Chicken little forecast

Still Chugging Along

Volcanoes are erupting in The Philippines, but on-fire Australia received some welcome rain. The Iran war cries have been called off and The Donald’s military powers are about to be hamstrung by the Senate. Meanwhile, his impeachment trial is starting, and we’re all on Twitter for a front-row seat.

S4. EPISODE 17

A Better World

Featuring James Pethokoukis

Did anyone “win” the debt ceiling debate? Where is the economy headed, long-term? And what breakthroughs can be used to build a better world? James Pethokoukis, a senior fellow at the American Enterprise Institute, where he specialized in US economic policy, joins us to share his perspective on a brighter future. Plus, bacteria-fighting AI and tracking social progress.

Prefer to read? Check out the Audio Transcript

[Audio Clip]

Zachary Karabell (ZK): What could go right? I’m Zachary Karabell, the founder of The Progress Network, and I’m joined as always by Emma Varvaloucas, the executive director of The Progress Network. And What Could Go Right? is our weekly podcast where we talk to people who are animated by a spirit that the future can be better, and that there are many people who are working assiduously and passionately and daily to make the world a place of our dreams because they recognize all the things that remain to be done in order to make it so.

We’re recording this in a moment of, I suppose, modestly good political and economic news in the United States, in that it would appear that the worst fears of our political process in the US leading to a massive economic miscalculation and default on the US sovereign debt is not going to happen. I suppose the world could fall apart between what I just said and when you’re listening to this, and if so, oh, well, but for the moment, that doesn’t seem likely.

And I think it’s another indication that we spend an awful lot of time gaming out and assuming the likelihood of the worst coming to pass, and much less so assuming that it won’t. And maybe that’s a pathology of modern news. Maybe it’s just a problem of we like drama and saying that, oh, don’t worry, it’ll be fine, isn’t very dramatic and isn’t very interesting, but in many cases it’s absolutely true, and this past week was one more example of it. And we’re gonna talk to someone today who’s been writing a lot about the government and economic policy, but also just about what’s going on in the world of technology and economics and growth and what the present, past, and future are, have been, and will be. So who are we gonna talk to today, Emma?

Emma Varvaloucas (EV): Right. So today, we’re gonna talk to James Pethokoukis. He’s a senior fellow at the American Enterprise Institute where he analyzes US economic policy. He writes and edits the AEIdeas blog and their podcast, which is the Political Economy podcast. And he is a writer of a Substack called Faster, Please!, which talks about all the things that Zachary just mentioned, tech, innovation, economics, and just generally how we can create what he calls a wealthier, healthier, more cool America.

ZK: All right. Let’s talk to Mr. Pethokoukis.

EV: All right.

ZK: James Pethokoukis, aka Jim, thank you for joining us today on What Could Go Right?. We are recording this just after the US House of Representatives passed a bill authorizing a raising of the US debt ceiling limit.

Audio Clip: Yeah. After weeks of public negotiations with folks from the White House heading over to Capitol Hill and folks from Capitol Hill coming here to the White House, that was it. It was an email, it was a press release, saying that the bill had been signed. In the email, he thanked Speaker McCarthy, Leader Jeffries, Leader Schumer, and Leader McConnell, for their partnership. Washington loves to work under pressure here, right? This happened 48 hours before that X-date that Treasury Secretary Janet Yellen put into place, saying the government would run out of money and be unable to pay their bills.

ZK: And while this is, in many ways, a weird, arcane, somewhat wonky thing, it has legitimately captured a lot of attention over the past couple of months. So as much as this was a symbol of dysfunction, I wonder if from your lights this was also ultimately a very bizarre, somewhat unexpected, and what will remain unheralded example of people in government kind of came together, did what was right, political inclinations notwithstanding.

James Pethokoukis (JP): I think reaching an agreement, even though it’s way closer than what it should have been, I think reaching that agreement suggests there is less crazy in Washington than we might have feared. It’s certainly my impression that certainly I think most Democrats and most Republicans realized defaulting under that would be a bad thing. Even though there were these theories that, oh, Wall Street really wouldn’t mind because it would show we’re serious about cutting long-term debt and all that, so if that was the price we had to pay, so be it. I mean, that was exactly a theory that we heard a decade ago. I think that theory, which I think is kind of ridiculous, didn’t really have much traction in the end, and finally the government came together and did what it was supposed to do. Again, much closer than what it should have been. I think that’s a good sign.

I think whenever politicians don’t make things noticeably worse, I think that’s a really good thing. It would really be great if we didn’t have to go through this every few years. And it would be even greater if those politicians who said they’re very concerned about our long-term debt would take actions, fundamental, substantive actions, to deal with long-term debt, rather these sort of tactical moves. But the fact they got this close to the side of dysfunction, I’ll take the win.

EV: I have a perhaps naive follow-up question to that, which is, I feel like we— as you said, we go through this every few years, meaning like there’s always this, like, we’re teetering on the edge of default and there’s lots of really intense rhetoric, and then it always does get resolved. And it seems to me just to be a matter of the minority party getting in the things that they haven’t been able to get in legislatively, right? Is that fair? Because as a layperson, I’ve kind of been like, every time this stuff comes around, I’m like, eh, they’ll figure it out, eh, never seen it happen before. Is that fair?

