would be very hard to.
>>STEVE: That's a very hopeful scenario that
academia could actually work properly.
I hope that what you're saying is ... turns
out to be true.
>>TYLER: But the transmission belt is not
working properly so don't get your hopes up,
right?
>>STEVE: Yes.
>>TYLER: So you could poll these economic
historians and maybe see consensus but it
doesn't leak out very well.
>>STEVE: So I want to turn to a related topic
which I heard you talk about on YouTube in
a very nice lecture you gave.
I think it was in Tel Aviv recently.
And one of the things you talked about there
was a productivity thesis concerning to what
extent productivity growth has slowed and
perhaps, the reason for this is that we've
harvested a lot of the low-hanging technological
fruit.
Maybe you could elaborate a little bit on
your thoughts there?
>>TYLER: Well, economists have a few different
ways of measuring productivity growth.
But by the method which I take to be the most
reliable, earlier in the 20th century, you
typically have productivity growth of 2% to
3% quite commonly, say in the 1920s and even
the 1930s.
And that's an era where really, all of America
is being completely transformed.
And then in recent decades, since about 1973,
some new years are exceptions, but very often,
the rate of productivity growth is 1% or even
a bit lower than that.
>>TYLER: And it's hard to find sustained years
for productivity growth to say, exceeding
1.5%.
Now, you can debate, are those the right numbers?
Do they adjust for quality in every way?
But I think when you study the whole literature
and work through each one of those questions,
it's hard to avoid the conclusion that productivity
growth is down significantly.
>>TYLER: And the simple issue of if not for
semiconductors, the internet, computers, what
other major breakthroughs have there been
since say, I was a kid?
It's hard to come up with much.
So cars are better, yes.
Radios are better.
Many things are better.
But if you compare the first 50 years of my
grandmother's life, she was born in 1905.
Most people worked on farms, they didn't graduate
from high school.
>>TYLER: Fast-forward 50 years to 1955, it's
like some version of modern America where
there's sanitation and electricity, not for
everyone but it's on its way and pretty common.
And things like radio hadn't existed, or cars
or airplanes, every area not just communications,
you saw then major breakthroughs.
So I think we're living in mostly a technologically
stagnant age.
>>COREY: So when I look at this talk, there's
actually two different issues that I think
you raised.
One was a slow productivity growth and the
other was kind of a symmetry in income growth
or wealth growth.
>>TYLER: That's right.
That talk in particular, yes.
>>COREY: Yeah.
And these are actually very separate topics.
So my sense is a lot of the disaffection has
come from wage stagnation for the middle class,
and you harped on this, right?
>>TYLER: Yes.
>>COREY: Male wages had not increased since
1970.
And it strikes me that male wages been increasing
over that period of time.
You probably wouldn't have had Trump and a
lot of the reaction you've got to the current
economy.
So I'm asking you, is it productivity growth
or is it wage stagnation?
Because those two things could operate independently,
although they may be-
>>TYLER: They tend to move in pretty close
conjunction.
First thing to keep in mind is the talk of
mine you saw was to an Israeli audience and
they have not had wage stagnation because
they were much poorer say, in the 1970s.
So I was tailoring the remarks to their experience
somewhat.
But in America, if you just measure male wages,
they were about as high in real inflation
adjusted terms in 1970 as they are today.
I find that astonishing.
>>TYLER: I think those numbers are a little
misleading.
There are gains in the quality of life, like
let's say air pollution that are counted by
those numbers.
But that it could even possibly be true is
a sign of great national failure, and I would
even say disgrace.
And it is in the middle, the poor actually
have seen more gains than the middle class
has.
And I don't feel we're on the verge of solving
this problem that it's so deeply rooted in
the bureaucratization of American life, excess
credentialism, so many veto points for different
kinds of major changes which yes, a lot of
startups can get around because they're working
digitally.
That's wonderful.
>>TYLER: But the rest of the economy can't
sidestep those restrictions.
>>STEVE: You discussed a couple of possible
explanations for this kind of stagnation.
And as you know, there are a lot of other
theories, right?
One is that there just incredible returns
to education, technology, that people who
occupy this middle realm may not have access
to.
So I'm curious, there's a huge range of this.
Why do you think it's driven by more regulation
and bureaucracy rather than some middle world
requiring ... giving inordinate returns to
higher skills and education level?
>>TYLER: Well, there are higher returns to
higher skill.
So if you're a very good programmer, you'll
be paid a lot to begin with, a fair amount.
And then if your product can be exported to
the whole world, you'll be paid all the more.
That itself should not account for wage stagnation
in the middle.
Public universities are fairly open with community
college.
It's very patch work but there are ways in
which you can get degrees, not quite for free
but actually pretty close to free.
>>TYLER: And I think there's been some corresponding
failure of national spirit in America.
We've become complacent.
I once wrote a book called The Complacent
Class.
