⤴ Faster, Please! — The FAQ
Where I try to answer some common queries about this humble project
1/ What are you trying to accomplish with this newsletter? I’m trying to encourage a wealthier, healthier, and more fun America and world through ideas that promote greater and more significant scientific discovery and invention … leading to greater and more significant business innovation … leading to faster worker productivity growth … leading to faster overall economic growth. Much faster. (Also important: a pro-progress, techno-optimist culture.) Let’s get the cool sci-fi future we were promised! Flying cars? Sure. But also a world where every economy is an “advanced” economy, where lifespans and healthspans are longer, where abundant clean energy and a space economy mean humanity is limited only by our effort and imagination. A world of less suffering and more freedom, choice, and opportunity. Faster, please!
2/ You write a lot about economic productivity growth. What is that, and why is it so important, exactly? Here are two quotes, each from a Nobel laureate. The first is from New York Times columnist Paul Krugman: “Productivity isn’t everything, but, in the long run, it is almost everything. A country’s ability to improve its standard of living over time depends almost entirely on its ability to raise its output per worker.” The second is from the University of Chicago’s Robert Lucas: “Once you start thinking about growth, it’s hard to think about anything else.” Over the long run, faster economic growth is driven by faster productivity growth: the amount of goods and services produced from each unit of labor input.
3/ But what does productivity growth have to do with scientific discovery and technological innovation? A lot! A country’s economy can become more productive by its workforce generating more hours of work and giving that workforce more equipment to do its job. But of greater importance than those things is the part of productivity growth driven by technological progress and business process innovation (known as total factor productivity growth). And tech progress is driven by scientific progress. Advances “in thermodynamics, physical chemistry, and electromagnetism, [led] to the introduction of electricity generation and internal-combustion engines,” notes an excellent CBO analysis. And we don’t get microchips and the IT revolution without a better understanding of physics.
4/ Where does public policy come into play? Doesn’t all this new science and technology kind of just happen with “Eureka!” moments? What we do as a society plays a huge role. That’s why I write a lot about science funding, regulation, immigration, infrastructure, and tax policy. But here is the Deep Magic: Key to the Industrial Revolution was government letting innovators innovate. For millennia, stasis had powerful defenders. The Roman Emperor Tiberius executed a man who had invented unbreakable glass, “fearing the possibility of angry workmen rebelling.” Queen Elizabeth I declined to grant a patent to the inventor of the stocking-frame knitting machine, worrying the invention would bring her subjects to “ruin by depriving them of employment.” Craft guilds continually blocked new technologies.
But then the preservers of the status quo, like the textile machinery-wrecking Luddites, started to lose. Governments started siding with the innovators. Politicians didn’t like angry workers, but they liked even less losing wars to richer and technologically superior enemies. Progress still relies on government letting innovators innovate — and being rewarded for that innovation — despite the disruption that necessarily ensues. Economist Deirdre McCloskey calls this arrangement the Bourgeois Deal, which has three acts:
Allow me, in the first act, to have a go at innovating in how people travel or buy groceries or do open‐heart surgery, and allow me to reap the rewards from my commercial venturing, or absorb the losses (darn it: isn’t there something the government can do about that?). I agree, reluctantly, to accept that in the second and third acts my supernormal profits will dissipate, because my lovely successes from innovating the department store or devising the laptop will attract imitators and competitors. (Those pesky imitators and competitors. Hmm. Maybe I can get the government to stop my competition.) By the end of the third act, I will have gotten rich, thank you very much, but only by making you, the customers, very rich indeed.
5/ What is the Great Downshift and when did it happen? The year 1973 marked a turning point in the boomy postwar economy. The era of fast productivity growth ended — much to the surprise of economists and experts of all sorts. As Nobel laureate economist William Nordhaus wrote in 2004: “The productivity slowdown of the 1970s does appear to be a major distinguishing feature of the last century, and particularly of the period since World War II.” And other than the PC + internet productivity upturn from the late 1990s through the early 2000s, the Great Downshift has lingered on. (This half-century period has also been called the Great or Long Stagnation.)
6/ Do we know why the Great Downshift happened and then continued? There are worse explanations than a) we’ve squeezed all the gains from the big inventions of the 20th century — from electrification to the IT revolution — and now we’re waiting for the Next Big Thing, and b) big ideas are simply getting harder to find, requiring more researchers and resources. Actually, those are good explanations. And to those, I would add our poor policy choices, such as too little R&D funding and too much regulation that makes it hard to innovate and build in the physical world as opposed to the digital one. (Much of this was an overcorrection to environmental concerns that emerged in the 1960s.)
