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Speaker 1: Hello, aud Loots listeners. We recorded an episode with our

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Speaker 1: friends over at What Goes Up. It's live today, so

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Speaker 1: go check it out. It's called the Adlots Crossover Episode.

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Speaker 2: Yep.

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Speaker 3: We chatted with the hosts, Mike Reagan and Vildona Hirich

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Speaker 3: about a bunch of topics that are near and dear

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Speaker 3: to odd Lots listeners, ranging from the growing power of

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Speaker 3: organized labor, the trillion dollar coin, evs, bidenomics, and more.

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Speaker 1: You can find it on the What Goes Up Podcast,

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Speaker 1: available on Spotify, Apple, or anywhere else that you get

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Speaker 1: your podcast fix.

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Speaker 3: Hello and welcome to another episode of the Odd Lots Podcast.

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Speaker 1: I'm Joe Wisenthal and I'm Tracy Alloway.

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Speaker 3: Tracy, it feels like there are many things in the

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Speaker 3: news these days that are like on the edge of

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Speaker 3: reality and frankly science fiction.

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Speaker 1: More evidence that we're living in the simulation. Yes, no,

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Speaker 1: you're absolutely right. So first of all, we had this

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Speaker 1: influx of AI technology. Everyone got very into chat GPT

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Speaker 1: and now everyone's talking about future AI applications. And then

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Speaker 1: we had let's see, oh, we have the excitement over

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Speaker 1: the possibility of a room temperature superconductor. And then even weirder.

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Speaker 1: We have a lot of talk about aliens. We had

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Speaker 1: the congressional hearings about UFOs recently. I actually saw someone

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Speaker 1: tie all of these things together recently. They thought that

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Speaker 1: the LK nine to nine coming out like the week

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Speaker 1: after the congressional hearings or the week of was evidence

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Speaker 1: that there are in fact aliens and the technology has

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Speaker 1: come from them.

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Speaker 3: So they take that with a grain of likes, like

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Speaker 3: left this little trail of yes for us.

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Speaker 2: That's interesting.

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Speaker 1: Well, I think one of the conspiracy theories is the

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Speaker 1: reason it feels like all of this is popping up

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Speaker 1: now and sort of going into hyper drive is because

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Speaker 1: the uh, I don't know, the powers that be are

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Speaker 1: laying the groundwork for us to actually find out there

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Speaker 1: are aliens. So they're sort of dripping it out and

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Speaker 1: now the pace is picking up, and so it's coming Joe.

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Speaker 2: So here's the thing. I do not believe in it.

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Speaker 3: I'm like a deep UFO skeptic to the point where

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Speaker 3: I've almost like tuned out all the news. If we

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Speaker 3: do have a room temperature superconductor, I don't even know

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Speaker 3: what that means. Like I see all these people like,

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Speaker 3: oh my god, we are so back, this is going

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Speaker 3: to change the world. I still don't really understand the

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Speaker 3: significance AI. I think it's pretty cool, but I don't

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Speaker 3: know what it's going to do and yet in terms

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Speaker 3: of the economy. So when you're faced with all these

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Speaker 3: sci fi things, Tracy like, what kind of guests do

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Speaker 3: you think?

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Speaker 2: Who comes to mind? Is someone who talking about Who's the.

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Speaker 1: First person I call? Yeah, well, I guess, uh, we

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Speaker 1: have the perfect guests.

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Speaker 3: We have the perfect guest. We are going to be

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Speaker 3: speaking with Paul Krugman, opinion writer for The New York Times,

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Speaker 3: professor at City University of New York, of course, a

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Speaker 3: Nobel Prize winner in economics. And I read on the

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Speaker 3: internet that he was inspired to be an economist because

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Speaker 3: of science fiction, at least according to a website I'm reading.

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Speaker 3: And so I think to understand the economics, the implications,

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Speaker 3: the thoughts are on aliens, AI, superconductors, what they mean

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Speaker 3: for the world and the economy. Obviously, the first name

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Speaker 3: we calls Paul's. I think this is your first time

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Speaker 3: on our podcast. So, Paul, thank you so much for

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Speaker 3: coming on.

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Speaker 2: Odd lots.

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Speaker 4: Oh thanks, I think it is my first time.

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Speaker 1: I'm so proud that the first time you're coming on

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Speaker 1: all thoughts is to talk about aliens. I'm so happy, I.

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Speaker 4: Know, of all the various things we should be talking about.

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Speaker 4: But hey, I'm pretty bored with inflation.

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Speaker 3: Yeah, that inflation, the FED soft landing fiscal policy, the

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Speaker 3: six hundred dollars checks. This recovery versus the other one

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Speaker 3: is so boring. It's so tired. Paul. Do you think

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Speaker 3: there could be a life elsewhere in the galaxy?

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Speaker 4: I would think that it's extremely unlikely that there isn't.

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Speaker 4: I mean, it's there is an argument that says that,

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Speaker 4: you know, particularly the complex life, may require some very

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Speaker 4: very special circumstances, then we might actually be alone out here.

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Speaker 4: But that's well, I guess that sounds unlikely. It doesn'tseem

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Speaker 4: like that it should be that hard for there to

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Speaker 4: be someplace else where complex life has arisen. But here's

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Speaker 4: an argument for that don't see very often, which is

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Speaker 4: that if there is other intelligent life out there, just

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Speaker 4: given the timescale of things, it must have evolved hundreds

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Speaker 4: of millions of years before we did. So if there

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Speaker 4: are aliens out there, they are if either wipe themselves

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Speaker 4: out one way or another or are on a level

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Speaker 4: so far beyond us that you know, the meaningful interaction

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Speaker 4: is impossible. So in terms of there being actual aliens,

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Speaker 4: you know, landing and kidnapping people and all of that,

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Speaker 4: that doesn't seem to me to be a very plausible story.

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Speaker 1: So can I ask a step back question, which is

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Speaker 1: you know, Joe mentioned that he read on the internet

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Speaker 1: always a reliable source, that you got into economics because

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Speaker 1: of your interest in science fiction. I remember you wrote

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Speaker 1: a paper, I think it's a very long time ago,

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Speaker 1: a theory of interstellar trade. But why does this area

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Speaker 1: interest you? How did you get into you?

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Speaker 3: Why did you pretty much?

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Speaker 4: Oh? Yeah, so it's very specific. I read as a

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Speaker 4: teenager Isakasimov's Foundation novels, and if anybody's ever read the novels,

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Speaker 4: they're about how galactic civilization is collapsing but is saved

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Speaker 4: by mathematical social scientists. And I wanted to be one

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Speaker 4: of those guys. So that's how I got into economics,

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Speaker 4: or at least that's the story I like to tell,

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Speaker 4: which is also, by the way, why why I cannot

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Speaker 4: bear to watch the Apple TV Foundation series, which completely

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Speaker 4: ditches the whole premise. There may not be good TV,

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Speaker 4: but it has nothing to do with what Isakasimov wrote.

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Speaker 4: So but anyway, wait, it was quite specific.

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Speaker 1: In science fiction Economists Save.

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Speaker 4: The World in one particular, a classic science fiction series,

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Speaker 4: and they're not economists exactly, they're mathematical social scientists. But

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Speaker 4: you know, that's as close as I could get is

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Speaker 4: doing economics.

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Speaker 3: You did write a paper, as Tracy mentioned, on interstellar trade.

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Speaker 2: What did you What is that all about?

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Speaker 3: I mean, like, what is what would make say, interstellar

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Speaker 3: trade any different between trade between yous and China.

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Speaker 4: It's the paper I wrote when I was very very young.

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Speaker 4: I was a frustrated assistant professor, and it finally got

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Speaker 4: published decades later. And so with mostly a blowoff steam paper,

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Speaker 4: I was having so fun with the fact that, well, look,

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Speaker 4: shipping times for interstellar commerce would be very very long.

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Speaker 4: You know, not the time it takes to get from

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Speaker 4: Sharing High to Los Angeles, but the climate takes to

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Speaker 4: cross twenty life years and at that point the interest

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Speaker 4: costs on shipping, yes, up in transit are going to

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Speaker 4: be a pretty significant part of the expense. But how

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Speaker 4: much time is spent on transit Because of the theory

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Speaker 4: of relativity we know that the amount of time received

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Speaker 4: on the spaceship is going to be different from the

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Speaker 4: amount of time perceived on a planet that remains stationary.

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Speaker 4: And it's always all kind of silly. But you know,

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Speaker 4: as I said, I think in the introduction that that

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Speaker 4: the results of this paper will be true but useless,

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Speaker 4: which is the opposite of what is typical in economics.

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Speaker 3: Wait, I thought that was typical, true but useless. I

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Speaker 3: thought that was what's typical in economics. All right, Well,

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Speaker 3: I'm sorry not to not to malign the whole profession.

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Speaker 4: Sorry, I had some fun and helped helped keep me

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Speaker 4: more or less sane during those you know, pre ten

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Speaker 4: year years that every academic has to go through.

