Ezra Klein on the Abundance Agenda

What happens when a liberal thinker shifts his attention from polarization to economic abundance? Ezra Klein's new book with Derek Thompson, Abundance, argues for an agenda of increased housing, infrastructure, clean energy, and innovation. But does abundance clash with polarization—or offer a way through it? In this conversation, Ezra and Tyler discuss how the abundance agenda interacts with political polarization, whether it's is an elite-driven movement, where Ezra favors NIMBYism, the geographic distribution of US cities, an abundance-driven approach to health care, what to do about fertility decline, how the U. S. federal government might prepare for AGI, whether mass layoffs in government are justified, Ezra's recommended travel destinations, and more. Read a full transcript https://conversationswithtyler.com/episodes/ezra-klein-3/ enhanced with helpful links, or watch the full video https://youtu.be/PYzh3Fb8Ln0. Recorded March 7th, 2025. Help keep the show ad free by donating https://mercatus.donorsupport.co/page/podcastgift?utm_source=cwt+podcast&utm_medium=podcast&utm_campaign=shownotes today! Other ways to connect Follow us on X https://twitter.com/cowenconvos and Instagram https://www.instagram.com/cowenconvos/?hl=en Follow Tyler https://twitter.com/tylercowen on X Follow Ezra https://x.com/ezraklein on X Sign up for our newsletter https://mercatus.tfaforms.net/5060931 Join our Discord https://discord.gg/JAVWP7vTxt Email us: [email protected] mailto:[email protected] Learn more about Conversations with Tyler and other Mercatus Center podcasts here https://www.mercatus.org/podcasts. Photo Credit: (c) Lucas Foglia

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:04Tyler Cowen?

  Conversations with Tyler is produced by the Mercatus Center at George Mason University, bridging the gap between academic ideas and real world problems. Learn more at mercatus.org. For a full transcript of every conversation enhanced with helpful links, visit conversationswithtyler.com.

• 0:26Tyler Cowen?

  Hello, everyone, and welcome back to Conversations with Tyler. Today, I'm chatting with Ezra Klein, who needs no introduction. And when I say that, in fact, I do not introduce the person. Ezra has a new book out with Derek Thompson called Abundance. This is one of the best and most important books of the year. Ezra, welcome.

• 0:45Speaker 01

  Always thrilled to be here, Tyler.

• 0:47Tyler Cowen?

  Your last book, and indeed, our last conversation, was on political polarization. How do the abundance agenda and political polarization interact?

• 0:57Speaker 01

  It is an effort to recut the line of polarization. So you and I used to debate this. You said for a while you thought polarization was going down. Do you still think that? Do you think it has gone down?

• 1:07Tyler Cowen?

  I think it is. It has more dimensions than ever before. In terms of what a lot of our government does and in terms of, say, racially, how people vote, I think it's down a lot.

• 1:17Speaker 01

  So I think if you go, one of the things about polarization that I think makes it tricky to talk about is we say it like it is a static thing, but what you are polarized over really matters. So when I was writing a lot of the book that came out in 2020, in the cursed, the cursed early quarter of 2020, before COVID bisected the tour, that was a polarization that had a number of dimensions, but I had written a lot of that book in the Obama years. And so I was thinking during a lot of it, polarization over the Supreme Court, polarization over Obamacare, polarization over taxes. I mean, you remember back when we used to talk a lot about the Grover Norquist Tax Pledge in Washington, and that was a big thing about how the parties were so divided. Compared to then, I think now, we have less policy polarization.

• 2:05Speaker 01

  And more system level polarization.

• 2:07Tyler Cowen?

  I agree with that.

• 2:08Speaker 01

  The debate is less over taxes. I actually think we could do more. I mean, we'll see, like, the Republicans still like tax cuts and they're going to pass a big one. But in some theoretical way, I think if you follow the intellectual currents here, we are less polarized over things like Obamacare over taxes. But the question of whether or not the system itself is legitimate, I think, is highly, highly polarizing.

• 2:27Tyler Cowen?

  So you don't think we'll end up with one party that's the pro-Nimby party?

• 2:31Speaker 01

  No. And so this is an effort to do sort of two things compared to the other book. And Derek, obviously, will have his own versions of this. But one is, at the end of my last book, my beloved wife, Annie Lowry, said to me, she's like, "You don't really do any chin stroking in this book, right? It's all descriptive. You know, you don't sort of say much about what you think the world should be." And that sort of rang in my head. And then the other was that I was sort of watching, in my own view, polarization just kind of get more dysfunctional. I don't think polarization about the system itself is a healthy form of polarization. And so to the extent these two things have a relationship, it's a relationship to sort of describe a different cross-cutting cleavage than what we have.

• 3:13Speaker 01

  I would like to see fights between people who believe in what I would call different forms of abundance politics, I say in the introduction, right? I think you have a version of this, the state capacity libertarianism. You can see Jim Bithakukas on the right with his sort of the conservative futurists, right? There are different people I feel more allied with on the right, even if we don't have all the same views. As opposed to, I think, what we are actually having, which is over legitimacy, which I think is a pretty toxic form of division.

• 3:41Tyler Cowen?

  But is the abundance agenda primarily a view of elites? And insofar as it succeeds, it will succeed to the extent that politics is not directly ruled by democratic forces?

• 3:54Speaker 01

  I don't know that I think that's true, but it's always a little bit true, right? So in my own head, I think there are two kinds of policy and procedure overhang. One is the kind people actually want. A lot of NIMBYism is popular at the level at which it is happening. But then there's a kind that comes from drift. It doesn't end up being in the book, but I wrote a Times piece about this. I don't know if you tracked this story a while back, that there was this public toilet being built in Noe Valley in a park, I used to live near this park, that was hooked up for water. And the cost estimate was $1.7 million. And they released a ribbon cutting for the, they came out to announce that they'd gotten the money from the state of California to build this $1.7 million toilet.

• 4:38Speaker 01

  And then my colleague Heather Knight, back then at the San Francisco Chronicle, reported on this and people freaked out, right? They were not happy that the city had gotten $1.7 million for a toilet. They thought, what the, what the, why? And I, I went and tracked down, how does a toilet get to $1.7 million? One of the justifications from Wreckin' Parks in SF was, look, we've built all these other toilets that were $1.6, $1.7 million and nobody complained about that. And it's this kind of Baroque process where you have seven, eight, nine agencies, you have all these, you know, public comment periods, right? There are all these rules on, you know, the grant proposal and how that goes out and what the procurement is and how do you do the bids on the contracts? Nobody asked for that, right? That's drift.

• 5:22Speaker 01

  That is process building on top of itself. That is nobody really having the power to say no or wanting to go through the difficulty of saying no. And so I cut that differently from some of the, there are places where people do not want to see an affordable housing complex built down the block. And then there are places where people would actually like to have a affordable public restroom next to the playground where there are kids who I have been through this period in life very recently, who are not fully potty trained to play. And they're not like out there hoping that we can add $1.3 million in cost by, by process. They just don't really know that it has happened.

• 5:58Tyler Cowen?

  If the abundance agenda is to some extent, an elite movement. It seems that high density, for the most part, is bad for elites. So in California, very wealthy elites, they want to move to Woodside. In Northern Virginia, they want to move to McLean. So does this mean the Yimby part of the movement is just never going to get very far? That you can take a bunch of places, say, near metro stops and allow for somewhat denser housing, but it will stop there?

• 6:24Speaker 01

  So is that true, though? Right, so I live in New York City now, and my sense is very wealthy elites, while they have a, you know, a weekend house or vacation house, possibly in the Hamptons. They live in Manhattan in glass towers, or they've started to buy really expensive property in Brooklyn.

• 6:42Tyler Cowen?

  But that's one state, right? Country as a whole, the elites want the ranch two hours from Houston.

• 6:48Speaker 01

  It seems they want both, to me. I feel like the elites of DC live in McLean. That was true 20 years ago, and it feels less true now. I mean, you still live there, but is that really what people do when they get rich in DC now? I feel like they buy expensive DC property because DC got safer and, you know, the food got better and all the things that everybody knows.

