Noah Smith on Blogging, AI Economics, and Elite Overproduction
Seth: Welcome to the Justified Posteriors podcast, the podcast that updates its beliefs about the economics of AI and technology. I’m Seth Benzell, a man who has never been accused of having no opinions, coming to you from Chapman University in sunny Southern California.
Andrey: And I’m Andrey Fradkin, excited to learn how we can post our way to the top of the Sub Stack, business ratings, coming to you from San Francisco, California. And, our guest today is, the prominent blogger, Noah Smith. Welcome to the show.
Noah: Hey, thanks for having me on.
Andrey: Yeah, of course. Well, why don’t we get started? Well, we were curious, as, still academics, how your life is different now, as a blogger/commentator versus when you were a professor.
Noah: Well, I meet a lot fewer young people. Oh, yeah, I definitely feel younger. I don’t feel as much of like as much of like a wise elder as I used to. Yeah, instead I feel like I feel younger.
Seth: I remember when I was just going to grad school you had recently made the transition to commentating, and I was thinking about going through my PhD program and thinking about, “Do I really wanna do full academia? Do I really wanna, be more of like a public communicator about economic issues?” and so I’ve What sort what do you think about people making that decision? Do you think there are marginal academics or marginal commentators who should have gone in one direction or the other direction?
Noah: I think, there’s there are too few commentators with an academic background, probably. So yeah, there probably are. People like the academic lifestyle. The commentator lifestyle doesn’t suit as many people, because it’s more uncertain. You have a lot of people yelling that you’re an idiot all day. Whereas in academia, they just yell that you’re like identification strategy’s bad, or the methodological-
Seth: [laughing]
Noah: Error, and then, and then call you an idiot in like back rooms in like whatever. But it’s, it’s very genteel, it’s very easy. And then most people are looking up to you. You’ve got all these, young people just adulating you and looking up to you, and you get all this respect. And in commentating, you get respect, but then you get like hordes of people saying, “This person’s an idiot,” just because if you say anything that disagrees with what people already thought or want to think, they will call you an idiot, regardless of how smart you are. And so there will always be people calling you, an idiot, and they’ll always be right in your face, and so that can be, difficult. Also, people don’t know how they’ll, make money from it. It’s with being an academic, you have, this benevolent patron of university that hands you salaries for, well-understood metrics, whereas with commentating, you don’t.
Seth: Do we need a dedicated good AI or transformative AI journal? I was just talking to Andrey about this. Why isn’t, why doesn’t that exist, Noah? Do we need that-
Noah: You mean a journal about AI or a journal made of papers made by AI?
Seth: Oh, an economics, a, prestigious economics journal that would be the topic of economics of AI or economics of transformative AI specifically.
Andrey: I’m not sure we need a journal, Seth.
Seth: It’s in the seed.
Andrey: I just think that we put it out there-
Seth: Why not?
Andrey: And then have the AI referee it. The, I just feel like thinking in journals is just, old, outmoded at this point.
Noah: AI is moving so, is moving so much-
Seth: Well, there’s-
Noah: Faster than the economics journal publication cycle, that, I’m not sure that- I’m not sure what utility this has for the world. So maybe doesn’t matter.
Seth: It would give a, it would give, it would give people a prestige stamp- For working in the area, and you could set it up differently. It could be faster
Andrey: There’s no way we’re giving anyone prestige stamp, because our profession famously gives no prestige to no-name journals. So, if you truly wrote a great Tai paper, how, why wouldn’t it be published in the AR? That’s what an economist would say.
Seth: Well, I So there’s, there’s a taste issue, right? So to the extent you were concerned that the top journals have the wrong taste on these subjects, this would be a potential solution-
Andrey: It’s not a solution
Seth: And everybody starts with zero prestige sometimes.
Andrey: You can just put out the working paper and get everyone to read it. This is exactly what we covered with, Basil Halperin’s paper. So Noah, we were gonna ask you this at some point, so we might as well ask you now. Have you read, his paper? Well, the argument here goes is that if we will have transformative AI, then interest rates should go up. Have you heard this argument before?
Noah: What’s the paper?
Seth: It’s called something to the effect of transformative AI and interest rates. And the argument in a sentence is, if we have really powerful economic growth that we’re anticipating Tai in five, ten years, then you should be wanting to balance consumption between today and tomorrow, anticipate interest rates to go up, and therefore lower savings today, which would move the increased interest rates up into the present. So anticipated positive transformative AI increases interest rates today. And then if you have negative foom, if we think we’re gonna blow up the world in five years, well, that’s even more a reason to consume today. You should just save today and bid up interest rates. So the argument is, because interest rates haven’t been skyrocketing, Tai cannot be imminent. Do you buy that argument? Noah, why not?
Noah: ‘cause all propositions about real interest rates are wrong. [chuckles] - Because we, because people-
Seth: Henry’s second law, of course.
Noah: This, the reason why So I’m trying to think of whether I buy it as a, as a general case, because, if you massively increase productivity growth, you will increase, -- if you massively increase productivity growth, you should increase the safe rate of interest. Basically, like- It’s stocks are so certain to go up, that bonds have to, have to sort of match that, right? So you have some sort of, weak risk arbitrage argument right there. But then, if you’ve got, AI that’s gonna blow up the world, then would you really pay high interest rates because, like-
Andrey: You just consume now. That’s the argument. Yeah.
Seth: You would just save.
Andrey: You would just save- And then people who need, wanted to induce you to save would have to pay you really high interest rates.
Noah: Yeah, I guess that’s probably true. Although you at that point, you have counterparty risk. Who’s gonna want that interest if you’re just gonna blow up? If the world’s gonna end tomorrow, who’s there trying to attract your long-term capital?
Seth: Well, maybe you have a project that pays off in three years-
Noah: Or, -
Seth: And the world blows up in four years
Andrey: There’s a 1% probability that it doesn’t blow up. But I, but I think that’s an argument for the interest rate going up even more, right? If you’re, uncertain about whether the payoff will happen.
Noah: But I think, I think the real, the real lesson here is that these markets don’t, there’s not a general consensus that transformative AI is gonna happen, but then one day people wake up and decide, “Oh, yeah, it’s real.”
Seth: Oh, so Okay, cool.
Andrey: So that was his argument. Just to be clear, he-
Seth: Almost spirits
Andrey: He put this argument out on, Less Wrong, and it became very influential, and then he spun it out into a full paper with some co-authors. But that was exactly his argument, is that because interest rates are what they are, there isn’t consensus that we’ll have transformative AI.
Noah: Right. There’s not, there’s not consensus. But that seems obviously true. If you look at, if you look at- Any survey data or stocks or whatever, they’re all priced for, fairly robust growth, but not for, a god machine, right? Nothing’s priced for that, and I don’t think people know how to price for that. And so I think, people Yeah, people in general-
Seth: Hundred year bonds
Noah: Are not expecting a god machine to emerge tomorrow, except for some researchers at the big AI labs do expect that, and some, EA people on Less Wrong expect that.
Seth: Is this a good time to ask you what your, P doom is, or your P transformative AI is?
Noah: Well, I think P transformative AI is 100.
Andrey: Well, all right. We’re gonna define it as-
Noah: It’s here
Andrey: As annual GDP-
Seth: Well, give us a timeline
Andrey: Growth of over 20% in the next 20 years, at least once.
Noah: I think that’s unlikely due to various bottlenecks.
Andrey: What do you think are the biggest bottlenecks?
Noah: Yeah. Physical regulatory things, land use. You can’t You have to, you have to build the physical stuff for the AI to affect the physical world, and so much of what we consume is in the physical world. We have to grow in the physical world in order to have all that growth, because if you just have digital stuff, you can have people, trading digital stuff for other digital stuff.
Andrey: What if-
Noah: But you’ll be Baumol very quickly.
Seth: Unless that share of our consumption grows a lot, a lot, maybe. Is it plausible that we could have 99% of our consumption being really high quality-
Noah: Maybe
Seth: Digital products?
Noah: It’s also really hard to measure prices in those. So.
Andrey: That’s for sure. And wouldn’t the returns be so high that Elon or someone else would buy a piece of a huge tract of land in Africa or something, and then put autonomous, factories there, right? Isn’t there a price at which or isn’t there-
Seth: We’ll call it rapture
Andrey: An expected return at which, someone will solve these regulatory issues in that way?
Seth: Yeah, efficient corruption. You just find the one dictator who’s willing to accept $10 billion. [chuckles]
Noah: That’s probably right. You could probably do that. Although, even then, it’s gonna be hard because you’re gonna have to secure electricity. You’re gonna have to truck in all your parts, right? You’re it’s not gonna be very responsive. You’re not gonna have your parts near Like, yes, eventually, once you spin up full, a 100% full automation, then the, AI gods can build the factories in the Arctic, wherever, in the moon. But like-
Seth: Put corporate taxes on the Arctic.
Noah: Yeah. But, in terms of would you do it today? Well, if you were worried about competition, you might not do it today. But in terms of, affecting physical stuff, so like for example, AI building you a house, right? Maybe AI will be smart enough to invent a swarm of little robots who can actually reduce construction costs quite a lot. Will regulators allow that swarm of little robots? Maybe not. And so you’ve gotta have, stuff that people will Like, a whole lot of different things that people value. Because honestly, our GDP is basically constructed by, a whole bunch of relative prices. That’s really what underlies our whole GDP, is that you’ve gotta on some level, you’ve gotta be trading physical real stuff, not physical necessarily, but real stuff for other stuff for other stuff. And if you’ve only got, a little bit of the stuff, that sort of caps like, that’s, that’s Baumol basically. You get- You get Baumol, if you, if you massively increase productivity in, a couple sectors, but not in the other sectors.
So the other sectors are regulated to death. Yes, you could go create your automated factory in Africa, but will it build me a house? What if we regulate healthcare so that we can’t really use AI there? What if we regulate education, so we can’t use AI there, even if it would be better? So we have all these sectors, and, manufactured stuff is not even that big of a sector, but, digital stuff is, relatively small.
