Caleb Watney - America's Innovation Engine

Caleb Watney is the director of innovation policy at the Progressive Policy Institute. Watch on YouTube https://youtu.be/Ayewh_O0LPQ. Listen on Apple Podcasts https://podcasts.apple.com/us/podcast/8-caleb-watney-americas-innovation-engine/id1516093381?i=1000490083547, Spotify https://spoti.fi/3ed3Zt3, or any other podcast platform. Episode website here https://www.dwarkeshpatel.com/p/ caleb-watney. Follow Caleb on Twitter https://twitter.com/calebwatney. Follow me on Twitter https://twitter.com/dwarkesh_sp for updates on future episodes. Caleb's new blog: https://www.agglomerations.tech/ Timestamps (00:00) - Intro (00:20 https://www.youtube.com/watch?v=Ayewh_O0LPQ&t=20s) - America's innovation engine is slowing (01:02 https://www.youtube.com/watch?v=Ayewh_O0LPQ&t=62s) - Remote work/ agglomeration effects (08:45 https://www.youtube.com/watch?v=Ayewh_O0LPQ&t=525s) - Chinese vs American innovation (16:23 https://www.youtube.com/watch?v=Ayewh_O0LPQ&t=983s) - Reforming institutions (19:00 https://www.youtube.com/watch?v=Ayewh_O0LPQ&t=1140s) - Tom Cotton's critique of high skilled Immigration (22:26 https://www.youtube.com/watch?v=Ayewh_O0LPQ&t=1346s) - Eric Weinstein's critique of high skilled Immigration (26:02 https://www.youtube.com/watch?v=Ayewh_O0LPQ&t=1562s) - Reforming H1-B (30:30 https://www.youtube.com/watch?v=Ayewh_O0LPQ&t=1830s) - Immigration during recession (32:55 https://www.youtube.com/watch?v=Ayewh_O0LPQ&t=1975s) - Big tech / AI (38:20 https://www.youtube.com/watch?v=Ayewh_O0LPQ&t=2300s) - EU regulation (40:07 https://www.youtube.com/watch?v=Ayewh_O0LPQ&t=2407s) - Biden vs Trump (42:30 https://www.youtube.com/watch?v=Ayewh_O0LPQ&t=2550s) - Federal R & D (47:20 https://www.youtube.com/watch?v=Ayewh_O0LPQ&t=2840s) - Climate megaprojects (49:35 https://www.youtube.com/watch?v=Ayewh_O0LPQ&t=2975s) - Falling fertility rates (52:20 https://www.youtube.com/watch?v=Ayewh_O0LPQ&t=3140s) - Advice to 20 year olds This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.dwarkesh.com https://www.dwarkesh.com?utm_medium=podcast&utm_campaign=CTA_1

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

• 0:05Dwarkesh Patel?

  Okay, today I have the pleasure of speaking with Caleb Watney, who is a Director of Innovation Policy at the Progressive Policy Institute. And he's recently written a piece of The Atlantic arguing that America's innovation engine is slowing. So before we get into the weeds, Caleb, do you want to describe the main reasons why you think America's innovation engine is slowing?

• 0:22Speaker 01

  Sure. Yeah, America's innovation engine is of course a very broad and multivariate, you know, thing, but I was trying to focus on three particular trends that I thought were troubling, make a major impacts on America's ability to innovate. And just briefly, those are basically high skill immigration, international talent flows. Number two are cutting edge university system that's really the best of the world. And three, the industrial clusters, the agglomerations that we have that are sort of the geographical regions where a lot of this innovation comes from. And each of those, we're sort of seeing maybe negative trends before the pandemic, but the pandemic might serve as kind of a breaking point in each of them.

• 1:03Dwarkesh Patel?

  Okay, so let's start with remote work first, or at least the agglomeration effects first. Now, what is so important about the physical agglomeration effects of being in these high productivity cities? Why can't remote work make up for that?

• 1:14Speaker 01

  Sure. Yes, I mean economists have, you know, for hundreds of years, basically been studying the effect of these close geographically connected networks of entrepreneurs, innovators, scientists, academics, you know, supply chain managers. When you have all of those people in a geographical region where they're, you know, running into each other spontaneously and they're sharing ideas and they're having long conversations, you know, in the hallway or in their offices that they wouldn't otherwise be able to replicate, you know, simply online, that ends up leading to a more creativity, more ideas, more patents. And, you know, we have a lot of evidence for that in the real world. And as you mentioned, some people are starting to counter and say, oh, well, you know, in the last 20 years, we've seen this huge

• 2:00Speaker 01

  Array of online communication platforms kind of pop up and can't those replicate a lot of the agglomeration effects that we're getting in physical environment? And I think that's certainly true to some extent, but I guess the right comparison here isn't even necessarily physical agglomeration versus digital agglomeration. But right now, if you're in one of these geographic clusters, you're getting the best of both worlds. You're getting the best that physical agglomeration effects have to offer. Plus, you know, I have tons of great conversations on Twitter. And so it's really digital and physical agglomeration effects versus just digital. And I think the difference there is still pretty large, and it would be a shame to lose a lot of the high productivity clusters that we currently have.

• 2:39Dwarkesh Patel?

  Okay, let me make the case that a remote worker is actually going to increase some sort of agglomeration benefit, and you convinced me that it's wrong. Okay, so first of all, it's just going to connect the entire world into this high hyperproductive city that we can't have in the real world, not just because of the limitations of how big cities can be and who can move in there, but just because of the inevitable zoning laws that cities like San Francisco pass that artificially limit how many people can join into the innovation circus there. And, you know, now we're going to have developing countries and the talent there joining into these agglomeration benefits, as well as people in rural areas in America. Why won't this massively outweigh the loss of physical agglomeration?

• 3:16Speaker 01

  Yeah, no, I think digital, you know, agglomeration, these digital networks can have huge benefits. And you're exactly right that there are a lot of ways you can arbitrage both bad regulations, you know, like zoning laws, but also, you know, just physical distances. But again, I think, you know, the relevant alternative here is not where you're just getting physical agglomeration or just digital. You know, right now, living in Washington DC or Silicon Valley or New York, you can have those conversations with people from all over the world. You can even hire remotely, but you do also get, there's a certain kind of like cultural context that you only get by like being in person and sharing conversations. I mean, I certainly experienced this in my own life. I get a lot of ideas, you know, from having conversations on Twitter, but it's still very different to, you know, have an extended two-hour-long conversation with a friend

• 4:01Speaker 01

  in their office, you know, like making eye contact, having this sort of spontaneous ideas that is hard to replicate even over Zoom. Personally, because I think Zoom meetings tend to be a little bit more scheduled. It's hard to have flexible time. You know, frequently, the best conversations that happen in the real world Are ones that, you know, aren't intended to start off as conversation. They just kind of spontaneously arise. You know, you start off just sharing one thing and then it extends into a whole conversation. But there's also kind of a Zoom fatigue that you see. You know, people, especially right now in this era of remote work are having so many Zoom calls. They're, they don't want to stay on longer, you know, just to maybe have a conversation with, with somebody extra. And so again, I, I think, uh, yeah, it's good to recognize that these aren't completely, um, you know, contradictory.

