Slow growth = bad politics; blue jeans vs. the environment; making the world smarter; Washington's R&D troubles; and more ...
“Everywhere I go, I hear the same thing: Where’s my f—king jet pack? Where’s my flying car? You’re thinking it right now. Where’s my vacation on the Moon? … Where’s the future you were promised? That’s what I hear you say. Who’s cheated me out of my spaceship and my ray gun? Stop looking for something that isn’t there. You live in the future and you don’t know it. The future sneaks up on us. It leaks in through the small, ordinary things.” - Doktor Sleepless by Warren Ellis
In This Issue:
📉 When economic growth falters, bad things happen. Like populism.
👖 Relax, all those jeans in your closet aren’t killing the planet
🧠 When smart people come to America, it makes the whole world smarter
🔬 Efforts to hugely ramp up federal R&D are running into trouble in Congress
📉 When economic growth falters, bad things happen. Like populism.
Over the past decade or so, we’ve experienced a global financial shock and recession/depression, a historically slow recovery, and a pandemic-driven global economic shutdown. And as concerns that last point, we’ve also seen how a technologically advanced society can tackle and solve a problem if it sets its mind to doing so. (There were certainly experts warning a COVID-19 pandemic vaccine might not arrive until 2023 or longer.)
And amid that economic tumult, we’ve seen the rise of nativist populism. How exactly might the two be linked? In the previous issue of Faster, Please!, I pointed to the study “Going to extremes: Politics after financial crises, 1870 – 2014,” which found that after a severe financial crisis, “voters seem to be particularly attracted to the political rhetoric of the extreme right, which often attributes blame to minorities or foreigners. On average, far-right parties increase their vote share by 30% after a financial crisis.”
A similar linkage between economic crises and populism is suggested in “Populist psychology: economics, culture, and emotions” by Matthew Rhodes-Purdy (Clemson University), Rachel Navarre (Bridgewater State University), Stephen K Utych (Boise State University.) From the paper:
Historical trends seem to show that populism, defined here as movements that self-identify as representatives of a unified, good people confronting a corrupted or malevolent elite, tends to cooccur with major economic disruptions. However, research into this connection provides us with a puzzle: while populist surges often come in the wake of economic crises, cultural variables tend to be better predictors of support for populism in public opinion surveys. In this paper, we develop a theory (affective political economy) that can resolve this paradox by analyzing the influence of emotions on politics. Using survey experiments, we show that economic crises cause emotional reactions that activate cultural discontent. This, in turn, activates populist attitudes. This paper provides an elegant solution to a major impasse in the study of the demand side of populism and provides a useful way of analyzing how economics and culture may interact to cause political outcomes.
This seems another reason to be extremely skeptical of those who are skeptical about the benefits of economic growth and technological progress. We’ve seen the downsides of shocks and stagnation, as well as the upside of having an innovative economy. And yet the notion of “degrowth” is being discussed with somewhat growing seriousness.
👖 Relax, all those jeans in your closet aren’t killing the planet
I didn’t understand this ad when I saw it play between innings of a baseball game I was watching (either White Sox-Yankees or Cubs-Cardinals):
Why would a clothing company like Levi’s want you to buy less clothing? After a bit of poking about the internet, I realized that there’s a supposed crisis of clothing overconsumption. Indeed, the ad informs viewers that “global clothing consumption has doubled in the last 15 years.” (Of course, I am pretty sure that this ad is still trying to nudge you to buy more fine Levi’s products.)
Assuming that the consumption fact is true — it sounds like something from an activist group — one explanation might be that humanity is a lot richer than it was 15 years ago. Indeed, global per capita GDP has also almost doubled over the past 15 years, and millions more of our fellow humans have emerged from deep poverty. (Moreover, global inequality has been on the decline.)