• 7:08Tyler Cowen?

  I think that's true. They may be more likely to live north on Connecticut Avenue, but they're still not angling for that to be much denser. Quite the contrary.

• 7:17Speaker 01

  That might be right. I mean, look, I think that people, when they get rich, want space. And so to the extent that density makes it harder to have space, I think people are going to, at a certain level of wealth, probably have both a place in the city and a place a bit outside the city.

• 7:32Tyler Cowen?

  What's the argument against the abundance agenda that most genuinely troubles you?

• 7:37Speaker 01

  I will admit this myself, that it does not know what to do about the question of voice. So one thing we're tracking in the book, there's a lot of great research on this from people like Zach Lesko and Leah Brooks, is that it is, one of the key reasons it has become much more expensive and cumbersome to build is that, over decades, we put into place all kinds of ways for citizens to exercise voice when something they don't like is happening. They can go to the planning board meeting, they can sue under the California Environmental Quality Act, or sometimes under the National Environmental Policy Act. There are just a million of these, depending on which particular process you're looking at. And on the one hand, you want that to be possible. You want it to be possible for people to come and say, this project will harm me.

• 8:22Speaker 01

  You don't want the government to be capable of being completely imperious. But one, it's very unrepresentative who shows up. The people, I mean, this is a classic example, but the people who show up to block an affordable housing complex are the people who live on that block now, not the people who would live on that block if the complex was built. And the second is it is just unrepresentative in other ways. Who has time? Who has enough information to know the policies work? I am pretty familiar with, as I know you are, with the way federal regulations go through. And there's all kinds of public comment periods. And those public comment periods were built for the public to comment. But the people who actually know the public comment periods work are lobbyists, are special interests, are people who have the organized money to participate. So it's tricky.

• 9:07Speaker 01

  You don't want to take away the opportunities for for voice because it's very easy to tip into abusiveness, right? In some ways, having this book come out at the same moment that Elon Musk and Doge are doing things with, let's call it, very, very little public input and very little agency input even. You can sort of see what the dark version of this. Our mutual friend Steve Telles calls what they're doing dark abundance. But with all these things, you're going to have to strike a balance. And it's hard to know how to strike the balance. I have a section on the sort of fiasco of high speed rail in California. And towards the end of that, I say, look, China's built 23,000 miles of high speed rail in the period of time that California was failing to build 500 miles. And on the one hand, all these things I'm describing happening in the California high speed rail situation do not happen in China.

• 9:51Speaker 01

  They're just, you know, if they want to move the storage facility, they just move it. They don't go through years and years of lawsuits about moving it a couple, you know, a couple of feet back. That allows for a very imperious and even abusive government of individual rights, and it also allows you to build trains. And so there are a lot of things here that are uncomfortably about striking a balance as opposed to saying, we are all wrong the way we do it now. We would be all right if we did it this other way.

• 10:15Tyler Cowen?

  Do you worry that higher density, residential density, might lead to lower fertility? I don't think we know that for sure, but it seems plausibly true if you look at East Asia.

• 10:25Speaker 01

  It seems to me that lower fertility is driven by women having more opportunities and that the both opportunity cost in leisure, money, pleasure, et cetera, of having children young goes up.

• 10:39Tyler Cowen?

  Well, that's clearly a factor. It might be the major factor. But still, if you you're in a smaller apartment, it's it's very hard to have three kids saying, Boston.

• 10:47Speaker 01

  Is that true, though? So my mom was out in New York recently. And one of the things, so my great, great grandparents, I guess it would be, lived in tenements in in New York. And so we toured the Tenement Museum, which is a great tour to take because they have these sort of preserved tenements from that that period. And these were very, very, very small places where you had, in the one we were in, I think it was six or seven people, the family were living there. And there was a border, right? And that was very common. And I'm not saying, and if you go and you look in sort of high fertility immigrant communities, right? I used to live in in San Francisco. You go down sort of further on to Daly City, things like that. You know, people talk about this is very overcrowded and on some level, certainly it is compared to to the way I live.

• 11:29Speaker 01

  But in most places, people just live with less space. So I do think there's a cultural norm thing here, right? Density plus of the norm that the kids all have their own room is going to be very, very bad for fertility. But that's going to be another consequence of, I think, the the almost feedback loop of low fertility societies. You begin to have expectations that cut against high fertility families.

• 11:52Tyler Cowen?

  I'm in NIMBY for Central Paris. Are you?

• 11:55Speaker 01

  Probably for Central Paris, but I'd want to be very careful about which places I I became in NIMBY for. I'm a NIMBY for Big Sur, right? And I've been thinking about how do I resolve something like that? So the the chapter on housing, which I'd be very curious for your thoughts about, but the chapter on housing, I I try to make this argument that the cities are the frontier of the modern economy, that that the frontier is not the the edge of the landmass, but the places where ideas happen and cities are broadly the places where ideas happen. And around those ideas are a lot of engines of mobility. And we sort of throw in that process into reverse. I have this great research in there from Peter Genong and and and show.

• 12:36Speaker 01

  Who sort of show that over decades, it used to be that we had income convergence across states and that was driven by people moving from poor areas to richer areas. But now that is actually thrown into reverse as people leave, lower income people leave richer areas for poorer areas because the cost of living is so high. So we used to have this, this driver of mobility, which is people move to the high productivity, high income area, even if they themselves were poor. And now it's so hard to build a house there or buy a house there that they can't do that. And so the reason I bring that up is that I think you should have very different intuitions about places that are, are highly economically important compared to places that aren't. My view is not that every patch of land on earth needs a high rise.

• 13:19Speaker 01

  My view is that there are a number of high density cities that play huge roles in idea generation and in economic mobility. And you should need to have an extremely good reason to make it very hard to build in them. So I'm not as familiar with Paris as you are. I'm a little bit familiar with Paris.

• 13:38Tyler Cowen?

  But you know it slowly. That's all you need to know.

• 13:40Speaker 01

  Yeah, I know it slowly. But in, in Brooklyn and New York, we've made a huge swath of the land historic preservation. Right? So I think you want to have a very high bar for what you're going to say is actually a beautiful culturally important space worth preserving. There are some of them and some of them are in Paris, but the, the question is how do you set a limit on that? And, and different people have thought about that, right? Maybe you have only a certain number of designations and it's functionally a cap and trade for historic importance, but I think you need something like that to protect against the creep of those designations covering, you know, in, in effect, a quarter of these entire cities or half of these entire cities.

• 14:16Tyler Cowen?

  What do you think about the geographic distribution of US cities? So as you know, for a country our size, our biggest cities are not actually that big. And we have a Nashville and we have an Austin and now there's a Chattanooga. Are the gains from that potentially high enough that it's okay to thwart more activity in or near New York City, in or near the Bay Area? And the geographic diversification of American intellectual and business life seems quite important to me.

• 14:45Speaker 01

  I agree, it seems important. It does not seem to me that our policy to force that into happening is all that good. I don't really know why. I think I probably am a little more skeptical on you on how well that dispersion is working. I think it is remarkable that New York does not have one significant AI company, just remarkable. It doesn't even really have one significant tech company. The the power of these agglomerations is so overwhelming and so sticky that I think you want to be very skeptical of the idea that if you begin to gate one of them, you will have constructive and productive spillover to just some other nearby secondary city. I love the secondary cities, but I don't

• 15:30Speaker 01

  think that's how you improve them.

• 15:31Tyler Cowen?

  But if we think about like our top three universities, say Harvard, MIT, Stanford, they're incredibly gated, right? They take very small numbers of people. They generate ideas at a world beating pace, nowhere in the world comes close to them. Doesn't that mean if you have good selection, you know, the price is super high? Gating can be just fine and people are free to go to plenty of other schools.

