WEBVTT - 54: The Optimist's Guide to the Economy

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<v Speaker 1>So I'd like to see the U S and other

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<v Speaker 1>countries work towards shared prosperity. But I don't see it

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<v Speaker 1>as a contest between one country or another. I see

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<v Speaker 1>it as a contest between good policies and bad policies worldwide.

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<v Speaker 1>Hello and welcome back to the Bloomberg Benchmark Podcast. It's Thursday, September.

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<v Speaker 1>I'm Scott landman and economics editor at Bloomberg News in Washington,

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<v Speaker 1>and I'm Daniel Moss, Executive editor for Global Economics at

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<v Speaker 1>Bloomberg in New York. So, so, Dan, how did you

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<v Speaker 1>get to work today? Did you come in a driverless car?

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<v Speaker 1>I came to work, Scott, in a very drive of

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<v Speaker 1>full car. It was a green taxi that I hailed

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<v Speaker 1>close to my apartment in Brooklyn. I had to repeat

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<v Speaker 1>where I was going three times, including the part about

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<v Speaker 1>fifty eight. There's just something about the Aussi accent that

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<v Speaker 1>didn't gel well. I feel for you, Dan, I didn't

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<v Speaker 1>have a driverless car too. I still have my two

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<v Speaker 1>thousand Honda occurred getting getting me where I need to go.

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<v Speaker 1>So we're not quite there yet, but our next guest

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<v Speaker 1>might have something to say about the direction the technology

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<v Speaker 1>is going and how it's going to impact our society.

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<v Speaker 1>Two weeks ago, we had on Robert Gordon, the economics

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<v Speaker 1>professor at Northwestern who believes that the best days of

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<v Speaker 1>American growth are behind us because we've already had the

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<v Speaker 1>kinds of inventions that truly changed our world, like indoor

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<v Speaker 1>plumbing and electricity. And joining us now is Eric Brynjolfson,

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<v Speaker 1>who is a professor at Massachusetts Institute of Technology and

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<v Speaker 1>director of its Initiative on the Digital Economy, and co

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<v Speaker 1>author of the book The Second Machine Age Now. The

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<v Speaker 1>subtitle of that book sets it up as a counterpoint

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<v Speaker 1>of Professor gordon work progress and prosperity in a time

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<v Speaker 1>of brilliant technologies. The author is not under selling it.

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<v Speaker 1>We'll get to that in a second. Eric. Thank you

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<v Speaker 1>for joining us. It's great to be with both. Dannon's

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<v Speaker 1>got now. Eric, it's been three years since you debated

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<v Speaker 1>Gordon at a TED talk and we're still stuck in

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<v Speaker 1>this rut of weak productivity. America is having trouble breaking

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<v Speaker 1>out of this two percent growth, and more and more

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<v Speaker 1>economists seemed to be coming around to the view that

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<v Speaker 1>maybe we are in a low growth era, that maybe

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<v Speaker 1>Larry Summers has a point after he's harped on the

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<v Speaker 1>idea of secular stagnation for the last few years. Has

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<v Speaker 1>your optimism been dimmed at all by these kinds of developments?

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<v Speaker 1>Not really, And I'll tell you why. I mean. First,

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<v Speaker 1>I want to say that I very much enjoyed having

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<v Speaker 1>these discussions with Bob Gordon. We're friends going way back,

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<v Speaker 1>and UH, I loved his book. I thought it was brilliant.