• 4:44Speaker 01

  Or we can have both and that's really what we're getting in the big physical agglomeration effects of today. Which kind of gets to the point, I think we need maybe a better taxonomy of what we're talking about in terms of the kinds of interactions that we think lead to innovation. Cause there's kind of a spontaneity and really in-depth conversation that you can, I think, only get in physical spaces. But there is a, obviously a huge effect from having just way more people that you can have access to in some of these digital spaces. So that's, that's one thing I would, I would like to see this conversation get into is, is rather than like, oh, which is better, which is more important. Let's break down what are the, the specific attributes of these kinds of, um, interactions that are happening in the physical or the digital space.

• 5:25Dwarkesh Patel?

  That's very interesting. Yeah, you talking the Atlantic piece about how, uh, there might be, uh, aspects of remote work that advantage the businesses that are using it. But for the net, net, uh, rate of innovation is actually quite bad. I'm wondering if, can, can we understand this in the context of like, um, you, you can't explicitly say that, listen, I just want to hang out in this coffee, uh, place or wherever in my office. Just in case somebody wants to help me leave this company and start another company. Or maybe some, I'll find a mate or something here. But great, getting on Zoom requires some sort of explicit, um, uh, you know, explicit communication of your motives. That is, you, you can get away with, without not doing in the real world.

• 6:03Speaker 01

  Yeah, I think that's exactly right. There's sort of, um, You know, I think you've seen some workplaces try to experiment this, like, what if you just left your camera on? And it was as if you were like working next to somebody in an office. But people seem to be really uncomfortable with that. They don't seem to like it. It doesn't seem to just like to have the same sort of easy spontaneous conversation that you can mimic in the real world. And I'm not sure exactly why. And I also don't want to necessarily rule out the case. It could be, you know, thirty years from now, or maybe sooner, you know, we have some sort of virtual reality technology that's really blossomed. And now everybody, regardless of where you're living, is kind of working in these these virtual workspaces. And if that's the case, then maybe, you know, physical agglomeration effects are really start to diminish in importance. But I certainly don't think we're there yet.

• 6:48Speaker 01

  And regardless, it seems like we're kind of, or there's a big experiment being taken. So I'll be very curious to see kind of what are the effects of all of these, you know, big tech companies, Facebook, Twitter, others, you know, that are moving to all remote work for the foreseeable future. And again, I think you kind of pinpointed something in your earlier comment. There's both productivity within the firm that I'm sort of concerned about, but in some ways, you could say that that's internalized. You know, if the companies themselves are seeing lower productivity measures, lower idea generation, then they should be able to internalize that themselves. But the thing I'm particularly concerned about from a public policy perspective is the the public spillovers. You know, the fact that you have fewer new firms being formed. And of course, you know, Facebook doesn't internalize that cost, and so they have no reason to to consider that.

• 7:32Speaker 01

  But as a matter of public policy, you know, we do care about new firm generation and the kind of idea spillovers that are generated in these public externalities.

• 7:40Dwarkesh Patel?

  Is there a reason why agglomeration effects are so salient even today when we have online courses or open source code? I would expect these sorts of more public and transparent displays would like reduce the effect of having to be in the right cluster at the right time.

• 7:56Speaker 01

  Yeah, I mean, I think they have reduced it to some extent, but at base, I think humans are extremely pro-social animals. We just do all of our thinking and Yeah, idea generation sort of in groups. I mean, of course, you have some, you know, lone geniuses that are, you know, introverts or something, but I think that's a pretty small minority of the population. Another way to maybe think about this is how long Silicon Valley has lasted already and how high the the rent costs have gotten. The fact that everybody, you know, continues to to live in Silicon Valley and pay these exorbitant rent fees despite the fact that all of this online technology has, you know, gotten so good is perhaps evidence that the the benefits, the productivity benefits of being in those clusters is actually really quite high.

• 8:40Dwarkesh Patel?

  Although we're seeing the rent prices crater recently, so we'll see what happens in the future.

• 8:44Speaker 01

  Yeah, we'll see.

• 8:45Dwarkesh Patel?

  Um, oh, so let's talk about the big picture before we get into these different points about why it even matters if America's innovation engine slows and somebody else takes over. So why can't I make the case that, listen, whatever country in the future is the innovation hub will be the one that is, you know, free, prosperous, has adopted the policies you're advocating. Otherwise, it wouldn't be the innovation hub. So why does it matter if somebody else takes the mantle of the innovation hub?

• 9:08Speaker 01

  Great question. I think one thing you've seen, and, you know, this last generation of communications technologies is actually an interesting example here, that there are a lot of cultural values that are conveyed in the building of especially technology platforms that end up becoming the underlying infrastructure that are used in the rest of the world. And the technology has a great degree of path dependence. You know, sometimes it's easy to be a technological determinist and say like, oh, whatever is the best technology will always win out. And that's true, you know, obviously within some bounds. But it's also the case that sometimes we can get really, you know, caught in a particular infrastructure, and that can be either like a physical or digital infrastructure or even like a cultural infrastructure. And so if you look at a lot of the social media platforms, you know, the biggest ones

• 9:52Speaker 01

  internationally are primarily American firms, and they've built into those platforms certain kinds of cultural mores around, say, free speech or the separation between the private and the government sector, about intellectual property law, you know, about a huge number of of different sort of choices that you end up baking into your platforms. And so I think if we were in an alternative universe where all of the main social media companies being used globally were, you know, Chinese or run by the Chinese Communist Party especially, there would be very different values embedded in those platforms and that would end up really shaping the direction the technology plays. And so especially as we're starting to look into the future of technologies that might even be more monumental like artificial intelligence.

• 10:35Speaker 01

  I think it is, we're thinking very carefully about where the leading firms are geographically and what kind of, you know, cultural attitudes or, you know, social infrastructures you end up building in. And I for one would much prefer the United States and their sort of, you know, broadly liberal democratic values are the ones ending up building into the emerging technologies of tomorrow than the Chinese Communist Party.

• 11:02Dwarkesh Patel?

  Okay, but then what about the claim that that's kind of turned into a truism at this point, which is that liberal democratic countries are just necessarily going to have higher rates of innovation. So as long as the Chinese Communist Party stays authoritarian, they're not going to be the next innovation hub for the things we care about.

• 11:19Speaker 01

  Um, I don't, I mean, I, I hope that's true, but we certainly can't have, you know, complete confidence in that. I think if you were comparing a lot of predictions of, you know, liberal democratic economists from, you know, 20 years ago about what China's expected development path is, they've certainly, you know, outplayed, I think, the vast majority of predictions. And some of that might be catch-up growth, but they've had much higher rates of catch-up growth than, you know, almost any other country. They've much, they're much bigger and they've maybe had other issues that they've been able to overcome, kind of surprisingly. The other thing is I wouldn't underestimate our ability to kind of shoot ourselves in, in the foot. So I would say that absent actively bad policy, this sort of free liberal democratic model should work

• 12:03Speaker 01

  or should outcompete, I think especially because the nature of innovation kind of relies on free thinking and iterative thought that's different from the consensus that, that tends to, I think, work better with these sorts of cultural values. But that doesn't, you know, that only works so long as, say, policy is equally conducive in, in both kind of cultural environments. And I would say that right now the United States is certainly not playing into its role as, you know, the global R and D hub of the world. And we're shooting ourselves in the foot in many ways that end up undermining our own ability to play that role.