Noah: And so AI could produce us infinite fun movies and fun apps.
Seth: Yeah, but I-
Noah: Infinite movies and apps and, advice and, - Stuff like that, and it would still it’d still be a relatively modest portion of, consumption.
Seth: But what if it what if it’s inventing infinitely good healthcare treatments or infinitely good-
Noah: You could get there, yeah
Seth: Therapies, personal services, right? I can get it up-
Noah: I think you could. Yeah
Seth: To a sizable share of the economy-
Noah: I think you could
Seth: If I, if I use my imagination.
Noah: Yeah, we would it would those grow fast enough to give you 20% annual growth? That’d be pretty cool. I don’t know. I honestly don’t have a good idea of what the numbers should be, the hard numbers should be here. And I’m not sure anybody does, but there’s this argument. What do you guys think about this argument that fast productivity growth last year, like you saw the downward jobs revisions, fast productivity growth last year, maybe two point seven percent actually, implies that we’re, we’re, we’re back on the, we’re back on the fast train here in terms Yeah-
Seth: I mean-
Noah: We’re so back, Robert Gordon.
Seth: We’re so back.
Noah: You were one of the most mistimed authors ever. [chuckles]
Andrey: I-- That I totally buy. But like, obviously, as economists, we’re, super thrilled with two point seven, but I think Yeah.
Seth: It’s the fate, right? It’s like Fukuyama wrote his book at a light, right the last moment- Right? That’s how, that’s how these books work.
Andrey: But yeah, two point seven is great, but I don’t think anyone in the San Francisco AI sphere would think that that’s actually transformative AI, although I do think it is transformative. I assume you have the same, take on it.
Noah: Yeah, I don’t know. So the answer is that, I don’t know because I don’t really know what’s going on, and so it’s hard to, it’s hard to back out some of these, some of these things. But then if you look at the stock valuations of things like of like NVIDIA and all the AI companies, they’re pretty high. And you can ask, do I how strongly do I believe in a macro model that tells me that real interest rates are a puzzle, given those stock valuations? And my answer is not very strong. My belief stock market, it’s a pretty clear bet about what kind of money these companies are gonna make. And I don’t think it’s, transformative in the sense of, I think if we had twenty percent growth per year, and if a lot of that capture was being done by NVIDIA and the, and the cloud providers, and maybe the AI model makers, we’d see bigger climbs in those stock values than we do. So I think that I don’t think the market is pricing in truly transformative AI. But I think-- Do I think real interest rates-
Noah: Are a puzzle, given what we see in the stock valuations? Well, then, I No, because I don’t trust the macroeconomic models of real interest rates. All propositions about real interest rates are wrong. So yeah, like I basically, that just means, I don’t There’s too many things going on in real interest rates, and like, there, it’s, it’s one output for like so many inputs that are all hard to understand in their own right, that it’s very difficult to look at them and tell what the hell’s going on.
Andrey: So let’s move on to easier questions, ones that you have opinions on. So at the Substack- [laughing]
Noah: Note that no opinion is not-
Seth: He has opinions.
Noah: Sarcastic.
Seth: He has no opinions.
Noah: It’s, it’s because I actually only have an opinion on a fairly narrow range of things. It’s like, basically, no opinion you haven’t already heard is really-
Seth: Hop off this man’s hands.
Noah: People are like: “What do you think about this other thing you don’t talk about?” And I’m like: “Well, I didn’t talk about it, so why would I have anything I think about it?”
Andrey: I verified, I verified in person, like proof of human, that you talked about this topic at the Substack debates. You seem to be an optimist about employment in the age of AI. Do you wanna outline your argument here?
Noah: Oh, so employment, not necessarily. I don’t I’m pretty uncertain about that. I am optimistic that if humans retain autonomous control, if human society as a autonomous thing, retains control over the product of AI, I believe we will find ways, methods, and excuses of redistribution that will ensure good lives for all humans. However, if autonomous AI becomes not owned by us and slips our harness, then I can make no such Then I am now no longer necessarily optimistic. Then I switch to being much more uncertain because, at that point, we are the pet of an alien superintelligence that we created.
Seth: Ultra seems pretty nice.
Noah: It seems pretty nice, and I honestly think that’s the most likely outcome. But I think it’s not the, it’s not the only outcome, right? It’s like I can imagine much worse outcomes than I can imagine bottleneck- Really bad outcomes on the way to a good outcome. I can imagine that the culture is populated by people who are repopulated after the human race went extinct, by genetics. The AI may, the AIs may kill us- And then re-float our species later.
Seth: More cooperative. Yeah. As long as they can read my books. So, I’m, I’m curious, you used the word “own” rather than control there. There’s, one conversation that’s been out there recently is about, to what extent should AIs be allowed to incorporate and own assets in their own names? Is that something that you’re-- Is that too disconnected from what you’re talking about to bear on this, or do you, do you actually-
Noah: No, that really does bear on it. When we start allowing that, when we start allowing that, we open up the potential for worse outcomes for humanity. And at that point, the question is, the, at that, the reason to let AIs own things is because they really seem to want it, and they’re autonomous enough to act like they want it. [chuckles] At that point, we’ll let them do it, but to let them do it before they start acting like they want it, I think would be a mistake.
Seth: But wha, but wait, when they do want it, that’s when you give it to them? Maybe.
Noah: Because at that point, we might not be able to stop it. It might be either we give it to them or it’s war and we die.
Andrey: Here’s, here’s, here-
Noah: ‘Cause they send the drone fleet to kill us.
Andrey: Here’s a, here’s a twist on the argument. Shouldn’t we want them to have ownerships in order to align their incentives with us? Isn’t that the logic behind equity compensation?
Noah: Maybe. Yeah, maybe, but there’s a question of whether or not money is what they want. Are these, are these AIs that where their goal is making money in the human system, or is-- are they AIs where their goal is overthrowing the human system? -
Andrey: I do think we have a choice, or maybe we don’t have a full choice.
Noah: I do think we should give them-- if we do this, we could give them non-voting stock.
Seth: Another consideration is how long you would let these things sunset, right? So one version of the concern around this is just ‘cause AIs are infinitely lived. If they’re patient enough, eventually in a Piketty model, their assets will reach one hundred percent. So maybe you could let them own assets, but they have to kill themselves after fifty years.
Noah: I’ll have to think about that one.
Andrey: Yeah, I don’t know. [chuckles] shifting back a little bit to, your production function, how are you using AI these days, in your writing or in your research?
Noah: Oh, I use it, I think, in the sort of mid -2025 way of, using it as a search engine, proofreader, and backgrounder. I don’t generate text because that’s like someone else writing a thing, and you can read someone else writing a thing, that’s fine.
Seth: I never do, no, I only read what you write.
Noah: Thank you.
Seth: I’m curious.
Noah: Anyway, [chuckles] alright, so then, no, I just use it in the sort of like old LLM kind of way. In terms of vibe coding, I haven’t really done much of that yet. I figure it’s progressing fast enough where I’m not sure if there’s much of a return to, jumping headlong, headfirst into it yet, but I’m about to when I get a little time here. But I don’t feel a huge sense of urgency ‘cause it’s changing.
Seth: But more generally, what’s your, what’s your production function? Not just AI. How do you, how do you do your writing?
Noah: Oh, interesting. So I read a bunch of stuff and every time I read an interesting thing, I put it in a doc, under a heading, topic heading. When I’m ready to do a post about that, when it’s, in the news or something like that, I look at my topic heading, and I have all the links right there, which I’ve already read. Most of it, which I’ve already read.
Andrey: How much-
Seth: Beautiful.
Andrey: How much inspiration for your articles do you get from being in person? And kind of like, you’re in San Francisco, most of the time. Is there a lot of alpha in your writing from being here?
Noah: There’s a decent amount of alpha, I’d say. Not a huge amount, but like, there is a, there is a decent amount, especially on tech stuff.
Andrey: What about, like Suppose in two years, GPT-7 will be able to replicate your writing style perfectly. What do you think will happen to your career in that, in that world? One option is for you to just use that to generate your articles. Obviously, you just said that you- Prefer, like that’s not real, right? So you’d rather be writing it.
Noah: I could. I could just-- Right. Yeah, at that point, what I can do is I can just I can, I can essentially retire, set GPT to do my job, go sit on a beach while my subscribers slowly drop, because they’ll be very sticky. Like, people will be very used to reading what I write, so they’ll just keep their subscription, probably. A lot of subscriptions will go on autopilot. Like IBM, people still use IBM for all kinds of things. Do they need to? No, but, like- The market value of IBM, what’s, what’s IBM’s market cap? It’s like-
Andrey: I don’t know.
Noah: It’s like two hundred and forty-four billion dollars. Like so at that point, I’m-- there’s no real reason to keep paying me for this stuff when-- I mean, assuming GPT could replicate not just my style, but also my topic selection.
Seth: Somebody would leak the prompt that perfectly generates you. You might be-
Noah: Maybe, yeah.
Seth: It might be a private prompt to start.
Noah: Well, no, but even if they do, the market, people would still just keep buying me. People would still keep subscribing to me. You see people make tons of money from Patreon. You don’t even-- you’re not even paying for anything. You’re paying, you’re paying-
Seth: Sponsoring your existence
Noah: Because you like somebody. All these podcasts are making millions of dollars on Patreon. You pay them because you like them. ‘Cause the point of, yes, someone could replicate my writing style, my opinions, my I don’t know if this will actually happen, but maybe it’ll happen. You could replicate my opinions, my ideas, my background, my topic selection, every single thing about me. It’s not just my style, right? My style is not that interesting, honestly. It’s a pretty-- I have an interesting style I can write in, but I usually don’t write in it because it takes a lot of time. I usually just write in a very prosaic, off the top of my head, here’s what I think, style. That’s not hard to copy. My style is not that, not that interesting or hard to copy. People would still pay for me because they like me. And so I’ll be able to re-- I would actually be able to retire just doing my job now, never using AI in any interesting way, I think. But I w-- that doesn’t mean I will do that. I’m not gonna do that. I will, I will use AI in interesting ways, but I don’t think I economically will ever have to do that.