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Speaker 1: Was it pure reviewed, I can't imagine.

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Speaker 4: But no. Actually, well, actually I sent it off The

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Speaker 4: Journal of Political Economy used to have a joke paper

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Speaker 4: section at the end, miscellany. I sent it and the

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Speaker 4: then editor didn't get any of the references. There were,

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Speaker 4: in fact, references to Isaac Asimov, and so he sent

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Speaker 4: why why is the planet named Trantor? And I, you know,

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Speaker 4: we need revisions, And I said, I'm not going to

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Speaker 4: do that, so I just let it sit. But it

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Speaker 4: hits circulated kind of the samisdot for a long time,

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Speaker 4: and eventually the Journal of Economic Inquiry contacted me and

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Speaker 4: we said, we've heard about this paper you once wrote,

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Speaker 4: can we publish it?

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Speaker 3: So I feel like not to keep diving onto this

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Speaker 3: one paper. But you know, if it if it takes

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Speaker 3: an incredibly long time to ship something from here to

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Speaker 3: the other planet, is the But the people on the

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Speaker 3: ship don't perceive it as long as those of us

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Speaker 3: on Earth, right, because time is slower time, Okay.

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Speaker 4: And yes, that's the point. If you're traveling at close

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Speaker 4: to the speed of light, you can do that, then

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Speaker 4: none of this it makes any sense. Then the subjective

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Speaker 4: time is going to be much And I actually then

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Speaker 4: went on very fancy economic steer improving to say that

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Speaker 4: that doesn't matter because the relevant opportunity costs is the

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Speaker 4: time it takes on the planet.

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Speaker 2: Anyway, I'm looking at it now. I found it online.

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Speaker 1: There's some great it's really funny.

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Speaker 2: Yeah.

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Speaker 1: Also, like in a very dry way, there's a line

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Speaker 1: that like interplanetary trade, while of considerable empirical interest, raises

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Speaker 1: no major theoretical problems. Among the authors who have not

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Speaker 1: pointed this out are Oland and Samuelson. I love that.

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Speaker 4: Yeah, Actually, Jeff Frankel, you may know that if Harvard

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Speaker 4: wrote it. A sort of companion paper around the same

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Speaker 4: time called is Their Trade with Other Planets, in which

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Speaker 4: he pointed out that if you sum up total world

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Speaker 4: exports and total world imports, you know, countries report the

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Speaker 4: amount the export they don't actually match. Oh yeah, and

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Speaker 4: that the world as a whole appears to export more

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Speaker 4: than it imports. Yeah.

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Speaker 3: Every statistical agency around the world wants to flatter their

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Speaker 3: numbers of exports and a little bit off the imports.

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Speaker 4: I guess, yeah, maybe there there are for right, Yeah,

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Speaker 4: and a fair bit yeah stuff that is not Also

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Speaker 4: that it's just if you smuggle stuff in past customs,

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Speaker 4: it shows up as an export but not as an import.

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Speaker 3: Right Anyway, do you pay attention to things like the

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Speaker 3: UFO hearings, like right now? Like how engaged are you?

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Speaker 3: Like when you see these headlines?

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Speaker 4: I think We've got enough. You know, there's enough. There's

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Speaker 4: enough weird stuff in the world. Although I will say that,

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Speaker 4: by the way, the theory that says that the aliens

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Speaker 4: are selectively releasing technologies that's a subplot in the movie

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Speaker 4: men in black and I hope people remember this. But

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Speaker 4: the agency that employees will smith is how they financed

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Speaker 4: themselves by selectively releasing alien technologies. I think that Bell

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Speaker 4: Crow was supposed to be one of them about that,

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Speaker 4: so that that's so you really should be. It should

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Speaker 4: be even more conspiratorial than people are. It's not just

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Speaker 4: that the aliens are doing this because they're about to

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Speaker 4: be found out. It's that the government agents in black

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Speaker 4: suits are selectively releasing these alien technologies.

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Speaker 1: Well, let me ask I guess the big question, which is,

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Speaker 1: how would you, as an economist, you know, a rigorous,

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Speaker 1: well grounded researcher in this field, how would you go

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Speaker 1: about thinking or incorporating something like aliens slash alien technology

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Speaker 1: into the way you think about the economy.

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Speaker 4: Yeah, the aliens, I have absolutely no idea. I mean again,

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Speaker 4: it's just if there are aliens out there, if they exist,

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Speaker 4: they almost have to be immensely more advanced, basically on

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Speaker 4: a different plane. And it's not clear that they would

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Speaker 4: have any interest in dealing with us. But the technologies,

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Speaker 4: if there are for whatever reason, whether it's they're leaking

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Speaker 4: out of Area fifty one where there are really big

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Speaker 4: technological things happening. Of course, the technological progress is the

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Speaker 4: ultimately the main driver of economic growth. So these are

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Speaker 4: important things things if they are if they pan.

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Speaker 3: Out, let's talk about technological progress as a driver of

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Speaker 3: economic growth because it seems like that. So it's like, Okay,

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Speaker 3: there is this thing that people are talking about, which

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Speaker 3: is the possibility of superconductors that can exist at room

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Speaker 3: temperature instead of really cold temperatures, which supposedly might have

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Speaker 3: all kinds of implications for battery tech or power transmission

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Speaker 3: or electricity consumption. I don't really totally get it. I'm

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Speaker 3: not a signed this, but it seems good. But on

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Speaker 3: the other hand, technologies exist and they are exciting, but

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Speaker 3: they don't necessarily show up in the economic aggregates. They

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Speaker 3: don't suddenly make GDP growth grow from three to three

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Speaker 3: percent to ten percent just because there's some new breakthrough.

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Speaker 3: Why don't they Why don't we get technological inventions that

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Speaker 3: suddenly caused GDP growth to grow at a much faster pace.

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Speaker 4: Oh? Well, me, we certainly do get inventions that make

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Speaker 4: a difference that show up a lot. I mean, so

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Speaker 4: if you think about, yeah, we have a pretty good

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Speaker 4: idea there was an acceleration in US productivity growth for

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Speaker 4: about ten years from the mid nineties to the mid naughties.

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Speaker 4: That was something like one percent a year faster growth

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Speaker 4: than before or since, which we think was because business

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Speaker 4: finally figured out what to do with it. And some

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Speaker 4: of that's the Internet, it's it's just actually some of

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Speaker 4: it is finally figuring out how to use barcodes to

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Speaker 4: do effective inventory management, you know, more prosaic things. But

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Speaker 4: basically there was a clear bump in productivity that's was

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Speaker 4: associated with the rise of IT, networks and all of that.

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Speaker 4: And you could say, well, that's it. All we got

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Speaker 4: was ten years of one percent faster growth. But that's

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Speaker 4: a ten percent bigger economy, and there's almost no conceivable

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Speaker 4: economic policy that would raise you as growth that much. Right, So,

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Speaker 4: even what was relative to a lot of what people

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Speaker 4: had hoped for or predicted, even though the results of

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Speaker 4: it have been somewhat disappointing, there's still huge relative to

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Speaker 4: anything that you know that any presidential candidate could plausibly

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Speaker 4: promise to accomplish.

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Speaker 1: How good are we at actually measuring technology's impact on productivity?

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Speaker 1: Because I remember this was a talking point a few

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Speaker 1: years ago the idea that well, technology is in fact improving,

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Speaker 1: but the way that it's improving and sort of feeding

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Speaker 1: into the economy is not well captured by statistical methods.

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Speaker 4: There's actually true levels of that. First of all, the

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Speaker 4: way that we actually of measure technology is god awful

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Speaker 4: except not clear how else you do it. I mean,

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Speaker 4: we think that we have ways of measuring the contributions

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Speaker 4: of tangible stuff like an increased stock of capital to

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Speaker 4: economic growth. And what economists do is they add up

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Speaker 4: all of those things. That's growth accounting, and then whatever's

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Speaker 4: left they say that's technology. You know, it's a really

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Speaker 4: pretty poor technique. It's basically, technology is the measure of

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Speaker 4: what you can't explain otherwise. That's not great. But on

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Speaker 4: top of that, then there's the unmeasured. As you say,

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Speaker 4: we don't have a very good handle on. You know,

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Speaker 4: what is the value of streamed entertainment one way or another?

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Speaker 4: You know, for me, I'm really into live musical performances

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Speaker 4: and can't get into you know, can't make time in

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Speaker 4: my life to go to as many as I would

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Speaker 4: like to. But I can watch a lot of live

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Speaker 4: musical performances on YouTube. That's a pretty big. I would

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Speaker 4: probably be willing to pay thousands of dollars a year

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Speaker 4: for that. As it happens, I don't have to pay that,

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Speaker 4: but it's and that's not captured by the GDP statistics.

