American population stagnation; building a pro-progress culture; Roaring or Boring Twenties, revisited; a chat with sci-fi author Ramez Naam; and more . . .
“If knowledge can create problems, it is not through ignorance that we can solve them.” – Isaac Asimov
In This Issue:
⬆ America has (almost) stopped growing: The pro-progress case for more Americans
🎬 A future-oriented America needs a future-optimist culture
🦁 Roaring Twenties or Boring Twenties, continued . . .
☀ Talking with Nexus trilogy author Ramez Naam
⬆ The pro-progress case for more Americans
America’s population growth, which never rebounded after slumping during the Global Financial Crisis, is now approaching zero. The Wall Street Journal reports that early estimates “show the total U.S. population grew 0.35% for the year ended July 1, 2020, the lowest ever documented, and growth is expected to remain near flat this year.” The population might even shrink for the first time on record. From the WSJ:
With the birthrate already drifting down, the nudge from the pandemic could result in what amounts to a scar on population growth, researchers say, which could be deeper than those left by historic periods of economic turmoil, such as the Great Depression and the stagnation and inflation of the 1970s, because it is underpinned by a shift toward lower fertility. “The economy of the developed world for the last two centuries now has been built on demographic expansion,” said Richard Jackson, president of the Global Aging Institute, a nonprofit research and education group. “We no longer have this long-term economic and geopolitical advantage.”
If you’re in favor of accelerating technological progress and economic growth (and my assumption is that description applies to most of you), then you should want a more populous America. That should almost certainly be your clear preference if you think the discovery of new ideas is critical to tech progress and growth. “Other things equal, a larger population means more researchers which in turns leads to more new ideas and to higher living standards,” explains Stanford University economist Charles Jones in his 2020 paper, “The End of Economic Growth? Unintended Consequences of a Declining Population.”
And not just that. Researchers have linked the long-term decline in the US startup rate to the long-term slowing in the growth rate of the US labor force, with the latter explaining as much as 70 percent of the former. And if “present trends in fertility and immigration continue, the startup rate will remain near its current levels,” write Fatih Karahan (New York Federal Reserve), Benjamin Pugsley (University of Notre Dame), and Ayşegül Şahin (University of Texas) in their 2019 paper, “Demographic Origins of the Startup Deficit.”
Likewise, the late Nobel laureate economist Gary Becker also saw the important linkage of fertility to productivity: “Low fertility reduces the rate of scientific and other innovations since innovations mainly come from younger individuals. Younger individuals are also generally more adaptable, which is why new industries, like high tech startups, generally attract younger workers who are not yet committed to older and declining industries.” (There is even something in boosting population growth for inequality worriers. In the best-selling Capital in the Twenty-First Century, economist Thomas Piketty argues that higher fertility would reduce inequality by increasing economic growth and dispersing the wealth of the rich among more descendants.)
So it’s not crazy to see pro-population growth as a key element in a broad pro-progress agenda. Of course, the most obvious way to boost population growth is through immigration. Boosting fertility rates, on the other hand, has proven far more difficult.
But author and US Senate candidate J.D. Vance seems to be making a different argument when he calls for giving kids a vote controlled by their parents. (I will set aside his political motives, as well as the illiberal nature of the idea.) Vance recently criticized childless, liberal politicians such as Sen. Cory Booker and Rep. Alexandria Ocasio-Cortez for what he described as having no “personal and direct stake” in the future of the country.
So let’s noodle that for a moment: Are societies with lower fertility rates more short-term oriented? That doesn’t seem to obviously be the case in their economic policies. Take a look at two economic factors, indebtedness and infrastructure. In one of my favorite studies, Yale economist Ray Fair notes that around 1970, US infrastructure spending as a share of GDP began a steady decline even as Washington started running large and consistent budget deficits. Fair argues the two occurrences reflect a sustained change in national attitude: "The overall results suggest that the United States became less future oriented beginning around 1970."
The reasoning here is obvious: Fixing your roof while the sun is shining and curbing spending before the bill collector calls require a bit of long-term thinking. So using those two indicators of future orientation or long-termism, how does the US compare versus nations with lower fertility rates? Plenty of rich countries that spend a larger share of GDP on transportation infrastructure also have a lower fertility rate than the US (1.71), including Australia (1.66), Austria (1.44), Canada (1.47), Denmark (1.67), Germany (1.54), United Kingdom (1.63), Sweden (1.66), and New Zealand (1.61). And countries with a higher World Economic Forum infrastructure ranking but lower fertility rate than the US include (in ranking order), Singapore (1.14), Netherlands (1.57), Switzerland (1.46), Japan (1.36), South Korea (0.92), Germany, Austria, and the United Kingdom.