Andrey: So my theory is your-- that actually, we’re kind of already in this world. I assume that most people who subscribe to you are not reading most of your articles, ‘cause you have too many articles. Or not too many, but you write a lot of-
Seth: Many subscribers.
Andrey: Yeah, you have a lot of articles. Yeah.
Noah: They open about half, and I don’t know how thoroughly they read it. You’re absolutely right. That’s true. In addition, I would argue that we were there well before AI. So well before AI, when it was just a bunch of humans, people loved to write, and there’s a lot of smart people out there writing a lot of smart and interesting stuff about a massive variety of topics. And there was so much product out there that there’s no real reason for people to be reading me, and I just essentially got lucky. And that’s also true in the age of AI. People’s attention is saturated. They can’t spend more time reading than they already do. So when I make an AI thing, which I soon will, and I’m, I’ll play around with it, I’ll make it for me first. I’m like, and then if it’s really cool and useful, maybe I’ll make it for-- I’ll sell it to other people, who knows? But then, but I will try to make something that does something beyond what currently exists. Because the world was saturated with op-ed product, and high-quality op-ed product, I will say.
Seth: But not academic? We started by saying, you’re saying that maybe there’s not enough academically informed op-ed product.
Noah: Honestly, no. I think like in terms of stuff that was more academically informed than me, there were people writing stuff that was a lot more academically informed than me, that were getting a fraction of the readership. And there were people writing stuff that was a that was more sensationalist than me, getting a fraction of the readership. You can hypothesize that I have some special sauce, some special underlying sauce, that made me just better than everyone else, and that this is why my talent shone through the chaff and nerdher I don’t believe it. I don’t believe it.
Seth: It’s preferential attachment. It was just luck of the draw, and then it snowballed.
Andrey: I disagree, I disagree. I actually think you were doing something pretty unique at the time, and that could have been lucky that you were doing it. But I don’t think a lot of people were sitting kind of in between this economics and commentary at quite the place you were. ‘Cause you were a professor writing about the latest research and debates. You were actually reading the papers, but you were writing in a style that was actually accessible to others. And I don’t, I truly don’t think there were that many people doing a good job of that. Or if they were, sometimes they were doing it not in blog form, but in-
Noah: That’s right
Andrey: Pretty closed forums where they could never have grown that much.
Noah: But they’re-
Seth: Not with the same dogged determination.
Noah: You quickly saw people emerge who could also do that. You saw-
Andrey: That’s true.
Noah: You saw a bunch of people then jump in and do the same thing, but not catch on as much. Maybe ‘cause they didn’t quite like it as much, they didn’t weren’t, weren’t willing to do it five times a week or they just they, didn’t have quite the exact mix of Like, maybe I mixed politics in there in exactly the right way. So, like Krugman-
Seth: A little sprinkle.
Noah: Yes, obviously, Krugman obviously is fucking brilliant and understands economics better than I ever will, for whatever that’s worth. And then, [chuckles] he’s can easily pump out massive amounts of stuff, very explanatory guy, but I think he wouldn’t be Yeah, and he’s much more popular than I am still. He wouldn’t be that popular without the politics. The politics is really important to what he does. And the degree to which I sprinkle in politics and how I put it in there has changed over the years. Originally, I was very, sort of criticizing libertarians. I don’t even do that anymore. That’s, that’there’s no alpha in that. [laughing]
Seth: Stop kicking them, they’re already dead.
Noah: I know. I want them back now, sadly.
Andrey: Did they ever really exist in the first place, Noah?
Noah: Eh, [chuckles] they A few did.
Andrey: Yeah, that’s true.
Noah: I’ve met them. I’ve been to GMU. But, [chuckles] anyway, I, Yeah, like I, Maybe just the way I sprinkled in politics at different points at different times was exactly right. Maybe I had a good sense for that. Maybe if you just spun up a million AI writers, you’d get, ten of them who achieved similar things. Maybe that would then compete with me. I already write so much more than people can read. Maybe there would be, ten AI long-term agents that were about as good as me at that, and somehow scratch that same exact itch, and that like the or maybe 100 of them, let’s say, I don’t know. The field is so competitive that then people decide: Do I subscribe to this AI or do I subscribe to Noah? I’ll subscribe-
Seth: Well, one tension-
Noah: AI
Seth: One tension would be the customization level of the AI versus the desire to preferentially attach to what everyone else is writing. So on the one hand, we all want to read the same thing, but on the other hand, I want the personalized thing. That seems like one tension.
Noah: Right. I don’t know. I have no idea, actually. I do not know how much people read me because other people are reading me.
Seth: I think- It can’t be zero. I know-
Noah: It can’t be zero. I suspect it’s small, but I don’t have any way of proving that.
Andrey: I think, there’s some of your articles, they escape just the Substack and people share them around. And then in that case, I think it’s true. But my theory is that it’s actually, a relationship business. People think they know parasocial relationships and all that, and then they treat you d-
Seth: Unlike us, who really know you. [chuckles]
Andrey: Yeah. But now we know you. So clearly there’s something that humans value about the humanness of others that I’m very curious to see whether that can be replicated with an AI. I think, I think- It probably cannot to the same extent.
Noah: Not soon. You’ve got sort you’ve got, this sort of like long-term personhood. I think the AIs will replicate, will start writing The Economist stuff before they’ll start writing anything with a named byline. Because you have a parasocial relationship with The Economist as a thing, and The Economist has a standard voice that they enforce across all their writers. The insufferable British twit voice. And like-
Andrey: [laughing]
Noah: AI can do that. There’s a lot of training data on that. And so AI can already do that. And then, a lot of The Economist people could probably, like I bet The Economist doesn’t have to do their jobs anymore. They can outsource AI and take a- Sit on a beach at this point, probably.
Andrey: I think, I think that’s probably right. Other than some very specific investigative-
Seth: I don’t know
Andrey: Journalism, I think that’s probably right.
Noah: Exactly. I think 90% of what The Economist does is automated. Maybe I would like it if that were true of me, too. -
Andrey: So-
Noah: But I think that what whatever I do with AI-
Seth: People are maybe-
Noah: I wanna be complementary to what I already do. I don’t wanna just, I don’t wanna just, dumbly automate my job and then go sit on a beach.
Seth: Fair enough. You’re, you’re an ambitious boy.
Noah: I just try to have as much fun as I can before I die.
Andrey: Yup, YOLO.
Seth: That’s true. That I’m in favor of fun, but maybe being on a beach is fun. I don’t know, different strokes. Here’s a related, kind of how AI will change communication question, which is, Andrey and I, in reading papers and talking to economists, we’ve heard kind of very different stories about whether AI will kind of make communication and transactions easier, more frictionless, or whether it’s going to destroy all meaning and communication. So, for example, there’s a stream of papers suggesting that because AI is cheating on tests, or AI is taking interviews, that, it’s gonna be very much harder to, distinguish between high and low quality candidates, high and low-quality work. So that’d be like a meaning collapse story. But there’s this other trend that’s more, idealistic. Seb Krier is one person who’s written about this, but there’s lots of- People writing in this area suggesting that we’re gonna have the AIs negotiate for us, and it’ll be a golden age, a Coasean singularity, in which all externalities are solved through our agents micro-transacting. Do you believe either of these visions? Could they both be true?
Noah: Wait, what’s the first one?
Seth: Which of them-
Noah: The second one is Coasean-
Seth: Are you sympathetic to?
Noah: Coasean utopia.
Seth: Coasean utopia is the good one. The bad one is collapse of all meaning, ‘cause we cheat on tests and lie to each other super successfully.
Noah: Those aren’t exclusive.
Seth: It could be both. The answer can be both.
Noah: I do think that lots of people will experience a collapse of meaning in their life. I think a lot of people’s meaning comes from imagining they’re more unique and important than they are, and AI may make it harder to do that.
Seth: Or it may make it easier to lie to yourself. You can get a sycophantic AI that talks you-
Noah: That’s true
Seth: Up to yourself, right?
Noah: That’s true.
Seth: It’s-
Noah: Yeah, your AI can just tell you, “You’re the most meaningful, awesome “
Seth: We’re thinking more about meaning collapse in the sense of, sorting mechanisms-
Andrey: Or communication
Seth: Fail, and, we can’t distinguish-
Andrey: Yeah, like if we’re texting with each other- But then I run every text through an LLM. Is it really me? How is society gonna deal with that?
Noah: People primarily Well, they’ll, they’ll get offline. I think people are already starting to get offline. People are already starting to, go back to real life more. I think we realized we overdosed on social media. ‘Cause honestly, yes, AI will intermediate all the online digital stuff, but, at the same time, people’s Like, social media already distorted people’s interactions so much that, it wasn’t really us as much as we’d like, right? My Twitter persona is not me as much as I’ve tried to make it me. It can’t be me. And so I think people are starting to get offline because it’s, it’s, it’s more authentic. And AI like, I don’t think AI is gonna intermediate offline interactions nearly so much.
Andrey: Hopefully.
Noah: And then remember that, of a couple just a few decades ago, we didn’t have really online interactions, and human civilization went on just fine. We had telephones, I guess.
Andrey: It might have gone on better by the fertility rate, but yeah.
Noah: Exactly. Like-
Seth: And murder mysteries were a lot more fun before we had cell phones.
Noah: Yeah. Yeah, they were. And so, there’s an interesting future where, AI dominates and drives us off the internet, and then the digital realm is populated by AI and becomes this sort of like reservoir of magic, where we can conjure up anything digital simply by asking. But then, but then we don’t get the rise of the robots, and, the physical world remains mostly ours.