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Speaker 4: And there's probably a bunch of things like that. To

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Speaker 4: take something that's less sexy, but healthcare, the fact that

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Speaker 4: doctors can treat lots of things that were untreatable before

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Speaker 4: is a really big thing. But you know, it has

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Speaker 4: always been true, but not always, but it's been true

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Speaker 4: for a very very long time. You know, if you

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Speaker 4: if you start from the late nineteenth century when you

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Speaker 4: started to finally get big improvements in public health because

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Speaker 4: the people stopped getting their their drinking water from a

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Speaker 4: well next to the outhouse, those are huge gains that

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Speaker 4: are really not at all captured by our official statistics.

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Speaker 4: So probably it's the case. Uh, you know, there's been

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Speaker 4: much more economic growth than the numbers show, or the

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Speaker 4: much more, much more improvement than the quality of life

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Speaker 4: anyway than the numbers show.

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Speaker 2: I'm glad you brought up the live music.

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Speaker 3: I was talking to Tracy earlier, and I have this

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Speaker 3: memory of us running into each other. It might have

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Speaker 3: been like twenty eleven or twenty twelve at some conference

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Speaker 3: in New York City and everyone else is mingling and

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Speaker 3: you were smartly in the corner watching I think a

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Speaker 3: live video of the Arcade fire in twenty eleven.

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Speaker 2: Twenty jobs.

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Speaker 3: Who do you like the days any band wrecks?

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Speaker 2: Oh wow, it's fine.

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Speaker 4: And I worry when I say this that I'm going

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Speaker 4: to insult bands I love by forgetting to mention them.

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Speaker 4: But the last concert I went to, which was just

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Speaker 4: at the beginning of the summer, was Lark and Poe,

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Speaker 4: which is a sisters from Atlanta who do mostly the

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Speaker 4: blues and are just incredible. I'm away for the summer.

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Speaker 4: I went to a little I won't get undisclosed located

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Speaker 4: by way. I went to just a bunch of local

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Speaker 4: musicians doing calling themselves the Grateful Dread regularly inspired Grateful

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Speaker 4: Dead covers, but which was great fun. But the next

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Speaker 4: thing I'm going to do something called a band has

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Speaker 4: been around for a while, old War Paint and does

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Speaker 4: sort of vaguely psychedelic stuff. I mean, he's saying a

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Speaker 4: boy genius. They've been getting quite a lot of play.

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Speaker 4: But actually the troubling I like the more intimate concerts. Yeah,

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Speaker 4: and the next Boy Genius performance is at Madison Square Garden.

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Speaker 4: Sorry that's I love the band, but I wouldn't love

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Speaker 4: that experience. So you know, there's a bunch. I mean,

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Speaker 4: that's the thing I subscribed to. I think around around

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Speaker 4: forty channels on YouTube which are almost all indie musicians

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Speaker 4: of one form or another, and.

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Speaker 3: I'm gonna have to check out Lark and Poe. I'm

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Speaker 3: looking them up now. It looks really good.

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Speaker 2: It looks like the kind of thing that I would like.

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Speaker 2: I want to go back.

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Speaker 3: We're talking about technological impacts on macro, and someone's going

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Speaker 3: to get really mad. I've defended the fact the sort

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Speaker 3: of famous infamous internet fax machine comment on the sort

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Speaker 3: that you made, because it doesn't seem like one percent

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Speaker 3: growth even over ten years, is really changes the economy

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Speaker 3: like that much or as much as you would think,

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Speaker 3: given there's sort of like huge upheaval that we've seen

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Speaker 3: that the Internet caused. Like, is there any way to

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Speaker 3: sort of know early on or in real time what

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Speaker 3: a technology is going to do to the economy or

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Speaker 3: is it the only kind of thing where you can

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Speaker 3: say afterwards?

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Speaker 2: This seems to be what happened here.

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Speaker 4: Okay. What people don't know, by the way, is that

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Speaker 4: comment about the Internet and the fax machine was in

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Speaker 4: the context of a piece that was meant to be funny.

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Speaker 3: I've taken a lot of flak on Twitter, Paul, and

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Speaker 3: now I'm discovering that I was defending.

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Speaker 4: No. I think it is actually defensible, and I will

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Speaker 4: agree with you on that. But what was actually happening

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Speaker 4: was that was a piece where before I worked for

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Speaker 4: The Times, so I was asked to write a piece

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Speaker 4: looking back from one hundred years in the future at

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Speaker 4: what had happened, and so I wrote that, you know

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Speaker 4: a bunch of things, and many of them were deliberately counterintuitive,

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Speaker 4: some of which have turned out to be true, and

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Speaker 4: some whatnot that they if you want it. The piece

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Speaker 4: ends by saying that my day job is working at

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Speaker 4: a vernet at a veterinarian, but I'm hoping that this

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Speaker 4: piece will get me on the lecture circuit. But the

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Speaker 4: other point was, in fact, if you're looking for the

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Speaker 4: transformative economic effects of the Internet, they are pretty elusive

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Speaker 4: in the data. Actually, take a even more extreme example,

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Speaker 4: the smartphones. The iPhone is introduced, I think in two

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Speaker 4: thousand and six, and if you look at the official

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Speaker 4: productivity numbers, the period since two thousand and six has

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Speaker 4: been lousy for productivity. It's been a long productivity drought.

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Speaker 4: The boom and productivity such as it was the boom

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Speaker 4: let was between about ninety five and two thousand and five,

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Speaker 4: which is more much more the fax machine era than

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Speaker 4: the Internet era.

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Speaker 1: Okay, I have a really basic question, which is, if

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Speaker 1: you get a brand new, world changing technology like the

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Speaker 1: Internet or say a room temperature superconductor, would that count

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Speaker 1: as like an exogenous shock or an indigenous.

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Speaker 4: I mean, at some level everything's in dodgeness, right, At

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Speaker 4: some level it's all quantum mechanics. But in terms of

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Speaker 4: being something that look that the long sweep of technological

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Speaker 4: progress that begins in about two centuries ago or a

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Speaker 4: bit more, that's clearly endogenous. Given that we had whatever

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Speaker 4: it was, the change in mindset, the change in the

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Speaker 4: way that people behave that caused the Industrial Revolution and

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Speaker 4: everything that followed, then of course there were going to

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Speaker 4: be a lot of explorations of new possibilities, lots of

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Speaker 4: new technologies. Any individual technology is there's a strong element

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Speaker 4: of we stumbled on something, and so when you stumble

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Speaker 4: on something that actually has big economic implication, that's even

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Speaker 4: more fortuitous. It's really not predictable in advance. Either way.

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Speaker 4: You can have something like I think many people would

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Speaker 4: have expected to see a much bigger visible impact on

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Speaker 4: the economy from smartphones than we appear to have seen.

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Speaker 4: But on the other hand, who would have thought that

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Speaker 4: shipping containers would matter as much as they have turned

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Speaker 4: out to for the global economy. So it's really in

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Speaker 4: the sense of being really hard to have predicted either

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Speaker 4: that the innovation would happen or that it would matter

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Speaker 4: a lot. Yeah, it's it's exogennous for all practical purposes.

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Speaker 3: You know, it's really important that we use the same

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Speaker 3: gauge and size shipping containers as they do in China.

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Speaker 3: I wonder how we would even coordinate that with another planet.

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Speaker 3: They might have like a totally different size shipping container

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Speaker 3: at their ports. That could be a very difficult container trouble.

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Speaker 4: And the trouble is that if they're forty years light

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Speaker 4: years away, the negotiations to establish the common standard a

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Speaker 4: couple of.

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Speaker 3: Millennias, That's what I was thinking, right, Like, it's hard

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Speaker 3: enough to come up with common standards here on Earth.

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Speaker 3: I want to pivot. I want to ask you about

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Speaker 3: AI actually, and I'm curious like people, you know, every

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Speaker 3: technology has its things like oh, people worry about which

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Speaker 3: jobs are gonna get disrupted and so forth, And then

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Speaker 3: with AI, it feels like there's like deeper angst that

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Speaker 3: many people have because it can think and it can write.

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Speaker 3: And I've expressed my own anxiety like, well, will I

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Speaker 3: be out of a job in a few years? Is

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Speaker 3: someone who like does words on the internet for a living,

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Speaker 3: because chat GPT is pretty good at doing words? Like

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Speaker 3: does it feel different to you in some way in

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Speaker 3: terms of or is it? Yeah, we have technically you know,

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Speaker 3: we are always getting better at things and it's sort

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Speaker 3: of part of a continuous process of technological gain.

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Speaker 4: Well, this looks like it. Maybe there are things that

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Speaker 4: are kind of narrow gauge technologies that affect a very

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Speaker 4: particular sector, but not that many peopleeople this stuff. Although

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Speaker 4: we're what we're calling AI isn't really arguably, but the

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Speaker 4: stuff we're calling AI anyway does look like it's going

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Speaker 4: to affect a lot of activities. The pessimists say, or

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Speaker 4: the skeptics say, look, it's not really thinking. It's not

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Speaker 4: creative or original. It's just sort of processing what other

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Speaker 4: people say, and it's just basically super enhanced autocorrect, which

436
00:24:32,320 --> 00:24:36,000
Speaker 4: is all kind of true. But then, how many people

437
00:24:36,000 --> 00:24:39,240
Speaker 4: out there in the real world are in fact being creative?