• 15:54Speaker 01

  They are, but would they be better? Would Harvard be better or worse if it were twice as big? I think it would be better. I mean, I'm not sure what the limit on that is. There is some limit, but I don't think they're they're exactly where they should be. And I also think the question of universities is a little bit different because you do have this this very early forcing mechanism, which is kids apply, they have to go somewhere. And if they can't go to Harvard, they're going to pick the the next one down. Whereas with a lot of what we're seeing in the cities, what happens is that people live. In far flung ways, you know, further out from, from the city, you spend an hour and a half in traffic every day, right? It's not that having applied to have your job in San Francisco and been rejected, your second best is Reno.

• 16:38Speaker 01

  You might live, you know, an hour and a half out, and that might be a pretty hard life for you. I think this is something that a lot of measures of affordability miss. Annie has written great pieces about this for The Atlantic. She calls it the wrong apartment problem, that you can run a measure of housing affordability and find people who do not actually look that rent burdened, but in practice, they're living 97 minutes away from the place they would like to live in order to be able to afford the home. And I think we should see that as a pretty big public policy failure.

• 17:07Tyler Cowen?

  Here's a question from a reader, and I'm paraphrasing. I can see why you would favor Obamacare and an abundance agenda, because Obamacare throws a lot more resources at the healthcare sector. In some ways, it did have Medicare cuts, but nonetheless, it's not choking the sector. But if you favor an abundance agenda, can you then possibly favor single payer health insurance through the government, which does tend to choke resources and stifle innovation?

• 17:33Speaker 01

  I think it'd depend on how you did the single payer healthcare. So one, I think, and here we should talk about the, because it's, it's referenced glancingly in the book in a place where you and I differ, but the, the supervillain view, right? That I hold in, in your view, which is that you should negotiate drug prices. And I think, and I've always thought on that, because I think in some ways it's a better toy example than single payer versus Obamacare. I think you want to take the amount of innovation you're getting very, very, very seriously. And so I've written pieces about this, that I think if you're going to do Medicare drug pricing at any kind of significant level, you want to be pairing that with a pretty significant agenda to make drug discovery much easier, to make testing much easier, right? A huge number of the choke points that make it hard to discover new pharmaceuticals,

• 18:17Speaker 01

  it's not that if you could do it, you can't make money off of it. It's that it is very, very, very, very cumbersome to take flyers on, on these drugs. Like, we could have had the GLP-1s decades ago, but there are a lot of reasons within the system that, you know, it would have been costly to try that out. Heidi Williams, who we both know has some very, I think, good ideas. For doing this, I think a huge failure of the way we talk about health care, what we call a health care reform is it, it's always health insurance reform. And we are extremely focused on the question of could somebody go in and afford the hospital bill, which is good. I want them to be able to afford the hospital bill and not what is that hospital actually providing to them? And what is it that we can put in place in the system at sort of every

• 19:00Speaker 01

  level to make sure the pace of drug discovery, to make sure the pace of drug advancements is going really well? We spent some time in one of the chapters Derek wrote on the story of Operation Warp Speed. And I always find two things really remarkable about that story. One is that they really did quite a bit under Donald Trump. And it's very unfortunate, I think, that this both policy and structure of policy got disowned afterwards. But they did quite a bit to speed the ability to not just bring these things to research and to market, but the government was very active in there trying to figure out how to make sure supply constraints and secondary items like vials, because you know, the vials need to be refrigerated and so on, that it wouldn't retard the rollout. And so the government there was acting in many ways is what

• 19:45Speaker 01

  Derek called a bottleneck detective. Months later, I was talking to some of the people who were working on trying to create pan coronavirus vaccines. And this doesn't seem to have panned out. And I don't know if it didn't pan out exactly because like they weren't able to figure it out or because of what I'm about to say, but they just described, and this was still when COVID was very, very live in people's minds. Here are these people working on a vaccine that could have genuinely ended the threat. And they described spending so much of their time, among other things, sourcing monkeys, because they just could not find the monkeys they needed to test the vaccines on. And then, so that was one side of it. I thought the government was doing a good job on that with Operation Warp Speed. And then when it came out, because the government had done a lot for it, there was a very strong equity component in it. When that came out, it was not

• 20:28Speaker 01

  that the richest people were the only ones who could get COVID vaccines. I mean, if you were wealthy and connected, it was a bit easier for you. But the cost of that vaccine at the beginning was zero. And it was zero for everybody in America. And people could go and they could get it CBS. I mean, we really did pair a aggressive Supply side policy within an aggressive demand side policy. And I don't think we do that enough, and in my critique, at least of my side of this. I think liberalism doesn't do this enough. It will often ask, how can we make it so people can afford something? But not, how can we make sure there is enough of the thing? And also, how can we make sure there is value in the thing that right now there isn't? Because we haven't done sufficient innovations.

• 21:08Speaker 01

  So the question of single payer and the system, it's like, well, did you radically increase the number of medical residency slots? Right? What kinds of things are you doing inside the innovation system? And inside the way we bring devices and drugs to market? And then, yeah, the point I think that you're making or that your reader is making. If you drive the price of things too far down, you are going to create shortages of them. And you are going to reduce the incentives to innovate in the future. And like, you have to be very thoughtful and careful about that.

• 21:35Tyler Cowen?

  But that's not an accident. If you look at the pure or single payer systems, Canada or the UK, they're very fiscally strapped. They grossly underinvest. Most of the incentives are to stint and drive down prices and not actually want to see too much innovation. In Canada, they even send a lot of people to their deaths under possibly dubious circumstances, which is a pretty radical place to end up in. So why trust these systems to fine tune where the incentives ought to be? When they're just basically fiscally, if not quite broke, badly ailing?

• 22:07Speaker 01

  My view has always been that you want a floor, not a ceiling on your system. So I've never actually been a supporter of. People often mean different things when they say single payer systems. But when we're really talking about something like Canada or the NHS, that's never been the structure I would move towards. I much prefer the kind of system you see in a place like France, where what you have is a significant healthcare, like a basic provision floor. And a huge amount of the value of healthcare comes out of basic healthcare. And then you have supplementary insurance, which you can buy on the open market, and people do. Or if you can't afford it, there are subsidized versions of it. And so you have a kind of what I used to describe as a floor without a ceiling. And so I prefer multi payer systems.

• 22:50Speaker 01

  I do want things provided universally at a basic level. And then I do think for some people who can't afford above that, there should be public provision of it. I think you want to be very, very careful about not having any exit from either the government pricing regime or the structure of government insurance, because there are things that come into the system that it's hard to know how to ration them, it's hard to know how to provide them, and you do want to make sure there is sufficient incentive to develop them.

• 23:20Tyler Cowen?

  What if someone said a true abundance agenda, and of course, this could never happen, but it's basically to zero out Medicare and Medicaid, which is a lot of money, right? And spend all of that on science and birth subsidies and social security, for that matter. Why isn't that the true abundance agenda?

• 23:38Speaker 01

  So the true abundance agenda would be to zero Medicare, Medicaid.

• 23:41Tyler Cowen?

  Christian scientists, they still have decent life expectancy, right? People would have maybe higher social security, they could still buy healthcare, we'd have many more people, it'd be a much younger society, more dynamic society, scientific advances would mean we'd cure many more diseases, forms of cancer, people would probably live longer. Why not do that? Just go crazy on innovation and number of births.

• 24:04Speaker 01

  Well, one, I think that's hugely probably a false choice, right? You can fund innovation, but if you don't have provision of healthcare, I mean, this is the other side of your arguments about drug pricing, but your view is that you should have, you get a huge innovation signal from the fact that in a rich country, virtually everybody and certainly all older people have healthcare and they're able to buy it. So one, I don't buy that you could close down Medicare and Medicaid without substantially harming innovation. Also, I just don't, but, but yes, I don't buy that on a political level at all.

• 24:36Tyler Cowen?

  No, it's not going to happen, but you could have prizes for really good drugs, right?

• 24:39Speaker 01

  But, but it doesn't fit my politics, right?

• 24:42Tyler Cowen?

  But why not?