JP: You sound like many Europeans, the editorial board of the Financial Times perhaps, who when they look at this, they figure, well, that in the end, America will do the right thing. After destroying everything else, it’ll do the right thing, that old saying. But, listen, I think this was pretty close. And there were certainly Republicans who were saying that, gee, if all this spending caused the inflation, which played some role, then maybe one way of getting rid of inflation is reducing the debt. So they had sort of a theory of the case that they thought was, you know, made some sense. But it was pretty close. It was as close as it’s ever been.

I mean, what is the incentive structure? The incentive structure now is that if you push the other party hard, the one that’s supposedly in control, the other party had the Democrats at the White House, that’s pretty important, that if you push them hard, you can get something out of it. You may not get everything, but you can get something out of it. And so I think Republicans feared we won. President Biden said, no strings attached. In the end, there were strings attached, so they can go— even though they didn’t get what the House Republicans originally wanted, they can say, we got something. So what’s the incentive for next time? Well, pushing it really hard and getting something.

ZK: So what do you think people got? I mean, was there an affirmative other than the Republicans got two years extra of work provisions for people aged 52, 53, the Democrats got to save more IRS funding because of just lovely Washington bookkeeping, you know, the budget was then cut, but then it won’t be cut because then the money that was cut from somewhere else will be reallocated to it, so it’s cut, but it’s not cut. I don’t know. I mean, it—

JP: A bit less spending, right? There’ll be a bit less spending. So I mean, given the potential downside, what was eventually achieved was pretty minimal. So, one, you have to think, was it fundamentally worth it? Well, no. I don’t think it was fundamentally worth it. Not much will be really changed. But again, if you’re political and, you know, I hate approaching it from this angle, but if your incentive is that it’s just to beat the other side to some degree, then that’s what Republicans did ’cause they were able to get something. And the most important thing they got is that President Biden had to give up on his no strings attached thing. So they can say, we moved the president. We forced him to do it.

JP: Now, again, I find that all very boring. I find those kinds of incentives and those kinds of games extremely boring. They make for a lot of like Axios and political stories, but I fundamentally have zero interest in those kinds of debates and figuring out the political winners and losers. I’m just really not interested in that. Now, if this debate had been two sides both putting forward their Medicare and social security or foreign plans and being discussed in the media, that would be great. That would’ve been a very interesting debate. But neither side had any interest in really doing that. So this debate is the debate about tactics and political winners and losers, which, again, I think this is a lot and fundamentally doesn’t change anything.

EV: I think there might not have been a whole lot of interest in journalism covering it that way either, right? There’s a big tendency towards horse race journalism, less of a tendency towards like, let’s actually try to assess whoever’s ideas or whoever’s policies are gonna make more sense here. I don’t see that a lot personally.

JP: Right. Well, again, it’s just like a political race. I mean, horse race coverage versus the substantive policy debate, though of course, more and more we see, I think, even in presidential races, you see politicians putting up sort of ridiculous plans as sort of admission tickets into their political races. I remember President Trump’s 2016 tax plan, which I think was a $13 trillion tax cut. What he eventually passed was a $1.5 trillion tax cut. So that first plan, which plenty of journalists covered, like this is his real plan and we need the— what would be— I mean, it was a silly plan, but yet you sort of have to cover it. But that wasn’t like a real plan. So it would also be great politicians would give somewhat real, comprehensive plans that would make some sort of sense that could actually get passed, and then we could debate those. So it’s a certain lack of seriousness.

ZK: So I wonder, is there another lack of seriousness in the way in which we politically understand, and then also the way we economically understand deficits. So there seems to be two extremes here. One is deficits don’t matter and there is a strain of what’s called modern monetary theory that essentially sovereign governments can endlessly— because they’re issuing debt in their own sovereign currency, you can’t ever really go bankrupt. So you can basically just continue to issue money. That’s an overly simplistic way of talking about that theory, but it’s essentially a theory of deficits, at least within the realm of what they exist and don’t matter. I’m sure nobody would argue that a deficit of, I don’t know, a quintillion dollars wouldn’t matter. I mean, there’s a number out there where no one would argue that it matters.

And then the other one of like, the American government should be like the average person who balances their checkbook and spends within their means, right? And those are kind of the two poles. But it seems like we’ve had people since the ’90s warning in a, again, very bipartisan way, Larry Summers, who’s been in democratic administrations, who’s his own version of a deficit hawk. But it doesn’t actually seem to have mattered yet, right? I mean, does it matter? Will it matter? Should it matter?

JP: I mean, this is a question I’ve discussed and I’ve asked people about what’s the magic number? What’s the magic share of GDP where we go over the edge and markets freak out? I mean, I don’t know exactly what that is. Certainly, as a share of GDP, the debt has gone up a lot since the early 2000s. Share of GDP, I think it’s tripled. And up until fairly recently, we had very low interest rates. Maybe they were artificially low. So in the end, markets will let us know. Will borrowing costs go up? And I don’t think there’s an infinite runway, but there is some runway. And I would feel a lot better that if we had fiscally solvent programs that didn’t assume debt never mattered.