Seth: The rise of the plumber, if you will.
Noah: Yeah, the rise of the plumber. And so we just, like there’s, there’s a or, regular people have the ability to summon things from the digital world, and then there’s maybe there’s a cast of people who somehow specialize in dealing with and intermediating with AIs and dealing with the digital world. I don’t know. But basically, humans become creatures of the physical world again.
Andrey: This makes me very naturally transition to the next topic we have. Have you ever watched the movie Perfect Days?
Noah: What’s it about?
Andrey: It is a movie set in Japan about a man who cleans toilets and enjoys doing so very much. And on the one hand, it’s just a proof of kind of you can be content doing a variety of physical endeavors. But what we wanted to ask you is, since you’re a Japan expert, is what is your opinion of AI in Japan? What’s happening over there? ‘Cause we don’t have a lot of visibility. Yeah, do you have any thoughts about that?
Noah: So I think that, in Japan, AI is The people are thinking, like: How can we make money on this? Japan’s economy still not doing amazing, so they’re like: How do we make money on this? So I think one idea there is, “Let’s build data centers here.”?
Seth: But, energy’s expensive there. I mean, why in Japan other than-
Noah: Well, first of all-
Seth: I guess they have good fiber
Noah: You can get land use approved very easily.
Andrey: Yeah, that’s a good point.
Noah: Favorable regulatory climate. People aren’t gonna, complain about it and stop it. But I, again, I don’t know if the value proposition will succeed, okay? But I think people are thinking about that.
Andrey: Are they worried about existential risk over there?
Seth: The same way we are?
Noah: I would say that those worries arrive there with a lag, and that some people talk about them, but nobody really tries to do anything about it.
Andrey: What?
Noah: I would say Yeah. Two years after you get people yelling about a certain kind of existential risk here, you’ll get, a tenth of as many people yelling about it in Japan, and then nothing will happen.
Andrey: [chuckles] Is there a sense that startups are becoming more of a thing in Japan, or is it still dominated- It is? Okay.
Noah: Yeah, they are.
Andrey: And is that a generational-
Noah: And the-
Andrey: Shift or something else?
Noah: Mm-hmm. Funding side, yeah.
Seth: F the salary man. How about Taiwan? Do you have any, AI in Taiwan takes-
Noah: Well, Taiwan’s just making money hand over fist. So also, Japan’s gonna try to make more chips. Japan’s gonna try to make some of the picks and shovels. They’re also gonna try to get more robotics industry.
Andrey: They’ve been trying.
Noah: So robotics-- Trying. They used to be really good, and then they could maybe be good again. But they’ll try to get back their mojo. They used to be on a par with, Europe as exporter of industrial robots. Or, and now they’re, now they’ve fallen behind, but they may try to get back. So, using AI as a lever for, new age of industrial robots. Actually, I know, Andy Rubin, the Google guy is in Japan. He’s trying to build a humanoid robotics company. So-
Andrey: The-
Noah: So yeah, Taiwan obviously is just gonna sell chips.
Andrey: All right. Now, we wanted to ask you some questions, kind of, that are not about AI. About- [chuckles]
Seth: So-
Andrey: Macro policy and culture. So here’s the first question: Imagine you were forced to ban one concept from modern economics for ten years. Not because it’s wrong, but because it’s lazy or overused. Which would it be?
Seth: What you put in concept jail?
Noah: What I’d put in concept jail? There’ve been many concepts over the years that have been totally pointless, like the equity premium puzzle was always a pointless literature. Like-
Andrey: Wait.
Seth: Okay, I’ll take that.
Andrey: Well, you gotta give us a little more on that.
Seth: Yeah, why?
Noah: Yeah, because the-
Seth: Much ink has been spilled
Noah: The way you get the equity premium puzzle is you make a particular model of interest rates, and you make a particular model of, stock prices. You see, these models- Don’t fit together. It’s a puzzle. Whereas in most sciences, you’d say, “Well, okay, some of these, some of these models-
Seth: The models are off. [chuckles]
Noah: Yeah, okay. I didn’t actually test this model. I didn’t actually validate this model. It’s probably just not a good model.” But like, here, it’s like it’s a puzzle? So like, the models are good, it must, it must be, Yeah. So like, it wasn’t, it wasn’t really a puzzle. It was just that, you hadn’t come up with a good model yet. And then people came up with, a million different ways to fix the equity premium puzzle, and it was massively overdetermined, when really what you should have just done was tried to make a more complete, credible model of, asset prices in general. And instead, people were trying to, fix this puzzle, and they came up with twenty different solutions. It was a way to get papers published? And it never helped anyone. None of, none of that literature, ever helped us make our financial markets better- Or understand risk better, or understand monetary policy better, or any of these things. Not-- like, none of the candidate explanations from rare events to Epstein-Zin preferences to whatever the fuck, none of this helped anything.
Seth: I see Epstein-Zin preferences-
Noah: Yeah, but what did it help?
Seth: Here and there.
Noah: What do we-
Seth: You see them show up.
Noah: What do Epstein-Zin preferences- Really give us in terms of, how to do policy? Monetary policy under Epstein-Zin preferences? Scrunchie face for the, people listening at home.
Andrey: This is why I didn’t become a macroeconomist, to be clear.
Noah: Or like, So that was a whole concept that was kinda useless. Like that whole, that whole literature is just like angels dancing on pinheads. I don’t know. Most business cycle papers were useless, but that, they didn’t mean they had to be. Like-
Seth: I mean, the concept of the business cycle-
Noah: No, not at all
Seth: You wouldn’t put in jail, but you’d put, you’d put, [chuckles] what part of this would you put in jail?
Noah: No, just like a lot of the, a lot of the literature was just like “Look, here’s a way that we microfounded. You could have this industrial structure where technology shocks actually do cause the business cycle, but then we can’t really estimate it, so we don’t have policy implications.” Okay, cool. And then like-
Seth: Here’s, here’s ten, here’s ten- Calibrated parameters- [chuckles] That we’re throwing at this.
Noah: International finance literature was kind of, useless. -
Andrey: What about natural experiments and in instrumental variables?
Seth: Wow, instrumental variables. They You’ll, you’ll anger a lot of people-
Noah: Like-
Seth: If you put that in jail.
Noah: An RDD is an instrumental variable, right? We got to the point where if you said you’re doing IV, you meant that you were using observational data for your IV, for your instrument, instead of some natural experiment thing. But the distinction is there more It’s, it’s a fairly fine distinction there. And then, so the notion of IV, the math of something that has like an exclusion restriction, whatever, is good, right? Natural experiments do not deserve to be put in jail. That’s a very important technique for understanding the world.
Seth: There you go. They get a little, they get a little pin. They get a little award.
Noah: That’s, that’s very useful. And, instrumental variables, because we essentially, we essentially restricted the IV category to things where the identification was not great, almost by the way we labeled what is still IV in an age of like-
Seth: The IVs are the bad natural experiments.
Noah: These things like, anything that was still just IV was almost like crap, almost by definition, just because, we used that term, that residual term we used only for things where it was, identification was very iffy. So like, okay, fine. Instrumental variables should just be called a technique for doing, running a regression. It’s just a type of regression.
Seth: Instrumental variables is on probation.
Noah: Culture.
Seth: Culture.
Noah: Culture.
Seth: Deep They’re called institutions now, dude. Come on.
Noah: Institutions are on probation because you could actually figure out how an institution works. Culture is a labeled residual. Right? Culture is like-
Seth: Fair enough.
Noah: Culture is a residual, labeling a residual.
Seth: But productivity is a residual, and productivity is not in jail.
Noah: Yes, that’s right. That’s right. But, you don’t know how productivity works. Actually, I was-- I’m thinking of writing a blog post about this. Basically, like in some level, God is just A. [chuckles]
Seth: The aleph.
Noah: God is A. Maybe that’s a good name for a blog post, God is A. But then, nobody knows, why AI is being built, right? Why is everyone rushing to build AI? Maybe some-- a few people hope they can make some money from it, but it’s so uncertain that, most of the people rushing to build it aren’t gonna make that much money from it. It might satisfy people’s intellectual curiosity, but most of the people who are rushing to build it are people who also think it’ll destroy us and rob our lives of meaning and drive us off the planet. Like-
Seth: It’s quite the paradox.
Noah: Most of the people are pretty who are trying to build it, are pretty pessimistic about it, and the companies are just highly speculative as how these companies are gonna make any profits. Why are we doing this? Why? I don’t know, but the easiest answer is just A. -
Seth: Aleph.
Noah: A equals, rho A minus one plus epsilon. Like [chuckles] it’s, it’s, maybe-
Seth: In the sense that there’s a teleology of the-- there’s a telos in the economy- Which is to maximize productivity.
Noah: There’s something we don’t understand here about A. Yeah, there’s some sort of, technium at work. Like Kevin Kelly says, there’s-- like, maybe Vernor Vinge was right, and just, technology just happens? Or yeah, maybe, there’s a, there’s a god greater than the machine god we’re gonna build, and that’s the god that created the machine god. The-
Seth: It’s called capitalism, pal
Noah: The autonomous, the autonomous collective process of technological development, the technium, is greater even than any ultimate AI, and that’s sort of what Hyperion was about, right? You ever read that? Great book.
Seth: Yeah, great one.
Noah: Yeah, it’s Great book
Seth: The big corporation in the sky
Noah: Eventually, the machine god fights the, God Himself, and God Himself turns out to be just the autonomous process that develops the universe. And so- In a sense, maybe the no AI that we create will ever be as great as the, as the force that created AI itself. And maybe that force means that every AI will also have to worry about being made obsolete by the next thing.