• 12:33Dwarkesh Patel?

  But there's some questions raised about the effectiveness of Chinese R and D. Patrick Collison has a question up on his website about like, why aren't the leading, given how much China spends on R and D, why aren't there any influential papers in the fields he cares about that come from China? So is there something about the way they're doing science there that's not that productive?

• 12:51Speaker 01

  Yeah, no, I share some of those same concerns. Again, I would kind of look at this in like an expected value model, right? So there's like some probability that China, you know, kind of stagnates or can't really, you know, maybe they're really good at catching up to the technological frontier, but it's just an entirely different kind of question than actively pushing out the technological frontier. That's actually where I'd say like maybe the majority likelihood is. But we can't completely rule out the chance that they're going to continue, you know, making progress in the way they have.

• 13:18Speaker 01

  But to that point, I do think that there are a number of, I think it's called Goodhart's Law, you know, the idea that when a metric becomes a target, it ceases to be a useful metric. And you do see, I think, lots of examples of that in China. One of my favorite examples is, you know, they made a big push recently for AI and they were saying, you know, we're going to have 50 world-class leading AI textbooks and 50 world-class leading AI online classes, which kind of seems to like miss the point of like, what a good textbook or what a good online class is supposed to do. I mean, after you have the first, you know, five really good ones, I don't know what the other 45 are really getting you. And so, yeah, I do think you see sort of issues like that. But I think the other point here is that regardless of whether or not China stagnates,

• 14:01Speaker 01

  it's good on the merits by itself for the United States to try to play this role. And so it's sort of like, it's good if China does end up playing the threat that we fear, but it's also good even if they end up stagnating and don't. You know, it's kind of a win-win either way.

• 14:15Dwarkesh Patel?

  Okay, so let me give you my optimistic scenario, which is that maybe the US shoots itself in the foot, but like China takes over or start to take over as the innovation hub. And the US, innovation is the sort of thing that you only recognize its importance when you can see saliently its lack, right? So you see like China's making innovations, we're not. And then we reverse the mistakes that we made that led us to less innovation. And we also already have like go to universities, we have a history of innovation. So then, you know, we'll become the innovation hub. If, you know, we start to lose our edge, we'll correct course and we'll become the innovation hub in the future. Is this a persuasive model?

• 14:49Speaker 01

  Uh, yeah, I think it's again certainly within the the range of of possibilities. It is, it sort of ring true that the United States seems to sort of coast for long periods of time and then when they feel particularly threatened by another great power, they kind of kick into a whole nother gear that a lot of the world kind of forgets that we have. You know, you look at how galvanizing it was for the US, you know, when the USSR was able to to launch Sputnik and and get into orbit before the US was, that kind of was a great political like awakening and there is something to, I don't know, you could use the term techno hegemony, on the idea that, you know, the United States is traditionally, or at least, you know, maybe since the the 1940s or so, that sort of clear unrivaled leader in science and technological development.

• 15:33Speaker 01

  And that when we have the chance, we'll kind of coast in that role, but as soon as somebody like explicitly takes up the mantle as a challenger in that, that that does kind of kick us into another gear. So we'll see if that can happen, but I think the counter, or the the case for concern would be that American, you know, governance institutions are much more sclerotic than they used to be. If you look at, you know, would the Van Ooyen bushes of today, you know, be willing to work in the NSF? And I I think you could have a pretty compelling case they wouldn't, you know, there's just so many more roadblocks to wanting to be an inventive, you know, interesting person who is is trying to push out the the frontier in useful ways and also working in government. That I think means that even if maybe we get our cultural attitudes right, it maybe

• 16:18Speaker 01

  our institutions are just too sclerotic to really be able to to kick into high gear in the way that they they once were.

• 16:23Dwarkesh Patel?

  Okay, and as far as these institutions go, there's, I know there's always been a debate about like whether you reform these institutions or you try to create new institutions that are better. When it comes to institutions that are funding science, political institutions, whatever else, but do you think the best course to increase innovation is just to make them less bureaucratic and have less red tape, or is it just to start alternative institutions?

• 16:45Speaker 01

  Yeah, I mean, I don't know that I have strong priors on that. I think it's gonna be for for some of these questions, it's really a matter of like political opportunism. You kind of have to like play with the cards you're dealt. And so I would certainly guess that reform seems much more likely than, you know, outright. You know, abolishing these institutions or creating new ones. But if the chance presents itself to, you know, create new ones, then that that might certainly be worthwhile. Part of it, I think, is we're almost trying to create like a governance infrastructure that can easily scale to the kinds of problems that we we we see ourselves facing. Or to the kinds of, you know, new roadblocks that existing institutions are running into. So, for example, with science funding.

• 17:26Speaker 01

  I think one of the easiest, you know, lowest cost things we could start doing is to introduce more like almost randomized control trials within science funding. So you saw, you know, I think it was New Zealand did an interesting experiment recently where instead of going through this lengthy science funding application process. They just randomly distributed funds to, you know, projects that met some, you know, qualified metric. And I think so far they they found it to be pretty successful. And, you know, they were trying to randomly distribute it so it would have some sort of external validity. But you can imagine, you know, running 10 different versions of that experiment in the United States where you're tweaking little variables within the current science funding apparatus. And seeing how each of those, you know, randomizations end up making the the results better or worse.

• 18:07Speaker 01

  And then you can then take those results and depending on how, you know, willing the the current bureaucracy is to incorporate these results. Then decide whether you want to reform or tear it down.

• 18:17Dwarkesh Patel?

  Yeah, the concern there is that the people who would be running the experiments are the ones that are vested interest in preserving the current structure. It reminds me like a story that Thomas Sowell always tells where it was like, but he used to be Marxist and then he worked at the Labor Department for summer. And he had this idea of studying whether the minimum wage actually increased employment. And he was just completely reputed by this department because it was like, they were saying this guy's just gonna make us all lose our jobs.

• 18:44Dwarkesh Patel?

  Yeah, it's interesting how you go about like instituting those kinds of studies.

• 18:47Speaker 01

  For sure, yeah, there's, I mean, yeah, there's the the whole meta problem here of can you even, you know, break through the current sclerosis enough to be able to to do things that would test the level of sclerosis and it comes almost circular inside some sense.

• 18:59Dwarkesh Patel?

  Yeah, yeah. Okay, so let's talk about immigration now.

• 19:02Speaker 01

  Yeah.

• 19:02Dwarkesh Patel?