• 24:43Speaker 01

  I see abundance as a corrective to where we are, because I do care about equity. This is a debate, Robin Hanson and I used to argue about this back when he was big on his healthcare is all signaling tip. And I think there's something to the fact that some of healthcare is signaling, but healthcare plays a lot of roles for people. One of the huge roles in addition, beyond the roles it directly plays in treating people with disease and treating people who need pharmaceuticals and so on, is that The amount of anxiety, fear, et cetera, people have when they are sick is tremendous. And one thing we see in a lot of different studies and a lot of different research around

• 25:24Speaker 01

  health is that one of the main ways healthcare affects wellbeing is it reduces anxiety and depression, particularly around when people get sick. And I mean, think of anybody in your life, how they begin to act when they get sick. Throwing people to the wolves on that and saying, don't worry, we're investing a lot in basic R and D is not compassionate and humane.

• 25:43Tyler Cowen?

  So you're going to cure a lot more cancers, say, right? If you're talking about equity, the person who dies at age 46 of cancer, Medicare doesn't save them. That's true in equity. We could increase defense spending, which would help many much poorer places around the world. It seems the opposite of equity, especially Medicare, to channel so much money to relatively wealthy older people who for sure have gotten in 65 years of life.

• 26:08Speaker 01

  Yeah, I just don't buy that you should begin to so radically discount the life and life quality of older people. I mean, as you know, people who are older end up at the doctor quite a lot and putting them sort of back out on the street on that, I don't think would work. Look, the point that you could, I mean, I could come up with versions of this that I think would in some ways be a tougher philosophical test, right? What you just said, right? What if you begin to cut out half of defense spending and you move it into public health subsidies for the poor worldwide, right? Or you, you know, or for that matter, you could do that with Medicare and Medicaid and all of a sudden PEPFAR is covering everything for everybody under the poverty line in the entire world.

• 26:48Speaker 01

  There's a certain nationalism in this, right? I do believe you have to take care of your people, but I think that once you have accepted the basic view, as I have, that health insurance is a way that is valuable to take care of people, both in terms of their life outcomes and in terms of the quality of life they lead, then I think you're in a place where zeroing it out for poor and elderly people is a bad idea on the merits and also a, obviously a horrific idea politically. But abundance is not just a relentless expansion of supply. You know, I do want to say that because you can push anything. One of the critiques I'm getting on the left is fundamentally the opposite of the critique that you're, or at least a thought experiment you're offering, which is.

• 27:30Speaker 01

  Oh, you know, here come Ezra and Derek saying all that matters is how many solar panels we build and how many drugs we invent and, you know, how many trains we build. And, you know, what about, you know, the child tax credit? What about childcare for everyone? And the theory here is not meant to replace every other argument in American or for that matter, global politics. It doesn't say you don't need to think about child tax credits, which I intensely support. It doesn't mean you don't have to think about the provision of health insurance. It doesn't mean you don't have to think about the provision of public education. There are a certain set of problems that have become very binding on certain set of policy, things that people who believe what I believe about the world should care about. I mean, I'm a Californian. I lived in California for much of the writing of this book.

• 28:14Speaker 01

  California is a place deranged by supply constraints. And the fact that it is deranged by supply constraints, by the inability to build high speed rail, by the inability to build homes, by the inability to build clean energy at anything like the pace needed to reach the goals California itself has set for itself, should be seen as a real problem. It doesn't mean it replaces the problem or completely moves it out of anything on the demand side or the subsidy side of the system. But it is a thing that if you are a liberal, I think, who wants to be honest about the problems of liberal governance, you have to confront.

• 28:45Tyler Cowen?

  But with all the talk of supply constraints, shouldn't you of all people be obsessed with fertility decline? It makes everything unaffordable.

• 28:55Speaker 01

  I kind of am.

• 28:56Tyler Cowen?

  It limits market size. Okay, so then we need to take money from somewhere and spend it on birth subsidies? I'm saying take it for Medicare.

• 29:03Speaker 01

  Do you think birth subsidies work?

• 29:04Tyler Cowen?

  We don't know. I think we need to try them more and more extreme.

• 29:08Speaker 01

  I am extremely open to birth subsidies. The question of where you should take them from the budget is an interesting one, but I, I'm extremely open to birth subsidies. I think people should be paid for being parents. Part of why people do not have children earlier is it's a huge, and particularly for women, a huge financial penalty that is lifelong. I am not sure we know, though, whether or not there's a birth subsidy at a level that is politically in any way viable, that actually works. I would love to see any country in the world pass some non-authoritarian, like non-Romanian, you know, decades ago, policy that seemed to have an effect on birth rates. I do think we're gonna have. I both think we are going to have severe political problems as society shrink.

• 29:50Speaker 01

  And I like in my own sort of moral framework, I think the continuation of human experience is a beautiful and important thing in the way it has just been absorbed into a kind of liberal expressive individualism, right? You I hear people talk about it as if it's like a good that is akin to whether or not they should take an international trip, right? What are the cost benefits? I think that's mistaken. So the I'm I'm pro trying to think about fertility. I just have not seen any policies at work.

• 30:20Tyler Cowen?

  But the more uncertain we are about birth subsidies, and I agree, that's the correct view, doesn't that mean we should all the more commit to some kind of revival of cultural conservatism on matters of family, that there's an asymmetric pairing, families should sort of be expected to have three or four children, and that that's the alternative? And yes, we should try subsidies, but the more uncertain we are, we've just got to go, you know, the Ross Dethat route. I think he has five kids now. Good for him.

• 30:46Speaker 01

  I think it would. So I don't think this is wrong. I just don't think it's doable. I listened to a fascinating interview between Barry Weiss and Louise Perry recently. It was a Valentine's Day interview on Barry's podcast, Honestly. And Louise Perry, for people don't know her, is a sort of kind of conservative British, you know, heterodox feminist thinker. I don't exactly.

• 31:04Tyler Cowen?

  Emergent Ventures winner also.

• 31:06Speaker 01

  Oh, really?

• 31:06Tyler Cowen?

  Yeah, she's great.

• 31:07Speaker 01

  So she was sort of saying towards the end, as Barry was pushing her on on solutions, because she's making some points, not she's more thinking about the the kind of sexual relationships, you know, the the relationships between men and women in this podcast more than birth rates. But, you know, she's saying things like, birth control, at least a pill, it's not that it should be banned. It should only be available for married women. That it is good for married women to be able to space out children, but it, you know, we should not take so much of the weight and the stakes and the incentive to marry off of the the singles dating market. Now, it's obviously not my view, but but I think it gets to what I don't think is going to work in in the view you're describing here, which

• 31:51Speaker 01

  is when society and technology have changed so much, when you have things like the pill, when you have the opportunities we now have for people to live lives of real sort of expressionism of sort of like building their identity around work, which we train people to do from a very early age. I don't know that there is a way to insert an ethic, a kind of cultural application of shaming or, you know, remoralization around this. They will substantially change behavior. If there was, I think some society already would have done it effectively. Now, Ross, right, and sort of the societies I think we would talk about here, that's coming from religion. It's not coming from just cultural conservatism. It's coming from religion.

• 32:35Speaker 01

  And religion is very, very, very powerful. But I don't know how we re-religionize people, right? Getting people to actually believe is different than telling them in an abstract way that, you know, birth outcomes are better and sort of society is more cohesive. In Utah, where the influence of the Church of Latter Day Saints is still very strong. So I actually think the sort of idea that we should just move back to a more shaming cultural conservatism has functionally all the same problems of the idea, which is like, we should just have more prenatal policy, which is it, it just doesn't appear to work. Lots of places try it and it doesn't work. Hungary is not a huge birth success story right now, nor is Russia. So there are places that still have more of this view or have tried to re-insert it, and they don't work.