7/ Why are you confident that after a half-century it’s possible to turn the Great Downshift into a Great Upshift? Several reasons:
A lot of Next Big Things seem to be happening right now: AI (machine learning), genetics (CRISPR), energy (advanced nuclear fission, fusion, and deep geothermal), and space (reusable rockets). We’ve also seen the emergence of “deep tech” venture capital funds that tend to specialize in “hard” tech startups based on science-driven and research-fueled innovation in sectors such as robotics, life sciences, and space. What’s more, we are already seeing some real-world results: AI used for drug discovery, a biotech company seeking approval for its CRSIPR treatment for inherited blood diseases including sickle cell anemia, governments turning to small modular nuclear reactors for energy, plans for private-sector space stations. Rapid vaccine development, anyone?
Economists seem to have a better understanding of the reasons behind the Great Downshift, both macroeconomic and policy related (as noted above). There’s greater confidence that our policy decisions can generate faster progress.
Crises can create opportunity for action. Journalist James Fallows argues that when Washington has passed some big, forward-looking legislation such as land grant colleges or the GI Bill, there was often some sense of emergency or national defense need that was nudging policymakers. We have a plate full of crises today: A once-in-a-century pandemic, the threat of a chaotic climate, energy shocks from war in Europe, the challenge of a rising geopolitical rival in China, the inadequacy of an economy that does too little for too many — all of this presents an opportunity for big change.
8/ Is there any hard evidence that a pro-progress agenda can really happen? Yes! Over the past year, Congress has passed bills to improve infrastructure and boost federal science investment — with increasing productivity growth as an acknowledged goal for both. Pro-build housing reform — sometimes it seems as if all our productivity problems are about housing — is finally making real progress at ground zero: California. The vaccine production success of Operation Warp Speed had led to calls for similar efforts to be applied to other health problems. And there might be no greater sign of progress that the revival of interest in nuclear energy. We are finally recognizing that our climate change problem is really a clean energy problem. On the left, policy journalists are pushing a pro-build “supply-side” progressivism. And on the right … well, the GOP embracing techno-optimist Elon Musk has to be a good sign, you know?
9/ If we don’t get a New Roaring Twenties, followed by a Thrilling Thirties, and Fantastic Forties, what probably went wrong? Maybe the aforementioned technologies turn out to be less consequential than they appear right now. Or maybe policy is unsupportive of their further development, emergence, and commercial diffusion throughout the economy. Maybe we do too little to support R&D by government and business. Maybe we don’t correct for a half-century of environmental overcorrection and continue to associate economic growth with degradation of nature. Maybe we are unwilling to accept the risks that come with change, whether from technological disruption or from an open economy that embraces immigration and trade. The forces of the status quo and fatalism win. Blech!
10/ That sounds terrible. Why would we let that happen? A theory: Just as an individual's future behavior is to some extent governed by his self-image of the kind of person he hopes to be, so too society. Our image of the future influences and inspires our intentions, actions, and attitudes today. As Dutch futurist Frederick Polak famously put it, any culture “turning aside from its own heritage of positive visions of the future, or actively at work in changing these positive visions into negative ones, has no future.” We need at least a vague notion that all this hard work and risk-taking will pay off in a better world. Not only do we need politicians to engage in this sort of image communication, but our culture, too.
“Great nations,” posited 19th-century English art critic John Ruskin, “write their autobiographies in three manuscripts, the book of their deeds, the book of their words, and the book of their art. Not one of these books can be understood unless we read the two others, but of the three the only trustworthy one is the last.” (Art historian Kenneth Clark adds his own twist on Ruskin in the magisterial 1969 documentary series Civilisation, “If I had to say which was telling the truth about Society, a speech by a minister of housing or the actual buildings put up in his time, I should believe the buildings.”)
We can’t feed ourselves only visions of zombie-ridden, inequality-riven, climate-ravaged, surveillance-state dystopias and expect to produce an aspirational, tech-solutionist society. What we say about ourselves and our dreams through fine arts, architecture, film, literature, television, and video games matters deeply. It’s why Faster, Please! covers more than just business, economics, public policy, and technological trends. It’s why I write about how Soylent Green illustrated 1970s eco-pessimism, and why it’s important for Hollywood to produce more optimistic sci-fi works such as For All Mankind and Interstellar. This is also why I also spend time highlighting pro-progress culture, and how we can influence it through policy such as America against making big investments in World's Fairs and awe-inspiring (and useful) megaprojects both here and in space.
