August 21, 2018
The Knowledge Project – Thinking About Thinking with Tyler Cowen
Intro
- Tyler Cowen (@tylercowen) is an economist and New York Times best selling author
- He runs the blog Marginal REVOLUTION
Average is Over
- A good question to ask yourself – Are computers enhancing your productivity, or are you competing against computers (in which case you’re likely to lose)
- “The world will be a lot more productive because of automation and smart software”
- This will give us a lot more consumer goods for free
- What else will does Tyler thing will happen as technology advances?
- There will be an even sharper divide between the rich and the poor
- But the poor will do better than we might expect in terms of consumption
- What jobs will remain and which will disappear? Where is the job market headed?
- Old style manufacturing jobs will disappear
- Technologies change all the time, requiring people to retrain themselves every 3-5 years
- This is hard for a lot of people
- You need to stay current – people who have a strong work ethic will do very well
- Who else will do well?
- Those with a tech background
- Those with good people skills
- There’s always room for sales, marketing, and management – “Computers will not be doing that for us anytime soon”
- But sales will become harder – there’s so many channels competing for our attention
- It’s a far more competitive environment
- How will this play out on a country and cultural level?
- More divergence, not convergence – poorer cities will get poorer, while richer cities get richer
- “I worry about the future of some face to face creative interactions”
- Big cities are becoming more expensive to live in for aspiring creatives
Virtual Tourism
- This is the idea, that sometime in the future, we’ll be able to put on some sort of VR headset, and explore certain areas, as oppose to traveling to them
- “I worry virtual reality will substitute for other kinds of experiences”
- “On the other hand, if I’m 81, ill, and stuck in bed, virtual tourism might be a wonderful thing”
- Bandwidth is still a problem
- Even video calls are still a challenge today
- For VR to work – the quality will have to be outstanding
The Decline of Newspapers
- Young people just don’t read newspapers much anymore
- There’s a movement away from regional and national newspapers
- “Newspapers, as we know them, are about to disappear”
- Our “daily flow” of news is replacing them – blogs, Facebook news feeds, etc.
- The ability to pick and choose the news you want is becoming popular – not something bundled together like a newspaper
The Complacent Class
- Americans have become more risk adverse
- We move around the country less, we’re more paranoid about how we raise our children, and rates of productivity growth are down outside the tech sector
- “It’s good to be safe, but when our society collectively makes this decision, there’s ways in which we’re all worse off”
- “For much of the world, change has slowed down”
- We’ve exhausted a lot of the low hanging fruit
- Think about life in the 1900s – there were no antibiotics, people didn’t fly regularly, most people didn’t finish high school, and there no cars or radio
- In the 1950s – Every one of the above was different
- Nowadays – what America looks like physically, is not that different from the 1950s
- Computers have changed, sure… but not much else
- Houses and cars are the same for the most part – someone from back in 1950 could easily drive one of today’s cars
- “We’ve entered a world where people find it difficult to imagine a future much different than the present”
- “We’re moving ourselves, increasingly, away from the physical world”
- We’ve stopped building infrastructure for the most part
- Much of the NYC subway system dates back to the 1930s
- We’re letting the physical world decay
- Many people actually prefer to live in homes from the 1920s-30s
- Getting around takes longer than it used to (there’s too much traffic) – no one is addressing this
- Tyler thinks governments should price the roads during rush hour, or in some places (like Manhattan) all the time
- Route 66 out of Washington and into Virginia has a toll of upwards of $30-40 during rush hour
- London and Singapore have congestion charges on some roads into the city – The US needs to do the same
- “Self driving cars could make the problem worse”
- People will probably abuse their cars for personal errands all the time, only adding to the traffic problem
- There’s so many barriers to getting new roads built today
- Tyler thinks governments should price the roads during rush hour, or in some places (like Manhattan) all the time
- We’ve stopped building infrastructure for the most part
What should people do about all of this?
- “The future belongs to people who are meta-rational, people who realize their own limitations”
- “Don’t just feel good about yourself, think critically about your skills” – Which skills of yours will compliment emerging sectors and technologies?
- The world of the future will be a world of algorithms (we’re already here now)
- People who think they can beat the algorithms will lose – know when you should defer
- “It’s becoming more important to when to know to trust other people”
- Think about things like Yelp and Amazon reviews
- “Epistemic modesty is showing higher returns that it used to”
- How can people develop good judgement?
- Have mentors who teach you
- Online experimentation – Read blogs, listen to your favorite podcasts, put time into having a great Twitter feed, take online courses
- “None of us are actually that great. Life is an experience of being humbled all the time”
- You’re either discouraged or reenergized by that
- Be more internally motivated – lose your ego
- How can you curve your child to be this way?