• 33:19Speaker 01

  Israel is a little bit of a more interesting case from this perspective. But when you are there, you know, people do to some degree what they see around them. And the influence of the Haridi families, of the, the sort of ultra orthodox families, which are huge, is everywhere. I was just in Israel, I guess not now just, but back in June. And I mean, there's obviously a lot happening that you could notice, but, but you really could feel the difference of being in a high fertility society there where I'd had this interaction with somebody at the park, Prospect Park, before I'd gone to Israel. And he had had four kids with him. And we'd just been chatting, and I must have said something that made him think a little bit like, I was asking like, what, what are you doing here with four kids? Cause he's like, oh, they're all, oh, I'd asked if they're all, they're all his, cause they sort of looked different. I thought it might be a group of kids. He's like, oh yeah, but he was sort of explaining it away.

• 34:04Speaker 01

  He's like, well, you know, we'd only meant to have three and then we had twins. In Israel, nobody's explaining away why they have four kids. Tons of people have four kids, tons of people have six kids, tons of people have eight kids. So you have a society there that there is an anchor weight of just what is normal being placed by the fact that there is still a huge conservative religious community. But I think just sort of doing the sort of thing I think JD Vance is trying to do when he was like scolding Child as Cat ladies, that doesn't appear to work.

• 34:31Tyler Cowen?

  But at the macro level, it can work, right? If enough things change over enough time. Keep in mind, if this doesn't happen culturally, it will happen through replacement. So it happens one way or the other.

• 34:41Speaker 01

  I mean, that might happen.

• 34:42Tyler Cowen?

  So one favors one version of it, no matter what.

• 34:45Speaker 01

  I mean, it could or it couldn't, right? Or, you know, as I understand, there's a view that, well, if you have liberal secular societies begin to shrink, eventually it's just going to be the Amish will take over the world. Maybe, or maybe as the Amish society grows, they will be impinged upon by all the pressures that hit all these other societies. And within a couple of generations, their birth rates will fall very rapidly. I wouldn't be surprised by that at all, would you?

• 35:11Tyler Cowen?

  It may not be the Amish, but whichever are the remnants of high birth rate cultures, it seems to me they will dominate. Maybe it's Niger, right? In Sahelian Africa.

• 35:21Speaker 01

  Yeah, but my understanding of the research on this is that while the numbers are higher in obviously Sub-Saharan Africa, the fertility numbers are higher. They're also on a downward trend. It seems to be a downward trend everywhere, which would make sense because you have a universal technological shock to fertility. And the richer people get the more of that shock there there is. So I guess I'm not.

• 35:43Tyler Cowen?

  Keep in mind, though, before the pandemic, US was above replacement rate. It doesn't seem so utopian to think we could get back to 2.2, 2.3.

• 35:52Speaker 01

  I'm of the view that at, I have two kind of contrasting views here. On the one hand, I am of the view that it seems likely that as societies shrink, they will figure out a cultural answer, you know, paired with policy answers. So people can actually have the lives that they say they want to have, which is lives where they marry and have two to three kids. I do think probably, I think the evidence is pretty good that the pressure there has to be on marrying younger, right? The, you know, I think you've probably seen the charts that have been going around. I think from the FT. But basically, if you, you know, if people were marrying younger, the difference here is really about whether or not you get married, right? The sort of piece of leverage is on marriage. People are much more unlikely correctly to have children outside the context of a

• 36:36Speaker 01

  highly committed, stable relationship. It's very, very hard to have children as a single parent. People do it, obviously. But, you know, that that's one of, that's going to be one of the main ingredients of fertility falling because it's just incredibly, incredibly difficult thing to do. So there's that. It seems to me that you should be able to practically, if you began to reorient the kind of cultural and policy machine of society to bring up the birth rate by, you know, point four, right? That can't be that hard. And then you ask yourself, why doesn't anybody seem able to do it? I mean, to the extent I'm pessimistic about both the ability to control use policy here and pessimistic about the ability of culture to act in an organized fashion, right? People have chosen to change a culture and the culture had to downstream change is

• 37:18Speaker 01

  because I think that some of the societies in, you know, Asia and other places that have entered into a very rapid shrinkage and have treated it as a problem, one of them would have figured something out by now. Now, maybe it just hasn't been long enough and South Korea is going to execute an amazing turnaround of this. But what I'm observing in South Korea, and frankly, what I feel like I'm observing even a little bit in America, is that gender relations worsen as this happens, right?

• 37:42Tyler Cowen?

  I agree.

• 37:42Speaker 01

  It's not like it brings everybody together to sort of deal with this problem and think about how we can have the families we want to have and so on, actually creates enmity, it creates scarcity, and those are very, very poor political conditions for what is both a cultural and policy project based on a kind of cross-gender cohesion and long-term planning. So it seems like it should be possible, but I mean, look, you look at this as much or more than I do. I feel like you're sounding, I feel like you're sounding more optimistic than I suspect you really are. Or if you are not, then what is your answer for why no one has done it successfully yet?

• 38:18Tyler Cowen?

  I genuinely don't know. I fear it's, as with negative emotional contagion, another topic we've discussed offline, that once you get on it, it's hard to reverse, but it's in fact not impossible to reverse, and there are periodic historical reversals in both directions, and at some point we'll see another one. But we need some quite bracing, strong, maybe almost Straussian movement towards some version of cultural conservatism and religion to make this happen.

• 38:45Speaker 01

  Is it cultural, is it religion? I think that's a real question here.

• 38:49Tyler Cowen?

  Their package. We might have a future that is religious without that much belief in God. That might be fine.

• 38:54Speaker 01

  So that might happen. I mean, I think one of the things I just think is true about the world. Is that religion is a functionally unmatched, depending on which side of this you sit in, like either understanding of ultimate reality that enhances human cohesion and cooperation, or just a cultural technology that enhances human cooperation cohesion. And as religion weakens, belief itself weakens. And you obviously had Ross on, and I thought that was a fantastic conversation. But as belief itself weakens, we have not replaced that with any other technology, cultural or otherwise, that is able to create cooperation, particularly long-term cooperation, cooperation that requires sacrificing now

• 39:38Speaker 01

  for gains later, or not even in this life, with anything of even nearly matched power. Worse than that, we've probably then added in a bunch of discohesive technologies like social media that make it harder to cooperate, make people more short-term oriented, make people's attention spans even weaker. And so the the underlying texture of this, I think, is quite is quite rough. I think religion, I don't really buy cultural conservatism. I think it probably needs to be something like religion, but I don't, I don't think you're really able to.

• 40:13Speaker 01

  I don't think you can do religion instrumentally. I don't think the the efforts to do that really work at at mass scale. People have to believe.

• 40:22Tyler Cowen?

  Let me give you another right wing view. Tell me what you think. The notion that the most important feature of state capacity is whether a state has enough of its citizens willing to fight and die for it. And in that case, the United States, Israel, but a pretty small number of nations have high state capacity. And most of Western Europe really does not because they don't have militaries that mean anything. Is that just the number one feature of abundance and state capacity?

• 40:51Speaker 01

  I think two things about that. So, one, I think if you listen to the right in America right now, they would say, we don't even have that anymore. And it's a reason that JD Vance and others sort of make this constant point that nationalism is not an idea. It is about having a physical connection to the land and the culture, usually multi-generational, that makes it enough your home that you would fight and die for it. Right? I mean, that was a major theme of Vance's RNC speech.

• 41:19Speaker 01

  The reason I'm not sure I think this is true is that I think that the question of whether or not people will fight and die for their country operates very differently under actual threat than under abstract discussion. So how much would you have said Ukrainians were excited to fight and die for their country, you know, six years ago, eight years ago, you know, 15 years ago? And it turns out they are extraordinarily heroically, courageously willing to fight and die for their country under the actual conditions of threat and invasion. And so, so then I think you get into kind of an interesting question about, well, what kind of state capacity and this sort of fight and die measure you're really looking for? Are you asking the question of how willing are Americans to fight and die for their country if their country tells them that the defense of Taiwan is in the

• 42:03Speaker 01

  national interest? I'm not sure how willing Americans are going to be to do that. How willing would they be to fight and die for their country if China was sending, you know, armed divisions landing on, you know, the shores of America? Probably much more so. So I think some of what we're talking there about state capacity reflects actually the success of peaceful institutions over a long period of time. And the way in which it will turn around is under conditions that we should not want to see coming.