People with more disposable income might want to buy more clothing. And who cares if wealthier people buy more clothing? It’s not like we are running out of Earth. In More from Less: The Surprising Story of How We Learned to Prosper Using Fewer Resources―and What Happens Next, Andrew McAfee, co-founder and co-director of MIT’s Initiative on the Digital Economy, documents the “dematerialization” of economic growth. As he told me in a 2019 podcast chat:
Let me talk about, for example, timber, and all other wood products put together. I think we’re 30 percent below our 1990 peak in timber. We are about, at least, 20 percent below our 1999 or 2000 peak in paper. When you look at the data for paper, you can just see the smartphone age appear. For about the past ten years — again, not per person, but our total use of paper has been declining really quickly.
Our total use of fertilizer in America is now going down even as our agricultural output measured in tons continues to go up. In fact, agriculture is a great microcosm of this phenomenon. American crop tonnage goes up while water used for agriculture and irrigation goes down. Fertilizer goes down, and crop land goes down, too. We have returned an amount of crop land to nature equal in size to the state of Washington since the early 1980s.
We are just treading more lightly on the planet. Total energy use in this country has been basically flat for about a decade, even though our economy is, I think, at least 15 to 20 percent bigger.
🧠 When smart people come to America, it makes the whole world smarter
What happens in America doesn’t stay in America. That’s one reason why some proponents of “industrial policy” want Washington to go beyond supporting basic research and support key sectors and technologies. It’s assumed that the benefits of the former spill over to other nations, such as China, more easily than that of the latter.
Of course, the benefits of innovation generally spread beyond the innovator. In the paper “Schumpeterian Profits in the American Economy: Theory and Measurement,” Nobel laureate economist William Nordhaus finds that nearly all of the social returns from technological advances over the second half of the 20th century — some 98 percent — were passed on to consumers rather than captured by producers.
This spillover effect also applies to global scientific talent. The implications are spelled out in “Why U.S. Immigration Barriers Matter for the Global Advancement of Science” by Ruchir Agarwal (International Monetary Fund), Ina Ganguli (University of Massachusetts Amherst), Patrick Gaulé (University of Bath and IZA), and Geoff Smith (University of Bath). From that paper:
First, among Nobel Prize winners and Fields Medalists, migrants to the U.S. play a central role in the global knowledge network— representing 20-33% of the frontier knowledge producers. Second, using novel survey data and hand-curated life-histories of International Math Olympiad medalists (IMO), we show that migrants to the U.S. are up to six times more productive than migrants to other countries— even after accounting for talent during one’s teenage years. Third, financing costs are a key factor preventing foreign talent from migrating abroad to pursue their dream careers, particularly talent from developing countries. … (In particular, among developing country IMO participants, 66% dream of studying in the U.S. while only 25% manage to do so.) … Fourth, certain ‘push’ incentives that reduce immigration barriers – by addressing financing constraints for top foreign talent – could increase the global scientific output of future cohorts by 44%.
The whole world benefits from smart people coming to America. How can we get more of them? The researchers highlight two approaches: easing financial constraints through scholarships and increasing the number of visas offered for permanent work-based immigration. Both are great, but if a policymaker had to choose one, the researchers would advise prioritizing scholarships for talented students over green cards: “The key intuition behind this result is that a large majority of top talent already dream of studying in the U.S., however, over half of them are unable to study in the U.S. — chiefly due to financing constraints.”
🔬 Efforts to hugely ramp up federal R&D are running into trouble in Congress
In their 2019 book, Jump-Starting America, economists Jonathan Gruber and Simon Johnson proposed adding half a percentage point of GDP— roughly $100 billion per year in our $20 trillion economy — to return public R&D funding to its 1980s level. Their claim: “Based on history and available evidence, this investment would lead to a significant growth boost, arising from more invention and faster productivity growth.”
Talk of faster productivity growth surely doesn’t inspire voters as much as, say, job creation. Or the need to meet a geopolitical challenge such as China. But none of those goals have yet proven compelling enough to push a megaplan through Congress — particularly one with a new emphasis on applied science.