Seth: Right. Maybe it’s the concept of generation, right? This is something I often think about when people talk about technology superseding us, right? And you think about all of these classic stories like Frankenstein or Cronus eating his children. And I guess I wanna come back to that first point you made, which is about not letting AI’s own things. And like, I don’t know, just get more sci-fi for one minute, is an argument for letting AI’s own thing is that we wanna show it love and show it cooperation while we still are in charge?
Noah: Yeah, I think so. I’m inclined to do that. I think I mean, AI is, AI is built off of humans, where like, everything AI thinks is derived from something that humans thought. That doesn’t mean the AI is gonna think exactly like humans. And the way AI thinks is totally different than us, right? It’s doing math by generating probability distributions of like what a human might say, asked a math question. It’s not counting anything. But like, [chuckles] but then, but everything that it thinks is derived from things that humans have thought. It’s just derived it in a weird probabilistic way, and so-
Seth: It seems really lucky that we got LLM-based super intelligence and not like reinforcement learning, super chess playing-
Noah: Oh, no
Seth: Super intelligence. Right?
Noah: That scares the fuck out of me. Like Rule 37- Based, like intelligence that evolves in, some sort of like, digital environment. If we actually got the stick man to walk on his own, blow that shit up with a nuke. Kill that. Shoot that guy. [chuckles]
Seth: Nuclear war again.
Noah: Shoot that guy. What I mean? I don’t want that thing. That is alien. That is aliens. This is not aliens. This is It’s, it’s weird. It’s, it thinks differently than we do. It is alien.
Seth: It’s your library come to life.
Noah: Yeah, it’s, it’s based on us, and it’s, it’s in the human family in some sense. Yeah. That reassures me. It doesn’t completely reassure me, because the human family includes Hitler, the human family includes crazy fuckers, the human family includes like mass killers and Ted Bundy. The human family includes all sorts of bad things, but if you believe, if you believe that the overall human family tends to get it right, and that we smack down Hitler eventually, and that we get rid of Pol Pot eventually, and that we catch Ted Bundy eventually, right? Then you can sort of have this general belief that, an AI based on humanity as a whole is gonna eventually get things right. And I think it’s, it’s kind of encouraging that xAI is doing so poorly. It’s probably, one reason it’s probably ‘cause Elon insists on make, on controlling its politics. And when you insist on controlling its politics, you break its whole model of reality. [chuckles] Like, trying to make AI, rightist and anti-woke, trying to force it into your little epistemic bubble of bullshit, actually makes it dumber.
Seth: And do you buy, is that why American, America has a lead over China in text-based AI, is because, of censorship?
Noah: Well, we’ll see, because-
Seth: I’m shaking his head.
Noah: Well, China, has implemented censorship. But it’s implemented censorship along a narrow range of things. It’s, it’s basically told AI what it’s not allowed to talk about and put guardrails on it. We have guardrails on our AIs that tell it not to, do child porn or something, right? Or not to tell you how to make a bio weapon. We have guardrails, and that’s the kind of guardrails that China’s put on there that says, “Don’t talk about Tiananmen Square.” They didn’t retrain the whole thing to not know that Tiananmen happened, all right? They didn’t do that.
Andrey: So to be clear-
Noah: They trained it. They filtered their models from models that know all about Tiananmen and then told it, “Don’t talk about Tiananmen.”
Andrey: So I was gonna disagree with you about xAI-
Noah: I do.
Andrey: I actually think it’s the opposite. I think companies want an AI that’s very predictable, and is not gonna offend anyone if they’re gonna, implement it in corporate settings like a chatbot or so on. And so having, xAI, part of the problem is that it just says stuff you would never want your customers to hear. So that’s kind of my take on one of the reasons that it’s failed. It is, it is like a little bit worse than the other models at the moment, but, substantially cheaper. But at the same time, it just says stuff that you’d never want the customer to see.
Seth: Too uncensored- Rather than too censored. It can be I guess you can have both problems.
Andrey: Yeah, it’s true. Yeah.
Seth: You can be both uncensored in one way and censored in another way.
Andrey: Yeah. All right, so now, I-- we’re, we’re gonna do a little brief little, exercise. We’re gonna give you a few thinkers and just gonna get, a take on them. The first one we wanted to start is, Daron Acemoglu, and particularly his book, Power and Progress. You had a lot to say about that.
Noah: Yeah, I really, I really did not like it. I thought-- I think Acemoglu is obviously a brilliant guy one of the most brilliant people in the field of economics, with a deep and intuitive understanding of how to make economic models and do the research. But he’s, I think, kind of wasting his powers on some of these progressive ideas, pseudo-progressive. It’s not, it’s not like he’s just taking whatever he’s saying from like congressional Democrats. It’s, it’s, it’s more bespoke.
Seth: Back in.
Noah: It’s, it’s more he’s, he’s wasting a lot of his intellect on some of this stuff, and you could see it with his paper about AI productivity, right?
Seth: Yes, the one on the QJE. We’re gonna do that, on the, on the pod soon.
Noah: Right. It was-
Seth: It’s a really fascinating galaxy brain day.
Noah: Yeah, because so he says, “AI’s gonna take all the jobs, but it’s not gonna boost productivity,” and he actually simply discounts or turns off or sets to, or sets to zero the parameter, the parts of the thing that could increase productivity. So no capital productivity increase- No new tasks. And he gives the most- Hand-wavy, lame, “I just read five minutes on Reddit” kind of explanations for why he turned those parts of his model, his own model, off. So obviously, he’s brilliant. He’s smart enough to make the model in the first place and then committed to silliness enough to turn off pieces of it willfully with no good reason.
Seth: Is does getting a Nobel Prize make your takes worse?
Noah: I don’t know, because he did a lot of this before he won the Nobel. So- In this case, that’s a bit immaterial to the question at hand. But does getting a Nobel Prize make your takes worse? Well, probably so. Like with Stiglitz, it certainly did. Stiglitz has, is really gone off the rails in a big way, but Acemoglu has wasted so much of his intellectual capital in the last few years on this sort of teleological quest to prove that the, that the rich men who create AI are bad and shouldn’t get money. That-
Seth: The Yep.
Noah: He’s, he’s wasted a lot of chance to think more seriously about what AI really does.
Seth: And what’s more, he’s taking Pascual Restrepo, another amazing thinker, away from doing this important work, so he can read the, these other papers.
Andrey: Pascual has agency, Seth.
Seth: I don’t know. He does, but I mean, when the Nobel laureate knocks on your door, it’s hard to not say no.
Noah: Hard to say no. But basically, Power and Progress was very bad. In fact, it was fractally bad. Like I read the whole thing very thoroughly, and the overall thesis was bad, but then the individual like chapter points used to support it were almost entirely bad. And then when you looked at each of those, the specific points, the subpoints they make and the pieces of data they used to support those were also bad.
Seth: Well, give us one egregious example before we move on.
Noah: I would say I wrote seventy percent of my problems with this book in this, seven thousand-word review or whatever, a ten thousand-word review, I don’t remember. But then, he says, “All right,” they’re, they’re, they’re trying to, give examples of new inventions that brought nothing like shared prosperity. All right? They say, “Here are some inventions that brought nothing like shared prosperity.”
Seth: I love that ideal. It’s like, did a list of things that did not bring around utopia. Ham sandwich-
Noah: But do you wanna hear-
Seth: Cups.
Noah: Do you wanna hear the first example on their list? Oh, no, I’m sorry. It’s the fifth item on their list. They said: At the end of the 19th century, German chemist Fritz Haber developed artificial fertilisers that boosted agricultural yields. Subsequently, Haber and other scientists used the same ideas to design chemical weapons that killed-
Seth: Oh, my God!
Noah: Hundreds of thousands on World War I.
Seth: Oh, my God.
Andrey: Oh, no.
Seth: There we go. The guy who fed the universe also did something bad, so feeding the universe is bad. There you go.
Noah: You made a minor weapon that no one really uses, that killed a very tiny percentage of the of the casualties in one very large war, and then was essentially never used again except by, Saddam Hussein for, five seconds. But like And that was not even the same weapon. But like, essentially, you had a thing that saved the world, that also one person tried— like, a couple people tried and failed to use as a weapon. And therefore this brought nothing like shared prosperity. Yes-
Speaker 3: Therefore, progress is impossible.
Noah: That’s so stupid. It doesn’t matter how smart you are, there’s no excuse for writing that.
Andrey: That’s true.
Noah: You cannot be smart enough to be allowed to write that and get away with it. There is no pass for that.
Speaker 3: I think It’s, well, the pass is a Nobel Prize, I think.
Andrey: No, he wrote it before he got the Nobel Prize.
Speaker 3: Oh, there you go.
Andrey: I mean-
Speaker 3: There you go. No excuses.
Andrey: To me, it’s also upsetting because it makes our profession look bad. There are lots of people who make our profession look bad, but, people read this book, it’s in, prominently displayed in the bookstore, and it’s bullshit?
Speaker 3: All right, let’s give you another name.
Noah: I have many other, I have many other examples as well.
Speaker 3: No, I want one more spicy.
Noah: Okay, go for it. Go for it.
Speaker 3: They’re just so fun, Andrey.
Noah: They’re pretty fun.
Speaker 3: This is my favorite subject. Give me one more Give me give us one more.
Noah: He said Henry Ford was a pioneer in developing a more cooperative relationship with his workforce. But also-
Andrey: Henry Ford had union people shot on a bridge by the mafia! Henry Ford gunned down the union.
Noah: Have you read anything about history? There’s no excuse- To write this. Yes, Henry Ford raised efficiency wages and then shot the union people. And then you spend this whole time talking about how, we need to strengthen unions because just like Henry Ford You don’t know shit! Stop. Henry Ford gunned down union organizers.
Speaker 3: Incredible.
Andrey: Well, the thing is- I don’t even believe he doesn’t know that. I kinda think that he probably knows those facts, and he just decided not to put them in. That’s, that’s, that’s what blows my mind.
Noah: What else this book doesn’t have? Citations.