- Expose your child, in their teen years, to any of your friends who could potentially be a possible role model for them
Tyler’s Reading Habit
- “When you’re young, it’s quite easy to read books that will shake everything you know”
- Tyler calls these quake books
- What are some examples for him? – John Stuart Mill’s autobiography
- Because your world view is not as formed, books have an incredible influence over you
- Tyler calls these quake books
- As you age, it’s harder for something to have a life changing impact
- As Tyler got older, he noticed that he tended to read more for facts and information
- Books, in a way, become more disposable
- Tyler rereads Shakespeare pretty frequently
- He plans to reread A Portrait of The Artist as a Young Man by James Joyce soon
- Tyler reads the classics cover to cover
- Maybe 1 books in 10, he finishes
- Ask yourself – Is the next chapter in the current book that you’re reading more valuable to you than starting a new book
- Tyler prefers physical books – he finds it harder to flip back with a Kindle
- “Be careful about giving books away”
- There’s the danger that the person you gave it to will read it just because it’s a gift
- “Unless you think it’s a book the person should be reading, it’s actually a cruel act”
- “Giving books away if overrated”
- “To read quickly, read a lot”
- There more nonfiction you’ve read, the more you know what’s coming
- “Overall, I’m more interested in reading books I disagree with than books I agree with”
How can we learn to think well?
- “I don’t know anyone who thinks well”
- “On almost any matter, there’s someone out there who knows more about it than you do”
- “Be far less sure about a lot of your opinions”
- The wisdom to know how and when to defer, is much more important -“This is the key wisdom of 2018”
- “The internet makes smart people smarter, and stupid people stupider” – Know how to judge the quality of something on the internet
- “Be epistemically modest, but be a critical reader”
- The ability to evaluate the quality of sources is becoming more important – and most people aren’t getting better at it
- How can we get better at this?
- “If something offends you, don’t assume it’s wrong. If you dismiss it, you won’t learn from it.”
- Be able to learn from everything
- “Don’t devalue and dismiss, you learn much less”
- How can we get better at this?
Arguments
- “In fights, both people can’t be right all the time. On average, you’re probably right less than half the time, because there’s so many fights where both sides are wrong”
- Trying to be right, or establish you’re right, is usually a mistake, because most of the time, you’re wrong
- It’s hard to keep this in mind, but it’s true
- Even if you realize this 10% more often, you’ll do better
- Chess has helped Tyler realize this
- If you lose at chess, almost 100% of the time it’s because you made the wrong moves – you have no excuse
- “Most of your moves are in fact wrong compared to the perfect moves”
- Tyler says chess is one of the biggest things that’s shaped how he thinks
- What else has he learned from chess?
- You can’t blame other people for your problems
TV
- Tyler only watches one TV show at a time
- Although most of the time, he’s not watching any TV shows
- He’s a fan of The Sopranos, Curb Your Enthusiasm, Westworld and The Americans
- “Most TV shows bore me. Movies are much better than TV. TV is overrated.”
- What are some “quake” movies for Tyler?
- Birdman movies from Sweeden
- He’s excited to see Black Panther
Some Rapid Fire Questions
- What are the long term consequences of interest rates being near zero?
- Anybody under 40 has never experienced interest rates above 5% or 6% in their lifetime
- “It’s much harder for millennials to save, and I fear they will have impoverished retirements”
- What is Tyler’s take on the minimum wage increases?
- Minimum wage increases put people out of work
- “Jobs are very important, and I’d look for different ways to raise wages”
- Instead, pay people based on productivity
- There’s good evidence that raising the minimum wage raises food prices, so other poorer people have to pay more for their food
- Tyler’s advice to younger people
- “People who save well have methods and symptoms, almost like a religion”
- Treat saving like a religion – have fixed rules
- Shane’s advice – Live off your first job’s salary
- “If you can be happy living off that wage, you’ll live a happy life”
- Tyler – “With the internet, there’s so much free fun, why do you have to go and spend all that money anyway?”
- Bitcoin and Blockchain
- Tyler doesn’t own any bitcoin
- “I don’t view bitcoin as a bubble, it has some useful functions as a store of value, but I don’t view it as a currency”
- It’s not convenient to spend
- “It’s a store of value, a bit like gold”
- “It’s a perfectly legitimate asset that will endure and have a high value”
- “The blokchain is a way of organizing information where you can verify and confirm things, without the need for a boss”
- Tyler doesn’t think we’ve found killer applications for the blockchain technology yet, besides bitcoin