438
00:24:39,320 --> 00:24:41,159
Speaker 4: How much of the work that we pay people a

439
00:24:41,160 --> 00:24:43,760
Speaker 4: lot of money to do is in fact a lot

440
00:24:43,960 --> 00:24:47,159
Speaker 4: like super expanded or correct? And I think the answer

441
00:24:47,240 --> 00:24:50,600
Speaker 4: is quite a lot. So this is potentially a really

442
00:24:50,600 --> 00:24:52,920
Speaker 4: big thing, and it could displace a lot of jobs.

443
00:24:52,920 --> 00:24:56,520
Speaker 4: And interestingly, it's the jobs that it might displace are

444
00:24:56,600 --> 00:24:59,160
Speaker 4: going to be ones that are kind of high prestige,

445
00:24:59,240 --> 00:25:02,639
Speaker 4: high education. We're a very very long way, as far

446
00:25:02,640 --> 00:25:06,120
Speaker 4: as I can tell, from being able to have robot plumbers,

447
00:25:06,320 --> 00:25:09,240
Speaker 4: but we may be very quite quite close, in fact,

448
00:25:09,240 --> 00:25:13,640
Speaker 4: may already be there to having robot journalists. So yeah,

449
00:25:14,200 --> 00:25:15,000
Speaker 4: this is serious.

450
00:25:15,520 --> 00:25:19,359
Speaker 1: So you obviously talk and write about economic policy quite

451
00:25:19,400 --> 00:25:22,560
Speaker 1: a lot from that perspective. What would be the best

452
00:25:22,640 --> 00:25:27,040
Speaker 1: way to handle AI if you're worried about society, if

453
00:25:27,040 --> 00:25:30,440
Speaker 1: you're worried about things like inequality, what would be the

454
00:25:30,520 --> 00:25:32,800
Speaker 1: best economic policies to put in place?

455
00:25:34,080 --> 00:25:36,760
Speaker 4: I don't think this one calls for a lot of

456
00:25:37,600 --> 00:25:42,320
Speaker 4: remedial policies other than simply having a strong social safety net.

457
00:25:42,440 --> 00:25:46,720
Speaker 4: It's too pervasive and too diffuse. I think you know

458
00:25:47,000 --> 00:25:50,600
Speaker 4: it's something when you have something like it's not technology,

459
00:25:50,680 --> 00:25:53,000
Speaker 4: but in some ways similar. You have something like the

460
00:25:54,800 --> 00:25:57,840
Speaker 4: China Shock, that period of about ten years where we

461
00:25:57,880 --> 00:26:01,440
Speaker 4: had a real surge of import from China. The thing

462
00:26:01,480 --> 00:26:04,679
Speaker 4: about that was actually a number of jobs displaced was

463
00:26:04,720 --> 00:26:09,199
Speaker 4: probably not was a million, between one and two million,

464
00:26:09,680 --> 00:26:14,679
Speaker 4: but they were very concentrated. There were just communities that

465
00:26:14,720 --> 00:26:18,960
Speaker 4: were effectively wiped out. And that's where the idea that

466
00:26:19,080 --> 00:26:23,920
Speaker 4: you probably should have had some kind of remedial policy

467
00:26:24,480 --> 00:26:29,280
Speaker 4: that tried to sustain or at least help these communities

468
00:26:29,320 --> 00:26:32,000
Speaker 4: adjust or help them downsize or something so that the

469
00:26:32,040 --> 00:26:34,800
Speaker 4: social impact would be less. That kind of made sense.

470
00:26:35,119 --> 00:26:36,520
Speaker 4: But now, if you have something that is going to

471
00:26:36,560 --> 00:26:41,239
Speaker 4: be wiping out certain kinds of white collar jobs, but

472
00:26:41,280 --> 00:26:44,280
Speaker 4: more or less evenly across the country, it's not going

473
00:26:44,359 --> 00:26:47,960
Speaker 4: to be doing any a whole lot more or less

474
00:26:47,960 --> 00:26:51,200
Speaker 4: in any particular region. It's not going to be affecting

475
00:26:51,240 --> 00:26:54,240
Speaker 4: any particular social group, except in the sense that it

476
00:26:54,280 --> 00:26:58,120
Speaker 4: may be devaluing certain kinds of higher education. I don't

477
00:26:58,119 --> 00:27:00,560
Speaker 4: think there's much you can do about that, just trying

478
00:27:00,560 --> 00:27:03,200
Speaker 4: to ban the technology altogether, which isn't going to work.

479
00:27:03,320 --> 00:27:06,440
Speaker 4: So I actually not sure that that, aside from the

480
00:27:06,480 --> 00:27:08,440
Speaker 4: fact that we should have a society where you don't

481
00:27:08,440 --> 00:27:11,479
Speaker 4: starve or go without medical care, if technology does have

482
00:27:11,560 --> 00:27:13,919
Speaker 4: to take your job, I'm not sure there's much more

483
00:27:13,960 --> 00:27:14,520
Speaker 4: you can do than that.

484
00:27:31,000 --> 00:27:33,959
Speaker 3: I'm going to break the pattern and actually kind of

485
00:27:33,960 --> 00:27:36,959
Speaker 3: asking a question that might be relevant to the current

486
00:27:37,119 --> 00:27:40,359
Speaker 3: economic data. But I was thinking about going back to

487
00:27:40,400 --> 00:27:43,679
Speaker 3: the nineties and the sort of productivity boom that we

488
00:27:43,760 --> 00:27:45,960
Speaker 3: saw in sort of the mid nineties and beyond. And

489
00:27:46,000 --> 00:27:49,440
Speaker 3: the other thing about that time, beyond just the sort

490
00:27:49,480 --> 00:27:52,080
Speaker 3: of advent of the Internet and a lot of information technologies,

491
00:27:52,119 --> 00:27:54,600
Speaker 3: is it was a strong economy. It was a robust

492
00:27:54,680 --> 00:27:57,720
Speaker 3: it was robust growth, It was robust employment growth. And

493
00:27:57,880 --> 00:28:03,159
Speaker 3: one theory that sometimes gets aired is that productivity is

494
00:28:03,320 --> 00:28:06,399
Speaker 3: downstream of robust growth and tight labor markets, and that

495
00:28:06,440 --> 00:28:09,600
Speaker 3: when there's tight labor markets that firms have to find

496
00:28:09,640 --> 00:28:12,560
Speaker 3: ways to implement new technologies because they can't just hire

497
00:28:12,600 --> 00:28:16,400
Speaker 3: someone cheaply. That forces the sort of like genuine productivity

498
00:28:16,400 --> 00:28:20,359
Speaker 3: gains technology to actually be incorporated. Of course, we have

499
00:28:20,520 --> 00:28:23,480
Speaker 3: very tight labor markets right now in the US. Like

500
00:28:24,160 --> 00:28:26,359
Speaker 3: how much credence do you buy that? I remember Jenny

501
00:28:26,400 --> 00:28:28,280
Speaker 3: Yellen giving a speech and I want to say, like

502
00:28:28,720 --> 00:28:31,840
Speaker 3: twenty fourteen, like the reverse history sists, and this idea

503
00:28:31,920 --> 00:28:34,479
Speaker 3: that like, if we run the economy hot for a while,

504
00:28:34,800 --> 00:28:36,720
Speaker 3: that it can really pay off in terms of these

505
00:28:36,720 --> 00:28:39,360
Speaker 3: productivity gains, and we might be getting a test of

506
00:28:39,400 --> 00:28:41,640
Speaker 3: that now, Like how compelling do you find that?

507
00:28:42,760 --> 00:28:47,480
Speaker 4: It's one of those things where I take it seriously

508
00:28:48,400 --> 00:28:51,600
Speaker 4: and have absolutely no idea whether it's true. There is

509
00:28:52,480 --> 00:28:55,640
Speaker 4: some case to be made that running of the economy

510
00:28:55,720 --> 00:28:59,640
Speaker 4: depressed These two losses that you basically differ make up

511
00:29:00,240 --> 00:29:03,680
Speaker 4: so that a weak economy for a sustained period of

512
00:29:03,680 --> 00:29:08,240
Speaker 4: time leads to lower productivity growth for many, many years thereafter.

513
00:29:08,520 --> 00:29:12,800
Speaker 4: And you can read some of the evidence from the

514
00:29:12,840 --> 00:29:15,880
Speaker 4: two thousand and eight financial crisis in aftermath to say that,

515
00:29:16,520 --> 00:29:20,760
Speaker 4: on the other hand, that isn't always true. The Great

516
00:29:20,800 --> 00:29:23,960
Speaker 4: Depression in the United States appears to have had zero

517
00:29:24,120 --> 00:29:28,120
Speaker 4: impact on all of that. If you look at the

518
00:29:28,160 --> 00:29:31,920
Speaker 4: economy in the late forties, it was just about where

519
00:29:32,000 --> 00:29:35,680
Speaker 4: extrapolating trends from nineteen twenty nine would have led you

520
00:29:35,720 --> 00:29:37,640
Speaker 4: to think it would Denail. It's true that we did

521
00:29:37,760 --> 00:29:41,160
Speaker 4: run a very very high pressure economy for four years

522
00:29:42,120 --> 00:29:44,160
Speaker 4: in nineteen forties, so maybe that was what.