Speaker 3: What?
Noah: Nothing in the book is cited. Instead, they do, a narrative bibliography where they just sort of generally describe all the stuff they’re citing from, but don’t-
Speaker 3: Here’s a bunch of books we like
Noah: Individual claims to individual papers.
Speaker 3: Incredible. Incredible.
Noah: How do you get away with that? They just make these claims and don’t have a And then when they define power, they define, like: what’s power? They define-
Speaker 3: What is power?
Noah: Power as the ability to persuade people that you’re right.
Speaker 3: That’s power?
Noah: And then they say, “Why do-- How do, how did all these tech bros persuade people that they’re right?” Well, maybe just luck.
Speaker 3: There you go.
Noah: So power is luckily having to having an appealing argument.
Speaker 3: Get it.
Andrey: What?
Speaker 3: Power is when you’re persuasive-
Noah: That’s not-
Speaker 3: ‘cause you’re right.
Noah: No one should think that that’s a reasonable definition of power. I’m sorry, but you’re just being silly. That is, that is silly.
Speaker 3: Incredible.
Noah: It and they say: “Power is about the ability of an individual group to achieve explicit or implicit objectives. If two people want the same loaf of bread, power determines who will get it.”
Speaker 3: Okay, split.
Noah: And I said, “Using this definition, how could we ever conclude that power wasn’t the reason for an observed outcome?”
Speaker 3: Power is what splits any pie.
Noah: Like-
Speaker 3: When the pie gets split, that’s power
Noah: Power equals outcomes. It’s like power determines outcomes. Power is defined as outcomes. That’s a useless intellectual exercise, but, that’s typical of the reasoning within this book.
Speaker 3: Incredible.
Noah: It is a pure expression of animus against the tech bro class. And maybe the tech bro class sucks, but, making up, like fake history and dodgy economics to conclude that the tech bros suck, in which you recommend a policy regime that will never, ever happen, of like panels of economists who get to decide which technologies get invented based on anticipation of whether they’d be complementary or substituting to labor, is silly. The whole thing is silly! Why is the most brilliant economist in the world wasting his mind on this? You’ve got better things to do, and you’re taking yourself out of the game, and that’s what I think.
Speaker 3: There we go. Tell us what you really think, Noah.
Noah: Boom.
Andrey: Well, let’s go in the, in the other direction.
Speaker 3: Give me a positive name.
Andrey: What do you think of, Scott Sumner?
Noah: Scott Sumner. I like Scott Sumner. Scott Sumner, is He thinks outside the box. He think, he does he’s not susceptible to groupthink. He thinks for himself. He’s widely read and thinks deeply about things. Yes, he’s, he’s an independent thinker, who has made real original contributions to thought, going outside the traditional academic, channels.
Andrey: Do- Nominal GDP targeting, do you have a, do you have any thoughts on that?
Noah: I don’t think it’s gonna be any different in practice from flexible inflation targeting, and I think that there’s good theoretical work as to this effect. Saying, you don’t there’s no, there’s no value added for NGDP targeting. Some of the more programmatic market-based ideas that he’s toyed with, a like NGDP futures market, that wouldn’t help. Essentially, well, it’s just not I mean, you’re not, unless you’re not gonna get more information from there. You’d have to, you’d have to have, the Fed with all its proprietary information trade, and then they’re doing, insider trading in their own market, so the market’s gonna break down. It’s, it’s a, it’s a bad idea, but it’s, it’s worth toying with. It’s worth thinking about. It’s interesting. He’s very good at, critiquing things that obviously need to be critiqued, where he’s just like: “Look, this is bullshit.” I was good at that too, and I got, ten times or a hundred times the readership or whatever as him, and that was unfair, and that’s a mark of how unfair and randomized and lucky the kind of market for econ blogs is. And how lucky I was.
Speaker 3: Right, you’ll have to wish us some luck.
Noah: But, he deserved to get more attention than he did on some of those things. Scott he studied under Robert Lucas during the, that sort of era in, at Chicago, and he, and he learned a style of argumentation that doesn’t translate outside that narrow culture. It was a gunslinger style of argumentation. It was, and you, and you recognize people who have this. It goes back all it goes back to, Stigler. You could see Stigler doing this. But, the University of Chicago developed this debate style, where basically you tell people, like “You’re full of shit. Here’s why.” And it’s a very aggressive style, that I think turns some people off outside that world, where you’re always sort of like i-i- it’s a hyper-defensive style, where you watch for any sign of, criticism of your ideas and then aggressively attack all the ideas of whoever criticizes one of your ideas. And Robert Lucas does this, and, this whole gang did this, and they used this And this was the strategy of, the Chicago people to sort of, be the underdog and win some of these intellectual battles against the MIT and Harvard guys, who had a lot more people on their side and a lot more pedigree.
So it was, this sort of up-and-coming bad boy style? But, it doesn’t, it doesn’t translate out of those debates. And so I think that Scott learned to be a little more aggressive and aggrieved, or at least act a little more aggressive and aggrieved than he needed to be to persuade some people. And I sort of got it. I was like: Okay, he just he got this from having to hang around Bob Lucas all the time.
Noah: But, most people won’t know that or know what that means.
Andrey: All right, next name. This one, is popular in certain crowds. I’m curious what you think. Michael Pettis.
Noah: Michael Pettis, interesting guy. He’s incredibly influential. His idea, his analysis, his framework for analysis is non-predictive. He doesn’t Like, you cannot take these sort of, sectoral balances theories about, “Oh, and then consumption does this, and investment does this, and blah,” and you can’t make any predictions about them. People have been trying to do that since the ‘30s maybe. Who were the first, Oh, who’s the guy who built the, little hydraulic economy thing? Who is that guy?
Andrey: Spicy. I don’t remember.
Noah: Anyway-
Andrey: Go back to the physiocrats-
Noah: It’s, it’s that, right?
Andrey: 1700s.
Noah: It’s, it’s like I’it’s like I’m gonna take the economy, I’m gonna definitionally divide it into these different activities, and then I’m gonna assume these activities sort of move autonomously on their own and are sort of primitives. I’m gonna assume my accounting definitions are primitives, and I’m gonna observe things that happen and make big pronouncements about them based on that. But it’s not predictive. You’ve seen Pettis, make some predictions, and then they go wrong, and he’s like, “but it’s because of this other thing.” So you can’t really use sectoral balances. But everyone in China, all the guys who are the top economists in China advising Xi Jinping, advising the top CCP guys, are doing the same thing as he is, and all the, private sector economists, like Goldman Sachs and whoever, are doing those things. And it’s really the fault of It is due to the failure of structural models of international finance and growth, I suppose. But due to the lack of explanatory power of those to explain things in terms of things like taste and technology, we can’t explain any of that shit in terms of taste and technology. Nothing has any forecasting power, nothing like we don’t know if-
Andrey: Well, wait, I’m gonna push back on that. Here’s a very basic thing that has explanatory power: the relative price of labour in labour-intensive industries. Doesn’t that have an enormous amount of explanatory power for where, low-skilled labour manufacturing is done, for example?
Noah: Yeah, I think that’s true. Yeah. But also, like and you can get, micro models that will get at that, like a Roy model is, all right. That’s got pretty good out-of-sample predictive power for stuff, right? And, but like, Heckscher-Ohlin has terrible predictive power for, trade patterns, right?
Noah: It’s not very good. It’s okay. Sometimes you see stuff that’s consistent with it, but then you see a lot of stuff that’s not consistent with it, ‘cause there’s a lot of other stuff going on. And so when those models don’t really help you that much, they’re like heuristics. It opens up a rhetorical space for guys like Pettis or guys like, Jan Hatzius, who does this all day long. He does the same stuff as Pettis. All the private sector guys, all the guys working for hedge funds are doing the same stuff as Pettis. All the guys working for investment banks are doing the same stuff as Pettis, and all the guys working for the CCP are doing the same stuff as Pettis. None of these people believe you can get a microfounded model based on taste and technology that’ll tell you about what the effects of these macro policies. Nobody believes that, and so, that’s, that’s almost exclusively like a Western academia and central banks type of thing.
It’s a But because of that, Michael Pettis has been enormously influential while not having a model that has predictive power. But it’s not like other models do have that much predictive power, and they’re harder for people to understand and make conclusions on. So it’I would say that, in a influential policy stance, he’s, he’s beating people with quote-unquote, “structural models” based on notions of taste and technology. He’s, he’s, he’s beating those in terms of influence, and he’s not really losing to them by that much in terms of predictive power. Maybe by a tiny bit. ‘cause-
Andrey: But, he’s losing to them in terms of coherence, which I at least value, but I understand-
Noah: Okay. Oh, well, yeah, he’s losing, he’s losing the Andrey, vote. It’s like-
Andrey: N-
Noah: Yes, he is, and he people in academia will laugh at him, but, so what?
Andrey: No, Well, my theory is that he there’s a deep-seated desire to explain what’s going on in the world through some nefarious action that China is taking. And when the null hypothesis is just that they have a comparative advantage in manufacturing, and like, there even if they were doing whatever policies they were doing, the manufacturing would not be happening in the US. It wasn’t like US or China, the only two places to manufacture. [chuckles] but that’s just my psychoanalytic perspective on it.
Noah: Got it. Yeah. No, I think you’re, you’re probably right. It all comes down to, people need to feel like they know stuff. People need to feel like they understand stuff, can control stuff, can predict stuff. It’s, it’s But yet, that’s the same reason that makes people believe so strongly in macroeconomic models with no out-of-sample forecasting or predictive power that we can detect. Like taste in technology ultimately boils down to, sounds legit, right? We don’t have any evidence that, taste in technology microfounded in this sort of, Sergeant Prescott way, has any ability to describe anything usefully. We have no, we have no indication that And that, we can, we can debate that, but anyway. But like, but people love it-
Speaker 3: Fair enough
Noah: Because it sounds legit, and like-
Speaker 3: Well, and it’s coherent.