But we also have the advantage of, one, obviously, the dollar’s the world’s currency. We’re not a heavily taxed nation, so if we had to, and we’re going to have to, we can raise taxes. And we’re a nation that is very productive, but could be way more productive. If you are a more productive country and you can grow more, it’s easier to deal with these debt problems. You can’t necessarily grow your way out of a debt problem, but if you are a growthier country, and a lot of my work is about that very issue, making us growthier, then you have more runway to deal with debt or spend money on a lot of things. But whether it’s spending money on, you know, you pick your program, it’s better to have greater resources than less. So the US is in a bit of a unique position, but I wouldn’t just assume that position can withstand all these other pressures and a potential financial market reaction at some point. I’d rather not see that day.

I do not believe we have optimal— I mean, one, does policy matter? I think it does matter. If I did not think it did, I would’ve been an attorney, something like that. Policy matters, obviously. I work at a think tank, and I think better policy would help encourage, to use the administration’s phrase, greater productive capacity by the United States. I love it. I love when politicians use that word, productivity, productive capacity. Yeah. I think absolutely we could. This is not the best of all possible worlds, and I don’t think we should accept that this is just kind of how it is and how we’re gonna grow, how we’re gonna grow, and therefore we need to purely focus on redistributing the benefits of that growth. I think we can grow faster. I think we can grow substantially faster. And I would like to see what the world would look like had we been growing substantially faster for the past half century. If those growthy dreams of the 1960s or even the 1990s had actually panned out, what the world would look like. I think it would be a better America.

EV: So the basic history here, being that we were super productive right up until the ’70s. The ’70s saw the “great stagnation” and we’re not nearly as growth oriented as we once were. And I know there are several theories about why this happened. What is yours? A compilation of them, or do you have a different one?

JP: Right. There are a lot of theories, and I sort of break them down into maybe things we could control and things we couldn’t control. I mean, there’s the theory that it just became a lot harder to get big ideas. If there’s like a tree of ideas, all the big ideas on the low hanging branches we got, so now we have to climb up higher on the tree. When we do research, it requires a greater expenditure of resources. We need more researchers. Researchers have to learn more, so they to go to school longer. The whole process is a lot slower. So that’s the low hanging fruit theory. And I think there’s some validity to that.

There’s that we had all these great inventions back in the late 18th century, rather, the late 19th century, early 20th century, we sort of extracted all the productivity gains from electrification and the internal combustion engine. The new inventions just haven’t been as good. Not that they’re unimportant, but the computer and the internet gave us a bit of a productivity boost. They just were not fundamentally as sweepingly important as public sanitation making us healthier, or, again, the combustion engine or electrifying factories. So that’s a theory. And there are others. That’s kinda like the macro theory.

I mean, there’s not much we could have done necessarily about those situations, but then what did we do? Did we make mistakes? Was it helpful that we began spending a lot less of a share of our economy on R&D, on basic research after the space race? Probably not helpful. Do we decide to create a regulatory regime that made it a lot harder to build things in the physical world? And we didn’t really focus that much on the downside. Probably not helpful. So I think there are things we could have done differently to sort of offset those headwinds, and we didn’t.

My ideal world, not to go on, is that every change to the tax code, every spending program should be looked at through a innovation lens. Does it make it easier to innovate in this country? Does it help growth? Does it help technological progress? That shouldn’t be the only factor, but that’s something we should care about. So I mean, that’s sort of my short answer, is I think it’s a multicausal, multifaceted problem. But at the end of the day, we could be richer, we could be healthier, the world could be cooler. And that’s the kind of world I like to build.

ZK: And I like the double entendre of the world could be cooler ’cause it could be less climate change, temperature rising, but it could also just be way cooler.

JP: I’ve been watching a lot of TV shows and movies lately, scary movies, about climate change, which I think do a great disservice. That’s on my mind.

ZK: What about the— and this is, you know, kind of wonk alert, wonk alert, but the question of we are maybe more productive than we think because productivity is a statistic whose measurements in a technology fueled world have been notoriously complicated. It was a 20th century statistic based largely on measurable output per worker hour.

JP: Wheat and steel.

ZK: Right.

JP: Wheat and steel.

ZK: Stuff we made.

JP: Wheat and steel economy. We don’t have a wheat and steel economy anymore.

ZK: So we don’t quite know how to do a bits and bytes productivity economy. There’s a lot of very interesting work. One of the members of The Progress Network, Erik Brynjolfsson, has done a lot of interesting work about all this stuff. But it remains a legit question, at least I think it remains a legit question even though many people pooh-pooh it, of maybe we’re a lot more productive than we think, we’re just not measuring it well. Maybe our economic growth is a little more straightforward, even that has some question marks. What about that idea?

JP: So I think if you wanna make an argument, and I think you can make an argument, that productivity growth is being mismeasured and let’s say it’s half a percentage point, several tenths of a point. It’s been faster. I think you can make that case. Is the mismeasurement so much that it’s actually twice as fast as what we think it is? I don’t think very many people are arguing that. And nor am I caught up on the number. I’m caught up like, what is our potential? Even if you could come up with a new way of measuring it that said, oh, guess what, it’s been faster all these years, well, given what I just said, given I think better policy, it could have been faster still. There’s no way, with as bad a policy as we’ve had on taxes, on regulation, on federal investment, on immigration, on trade, that we couldn’t be in a better place than we are right now. So I would not take any solace in those numbers. I think we should try to get the best number we can, but the point remains that growth could have been faster no matter how we accurately or inaccurately measure it.

