π Faster, Please! Week in Review #64
Please check out some great highlights from my essays and interviews!
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Melior Mundus
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My new book The Conservative Futurist: How To Create the Sci-Fi World We Were Promised
In This Issue
Essay Highlights
β American capitalism and 'deaths of despair,' again
β We all should hope the US economy can avoid recession. Really.
Best of the Q&A
β 5 Quick Questions for ... James Pethokoukis (me!) on his new book, 'The Conservative Futurist: How to Create the Sci-Fi World We Were Promised'
β A Q&A with β¦ economist Alex Whalley on the economics of moonshot R&D spending
Essay Highlights
π€ American capitalism and 'deaths of despair,' again
Nobel laureate economist Angus Deaton has a new book, Economics in America: An Immigrant Economist Explores the Land of Inequality. Deaton argues that the economics profession has been too focused on economic growth, especially via globalization, and too little on the economic inequality and disruption caused by Schumpeterian creative destruction. As Deaton tells Bloomberg, βYou canβt think about trade policy and think about money entirely. Itβs peopleβs souls and their communities and their churchesβ and their lives that are at stake when jobs are dislocated.β First, I am deeply skeptical of the notion that a country stuck in a productivity funk for most of the past half-century has been overly obsessed with economic efficiency. Second, I would also note that while there have been job losses in sectors competing with Chinese imports, the overall picture, considering both import and export dynamics, is positive. Third, I am also skeptical of the idea that inequality-riven βlate-stage capitalismβ or technology or global trade have made working-class Americans desperate and opioids appealing with tragic consequences.
π We all should hope the US economy can avoid recession. Really.
From 2007 through 2022, the American economy grew at less than half the pace of the previous multi-decade period extending back to the end of World War Two, experiencing both a Great Recession and Great Pandemic during that span. What this country desperately needs now is an extended period of rapid economic growth driven by rapid technological progress and innovation. That sort of success would help contribute to a virtuous circle of greater economic optimism and willingness to accept the inevitable risk and disruption from change, all in the hope for a brighter future for ourselves and future generations. Which brings us to the September employment report, released earlier today. I would guess the most common interpretation is that blockbuster job numbers β over 300,000 new jobs added, the most since January β increase the likelihood of more Fed rate hikes. Fingers crossed, though, that the New Roaring Twenties have finally lifted off and next year will be one of sustainable acceleration where good economic news really is good economic news.
Best of 5QQ
What caused the Great Downshift in tech progress and growth?
In all honesty, there probably isn't just one reason. Economists point to a number of macro reasons, such as having fully exploited the productivity enhancing potential of the great inventions of the past, as well as big game-changing discoveries and inventions just being harder to find. But I am also confident that the slowdown resulted from decisions we made as a country, such as regulating as if regulations had no impact on our innovative capacity and our capacity to build in the real world. I also think it was a huge mistake to invest less in scientific research after the end of Project Apollo and the end of Space Race. In any event, the Great Downshift was a massive surprise to the future optimists of the 1960s β and for that matter, those of the late 1990s who thought the tech boom of those years would result in a permanent upshift in productivity and economic growth. All of it: human-level AI, space colonies, undersea cities, and much, much larger economy.
π‘ A Q&A with β¦ economist Alex Whalley on the economics of moonshot R&D spending
Alex Whalley, an associate professor of economics at the University of Calgary and the Haskayne School of Business, is co-author of the NBER working paper, βMoonshot: Public R&D and Growth.β
So how different then was NASA spending than any other kind of government spending on growth and job creation?
Our conclusions is, really, it doesn't seem that different from other things. If you go back, there's a really interesting interview they did with a bunch of space scientists in the early 1970s. They asked them to reflect on NASA being involved in the space program: What technologies did they develop and how did NASA impact the technological development? And in those interviews, what comes through is that NASA is really speeding up the pace of technology; it's not generating that many completely new technologies nobody has ever thought of. And so I think that's really what it does. It kind of accelerates. It's kind of like Operation Warp Speed with vaccine development: A lot of the elements were there already, and so having massive government investment, having the regulatory burden reduced, this kind of national priority to meet this goal, I think that really accelerates innovation. But I'm not sure it's a completely different animal.