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<v Speaker 1>I agree with about nine of it. The part we

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<v Speaker 1>disagree with, the part that people love to talk about,

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<v Speaker 1>which maybe is the most important part, is not what

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<v Speaker 1>happened in the past, but what's likely to happen in

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<v Speaker 1>the future. And UH, Bob takes some of the pessimism

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<v Speaker 1>of the of the recent past, the low productivity that

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<v Speaker 1>we've had in the past decade or so, and UH

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<v Speaker 1>uses it to bolsters argument that the best days are

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<v Speaker 1>behind us, and UH, as Larry Summers and others who

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<v Speaker 1>pointed out we have been in a low growth era

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<v Speaker 1>for some time. However, I think much better days are

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<v Speaker 1>ahead of us. And my optimism comes not from extrapolating

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<v Speaker 1>what happened with productivity recently. It comes from going out

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<v Speaker 1>and visiting companies UM in particular, I think we should

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<v Speaker 1>remember that this is not the first time people talked

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<v Speaker 1>about secular stagnation. The term was actually coined by Alvin

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<v Speaker 1>Hanson back in the nineteen thirties, another really bad period

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<v Speaker 1>for growth, and he basically said, as Bob Gordon says today,

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<v Speaker 1>that the great inventions were all behind us. People were depressed.

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<v Speaker 1>He pointed out that there wasn't more land that we

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<v Speaker 1>could take advantage of. Population growth was slowing and ran

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<v Speaker 1>through some great inventions that you know, had already been discovered,

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<v Speaker 1>and didn't think of any new ones ahead of us. Well,

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<v Speaker 1>in Alvin Hanson's case, it turned out that he was

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<v Speaker 1>a hundred eighty degrees wrong. Literally, the best three decades

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<v Speaker 1>we've ever had so far, we're right. After Alvin promulgated

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<v Speaker 1>the idea of secular stagnation, the forties, fifties, and sixties

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<v Speaker 1>were just blockbuster decades for growth and productivity. And I

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<v Speaker 1>think we should take that as as a warning and

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<v Speaker 1>be a little humble about what we think will be

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<v Speaker 1>going what will happen going forward. Productivity is really what

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<v Speaker 1>drives living standards more than population growth or any the

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<v Speaker 1>other uh factors, and productivity is inherently unpredictable. Economists sometimes

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<v Speaker 1>call it a measure of our ignorance, because it's the

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<v Speaker 1>residual that's left over after you account for all the

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<v Speaker 1>things that you can measure, like labor and capital. So

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<v Speaker 1>both in theory and in practice, it's it's very hard

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<v Speaker 1>to predict productivity. After I debated Bob Gordon, I did

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<v Speaker 1>a little exercise. I took all the ten year periods

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<v Speaker 1>we have on record and compared the productivity growth in

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<v Speaker 1>one ten year period to the productivity growth in the

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<v Speaker 1>next ten year period. And guess what the correlation was

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<v Speaker 1>from one decade to the next. There is none. Yeah,

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<v Speaker 1>that's right, there was absolutely none. Um. You know, sometimes

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<v Speaker 1>you had much better decades, like after Alvin Hansen's discussion

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<v Speaker 1>of secondar stagnation. Sometimes you had correlation, but on average

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<v Speaker 1>it turned out to be a big zero. And uh so,

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<v Speaker 1>just saying hey, we've had some bad years, ergo it's

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<v Speaker 1>going to keep getting bad. That that doesn't have much

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<v Speaker 1>empirical support or, as I said, theoretical support. So Eric,

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<v Speaker 1>how has all this escaped or sailed below the popular

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<v Speaker 1>economic narrative where best with the use of terms like

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<v Speaker 1>new normal quote unquote slow recovery quote unquote wageless recovery.

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<v Speaker 1>This all seems at odds with what we're hearing a

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<v Speaker 1>lot of at the moment. Can you explain that? Well,

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<v Speaker 1>it depends who you talk to. And there's no question

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<v Speaker 1>we've had some very low growth, both in productivity and

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<v Speaker 1>overall economic growth, and I think that's legitimate to point out.

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<v Speaker 1>And there's a lot of things we can do in

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<v Speaker 1>the to compact some of the cyclical problems we've been having.

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<v Speaker 1>I think people still underestimate the scale and scope of

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<v Speaker 1>the Great Recession and the cyclical factors that are still

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<v Speaker 1>slowing us down. Um So I wouldn't belittle those concerns,

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<v Speaker 1>but I also wouldn't use them to extrapolate into what's

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<v Speaker 1>happening with technological progress. That's a whole different ballgame. Technological progress.