And I just think there’s like an acceptance. I remember back in the early ’90s, the consensus was the US economy had sort of hit its steady state, growth was what it was, and how dare presidential candidates talk about speeding growth up. And then we had a growth boom. Like 15 minutes later, we had a growth boom. I hope we’re at a similar point where people are saying growth is what it is, but I hope there’s enough happening in technology that we’re gonna do the right things to encourage technology that we can have not just a sort of ’90s growth boom, but something a lot longer and more sustained.

EV: Yeah. So let’s talk about some of those things that are on the horizon that I know you’re excited about by reading your, your newsletter. Yeah, AI being one of them. I’ll start with that. There’s some others. We’ve talked about AI in the podcast, but it was from a more ambivalent point of view. I think how I would describe your point of view is that you’re worried it’s gonna be strangled by regulation. I wonder if you could talk a little bit about that and if you just feel optimistic about it in general, what you feel excited about.

JP: Well, I mean, I think the good news that if it kills us all, we don’t have to worry about Social Security entitlement.

EV: [Laughs] Screw the debt.

JP: So there’s your fix. Yeah. So we can just spend, spend, spend ’cause we’re never gonna reach the point. So one of the things I’ve complained about is sort of this pervasive half century real pessimism about technology. And if I ever thought that somehow I was making too much of it, the fact that we had what seems to be a pretty substantial breakthrough in creating what they would call a general purpose technology that can be used across the economy, we got to enjoy that for about 10 minutes before all the jobs are gonna be taken away, and again, if they don’t take all the jobs, they’ll probably all kill us.

Listen, I think we should talk about AI safety and I think we should talk about potentially what that means for workers, but to me, the imbalance in the coverage between upsides and downsides, it’s just so emblematic of the mistakes we’ve been making for decades. So it does not surprise me that a culture, which has been sort of stewing in catastrophic thinking for all these years, and a media which has now, again, firmly jumped on the, this is all gonna kill us and we need to talk a lot about it, that I guess I’m surprised that only like 60% of people think that AI’s gonna kill us in the end. I’m surprised that maybe it’s not higher. So that bothers me. That bothers me.

And then for a country that has learned nothing, nothing— we’re sitting here, we were talking about climate change and, again, I’ve been watching some very high profile TV series like Extrapolations on Apple TV+ about climate change and we’re all worried very much— well, if we were getting 80% of our power from nuclear energy, maybe we wouldn’t have a climate change problem. But there was this sort of overcorrection, I think, decades ago, but we seem to have learned nothing ’cause now we’re seeing, I think, that overcorrection or overreaction to a technology that is not sentient, that cannot kill us all, and the threats, at this point, remain science fictional, and already we’re talking about pauses and nationalizing the technology. So yeah, that concerns me and that worries me.

EV: Can I say— wait, just one quick thing, Zachary, sorry. I will say it’s not just the general populace and the media, right? It’s also AI researchers and experts.

JP: Yes.

EV: And I think that’s a thing that got me ’cause I have a job that has a lot of writing, right? You also write quite a bit, and we’re supposed to be very exposed to AI. I really feel that the AI right now, there’s no way it could do my job. It helps me right now. It’s sort of a useful tool. But there should be something to be said that the people that know the science and the tech behind this stuff are worried.

JP: I think the easy sort of center right or libertarian responses, look, these guys work at these companies and these CEOs, they already have the technology. They’re just trying to pull up the ladder behind them. So now that we have the technology, we have the models, let’s have a lot of regulation. We have a lot of money, we can deal with the regulation. And that is a classic critique of calls for regulation, that it helps the people who are already there. It helps big technology companies. And I’m not gonna say that that is not playing a role, but as I think about this issue, just like I’m setting that aside and thinking like, people have real concerns. So I think absolutely, this is an issue we should talk about, that government should perhaps help research. I don’t think it should be ignored. But I think to immediately jump to the idea that it’s gonna kill us, we should freeze it, we should nationalize it, I am worried, again, about the overreaction. To think about it and to research it and be aware of it, I think is one thing. To make that leap, I think some people are making that leap, but I think—

Listen, the original sort of early ’70s environmental movement, one reason they didn’t like nuclear power, not just because they’re worried about an accident or they’re worried about nuclear waste, but they were worried that it would supply a lot more power and fuel a consumption of natural resources. And that’s one reason [inaudible]. Then you have sort of what they would call the de-growth people who aren’t gonna like it ’cause it looks like it might speed up economic growth. I hope it does. So I think there’s a lot of reasons, though to be clear, I do take the scientists very seriously, and I’m not just gonna hand wave away their concerns as a bunch of CYA, cover their tuchus kinds of things. No, I’m not gonna do that.

ZK: You know, another set of members of The Progress Network, Ted Nordhaus and The Breakthrough Institute and Alex sort of have been making this argument of nuclear power is probably the simplest immediate fix to some of the carbon emissions energy problem, but of course is so embedded in a framework in both Japan and Europe and the United States of Chernobyl and Fukushima and Three Mile Island and The China Syndrome and it’s gonna kill us.

JP: Thank you for the China Syndrome reference, often gets left out.