  I I just want to bounce some anti-high school immigration arguments off of you and see how you respond. Okay, so Senator Tom Cotton has proposed limiting Chinese students from coming to US and studying in STEM fields. He, this is his direct quote, "If Chinese students want to come here and study Shakespeare and the Federalist Papers, that's what they need to learn from America. They don't need to learn quantum computing and artificial intelligence from America." And the case here is, you know, is it just some sort of arbitrage where they'll learn the information that tax payers have subsidized in the US and get that innovation and just move it to China? Why is that a bad argument?

• 19:33Speaker 01

  Yeah, I think it's it's a pretty foolish argument and it would be even worse if we ended up, you know, actually running some version of that. I think that there's a number of factors here. One, it's good to recognize, what does the CCP themselves recognize as their biggest barriers to actually achieving some sort of, you know, technological leadership role? And they've consistently pointed to their lack of talent acquisition. You know, they've said multiple times that their their really innovation strategy is a talent-first strategy. Because they're they're, one of their single biggest problems as a regime is that all of their best and brightest don't want to stay in China and said, you know, go to the US, go to Australia, go to other foreign universities and then want to stay and work there. So if you look at something, say, AI PhD students from China that study in the United States,

• 20:17Speaker 01

  when given the opportunity, you know, 90% plus of them end up staying in the United States. And that's a, that's a really big problem for China if you're then trying to, you know, develop the cutting-edge AI companies of the future. So they've been pretty explicit in in the fact that, yeah, talent retention is their biggest issue. They're, you know, undertaking a bunch of programs to try to fix that. They have the 1,000 Talents Program and the 1,000 Foreign Talents Program that are both aimed at trying to recruit both, you know, Chinese nationals that are brought back home and even just, you know, generally talented scientists from abroad and recruit them back home. And so in some sense, if we took extremely broad measures to just, you know, shut down all Chinese students from coming here to to learn STEM. We'd be really doing them a huge favor because that's exactly what they're in sense hoping for.

• 21:01Speaker 01

  You know, like, great, now we can keep all of these, you know, smart Chinese STEM students here in China rather than in the United States. Um, so I think, one, yeah, it would sort of play into the CCP's hands there. Um, two, I don't want to downplay and say that, um, you know, Chinese industrial espionage isn't a problem. Because, yeah, there are certainly, um, many examples of it. One problem is we don't have a good, uh, sense of like how big or small the problem actually is. You hear tons of, you know, anecdotes or, or tangential stories. Um, but it, but it's hard to know systematically, kind of by the nature of espionage, you know, how widespread this is. Um, and so I would certainly be supportive of, you know, more narrowly targeted, um, ways of trying to say, you know, do more background checks before, um, Chinese nationals are working on sensitive government projects or receiving, you know, government funds or for, for research or whatnot.

• 21:46Speaker 01

  I think there, there's a number of, you know, more carefully targeted, or we can run counter espionage networks. Um, or additionally, sometimes it's the uncertainty about Chinese students' ability to stay in the United States that ends up giving the CCP leverage. And so if you give them a clear path to, you know, uh, say, permanent worker status in the United States upon completion of their degree, I think that reduces a lot of the leverage that the CCP has. Um, so, broad story, I would say, yeah, we could certainly take many more targeted actions than we should to reduce, you know, the threat of espionage. But to, um, take overly broad actions that end up, you know, playing into the CCP's hands would actually be a mistake.

• 22:20Dwarkesh Patel?

  Yeah, the, the fact that their top talent wants to come here and stay here is such a good card to be having. It's, it's amazing that people just want to burn it down.

• 22:26Speaker 01

  Absolutely.

• 22:27Dwarkesh Patel?

  Yeah. Um, okay, so here's another argument. Eric Weinstein argues that in the long term, uh, in a free market, uh, wages and demand, uh, equilibrate. So there's no such thing as labor market shortage. So that this entire business about having, uh, uh, shortages and STEM fields is a conspiracy from the NSF to reduce, uh, reduce wages for STEM field, uh, graduates to help employers.

• 22:51Speaker 01

  Yeah, I think, again, that's pretty silly. I think it really misses the like positive sum nature of especially, you know, fields in technology. The fact is, we don't have some set number of, you know, top end machine learning jobs that are just waiting to be filled by American nationals. And if you keep, you know, foreign nationals out, then that means more jobs and higher wages for Americans. Like, that may be true in individual cases, but I think in a dynamic equilibrium, it's totally not true. You see that, you know, foreign immigrants that come here have much higher rates of patenting and that they actually, they're sort of, again, going back to the agglomeration effects, they make their American counterparts more productive and they patent at higher rates when they've had exposure to these international entrepreneurs. They also start businesses at higher rates, which, again, if you're like explicitly starting

• 23:36Speaker 01

  a business, it's kind of by definition net positive in terms of the number of jobs. Um, yeah, so, so I, I think, yeah, he's completely missing the, the, um, the positive sum element of this. And I think in some ways, like, the, the, there's sort of a word game about, oh, is there a STEM shortage or not? But I think is, again, like, not particularly relevant, because it is true that to make progress on the cutting edge of emerging technologies, you just need more really smart people working in a conducive environment. And the more really smart conducive, or people you have working in a conducive environment, the faster your progress will go. And so, again, I would prefer the United States to have that progress inside. I want all of the best and brightest world talent to be coalesced in the United States. And I'd say, as one additional point, there's also some interesting, I mean, there's, there's

• 24:20Speaker 01

  a long line of academic research, I think, backing up, there's a very strong case for high school immigration. But there's a new paper recently that came out in NBR that specifically showed when you cut down programs like the H1B program, it actually increases offshoring. Because when companies don't have the option of bringing their talented people that they would like to hire here in the United States, it's sometimes easier to just move your headquarters somewhere else where you can hire them. So I think that's a whole nother dynamic that he's not considering.

• 24:47Dwarkesh Patel?

  Oh, that's a very interesting piece of evidence. And it's probably going to be exacerbated by remote work, so it's going to be much easier to just offer labor. And, uh, yeah, it seems our intuition works here when we're just talking about native born talent. It's like, there's more CS graduates now than there were 20 years ago, but there's more IT jobs, because every new CS grad is a probability that the new business is going to be created and more jobs will be created.

• 25:09Speaker 01

  Sure. Now?

• 25:11Dwarkesh Patel?

  Go ahead.

• 25:12Speaker 01

  Sorry, I would say, though, that I think there's a lot of complaints against the H1B program that are completely valid, and I have, you know, a long list of reforms that I would like to see the H1B, you know, undertake, but just taking it as it is and sort of like cutting it in half or slashing it, I think would be very kind of productive.

• 25:29Dwarkesh Patel?

  Yeah, I know those pains personally. My dad is a doctor, and so when I was eight, we moved to the US, and I'm 20 now, but we're still waiting in the queue to get, you know, get the, because there's per country caps to get green cards, so we'll certainly get green cards. And I'll probably get kicked off unless Congress passes a bill to let kids stay on. I'll probably get kicked off, and I'll have to start the process again to get my own H1B off my CS degree. And at that point, it might be easier to like leave the country and go to another where there's more lax immigration laws.