523
00:29:44,360 --> 00:29:45,720
Speaker 2: Actually the original.

524
00:29:47,480 --> 00:29:49,560
Speaker 4: Yeah, I'm not sure if readers will know about that,

525
00:29:49,560 --> 00:29:52,520
Speaker 4: but yeah, the frying pan charts that I've been promoting through.

526
00:29:52,960 --> 00:29:56,840
Speaker 4: But productivities did pretty well even during the thirties, even

527
00:29:56,880 --> 00:30:01,000
Speaker 4: with the very depressed economy. It's possible right now, Denice

528
00:30:01,040 --> 00:30:05,720
Speaker 4: to believe that by running a genuinely full employment economy,

529
00:30:05,800 --> 00:30:09,400
Speaker 4: arguably for the first time since the late Clinton years,

530
00:30:09,440 --> 00:30:12,320
Speaker 4: that we are setting the stage for an era of

531
00:30:12,360 --> 00:30:16,080
Speaker 4: good productivity growth. But I don't know that, and I

532
00:30:16,160 --> 00:30:18,400
Speaker 4: think I can make a firm prediction is that we

533
00:30:18,440 --> 00:30:21,120
Speaker 4: will never know that we were even though, you know,

534
00:30:21,160 --> 00:30:24,680
Speaker 4: looking back ten years from now, if productivity growth was high,

535
00:30:25,520 --> 00:30:29,520
Speaker 4: we won't know whether that was because finally we got

536
00:30:29,840 --> 00:30:33,960
Speaker 4: sufficiently expanised very macro policy or because we just happened

537
00:30:34,000 --> 00:30:38,040
Speaker 4: to luck into getting usable AI for the first time.

538
00:30:38,240 --> 00:30:38,880
Speaker 2: Yeah, Tracy.

539
00:30:38,960 --> 00:30:41,600
Speaker 3: If there's one thing I feel like I've learned from

540
00:30:41,800 --> 00:30:44,480
Speaker 3: you know, sort of covering economics over the last fifteen

541
00:30:44,520 --> 00:30:47,240
Speaker 3: years or whatever, is that debates never actually get resolved.

542
00:30:47,600 --> 00:30:49,480
Speaker 3: It's you can have all the data and then there's

543
00:30:49,480 --> 00:30:50,840
Speaker 3: just two people tell a different story.

544
00:30:51,000 --> 00:30:52,960
Speaker 1: Yeah, no, that is very that's the same.

545
00:30:52,720 --> 00:30:57,000
Speaker 4: Two people selling the same two different stories decade after decade.

546
00:30:57,040 --> 00:30:59,560
Speaker 4: That's what really drives me crazy. It's always the same

547
00:30:59,560 --> 00:31:03,520
Speaker 4: people on the same side. Whatever the data are, it

548
00:31:03,560 --> 00:31:05,520
Speaker 4: doesn't actually speak too well for my profession.

549
00:31:05,840 --> 00:31:08,240
Speaker 1: Wait, since Joe asked a question that brought us back

550
00:31:08,280 --> 00:31:11,520
Speaker 1: to more modern times and more relevant themes, I want

551
00:31:11,520 --> 00:31:14,720
Speaker 1: to ask one too, which is would an alien invasion

552
00:31:14,800 --> 00:31:18,960
Speaker 1: be deflationary or inflationary? Very serious question.

553
00:31:20,600 --> 00:31:23,200
Speaker 4: I think that we can say pretty almost surely with

554
00:31:23,280 --> 00:31:28,160
Speaker 4: the inflationary wars almost always are an uncontested alien invasion.

555
00:31:28,320 --> 00:31:30,680
Speaker 4: I guess it kind of depends on how they run

556
00:31:30,720 --> 00:31:37,360
Speaker 4: the occupation. But actual wars have been in are always inflationary.

557
00:31:37,440 --> 00:31:39,800
Speaker 4: I can't think of one that wasn't They always involved

558
00:31:40,280 --> 00:31:44,200
Speaker 4: big government spending. Actually, they always involve a collision between

559
00:31:44,280 --> 00:31:49,840
Speaker 4: large spending and at least temporarily reduced productive capacity. So yeah,

560
00:31:49,920 --> 00:31:54,920
Speaker 4: you may recall that back when I was desperately leading

561
00:31:55,400 --> 00:31:59,360
Speaker 4: for more fiscal stimulus. Oh that's right, Yes, I said

562
00:31:59,360 --> 00:32:01,560
Speaker 4: that the government should lie and claim that we were

563
00:32:01,600 --> 00:32:05,120
Speaker 4: facing an imminent alien invasion and that in order to

564
00:32:05,280 --> 00:32:08,680
Speaker 4: fight that imminent alien evasion, what we needed was better infrastructure.

565
00:32:09,000 --> 00:32:13,640
Speaker 4: So a big public infrastructure platform. Two, because things that

566
00:32:13,680 --> 00:32:16,440
Speaker 4: people would never agree to simply in order to make

567
00:32:16,440 --> 00:32:19,240
Speaker 4: people's lives that are, they will agree to it in

568
00:32:19,360 --> 00:32:20,600
Speaker 4: order to fight invasion.

569
00:32:20,920 --> 00:32:23,560
Speaker 3: It is interesting the degree, and you definitely see this

570
00:32:23,600 --> 00:32:26,200
Speaker 3: over the last couple of years, the degree to which

571
00:32:26,240 --> 00:32:30,440
Speaker 3: big public investment programs seem to go down easier politically

572
00:32:30,760 --> 00:32:33,800
Speaker 3: if it can be couched in the language of geopolitical conflict.

573
00:32:34,000 --> 00:32:37,040
Speaker 3: And so even like say, like some of the decarbonization

574
00:32:37,120 --> 00:32:39,320
Speaker 3: efforts in the US, the IRA, a lot of it

575
00:32:39,360 --> 00:32:43,600
Speaker 3: is almost either implicitly or explicitly oh because China is

576
00:32:43,600 --> 00:32:46,840
Speaker 3: doing this too, and suddenly that that brings out the

577
00:32:46,880 --> 00:32:47,560
Speaker 3: votes a bit more.

578
00:32:48,360 --> 00:32:52,960
Speaker 4: Well, yeah, I mean we have two big public infrastructure programs,

579
00:32:53,080 --> 00:32:55,440
Speaker 4: well three. We have one which is the straight infrastructure,

580
00:32:55,480 --> 00:32:57,920
Speaker 4: but that was to some extent said well, you know,

581
00:32:57,960 --> 00:33:01,680
Speaker 4: we're falling behind and China need to do something. Then

582
00:33:01,720 --> 00:33:07,000
Speaker 4: we have the Chips Act, which is explicitly about countering China.

583
00:33:07,080 --> 00:33:09,680
Speaker 4: And then yeah, some of the IRA stuff has been

584
00:33:09,720 --> 00:33:13,600
Speaker 4: sold as being a national security concern as well. So

585
00:33:13,640 --> 00:33:17,760
Speaker 4: sure it's crazy, but yeah, in order to provide people

586
00:33:17,800 --> 00:33:22,120
Speaker 4: with just a better economy and a better life, you

587
00:33:22,240 --> 00:33:25,400
Speaker 4: generally can't get that past the depths that's golds unless

588
00:33:25,440 --> 00:33:29,520
Speaker 4: it's in the interest of fighting evil outsiders.

589
00:33:31,480 --> 00:33:33,120
Speaker 2: I want to ask another AI question.

590
00:33:33,160 --> 00:33:35,080
Speaker 3: I mean, I know you say, like, okay, there's not

591
00:33:35,160 --> 00:33:39,000
Speaker 3: some obvious like medial policy, but it is interesting that

592
00:33:39,000 --> 00:33:42,320
Speaker 3: there is this possibility that it disrupts a lot of

593
00:33:42,840 --> 00:33:46,440
Speaker 3: currently like high status jobs, people with a high level

594
00:33:46,440 --> 00:33:50,080
Speaker 3: of education, white color work, et cetera, which I guess

595
00:33:50,080 --> 00:33:54,920
Speaker 3: in people's minds feels different than like a loom on

596
00:33:55,040 --> 00:33:56,880
Speaker 3: you know, a shop floor or something like that, which

597
00:33:56,880 --> 00:33:59,840
Speaker 3: people think, well, this is different in some way. Historically,

598
00:34:00,880 --> 00:34:03,400
Speaker 3: other examples that feel similar were like, no, this really

599
00:34:03,400 --> 00:34:06,440
Speaker 3: disrupted something that at the time was seen as like

600
00:34:06,880 --> 00:34:08,680
Speaker 3: very high status prestige work.