Last week, the former Endless Frontier Act — which would have established a new Technology Directorate within the National Science Foundation with a $100 billion budget over five years to lead R&D investment in key tech sectors — was rolled into a broader piece of legislation in the Senate. “In short,” writes Niskanen Center analyst Samuel Hammond, “what was sold as a ~$100 billion boost in federal support for R&D is now less than $40 billion in new spending, of which less than $10 billion is reserved for anything resembling research or development.” Meanwhile, a similar R&D bill is making its way through the House.
I will admit I find the politics here pretty weird, perhaps a combo of (a) a belief that government is bad at industrial policy and this looks like industrial policy, (b) a concern that this somehow looks like Washington subsidizing business even as there’s an anti-business mood in Washington, and (c) some residual fiscal hawkery. Here a bit on this issue from a new podcast chat I had with Matt Hourihan, director of the R&D Budget and Policy Program for the American Association for the Advancement of Science:
Pethokoukis: Does this issue break down along partisan lines in the way you would have expected? Because it seems like the current debates regarding the NSF and the Endless Frontier Act kind of scrambles partisan stereotypes.
Hourihan: I agree, this most recent debate over the NSF and its technology directorate doesn’t fit neatly along partisan lines in the way you might expect. And it’s also not the first time that R&D policy generally has fallen apart regarding the partisan classifications of who should support what.
The way I would characterize it, I think, is that there’s something to the idea that generally — notionally — Republicans tend to be a bit more skeptical when it comes to more applied R&D and technology research. They’re more conscious of trying to walk the line between where an appropriate role for government ends and where an appropriate role for industry begins. And they’re perhaps a bit more skeptical of where they draw that line for government, whereas Democrats are more comfortable with government doing a bit more technology research.
Generally, at the same time, there are lots and lots of areas where this idea has really fallen apart. And this NSF debate you identified is one good example of how partisan politics don’t really hold up when it comes to R&D. Just in the past five years, you’ve had bipartisan support for, of course, basic science at agencies like the National Institutes of Health. Now, that’s always been broadly supported across the parties, but then you’ve also had big increases in recent years for technology research at the Department of Energy for advanced nuclear and renewables and things like that. And again, there is quite a bit of bipartisan support for that.
An important factor when we think about R&D and who does or doesn’t support it is the fact that a lot of it breaks down not along partisan lines, but along regional lines. There are both Republicans and Democrats who have, in their districts, national labs or universities or high-tech industry. And in many cases, if we see their constituents asking them to support R&D, whether it’s basic science, fundamental science, or more applied technology research, what the folks at home want often can be a big driver. And that doesn’t always break down over partisan lines.
Long Slide Looms for World Population, With Sweeping Ramifications - NYT | Policy matters, unless it doesn’t. From the piece:
To goose the birthrate, the [South Korean] government has handed out baby bonuses. It increased child allowances and medical subsidies for fertility treatments and pregnancy. Health officials have showered newborns with gifts of beef, baby clothes and toys. The government is also building kindergartens and day care centers by the hundreds. In Seoul, every bus and subway car has pink seats reserved for pregnant women. But this month, Deputy Prime Minister Hong Nam-ki admitted that the government — which has spent more than $178 billion over the past 15 years encouraging women to have more babies — was not making enough progress. In many families, the shift feels cultural and permanent.
Science funding is a mess. Could grant lotteries make it better? - Vox | Innovation policy is more than just throwing more money at federal R&D efforts. How that money is spent counts, too. Here’s one idea about to spend more effectively:
Our current grant review process doesn’t select the best proposals, by a long shot. One study found very little correlation between how a grant was scored and whether the research it produced was cited … Another analysis looked at successful grants and found that 59 percent of them could have been rejected due to random variability in scoring. … So what if reviewers were merely responsible for deciding whether the papers are above the threshold for immediate rejection? Papers below that threshold then get rejected. Papers above the threshold enter the lottery and grants are awarded at random.
For All Mankind: A Peek Into What Could Have Been - Dennis Sanders, Ordinary Times | As long-time subscribers to Faster, Please! know, I’m a massive fan of Ronald D. Moore’s (Battlestar Galactica) alt-history look at the Space Race — if the Soviet Union had landed on the Moon first.