ZK: Well, let’s get that one in there. I do wonder about the de-growth part, right? So here’s another maybe devil’s advocate-y question, which is the world’s population is plateauing. The population of the developed world is shrinking and aging. Well, it’ll age before it shrinks, but it’ll plateau, it’ll age, and then it’ll shrink. And I don’t know that any of us fully confronted the question of like, what do you do about growth when there are fewer people and they’re consuming less? As in separate from whether or not de-growth is an ideology that you ought to buy into, isn’t there just a pragmatic legitimacy to think that endless growth in the face of a shrinking number of bodies is unrealistic and therefore trying to create policies that juice it are not the best use of our collective resources.

JP: Right. I think all the impacts of a global population plateau and shrinkage and shrinkage in developing economies— and I just did a great conversation with one of our visiting scholars who thinks that the UN is overestimating population growth, so instead of peaking at the end of the century, it’s actually gonna peak in the 2060s, never really get much beyond 9 billion. And here’s the thing, he had never seen the movie Children of Men [laughs], so I recommended that he watch it. So I think you have to look, what are the problems. We don’t want economic growth just ’cause it’s statistics. What are the problems we want to solve and growth will help us solve?

I think problems such as there’s still a lot of poor people in the world. I think we would like those people to be better off, to be healthier, have more opportunity. I think that’s a problem. I think we have lots of medical issues. We’d like to solve those. We would like to make our society more resilient to all kinds of— we’ve heard this word about existential threats from AI lately, well, AI could actually help us deal with some existential threats. So I think are there problems that having more technological progress would solve? I think there are. Can you do that in a world of shrinking population? I think that’s more of a challenge. To the extent that our brains matter and the more brains you can throw at a problem, the more likely you can solve that problem, then a shrinking population, again, hurts that. But I think that’s where AI comes in, to help leverage AI to be a super research assistant for our research community. So I think if you’re worried about, gee, well, the shrinking population can’t grow as fast, then I think you have to really be very enthusiastic about AI helping, as machines always have, help us do more with what we have.

ZK: But doesn’t things becoming ever cheaper equally solve the problem? Like, I’ve always posited this, and I feel like this is part of the problem of statistics and our frameworks, right? If something costs a dollar and you’re only earning 70 cents, then earning a dollar is a good thing ’cause it gets you to buy whatever the thing that you need that costs a dollar. But if you’re earning 70 cents and that thing suddenly costs 50 cents, you’ve done just as good a job of meeting the needs that you talk about, right? So people who can’t access things they need because their income isn’t sufficient, one way, in fact, the only way we’ve focused on altering that equation is more growth, more income, more productivity, more output. But you could also solve that issue by cheaper stuff, which would actually look really bad for GDP and growth, but it would still solve the essential [inaudible]—

JP: But that would also come through innovation.

ZK: Right.

JP: To be able to create things more cheaply also comes through innovation. And then there are the needs we don’t ha— then there are the things which we don’t think of as needs or wants ’cause they don’t exist yet, right? [Laughs] what we view as what our basic needs are and what is a good life, that’s not a static thing. What I thought were my needs and wants, what I thought made for a interesting life were different. There are things, say, that I couldn’t imagine as a kid and perhaps for my children, that will mean taking a vacation in orbit or taking a vacation on the moon, or living to 120, and when you’re 100 you feel like I do right now. So we don’t know what those— that’s what we’re doing. We’re trying to solve problems and I guess meet needs we don’t even know we want yet. I mean, I’m sort of not being [inaudible]. I talk about a cooler, more interesting, more opportunity filled world. I mean, I think that is sort of the never ending endgame I’m looking at.

EV: It’s funny ’cause I feel like I’m so used to thinking about that through a dystopian lens, right? Like when you think about, are basic human needs being met? Where the popular culture usually goes is everyone’s basic human needs are met, now everything is done through AI and you’re only interacting with people through a like VR set, and so we’re all in the corners of our room.

JP: Right.

EV: But I mean, can you flip that for me right now? Like, let’s say we meet all of our basic human needs, poverty isn’t a problem anymore, let’s say health is pretty largely solved. I mean, what else could be out there? Do you imagine these things?

JP: I think another way of looking at that is what are gonna replace the jobs that machines replace? I don’t know. I mean, that is the weakness of my position in any kind of debate or argument. I can think about how AI or humanoid robots can do some of the things or maybe a lot of things that we currently do. I I think most of us could imagine that. I guess I could imagine how an AI can do a lot of my current job. I cannot imagine very easily, and maybe I’d be a really great investor if I could, I cannot imagine the new things that will be created, the new job, the new task, the new desires. It’s very difficult. Again, I would be a fantastic growth stock investor or a venture capitalist if I could do that. But I can’t. And that’s why there’s a lot of humility.

My version of futurism is not, this is what’s gonna happen in 10 years, or here are my three scenarios. My version of futurism is creating a society that kind of organically bottles up through all our decisions, give us the capability to create a sort of better future. I don’t know exactly what that’s gonna look. Maybe it’ll look like, you know, maybe what we’ll decide as a planet, as a people, will look like a Coruscant in Star Wars, a giant planet-sized city, or maybe it’ll look like some of these solarpunk images, we’re all living kind of in tree houses and things [laughs], artificial trees.