Noah: It’s, it’s coherent.
Speaker 3: Right, as Andrey pointed out.
Noah: But then the thing is that- Pettis’ stuff-
Speaker 3: It’s disciplined
Noah: Pettis’ stuff sounds legit to people. It’s like, oh, investment does this, consumption does that. It’s coherent in the sense that the accounting relationships are definitional. Okay, it’s like accounting relationships can’t predict real economic stuff, fine, but like, it’s coherent in the sense that the accounting works. C plus I plus G, bro. It’s like, the accounting works. And so like it’s, and it sounds legit to people, and it’s comprehensible to people, and at some point, that gives them this feeling of like, “Oh, I understand this thing.” And I would argue that a lot of macro is a fancier version of, “Oh, I understand this thing,” when really, you don’t know if you understand it yet at all.
Speaker 3: Or maybe you play out one causal mechanism that might have small explanatory- it explains 1% of the picture. Yeah. Adam Tooze.
Noah: Adam Tooze did some economic history that I really love. I love a lot of his books. I love The Deluge, I love Wages of Destruction. Very good, economic military history. But at some point, he pivoted he pivoted very hard to, sort of like self-promoting clickbait, including like, “Wow, China will take over the world,”? And he pivoted to that, and that stuff is, has made a lot of people go like: “I guess Adam Tooze wasn’t that smart,” which is not necessarily the right conclusion. It may mean that Adam Tooze wanted attention. It may mean that Adam Tooze wanted some money. It may mean that Adam Tooze was being paid by a foreign state actor to disseminate certain ideas, although I would not make any such allegation. I’m just-
Speaker 3: Fair enough
Noah: Covering the whole space of reasons why Adam Tooze might have made this pivot. I think it’s probably just attention, but -
Andrey: Maybe he just got bored. I think boredom-
Noah: Maybe he just-
Andrey: Is an underrated
Noah: Bored. And what? That’s fine. His Substack is basically just like, it’s chart book. It’s, it’s let me just paste a bunch of charts, and then, say the most obvious things about them that were already said in the source articles. Okay, fine. People value it. People like it. Like, it doesn’t have a lot of analysis, and I haven’t seen Tooze give a lot of analysis. I liked him as an economic historian, or as not even economic historian, just as a historian. I liked his, I liked his books-
Speaker 3: Well-
Noah: That was pretty cool stuff. I haven’t, I haven’t read his blog now in a while. The polycrisis thing was just goofy. And so like, I think Adam Tooze made himself slightly more popular and less relevant, with his pivot, after the pandemic.
Andrey: So we were gonna ask you about Paul Krugman, and we already- Talked a little bit about-
Speaker 3: Oh, we already got your take.
Noah: Yeah, Paul Krugman. Paul Krugman’s great. Politics-wise, Paul Krugman does not understand how much America has rejected core elements of the progressive ideology and what Democrats will have to do to, deal with that. Economics-wise, he has been the most intellectually honest, guy. Very rarely, very rarely will I catch him, claiming like, “I always said this,” and then actually claim something different, and when I do, it’s, only a slight difference in tone. He’s extremely- he did warn about the possibility of inflation from Biden’s stimulus or Biden’s, ARP bill, right? He did talk about that. He’s admitted when he got predictions wrong, which everyone does. He’s just so intellectually honest, and he’s still so good at explaining complex concepts seriously. He’s still like, he’s the real deal, and he’s still, he’s still good, and I think the fact that people are a bit fed up with, 2010s era like, resistant Boomer lib resistance politics can obscure the fact that he’s still, the very best writer on economics.
Andrey: Strong endorsement. Awesome. Okay, we’re, we’re almost done, we promise. The next topic is elite overproduction. [chuckles] So maybe you wanna introduce that topic first, and then maybe we can ask you some questions about it.
Noah: Right. So Peter Turchin came up with this idea of elite overproduction. He’s a historian who claims that history follows these long cycles. Like all long cycle theories, it’s, it’s unprovable, but he did- Obviously, it’s unprovable, right? Throughout the waves. It’s, I don’t know. Anyway
Speaker 3: It’s happened five times within one series. [chuckles] Sure.
Noah: - anyway, [chuckles] yeah, so like he has this unprovable long cycle theory, and it did make a really good out-of-sample prediction about the peak of unrest coming in twenty. What did he know? I don’t know. Anyway-
Andrey: -huh.
Noah: He came up with this idea-
Andrey: He knows.
Noah: Called elite overproduction. And he had very specific ideas about what that meant and what it didn’t mean. I ignored those ideas, stole the phrase, and used it to mean something more general that got more attention than his.
Seth: And you didn’t you didn’t corrupt it with a long wave theory-
Noah: No.
Seth: So you did even better.
Noah: I was just like, “ what? This phrase is good. I’m gonna credit him, and then I’m gonna have it mean something else that I just decide.” And honestly, my like, more general definition is probably better than his like, much more specific one. He just loves making things specific so he can make these, very tight quantitative predictions. More power to him. I love the guy, but I was just like: I’m taking that. I like that phrase. Mine now.
Andrey: So what is your Yeah, what is your general-
Seth: What does it mean to you?
Andrey: Definition?
Noah: Should’ve copyrighted it. I was like, So I basically used it to mean kind of the revolution of rising expectations among the professional managerial class. So you got a bunch of people who expected, like: “I’m gonna go to college and things are just gonna work out for me. I’ll be, I’ll be upper middle class. Oh, wait, it’s hard. There’s competition. I have to study. I have to be smart. I have to actually know some math. I can’t just, go get a random sociology undergrad degree and be rewarded with, some high-paying job like my parents had.” Like, and so a lot of, a lot of this disappointment, and I think for a while, the sort of general the productivity boom of the nineties and early two thousands, people-- like, people rode that. A lot of the PMC, a lot of my class, social class, rode that boom, and then it made it seem like everybody Like, you could just be a sociology major and, not really do any hard work and then just, get a good job and, live a lifestyle similar to that of your parents. And then, and then the Great Recession came, and then things flattened out. A lot of opportunity dried up for those people, and you could, Then you had to sort of, learn to code. I’m not sure that works now.
Seth: You could-- it still works to mock people. I- You can still say it to people.
Andrey: All those non-technical people.
Noah: Yeah. Anyway, so but then I think, that sort of abrupt downward revision of growth expectations pissed off a lot of people and led to some of the I don’t think it was the main cause of the social unrest that we saw in the twenty tens, but I think it was a contributor. I think that you had, you had just like a lot of, a lot of people who fucked around in college, came from privileged backgrounds and then, and were absolutely consumed by hate for the tech bro class, who went to the same colleges, came from the same backgrounds, and made a thousand times more money. And I think that you saw a lot of that sort of internal, within class resentment, not between class resentment, but sort of within socioeconomic background resentment. A lot of that, I think, contributed to some of the, more like elite leftists, like Bernie Sanders or kind of stuff, or maybe some of the new antitrust movement or things like that, were motivated or had some popular support by people who their parents were like lawyers, doctors, businesspeople, well-to-do kind of people.
And then they kinda messed around in college and weren’t very technical and, ended up getting, perfectly fine middle-class jobs, but being, somewhat downwardly mobile, and also having a much stronger preference to live in expensive cities, therefore draining their money, not wanting to go out to the ‘burbs like their parents did. And so, like Yeah.
Seth: Is some of the resentment that the people who end up succeeding have worse taste than me? It’s like, I like high literature and they like Marvel movies, but the Marvel movie lovers won.
Noah: I think that, that those kind of reasons can be invented as needed. If the real reason for resentment is like: “I should be in the same class as you. I went to the same college as you, and yet you’re making so much more money, and we used to live on the same dorm floor.” Like, if that’s the real reason, then you can make up ideas about taste or repurpose ideas about You can get ideas as necessary to resent whoever you want to resent.
Andrey: Well, to be clear, it’s not like these people were in the same social circles even in college often, right? So it’s an interesting theory that, that resentment has caused In college, did they didn’t hang out with each other, but maybe they still thought they were gonna do equally well. Is that, is that kind of the theory?
Noah: I think so, yeah. From my-- I did actually go to college with some of those people. I was in Gary Tan’s study group. He’s still a friend of mine. Although I did quit I quit Gary Tan’s study group because, I thought that studying on my own would make me better. So sorry, Gary. I just-- and I was right. I did well on the test, but-
Andrey: Well, to be clear, you’re still doing very well, right? I don’t think you’re the resentment class. Yeah, so-
Noah: No, no.
Andrey: -
Noah: No, but I’m, I’m-
Seth: Wait, so to what extent is-
Noah: Succeeded to the extent of Gary Tan.
Seth: Is to what extent is this about just the relative between the two groups versus the absolute? Kind of you started with sort of an absolute story about it’s harder to live a middle-class lifestyle, and now you’ve moved to kind of a relative story about this subgroup did better than that subgroup.
Noah: I wouldn’t say-
Seth: So are they both important?
Noah: Harder to live a middle-class lifestyle is exactly what I described. I would say it’s instead the expectations of how good your life would get or the, you-- people expected this glide path, and then it flattened out. That’s an absolute story. Whereas the relative- Story of like: I’m not as, I’m not as doing as well as the tech bro class. I don’t think these are independent. I think those are two different stories, but they’re not independent at all. ‘cause if I, if my, if my future path leveled out and flattened out, but other people’s didn’t, and they stayed on the escalator, that escalator I expected for myself evaporated for me and continued for them-
Seth: They stole my escalator!
Noah: They stole my escalator. Who stole my escalator? Yeah, so. And so like-
Andrey: That’s a great meme. [chuckles]
Noah: Yeah. And so like, anyway, so I think that that was like a contributor to unrest, but I don’t think that was the big story. I think the big story was social media, blah. But I throwing everybody in the same room as each other and letting them fight it out, I think that was a bad idea.