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<v Speaker 1>It's very different from the underutilization of labor and capital

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<v Speaker 1>in the economy. If you, understan want to understand what's

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<v Speaker 1>going on with technological progress, you need to talk to technologists,

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<v Speaker 1>and I spend a lot of time doing that in

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<v Speaker 1>places like Silicon Valley and of course here at at

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<v Speaker 1>M I T and UH, maybe it's just escaped the

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<v Speaker 1>popular discourse in some parts of the country. But among

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<v Speaker 1>technologists UH, people are very optimistic. People like Bill Gates

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<v Speaker 1>say that the innovation has never been faster. I was

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<v Speaker 1>just back from a two week visit to UH, to

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<v Speaker 1>Silicon Valley, meeting with a lot of the tech leaders,

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<v Speaker 1>and and they continue to be very, very optimistic, and

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<v Speaker 1>they feel like there are some great things that they

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<v Speaker 1>are making investments in. And I think if you look

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<v Speaker 1>at the broader market, it's also pretty bullish on technology. Um,

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<v Speaker 1>what are the five most valuable companies in America? Well,

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<v Speaker 1>they're all tech companies. They are Apple, alphabet or Google, Facebook, Microsoft,

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<v Speaker 1>and Amazon. These are tech companies and their sales are

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<v Speaker 1>growing rapidly. Their profits are enormous, the biggest in history.

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<v Speaker 1>And investors must be very bullish because they are putting

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<v Speaker 1>their their valuations at pretty decent levels. So that suggests

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<v Speaker 1>to me that maybe inside the Beltway or in other places,

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<v Speaker 1>people aren't optimistic about technology. But I hear a different

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<v Speaker 1>story when I visit technologists. So is there any single

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<v Speaker 1>invention that you see out there or a couple inventions

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<v Speaker 1>that that could really change the world? You know, you

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<v Speaker 1>talk a lot about driverless cars, artificial intelligence, three D printing,

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<v Speaker 1>things like that in your in your book. Are things

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<v Speaker 1>like that going to really boost productivity or do we

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<v Speaker 1>have to think of a combination of these inventions like

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<v Speaker 1>you talked about as well. I think it's both some

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<v Speaker 1>core technologies and the recombination of these technologies. And if

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<v Speaker 1>I were forced to say the ones that are most

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<v Speaker 1>excited about right now, I would have to say the

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<v Speaker 1>broad cluster of artificial intelligence, particularly what I sometimes called

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<v Speaker 1>the second wave of the second machine age, which is

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<v Speaker 1>this ability for machines to learn on their own how

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<v Speaker 1>to solve problems using neural nets, deep learning, reinforcement learning,

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<v Speaker 1>and that is what's enabling some of these inventions. You

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<v Speaker 1>talked about driverless cars, and we featured them at the

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<v Speaker 1>beginning of our book, and some people kind of made

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<v Speaker 1>fun of us for being very science fiction e back in.

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<v Speaker 1>But they're happening even faster than we predicted that for

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<v Speaker 1>that matter, faster than I think most of the technologists

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<v Speaker 1>even predicted. UM Singapore is rolling up driverless taxis actually

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<v Speaker 1>rolled them out last week using some M I T technology.

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<v Speaker 1>Uber has some driverless cars in Pittsburgh this month. And

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<v Speaker 1>they still have a human sitting in the front seat

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<v Speaker 1>just to kind of keep an eye on it. But

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<v Speaker 1>the technology is happening pretty rapidly, and that's driven by

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<v Speaker 1>these machine learning systems that have vastly improved vision. When

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<v Speaker 1>we wrote the book, humans could see better than machines.

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<v Speaker 1>Now in many tasks, machines are much better, for instance,

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<v Speaker 1>that recognizing street signs or uh interpreting images in a

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<v Speaker 1>big databases like image net. The same technology is vastly

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<v Speaker 1>improved voice recognition, and even in mundane things that we

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<v Speaker 1>don't hear that much about, like power use in data centers.