And I think the key problem is our previous
technological miracle which was fossil fuel-powered
machines, we did almost everything you can
do with that and we arrived at diminishing
returns and we haven't had the kind of moonshot-like
commitment to breaking through with further
progress.
>>TYLER: So it's not anyone's fault in particular.
>>STEVE: So I agree with Corey that maybe
there's two topics here.
As a technologist, one of them is aside from
wage growth, have we stagnated in the rate
of technological progress in our civilization?
And I'm pretty persuaded by a lot of the arguments
that someone born at the turn of the century,
20th century, saw in their lifetimes electrification
of their house, maybe indoor plumbing, air-conditioning,
all kinds of appliances that didn't exist
before.
>>STEVE: Whereas in my generation, I'm driving
my car at the same speed that my dad was driving
his car.
>>TYLER: Slower.
>>STEVE: Slower, yeah.
But my car is a little bit safer, I have airbags.
When I fly to London, I'm flying at the same
speed that people were flying.
They're better at packing us in on the flight,
managing their inventory because of computers,
but a lot of the basic core engineering and
physical science type of things, the rate
of progress I think in some way, it's a little
bit harder to find what you mean by the rate
of progress but it hasn't been that impressive,
i.e., where is my flying car?
>>STEVE: And almost all the good stuff is
on the information technology side, but we're
very poor at measuring the returns on that.
So if my son can be happy all afternoon just
doing stuff on his phone and it's all free,
how do I measure that in terms of productivity
gain?
He gets an infinite amount of entertainment
from his phone.
He's 13 years old.
But how do I measure that?
>>COREY: Probably productivity loss for the
rest ... for the most of society.
>>STEVE: In some sense, yes.
Yes.
>>TYLER: We're getting better at measuring
that.
For one thing, as you well know, the internet
is more and more monetized.
So more of the things you're doing generate
revenue for someone.
That may be unfortunate but it's a fact.
So more of the internet is included in GDP
than back in earlier times when all you would
do is read blogs.
But there are also ways of valuing people's
time.
You can measure how much time do people spend
on Facebook, how much is that worth an hour?
>>TYLER: It's imperfect, but when you do those
studies, a guy named Chad Syverson at University
of Chicago has adjusted for a lot of the unmeasured
value of the internet.
And he finds that best under the most generous
assumptions that explains only about a third
of the productivity shortfall.
And again today, no one has found any big
problems in his calculations.
>>TYLER: We need to keep an open mind that
there might still be something we're missing.
But as far as we can tell, the unmeasured
value of the internet while significant does
not come close to obliterating that measured
productivity gap.
>>STEVE: So I think that thesis or that scenario
... that picture is plausible to me.
I think one of the things I would say is as
a natural scientist is that, there is some
just structure of the difficulty of innovations
and discovery.
So it could very well be that we discovered
a lot of the low-hanging ... picked a lot
of the low-hanging technological fruit and
now, we're confronted with much more complex
problems that we're working on.
>>STEVE: Now, those could burst through and
create huge chunks of productivity gain like
say, from quantum computing or AI or genomics,
but we have been stuck I think for a while.
I think that's plausible to me.
>>COREY: I think it's reasonable to see that
we've been in a period where IT has basically
been encapsulated in an unmovable box, right,
for the past 50 or 60 years.
You have very large mainframes, you have desktops,
you have laptops, you have mobile phones now.
But the fact is the kind of changes you want
to see in your personal life are really going
to come from making these things mobile and
robotic.
And we're just on the cusp of that it seems.
>>COREY: So I think it's ... we had a 56 years
of basically solid state IT advancements but
the next 20 or 30 years, you're probably going
to see pretty large changes in how your cars
work, in what goes on in your home through
just the expansion of robotic technology.
So I think what you might be seeing is just
sort of the end of this paradigm of IT and
the beginning of the next.
>>STEVE: I hope that optimistic view turns
out to be correct.
I could give evidence against it in the sense
it's a Moore's law has ended.
So for example, our ability to continue to
miniaturize features on a CPU has basically
stopped and is near the end.
Feature size is not going to get that much
smaller before we actually hit quantum physics.
So it could go either way I think.
>>COREY: But is the barrier to robotics a
matter of basically chip design?
I sense it's more of a kind of software engineering.
It's not robots aren't working well now because
you have small enough chips, we haven't actually
solved AI problem fully and that's not going
to require massive advances of Moore's law
into the future.
>>STEVE: Well, it's interesting because if
you actually ask in my lifetime, we got more
than a fact of a million in CPU in compute
and storage and bandwidth.
Are our software tools 100 times better than
they were 50 years ago?
Maybe, but they're not anywhere near a million
times better.
>>COREY: But look at robotics, right?
Look at Boston Dynamics, right?
Look at robots 20 years ago and look at them
now and think of what they're going to be
like in 20 years, right?
And that's not going to require a continued
advancement in Moore's law before you get
robots being very, very good.