• 42:30Tyler Cowen?

  But they're probably coming. I mean, don't, doesn't America have a remarkable record, say with Latino soldiers, maybe not born in this country, but who exhibit extreme bravery in recent times, fighting for causes in Iraq, Afghanistan, that are quite obscure in some way, right? Now, they were told it's important, but American soldiers are amongst the best in the world. And America does that. Israel, I know there's an issue with Haridi, but Israel clearly does that. You go to West, you know, Germany, and you tell people, well, this is how it's going to be. I think there's just no enthusiasm. People haven't grown up, you know, with guns or martial spirit. There's a culture of vacation. It just seems like an obvious huge gap to me where America is clearly in the

• 43:15Tyler Cowen?

  lead. Ukraine, great, Israel, but not many places. And that's how we should think about state capacity.

• 43:21Speaker 01

  Don't you think in Germany, though, that that reflects a? Absorbed view of maybe that martial, it is not as if there is something in the German people that is unwilling to fight.

• 43:32Tyler Cowen?

  I'm sure, that's why they don't have state capacity. But if you went to the Dutch, I don't think you would see so much more enthusiasm. Or try Luxembourg. You know, I think it's, Switzerland would be an outlier.

• 43:44Speaker 01

  I think the place where we probably disagree on this is that I think under conditions of threat, that would change very rapidly. And you, I guess you could say, right? This is definitely a view many people hold, which is that our society has become soft under conditions of too little threat. And you're of course, right about the extraordinary success the American military has integrating immigrants, integrating first generation Americans. It's again, a reason why I think that part of JD Vance's speech was, let's call it unkinded as a very low level, because like plenty of people fight and die for this country who do not have seven generations buried in the same Kentucky graveyard. But I, at the same time, think that there is kind of something missing about it. So something is jogged for me is you've read the book, Where's My Flying Car? Where, what is the name of the author? I'm just blanking on it at the moment.

• 44:29Tyler Cowen?

  Oh, Storrs?

• 44:30Speaker 01

  Yeah, there are stores. So he's got an entire section in that book where he is arguing that one reason we have simply ceased inventing and ceased having the sort of heroic entrepreneurial energy to invent is that we are not sufficiently exposed, countries are not sufficiently exposed to invasion anymore. And he basically says, look, like there was a, you know, for much of human history before we had all these, you know, annoying liberal, all this annoying liberal internationalism. If you were an underperforming society, you could simply be swallowed up by the overperforming society next door. And now we don't let that happen. And that allows a kind of softness and stagnation to take root and infect societies. And I just think if that were true, among other things, America would not be as dynamic society as it is because we are much less exposed to invasion.

• 45:14Speaker 01

  Whereas a lot of societies that exist under that kind of martial threat, and for that reason have ended up with very martial cultures, at least for long periods of time, don't seem to have that dynamism, right? I don't think we would look at the, a bunch of the countries in Africa that have been fighting wars for some decades now, you know, on and off, and say, wow, that's amazing state capacity there. So I think there is some, I think there is something wrong with this theory because I don't think it predicts enough about what societies are doing well and what societies are doing poorly and, and in what ways.

• 45:44Tyler Cowen?

  What should government, the US federal government do to prepare for AGI? We should just lay off people, right?

• 45:51Speaker 01

  I would not say it that way. I wouldn't say just lay off people. I think that's

• 45:55Tyler Cowen?

  No, not just, but you know, step one.

• 45:57Speaker 01

  I wouldn't, I mean, do you think that's step one? Do you buy this Doge is preparation for AGI?

• 46:03Tyler Cowen?

  I think maybe a fifth of them, a fifth of them think that. Maybe it's step two or step three, but it's a pretty early step, right?

• 46:10Speaker 01

  I think that the question of AI, of AGI in the federal government in anywhere, and this is one reason I've not bought this argument about Doge, is you have to ask, well, what is this AI or AGI doing? What is its value function? What prompt have you given it? What have you asked it to execute across the government and how, right? Alignment, which we have primarily talked about in terms of whether or not the AI, the superintelligence makes us onto paperclips, is a constant question of just, you know, near-term systems as well. And I think the question of how should we prepare for AGI or for AI in the federal government? So first has to do with deciding what we would like the AI or the AGI to do. That could be different things, different areas.

• 46:55Speaker 01

  My sense, from talking to a bunch of people in the companies, has sort of helped me conceptualize this better, is that the first thing I would do is sort of begin to ask, what do I think the opportunities of AI are scientifically and in terms of different kinds of discoveries? So let's take drug development.

• 47:12Speaker 01

  I am pretty convinced that within the next five-ish, five to 10 years, that the set of tools we are developing using AI, not all of it AGI, some of it are narrow systems like the AlphaFold system, should be, should get us to the place where the systems are developing much higher probability, molecules with much higher probability of actually making it through trial and doing something beneficial in the human body. I think we are getting better sort of models of different parts of the human body, right? Arc is trying to create a cell model right now, and I think this is going to work. So then I think you need to actually ask, how do you prepare other parts of the system to absorb what in theory will be a rapid

• 47:55Speaker 01

  increase in valuable candidates?

• 47:58Tyler Cowen?

  Yeah, so more bureaucrats for the FDA if we need them, even though AI could evaluate those drugs. But a lot of government, we could just

• 48:05Speaker 01

  But also you'll need to do like, you'll also need to make it much, much easier to get rats, monkeys and human beings for testing. Right? That would be another piece of it. It's actually extremely difficult right now. And I think you got to go sort of one by one like that. I mean, one of the reasons I'm not probably in agreement that the first thing you're going to want to do with AI is lay a bunch of people off is that the first thing AI is going to do is create much more of something, some kind of information that is going to overwhelm choke points somewhere. So if what you're basically doing with AI in terms of thinking about opportunities is, well, the AI is about to proffer a much higher hit rate of good things we should do, then probably, at least for some period of time, you need a higher rate of ways to do them. Now, that doesn't mean we should have

• 48:50Tyler Cowen?

  That reallocate labor to the growing sectors, right?

• 48:52Speaker 01

  So that would be

• 48:52Tyler Cowen?

  If you need more people in the FDA, lay people off other places. And then when you have bottlenecks, throw labor at them if that's what's called for. But you can't just always think the number of people working in the government should

• 49:03Speaker 01

  No, I don't. I don't always think the number. Well, I actually probably think that the, I mean, as you know, the civilian side of the federal government has held studied about 2 million people since, what is it, the 50s?

• 49:11Tyler Cowen?

  But consultants, whatever one thinks of them.

• 49:13Speaker 01

  But I think you would not want that, right? I think you would actually want to, I mean, this is something I sort of talk about in the book. I think you'd actually want to in-source a lot of what the government does. Look, the reason I am, I'm being squarely at this moment, I will give you a non-s squarely answer now, is because I don't like the way Musk is doing it. If you had asked me three months ago, and I believe today what I believe three months ago, I would have said, the civil service rules we have are archaic. They make it much too difficult to hire and fire. They make it much too difficult to reorganize systems, right? It actually is the case, say what you will about whether or not you think what they're doing is a good idea. It is the case that it used to be much more in the president's power to reorganize, create, fold agencies, sub-agencies, et cetera.

• 49:55Speaker 01

  And we have, I think, made it too hard by a lot to restructure and manage the administrative state. And so the thing that I would like to do is create much more flexibility and much more power with with the people we call bureaucrats. I would like people to have much more agency, much more ability to, yeah, to actually hire and fire. I would not want to do it indiscriminately, right? The idea that just everybody in the federal workforce is probably bad and on the margin, getting rid of any of them for any reason is probably good is just not an idea I share. So the thing where they fired all the probationary employees, that was disproportionately young people and people who had just had promotions.

• 50:35Tyler Cowen?