601
00:34:09,920 --> 00:34:13,239
Speaker 4: Well really high status prestige work, I'm not sure, but

602
00:34:13,600 --> 00:34:16,759
Speaker 4: relatively high. I mean people we talk about the Bloodes,

603
00:34:17,360 --> 00:34:21,239
Speaker 4: the Bludyes were not the poorest, least skilled workers. The

604
00:34:21,239 --> 00:34:26,400
Speaker 4: blood Ice were skilled weavers who were actually relatively high waves.

605
00:34:26,400 --> 00:34:29,480
Speaker 4: What had happened was that the factory production of yarn

606
00:34:30,160 --> 00:34:32,880
Speaker 4: had created an abundance of yarn, but the weaving was

607
00:34:32,920 --> 00:34:36,760
Speaker 4: still being done by highly skilled manual workers. Manual workers

608
00:34:36,760 --> 00:34:40,080
Speaker 4: but high high skill. And then along came the power loom,

609
00:34:40,120 --> 00:34:44,759
Speaker 4: and suddenly the relatively high wage workers found their jobs disappearing,

610
00:34:44,800 --> 00:34:48,080
Speaker 4: and that they were the ones who went out and rioted.

611
00:34:48,320 --> 00:34:53,000
Speaker 4: So it's simply not the case that technology is always

612
00:34:53,719 --> 00:34:57,120
Speaker 4: going to favor the higher wage people at the expensive

613
00:34:57,239 --> 00:35:00,200
Speaker 4: lower wage people. And yeah, there's probably a lot of

614
00:35:00,280 --> 00:35:03,799
Speaker 4: quiet stuff in there that this has probably been going

615
00:35:03,840 --> 00:35:06,160
Speaker 4: on to some extent. One of the things that about

616
00:35:06,320 --> 00:35:09,719
Speaker 4: US inequality is that there was a time when people said, oh,

617
00:35:09,719 --> 00:35:13,600
Speaker 4: it's all about education differentials, but the college wage premium

618
00:35:13,600 --> 00:35:17,920
Speaker 4: hasn't really gone up for a long time now. But

619
00:35:17,960 --> 00:35:21,160
Speaker 4: it's also true that a lot of information processing that

620
00:35:21,320 --> 00:35:24,480
Speaker 4: used to require human being either doesn't or can be

621
00:35:24,560 --> 00:35:28,680
Speaker 4: done by fewer human beings because machine assistance helps.

622
00:35:29,320 --> 00:35:31,560
Speaker 1: On the topic of inequality, it does feel like there

623
00:35:31,600 --> 00:35:35,560
Speaker 1: is this pervasive sense that the US economy is doing

624
00:35:36,000 --> 00:35:40,560
Speaker 1: worse in many ways for a large chunk of the population,

625
00:35:40,719 --> 00:35:43,600
Speaker 1: despite everything that we've seen in some of the hard

626
00:35:43,640 --> 00:35:47,200
Speaker 1: data recently, and a lot more discourse about the possibility

627
00:35:47,239 --> 00:35:49,440
Speaker 1: of a soft landing, But what do you think is

628
00:35:49,560 --> 00:35:53,759
Speaker 1: driving that dissatisfaction? And then secondly, you know, how do

629
00:35:53,840 --> 00:35:57,560
Speaker 1: you go about I guess like messaging that the economy

630
00:35:57,760 --> 00:36:01,680
Speaker 1: isn't that bad to the general population so that aliens

631
00:36:01,680 --> 00:36:03,960
Speaker 1: don't feel the need to invade the planet to make

632
00:36:04,040 --> 00:36:05,720
Speaker 1: us all feel better or worse.

633
00:36:05,920 --> 00:36:10,040
Speaker 4: Yeah, it's now it's an interesting question. I mean, if

634
00:36:10,040 --> 00:36:15,520
Speaker 4: you actually are asking about inequality, have recent events hurt

635
00:36:16,040 --> 00:36:20,240
Speaker 4: lower income people more in the higher income That's actually

636
00:36:20,280 --> 00:36:23,800
Speaker 4: not what the data says. If anything. On the contrary,

637
00:36:23,800 --> 00:36:29,200
Speaker 4: what we've seen is is a surprisingly fast narrowing of

638
00:36:29,239 --> 00:36:32,000
Speaker 4: wage gaps. The people at the bottom of the wage

639
00:36:32,000 --> 00:36:35,000
Speaker 4: distribution have done a lot better than the average. You know,

640
00:36:35,040 --> 00:36:38,040
Speaker 4: Aaron Doubay has been doing writing about this. The unexpected

641
00:36:38,080 --> 00:36:41,720
Speaker 4: compression of wage inequality has taken place in the last

642
00:36:41,880 --> 00:36:46,080
Speaker 4: couple of years. So that's not really the story of

643
00:36:46,120 --> 00:36:51,359
Speaker 4: why people are feeling dissatisfied. If I had to try

644
00:36:51,400 --> 00:36:53,719
Speaker 4: to say why people are dissatisfied, what if it is

645
00:36:53,760 --> 00:36:59,839
Speaker 4: that Look, the return of inflation after a generation when

646
00:37:00,080 --> 00:37:02,600
Speaker 4: people just didn't think about it. That was a big

647
00:37:02,640 --> 00:37:07,160
Speaker 4: shock and people are going to take some time to

648
00:37:07,280 --> 00:37:10,480
Speaker 4: recover from it. Then actually I think it's more than

649
00:37:10,480 --> 00:37:13,400
Speaker 4: two things. I'm going to turn Monty Python routine amongst

650
00:37:13,840 --> 00:37:18,839
Speaker 4: the reasons, but then various partisan shit. It's just astonishing

651
00:37:18,920 --> 00:37:22,080
Speaker 4: if you look at the surveys how much it's true

652
00:37:22,120 --> 00:37:24,879
Speaker 4: for both parties, although it's even more extreme for Republicans.

653
00:37:24,960 --> 00:37:28,160
Speaker 4: But an economy that was really great as long as

654
00:37:28,200 --> 00:37:32,239
Speaker 4: Trump was in the White House suddenly becomes terrible, even

655
00:37:32,280 --> 00:37:34,680
Speaker 4: though it's the same economy with a Democrat in the

656
00:37:34,719 --> 00:37:40,240
Speaker 4: white House. But then perceptions are shaped by narratives. There's

657
00:37:40,280 --> 00:37:43,560
Speaker 4: just lots and lots of surveys now which you ask people,

658
00:37:43,800 --> 00:37:46,719
Speaker 4: how are you doing, and they say fine, and how's

659
00:37:46,760 --> 00:37:52,080
Speaker 4: the economy doing, Oh, it's terrible, which is this is

660
00:37:52,320 --> 00:37:56,120
Speaker 4: relatively new in economics, but in other areas we know,

661
00:37:56,480 --> 00:37:58,800
Speaker 4: we see that all the time. I look at crime,

662
00:38:00,040 --> 00:38:04,560
Speaker 4: and an epic decline in crime between about nineteen ninety

663
00:38:04,800 --> 00:38:09,520
Speaker 4: and the mid twenty tens really astonishing, and we have

664
00:38:09,680 --> 00:38:12,080
Speaker 4: still basically have no idea why it happened. But for

665
00:38:12,120 --> 00:38:15,960
Speaker 4: some reason America became a much safer place and all

666
00:38:16,000 --> 00:38:20,320
Speaker 4: through that surveys. If you ask for people what's happening

667
00:38:20,320 --> 00:38:23,719
Speaker 4: to crime, they said it's increasing, Although if you ask them,

668
00:38:23,920 --> 00:38:27,280
Speaker 4: How how do you feel about your neighborhood or your town?

669
00:38:27,960 --> 00:38:31,080
Speaker 4: They were much more favorable. So there's we've got some

670
00:38:31,160 --> 00:38:34,240
Speaker 4: kind of psychology where a lot of people now believe

671
00:38:34,360 --> 00:38:38,560
Speaker 4: that really bad things are happening to somebody else, somebody

672
00:38:38,600 --> 00:38:39,160
Speaker 4: I don't know.

673
00:38:40,200 --> 00:38:42,520
Speaker 3: I hope the media isn't culpable for any of that,

674
00:38:42,760 --> 00:38:45,640
Speaker 3: you know, just going back to your point about how

675
00:38:45,800 --> 00:38:49,360
Speaker 3: things like AI or things that may have compressed education

676
00:38:49,600 --> 00:38:52,520
Speaker 3: labor is like, it's not really that new of a story.

677
00:38:52,840 --> 00:38:55,919
Speaker 3: Germo Ruddy T Domingos, who has been on the show,

678
00:38:56,080 --> 00:38:59,080
Speaker 3: He always likes pointing out that the word computer used

679
00:38:59,080 --> 00:39:01,440
Speaker 3: to refer to a profession that like, there used to

680
00:39:01,520 --> 00:39:05,600
Speaker 3: be like people who's type whose occupation was.