>>STEVE: So I'm not sure whether you're in
your mental extrapolation of the next 20 years
whether you're implicitly assuming that there's
a kind of Moore's law acting in the background.
>>COREY: I guess I think it's going to ... Even
if the curve begins to bend, I still think
you're going to be getting robots inserting
themselves into life, which will change a
lot of your daily experience of your home
and your car.
And we're on the cusp of that right now I
think.
And the fact that Moore's law is not going
to continue in the way it was before is actually
not going to stop that advance.
That's what I'm arguing.
>>TYLER: From my vantage point, there's been
a major loss of national will in this country.
So we set out to put a man on the moon against
strong odds.
We do it really very rapidly.
Often overlooked is the Clean Air Act of 1970.
Other than the internet in a way it's the
last great thing this nation did.
One of the wisest pieces of legislation ever
passed saved millions of lives, helped many
kids.
When the Clean Air Act was written, the standards
were so extreme the demands, the time table
were so rapid, so tough it was considered
insanely impossible that America could never
do this and some of the standards did end
up being relaxed.
>>TYLER: But for the most part, we met the
targets and made the Clean Air Act a reality.
And it's hard to imagine the America we know
now doing something like that say, with climate
change.
And the Clean Air Act was not a tech thing,
a small amount of tech was involved.
The moon had a bit more tech involved but
again, a lot of the work was just improving
physical systems.
And we did those two things in the '60s, in
1970.
>>TYLER: And in terms of physical systems,
we haven't done anything since with vastly
superior technology.
So I think the problem is more than just well,
how well will the technology for robots do?
We could get robots in your home as a nice
add-on but to really be willing to transform
the structure of our lives, it just seems
there are too many veto points, regulations,
hesitancies, inertias, status quo bias.
>>TYLER: It wasn't that long ago that we did
the Clean Air Act and made it work.
It was phenomenal.
>>STEVE: I agree with the observation that
it seems harder to accomplish big things in
America and the west in general.
Whether that's some kind of spirit of the
age thing or it is indeed bureaucracy and
the way we have our society organized right
now, I'm not entirely sure.
But I will say that I just came back from
Beijing, and this is a mega city with roughly,
if you count the undocumented people ... the
people who are not really residents there
but work there, it could be a city of 25 million
people.
>>STEVE: And they have 20 subway lines now
where if you get on the subway at one end,
that line at one end and you ride it until
the end, you're on the train for 90 plus minutes.
It's unbelievable and all of the stuff is
less than five or 10 years old.
So their ambition and their ability to just
get stuff done is just unbelievable in comparison
to the United States.
>>TYLER: We can't even upgrade Amtrak.
I rode that as a kid.
I'm still riding it.
It's slightly worse.
>>STEVE: Yes.
>>COREY: So I think not just national will,
but it seems to be definitely national cohesion,
right?
There are just many people who would oppose
developing such a system you described, Steve.
And there's just so many people who would
oppose something on the analogy of the Clean
Air Act today.
You couldn't politically get it through.
So it's ironic because the Clean Air Act is
essentially regulation but we don't have a
kind of unified view as to what the society
should be, what our policy should be.
>>COREY: We don't have the kind of command
politics they have in China and maybe that's
a fragmentation of the country.
>>STEVE: Do you feel there are any areas where
say, 65%, 70% of Americans would actually
all agree on what should be done in a poll?
But still, there are some bureaucratic or
institutional obstacle for going there?
>>COREY: I think I sent out this article about
basically how Democrats have distorted views
of Republicans, Republicans have distorted
views of Democrats.
But in that poll, they point out that half
of the college Republican clubs in the country
had basically passed resolution calling for
carbon tax.
And it suggests that maybe in our generation,
you may find will among the next generation
to address climate change.
>>COREY: There's definitely a lot more skepticism
among people our age than there are among
people in their 20s and so forth.
So things may change when we die off.
>>TYLER: I hope they do, but if you think
about the layers of environmental review embedded
in any new project, how long it took New York
City to open the subway line, 2nd Avenue Subway
Line, how costly it is to build infrastructure
in this country compared to almost anywhere
else.
Those seem like very deeply rooted problems.
And if the favorable aspect of youth opinion
continue with those people age, I don't think
that's nearly enough to overcome them actually.
>>TYLER: I'm hopeful and I think things that
appear impossible in the short term can end
up happening.
Who would have thought in so few years, we
have all the world's people connected, enabled
to make phone calls to each other and send
data, right?
That was not obvious.
And here we are.
>>STEVE: For free.
>>TYLER: South Asia, Africa, very poor locations,
you can do it.
>>COREY: It's interesting.
A friend of mine is the chief consultant at
the MTA.
And he'll go a name, but if you want to hear
about the problems of a large system in trying
to get things done, maybe we'll be able to
have him on with some sort of voice correction.
But the second subway was a disaster ... is
a very difficult problem across the system
for many reasons.
>>TYLER: Yes.