And when it comes to debt, among the countries with lower fertility rates and a lower gross public debt-to-GDP ratio: Canada (107 percent), Denmark (48 percent), Finland (70 percent), Germany (68 percent), United Kingdom (117 percent), Norway (47 percent), and Sweden (56 percent).
If you’re worried about population stagnation — whether for economic or geopolitical reasons — the most obvious and workable solution is more immigration. It’s hard to write this sort of newsletter without frequently mentioning immigration. And, indeed, I have done so and will continue to do so in the future. (You might also want to check out my podcast (and transcript) with economic commentator Matthew Yglesias about his book One Billion Americans: The Case for Thinking Bigger.
🎬 A future-oriented America needs a future-optimist culture
During what is often called a “golden age” for the US economy, fast GDP and productivity growth was accompanied by an optimistic, tech-solutionist culture. From The Jetsons to Star Trek to 2001: A Space Odyssey, Hollywood was producing images of a future worth striving for. And it really did seem like a whole-of-society effort to embrace progress. For example: As the American attempt at a Moon landing neared, Standard Oil distributed the “Map of the Moon” and “Trip to the Moon.” The two giveaways, according to Atlas Obscura, combined “lunar geography, photography, and spacecraft illustrations, along with celestial facts and purple prose: ‘The pale moon hangs like a distant target against the jet-black background of outer space.’”
And after the successful Apollo 11 mission, Gulf Oil gave away “We Came in Peace” with each fill-up (also available for purchase), a booklet recounting the grand civilizational achievement. The oil company even ran a television ad about it, featuring Twilight Zone creator Rod Serling:
And here’s the text:
Rod Serling: Man has walked on the Moon. But do you and your children really know how he did it? How he got there, how his space vehicles work? Or about the universe that man now so freely travels? Have you considered all the new careers that man’s quest in space has created? Well, much of this has been written. But it’s spread out like space itself. The people at Gulf who’ve brought you so much space news know that. Now they’ve put all of this material into this collector’s edition called “We Came in Peace.” It’s a permanent, 75-page book with full-color illustrations. “We Came in Peace” tells you the full story of one of man’s greatest accomplishments — clearly, simply, completely. I can tell you as a man who’s been associated with another end of space, that I’ve learned things from this book.
Narrator: Since your name isn’t Rod Serling, just think of all that you can learn from “We Came in Peace.” Buy your copy at any participating Gulf station for $1.
Of course, when your society is doing big things, it’s easier to promote a future-optimist vision. Just ask the Disneyland folks tasked in the 1970s with devising new rides for Tomorrowland. The end of the Space Race played a big role in the theme-land’s loss of future focus, from which it has never really recovered.
Yet even if the real world isn’t doing big, aspirational things, the culture still can. In this newsletter, I have pointed to some (all too few) examples of future-optimistic films and television shows such as Interstellar, The Expanse, and For All Mankind. More of that would be helpful. But Hollywood shouldn’t carry the entire burden. TEDx event organizer Cameron Wiese recently wrote an essay promoting a 21st century update to World Fairs as a means of promoting aspirational images of the future. It’s worked before. The Crystal Palace Exhibition of 1851 in London was the first of many 19th century fairs that highlighted the rapid industrial advances of the age. For Great Britain in particular, the goal was to provide hope for a brighter future through technology after two decades of European political upheaval. From Wiese’s essay:
For months, you've watched livestreams of cranes and trucks sculpting the landscape into a world of wonder. Now, flicking your wearable token with impatient fingers, you feel a slight force as your Hyperloop pod comes to a stop. The door slides open to reveal the Tree of Life — a 900-foot tall work of art made from carbon dioxide that's been reclaimed from the atmosphere. You walk towards its center and begin to notice the images of every known species flickering on its branches. You meet your friends, shake hands, hug, and then step through the Tree's portal gate.
You leave today and enter the world of tomorrow.
In this world, you explore the depths of our oceans, take a mission to Mars, and travel back in time to the 1893 Chicago World's Fair recreated in VR. You tour the geothermal plant powering the Fair, see the 3D-printed homes of tomorrow, and watch synthetic organisms decompose the plastic polluting our oceans. You meet the bright minds of tomorrow at the World's Science Competition, watch de-extinct wooly mammoths play, and cheer researchers as they debut the cure for aging.
Another example of future-optimist culture are the fantastic “Visions of the Future” posters commissioned by NASA and the Jet Propulsion Lab. A few of the works:
And again, we can have a virtuous circle where fast economic growth and tech progress support a culture of growth, and vice versa. We’ve certainly seen it work the other way: a doom loop of slow growth and dystopian images of the future. Enough.
