🚀 Faster, Please! Week in Review #42
'Future Cities,' AI vs. populism, 'innovativity,' and more
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In This Issue
— Taking a serious (first) look at Donald Trump's 'Future Cities' idea
— The Age of AI vs. the Age of Populism
Best of 5QQ
— 5 Quick Questions for … economist Kevin James on ideas and economic growth
Best of the Pod
— A replay of my conversation with political scientist Daniel Deudney on the geopolitical and existential risks of space expansionism
🏙 Taking a serious (first) look at Donald Trump's 'Future Cities' idea
Former President and 2024 hopeful Donald Trump recently announced his idea to build ten new “Freedom Cities” on federal land. Trump may be a salesman at heart with a history of pushing absurd policy proposals (like his $12 trillion tax cut plan back in 2015), but building new American cities, ceteris paribus, is not an inherently absurd notion. One wonders why, for instance, there are no big cities between Los Angeles and San Francisco. As urban planner Nolan Gray told me last year, “You could easily build million-plus cities on the existing footprint of Santa Barbara, San Luis Obispo, Monterey, or Santa Cruz without touching anything even resembling nature.” If Trump actually pushes “Freedom Cities” in a big way, someone might also want to ask him to what extent a) his trade protectionism might make building these cities way more costly and b) his immigration restrictionism might reduce the number of workers needed to build these cities — and people who might want to start a new life in them.
🤖 The Age of AI vs. the Age of Populism
We’re going to need better from our politicians in the Age of AI when along with plenty of creation there’s going to necessarily be destruction. But will we fear the latter so much — egged on by populist opinion makers — that we don’t accept the former and thus miss out on its benefits? Venture capitalist Marc Andreessen anticipates such pushback, which is why he’s not worried about massive AI-driven technological unemployment. Andreessen argues that AI and other innovation is already “illegal” for most of the American economy. Sectors like education, health care, and housing are dominated by government and industry barriers that prevent technological innovation and drive up prices. And as AI and robotics become more disruptive forces, workers will need something more than politicians promoting ahistorical fears. They’ll need policies to help workers increase their abilities to take advantage of change, not ones that acquiesce to fear of change, and present a vision of the future worth fighting for and living in.
Best of 5QQ
↗️ 5 Quick Questions for … economist Kevin James on ideas and economic growth
Are Americans becoming less entrepreneurial and risk tolerant? Is that why idea processing is lacking?
A firm’s ability to process an idea is a function of its strategy. A firm can pursue a long-horizon Innovation strategy that develops the innovative potential of an idea (and contributes to TFP growth), or it can pursue a short-horizon Quick Win strategy that does not exploit the innovative potential of an idea (and does not contribute to TFP growth). The economy’s idea processing capacity is then equal to the proportion of firms that choose an Innovation strategy.
Firms pursue the strategy that financial markets reward. When financial markets are effective (good corporate governance, effective disclosure, accurate non-manipulated asset pricing, etc.), firms can credibly pursue long-horizon Innovation strategies. When markets work poorly, investors reward short-horizon Quick Win (or “show me the money”) strategies that don’t require much commitment. So, the economy’s idea processing capacity has fallen because financial markets have become less effective, causing firms to pursue short-horizon Quick Win strategies.
This may sound a bit abstract, but something very similar is happening in science. In their brilliant paper “Stagnation and Scientific Incentives,” Bhattacharya and Packalen find that: i) scientists pursue the research strategy that their “market” (grants, academic positions) rewards; and ii) scientists also choose between Quick Win strategies that produce citations for certain but do not do much to advance science and high-risk long-horizon Innovation strategies that will advance science if they work out but will not produce citations if they do not. As the market has come to evaluate scientists on the basis of citations, scientists have shifted to the Quick Win strategy. Science has stagnated as a result.
So, to answer the question, Americans have not become *inherently* more risk averse or less entrepreneurial. However, the incentives that financial markets now create have induced firms to pursue Quick Win strategies that result in less innovation.
Best of the Pod
🌎 A replay of my conversation with political scientist Daniel Deudney on the geopolitical and existential risks of space expansionism
Daniel Deudney is a professor of political science, international relations, and political theory at Johns Hopkins University. He’s the author of several books, including Dark Skies: Space Expansionism, Planetary Geopolitics, and the Ends of Humanity, released in March of 2020.
So what don’t you like about expansionist visions of humanity in space?
Daniel Deudney: Well, Musk and Bezos articulate a vision of space expansionism that was first articulated early in the 20th century and has been subsequently developed. Bezos was actually a student of Gerard O’Neill, who was one of the main visionaries of space colonization in the United States during the 1970s. So they’re articulating a central set of ideas that is held by a large number of people, both in the United States and globally. And my book, Dark Skies, is really a systematic evaluation of the actual impact of space activities to date and a critical assessment of the likely impacts of many of these yet unrealized projects.
So to start with the historical record, this is not a simple task because space is just a place. And so there’s a heterogeneity of activities that have gone on there. So it’s like summing up apples, light bulbs, and grenades. But the standard narrative of space activities to date, I argue, is woefully inaccurate. It leaves out one of our major space programs — and, depending on how you count, perhaps our major space program and arguably our most consequential space program — which is the use of ballistic missiles to deliver thermonuclear weapons at global distances in very short periods of time.
The standard definition of space weapons is that they are weapons used against objects in orbit or placed in orbit. That’s completely insufficient because it leaves out the use of the frictionless environment of space as a corridor for rapid bombardment at distance. And so I say that we have this major space program that we don’t acknowledge as a space program. It’s what would be called an “unknown known.” Everyone knows that these exist, but they get misplaced or miscategorized. And if we put ballistic missiles back into the ledger sheet for an assessment of space activities to date, I have to conclude that the impact has been to increase the probability of nuclear war, which would obviously be a civilizational, perhaps existential, catastrophe for humanity. Take the Cuban Missile Crisis. The fact that these weapons move so rapidly — are so difficult to intercept — has created this unprecedented situation of vulnerability.
And this really points to a more general fallacy of this very optimistic thinking about space, which is to simply neglect the violence potential and the tendencies for this violence potential to be harnessed. It’s like they think that space is good, and if something is not good, then it can’t be involved in space. The reality is that this major space program (that we don’t acknowledge as such) has been a major negative in terms of the survival of our civilization. And so the first step for the space expansionist, I think, is really to be a bit more realistic and accurate about what they’ve actually done and the inherently enormous violence potential involved in this domain.