>>STEVE: So Tyler, I wanted to ask you a couple
of questions and feel free to answer either
short answer or go on as long as you want.
So one of my questions is if you had unbounded
resources, so Bill Gates turned over a huge
amount of money to you.
What experiment in social science or dataset
would you fund?
>>TYLER: I suppose I would do more funding
on whether good methods for charter schools
are applicable or whether they're just noise,
accidents and randomness.
But that's not the main thing I would do.
The main thing I would do is hand the money
out on a decentralized basis to other people
to make those decisions because I really don't
think I'm the best person whose judgment should
be trusted on that question.
>>STEVE: Got it.
Okay.
Another related question.
I give you a onetime use time machine.
And it has a dial which you can set to plus
10 years, plus 30 years, plus 100 years and
you get to go forward in time and look around
and observe that society of the future to
see what actually happened in the future and
then come back.
What value of X is most interesting to you
and what question about the future are you
most interested in answering?
>>TYLER: Whether we're still around, I think
I would go 150 years into the future.
That's far enough away to be very different.
But if you pick the 5,000 years in the future,
you might just simply not understand what
you're seeing.
>>STEVE: So the main question is existential,
whether we would continue to be around in
150 years?
>>TYLER: I'm pretty sure human beings will
still be alive but will we have intact civilizations
making regular progress with more or less
world peace reigning?
That to me is very much an open question and
that's what I would want to see.
>>STEVE: Aren't you curious about winning
some bets from your colleague Robin Hanson
about cryogenically frozen brains and people
living in simulations, stuff like that?
>>TYLER: I feel pretty confident about those
judgments as it stands.
I don't think we're due for any of that to
happen.
And I think it may even be harmful to pursue
it.
I'm all for life extension, but there's something
about it, some fundamental level, accepting
that we're humans who must die.
And that even if you have some powers that
at a certain point, you should use those resources
to help other people rather than just try
to live forever.
>>STEVE: Great.
>>TYLER: And I don't think we'll ever all
be uploads.
I can't even get Siri to understand simple
questions.
Uploads to me seems highly unlikely.
I worry much more about will war come back
and who will be damaged?
And the level of peace we see today, I'm not
convinced by Stephen Baker that it's permanent.
>>STEVE: I think uploads are difficult but
I think Siri will get much better in your
lifetime.
>>TYLER: Of course but-
>>COREY: It's got much better than the past
year.
>>STEVE: Yeah.
>>TYLER: It shows how difficult a lot of the
more ambitious projects are.
Self-driving cars, we're now told they're
not coming right away.
We need to wait some more.
How long?
The answer is not clear.
Last mile problem and so on.
Just try sending money to Mexico without someone
taking 7% of it away from you.
That's very hard to do.
>>COREY: I actually have a couple of questions,
Tyler, that were raised in your Tel Aviv talk.
You said some things that were ... that I
definitely didn't know about.
You talked about people in China saying that
there's often much more open discourse in
China about policies than there is in the
U.S.
And it's interesting, this is something I'd
actually heard about Israel in regards to
the Israeli-Palestinian conflict, you have
much more open discussion there than you do
in the U.S.
So I'd like to have you say a little more
about that.
>>COREY: And I also found it very interesting.
You said that one of the major advances in
China they really allowed it to take off was
the government simply started polling people
and collecting data on people's views and
then enacting policies that were responsive
to those views.
I think that's a major innovation kind of
autocracy.
>>TYLER: Sure.
And it's worrying.
It's great that the Chinese are so much better
off, but the Chinese have found a method at
least in their culture to make autocracy work.
It does appear to be stable and they've had
an incredible growth trajectory since about
1979 and we need to be worried about this.
And I think being open to the idea of polling
citizens has been the single most important
thing they've done.
>>TYLER: The old style soviet or Maoist approach,
we're going to tell you what you want and
if you don't get it, we're going to lie to
you.
And if you don't believe our lies, we're going
to tell you you don't deserve it and if you
don't believe that, we'll take it away from
you or we'll send you to a camp.
That clearly didn't work.
There is considerable censorship in China.
I don't at all wish to apologize for them
but there is also less political correctness
and there are frank open debates about all
kinds of things, not Tibet, not Tiananmen
Square, not the communist party and that's
all terrible.
>>TYLER: But nonetheless, the kind of stifling
uniformity you see in American academia you
cannot find in China.
On some issues of course, Taiwan, Tibet, it's
awful.
>>STEVE: Yeah.
I have to comment on this since I was just
there for an extended period.
There are certain no-go zones where people
would get very uncomfortable if you want to
talk about those things?
>>TYLER: For example?
>>STEVE: Tiananmen, for example, but even
there like software developer I was talking
to said to me, when he happened to go in for
a job interview at a tech company on, I think
is it June 4th?
And the other guy just smiled at him and said,
"Hey, you know what day today is, right?"
And he said, "Yeah."
So it was like a little joke.