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<v Speaker 1>Google's deep Mind team, a group of AI researchers turned

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<v Speaker 1>their technology on their own data centers and very quickly

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<v Speaker 1>found that they were able to run them more efficiently. Um,

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<v Speaker 1>they're working to diagnose diseases better. So what we're doing

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<v Speaker 1>is taking this core technology of artificial intelligence machine learning

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<v Speaker 1>and combining it with knowledge and lots of different areas

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<v Speaker 1>to create new products and services. Eric, I'm glad you

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<v Speaker 1>mentioned the belt White a little while ago. The sort

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<v Speaker 1>of technological advances that you're talking about saying to be

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<v Speaker 1>running parallel to or transcending the political process Is there

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<v Speaker 1>anything that could go wrong or right with this essentially

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<v Speaker 1>optimistic view after the election? Oh very much so. I

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<v Speaker 1>can see a lot of ways this can go wrong.

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<v Speaker 1>You know, technology is a catalyst for bigger changes, but

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<v Speaker 1>by itself, technology doesn't raise living standards. It requires a

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<v Speaker 1>host of complementary innovations, just as it did in the

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<v Speaker 1>Industrial Revolution, investments in education, reorganization of work, new policies.

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<v Speaker 1>I don't see as being nearly as good at those

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<v Speaker 1>complementary innovations or nearly as fast at those complementary innovations

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<v Speaker 1>as we have been in the core technologies, and the

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<v Speaker 1>political system doesn't give me a lot of optimism. And

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<v Speaker 1>that's the part that, if anything, I'm more depressed about

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<v Speaker 1>than it was in the past. And that shows up

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<v Speaker 1>in some really alarming statistics that we highlighted in the

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<v Speaker 1>our and and I highlighted in our book the second

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<v Speaker 1>machine age UM like the stagnation of median income. It's

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<v Speaker 1>bumped up a little bit the past year, but it's

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<v Speaker 1>still lower now, significantly lower now than it was back

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<v Speaker 1>in the year two thousand. UM that income at the

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<v Speaker 1>fiftie percentile, overall income of the economy, overall GDP per

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<v Speaker 1>person is higher, much higher than it was. So how

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<v Speaker 1>is that possible that median income is lower. Well, that's

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<v Speaker 1>because it's become more unequal. There are a lot of

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<v Speaker 1>people who have jobs, a lot of particularly routine information

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<v Speaker 1>processing jobs that aren't as much in demand as they

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<v Speaker 1>were a decade or two ago. Um. There's a variety

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<v Speaker 1>of reasons for that, but one of the most important

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<v Speaker 1>ones is the machines can do a lot of those

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<v Speaker 1>jobs better, like travel agents or routine tax preparation, or

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<v Speaker 1>just a lot of clerks and middle managers that used

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<v Speaker 1>to shuffle a lot of paper. Machines are getting really

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<v Speaker 1>good at that, reading legal documents, etcetera. That's a concern,

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<v Speaker 1>and we need to rethink our policies, retrain people, boost

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<v Speaker 1>entrepreneurship to help invent new goods and services. Uh and

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<v Speaker 1>and people need to work harder at their own skills

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<v Speaker 1>and educate themselves so that they'll be more prepared for

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<v Speaker 1>the kinds of jobs that machines don't do as well.

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<v Speaker 1>That does, is that what you're trying to do with

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<v Speaker 1>this competition inclusive innovation. Thanks for mentioning that, so you know,

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<v Speaker 1>we don't want to just talk about it UM and

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<v Speaker 1>research it. We wanted to take an active role. So

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<v Speaker 1>here at M I t A, we've got a research

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<v Speaker 1>center called the Initiative on the Digital Economy, and we've

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<v Speaker 1>launched an inclusive innovation competition to recognize and reward the

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<v Speaker 1>companies that are doing what I just described, that are

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<v Speaker 1>using technology to involve more people in the workforce to

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<v Speaker 1>create more shared prosperity. I've been reviewing those applications along

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<v Speaker 1>with an all star lineup of judges. That is a

0:12:51.559 --> 0:12:57.520
<v Speaker 1>cause for optimism because there are just so many amazing entrepreneurs,

0:12:57.520 --> 0:13:02.080
<v Speaker 1>social entrepreneurs and for profit entrepreneurs and people working with

0:13:02.400 --> 0:13:06.640
<v Speaker 1>labor and with technology that are in the process of

0:13:06.720 --> 0:13:09.400
<v Speaker 1>reinventing our economy. So that's what we need to see

0:13:09.400 --> 0:13:13.439
<v Speaker 1>more of. We need to encourage it UM. Sadly, broadly speaking,

0:13:14.040 --> 0:13:17.800
<v Speaker 1>entrepreneurship has not been keeping up with technology. Uh. Great

0:13:17.800 --> 0:13:20.800
<v Speaker 1>work by Halta Wanger and Steve Davis and others has

0:13:20.840 --> 0:13:23.520
<v Speaker 1>pointed out that we haven't had as dynamic economy as

0:13:23.520 --> 0:13:26.000
<v Speaker 1>we used to have, so so that that would be

0:13:26.000 --> 0:13:28.520
<v Speaker 1>where I want to work harder. And UH, if we

0:13:28.559 --> 0:13:31.720
<v Speaker 1>do that, I think median incomes will recover Now that

0:13:31.720 --> 0:13:34.439
<v Speaker 1>that brings us to a related issue, which is the

0:13:34.480 --> 0:13:37.360
<v Speaker 1>government's role in all of this. Paul Krugman, for example,

0:13:37.400 --> 0:13:39.520
<v Speaker 1>who you said in your book is a fan of

0:13:39.600 --> 0:13:43.560
<v Speaker 1>government borrowing at low interest rates for infrastructure. There's also

0:13:43.600 --> 0:13:47.240
<v Speaker 1>an issue with government support for R and D. What

0:13:47.400 --> 0:13:52.720
<v Speaker 1>role does the government play in the Second Machine Age? Yeah,

0:13:52.760 --> 0:13:54.760
<v Speaker 1>you know, I think there's too many people who try

0:13:54.760 --> 0:13:56.720
<v Speaker 1>to make it in either or either the government does

0:13:56.840 --> 0:13:58.440
<v Speaker 1>or the private sector. I think it's got to be

0:13:58.440 --> 0:14:01.720
<v Speaker 1>a both and Um, the government has an absolutely essential

0:14:01.800 --> 0:14:05.959
<v Speaker 1>role in basic R and D helping set standards, provide

0:14:05.960 --> 0:14:09.920
<v Speaker 1>the basic infrastructure. The Internet itself started as a government project,

0:14:10.280 --> 0:14:13.480
<v Speaker 1>and so on top of that, there was a bunch

0:14:13.480 --> 0:14:17.080
<v Speaker 1>of companies that made billions of dollars making the Internet

0:14:17.120 --> 0:14:20.280
<v Speaker 1>more relevant to consumers and more useful for businesses. I

0:14:20.280 --> 0:14:24.480
<v Speaker 1>think we've got to continue that spirit of government focusing

0:14:24.520 --> 0:14:27.320
<v Speaker 1>on basic R and D and infrastructure and also boosting

0:14:27.440 --> 0:14:31.680
<v Speaker 1>education and then making it easier for companies to build

0:14:31.720 --> 0:14:36.000
<v Speaker 1>on that foundation to create wealth. Much of the Second

0:14:36.040 --> 0:14:40.280
<v Speaker 1>Machine Age appears sensitor around the United States. How has

0:14:40.320 --> 0:14:44.400
<v Speaker 1>America placed relative to other lodge economies in this next

0:14:44.680 --> 0:14:48.960
<v Speaker 1>golden era of tech and productivity. I think one of

0:14:49.000 --> 0:14:51.800
<v Speaker 1>the advantage of the United States has is it's encouraged

0:14:51.840 --> 0:14:54.200
<v Speaker 1>a lot of the kinds of entrepreneurship, not as much

0:14:54.200 --> 0:14:56.840
<v Speaker 1>as it should or could, but still it's encouraged it

0:14:56.840 --> 0:14:58.520
<v Speaker 1>in a way that a lot of other countries haven't.

0:14:58.760 --> 0:15:02.520
<v Speaker 1>It had a relatively well educated workforce and one that

0:15:03.240 --> 0:15:05.800
<v Speaker 1>has a lot of creativity. But this is not really

0:15:06.440 --> 0:15:10.160
<v Speaker 1>one nation versus another nation kind of question. These innovations

0:15:10.160 --> 0:15:13.880
<v Speaker 1>are largely boundary lists and I just just back from Helsinki,

0:15:13.880 --> 0:15:16.800
<v Speaker 1>where there's some amazing people working at companies like super Cell,

0:15:17.440 --> 0:15:20.760
<v Speaker 1>creating billions of dollars of value with just a handful

0:15:20.880 --> 0:15:26.680
<v Speaker 1>of engineers. Um Stockholm is another example. Amazing things happening

0:15:26.720 --> 0:15:32.440
<v Speaker 1>in London, in Tokyo, in Shenzang, in Bangalore. If you're bright,

0:15:32.840 --> 0:15:34.720
<v Speaker 1>and you have an idea and you have access to

0:15:34.760 --> 0:15:38.120
<v Speaker 1>the Internet, you can reach a billion people and do

0:15:38.160 --> 0:15:40.680
<v Speaker 1>amazing things in the way you couldn't have previously. This

0:15:40.760 --> 0:15:43.880
<v Speaker 1>is a very new era. I had an undergraduate student

0:15:43.920 --> 0:15:45.920
<v Speaker 1>who wrote a little app. He said he took him

0:15:45.960 --> 0:15:48.480
<v Speaker 1>a few weeks, and uh, in a few months he

0:15:48.520 --> 0:15:51.440
<v Speaker 1>had a million users. That's something that wouldn't have happened

0:15:51.560 --> 0:15:54.920
<v Speaker 1>ten or twenty years ago, and it really has lowered

0:15:54.920 --> 0:15:57.240
<v Speaker 1>the boundaries to innovation quite a bit, and we all

0:15:57.240 --> 0:15:59.600
<v Speaker 1>stand to gain from it, regardless of where those in

0:16:00.040 --> 0:16:02.920
<v Speaker 1>leaders are located. But it sounds like you're definitely not

0:16:03.080 --> 0:16:06.720
<v Speaker 1>a US declinist. No, I mean it's not. And again

0:16:06.760 --> 0:16:09.800
<v Speaker 1>it's not the US versus other countries. I'm pretty optimistic

0:16:09.800 --> 0:16:13.360
<v Speaker 1>because I see such amazing technologies in the pipeline. I'm

0:16:13.360 --> 0:16:17.120
<v Speaker 1>concerned because it's not automatic that those technologies are going

0:16:17.160 --> 0:16:21.400
<v Speaker 1>to benefit everybody, or benefit people more broadly. So I'd

0:16:21.400 --> 0:16:22.840
<v Speaker 1>like to see the U, S and other countries work

0:16:22.840 --> 0:16:26.000
<v Speaker 1>towards shared prosperity. But I don't see it as a

0:16:26.480 --> 0:16:29.080
<v Speaker 1>contest between one country or another. I see it as

0:16:29.160 --> 0:16:33.200
<v Speaker 1>a contest between good policies and bad policies worldwide. It's

0:16:33.240 --> 0:16:36.640
<v Speaker 1>about to tell you about a real life technological challenge

0:16:36.720 --> 0:16:39.760
<v Speaker 1>he faced on the weekend with his car. That's right.

0:16:39.800 --> 0:16:42.440
<v Speaker 1>A few days ago, my car's battery died while I

0:16:42.440 --> 0:16:45.320
<v Speaker 1>was out with my family. Um, you know this might

0:16:45.360 --> 0:16:48.120
<v Speaker 1>illustrate a couple of our issues. I was able to

0:16:48.160 --> 0:16:53.040
<v Speaker 1>search easily for an open service shop using Google Maps,

0:16:53.080 --> 0:16:55.840
<v Speaker 1>but I still had to trudge there and wait awhile

0:16:55.960 --> 0:16:59.080
<v Speaker 1>to get the battery installed, and you know, just the

0:16:59.120 --> 0:17:01.560
<v Speaker 1>fact that the battery he runs out. That's another issue

0:17:01.560 --> 0:17:03.560
<v Speaker 1>that you point to in your book. We haven't developed

0:17:03.560 --> 0:17:07.240
<v Speaker 1>the kinds of battery technologies, uh that we have and

0:17:07.320 --> 0:17:10.720
<v Speaker 1>other kinds of information technology. We're still using the same

0:17:10.840 --> 0:17:14.200
<v Speaker 1>technology as decades ago to power cars. We haven't really

0:17:14.640 --> 0:17:18.800
<v Speaker 1>made full advance in that yet. There's no equivalent of

0:17:19.040 --> 0:17:23.399
<v Speaker 1>Uber for car repairs like this, Is this a bottleneck

0:17:23.480 --> 0:17:25.760
<v Speaker 1>in the economy? Do we have to wait until we

0:17:25.800 --> 0:17:29.879
<v Speaker 1>can get driverless cars that can charge batteries that last forever?

0:17:30.880 --> 0:17:32.960
<v Speaker 1>There are thousands of all next and that's one of them.

0:17:33.320 --> 0:17:37.280
<v Speaker 1>Or is entrepreneurs called them opportunities? Um? Uber for car repair?

0:17:37.320 --> 0:17:39.680
<v Speaker 1>I think that there's probably going to be a bunch

0:17:39.720 --> 0:17:43.520
<v Speaker 1>of business plans submitted to our VC friends after this podcast.

0:17:44.119 --> 0:17:46.760
<v Speaker 1>I would sign up for that. And Uh, that's something

0:17:46.800 --> 0:17:50.080
<v Speaker 1>that our mobile infrastructure makes easier to handle than previously.

0:17:50.480 --> 0:17:52.880
<v Speaker 1>I was just looking at some charts on battery technologies

0:17:52.960 --> 0:17:55.600
<v Speaker 1>and I always astonished that it's it's really started improving

0:17:55.720 --> 0:17:58.800
<v Speaker 1>quite a bit lately. Um. You know, uh, Elon Musk

0:17:58.920 --> 0:18:01.120
<v Speaker 1>is bringing on the Gigafact three that's going to drive

0:18:01.119 --> 0:18:03.840
<v Speaker 1>down production costs quite a bit, and and feeling they're

0:18:03.840 --> 0:18:07.840
<v Speaker 1>thinking of developing even cheaper battery factory. So I think

0:18:07.920 --> 0:18:10.320
<v Speaker 1>we have a lot of barriers to overcome. Um. This

0:18:10.400 --> 0:18:12.359
<v Speaker 1>is a theme that I write about in my research

0:18:12.400 --> 0:18:14.840
<v Speaker 1>a lot that that when someone makes a big invention

0:18:14.920 --> 0:18:19.680
<v Speaker 1>like electricity, the steam engine, or the microprocessor, then thousands,

0:18:19.680 --> 0:18:22.840
<v Speaker 1>if not millions of other people have to make complementary

0:18:22.840 --> 0:18:26.160
<v Speaker 1>innovations that make it really useful. And that's the process

0:18:26.160 --> 0:18:29.080
<v Speaker 1>we're going through right now, whether it's with electric vehicles

0:18:29.119 --> 0:18:33.920
<v Speaker 1>and self driving cars, or mobile telephony or artificial intelligence.

0:18:34.359 --> 0:18:37.280
<v Speaker 1>Al Right, professor, well, thank you very much for joining us.

0:18:37.280 --> 0:18:41.080
<v Speaker 1>We'll leave it there. It's been a pleasure. So we've

0:18:41.119 --> 0:18:45.480
<v Speaker 1>now heard from both Gordon and Brynjolfson. Who do you

0:18:45.520 --> 0:18:48.760
<v Speaker 1>think is right? Well, we'll just have to wait and see.

0:18:49.040 --> 0:18:51.199
<v Speaker 1>Maybe both of them could be right, but you know,

0:18:51.240 --> 0:18:54.000
<v Speaker 1>there's there's uh they but they both raised some pretty

0:18:54.040 --> 0:18:57.760
<v Speaker 1>strong points about whether the best days are behind us

0:18:57.840 --> 0:19:01.720
<v Speaker 1>or whether you know, there's really no coreation between what's

0:19:01.760 --> 0:19:04.160
<v Speaker 1>happened before and what will happen in the future. It's

0:19:04.200 --> 0:19:07.600
<v Speaker 1>like they say, in the markets, past performances is no

0:19:07.760 --> 0:19:12.120
<v Speaker 1>indication of the future. So it just depends if we're

0:19:12.119 --> 0:19:14.040
<v Speaker 1>in that age and and maybe we could have these

0:19:14.280 --> 0:19:17.680
<v Speaker 1>innovations and still you know, and not have growth or

0:19:17.760 --> 0:19:21.600
<v Speaker 1>growth without innovations. I was struck by Eric's upbeat tone,

0:19:21.640 --> 0:19:24.840
<v Speaker 1>and that comes through in the book. Scott. I'm wondering

0:19:24.920 --> 0:19:28.240
<v Speaker 1>if the period we're in now is kind of analogous

0:19:28.359 --> 0:19:32.240
<v Speaker 1>to the early nineteen nineties. The popular narrative was in

0:19:32.320 --> 0:19:36.280
<v Speaker 1>America was washed up. There was a rising Asian power

0:19:36.520 --> 0:19:41.359
<v Speaker 1>which was going to crush us jobless recovery, wageless recovery.

0:19:41.520 --> 0:19:46.720
<v Speaker 1>And yet as the nineties unfolded, something of a great decade,

0:19:47.080 --> 0:19:51.159
<v Speaker 1>and even Bob Gordon talks about progress in productivity, significant

0:19:51.160 --> 0:19:54.240
<v Speaker 1>progress made in the nineteen nineties. I wonder whether we're

0:19:54.240 --> 0:19:57.480
<v Speaker 1>at the cusp of something now. But the popular narrative

0:19:57.560 --> 0:20:00.520
<v Speaker 1>is just so down we don't even read allies. It's

0:20:00.560 --> 0:20:03.080
<v Speaker 1>happening before our eyes. Well, that's going to keep us

0:20:03.080 --> 0:20:05.280
<v Speaker 1>busy for the next ten or twenty years trying to

0:20:05.320 --> 0:20:08.120
<v Speaker 1>answer these questions and talk about them with our audience.

0:20:08.240 --> 0:20:18.880
<v Speaker 1>Right then, thank goodness, Benchmark will be back next week,

0:20:18.920 --> 0:20:21.080
<v Speaker 1>And until then you can find us on the Bloomberg

0:20:21.200 --> 0:20:24.600
<v Speaker 1>Terminal and Bloomberg dot Com, as well as on iTunes,

0:20:24.720 --> 0:20:27.920
<v Speaker 1>pocket casts, and Stitcher. While you're there, take a minute

0:20:27.920 --> 0:20:30.400
<v Speaker 1>to rate and review the show so more listeners can

0:20:30.400 --> 0:20:32.560
<v Speaker 1>find us and let us know what you thought of

0:20:32.640 --> 0:20:35.160
<v Speaker 1>the show. You can talk to and follow us on

0:20:35.200 --> 0:20:39.520
<v Speaker 1>Twitter at Daniel Moss, d C at Scotland, and our

0:20:39.640 --> 0:20:46.679
<v Speaker 1>guest is it at Eric. Bring see you next week.