681
00:39:05,920 --> 00:39:08,799
Speaker 1: Computer, human Excel spreadsheets.

682
00:39:08,320 --> 00:39:13,600
Speaker 4: Human Excel Spreadsheeah Richard Fireman, Richard Fiman ran the computers

683
00:39:14,000 --> 00:39:17,960
Speaker 4: at Los Alamos. You've just seen Oppenheimer and the Fireman,

684
00:39:18,040 --> 00:39:21,160
Speaker 4: and actually what is clearly Fireman appears there playing the

685
00:39:21,160 --> 00:39:24,480
Speaker 4: bongos but is not a speaking character. But he ran

686
00:39:24,520 --> 00:39:27,520
Speaker 4: the computer section at Los Alamos, which was a bunch

687
00:39:27,520 --> 00:39:31,160
Speaker 4: of women. How we're actually computing, right?

688
00:39:32,040 --> 00:39:32,760
Speaker 2: Can I ask?

689
00:39:32,920 --> 00:39:35,400
Speaker 3: We sort of glossed over this within the context of

690
00:39:35,440 --> 00:39:39,960
Speaker 3: alien technology, but are you paying attention to the superconductor stuff?

691
00:39:39,960 --> 00:39:42,440
Speaker 3: Like and you know you're really plugged in your online

692
00:39:42,440 --> 00:39:45,520
Speaker 3: You're probably is like online and on Twitter as much

693
00:39:45,560 --> 00:39:48,440
Speaker 3: as me and Tracy is. And you see these videos

694
00:39:48,440 --> 00:39:51,040
Speaker 3: of like a magnet flapping and people are like, oh

695
00:39:51,040 --> 00:39:53,359
Speaker 3: my god, this is like the Holy Grail, Like, how

696
00:39:53,400 --> 00:39:55,640
Speaker 3: do you This is like a question I've been asking everyone, like,

697
00:39:55,680 --> 00:39:59,480
Speaker 3: how do you, as a sort of intelligent, plugged in

698
00:39:59,600 --> 00:40:02,440
Speaker 3: person and try to process what's going on when you

699
00:40:02,480 --> 00:40:04,120
Speaker 3: see things like this happening in the world.

700
00:40:05,000 --> 00:40:09,480
Speaker 4: This one is really hard. I mean, I am extremely online. Actually,

701
00:40:09,520 --> 00:40:12,239
Speaker 4: I hate when when my phone tells me how much

702
00:40:12,239 --> 00:40:15,000
Speaker 4: screen time I've had each day. I often feel that

703
00:40:15,040 --> 00:40:18,680
Speaker 4: I can go online and get reasonably reliable assessments of

704
00:40:18,800 --> 00:40:22,160
Speaker 4: stuff in areas of which I personally know nothing, because

705
00:40:22,200 --> 00:40:25,480
Speaker 4: I kind of think that I do know enough to

706
00:40:26,120 --> 00:40:28,879
Speaker 4: recognize people who have some idea what they're talking about.

707
00:40:29,239 --> 00:40:32,160
Speaker 4: I know what actual research sounds like. This is one

708
00:40:32,200 --> 00:40:35,719
Speaker 4: of those areas where I can't make it out. It

709
00:40:36,440 --> 00:40:40,799
Speaker 4: sounds like there are reasonable people on both sides. There's

710
00:40:40,840 --> 00:40:47,239
Speaker 4: no obvious motivated reasoning driving this, and I'm kind of

711
00:40:47,280 --> 00:40:50,719
Speaker 4: just saying I have no idea, and not only am

712
00:40:50,760 --> 00:40:53,799
Speaker 4: I not entitled to an independent opinion, I don't know

713
00:40:53,840 --> 00:40:55,000
Speaker 4: whose opinion to trust.

714
00:40:56,719 --> 00:40:59,600
Speaker 1: I just have one more sort of theoretical question, getting

715
00:40:59,600 --> 00:41:03,080
Speaker 1: back to the beginning of this conversation and science fiction,

716
00:41:03,320 --> 00:41:07,280
Speaker 1: But what's your favorite economic system in science fiction?

717
00:41:07,440 --> 00:41:08,600
Speaker 2: If you had to choose.

718
00:41:08,320 --> 00:41:15,680
Speaker 4: This, Oh, well, that's interesting. Most science fiction either doesn't

719
00:41:15,719 --> 00:41:20,400
Speaker 4: specify or kind of assumes that it's not very different

720
00:41:20,400 --> 00:41:22,880
Speaker 4: from what we have now, So there are very few

721
00:41:23,320 --> 00:41:26,520
Speaker 4: sort of furious alternatives. If you look at the start

722
00:41:27,160 --> 00:41:32,719
Speaker 4: Trek universe, that appears to be nobody says it, but

723
00:41:32,800 --> 00:41:37,360
Speaker 4: it actually appears to be sort of idealized Marxian socialism.

724
00:41:37,640 --> 00:41:40,279
Speaker 3: Right, that's the one that you always see. I've heard

725
00:41:40,320 --> 00:41:43,360
Speaker 3: that before, that that's like the literally live.

726
00:41:43,320 --> 00:41:49,640
Speaker 4: Long and well, actually that's actually the opposite. The America

727
00:41:49,880 --> 00:41:52,759
Speaker 4: is the country where we we prosper and die and

728
00:41:52,800 --> 00:41:53,960
Speaker 4: die early, but.

729
00:41:56,719 --> 00:41:57,760
Speaker 2: Live short and prosper.

730
00:41:58,600 --> 00:42:02,319
Speaker 4: Yeah, but if we know the replicator, you just say

731
00:42:02,719 --> 00:42:06,080
Speaker 4: tea earl Gray hot and there it is. And supposedly

732
00:42:06,120 --> 00:42:09,520
Speaker 4: it's an economy of total abundance. Although you know, I'm

733
00:42:09,560 --> 00:42:13,000
Speaker 4: occasionally attempted to yell at the screen, but services are

734
00:42:13,000 --> 00:42:16,320
Speaker 4: most of the economy, and replicators can't do that, although

735
00:42:16,320 --> 00:42:19,520
Speaker 4: I guess androids can. But other than that, it's really

736
00:42:19,600 --> 00:42:24,319
Speaker 4: hard to see very much. People are not very original

737
00:42:25,560 --> 00:42:28,640
Speaker 4: in trying to think about economic systems. There is a

738
00:42:28,680 --> 00:42:32,520
Speaker 4: real paucity of ideas for something different. I mean, we've

739
00:42:32,560 --> 00:42:38,439
Speaker 4: seen there's are little sort of central planning fantasies out

740
00:42:38,480 --> 00:42:42,439
Speaker 4: there in economics. There are some people who try to

741
00:42:42,480 --> 00:42:45,879
Speaker 4: invent or some kind of system of points or so on,

742
00:42:46,120 --> 00:42:48,400
Speaker 4: But what they don't seem to realize is that what

743
00:42:48,719 --> 00:42:52,839
Speaker 4: they're actually doing is reinventing capitalism. Other than that, I

744
00:42:52,880 --> 00:42:57,680
Speaker 4: haven't seen a whole lot of interesting speculation. It's possible

745
00:42:57,719 --> 00:43:00,560
Speaker 4: that we've already explored all the possibilities there are, but

746
00:43:00,760 --> 00:43:03,359
Speaker 4: I don't know. It's really the one thing I had

747
00:43:03,520 --> 00:43:07,320
Speaker 4: to see is a fair bit of sort of fairly

748
00:43:08,040 --> 00:43:12,120
Speaker 4: thoughtful science fiction just kind of assumes that the future,

749
00:43:12,960 --> 00:43:16,400
Speaker 4: that future societies have a kind of a Scandinavian welfare state,

750
00:43:17,080 --> 00:43:20,200
Speaker 4: that whatever else there is, there's always basic income to

751
00:43:20,320 --> 00:43:24,320
Speaker 4: fall back on. And actually, if too much too much information,

752
00:43:24,400 --> 00:43:28,080
Speaker 4: but the expanse if you watch that science fiction series,

753
00:43:28,120 --> 00:43:30,640
Speaker 4: which was one of those things where the TV I

754
00:43:30,640 --> 00:43:33,880
Speaker 4: think was better than the novels. But anyway, the Earth's

755
00:43:34,040 --> 00:43:37,960
Speaker 4: economy and the expanse appears to be a kind of

756
00:43:38,040 --> 00:43:42,360
Speaker 4: a UBI society, except that it sounds like what everybody

757
00:43:42,400 --> 00:43:44,560
Speaker 4: receives if they're not employed, and they apparently they have

758
00:43:44,600 --> 00:43:47,319
Speaker 4: mass numbers of people who just have no jobs. But

759
00:43:47,400 --> 00:43:49,440
Speaker 4: what they did, what they get is they get the

760
00:43:49,520 --> 00:43:52,880
Speaker 4: basics to survive in kind rather than in cash. So

761
00:43:53,600 --> 00:43:57,319
Speaker 4: that's a few but it's not a utopia. It's kind

762
00:43:57,320 --> 00:44:01,279
Speaker 4: of portrayed as being kind of grim, but that's kind

763
00:44:01,320 --> 00:44:07,960
Speaker 4: of where if you look for real, seriously alternative economic systems,

764
00:44:08,239 --> 00:44:10,320
Speaker 4: I can't think of one in any of the science

765
00:44:10,360 --> 00:44:11,000
Speaker 4: fiction I've read.