But you would be careful if you were at a
dinner and you started saying some strong
things about what happened on June 4th about
... that you might get into some trouble or
something.
>>STEVE: But aside from those specific areas
that are no-go zones, the discussion is much
more open in China because they don't have
political correctness.
They are much more realistic about the way
the world works and things like this.
So yes, it's in many ways a more open society
than ours.
>>COREY: But isn't that just their former
political correctness?
That we have our no-go zones and so do they?
>>STEVE: Right.
But theirs are very tightly constrained about
certain things the communist party is sensitive
about whereas all kinds of other things can
be discussed.
>>COREY: But is this also just not ... There
may be a degree of political correctness on
campus.
You're talking about the tech sector.
And you've operated both in tech sector here
and a tech sector there.
Do you find you don't find ... You find less
open discussion in the U.S. tech sector compared
to Chinese tech sector?
>>STEVE: Well yes.
For example, you have a steady stream of Google
engineers who are going public about the level
of shall we say, political conformity when
in Google and Facebook places like this?
So yeah, definitely.
If you were an engineer at a Chinese company,
there are lots of things you could discuss
which would get you in trouble at Google.
>>STEVE: Just to give you an example, in Chinese,
you could talk about a potential of innate
differences between males and females.
If you said that kind of thing here or at
Google, you might get into real trouble, real
trouble where HR actually contacts you.
>>TYLER: [crosstalk 00:59:43] was fired.
We all know this, right?
>>STEVE: Yes.
>>COREY: So that's the Tiananmen here, right?
Is that any different?
>>STEVE: It's different because here, we pointed
China and we say, "That is a totalitarian
autocracy because they can't talk about Tiananmen
Square", whereas we say, "We live in an open
democracy and our universities pursue truth
but we can't talk about certain concepts.
>>COREY: All I see is that you found an issue
that isn't discussed here and is an issue
that isn't discussed there.
>>STEVE: Right.
There are many such issues.
>>COREY: Yeah.
But it's not so much a question.
What's pointy thing of the question is, is
there reason to think that they're ... discussions
in their tech sector is more open than ours?
>>STEVE: There, they know they are being told
not to discuss certain things and that the
government is censoring certain things.
Here, we do not admit that our society is
censoring certain things.
>>COREY: So it's a different-
>>TYLER: Enforcers are different, right?
There, it's the government.
If not for the government, there would be
open arguments about Tibet and China all the
time.
And indeed, there were in the 1990s before
there was this much censorship as there is
right now.
>>STEVE: Another way to say it is they know
they're being lied to occasionally by their
media.
We do not generally realize we are being lied
to.
>>COREY: But that's different from the original
question.
The original question was the extent of the
discourse, not the nature of the overseer,
not the awareness of it, not finger-pointing.
>>STEVE: Right.
So then it's an issue of how you measure.
Like okay, there are these five topics you
can't discuss in China.
There are these whatever N topics you can't
discuss here.
And then what's greater ... It's accounting.
It's a [crosstalk 01:01:07].
>>COREY: With any reason to think that one
is larger than the other.
>>STEVE: I think it's hard to actually define
what you mean by more or less in that context.
It's just different.
But the difference is that we routinely point
to them and say, "Oh, wouldn't it be nice
if those poor Chinese people could live in
a free country like ours?"
>>COREY: We do this for all parts of the world,
right?
It's U.S. hubris.
>>TYLER: I showed my law students a movie
this last semester called The Chinese Mayor.
It's a Chinese movie about a Chinese mayor
who wants to demolish a lot of buildings and
have the citizens push back and complain.
And my students who were very well-educated,
super smart, very coastal cosmopolitan, whatever,
they were shocked just that in China, you
could in essence, complain to the mayor and
speak your mind and there was very open discourse
about what to do about these buildings.
>>TYLER: So I don't at all want to say things
are somehow better in China.
I don't think that's true.
But our understanding of China is typically
very far off, I would put it that way.
>>COREY: But the point is true the rest of
the world in general.
The U.S. seems to be woefully ignorant of
the rest of the world, although the world
cannot afford to be ignorant of the U.S.
>>TYLER: But I don't think Americans have
the same misconceptions say, about Australia.
They may have other misconceptions but-
>>COREY: We have misconceptions about Australia.
We have misconceptions about France.
We have misconceptions about Germany.
We have misconceptions on parts of Africa.
We have misconceptions about ... For instance,
many Americans think that Sweden has ... doesn't
have private health insurance.
So we have total misconceptions about Scandinavian
healthcare.
So I think just a level understanding of the
U.S. relative ... of the rest of the world
is comparatively low.
>>TYLER: Sure.
>>COREY: Yeah.
I would actually like to get to something
else.
Maybe you can just end on our high note which
is we'd like to ... we've been discussing
current politics here.