I don’t know what it’s gonna look like, but I want people to have the ability and resources to create the kind of future they think they wanna live in and their children want to live in. Again, I, I don’t know exactly what it’s gonna look like. It’s very easy to create the other thing, what you just mentioned, the dystopian version. Boy, that’s just a lot of rubble and smoke and people being very sweaty, or zombies. That’s so easy. AI will be very easily able to create dystopian films. Maybe it can help us create some utopian films as well.

ZK: It’s funny when you give a dystopian view of the world, A, if you’re the one giving it, just don’t give a date, right? Like, if you’re gonna do the Armageddon scenario. And B, no one holds you to that, right? No one holds you to the date. You’re not beholden to prove, in our contemporary culture at least, to prove your worst case outcomes. But you are somehow on the hook for the proof that you just said it’s hard to prove, right? You can’t show what jobs are gonna be created. But somehow that becomes a failing in the argument, whereas if you just forecast the dominoes falling and gloom descending, somehow one is not held to quite the same standard of future evidence.

JP: Well, what’s the Wall Street saying, if you’re a market forecaster, give a number and a date, but not both. [Laughs] I always forget who said this, that how is it that people think we have nothing but disaster ahead of us when we have nothing but progress behind us? We’ve had an amazing quarter millennium of progress, but yet people think that they’re always living in the end of days, that this is it. We can’t keep doing it ’cause it’s unpredictable. It’s absolutely unpredictable. So what I wanna do is give us the resources to not predict the future, but sort of invent the future that we want. Maybe that’s what they call a cool shit futurism scenario where it is space elevators and it’s a multi-planetary civilization. That’s very attractive. Maybe we’ll decide something different, but give us the capabilities to create what we find to be interesting and fulfilling. And hopefully along the way, it will mean that all the other billions of people on this planet who don’t maybe think much about the future because their present isn’t very good, that then they’ll think about the future.

I mean, we were talking about de-growth. It’s not just some crazy ideology ’cause it seeps into all our conversations when you hear people say, we can’t have all these poor people in the world live like we do now. I think that’s a pretty good goal. I think that’s an absolutely fantastic goal. What are we trying to achieve? That every person in the world can live the way the average American or Swede or German lives today. Yeah, I like that goal. Let’s do that.

EV: Jim, I have a personal question for you, which is, how did you get here? Meaning, I feel you probably didn’t pop out of the womb or out of college with this vision of futurism that— it really is fun. Every time I read your Substack, I feel like I had a good time.

JP: Great.

EV: [Laughs]. It’s true. Yeah. I mean, how did you get to where you are now with your thinking on this?

JP: Well, I think the easiest explanation that doesn’t recount me talking about my love of science fiction and growing up in kind of a working-class background where I did not think like this is the best my life could be. And I would love if I could move up the ladder. So that was always in my thinking. But listen, I have a big family. I want my kids to live in a world that is, safer, more opportunity-filled, that they can live the kind of dreams they want, that when they walk outside, it’s not gonna be 130 degrees in the middle of January. That’s what I want for them. So a lot of it really comes, and I started thinking a lot more about this as I had more kids. So what is the pro-growth reason for having more kids? Well, it makes you think a lot about the future. And it has certainly made me think more about the future and what kind of world I want for them. My days aren’t over yet, but that’s a big part of it.

ZK: There’s sort of a trope out there of millennials and Gen X having a much grimmer view of the future, both planetarily and economically. I mean, if you’re comfortable, do your children, many of whom I think are grown, share that, and what’s the debate like? What’s the dinner table debate when you’re making that argument and they’re saying, hey man.

JP: [Laughs] I know they really love the idea of student loans are being forgiven. As far as policy goes, they would love to live in a world where their student loans are forgiven. That is one sort of future-oriented thing we’ve talked about. I think they’re generally pretty optimistic, though, again, I think the last few years has made it harder, certainly with a pandemic which has disrupted their lives, disrupted their schooling. They look at the American political scene and it seems absolutely insane and chaotic. And I keep telling them like, it’s kind of not normal, politics like this is not— it used to be a lot more civilized. And so I think generally, they’re pretty optimistic. And whenever I hear the hint of like, oh, you know, the earth is gonna be turned to a cinder, I go, that is just absolutely not true. And you have every reason that your life could be every bit as fulfilling as mine was and my parents and more fulfilling. There’s no reason why that can’t happen, but you need to make good decisions.

Listen, one of my favorite sort of someone who’s not known as a futurist is, he’s known as a nuclear war theorist, was Herman Kahn. They did a version of him in Dr. Strangelove, who’s kind of painted as this dark nuclear war theorist. But in the latter half of his career, he became [inaudible] technocapitalist futurist in the ’70s. And when he was talking about his views, he eventually summed it up like as long as we keep advancing technically, and we just don’t make a bunch of stupid decisions, we should be okay. So that’s my bar. Let’s keep advancing. Let’s make sure the government does what it’s supposed to do. Let’s make sure our private sector is doing what it’s supposed to do. And just let’s not make any horrible decisions. And I think we’ll be okay.

EV: How millennials and Gen Z and younger view the US political scene is a very favorite topic of mine because I’m a millennial. My political consciousness sort of began around 9/11. I just feel like it’s just been a shitstorm ever since. And so I feel like people my age and younger feel like there’s no other way, like this is just how politics is. And you had something in one of your newsletters about the United States 50 years from now, and I think a lot of people my age assume the United States is gonna be worse 50 years from now. And you had something where you’re like, you think the economy will be stronger, the US will be more important in the world, the country will be more politically unified, and the gap between the rich and the poor will shrink. And I was like, well, that’s pretty much the opposite of what we hear most of the time. You wanna back that up a little, why you think that? A SparkNotes version.

