Tyler Cowen: 'Economists cannot predict the effects of new technologies.  Surely that should humiliate us a bit?

Tyler Cowen: ‘Economists cannot predict the effects of new technologies. Surely that should humiliate us a bit?

Tyler Cowen has only had coffee twice in his life. He only drinks tea if someone offers it to him. He does not touch alcohol. “Alcohol is bad for everyone’s productivity.”

Instead, Cowen’s drug of choice is information. He’s not just an addict, he’s a peddler, a kingpin. Through his blogs, podcasts, and books, he spreads great thoughts and intellectual trivia. He is one of the most eclectic economists. He defends markets and big business. He insists that artificial intelligence, starting with chatbots like ChatGPT, is about to change the world. But he also writes about restaurants, movies and books, because he enjoys them and because he’s convinced that culture shapes markets (and vice versa). “People should collect more information about music, about the economy, about books. So I try to show them how I do that.”

Cowen, an economics professor at George Mason University in Virginia, has become a cult figure among a hyper-intellectual elite bent on self-improvement. At Marginal Revolution, the blog he co-founded in 2003, he highlights the latest research on, for example, why the US gender pay gap stopped narrowing (family leave policies) and how long Roman emperors lasted before of being killed. Devoted readers include author Malcolm Gladwell and, Cowen is told, UK Prime Minister Rishi Sunak. But he wants more. He has launched an online university, made up of free economics modules.

“My personal ambition is to be the person who has done the most to teach the world economy, in a broad sense,” he tells me. When I ask who his competitors for this title might be, he begins by naming Adam Smith and John Maynard Keynes.

Cowen’s brand of economy is practical. Last year, he and Daniel Gross, an entrepreneur, published a book, Talent, on how to hire creative people. Some organizations avoid unstructured interviews, concerned that they will discriminate against candidates. Cowen celebrates those smooth interviews, especially if the interviewer is asking about things that really interest you.

He often delights in being contrary. When we meet in London, the consensus is that the British economy couldn’t be much worse. The disagrees. “I see the south of England (London, Cambridge, Oxford) as one of the most wonderful parts of the world, one of the few places where you can really birth and execute a new idea. you see it with him [Oxford Covid-19] vaccine, you see it with DeepMind [Google’s AI unit founded in London]. This corner of England: it’s past Singapore-on-Thames. You have left Singapore in the dust!”

Is not Britain lacking in animal spirits? “That is true, in part. I wish the ethic of working hard and having a lot of money was out [seen as] most unequivocally positive. But not everywhere will be like the United States. The strong sticks here are so strong. London is literally the best city in the world.

This is typical of Cowen: quick to classify people, places, and cultures. Others would say, for example, that every major city has great Asian food these days. “That’s not true! While there is plenty of good Asian food in Paris, you just can’t stumble across it.”

He has an old-fashioned love of generalization. “People think these things anyway, they’re just afraid to say it. Why not just say what you think? He sees himself as more “psychologically integrated”. My natural inclination is just to tell you what I think.

He wants to boost the economy beyond academic methods. He hasn’t written any peer-reviewed articles since 2017. “I’ve done a lot,” she says. “A lot of [economics] it is too narrow. I have tried to engage with real world problems and express uncertainty when and where I feel it. I think that resonates with a large number of people.”

Cowen, 60, was not always curious. He grew up in New Jersey with little interest in exotic food or travel. Then, in his late teens, he began traveling to New York, with his concerts, crowds, and used bookstores.

His first papers in economics were accepted by magazines at age 19, and he was a full professor at 27. But it was blogging that allowed him to find his audience. “The modern Internet changed my life completely.”

Cowen’s superpower is reading. He sees himself as hyperlexic, with prodigious reading skills. “If it’s a nonfiction book that I know something about, I could read about five books a night.” He starts reading shortly after 7 am and eats early, around 5 pm, and finds that it helps him work better at night. (Although he loves the diversity of cities, he lives in the Virginia suburbs, partly because of the tax rate.)

His lists of the best books of 2022 included 36 titles, including his own. Talent, with the shameless condition: “These were the best books!” However, it is open to non-readers: “Maybe books are overrated. Travel is underrated. Among educated and intelligent people, books can be a bit overrated.”

Hyperlexia is often associated with autism, but Cowen doesn’t have the social difficulties that autistic people often experience. In person, he is engaging and direct, and his responses are often forceful.