Your theory that stagnant productivity growth
or decreased productivity growth let's say,
is an explanation for the current response,
the fact that the rise of populism in the
U.S. and you argued the same is true for Brexit
in the U.K. I just like to, if you could explain
why you think this is the reaction to lower
productivity growth.
>>TYLER: I think something like Trumpism or
populism or Brexit, they're all a bit different.
But I think low productivity growth is only
one of the causes.
Eric Kaufmann has a recent book.
I interviewed him on my podcast.
And he thinks that rising immigration is the
most significant cause of the backlash and
I'm inclined to agree with him if we have
to rate causes ordinally.
That people simply grow uncomfortable when
there's such a high rate of change as to who
is surrounding them.
Some of it is racism I think but a lot of
it is just status quo bias.
>>TYLER: But I think low productivity growth
is nonetheless a major that if you just imagine
all American incomes going up 2.5%, 3% as
was often the case say, in the mid-1960s,
we would have a much happier country and there
would be a lot more opportunity and a lot
more upward mobility.
And a lot of the complaints of the so-called
populists, they just wouldn't ring very true.
>>COREY: Here's the thing is where we live
at least-
>>TYLER: Where is that?
Michigan?
>>COREY: We're in Michigan, yeah.
>>TYLER: Yeah.
>>COREY: We're not being overrun by immigrants
in Michigan.
And it's places like this which seem to have
fairly low levels of immigration and they
in fact need it for jobs that are often the
most anti-immigrant.
>>STEVE: I'd like to comment on that, Corey,
because earlier when we were talking about
civilizational decline and I said, "Hey, are
there any issues that regular polling shows
65% or 70% of Americans really want it but
it never gets done?"
I think immigration reform is one of those
things and it's pretty clear what the majority
of American people want.
They actually want less immigration.
>>STEVE: I want to tell you about when I was
a professor at the University of Oregon, I
got there around 1998 and I bought ... as
a young professor, I bought a house.
And at that time, all the trades work, the
roofing, remodeling, putting in a hardwood
floor, it was done by, for a lack of better
word, white Oregonians who would do that kind
of work.
By the time I was a more senior professor
and we'd moved into a bigger house when my
kids were born, all of that work, putting
in the carpeting, the floor, the roofing was
done by Mexicans.
>>STEVE: And that cannot have not had a difficult
effect on working class white Oregonians.
And I think there are similar things in Michigan
too, you just don't see it that much.
But the people that you hired to do work on
your house, I wonder what the composition
of those people is.
>>COREY: Again, I'd like to see some statistics
on number of immigrants settling in Michigan.
But I don't think there's a huge correlation
between the number of people ... immigrants
settling in a particular area and the immigrant
... anti-immigrant sentiment.
>>TYLER: No, it's inverse.
>>COREY: Yeah, exactly.
>>TYLER: But I think still if you tell people
in Michigan, "Well, there's one American political
party, the Democrats and they've been boasting
that America will soon be majority non-white."
They don't like it, and some of that is racism,
some of that may be other motives.
But just as a flat-out description of our
country, they don't like it.
And if you told people in 1965 what was going
to happen, they would have been shocked.
They just literally would not have believed
that this would happen.
>>TYLER: And I think Brexit the same.
The extent to which London is not an English
or British city anymore, I find it a vast
upgrade.
I'm happy.
I'm very anti-Brexit.
But I understand, I was in London in 1979
and I was in London this year.
I understand the difference and I do get that
it upsets people for reasons which are not
nearly racism.
They feel they're losing their country.
>>COREY: No, I think that's something I think
Democrats really ... at least many people
on the left really don't quite acknowledge.
They don't get how unsettled people are by
a change.
I share with you, one thing they used to say
about New York, what's great about New York
is going to be New Yorker, not even being
American.
I really like that fact.
You can be anywhere in the world.
You cannot even be a citizen and can be New
Yorker.
But I see that many people may find that uncomfortable
and react to it.
>>COREY: I was thinking when I was listening
to your discussion of productivity growth,
and I think it's something you actually said
in your talk is that when things are not going
well, people blame either foreign country
... or countries or immigrants.
So the causation, as I understood you are
making the case, was that this economic dissatisfaction
drove the anti-immigrant sentiments and also,
drove our opposition to China.
>>COREY: We had a guy recently, Mark Moffett
who said ... made similar arguments.
He says, "When things are plentiful, people
are quite willing to accept newcomers into
their midst.
But when scarcity arises", he then defined
people getting more xenophobic.
So I was curious to that.
In your talk, you seem to be saying that the
immigrant ... the issue with immigrants was
effectively a symptom of economic delays rather
than independent driver.
>>COREY: But now, you seem to be suggesting,
I think it's ex-independent driver?
>>TYLER: I think it's both, but I also think
it's an independent driver.
And I think another major independent driver,
not discussed much is the U.S. has lost global
status partly because of our own stupid decisions
but partly just the rest of the world is bigger
and better.
And we feel that and don't quite admit it
to ourselves and then feel like something
is wrong.
There's talk to make America great again.
It's striking to me that that's the motto,
right?
Make America great again.
>>TYLER: Well, we're not going to be back
to the day where like 60% of the gold reserves
of the world are held in the United States,
right?
That will never ever, ever be the case.
I don't care what we do.
>>COREY: It's interesting.
I think you nailed that.
So this is a definition which there's enormous
racial difference because you can see a lot
of white American maybe nostalgic for the
period when America had unbridled power.
That was also the era of segregation, when
the black Americans, other minorities were
much less ... Also, there's absolutely no
nostalgia.
There may be negative nostalgia for those
periods.
>>COREY: So that's a huge [crosstalk 01:09:24]
point.
>>TYLER: As it should be, yes.
>>COREY: You said something else that's very
interesting, your talk about, you think the
era of the kind of one world internet, one
tech world is coming to an end.
>>TYLER: Yes.
>>COREY: That there's really going to be a
U.S. tech world, a U.S.-centered tech world
and a Chinese-centered tech world.
You said something also that was quite interesting
which was you thought that Europe and the
U.S. ... your line is between U.S. and Europe
had effectively come to an end because the
worldviews had diverged so much.
And Europe is taking kind of pragmatic point
of view by trying to straddle these two worlds.
>>COREY: And I think your example, how do
you pronounce it, Huawei?
Huawei?
>>STEVE: Huawei.
>>COREY: Huawei.
Basically, giving the finger to the U.S. and
saying, "Look.
Huawei's systems are cheaper and easier to
implement and so we're going to use them."
And that is effectively going to alienate
Europe from the U.S. long term.
I'm not quite sure how that ... I think European
outlooks are much closer to the U.S. than
it is to China but I just like to hear your
elaboration on those thoughts.
>>TYLER: Well, the countries in NATO are mostly
unwilling to spend 2% of their GDPs on defense.
And we put up with that for a while.
It may even be efficient that we carry almost
all the burden.
But on the other hand, one needs to see that's
not sustainable politically either.
And if your country won't spend 2% of GDP
to defend itself, that says to me, the military
alliance is over.
So you take the United Kingdom, we used to
call that the special relationship.
>>TYLER: Recently, Iran ceases two of their
tankers with no provocation and Pompeo just
says, "Oh, you'll have to deal with it."
And maybe we're helping them behind the scenes,
probably we are, but at the end of the day,
we're not part of the Rambo brigade.
They don't even have the aircraft carriers
they had in 1982 and everyone is quite embarrassed
by this and then we just decide to stop talking
about it.
>>TYLER: It's incredible.
Compare it to how people would have responded
in 1980.
It's become a nonstory.
>>COREY: Don't you think this is actually
a good thing?
>>TYLER: I don't know.
Compared to what?
But I think it shows in the short run, we
have more resources to spend on other problems
but in the long run, I don't think it's sustainable.
Global order will fray and the bad actors
including Iran and China will take advantage
of it and keep on winning victories and be
involved in it.
>>COREY: I'm not an isolationist, but I really
strongly advocate pulling U.S. troops out
of Europe and most ... the rest of these countries.
And again, if Europe doesn't want to spend
2% on its defense or whatever it ... it spends
what it wants to spend.
That should be their business, but it shouldn't
be our business to defend them and to spend
our resources there.
>>COREY: So I agree, it's unsustainable.
>>TYLER: It might be better, but if Putin
takes Eastern Estonia and Ukraine becomes
chaotic and Germany decides it wants to build
nuclear weapons and Poland too, that could
be better but it could also be much worse.
It's a very risky path to go down.
>>COREY: I would agree.
I agree.
All change is risky here.
Look, I agree it's unsustainable.
I just don't think there's any other options
in this case.
The U.S. is not going to continue to fund
European defense.
So we're going to go down this road in some
form or other.
>>TYLER: And when Trump says all these things
about Germany, "Oh, you're not part of the
western alliance anymore", he's been attacked
so much but he's not completely wrong.
Germany spends its money on gas from Putin
and then asks America to defend it from Putin.
That is not politically sustainable.
It is for a while, not forever.
>>STEVE: I'll just throw in a little anecdote
related to Huawei for you.
So there's a big issue whether which country
should use Huawei infrastructure to build
out their 5G networks and obviously, it's
very contentious.
U.S. is trying to keep everybody from doing
it.
I was meeting with some very senior scientists
in Germany who are actually involved in national
security issues and defense.
>>STEVE: And they pointed out to me, they
reminded me that the U.S. NSA had been caught
listening to Merkel's cellphone.
And it wasn't the Chinese that were listening
to Merkel's cellphone, it was the Americans.
And part of the reason for the hostility to
Huawei is that they won't put in backdoors
for U.S. intelligence unlike all the other
companies that are building out telco infrastructure.
>>STEVE: So the Germans are in a funny situation,
right?
Do you want to be spied on by the Chinese
or do you want to be spied on by the Americans?