For too long, we’ve been stuck in a sort of self-reinforcing doom loop or “idea trap”: bad ideas and bad stories lead to bad policy, bad policy leads to bad growth, and bad growth cements bad ideas and encourages more bad stories. We need to break from that multi-decade doom loop, in part, by telling ourselves a different story. We should be using fictional and non-fictional presentations alike to inspire Americans to believe in how amazing the future can be.
Next year marks the 50th anniversary of the Great Downshift. At America’s 2076 Tricentennial, let’s make sure Americans can look back at five decades of tremendous and indisputable problem-solving and progress.
Micro Reads
▶ NASA Sets Launch Coverage for Artemis Mega Moon Rocket, Spacecraft - NASA | NASA will provide coverage of prelaunch, launch, and postlaunch activities for Artemis I, the first integrated test of NASA’s Orion spacecraft, Space Launch System (SLS) rocket, and the ground systems at the agency’s Kennedy Space Center in Florida. This uncrewed flight test around the Moon will pave the way for a crewed flight test and future human lunar exploration as part of Artemis. The SLS rocket is targeted to launch during a two-hour window that opens at 8:33 a.m. EDT Monday, Aug. 29, from Launch Pad 39B at Kennedy. The rocket and spacecraft arrived at its launch pad Wednesday after the nearly 10-hour, four-mile trek from the Vehicle Assembly Building. A livestream of the rocket and spacecraft at the launch pad currently is available on the NASA Kennedy YouTube channel. Live coverage of events will air on NASA Television, the NASA app, and the agency’s website, with prelaunch events starting Monday, Aug. 22. The launch countdown will begin Saturday, Aug. 27, at 10:23 a.m.
▶ Revolutionary Crispr gene editing speeds from lab to treatment room - Hannah Kuchler, Financial Times | Just a decade after Crispr was invented, the first drug to make use of the revolutionary gene-editing technology will be with regulators by the end of the year, with the promise that it will eventually transform the treatment of genetic diseases. …The first to close in on success is Crispr Therapeutics which, in partnership with biotech group Vertex, expects to submit late stage trial data seeking approval for its treatment for the inherited blood diseases sickle cell anaemia and beta thalassaemia to EU and UK regulators at the end of 2022. … Accordingly, big pharma groups like Pfizer, Bayer and Regeneron have taken note, forming partnerships with the pioneers. Analysts predict drugmakers will soon be in the market to buy Crispr companies, partly in the hope of acquiring the tool to improve innovative treatments for cancer.
▶ Europe’s Energy Crisis: Lessons from Fukushima and the US Shale Boom - Goldman Sachs | First, we estimate that Fukushima subtracted ½% from Japanese GDP while shale added 1% to US GDP. The European energy shock has had a much larger price effect than either of these events and is likely to have a larger economic effect as well. Second, we find that Japanese businesses and especially households economized on energy use and thereby cushioned the blow to the directly affected industries. While replicating Japan’s highly coordinated energy rationing will be difficult, we expect directionally similar responses in Europe, especially in Italy and the UK where households account for a particularly large gas consumption share. Third, the Fukushima experience shows that supply chain disruptions in downstream industries can amplify the output hit, which implies that not only the chemicals, metals and paper industries but also transportation equipment and machinery are at risk. On a more positive note, the US shale experience suggests that labor market effects are likely to remain relatively limited.
▶ Robots Are Key to Winning the Productivity War - Thomas Black, Bloomberg Opinion |
In the US, orders for industrial robots rose to a record 40,000 last year from 31,000 in 2020 and 30,000 in 2019. If anything, the US lags behind on robot adoption. In the latest worldwide data from the International Federation of Robotics, Asia’s installations of 266,000 robots in 2020 topped those in the Americas by more than sixfold. For robot density, which measures the number of these machines for every 10,000 workers, the US is seventh, trailing manufacturing powerhouses such as South Korea, Japan and Germany. The pandemic and the lingering labor shortage that came with it will accelerate this adoption of automation, which should be viewed as beneficial for the economy, for companies and even for workers. It bolsters productivity, which allows salaries to rise without adding to inflation. This latest wave of US warehouse and factory automation is unique because it comes at a time of near full employment, which helps allay some of the fears that the robots are coming to take everyone’s job. This rapid rise of robot demand hasn’t put thousands of workers on the street. Manufacturing employment increased by 271,000 in the first six months of this year, and the unemployment rate has dropped to 3.5%, matching the pre-pandemic level in 2019 that was the lowest since the late 1960s.
Very nice, I like the idea of writing a FAQ to better put context on what you write. Thank you for doing this, and everything else. Upward! 💚 🥃