  I'm not sure that's happening, by the way. I know it's been in media, but

• 50:39Speaker 01

  I've known people who've gotten fired through it, I guess I would say. So something, something seems to be happening around that. I'm not sure they've done it at the mass level, but they, but they do appear to have done it to some degree in some places. They, I am seeing a lot of extremely indiscriminate work doing, you know, people who, for instance, it took a long time to recruit into the federal government because it was hard and they had to get exemptions in order to give them sort of higher pay, right? That's a thing that happens a lot. And it's like a long time of bureaucratic fighting. On the one hand, that it took so long to get them in is a problem I want to solve. On the other hand, indiscriminately now knocking them out is not something I would like to see. So the question of how to, I think the question of how to ready the government for AI is a real one. I would like to see a little bit of what this AI looks like before I start doing mass firings. It's important. And I would like to decide, like actually describe

• 51:25Speaker 01

  aims for this AI. So you said this a couple of times. What should the aims of the AI be, right? You're not like a person who just thinks of the category of AIs undifferentiate. You need to tell it what you want it to do, or at least tell it what you wanted to figure out to do. Like, what, what is it doing here?

• 51:42Tyler Cowen?

  I'm struck by how small many companies can become. So Mid Journey, which you're familiar with, at the peak of its innovation was eight people. And that was not mainly a story about consultants. Sam Altman says it will be possible to have billion dollar companies run by one person. I suspect that's two or three people. But nonetheless, that seems not so far off. So it seems to me there really ought to be significant parts of the government, by no means all, where you could have a much smaller number of people directing the AIs. It would be the same people at the top, giving the orders as today, more or less, and just a lot fewer staff. I don't see how that can't be the case.

• 52:22Speaker 01

  I agree with you that in theory should be the case. But I do think that as you actually see it emerge from like in theory should be the case till we figured out a way to do it. It's going to turn out that things a federal government does are not all that like type up like an image prompt into a thing.

• 52:38Tyler Cowen?

  But it's so hard to get rid of people. Don't you need to start with a chainsaw? Iterate, you know, maybe the next democratic administration rehires what's needed.

• 52:48Speaker 01

  I don't think, I don't think you start with a chainsaw in this way because one, you're breaking things right now that AI is not about to fix. I think you have to have a very low opinion of the federal government and what the people in it do. And maybe, you know, we have different opinions of those probably to think this is all going to be, you're not going to break things that were needed. And I worry that a lot of things I'm seeing them break, right? Like people who I know who worked at the Consumer Financial Protection Bureau on, you know, financial scams. I don't think knocking them out of government is going to create a macro problem in the US economy. But like, I do know these people were getting money back for consumers who had gotten scammed. And frankly, I think the capacity to scam people on AI is about to go much higher. And so I think that a good thing that was happening is going to happen less well right now.

• 53:29Speaker 01

  My gut is that AI, as it emerges into the kind of view and flexibility where we could integrate it into core systems, which it's not at yet in most cases, is going to create places where you need to expand and places where you need to contract. So that's why I was sort of trying to ground this in an actual example, like drug development. If it is throwing off way, way, way more good candidates for drug development, yes, there are parts of the system that can contract, parts of it they're going to need to expand. Energy, again, it's like if you read any of these projects, right? You know, or any of these slightly more utopic visions of AI, which I certainly hope we're going to live in, the idea is that it's going to throw off a bunch of realizations and discoveries about how we can make much more energy dense materials.

• 54:13Speaker 01

  And so lay down everything from solar panels to, you know, get better doing advanced geothermal. And that would mean some parts of DOE maybe become less important. It would also mean our ability to permit and do other things becomes more important. I am not sure particularly at the beginning, what you need is less so much as the ability to reality. Now, look, your view that you do mass firings and then you hire back what you need. I mean, I guess I understand where you're coming from on that, but I want to see, I want to see the thing we are doing the firings for working first, not fire people and hope that Sam Altman's view of billion dollar companies with three people is actually going to work at the Social Security Administration in the year of our Lord 2027.

• 54:56Tyler Cowen?

  But you know full well, Steve Tallis's work on cludgeocracy, right? We have at least 50 years of the clutches just accumulating. Everyone in government knows about this. It's not some secret. Various administrations have tried to address it. You know, Al Gore did a bit. That was fine, but it didn't really stop it. So I don't see that there's any other recipe besides quite a bit of disruption. Again, there'll be future administrations to sort it out, like the New Deal agencies. They weren't so great to begin with. They didn't have experience or data or staffing, but over time pieces fell into place. And maybe the options are just more and more Steve Tallis cludgeocracy. Or we take some chances today and do some things that actually hurt, right?

• 55:38Tyler Cowen?

  And then over an eight to 12 year period, sort it out with AI. And most of all, with future administrations. I don't really see what the alternative is.

• 55:46Speaker 01

  I think there are two questions here. Let's say there's a good version of this and a bad version of this. And I'll sort of outline the way I see both. Let me start with a good version of this. If I was saying sort of what I hope the story of this period will ultimately be, like I have to sort of describe it as like thesis, antithesis and synthesis, which I think is a little bit of what you're saying. My critique of Democrats is they became culturally process and bureaucracy obsessed. They saw like the state and inside their own agencies, inside things they in theory run. They were, anything a lawyer said, you had to take as holy writ, right? No matter how off the wall or stringent the interpretation of what's clearly a looser

• 56:30Speaker 01

  original statute was, you like, it was careful. They, every process had to be followed to a T. And Democrats, in theory, the party of government cannot run government effectively because for all the, some of the reasons you just described and some of the reasons I just described. So then in comes Donald Trump and Elon Musk.

• 56:49Speaker 01

  And if they have proven anything, it is that a lot of the things that previous administrations, by the way, Democratic and Republican, treated as inviolable, were just not. They weren't real. They were norms, not rules, norms, not laws. It is clear that some of the firings were illegal, clearly not all of them. It is clear that some of the withholding of money is illegal. My gut is, you know, having seen the 5-4 decision the other day at the Supreme Court, which went against the Trump administration, but it was a 5-4 decision. It's not going to be all of it. There is a lesson that is being taught here by Musk, which I think liberals have to look at very uncomfortably, which is that things that they

• 57:31Speaker 01

  treated as facts of the system that could not be in any way altered, and then used as excuses for low-performing government services for genuinely, like, probably what Elon Musk is calling waste and what I would call waste are not the same thing, but there is what I would think of as a lot of waste. They allowed a civil service system to emerge and evolve that everybody knows is crazy. Everybody knows it's crazy. And so here comes Musk and Trump antithesis, right? I don't think they're trying to make things work. I don't think it is zero-based budgeting. I don't think they're holding things to a standard. I think they have cut off huge amounts of life-saving work. I think they are creating a lot of risk in parts of the system that could really blow up. I don't, I think what they want is control, not a working government.

• 58:14Tyler Cowen?

  No, I'm not defending what they are doing.

• 58:16Speaker 01

  I'm not saying you're, well, I think you're a little, at least I think on the margin, I would take that as a stretch.

• 58:21Tyler Cowen?

  Some parts of the approach are necessary. It's not even clear to me what they're doing.

• 58:25Speaker 01

  And my hope, I think it's not always clear to them. And then my hope is that the next administration, if this all doesn't blow up in our faces in a truly terrible way, is able to do synthesis, right? Which is to not try to destroy the federal government, but to take the lesson of Doge seriously, that a lot of what liberals, a lot of what the establishment was treating as it just has to be this way, these are the rules, these are the processes, there's nothing to be done about it. No, it actually seems you can do quite a lot of it. I mean, I've thought a lot about the payment systems and the Treasury privacy data. And how many social insurance Programs worked poorly because they couldn't get any access to that data. Like, I've heard about this a lot in the design of systems beforehand. And this turned out to not be the case. Like, you could get access to the data if you really wanted it.

• 59:10Speaker 01

  There's no reason we needed to have the software procurement systems that led to healthcare.gov. We just didn't. And it is true that then, over time, the system adapted somewhat in that area. USGS, US Digital Service, and AT&F were significant there, and they've sort of destroyed them. But there was a lot you could do. So that, I think, is the good, the good version where what we've had is a kind of fire. And it'll do things that I am very unhappy about. But it will also open the way to something that is not as relentlessly and illogically as bureaucratized as the way government was run under, say, the Biden administration, and is not as destructive and corrupted as what we're seeing under Trump and Musk. I think the bad version of there's no choice, but we have to come in and do something like this, is that they actually don't know what they're doing.