Conversation, like reading, is one way you gather information. But it’s not enough either. “If you were only to read, you could still be an idiot.” It is a writing that “forces you to decide what you think about something. If you write something every day, no matter how long, it adds up. It is the people who go many days without writing who have productivity problems.”

Since 2003, Cowen has written every day: “Sunday, birthdays, Christmas, whatever.” On Christmas Day, she blogged about China’s zero covid policies. On Thanksgiving Day, she asked why more coins weren’t more valuable than the dollar.

What is Cowen’s general creed? Seek to see topics “drained from emotion.” That leads him to an optimism about human progress not unlike that of psychologist Steven Pinker. He calls himself a moderately libertarian and has contributed to billionaire venture capitalist Peter Thiel’s foundation. He has also defended classical liberalism against the populist right, arguing that the latter, by fostering distrust of elites, can accelerate “the Brazilianization of the United States.” “I don’t know if I’m centrist on the issues, but I’m centrist on the mood and focus.”

He is enthusiastic about technological change, but is in favor of institutional continuity, even if US policy seems broken. “My core intuition is that if your GDP per capita is 30-40 percent higher than most of your peer countries, it probably won’t change. I have always been anti-Trump [but] I don’t think Trump will win again, or even get the nomination again. But it seems to me that the system works. And we’ve had a lot of policy changes lately, not all of them good, but it’s not a deadlock at all.”

What does Cowen’s open-mindedness bring you? She supported former UK Prime Minister Liz Truss’ tax cuts, leading to her being ousted from office: “I thought the market overreacted.” In March 2022, she interviewed Sam Bankman-Fried, the founder of the now-defunct crypto platform FTX, and declared him “excellent.”

(That interview prompted Cowen’s questioning: “I think the best French fries in the world are in southern Argentina, in Patagonia. Where do you think they are?”)

Cowen met Bankman-Fried a decade ago. They played bughouse chess, a variation of the game. “He was good. He was better at bug house than chess. It’s a very important concept to understand FTX. You have four people and two boards. If I take his piece on this board, I give it to my partner, and my partner can drop the piece instead of making a move. You can be in this desperate situation, suddenly your partner hands you a queen. So there is no balance in bughouse chess. Things come out of nowhere to save you. You play desperately and you risk a lot. If people play bughouse, that’s their core mindset.”

Cowen is a talent scout. After interviewing Bankman-Fried, would he have hired him? “I would have funded him as a VC, I don’t know if he would have hired him as an employee. One thing that Daniel Gross and I say in Talent is: Conscientiousness is the most difficult trait to judge and the easiest trait to falsify.

In the instant

What gift do you give most often? Compact discs, maybe. But the real present is information: you tell someone something. And then only money, right?

Would more wealth make you happier? Not. [But] It may be that when I am 84 years old I will be in a better nursing home, and that will make me happier.

On cancel culture: The left is canceled more than the right. [In universities] Democratic women from the moderate to left are the demographic group most likely to be cancelled. Right-wing men are relatively safe.

Cowen remains hopeful about cryptocurrencies. “Crypto is a really new idea. And people shouldn’t just go overboard about it.”

In general, he sees disruption as non-threatening. “YouTube is the most important educational vehicle in the world,” but prestigious universities and large state universities “will continue to do well.” Humans will also outgrow the AI ​​disruption, he says, though he challenges economists to try to predict the consequences more accurately. “We cannot predict business cycles, we cannot predict the effects of new technologies. Surely that should humiliate us a bit?

He plans to focus less on writing and more on oral appearances, to adjust to a world where readers spend time with chatbots. “If they built a really good GPT [chatbot] to imitate me, I would be very happy. It would make some version of me immortal. I am 60 years old, have a fixed position and other sources of income, so not everyone is in that position.

Cowen’s optimism has limits. “I am more optimistic than most people about the possibility of a nuclear war in any given year. But if you just run enough years, it will happen. How many years do you have to run before the probability is high enough? My estimate was 700-800 years. You can argue about the number, but it’s not a million years. I don’t think it would kill all humans, but it would ruin what we think of as civilization.”

However, the prospect doesn’t seem to bother him. “If we have better institutions, we make better decisions, we can make a difference.” For now, there are talented people to discover, interesting ideas to select. He leaves our interview, no doubt to clear out the London bookshops and fill his life with as much information as possible.

Leave a Comment

Your email address will not be published. Required fields are marked *