766
00:44:12,360 --> 00:44:15,120
Speaker 3: Paul Krugman is so great to finally have you on

767
00:44:15,160 --> 00:44:17,560
Speaker 3: Odd Lots, and it was so great to talk about

768
00:44:17,680 --> 00:44:20,000
Speaker 3: things that are not just the sort of day to

769
00:44:20,080 --> 00:44:21,960
Speaker 3: day what's the Fed going to do next week? So

770
00:44:22,280 --> 00:44:24,239
Speaker 3: I really appreciate you coming on. That was a really

771
00:44:24,239 --> 00:44:25,840
Speaker 3: fun conversation, so much fun.

772
00:44:26,080 --> 00:44:29,320
Speaker 4: Okay, take care and yeah, that's great, great stock.

773
00:44:42,280 --> 00:44:43,760
Speaker 2: That was fun, Tracy.

774
00:44:44,920 --> 00:44:48,880
Speaker 1: I absolutely love it that Paul Krugman's first appearance on

775
00:44:48,920 --> 00:44:52,719
Speaker 1: this podcast is to talk about aliens. You can't be I.

776
00:44:52,680 --> 00:44:56,239
Speaker 3: Hadn't thought about the challenge that would pose, which is

777
00:44:56,280 --> 00:44:56,640
Speaker 3: at the.

778
00:44:56,640 --> 00:44:58,280
Speaker 1: Time the productivity statistics.

779
00:44:58,360 --> 00:45:00,960
Speaker 3: Yeah, or and the challenge that would pose of like

780
00:45:01,000 --> 00:45:04,960
Speaker 3: well the time, like the rate of interest for people

781
00:45:04,960 --> 00:45:07,439
Speaker 3: in normal time versus like the payment that people would

782
00:45:07,440 --> 00:45:09,759
Speaker 3: demand who are like on the ship itself moving at

783
00:45:09,760 --> 00:45:14,040
Speaker 3: a different time. Very interesting theoretical questions that to his point.

784
00:45:14,360 --> 00:45:16,239
Speaker 3: But I think that probably much of economics does not

785
00:45:16,320 --> 00:45:17,480
Speaker 3: have much practical application.

786
00:45:17,560 --> 00:45:19,240
Speaker 1: You know, it would blow your mind if you start

787
00:45:19,239 --> 00:45:22,800
Speaker 1: thinking what interstellar finance would actually look like, like currency

788
00:45:22,800 --> 00:45:25,960
Speaker 1: exchange markets and things like that, where you have spot

789
00:45:26,000 --> 00:45:27,479
Speaker 1: and forward markets and things.

790
00:45:27,560 --> 00:45:31,000
Speaker 3: Well, anyway, can I just say something, I Foundation for

791
00:45:31,120 --> 00:45:36,000
Speaker 3: Economic something fee dot org, which is Fundation for Economic Education,

792
00:45:36,120 --> 00:45:38,520
Speaker 3: which I think is like this sort of like libertarian

793
00:45:38,640 --> 00:45:41,920
Speaker 3: like pro capitalists, like think Tank, they have a they

794
00:45:41,960 --> 00:45:45,120
Speaker 3: have an article a Star Trek is not socialist, They're

795
00:45:45,400 --> 00:45:47,279
Speaker 3: really like because I did, that was one of the

796
00:45:47,320 --> 00:45:50,000
Speaker 3: first hit first things that came up, is Star Trek

797
00:45:50,080 --> 00:45:50,760
Speaker 3: really socialist?

798
00:45:50,840 --> 00:45:52,719
Speaker 2: Knows So some people push back on that.

799
00:45:53,280 --> 00:45:55,360
Speaker 1: I do think there clearly there's a gap in the

800
00:45:55,400 --> 00:45:58,600
Speaker 1: market for like a really well thought out piece of

801
00:45:58,600 --> 00:46:01,920
Speaker 1: science fiction that's like predic on a very specific and

802
00:46:01,960 --> 00:46:03,280
Speaker 1: creative economic system.

803
00:46:03,440 --> 00:46:06,480
Speaker 3: It's funny to think about like these sci fi writers like, oh,

804
00:46:06,480 --> 00:46:08,319
Speaker 3: it's gonna be a points and blows, like, bro, you

805
00:46:08,360 --> 00:46:10,760
Speaker 3: invented money, you reinvented the dollar.

806
00:46:10,920 --> 00:46:12,160
Speaker 2: Well done, well.

807
00:46:12,200 --> 00:46:14,080
Speaker 1: I mean it does also get back to you know.

808
00:46:14,600 --> 00:46:17,560
Speaker 1: Paul made the point that a lot of science fiction

809
00:46:18,280 --> 00:46:22,680
Speaker 1: seems to default to this idea of Knesyan abundance, right

810
00:46:22,760 --> 00:46:29,280
Speaker 1: like most scarcity, but if anything in twenty twenty three, like, yes,

811
00:46:29,400 --> 00:46:32,239
Speaker 1: there have been a lot of technological advances, but there

812
00:46:32,239 --> 00:46:36,839
Speaker 1: are serious concerns over basic resources and their availability and

813
00:46:36,880 --> 00:46:39,240
Speaker 1: how they're distributed and things like that.

814
00:46:39,200 --> 00:46:41,640
Speaker 3: And services because we have so much good AI, but

815
00:46:41,680 --> 00:46:43,879
Speaker 3: we don't have good robots, and so it's like when

816
00:46:43,880 --> 00:46:46,560
Speaker 3: we talk about like childcare, elder care, etc. It's like,

817
00:46:46,840 --> 00:46:48,680
Speaker 3: we really need these robots to come along, and we're

818
00:46:48,680 --> 00:46:49,880
Speaker 3: going to get that true abundance.

819
00:46:49,960 --> 00:46:51,760
Speaker 1: Hopefully the aliens bring the robots.

820
00:46:51,840 --> 00:46:54,840
Speaker 2: Yes, okay, please bring robots.

821
00:46:54,880 --> 00:46:55,640
Speaker 1: Shall we leave it there?

822
00:46:55,760 --> 00:46:56,919
Speaker 2: Let's leave it there all right?

823
00:46:57,200 --> 00:46:59,840
Speaker 1: This has been another episode of the Odd Thoughts podcast.

824
00:47:00,000 --> 00:47:02,399
Speaker 1: I'm Tracy Alloway. You can follow me on Twitter at

825
00:47:02,440 --> 00:47:03,720
Speaker 1: Tracy Alloway.

826
00:47:03,320 --> 00:47:05,800
Speaker 3: And I'm Joe Wisenthal. You can follow me on Twitter

827
00:47:05,840 --> 00:47:08,880
Speaker 3: at the Stalwart. Follow our guest Paul Krugman on Twitter

828
00:47:08,920 --> 00:47:12,719
Speaker 3: He's at Paul Krugman. Follow our producers Carmen Rodriguez at

829
00:47:12,760 --> 00:47:16,319
Speaker 3: Carmen Arman and Dashel Bennett at dashbot. And check out

830
00:47:16,320 --> 00:47:19,760
Speaker 3: all of our podcasts at Bloomberg under the handle at podcasts.

831
00:47:19,800 --> 00:47:21,600
Speaker 2: And for our Odlots content, go to.

832
00:47:21,600 --> 00:47:25,960
Speaker 3: Bloomberg dot com slash odlots, where we have transcripts, a blog,

833
00:47:26,000 --> 00:47:28,840
Speaker 3: and a newsletter. And if you want to chat about

834
00:47:28,880 --> 00:47:33,040
Speaker 3: like everything we talked about in here, from energy scarcity

835
00:47:33,040 --> 00:47:35,759
Speaker 3: and abundance to AI to other stuff, check out our

836
00:47:35,800 --> 00:47:38,080
Speaker 3: discord we'll channels for all this stuff. People are chatting

837
00:47:38,080 --> 00:47:41,480
Speaker 3: twenty four to seven Discord dot gg, slash od loots.

838
00:47:41,520 --> 00:47:42,200
Speaker 2: It's a lot of fun.

839
00:47:42,560 --> 00:47:45,520
Speaker 1: And if you enjoy odd Lots, if you like our

840
00:47:45,560 --> 00:47:49,960
Speaker 1: conversations about alien technology with Nobel Prize winners, then please

841
00:47:50,120 --> 00:47:53,719
Speaker 1: leave us a positive review on your favorite podcast platform.

842
00:47:53,760 --> 00:48:00,239
Speaker 1: Thanks for listening in

843
00:48:12,880 --> 00:48:12,960
Speaker 4: In