• 59:56Speaker 01

  This isn't zero-based budgeting. They don't know who they're firing. They don't really know what the people do, right? They've not evaluated things on a cost-benefit scale. They're trying to use loopholes. And it does turn out that the system manages a lot of risk. And, you know, most of the risk it manages in any given year, it's going to be fine if you don't have anybody there managing it. But when then things do go wrong, when you do roll snake eyes, and you always do eventually, it's going to turn out we really needed some of this, right? And you see them, they're kind of like freaking out about this on the, on the daily, basically, right? They go fire all these people who are on nuclear safety and don't even realize they've done it, and then are desperately trying to get back in touch with them to come back so we don't have huge problems in the nuclear system. Or, you know, Musk saying that he didn't mean to turn off all the payments on the

• 1:00:40Speaker 01

  sort of Ebola work, but it turns out they did, and then saying that he turned it back on. And in fact, you talk to people on the ground there, and he didn't. So I'm worried about risk exploding, which is why I wouldn't have wanted to see it done this way. But I think that people who are in my position, and I think people who care about effective government, really need to look with some anger and shame about the way in which the people who believe in government basically gave up on government reform and left that to this kind of process.

• 1:01:09Tyler Cowen?

  If we think steady state, when I look at the private sector, it seems to me, large foundations, charitable foundations, they're not better run than smaller ones, on average. If someone says, well, five years from now, we could have a USAID that maybe even gives away more money, is more effective. And total personnel is 300 or 400 people plus AGI. That seems entirely plausible to me and actually a good goal. Like, could you imagine supporting, you know, a future vision for USAID with 350 employees plus AGI, way, way less with the US-based contractors? Get rid of that part of the law. That's just domestic wealth, corporate cronyism, welfare, and give away more money and have way fewer people. Why isn't that a good vision?

• 1:01:54Speaker 01

  I could imagine that. I think USAID is a weird one to imagine would work like that because I think what you would then get, I mean, somebody is actually providing somewhere what USAID provides. And if it's not the contractors like out there working in Africa and working in Latin America and working in other places, like if you imagine, let me try to flesh this vision out, right? Let's say you fire, you know, USAID is functionally gutted now, so you're going to be down at that sort of low level of staffing. And then you have, you know, in 2028, we have something we're willing to call AGI. And you're basically getting AGI to do the work that GiveWell was doing, right? At a sort of more AGI-like level and evaluate what is the highest benefit per dollar that we can spend through USAID. And it's doing a better job of that.

• 1:02:39Speaker 01

  Then, of course, like, that is going to have to be spent out in the real world. Vaccines have to go into people's arms, HIV/AIDS, retroviruses, you know, drugs have to be handed to people. The AGI is not going to do that. And so then you have this question of, in this world, are you expanding staffing somewhere? I'm fine with that world. My disagreement with what is happening right now is that I, I really think it is important to be clear that the disagreement is about whether or not we should be doing aid, right? Not over what aid is effective. They could have gone in and restructured USAID and what it spends money on. They have not articulated any desire to save lives of people in other countries at all.

• 1:03:20Speaker 01

  And this is where I think this kind of conversation can get a little hiding the ball. I think it's efficiency is always towards what, right? You know, what are you trying to make more efficient? And there are always values in that. And the language of efficiency is often a way of trying to hide the values. But yes, the question hypothetically.

• 1:03:42Speaker 01

  Could you imagine a world where aggressive reform of USAID led to a USAID that was much more laser focused on public health provision and maybe some forms of functionally cash transfer programs and probably support for certain kinds of government functions in other countries and administering that required much less administrative staff in Washington and in the US? Absolutely. But that's a goal you can define and work towards right now. AGI is not even really doing anything in that hypothetical. What's doing something in the hypothetical is having a coherent vision of foreign aid and then a willingness

• 1:04:22Speaker 01

  to upend the bureaucracy to achieve it, which on the one hand, I don't think you've seen necessarily from a lot of the nonprofit industrial complexes, it gets called. But on the other hand, on the values level, you shouldn't, you certainly have not seen from this crew.

• 1:04:37Tyler Cowen?

  At the end of your podcasts, you ask your guests to recommend three books, maybe they've been reading lately. I'll ask you to recommend three travel spots. It doesn't have to have been recent and it could be around the block in Brooklyn. It could be anywhere. But tell us just three spots where people ought to go or think about and why they're interesting or important to you.

• 1:04:56Speaker 01

  So my father's Brazilian and I've been to Brazil many times and I think of Rio de Janeiro as one of, I just believe it is one of the most beautiful and vibrant and dynamic and exciting cities in the world. And Brazil itself is just tremendous. It is one of those countries you could spend a lifetime exploring and never reach the terminal point of it. And there's so much I have not done there. So Brazil just itself to me, you could pick all kinds of places, start with Rio, but, but, but try to travel out of Rio. Go to some of the, the sort of spots where Brazilians, you know, vacation

• 1:05:38Speaker 01

  in the, in the summer. There's a place that I went with my father to a conference when I was young called Bahadusei, which, you know, it's kind of an island. You can see your feet in the water. I was young, so I'm not sure how accurate my impressions of it are, but it sits in my head like a kind of Shangri-La. Like I just, I love it. And I've had a lot of experiences in Brazil like that. That's one. I love Berlin as a city. Now, partially, this is because I'm into electronic music and it's a city that takes electronic music incredibly seriously. And so you have just this remarkable mixture of nightlife that I find really, really exciting and really vibrant. It's just a fun city to walk around. It has great museums. It has great food. People are friendly. There are a lot of immigrants, right?

• 1:06:22Speaker 01

  There's a lot to see and there's sort of a thing to experience there that I just like. So I'm not sure it'd be exactly true for everybody, although I think probably even people with radically different tastes in mind would find a lot to love in Berlin. But if you have my specific tastes, Berlin is just an extraordinary place to go. I spent a week there last year. And if I could, I think I would spend a couple of weeks there every year. It's one of the places, Mexico City being the other, where I've landed and spent some time and just immediately had the view. I could live here, right? I could just do this. It would be, it would be wonderful. I am just a huge fan of American second cities and I travel a lot around music. And so I guess one of the others, I go to a lot of music festivals in small places, not all electronic.

• 1:07:06Speaker 01

  One of my favorites is one called Big Years in Knoxville. And it's a lot of folk music. It's a lot of experimental music, but Knoxville is just a great place and a great city. And again, the food is great. I think in general, at this point, the food in places like Knoxville, like all kinds of smaller cities are just better than in the really big cities because so many people have been costed out. Like San Francisco's food just isn't good anymore. It's like not a good food city, hasn't been for some time. It's one of the most disappointing things to me about living there. You know, California cuisine used to be so vibrant, but I think now isn't. And it's just because we've pushed the people who could make it out, like the labor costs are too high, et cetera.

• 1:07:47Speaker 01

  So I think actually just traveling around America itself is, as you would say, underrated. And as somebody who tends to like urban travel, that's part of it. I guess I did three there, so I shouldn't, I shouldn't keep going.

• 1:07:59Tyler Cowen?

  Four, if you can't, Mexico City. A plug again for the book Abundance by Ezra Klein and Derek Thompson. Wonderful book. I recommend it to everyone. Ezra, thank you very much.

• 1:08:07Speaker 01

  Thank you, Tyler. Really enjoyed it.

• 1:08:11Tyler Cowen?

  Thanks for listening to Conversations with Tyler. You can subscribe to the show on Apple Podcasts, Spotify, or your favorite podcast app. If you like this podcast, please consider giving us a rating and leaving a review. This helps other listeners find the show. On Twitter, I'm @TylerCowan and the show is @CowanConvos. Until next time, please keep listening and learning.