🦁 Roaring Twenties or Boring Twenties, continued . . .
So here’s the other side of the pro-growth Roaring Twenties argument: the Boring Twenties argument. I think it’s wrong. I hope it’s wrong. But we have to consider whether it’s right. And policymakers should assume it’s right and double-down on pro-progress public policy. Now you might already be familiar with the reasoning of productivity pessimist Robert Gordon, a Northwestern University economics professor and author of the outstanding The Rise and Fall of American Growth. As he recently wrote to explain his position in a “long bet” with productivity optimist Erik Brynjolfsson:
Will robots and AI bring a new revival comparable to the post-1995 digital revival? A reason for doubt is that a doubling of the U.S. stock of robots in the past decade failed to revive manufacturing productivity growth, which has languished at a pitiful 0.1 percent rate. Similarly, AI is nothing new, and for more than a decade has replaced human customer service representatives by annoying voice-recognition systems without reviving growth. Much economic activity, from home construction to slicing deli meats at the local supermarket, remains immune from a radical AI transformation.
I briefly critiqued that position in my previous newsletter. (And, of course, read Brynjolfsson’s take.) Another bit of productivity pessimism comes for economic consultancy Capital Economics. In a new report, it focuses on the argument that the pandemic has created or accelerated changes in the economy, such as work from home and ecommerce, that will boost productivity. (Again, a counter argument, this one from Goldman Sachs, in a previous recent Faster, Please! issue.) At the moment nonfarm business productivity growth is running at a rapid 4 percent pace, year over year. But that pace stems from the pandemic hangover since in the early stages of the outbreak nearly 40 percent of job losses were in the leisure & hospitality sector, where, according to CA, productivity is less than half the economy-wide average. Anyway, here is the dour CA case going forward:
It is hard to tell whether working from home has been a positive or negative for productivity. Academic research points to a small boost to productivity per hour, but the limited evidence we have on sectoral productivity in services suggests that it was a slight negative. But either way, the longer-term impact on economy-wide productivity is likely to be modest because only 14.4% of workers were still teleworking in June. For most occupations, working from home is still not an option.
The pandemic also accelerated other structural shifts in the economy that could provide a boost to productivity, such as the transition from brick-and-mortar to online retailing. That shift has driven strong productivity growth in the retail sector over the past decade, although associated industries also benefitting from the shift, like couriers and messengers, have seen productivity plummet.
Finally, widespread labour shortages, which are unprecedented for this early stage of the economic cycle, could boost capital investment and productivity instead. But the sectors experiencing the most acute shortages — leisure & hospitality and manufacturing — are also two of the sectors with particularly bad productivity records over the past decade. The upshot is that we don’t expect any efficiency gains resulting from the labour shortages to offset the impact of the return of employees into low-productivity industries.
CA’s bottom-line is that it expects productivity growth to slow to 0.8 percent in 2022 and 2023. Yet in the firm’s longer-term forecast for a pickup to 2 percent growth, one can see optimism that new technologies, such as machine learning, will provide a boost.
☀ Talking with Nexus trilogy author Ramez Naam
I recently had a great podcast chat with Ramez Naam, a computer scientist, futurist, and author of the Nexus trilogy, an award-winning science fiction series that explores how neurotechnology could impact our society. I became acquainted with Naam via Twitter, where he often microblogs about the progress and potential of solar energy. And if you check out the podcast, he provides plenty cool info on solar. But I wanted to use the newsletter to highlight his thoughts about being a tech-optimist in a world with so much negativity about what tomorrow might bring.
![Nexus (The Nexus Trilogy Book 1) by [Ramez Naam]](https://substackcdn.com/image/fetch/f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fefd3a019-e7e4-43b8-9bc5-a5724628d745_292x500.jpeg "Nexus (The Nexus Trilogy Book 1) by [Ramez Naam]")
So here’s a bit of that exchange:
Pethokoukis: You call yourself a tech optimist. And what you’re talking about is a world of growth — and finding a way to power that growth in a sustainable way that doesn’t ruin the climate. There are people who take the other side and think you’re on the wrong path. They think that growth is killing the planet, that these are just temporary fixes and delays of the inevitable changes we’re going to have to make as far as accepting lower living standards. What do you think you understand that they don’t?
Naam: I think I get the long history of surpassing apparent limits, as well as the long history of reducing pollution or waste while increasing prosperity. I mean, if you go back to the late 1960s, we had the ozone hole, and we had air pollution and smog in New York, Los Angeles, and London that was so thick you could cut it with a knife. We had polluted water supplies. We had the Cuyahoga River catch on fire because it was so covered with oil, chemicals, debris, and so on.