• 25:59Speaker 01

  Yeah, that's such a mess.

• 26:01Dwarkesh Patel?

  Okay, so how would you go about reforming the H1B visa?

• 26:05Speaker 01

  Yeah, so I would say I have a number of specific reforms for the H1B, but then almost as a meta thing, I think in some sense, the H1B is like an overrated visa program, and I would like us to almost move our focus more broadly, but I'll start with the specific reforms to H1B. So there's a couple of problems here you could try to address. One is the fact that the current lottery system that's used is it adds a lot of unnecessary uncertainty and also doesn't prioritize the most highly skilled candidates that we care about. You know, because it's just a lottery, if you've met certain qualifications, it gives kind of equal weight to the, you know, top and machine learning engineer who has a salary offer of $400,000 from, you know, some top firm with the, you know, IT specialist that

• 26:49Speaker 01

  is still important, but would be making $60,000 or $70,000, you know. And I just think if this is a high skill immigration, you know, program, we should be giving priority to those that have like the higher salary offers. And so some suggestions have said, oh, maybe we should do a salary ranking where basically like the higher up you have as a salary offer, then, you know, the higher priority you should have in the queue. I would be open to something like that, but I would also want to modify it to include equity, because there's a lot of times, small startups can't compete on, you know, just a salary wage, but they can offer pretty, you know, lucrative equity packages. And so I think so long as you have some sort of equity adjusted salary ranking, I think that would be, you know, one easy way of making the H1B much better targeted.

• 27:31Speaker 01

  Another issue with the H1B is that it's tied categorically to like a very specific employer. And then it's kind of hard to transfer. And this is, you know, leads to some of the complaints people have that, oh, well, maybe you can be underpaying workers because they really have no other option. But again, that's not like a problem with the workers or them being in the United States and bringing their talents here. It's a problem with the structure of the visa that doesn't let them switch. You know, and so you could either try to make it easier for, you know, H1B workers to switch between

• 28:01Speaker 01

  between employers or to even start their own business. Because oftentimes you have people that, you know, come here, want to live and work in the United States. And maybe they even have an interesting startup idea, but they end up having to work at a big company, you know, for for six years while they're in line for green card. And then finally, once they get permanent residence.

• 28:15Dwarkesh Patel?

  Six would be great.

• 28:17Speaker 01

  Yeah, that would be ideal.

• 28:20Speaker 01

  Which kind of gets to, I think, the larger meta problem that the H1B is just pretty poorly structured to actually like both attract and integrate the kind of talent that that we want. And so I've been looking at alternative programs. One that I'm particularly excited about is the O1 visa for immigrants of extraordinary ability. It's a pretty under leveraged visa right now. But in principle, it's very flexible because congressionally it has no cap. It's just supposed to be, you know, for immigrants of extraordinary ability. And then USCIS has like sort of an eight factor test evidentiary criteria for for choosing who then fits into that. And so you could conceivably have a new USAIS director come in and either issue new regulations to change those eight criteria,

• 29:01Speaker 01

  or even just rewrite the internal guidance documents that they use to, you know, make these decisions and end up letting in dramatically, you know, more really talented, really exceptionally, you know, individuals through that program. And the nice thing is, unlike the H1B, that's not categorically tied with one employer. So you could use an O1 to then start a business or work for a startup for, you know, any number of things. So that's just, you know, a few examples.

• 29:23Dwarkesh Patel?

  Yeah, isn't that called like the Einstein visa because of how hard it is to get it and how rare it is?

• 29:28Speaker 01

  It is, yeah. It, yeah, so it's very hard right now. You know, you really have to be like a top, top five and, and, you know, even then it's like a 500 length, you know, or 500 page length petition process, which is awful. But again, because it's so subjective and because the congressional mandate is so broad, I think that means that the the scope for possible reform, without even necessarily needing to go through Congress, is also very broad.

• 29:50Dwarkesh Patel?

  Okay.

• 29:53Dwarkesh Patel?

  Has Joe Biden spelled out how he would, if he would liberalize high school immigration and how he would do it if he became president?

• 30:00Speaker 01

  He has not given a lot of details. You know, he's certainly spoken very positively about, you know, trying to undo some of the damage of the last four years and make it clear that the United States wants to be, you know, the destination for a lot of these high-skill immigrants. But I think understandably, voters have not shown a strong preference, really detailed policy plans, and so I don't think that's his highest priority right now. But I think in the months after the election, if he wins, then there will be a lot of attention to actually getting the details on board.

• 30:28Dwarkesh Patel?

  I hope so. Oh, speaking of what's going on at this time, so another argument that I forgot to bounce off of you is, well, listen, high school immigration is usually good, and we should usually have more of it. But right now, given the high unemployment rate, given the economic catastrophe, we need to be emphasizing our own labors. And so for a little while, let's just pause H1B while our economy adjusts.

• 30:53Speaker 01

  Yeah, I mean, again, I think you can see that we have lots of economic evidence about, you know, the regions that have higher rates of H1B historically have higher rates of job growth, you know, for native workers, they have higher wages. So again, I think if you're looking at it in a positive some sense, even like a pause doesn't necessarily make sense. One, because also the kinds of, you know, job categories that have been the hardest hit by the pandemic are not the ones where H1B employers are typically going to be hiring from. And so I think it's mostly the service sector jobs or jobs that require a lot of in-person, you know, interaction with customers and whatnot. So I think it's pretty unconnected from the specific job market issues of this pandemic.

• 31:33Dwarkesh Patel?

  To the extent it is connected, it's through medicine, which is an increased demand now, if anything.

• 31:37Speaker 01

  Exactly. Yeah, yeah, yeah.

• 31:38Dwarkesh Patel?

  Yeah. Okay, so I think you said somewhere or wrote somewhere that immigration is the one lever you change first to increase levels of innovation. Why is it so much more important than other factors?

• 31:50Speaker 01

  Yeah, I mean, it's, I would consider it my number one lever right now, simply because.

• 31:58Speaker 01

  I guess it's so far away from optimal. So if we look at maybe, say, trade policy as an analog, right? You could talk about the free flows of people and the free foods of goods. Right now, the free flow of goods is like pretty close to optimal, right? We have, we still have tariffs and we still have, you know, dumb regulations and everything that prevent us from, you know, getting to some hypothetical free trade optimal. But, you know, moving another five percentage points in favor of free trade on the margin just matters not that much. But we're so far away from the global optimum on immigration policy that, you know, a 5% change in how many really smart, skilled, talented people could come to the United States could make a very large difference. And I think also if you kind of follow the idea that people are in some sense the ultimate

• 32:43Speaker 01

  resource, right? You know, they are sources of creativity, of innovation, then of course, if you're trying to affect innovation, you want the thing that, you know, can most directly come up with new ideas, which are people.

• 32:54Dwarkesh Patel?