JP: Yeah. I think the pandemic actually helps my case. I hope it does. It’s not entirely built on that, but it’s partially built on the pandemic, is that we saw what it was like to live in a world of shortages, right? Where we have supply chain problems, so maybe we couldn’t get things as easily in the past, or we just didn’t have things we needed. We didn’t have the masks we needed, we didn’t have the ventilators, even though this was a problem that there were a gazillion reports warning us of, we still weren’t quite ready. So we saw a world where we didn’t have what we needed. We saw a world where there were shortages. And we saw a world where it was a de-growth economy.

And then we saw the value of being, one, a wealthy country and a country capable of coming up with solutions on the fly. We saw the value of technology. We saw the value of being able to come up with a vaccine based on a technology that was still fairly experimental. So I hope that one of the lessons we learned is that— and I don’t know if you remember all the stories about America’s a failed state. We’re a failed state because we— well, the failed state was able to generate amazing vaccines. Now, getting people to take them may be something else, but is able to come up with amazing vaccines very quickly. Why were able to do that? Because we are a rich, technologically advanced country. That, doing that, people working together, where you had the government doing its part, you had entrepreneurs, the private sector doing its part, that can create some amazing solutions. And that’s why the country didn’t look like the movie Contagion, which we were all watching in 2020, where everything falls apart ’cause we were able to solve problems. And that’s how we move forward. We work together, we solve one problem, we solve another problem, and then we get to a better world.

ZK: Amen, brother. I’ll take that as a final word for this particular conversation. I think that’s a good final word. I think that’s true of most societies. One thing we’ve been trying to highlight in these conversations is that the United States has done uniquely well in dealing with collective problems, not nearly as well as we would like or can in the future, which you’ve been highlighting, but we don’t have a monopoly on that, that other societies have similar desires, similar impetus. And one of the less heralded stories for the past 20 years has been the degree to which vast numbers of people around the world and what we used to call the developing world, have begun to, I guess, own their own destiny. They’ve been able to own their own destiny and they’ve been able to create systems and societies that are just like everybody else, messily and stumblingly, solving those issues, producing better material conditions, better social cohesion, you name it. And that that’s not a story that is somehow limited to Japan, the United States, and Western Europe.

So, great to talk to you. I hope we’ll do it again. We do love the work. Again, Emma’s pointed to your Substack, which everyone should read, and you are a voice that we like listening to and have enjoyed listening to for the past bit of time. So thanks, Jim.

JP: Thank you both for having me on. I greatly appreciated it.

EV: Thank you, Jim.

ZK: Clearly, one of the difficulties and challenges of doing this podcast is the risk of an amen chorus ’cause we do tend to have people on who we like hearing. That hasn’t been always true. I mean, I like hearing the people even I don’t like hearing from, so it’s not like I only wanna listen to people whose views inherently accord with my own. But Jim’s one of these people who’ve really embodied this idea of let’s look at what’s working, let’s look at how we can solve what isn’t working, let’s look at the ways in which we’ve done so in the past, let’s have some degree of faith that we’re gonna be able to do it in the future.

EV: Yeah. And he really does this with sort of a, he hinted at this towards the end, like sci-fi inflected way, that there’s a lot of topics that I would consider dry that he writes about, that I really meant what I said, like it’s fun. And when you can get yourself on board with a mind that okay, may not have all the answers, but just seize the future in a cool way, in a more fun way. He says this a lot, like let’s make the United States like a cooler, more fun place to live. It makes the whole thing more palatable, and it’s a nice palate cleanser, actually. We are an amen chorus maybe sometimes here on the podcast, but we are very different from most of the voices out there, so there is that.

ZK: Maybe we should create hats. I should have thought of this during our discussion with Jim. We could do MACA hats instead of MAGA hats, Make America Cool Again. We could do like the Make America Cool Again. I think we’d get a whole sort of cross-cultural, bipartisan, just an idea.

EV: You know, I’m happy to report that our followers on Twitter come from both the hard left and the hard right. Jim himself writes in a very nonpartisan way in terms of political parties, so I think we can do it. MACA. MACA, MACA. Why not?

ZK: MACA. MACA, MACA, MACA, MACA.

All right. From MACA to the news of the week. What do you got for us?

EV: All right, so I have a couple things that are very much so related to the conversation that we just had. One of them is how AI is helping us fight bacteria. Obviously, antibiotic resistance is a huge issue, one that most people know about, that we are just running out of things to kill bacteria. And AI took half an hour to go through thousands of compounds to give to scientists that may help against a certain bacteria that it’s a superbug. There’s really no antibiotics right now that can kill it. And the scientists, in collaboration with AI, found nine potential new antibiotics, and one in particular that works really well against this superbug, this very particular bacteria. So this new antibiotic is called abaucin. Not sure if I pronounced that right, but it’s amazing. I mean, it’s super cool because there’s a lot of potential out there to find things that will kill bacteria. The problem is finding them, and AI cuts that time down very much so.