And they're going to have to make a choice.
>>TYLER: They've made the choice as far as
I can tell.
>>COREY: So Tyler, your future seems to be
a growing schism between the U.S. and China,
maybe not break an all-out-war, but how do
you see this playing out over the next 20,
30 years?
>>TYLER: That China becomes truly the major
power in Asia and consolidates Hong Kong and
brings Taiwan into its orbit.
And that more Asian countries become like
Cambodia and take something like marching
orders from Beijing on many issues and now
that the world is significantly less free.
I don't think it's the end of the world, I
don't think there will be a major war between
America and China, but I think it will be
fairly unpleasant compared to a future we
might have had.
>>STEVE: I think if you talked to most sophisticated
businesspeople or technologists who are not
in the U.S., they ... especially ones in Asia,
they view this as two systems, but not good
versus evil.
There are aspects of one system they like
better, there are aspects of others ... the
other system they like better and these ... they
can see these two systems are going to compete.
But it's not the end of the world.
>>STEVE: Here, we're mapping it back on to
the cold war as if, okay, now we're back in
the cold war and instead of the Soviet Union,
we have China to compete with.
>>TYLER: But you will have places like Hong
Kong and Taiwan that formerly were very free
and they'll become quite not free.
And the incentive in places such as East Africa
will not be to be a blossoming democracy along
the lines of Ghana or Senegal, but to be somewhat
autocratic.
And I think we'll see that and I think it
will be worse for those areas.
>>TYLER: So I am greatly concerned.
I don't feel I'm hysterical or alarmist or
paranoid, but the notion that not all of the
world become globalized and in some way in
the western orbit, I do think that's an enormous
great loss.
>>STEVE: Yeah.
I think the U.S. should be realistic that
okay, we have another existential competitor
now in place of the Soviet Union.
Now, as far as the internal political evolution
of China, it's still kind of up in the air.
So if you went back five or seven years, most
of the top intellectuals and political scientists
would have been surprised that somebody like
Xi could arise and amass so much power.
>>STEVE: They thought it was heading the other
way.
They actually thought they were heading toward
liberalization.
And after Xi is gone, perhaps it may go back
that way.
It's not at all clear what the trend is.
So one can-
>>TYLER: But China and its history, look at
the long-term trend.
China has never ever been democratic, and
it probably won't be.
>>STEVE: No.
It probably won't be democratic in the full-blown
western sense but it could still liberalize
far beyond where it is today.
>>TYLER: It could, but I think the opposite
is more likely at this point.
I know a fair number of Chinese.
I don't see them in general as demanding liberal
democracy.
>>COREY: Yeah, that's the rise we've seen.
That's what we've seen over the past decade
and a half.
People seem extremely happy with improved
economic opportunities and are just not all
that interested in what many intellectuals
like us consider to be extremely valuable
things like free speech and open elections.
>>STEVE: Yeah.
It's kind of a tradeoff.
The current tradeoff is you don't bother me
while I'm trying to get rich and I won't try
to take political power from you guys.
And people seem fairly satisfied with that.
How long that will continue, I don't know.
>>COREY: Yeah.
Russia is also running a parallel experiment,
although not with the same economic success.
So I think the interesting question, how long
Russians are satisfied with Putin if he can't
give them something like Chinese levels of
development.
>>TYLER: I know many people from Russia and
my wife was a refugee from Soviet Union.
And even in America where there's no censorship
at all, it's striking to me how many non-Jewish
or non-ethnic minority Russians are ... I
would say most of them are.
And their GDP has been shrinking for five
years but nonetheless, there's something called
... It's really attractive about a strong
leader and I don't see Russia liberalizing
anytime soon either.
>>COREY: So you said that you're surprised
at how many non-ethnic Russians are pro?
>>TYLER: Non-ethnic, so Armenians, Kazakhs,
people who are Jewish or part Jewish.
They're fairly reliably anti-Putin.
>>COREY: Yeah.
>>TYLER: And those who are just what you might
call ethnic Russian or close to pure ethnic
Russian are far more pro-Putin than you might
have thought in the 1990s they would be.
>>COREY: Yeah.
My ex-wife is Uzbek and she hated ... hates
Putin, hates the entire culture, did everything
she could to get out of the ... It was post-Soviet
Union but to get out of Uzbekistan that time.
>>TYLER: Yeah.
As did my wife.
But that's not the dominant sentiment there.
>>STEVE: So I think we're over time, Corey.
Do you have any more questions for Tyler?
If not, we should probably call it.
>>COREY: I don't.
I really appreciate all the time you've given
us, Tyler.
This has been a really interesting discussion.
>>TYLER: Thank you very much.
And when it's out, send it to me, the tweet,
blog, et cetera.
>>STEVE: All right.
Thanks a lot Tyler.
Hope to see you soon.
>>TYLER: Okay.
Take care.
Bye.
>>STEVE: Okay.
Bye.