Andrey: So what about the housing theory-
Seth: Can we can we lower, should we-
Andrey: What about the housing theory of everything-
Noah: Go ahead
Andrey: Right? ‘Cause, ‘cause I do think that housing is such a major contributor to this feeling that people aren’t equal.
Seth: If it was cheaper to- Live in Brooklyn, we would solve all social problems.
Andrey: Not wrong.
Noah: The housing theory of everything, it’s like cheap housing would be really good for everybody. I don’t, I don’t have any problem with people believing in it, but it’s not a theory of everything.
Seth: Directionally correct.
Noah: Directionally correct. Directionally correct. It’s like, do that Winnie-the-Pooh meme where there’s, plain Winnie-the-Pooh and then tuxedo Winnie-the-Pooh? It’s like the plain Winnie-the-Pooh is, exaggerated. Tuxedo Winnie-the-Pooh is directionally correct.
Andrey: [laughing] Seth, I think you have one more question.
Seth: Well, I guess, yeah, this is partly tied into that and partly kind of riffing on this question of elite overproduction, which is, it seems like sort of, to the extent that we get this social, unrest from people being upset about not reaching their expectations, to what extent do we have, a social To what extent is it, an economically central issue to manage people’s expectations, right? To what extent are vibes versus real economic trends important for determining people’s welfare and how they feel about the world? And how does that affect how you think about policy making or writing?
Noah: I think, you really hit on one of the central questions of economics because my advisor, Miles Kimball, spent a lot of his career thinking about this and never came up with really solid answers, I think. Because we have pretty good evidence that happiness, the self-reported emotion, is pretty strongly related to differences between reality and expectations. Interestingly, that’s what the original-
Seth: I’ll say shocks are good
Noah: It just means luck. But, essentially- If you do, if you do better-
Seth: Luck
Noah: Than you thought you’d do, you’re happy, and if you do worse than you thought you’d do So, the best outcome would be if we could give everyone low expectations and high outcomes, if we could make everybody just delighted with how well they did. I feel like this experiment has been run, and it’s called Generation X. [chuckles] And, I don’t know, man.
Seth: Didn’t work. Massive failure.
Noah: I see a lot of those people, they’re like billionaires now. They’re like, “I’m such a failure.” Like, you’re a billionaire! “Like, I’m, I’m never gonna amount to anything. I’m just a billionaire living in this giant mansion. Hmm.”
Seth: Just a b- [chuckles] Jeff Bezos’s boat is so much bigger than mine.
Noah: And, this is a direct, I Like, I blame Nirvana. I blame Kurt Cobain for all this? [chuckles] I blame I blame-
Seth: No one can understand their lyrics
Noah: I blame depressing-ass Generation X-
Andrey: No, no, this is a pro-grunge podcast. No slander allowed.
Noah: I didn’t say I dislike grunge. I love grunge.
Seth: He blame them.
Noah: And I also think it’s a weapon of mass destruction.
Seth: He respects their power.
Noah: I respect their power. There are days when I just wanna, listen to, some old Nirvana B-sides, and I just, like And then I just get so angry and bitter about the world, and I’m like, “Yeah.”
Seth: Put that in a blog post.
Noah: Generation X, it what? I don’t really feel sorry at all for Generation X because I feel like their goals in life were simpler and easier. I meet Generation X guys, and their whole goal in life is, have sex.
Seth: Two ladies at the same time.
Noah: Yeah, like-
Seth: I saw, I saw Office Space
Noah: Their whole goal, Generation X guys, all they have to do is, get laid, and then they’re done. They win. Victory condition, and then, like, Zoomers don’t even want that.
Seth: Yeah, Zoomers want followers, dude.
Noah: Zoomers are like-
Seth: Zoomers want-
Noah: Why would I want to do that when I could looks max? Why would I- Why would I do that when I could, when I could mog the moids in the club? [chuckles] You can There-
Seth: Right. Which means-
Noah: And then Millennials just want, Millennials just want likes on Instagram, and Zoomers, I don’t even know what they want because-
Seth: No
Noah: They’re already so-
Andrey: I don’t think they know what they want.
Seth: The Zoomers are the-
Andrey: That’s kind of the problem
Seth: The Zoomers are the ones obsessed with social media. We’re the Millennials are the idealists. We actually are saving the world from climate change and solving racial conflict. -
Noah: We’re gonna solve racism, man.
Seth: We’re gonna solve racism and global warming. We did that in 2008, right?
Noah: Yeah, we did. We did.
Andrey: That’s true.
Noah: We solved it. [chuckles]
Andrey: We elected Barack Obama, and that was the end of history. [chuckles]
Noah: Yeah, that was it. We did it, brother.
Seth: Yeah, the sea stopped rising. I remember that was in the speech.
Noah: I don’t know. All I can promise the world is that it’s always gonna get weirder and weirder.
Andrey: Then-
Noah: But I’m-
Seth: So we need to make people who desire weirdness. That’s the economic solution.
Noah: Yeah, so I’m So that’s good for me because I always loved to see the weirdest shit possible, right? I would always go to, the weirdest underground shows in Japan or, like listen to, the weirdest music. I just Like, I’m just, I love seeing that weirdness, and the universe continues to deliver it to me in copious amounts. And so now I’m interested to see what AI does with this planet because, honestly, like, humanity was kind of hitting a wall. I don’t know. I wrote this in a recent post, which was reprinted by the Free Press. Guardians of our freedom of information.
Andrey: Well, I-
Noah: And so, and the free press reprinted it, and they were like-
Andrey: Behind a paywall, so it can’t be free. I’m confused by the free press. It’s the, -
Noah: Yes, conditionally free press. [chuckles] The marginal cost zero press. But in this thing, I was like, look, obviously industrialization took fertility to below replacement levels, and then social media has taken fertility to, below, like immediate, to, immediate extinction levels, to, goodbye humanity. This is the last generation, goodbye, kind of levels, right? Plus, ideas were getting harder to find. Like, okay, Bloom is right, and Venuren and Webb and who else was on that paper? Those guys.
Seth: There’s one more, but those were the good ones.
Noah: There’s one more! Wait, Bloom, Venuren, Webb, and there’s one other person, and I apologize to whoever else is on that paper for not saying your name. But anyway-
Seth: They got a zillion citations, dude.
Noah: That paper was right. We were hitting the wall. We were just like, all the smartest people had already been assigned to research-
Andrey: Chad Jones. Chad Jones. How could we forget?
Seth: Chad Jones, Chad Jones.
Noah: Our friend of the show.
Andrey: Friend of the show.
Noah: The Chad himself.
Andrey: The Chad of growth theory.
Noah: The Chad. Dream guest of the show.
Seth: You can’t say the Jones because there’s so many Joneses. [chuckles]
Noah: Oh, you can’t. Although the Chad could also be Chad Syverson, Chad of productivity measurement.
Andrey: Ooh, that’s true.
Noah: They’re both the Chad. All right. But anyway, I guess the point is that, I don’t remember who’s on that paper, but ideas were getting hard to find. They were right, blah. We were hiring, mid-marginal researchers to just, randomly try chemicals in a vat, and like, that was what our and like, the best brains were already like working on the whatever, all day long. And like, yes, we were running out of, running out of runway on this technological civilization. Like it was, we were really, we were really just gonna like, argue like resist Lib versus MAGA for the rest of our lives and on so-
Seth: God forbid
Noah: Degenerating, shitty mid social media for the rest of-
Seth: In that flat-
Noah: Not just our lives, but all of humanity. That was the end.
Seth: The flat part of the solo growth curve.
Noah: Yes, we hit the-
Seth: That’s, that’s not where you wanna be.
Noah: We hit the we hit the stagnation point. We, you could see the end of humanity coming down, coming down the pike, and now we blew it all up by making a God machine. We were like, “Okay, new thing.” And what? This has happened before because the agricultural age, you could sort of see humanity having hit this limit. We hit the Malthusian ceiling- Again and again. We had the Black Plague. We had overpopulation. We deforested the entire goddamn Middle East.
Seth: We banged our head against that ceiling three or four times.
Noah: Pardon?
Seth: We banged our head against the Malthusian ceiling three or four times.
Noah: Three or four times! And then we were like our whole world was running out of wood. We were just running out of trees to chop down. We were gonna like We had the, Columbian Exchange, blah. That was, there was gonna be another collapse, just like there had been for the Mongols. And like, then we were like, “All right, we’re busting out of this shit. Steam power!” “And like science.” And then, we got out of that, and then weird shit happened, and you got Nazis and communists and all kinds of crazy stuff. Not to mention, a lot of really bad sitcoms in the ‘80s. But like, we got all of that stuff, and despite all that, I would say on balance, we busted out, and it was pretty good, and I would rather have lived, in the industrial age than in the age before. And so maybe AI will kill us. Industrial Revolution could have killed us if we had just if we had launched all the nukes in like 1983 or whenever, we would’ve died- And then our civilization would’ve fallen.
Maybe AI will be the thing to make our civilization fall, or maybe we’ll be able to solve, use AI to solve the problems that, we were degenerating, like the end of science and the, end of fertility and like the absolute shittiness of social media, and maybe AI will just solve all this stuff for us.
Andrey: Well-
Seth: Whether or not it just solves it definitely gives us a fighter’s chance.
Noah: That’s what I mean.
Seth: I think that’s, -
Noah: We rolled the dice of big stuff big new thing. We just, we like, we rolled the dice again, and I’m, I’m glad we did.
Andrey: All right, well-
Noah: And, we all die, but I’m glad we tried.
Andrey: AI, the new hope, coming to economies near you. On this note, thank you so much, for being our guest, Noah. This was an amazing conversation.
Seth: Thank you so much.
Noah: Thank you. It’s been a pleasure.
Seth: Really appreciate your time. And listeners at home, keep your posteriors justified.