ZK: Yeah, you definitely can model out many, many, many more variables and scenarios and multi-variate scenarios through AI than the human— well, certainly than humans can do in a lab or than any other computer program had been able to do prior.

Audio Clip: The, name of the bacteria is called Acinetobacter baumannii. It’s a bit of a mouthful, but it’s a really nasty infection and it is quite resistant to most antibiotics. It causes sometimes quite devastating lung infections and skin infections and new antibiotics to treat this are essential. And what the scientists did was they looked at the structure of this particular bacteria and they used AI to really help inform them of how best to attack this structure and how best to not just penetrate the structure, but look at the inner workings of it to develop an antibiotic that could treat this really, really challenging infection. And they found a really good antibiotic to do this. And the interesting thing is the antibiotic is actually a narrow spectrum antibiotic. It doesn’t appear that it will work on a lot of other bacteria, just this bacteria. You think, well, that’s not a good idea, but it actually is a good idea because this way, it’s laser focused on this particular infection and you don’t have the potential to develop antibiotic resistance, or I guess I should say less potential to develop antibiotic resistance, to this particular antibiotic. So this is an incredible development, and I think we’ll see a lot more AI in the future to help with drug discovery.

ZK: I’m always amazed at the naming groups within biotech and pharma, like who comes up with abaucin? Did someone think of Abacus and think that abaucin was some sort of a problem solving, multi-column, will do this all at once. I know actually these large pharma companies have naming groups, right? Because they need to come up with, you know, Avastin, or whatever these names which mean nothing but suggest something.

EV: Yeah, I have no idea. You know what? I know where it came from. It’s because of the bacteria, which actually when you put that together, it’s just the A, the B, A, and the U, and then C-I-N, which is probably some pharma things. So it actually does make sense, but I didn’t connect that until just now [laughs]. It’s hard to tell from the verbal, you know, saying it out loud.

ZK: All right, abaucin it is.

EV: Yes. So moving on from saving us all from nasty bacteria and into the unheralded story that you mentioned at the end, that a lot of countries in a lot of places are moving on up in the world, there is a big index, big dataset called the Social Progress Index that tracks not GDP, but 52 other quality of life indicators, so everything from basic human needs to personal rights and freedoms, to environmental quality, life longevity, basically like all stuff other than economic growth that makes up having a good life. And they do these scores every year, but until now, we didn’t have the ability to compare countries over time.

So what they did is like made a huge data set that tracks every country, it’s 170 countries, covers 99.9% of the world’s population, tracks the progress between 1990 and 2020. And we’ve made incredible progress. Basically, every country improved between 1990 and 2020. Only Venezuela’s overall score declined. Tajikistan had the same score between 1990 and 2020. And then there were a few countries that made very little progress like North Korea, Zimbabwe. But overall, almost every country showed progress. Some showed massive progress, and the world score as a whole improved. So there is actually real data that shows that the world is improving.

ZK: I think this is one of these things, again, we struggle with constantly of, and the social progress people who’ve been at this for a while struggle with, there is this like don’t let the facts get in the way of a bad story. So of course the Social Progress Index does solve some of the problems, some of the happiness indexes, the UN Human Development Index, all of which attempted to broaden the dashboard, right? It’s not just about economic growth. It’s not just about output. We talked about that with Jim just now. But there are definitely other metrics that all of us understand are essential components of living a good life or living in a stable society. And the deficiencies of GDP have been known for decades. Robert Kennedy’s famous speech before he got assassinated in 1968 about how GDP essentially measures everything except that which is worth measuring in life, you know, time spent with family, enjoying a summer’s day.

And actually, some of these other indexes, as the social progress one, does talk about things like leisure time and space. I mean, all these things that you kind of need as part of the warp and woof of a good life and a good society. So even on those, when we broaden out the data, like not just output per person or longevity or infant mortality or child maternal mortality, even when you move beyond that to things that are harder to quantify, but you can’t quantify free time, disposable income, things like that. Even then, everything has been improving markedly. And even then things have a long ways to improve. And even then, everything we just said for a huge portion of people in our contemporary world is like crickets. Or it’s like, wah, wah, wah, wah, wah, wah, just doesn’t compute.

EV: Yeah, and I should say quickly too, that we didn’t improve in all of the indicators, there are 52 of them, but if you are interested in looking at the data, you can just Google Social Progress Index and the data is all there for you. And I should say too, that lest you think the progress stopped in 2021 or 2022, it did not. The only reason why it’s not included in the backtracking to 1990 is because they expanded the index even more to include more indicators. There are soon to be some clouds on the horizon for 2023. They’re kind of expecting a little bit of rocky times, but I think that’s the aftershocks of the pandemic. So we’ll wait and see.

ZK: So yeah, people should definitely check out the Social Progress Initiative, socialprogress.org, and you can look at countries comparatively. You can also look at where countries are doing better or not. And they’re just part of a whole [inaudible] of other organizations which we are trying to highlight at The Progress Network. You can go on the website. We have related organizations that are doing like-minded work to try to create this network of networks, which is equally important to the people who are involved, and which Emma is totally essential in creating. So thank you for doing that. Thank you for the conversation. Thank you all for listening. We will be with you next week and wrapping up this particular season a few weeks after that.

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Zachary Karabell

Emma Varvaloucas

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