  Yeah, yeah. That's definitely all very persuasive. Okay, so let's talk about big tech. We were talking, I think, a month after Congress held hearings considering antitrust association against big tech companies. And here are the concerns, and I want you, I want to bounce these off of you as well. Okay, they're too big, their small startups can't compete with them, and they limit innovation, they buy up new startups. These are a lot of concerns, so there's a lot to unpack here. But, and then you've also written a paper about decreasing the barriers to entering the AI market. And the concern is they have too much data, and how are you supposed to compete with the petabytes of user data that Google has? And they need to be broken up so there can be more competition and innovation. Will breaking up these big tech companies increase innovation?

• 33:37Speaker 01

  Yeah, so there's a lot there. Obviously, we can try to break it down into chunks. I think in broad strokes, I would say that, again, if we're looking at this in like expected value terms, there is some probability that if you broke up these big tech companies, you know, maybe you get lots of innovation. Personally, I would assign a pretty small value there. I just think it's unlikely, given, you know, many arguments that we can talk about in just a little bit, but in broad strokes, I think it's pretty unlikely. And the other factor is that it's a very high-risk strategy. So if you break them up and you're wrong about the effect of innovation, then you've just destroyed like, you know, the few golden geese actually producing productivity gains in our economy.

• 34:13Dwarkesh Patel?

  Yeah.

• 34:13Speaker 01

  And that's extremely bad. And you've given it that to China and da da da. So I think a much lower risk strategy that maybe gets at some of these same concerns would be sort of like a big national push to tear down entry barriers, make it much easier to compete against these companies in a variety of ways and and sort of, you know, reduce the, the maybe moats they have around them in some sense. Increase, you know, the, the gale of creative destruction, to use a charmatarian term. And then if they can survive that, you know, a level of increased competition, then that further increases the evidence we have that maybe they are efficient, they are competitive. And if they end up, you know, falling because now some new startup has, has outcompeted them, then congrats, you've gotten the outcome you wanted. So I think as a meta strategy, I would prefer to at, at least at first, try the strategy of really, you know,

• 34:58Speaker 01

  increasing the, the level of competition they're faced with, not by artificially tearing them down, but by making it much easier to compete with them. And so that's sort of the, the broad strategy I was, I was trying to lay out in that, that AI paper. One thing, kind of briefly connecting this to the immigration discussion, is the fact that I think a lot of these big tech companies have a huge advantage in the immigration market. Because they actually have, you know, large HR departments that are capable of, of braving the immigration bureaucracy. If you look at the career preferences of a lot of these, you know, top end talented immigrants, a lot of them say they would prefer to work at startups or start their own company at a much higher rate than American native born workers in these same, you know, graduate programs.

• 35:37Speaker 01

  But then in actuality, the immigrants are way more likely to work at the big firms because that's the only place that they can actually end up getting, you know, an immigration visa. And so if you could find ways to make it, you know, just as easy for startups to have access to this, you know, high skilled talent, I think you, you would sort of unlock a whole pool of entrepreneurial talent that right now is currently stuck at big tech firms. So that's just one example of a policy lever I think you could pull. That wouldn't be artificially tearing down, you know, these big tech companies, but would be making it easier to compete against them. And I, I think you could try to do similar things for, you know, data. I, I think on the data side, we sometimes get confused if we think of data as this like homogenous thing, but like, oh, just the more data you have, always the better it is.

• 36:19Speaker 01

  Data is not context dependent. It's just, you know, reams and reams into data and the more you have, the better it is. In reality, data. Is very context dependent. It almost has no value outside of, you know, almost the the original circumstances that created it. And in trying to almost utilize data is itself, it requires like a massive infrastructure, internal operation to be able to utilize the data. You know, if someone gave you all of the, you know, the data from Amazon Web Services or from, you know, Google Search results, it's like pretty unclear how you could use that, even if you're trying to to build a competition or competitor. And even then, even if you have this one time static flow of data that totally misses the dynamic flow of data that actually matters, because it's what happens when you make a change

• 37:01Speaker 01

  in your platform, and then you can see where the results are. And so I think, yeah, there there might be like one-off isolated cases where I'd be in favor of like interoperability, but I think we want to be pretty careful about that, because also trying to make data useful in the first place is a very expensive operation. You know, it requires building a massive internal infrastructure where you have, you know, data engineers that can collect the data in the first place, or think carefully about what kind of data you're trying to collect, how can you process it, actually turn it into useful insights, and then how can you apply it? And so you actually need lots of talent, again, at each step of that phase, to be able to turn raw data into something useful, which is, I think, actually, in some sense, where the barrier is. And I think there might also

• 37:43Speaker 01

  be some interesting things you could do with government sector data. You know, the government like has lots of data about, you know, the business sector and, you know, geographical regions. And there's been plenty of examples of times in which the government has made, you know, information that they only have, and then made it public, and then that's ended up, you know, leading to to pretty large gains. You know, probably one of the best examples is a lot of geolocation data from, you know, GPS satellites, and how that's created, you know, an entire industry. So I would be interested in also looking at, you know, maybe various open source data sets, or data sets you could make open source.

• 38:18Dwarkesh Patel?

  Yeah, you've been writing about

• 38:22Dwarkesh Patel?

  How this attention the news media gives to glowing attention news media gives to EU's regulation of tech companies is so misplaced because if the claim is that they're really going after the big guys, you have to explain why only one of the top 30 big tech startups came from came from Europe and these new startups are the ones that would be competing against Google and Facebook and Amazon. They're the ones that these companies are afraid of and they put up such barriers against starting such things that it benefits the very the very big companies that they're presumably trying to target.

• 38:55Speaker 01

  That's exactly right. If you look at, you know, something like the GDPR, which, you know, Europe was touting and still you see tons of conversations in the United States about, oh, well, really, we should just adopt the EU approach and have our own version of GDPR. But after the GDPR has gone into effect, it's only increased the market share of Facebook and Google because, you know, again, it's sort of similar to the immigration discussion. The more you have, you know, these large bureaucratic burdens that you need to meet, the easier it is for large companies to be able to handle that because they actually have the staffing resources to be able to have these huge teams of lawyers to make sure that they're compatible. And so, yeah, the United States is the one that's actually producing a lot of these top end companies that are competing internationally.

• 39:37Speaker 01

  They're by far, you know, the most innovative in terms of like patents and where interesting startups are coming from. And then the EU, you know, talks a big game, but their regulations and practice just make it even easier for the big companies to succeed there.

• 39:50Dwarkesh Patel?

  Yeah, I like the thing Jonah Goldberg says, which is that complexity is a subsidy, that if you have more cognitive or legal or whatever other resource or labor resources, the more resources you have, the easier you can navigate the complexity.

• 40:04Speaker 01

  That's a great framing, yeah.

• 40:06Dwarkesh Patel?

  Yeah. Okay, so let's get a little bit into the politics here. This might be a meaningless question, but given that there's an election coming up, which party cares more about innovation or would have a better pro-innovation strategy? Because you can look at Trump and say, there's, he might be good on regulation taxes, he's bad on immigration, and the Congress or the Democrats on balance, which one is better for innovation?

• 40:28Speaker 01

  Yeah, I mean, I think trying to almost talking about parties is in some sense.

• 40:35Speaker 01

  I don't know if it's the best framing, partially because the parties are so broad. I mean, if on the one hand, you have one party that incorporates everyone from AOC to Joe Biden. On the other hand, you have everyone that incorporates someone from Donald Trump to Jeb Bush. You know, really, I think a better way of almost thinking about it is that there's sub-parties within the existing national parties and they're, you know, competing. And then whoever, you know, went to the primary ends up getting the national thing. But I would say certainly, I think a Joe Biden agenda would be better for innovation in the United States, I think, than a Donald Trump agenda. Especially when you consider what I would, what I would see as like the biggest drivers of innovation right now that we're missing, which are things like high-scale immigration

• 41:14Speaker 01

  reform, I think, federal R and D reform, you know, a lot more housing in these big, you know, agglomerations and these industrial clusters. This would probably be my top three. And on each of those, I think, you know, Joe Biden has expressed more interest in those than Donald Trump has.

• 41:31Dwarkesh Patel?

  Oh, I didn't know that he was proposing zoning reforms in the big cities.

• 41:33Speaker 01

  Well, again, he is not really talking about many of these things, but in terms of where is the energy within the people that would likely be, you know, put into the various cabinet positions?

• 41:43Dwarkesh Patel?

  Good, good. Okay, I'm happy to hear that. But what about the fact that he wants to raise the corporate income tax rate or probably increase the regulations that Trump cut down?

• 41:51Speaker 01

  Yeah, I mean, that would be, you know, bad in some ways. Everything is like a series of trade-offs. I would say at this point, like, I would take a trade-off where we get more high-scale immigration and more, say, you know, federal R and D or experimentation there in exchange for, you know, slightly higher taxes or slightly higher regulations in some ways. But again, I think, you know, the better way to try to look at these things is on a case-by-case basis. I mean, of course, at some level practically, you have to choose which of those packages do you prefer? And yeah, that's kind of what I would prefer at this point, but that doesn't mean you have to, you know. Strategically, I'm going to be also trying to push the Biden administration in a better direction in some of these things.

• 42:26Dwarkesh Patel?

  I'm happy to hear that. Okay. All right, so I want to ask you, with these three areas, what is the most undervalued phenomenon relative to its impact? Okay, so relative to its impact, what is the most understudied public policy issue? Stuff like immigration, taxes, regulation?

• 42:43Dwarkesh Patel?

  Healthcare.

• 42:44Speaker 01

  Oh, that's a good question. I think we still have a pretty poor understanding of why some of these industrial clusters form in the first place. It seems like sometimes it's like accidents of history, you know, that it just so happened that such and such a company was here and then, you know, there was a number of competitors that kind of formed around them. But then how you get from sort of like a fledgling industrial cluster to something that becomes, you know, full scale like Silicon Valley, I think it's pretty mysterious. And certainly, we've had lots of artificial experiments to try to, you know, seed new industrial clusters in other places that have failed pretty miserably. But, you know, sometimes they work. So I think a much better understanding of how and why these agglomerations form is one of the things

• 43:25Speaker 01

  that I would love to see. I think also the the structure of federal R and D support is is pretty understudied. You know, it seems like both as like a percentage of GDP, we've seen, you know, basic R and D support from the federal government just keeps on declining as a percentage of GDP. But then also, we're just not seeing like a lot of experimentation in the structure of these grants. And so I'd love to see almost like a science of science, like, how do we know that actually that, you know, these structures we're using are the best versions of them? Because I think we're probably pretty far away from the optimal. But given the huge public spillovers of, you know, really well structured, well targeted, you know, public subsidies for R and D, it matters a lot. So I would love to see a lot more attention on that, too.

• 44:08Dwarkesh Patel?

  Okay, so I have it like a sort of like naive. I know that like, I know like the first few arguments against more government spending in R and D, and I want you to just see what you respond with here. So Matt Ridley's new book on innovation talked about this. The problem with government spending more on innovation is that they don't know where the next big areas of innovation are. And so they might be misspending their money. And worse yet, they might be crowding out the priorities of the actual businesses that have a hands on practical understanding of what the interesting problem areas are. And so the researchers are working on the problems the government wants them to work on instead of the problems that businesses would have a better understanding of.

• 44:45Speaker 01

  Yeah, I mean, I, again, a lot of these arguments could be true like in the abstract, but not necessarily true on current margins. I mean, I think that's probably an example. Um, so if you look at something like the R and D tax credit, uh, which is probably like the biggest in terms of spending that the federal government does. Um, the nice thing about that is that it's not directed toward the particular thing. It's basically saying, hey, you know, companies, you invest in the R and D that you think is most valuable and it will reduce the amount of, you know, taxes you need to pay on that, basically. Uh, and you've seen that a lot of, you know, um, the, the biggest tech companies today are by far the biggest R and D spenders. You know, if you look at like the top five, it's like Amazon, Google, uh, Apple, Qualcomm, you know, in some order, I can't remember exactly, but, um, it certainly, uh, it seems to be successful in, in prompting our big tech companies to be able to, to spend on R and D, which is good.

• 45:29Speaker 01

  Um, I think the other thing is it, we maybe need a better structure or a better theory of, um, what are the kinds of science that we want the federal government to be investing in? So, so for, for, for my perspective, I think private companies will invest in R and D so long as it is sufficiently predictable in sort of what kind of outcomes you're going to get, um, sufficiently timely in terms of like, is it going to be, you know, on, on a profitable timeline in the next, you know, five to 10 years? Um, and, uh, I guess, uh, sufficiently, um, you know, cost effective, um, you know, has to be like profitable in some sense. Um, but there's a lot of ways in which, um, valuable questions don't fall into one of those three categories and in which previous scientific advancements have not met one of those criterias.

• 46:14Speaker 01

  I mean, especially in terms of the predictiveness, we're constantly getting scientific advancements in fields completely unconnected from what we think we're going to be studying, um, partially because, you know, scientific advancement, especially breakthroughs, um, kind of in some, has to be unpredictable, otherwise it would have already been, you know, discovered. Um, that means that, uh, there's not really an incentive for, uh, you know, Google's revolution's car division to be pouring a lot of money into something that, you know, might suddenly have an advancement, uh, for molecular biology, you know, um, because, uh, why, why would they, they do that? So the more unpredictable in terms of what, how is this going to pay off, the less likely companies are to do it. And so I think when you start focusing on what are the kinds of scientific questions that fall into those three buckets, um, the less relevant the crowd out question is,

• 46:57Speaker 01

  um, because again, if private companies are not going to be spending on these areas anyways, because it's sufficiently untimely, sufficiently unconnected and not sufficiently profitable, um, then yeah, you, you have way less concern about, uh, credit.

• 47:08Dwarkesh Patel?

  Yeah, and there's also the question of, there's a lot of science that's inexcludable and inexhaustible. And maybe it's not worth it for companies individually to invest in that R and D. But for the economy as a whole, the tech is more than worth it.

• 47:20Speaker 01

  For sure.

• 47:21Dwarkesh Patel?

  Yeah, yeah. Okay, so the next question is, what is relative to its impact? What is the most undervalued future technology? This is like stuff like crypto or AGI, biotech, VR.

• 47:32Speaker 01

  Yeah, it's a hard question.

• 47:36Speaker 01

  I mean, I would say, sort of, it depends on, if AGI does end up being feasible, then probably it's AGI, just, you know, given how wide-ranging its effects would be across the economy. But of course, you know, that's in some sense begging the question, we don't know if AGI is going to be, you know, completely possible to create. There might be, you know, difficulties that we're not running into yet, that we don't know about.

• 48:02Speaker 01

  So I think one thing I would like to see a lot more emphasis and research on is sort of big climate mega projects that I think are being very underhyped. We're getting to a point where to really avoid some of the, you know, worst outcomes of climate change, we're going to start needing pretty dramatic action now. But I think any sort of political approach that basically just asks consumers to take massive welfare hits themselves is going to be completely untenable, it's not going to get anywhere. But there's lots of, you know, big environmental mega projects that we could do. Eli Dorado has been paying a lot of attention to this. He's talked about olivine is this kind of mineral that I think you can put on a lot of beaches that ends up absorbing a lot more carbon than traditional sand does, but it has a very similar texture.

• 48:46Speaker 01

  The main difference from sand is that it's green, so it kind of even looks cooler. Or, you know, you could do something like Yellowstone produces just an absolutely massive amount of geothermal energy, partially because there's a massive supervolcano underneath it. And so you could tap Yellowstone for geothermal energy supply, a very high percentage of the US national energy needs, just via that. And you'd also be reducing the risk of that supervolcano erupting, so it seems like a win-win. So those are, I think, just a few examples, but I think as an area, it's really underleveraged.

• 49:18Dwarkesh Patel?

  Oh yeah, it's super fascinating. Guys, you had no idea about the specific things you talked about. And also, if you think climate change is a serious threat to human civilization, it makes perfect sense to take a few risks, just see what happens if you throw some stuff in the oceans, if it's gonna, you know, save

• 49:33Speaker 01

  For sure, yeah, yeah, yeah.

• 49:34Dwarkesh Patel?

  As you know it.

• 49:35Speaker 01

  Yeah.

• 49:36Dwarkesh Patel?

  Okay, so relative to its impact, what is the most undervalued social or geopolitical threat? This is stuff like falling fertility rates, the rise of Asia, stuff like that.

• 49:46Speaker 01

  Yeah, I mean, I think

• 49:49Speaker 01

  earlier I would have said maybe falling fertility rates, just because, you know, it's only really in the last couple of years, especially in the US, but I feel like that's become like a major political phenomenon. But you are starting to see a couple of books now that are starting to discuss that more explicitly. Ross Douthat's Decadent Society makes that a big central focus. Matt Iglesias's upcoming One Billion Americans talks about that. So I'm glad to see that, you know, start becoming a major focus. But it does seem like demographics are just so connected with a wide range of outcomes. You know, culturally, I think it makes like a society more conservative and less risk-taking. You know, when you have an older demographic. You know, Megan McArdle had an interesting example, I think, a couple of years ago, when she was writing about this, where she talks about, you know,

• 50:32Speaker 01

  think about an average town that has, you know, median age of 27 versus a town that has like an average age of 57. And just, you know, when you're that much older, like, yeah, you are more experienced and maybe you have more, you know, human capital or technical skills, but partially because you have less time and you're, you know, more embedded in like a family, you're less willing to work the 18-hour days and, you know, leave your job to go, you know, create the new startup. And so that ends up having sort of cultural effects, both in terms of company formation and idea generation, innovation, that I think end up resounding. And of course, even young people that are traditionally surrounded by an older society, I think will themselves be less risk-taking too. So, yeah, maybe I would still say, you know, demographic aging, just given the fact that it's starting to get a bit more attention now,

• 51:17Speaker 01

  but it has such wide-ranging consequences that, and it's not really talked about in the, you know, national discourse in a major way yet.

• 51:25Dwarkesh Patel?

  Oh yeah, that was the scariest chapter in the Decadent Society for me. And there was a chapter on authoritarianism coming to liberal democracies and the one on falling for

• 51:33Speaker 01

  Yeah.

• 51:35Dwarkesh Patel?

  Okay, so by the way, does that mean that you expect Sub-Saharan Africa and parts of Asia to be a much bigger deal, given that they have rising populations?

• 51:42Speaker 01

  Oh, totally, yeah, no, I totally buy, you know, I think at the end of the Decadent Society, Ross says, you know, one of the more optimistic versions is some sort of like Afro-Eurasian futurism, you know, where sort of if you imagine, you know, classically European cathedrals being filled, you know, by Sub-Saharan Africa like that, that's a great vision and something that could end up, you know, providing both a sort of like multicultural society that we want to see, while also trying to help solve some of these, you know, birth rate problems.

• 52:15Dwarkesh Patel?

  Well, kind of forever.

• 52:16Speaker 01

  Yeah.

• 52:17Dwarkesh Patel?

  So that's the future, okay. All right, so to close it out, what kind of advice would you give to a 20-year-old? Maybe when you were 20, or just to a generic 20-year-old?

• 52:27Speaker 01

  Yeah, I think I would say, think hard about like the kinds of questions that you think matter for society and where you might be most effective. So, one of the things that I was trying to think about in my own career is, I think problems that, like the profit motive can kind of be brought to bear on, I just have a higher certainty in my own hand that those will eventually get solved. Like, if there's money out there, someone's going to solve it. But where there's not, that's maybe where there's more attention worth throwing at it, because in some sense it runs like counter to self-interest. And so I think something like policy analysis, like the reason I'm in there is because it does kind of seem like the missing element in like the American growth engine. If you think about like an O-ring theory of growth, where you need all of the components

• 53:11Speaker 01

  to really be working well for like the rocket ship to take off, it seems like bad policy is really the thing that's like strangling, you know, the American growth engine. And so trying to fix that bad policy is not something that right now is going to be economically, you know, profitable, but could end up having like a really big impact. And it just so happened that I think, you know, my comparative advantage was in writing and communicating and whatnot. So that's why I went into that. But, yeah, if you think about, yeah, sort of, you could use a traditional, you know, effective altruism framework, you know, what's the highest impact combined by, you know, what are your efforts on the margin going to have the highest impact on? And I think that'll get you pretty close to what you should do.

• 53:47Dwarkesh Patel?

  Yeah, I'm glad you're doing the work you're doing because innovation is like the most salient fact about our civilization. If we just look at what makes our life better over time, it's clearly innovation. But our incapacity to see future innovation and how much better our lives could be, it just makes us undervalue it so much. I'm glad you're doing the work you're doing.

• 54:04Speaker 01

  Thanks. Yeah, no, I'm hoping to get other people excited about this, too.

• 54:09Dwarkesh Patel?

  Okay. Well, thank you so much for talking to me. This is a lot of fun. I learned a lot.

• 54:13Speaker 01

  Definitely. Yeah, great conversation.