We solved all of that. The air in the US is the cleanest it’s been. The water is the cleanest it’s been. In the US, our rivers don’t catch on fire. Smog is massively reduced from where it was in the late 60s and early 70s, and we solved that while doubling or tripling GDP per capita in that time. So we can actually do this. Technology is amazing if we put our minds to it and use policy to drive it forward.
Do you often debate these issues with environmentalists who think what you’re describing is the wrong path or even dangerous?
Yeah, I debate with de-growthers all the time. And honestly, I think de-growthers are dangerous because it turns out what really irks people about climate change is not the idea that climate change is real or that it’s human-made. It’s that it comes with this assumption that the solutions for climate change are going to involve living smaller lives, de-growth, economic stagnation, having to shrink our homes, not traveling so much, and so on. And that’s hugely alienating.
The futurists and other forward thinkers in the late ’50s and 1960s had an exciting vision of expansion, growth, and progress — colonizing the solar system and cities under the ocean, for instance. And then that changed in the 1970s. People began painting a very different vision of the future — a vision of retreat and worse living standards. Are people who talk about the future a lot still trapped in that 1970s mode?
Yeah. There are both optimistic and pessimistic future-thinkers. I think, from a narrative standpoint, you can’t have a story where “everything got better,” because that doesn’t have any narrative tension. So one reason that you see dystopia as a large challenge or whatnot in movies, novels, and so on is you need to have something for the heroes and protagonists to actually fight against and overcome. That clouds the issue somewhat.
But it’s undeniable that climate is on people’s minds. I live in Seattle. We just went through a massive heatwave. Yesterday it was 108 degrees. This is in June. The previous record was 103, and that was during August, which is when typically it’s hottest here. Before this year, we’ve only been over a hundred degrees three times. We passed 100 degrees three times this year. Portland’s up to 115-116 degrees. The heat almost set a record for Vegas and Portland. So I think when you look at that, people can get very pessimistic and very bleak because they see this real problem coming that we’ve under-invested in.
Despite that, I do think that there’s every possibility that we can build a world of more abundance — a world where the average person on earth, and nearly every person on earth, is much better off than they were a generation ago. But it will take some effort, and there will be some things that get worse rather than better.
Can we get to that future if the image of the future that most people see is apocalyptic and dystopian? Do you think it matters when the image in books, video games, movies, and TV shows seems almost universally terrible? Can we have that kind of culture underlying a society that still manages to build fantastic new technologies, whether it’s IT technology, energy, or biotechnology?
I don’t think it’s healthy for all the images to be dystopian. But I do think that, even though dystopian images are more common, there are lots of positive images that are out there as well. Maybe you find them more in nonfiction than you do in fiction. But you find some in science fiction as well.
You need some mix of both. I think really dystopian stuff can motivate people to take action out of fear and concern, but you also need a guide star — something that you find aspirational that you want to move towards. We need both of those out there.
EU proposals to regulate AI are only going to hinder innovation – Andrew McAfee, FT | “The EU is a rich and well-educated region with great technological strengths. Yet it is lagging as we move deeper into the ‘second machine age’, and by some measures lagging badly. There are many reasons why. One of them, I believe, is that more upstream governance translates to less downstream innovation.”
On Medici and Thiel: We should radically scale genius grants – Strange Loop Canon| “What we need is the YC of talent identification and encouragement. We either need Thiel to step up and 100x his fellowship, or a 100 other billionaires to step up and stop whining about talent.”
The Biden administration is responsible for the waste of 100,000 green cards – David Bier, WaPo | “Without drastic revisions in the glacial processing times, President Biden will have presided over one of the largest cuts to legal immigration in U.S. history — and almost no one is talking about it.”
The Case for a Longevity Moonshot – Bonnie Kavoussi, Lincoln Policy | “It would be more valuable to find a cure for aging than for individual diseases like cancer because it would stop those diseases from materializing in the first place. You’re at much greater risk of cancer and Alzheimer’s at age 70 than at age 30, and a cure for aging could fundamentally change that.”
The Reason Renewables Can't Power Modern Civilization Is Because They Were Never Meant To – Michael Shellenberger, Forbes | “All of which raises a question: if renewables can’t cheaply power Germany, one of the richest and most technologically advanced countries in the world, how could a developing nation like Kenya ever expect them to allow it to ‘leapfrog’ fossil fuels?”
On Twitter, Chris Dixon writes about the phenomenon of emerging tech being dismissed a toy or a triviality:
