Brandt Foundation Lecture - Dr. Tyler Cowen

Good evening, everybody. Good evening and welcome. I'm Mark Bannister, Dean of the College of Business and Economics here at Boise State University. I'm very pleased pleased to have you here tonight. This is a special lecture, and we welcome you to it. That unfortunately last year, we were not able to hold a Brandt Lecture because of the pandemic, and so we're glad to have people back together. And we also have a very outstanding speaker tonight who I think we're all really going to enjoy. But before I get there, let me express some appreciation. I'm going to express deep gratitude to the John and Ora Brandt Foundation, John and Ora Brandt's extraordinary lives and commitment to their community, described in tonight's program, continue to make a significant contribution to the people of Idaho. I want to express a special thanks to Anne Walker, the Brandt Foundation Fellow in Free Enterprise Capitalism at Boise State University, for organizing tonight's event. Thank you, Anne. I want to acknowledge the trustees of the Brandt Foundation. Don Brandt, the president of the Brandt Agency, was unable to be here tonight. We know he cares deeply about programs like this. Bob Rathbone.

Bob?

Thank you, Bob. The Honorable Judge J.R. Schiller. Thank you, Judge. Don Anderson. Thank you, Don. John Barnes. Mike Segersma. Thank you, Mike. And I want to note that we have several legislators that are here tonight, and we very much appreciate you and enjoy having you on campus and part of this event. And a few procedural matters before I go further. Please silence your cell phone if you haven't. We see a scramble. Thank you for doing that. We don't want to interrupt the call. At the conclusion of tonight's talk, there'll be a short question and answer period. Once that begins, please proceed to the microphone. There are two microphones in the aisles. And students from our MBA program and the Master's of Economics program will assist you. We ask that your questions be brief to allow others time to ask questions and assure that they're questions, not statements, please. If you leave early, we ask that you do so quietly so those who remain for the question and answer are not disturbed. And as you leave, students will collect feedback forms found inside your program, and there are also extra credit slips for students And if you have a VIP badge, please drop them on the table so that we can reuse them next year. Now let me share some biographical information. Anyone that has a program has information on our guest speaker, but the purpose of the Brandt Foundation Lecture Series is to bring to Idaho those who are making important contributions to the public understanding of the foundations of a free and prosperous society. Tonight's speaker, Dr. Tyler Cowen, at George Mason University, has made numerous contributions to the field of economics that highlight the importance and benefits of free market capitalism. He is an economist, professor, blogger, podcast, and author. His work covers topics as diverse as the economics of art and culture to relationships between technology evolution and economic growth. He's the author of several bestselling books and is widely published in academic journals and the popular media. He's a columnist for Bloomberg View and has contributed extensively to national publications such as The New York Times, Wall Street Journal, and Money. He's a co-author of the popular economics blog Marginal Revolution. He is a host of Conversations with Tyler Cowen, a podcast featuring influential thinkers on a variety of topics. He jointly created the online education platform for economics education called Marginal Revolution University. And if that isn't enough, in 2018, he launched Emergent Ventures, a grant and fellowship program focused on moonshot ideas as an effort to bridge the gap between academic ideas and real-world problems. The Brant Foundation Lecture Series is honored to present tonight's speaker, Tyler Cowen, and his topic, Big Business Lessons from the Pandemic. Please welcome Tyler Cowen.

I'm going to talk about the future of the whole world, the future of Idaho, and if you're a student, the future of you. So there's two major themes I'm going to put forward, and those two themes, they're going to intersect, and we'll see what happens when they intersect. But let me introduce each of the two themes. The first is the pandemic speeded up many events that were happening anyway. That's theme one. Second theme: the only really functional institutions during the pandemic in America were big business. That's theme two. I'm going to come back to theme two, but let me talk a bit about theme one and theme two. Then they're going to intersect and we're going to see the future of the whole world, future of Idaho, future of you.

Okay.

So I don't know if any of you have seen the new movie out, Dune, right? It's in the theater, but it's also striking that you can watch Dune at home on your sofa by HBO Max. Very simple point, but it's an example of a phenomenon that is being repeated in many, many parts of American life. So if you go back over the years, years ago, if a movie came out, you had to wait maybe a year before you could see it on TV. A full year. And then they narrowed that window. It was 9 months, then it was 6 months. Before the pandemic, it got down to 3 months. Occasionally it'd be, it'd be a month. Every now and then a movie would come out and you could buy the DVD the same day. That was a trend. Now, obviously, when the pandemic arrived, movie theaters, they either closed or limited access, or you didn't want to go. It depends where you live. So new movies were made. Some were postponed, but a lot of them were just put out on streaming, right? Fine. So now Dune comes out, and this trend that was underway already was just accelerated. Dune, huge movie. I really liked it, by the way, if you're curious. But do see it on the big screen. But you can watch it at home on HBO Max. So that's a trend that was already underway, rapidly speeded up. Another trend, ordering things online. I mean, you look at books. I buy just a ton of books. I buy so many books, it's a problem for me to get rid of them. I give them away. I used to donate them to public libraries. They don't take my donations anymore. So I get more— a lot of review copies at the end of every week. I actually have more books than will fit in my trash can. So it's a logistics issue. Now, I used to buy books at Borders, Barnes Noble. Now I'm like 97% Amazon. So when the pandemic came, again, I was not going to the bookstore, not going to New York City. Click, click, click, everything Amazon. Another trend accelerated. Buying food online, which I'm sure most of you do one way or another. It could be groceries. What about DoorDash, right? What about Uber Eats? Whatever you use, if you look at market prices for these companies, you know, DoorDash is worth more than Uber. Everyone talks about Uber like Uber is a big deal. Uber, yeah, it's a big deal, but DoorDash is a bigger deal. So it may not always stay at its pandemic height, but that trend also is going to stick. So over the last 2 years, we have lived through an extraordinary time where, apart from all the biomedical issues, but history has been put on fast forward in a lot of bad ways, of course, but also in some good ways. Online shopping is fun, right? And it's super easy. It's often cheaper. Homeschooling, another trend. I'm a big fan of homeschooling. I know there's a lot of it in Idaho, and obviously with schools either closed or not operating very well, or just schools showing their total arrogance toward parents, they would say to parents, what makes you think you have any right to have a say in the education of your child. This to me is one of the most stunning moments of American history that I've experienced, that schools would say this shamelessly with no apology. It wasn't, we're sorry, you know, we screwed up, we should have done better, we failed you. No, it was, you have no say, please pay us, we will let you know when your child can go back to school, but it's probably not soon, and when it happens, it won't be any good. Again, no shame. So, of course, homeschooling became a lot more popular. And there's every indication— not all of this will stick. Many people are sending their kids back. But a lot of people are like, "Hey, you know, this is pretty good." Major trend. Again, history has been put on fast forward. There's just a lot of little things. I think of my wife. She never used to go for long walks. Just— she didn't really think about it. We actually live near this kind of big forest. I live in Virginia, like very green, treed, kind of lush, rains. But she's like a city girl. She grew up in Moscow. Not Moscow, Idaho. I said I was going to talk about Idaho, but not yet. She's from Moscow, Russia. She started taking 2-hour walks. There was like nothing else to do. Now everything— Virginia's reopened. She's still taking 2-hour walks. Again, history put on fast forward. We don't have a dog. A lot of people bought dogs. Demand for dogs way up. Some of those dogs will be abandoned. But I think mostly people are moving to new lives with more walking, more nature, more outdoors, more dogs, more of a lot of things. Just to run ahead for a moment, I said I would talk about Idaho. I'm not at all an expert on Idaho. But one thing I know is that Idaho is really nice. So if people are fast-forwarding to more walking, more nature, more outdoors, more dogs, how's Idaho gonna do in that world? Pretty well. Again, history put on fast-forward. Maybe quicker than you might have wanted, right? But that's gonna be the deal. So I just think it's been an extraordinary time. Again, apart from all the tragedy and medical issues and lives lost, just to see how change itself has changed in almost every part of our lives. People leaving San Francisco— don't a few of them come here? Am I wrong? There was already a trickle from San Francisco. Now it's like a gusher. You know, I'm staying in the hotel, Inn 500. It's a great hotel. Probably, like, if you live here, maybe you've never stayed there. Because you live here, right? It's worth staying there somehow. But it used to be, when I'd get a hotel room, I'm like a total mess. I have all these books, these things. I buy strawberries, and I spread them around the room. And I'm just like a mess. It's not dirty, but it's distributed, as they say. And in the old days, I used to always wish, oh, if only the maid wouldn't have to come by and clean up the room. It's terrible, isn't it? But that's how I felt. My whole life. And then you had the pandemic, people were afraid of the maid, the maid was afraid of you, then there's a labor shortage. You can just put the sign out, the maid won't come. They won't call up, they won't think you're like dead of an overdose, the maid won't come. It's great. I think we're going to keep this. I think 10 years from now, like if I'm at INN 500 again or wherever I am, I'm going to put the sign out, my strawberries, my books, they're going to be distributed It's gonna be totally normal. I'm gonna be happy. So that, that's one of the bit— for me, one of the better fast-forwards. Okay, so that's one of the trends, but it's only one of the trends. So many examples of that. Now I'd like to talk about which institutions were well-functioning and which institutions really did very, very poorly. And this varies a bit by state, or also by country, but Mostly Americans here. Probably most of you are from Idaho. Again, I'm not an expert on Idaho, but I'm talking about the country as a whole. So DoorDash, it fed us, right? How much did, did it screw up? Uber Eats, you know, you, you click, it sends you food. They get the money, you get the food. That became a very big business. I ordered most of my groceries, or close to all of them actually, on Amazon. No one thought before this all started that Amazon had the capacity to feed a nation of people. But within actually a number of weeks, not that everyone was ordering on Amazon, but it was the single— was still the single largest supplier of delivered stuff, including food. They bought Whole Foods. I would order from Whole Foods every single time. The stuff just came. So this is a pandemic. There's pressure on labor supply, issues with supply chains. Occasionally they didn't have my favorite chocolate. It wasn't perfect. But it was incredible. I could click, and in less than 24 hours, for free I might add, the food would just come. That was big business. Big business saved us. This was not entirely expected. So many of you, you're affiliated with the school, Boise State, right? Of course, what happened is we put classes online, often on Zoom, but other, other services. I would say this was highly imperfect, but the fact that it was possible at all was a kind of miracle. I've been on like so many Zoom calls the last almost 2 years, so many. Uh, for at times I hate it. Other times I'm very grateful. Mostly I'm grateful. But if I ask the simple question, how many of those Zoom calls have dropped? Like you're on the call and it goes poof and you can't get the call back. For me, I'm sure there are some cases. For me, I don't think it's been one. Zoom was not that big a company 2 years ago. It became a much bigger company very rapidly. It became a big business. Zoom overall did extraordinarily well. It served our needs. Again, I'm not saying it's as good as actually going to Boise State or George Mason, my school. But who is it that dropped the ball and who is it that stepped in? Our K through 12, I would say, did miserably. Especially where I live here, I couldn't say. Zoom was there. Pretty amazing. Best thing that happened to fight the pandemic, of course, was the vaccines. Big business. It's incredible to me that it has been a serious topic in American policy, the notion that Big Pharma is still evil. We need to put price controls on what they do. We need to tax them more. We need to regulate them more. I mean, how many months has it been since the vaccines saved hundreds of thousands of lives and still ongoing? I'm here, you know, there's the phrase fully vaccinated. It's like a euphemism for two. I'm what they call very vaccinated. So I'm not past fully vaccinated. I think I'm much safer that way. And like every day I get up and I think of Moderna, I think of Pfizer. Which are companies, right? That's big business. Moderna wasn't big until the vaccine. Now it's worth a lot of money. Pfizer has been big for a long time. They turned out to be highly functional institutions, uh, just like my internet service at home. Like, everyone was way more at home, working from home, Zooming from home, ordering food from home, streaming Netflix, whatever you were doing. Like how often did your internet pop out? Again, I can't speak to Idaho. My internet pops out when there's a power— you know, there's a storm and the power lines fall. But internet never popped out just because a lot of Americans were watching Netflix. Like it never happened. That's my cable company. That worked pretty well. Netflix entertained people. So if you just keep on going down the list, or you could cite the NBA. That's a big business. People were shocked when the NBA canceled its season in March 2020. People thought, "How can they cancel the season?" Who was it that really said the pandemic was coming and would be serious? It was tech executives and it was the NBA, ahead actually of most of our governments. If you look during the same pandemic at the record of those governments, In my view, you see really a high degree of failure. So here's like a simple example that actually most people don't know about, but to me, it is just jaw-dropping. May of this year, not that long ago, this is— right, we're on the verge of November. This is in May. Our CDC decided it was going to stop collecting data on new strains because they thought the pandemic was over. It's not even that expensive a thing to do. It is, in my opinion, a truly legitimate function of government to be collecting data on possible new strains. So when Delta came along, we as a nation were surprised. Our government said in May, we're not going to do this anymore. Can you believe that? That, to me, It's stunning that that happened, and it's not even a major story. They just stopped doing it, and we ended up on the phone with the UK, to some extent Israel, a bit later Singapore, begging them for data because we, much bigger, much richer, supposedly more advanced nation, weren't doing it.

Unbelievable.

If you want to look at other mistakes, just having readily available, rapid, pretty cheap tests ready at hand, we're still working on getting that right. It's almost 2 years since the pandemic started. Recently, Biden and the FDA agreed that more of them could be used. But again, this is— I wouldn't say the pandemic's almost over, but it's like way, way, way into the pandemic. And like now, finally, were approving tests, tests that for the most part existed like in April of 2020. And you know what happened before that? The CDC— that's our government. They live near me. It's like I live near a lot of stuff, believe me. The CDC said, we're going to make our own test. Like, that's OK. I'm OK with that. I don't think they can do it. They didn't do it. And they said all other private tests are banned because we're going to make our own. Again, insane. And to me, an insane restriction on competition in the marketplace, a restriction on business, which overall, for the most part, was the functional institution during the pandemic. So it was all of a sudden illegal for the private sector to come up with emergency alternatives. Because, oh, the private sector couldn't possibly do as good a job as government. The tests the CDC was working on, what became of them? Contaminated, didn't work. Many months passed, then a year passed. Like now, finally, in the latter stages of everything going on, we're getting around. And even now, we still can't quite get all the pieces together to make, import, whatever These rapid, cheap tests, some of the times they're there, some of the times they're not. A lot of them aren't approved, so on and so on. So complicated. Just totally screwed up. Imagine if Amazon, Zoom, Pfizer, Moderna, Netflix, cable companies, Uber, whatever, Uber Eats, like ran the same way. It'd be Amazon, it'd be like, get that little email from Amazon. You get those emails, I get so many of them. They tell me what's coming. It's like every day. 5 emails from Amazon. Imagine getting your email from Amazon, you know, "Your food will be arriving in 17 months." How would that feel? Like, who would even take Amazon seriously? It couldn't exist. But that's a lot of the service we've been getting from some parts of our public sector. Another thing that happened that I've been closely involved in, and this again is not actually that widely known, But the major part of our federal government that finances biomedical research, it's called the National Institutes of Health. It's located, again, near where I live. It's in Maryland. I live in Virginia. It's like 25-minute drive. And typically they have a pretty lengthy refereeing process to give out a grant. It takes like 5 to 9 months. Like, that's a long time, but I think in a normal state of affairs, It's not ideal, but maybe you can live with it. When the pandemic came, which was an emergency at its peak, killing 4,000 Americans a day, plus people, you know, possibly with long COVID, other costs, people who couldn't go to work, whatever, people losing jobs, 4,000 a day, the NIH was still mostly operating on a cycle that it would take 5 to 9 months to get a grant decision. Again, that makes no sense. Now, they had some accelerated grants eventually that were like 4 to 5 months. Again, this is an emergency situation. How long did it take us to fight and win World War II?

Right?

Like, actually less than 4 years. So, Keep that number in the back of your mind. So in terms of like speed, allowing solutions to happen, I think our public sector didn't do that well. Big business did really well, was the big hero. So now I've laid out like these two segments and going to put them together. So the first segment was we've applied a fast forward to history. Dune on HBO Max. Fast forward, a lot of trends accelerated. The second segment was big business as relatively functional and effective, and a lot of our public sector pretty mixed, schools very bad. Operation Warp Speed was the one part I would say did a great job, like kudos to them. I wouldn't say it all went badly. That was fantastic. But for the most part, there was an ascendancy of big business. Big business had the talent, the resources, the liquidity to actually tackle problems, deliver results, often within a week or two of things going bad. Pretty remarkable record. So if that's the case, and then you think we've seen history and fast forward, my thesis would be— my thesis tonight that the future of functional activity in the United States of America will be a large and actually growing role for big business. Now, I would give a lot of credit to business for this. I don't think it's entirely reassuring. I think we also need a better functioning public sector. But I said I would talk about, you know, the whole world. Where is the world going? We are now on a track where we are relying more and more on business and market incentives, but also just sheer size. Like small business did fine. I don't intend any criticism of small business and some small business did so fine, it became really big. But kind of the institutions that delivered, like above all, are those large corporations. And it's just striking to me. I mean, I haven't seen recent polls. It's harder to poll people now. They don't answer their phones. There's pandemic. You can't just approach them. But before the pandemic, there were some polls. And they asked people, which are the institutions in American society that you trust? And who is it you think comes out at the top? Number 1, military, which, you know, great, fine. I understand that. Very happy to see that. Second is small business. I'm delighted people love small business. But small business is like very trusted. You look at the two on the bottom, the very bottom, it's Congress. Like they're the worst. Okay, I get that. And then second worst is big business. And that to me suggests we are badly messed up ideologically and intellectually. If you look at, you know, whether it's Amazon, the NBA, vaccines, whatever, Big business did very well. And I hope if we rerun that poll, that big business is climbing toward the top. I suspect it's not. But that to me is a great intellectual failing of our current moment, that people have not digested that lesson. And, you know, the Biden administration has done a lot of legislation on different issues. I'm not really here to talk about that. But there have been so many failures of the public health agencies, and there is no proposed reform. It's not in that bill they're considering. It's not in some other bill. It's not being talked about. It's not being drafted. No reform of the NIH, CDC. And again, to me, that's mind-boggling. I, I don't mean this point is like whether you're Democrat, Republican, Libertarian, progressive, whatever you are, you might disagree on how we should reform them, right? A Democrat and Republican might well disagree, but there is just no reform being proposed. And again, mind-boggling to me. And you wonder why is Congress at the bottom of that list? I'm not even sure that's the reason, but like, it's my reason. Just very hard for me to believe that what happened happened, and we're just going to approach the risk of whenever the next pandemic might be or the next variant with no reforms. Stunning world. So I think our public sector is in large part not, not doing the job. Big business has been stepping in. I think also there's another reason why big business will be more important in the future. This is not related really to the pandemic.. But it has to do with the nature of software. So software, as you know, once you write it or once you make it user-friendly or once you embed it in a product, like, that's pretty costly. It can be very costly. But then, what does it cost to copy that software? Basically zero, right? Tiny bit of energy, or maybe you need to know how to work the gizmo or issue the command, but it's essentially free at the margin. So companies that rely on software, they tend to be pretty big because once they have good software, sell it, distribute it, give it away. If it's Facebook, Meta now, whatever, they can do that readily. So those companies scale very rapidly, right? So, you know, Marc Andreessen, the venture capitalist, the guy who invented the browser, he likes to say software is eating the world. So, software used to be like way back when, like, "Oh, you would email your friends." And then like 2003, it was like, "Oh, I write a blog." And now you have software writing articles like about minor league sports. You read an article about minor league sports, it's probably written by a computer. You read an article about like a change in securities prices, there's a good chance it was written by a computer. There are people working on computers that can grade essay exams. I don't think it's there yet. I'm pretty sure it will be there in less than 10 years. There's a computer program, it's called GPT-3. You can feed it content from Tyler Cowen and then tell it, give us some Tyler Cowen. I was like, eh, what do you know? It can't do Tyler Cowen. Like, I'm Tyler Cowen. I read some. I was like, oh my God, it was Tyler Cowen. And then a friend of mine, mischievous guy, my goodness, he thought, I want to create a podcast between Tyler Cowen and Donald Trump. This is like not really going to happen. So we fed it a lot of Donald Trump. There's plenty of Trump online, right? There's plenty of Tyler Cowen online. And GPT-3 wrote, if that's even the right word, a podcast between Tyler Cowen and Donald Trump. I read it, you know, probably better than the real thing, if we ever had the real thing. Donald Trump sounded like Donald Trump. So the more that software spreads, which clearly is the trend almost everywhere, that means you're gonna have a lot of companies that will scale rapidly and get big. They're gonna get us things really cheaply. I'm not trying to get you terrified of these monopolies. Like Amazon's pretty cheap. Google is free, right? Facebook, the company formerly known as Facebook, WhatsApp, Instagram, that's free. So, it's not something to be terrified of, but it's gonna mean a much bigger role for big business because more and more of the economy will scale. Now, here's a A key point I wanna get to, and when I said I'm gonna tell you the future of you, and I meant the students, I'm now gonna tell you the future of you. And I'm gonna try to scare you a bit. I wrote a book once with a 3-word title. I think it applies here. And the title should scare you. The title is called "Average Is Over." So I think in today's world, but all the more in the world to come, The people who take initiative and seize opportunities and get a good education, I might add, will do much, much better than ever before. So there is more opportunity in the world now than there ever has been. But that said, the world as a whole is much more competitive. So people who do not seize opportunities, become entrepreneurial, get educated, whatever it is you need to be doing for your thing, maybe, you know, practicing baseball if you're going to be a pitcher, whatever, you're not really going to do that well. Like, average performance is no longer good enough. So in some ways, life is becoming more stressful. This is, again, for non-pandemic reasons. We are becoming more productive. So we had this terrible pandemic, awful stuff. And you know what happened in the American economy? Productivity rose. It didn't fall. Everyone's, "Oh, it's gonna crush productivity." No, productivity went up. Counterintuitive, but that is also the wave of the future. And one reason it went up is just this phenomenon, which we call work from home or work from a distance. Now for a lot of the economy, that just is not feasible, right? You wanna go to Kentucky Fried Chicken, someone has to serve you. It's not yet a robot. It's not yet AI. Like, there is no work from home. Someone has to cook the chicken and give it to you. That's not going to change right away. But for so many jobs, including tech jobs, research jobs, journalism jobs, a growing part of our economy, as our economy becomes more tech-focused, it will be more and more of our economy work from home is feasible. Not just feasible, but in many cases desirable. You eliminate commutes, for instance. In this future world where, again, history's on fast forward, so a lot of work from home, work from a distance is going to stick. So first of all, future of Idaho, where are people going to want to live? Idaho, right? Not only Idaho. Where I live in the Northeast Mid-Atlantic, so the nice parts of West Virginia, Maine, and Vermont are just taking off. Why? Because they're nice, right? A lot of people, they're not there necessarily the whole year. Like Vermont in winter is not my thing. Some people love to ski, they're there all year, great for them. So many people I know They just take the 3 months they're working in the summer, maybe the 5 months, and they do it in Vermont. For them, it is awesome. They do not want to give that up. And if you think that bosses can say to those workers, "Hey, people, the pandemic is over. Come back from Vermont to your traffic-laden commute." No, they are not going to do it. This is going to stick. Not for everyone. But it is also going to stick for Idaho, here, right here where I'm speaking, places that are nice. And I think globally there's an effect as well. You want to live in nice places. You know, I'm teaching online this semester. I went for a week to Ireland. I was working most of the time, probably getting more work done than if I were at home. Actually, fewer distractions in Ireland. I think Ireland and also Northern Ireland, they're going to do just great. One big advantage of Ireland is its time zone. If you play kind of a game, what's the time zone you can live in where for a global company you can make Zoom calls to all other time zones without getting up at 3 AM? And you'd like solve that as a logic puzzle. Do you know which time zone wins that game? Ireland and Portugal. And if you're looking for places to be bullish on, I would look at Ireland and Portugal. Portugal just announced a new regime where you can just live there without going through a big visa hassle. You just need to show you have a job. Uh, rates of tax on capital gains, crypto gains, whatever, it's like 0 to 10%. How's the weather in Portugal? Anyone been there? People are friendly, aren't they? It's beautiful, isn't it? And it's not that big a place, so you could have a surge into Portugal that would have a pretty big impact on Portugal. Ireland is what, 3 to 4 million people? You already see the difference in Ireland. So this is going to change our whole world, and nice places are being revolutionized, and you all are living this right now as I am speaking. Now for the workers, here's to get back to scaring the students, which you can never really do too much of, right? Work from a distance now means you are competing against the whole world. It used to be like maybe you went to school here, you stayed in Idaho. Oh, I'm competing against those people from the University of Idaho. Or if you had big visions, like, I'm competing against the Dakotas. Or maybe, what if someone from Seattle were to come? I'd have to compete against them. Like, OK. But that is so crushed, that vision of your future life. That is toast. That is history. That is done and gone. Looking forward, you are competing against the entire English-speaking world. How many people are in Bangladesh, Philippines, Pakistan, India? I've been to these places. Actually, never been to Bangladesh, been to the others. People there, they're not less smart than we are. They face disadvantages, or maybe their schools are bad, but they want your job, and they're willing, on average, to to work harder than a lot of Americans. So there will be a kind of new meritocracy where competitive standards will be higher. It's also the case more countries will learn English, right, the further this goes. Nigeria, a lot of talented people in Nigeria who don't have opportunities necessarily at home. But if they can get a good enough internet connection, which not always the case, by the way, but when they can, You're competing against them too. So if you're highly skilled and seize opportunity, you as a worker, you have access to all these markets. Like, you are much better off. But if you're just like, eh, I'm gonna sit on my behind, someone from those places— could be Canada, could be Florida, right? Could be Mexico, who knows? But you're competing against them too. Now, when the whole world is more competitive, more productive, more innovative, yes, on average we are better off, but it doesn't mean everyone is better off. And I'm just telling you, you want to make sure that you will be one of those people who is better off. And maybe you think you can stop this, maybe you think government should stop it. Again, I'm not going to get into that, but unless you think our government is going to intervene and like cut off all Zoom calls, which I really don't see happening. Like some version of this, it's already happening. And like software companies, they're hiring many more people in India. They're working much more closely with their offices in, you know, wherever, Singapore, Indonesia. World is taking much greater care to learn better English. Again, world is being revolutionized. It's all been happening in fast forward. I'm just telling you, average is over. I want you to be on the right side of these trends. And if you're in the US of America, you have a lot of advantages, like your English is awesome. And like you're funny in English, right? I hope you're funny in English. But people from other countries, I'm not going to name names here. I'm not going to mention Germany or other places. Like they might speak good English, but they're not that funny. You can be charming, funny, subtle, leadership. Americans make great leaders, great CEOs, great managers. The language, like the cultural self-confidence. We're a nation of immigrants, so your ability to like understand and reach out to the world is better than almost anywhere else. There's like so much going for you. Like, this is a competition you can win. But it is a much tougher competition, and we will all need to rise to that challenge. So to sum up, my 40 minutes is about up. But I would just say, we've seen so much history in the last 2 years. We need to understand it. A lot of that history is going to stick. Things are never going back to normal, like our, our health was going to go back to normal. But the world is not. And in that world, big business doing pretty well, parts of our government really doing— I mean, I'm not here to be rude, but it's like, to me, very, very, very disappointing. Is that rude? Like 3 verys? 4 verys? Our public health agencies, our K-12, to me, those are like beyond failure. They're disgraces, I think. Some people have seceded, but we're kind of swallowing some of it. So I think parts of our public sector will not be improving. We're not trying to improve them. Software is eating the world. You will face a more competitive future with more opportunity, but also greater challenges than ever before. And I thank you all for coming and listening. Thank you. There is time for questions. I'm told there are mics somewhere. And go to the mic and you will be called on sequentially. And feel free to ask about anything, really. Sure. And then I'll— Obviously, the world you're describing sounds like it's going to be a more unequal world. Do you see a role for government in helping in terms of that inequality that's likely to rise?

Tyler Cowen.

It's a very good question. So I agree with your statement that it will be a more unequal world in terms of income. I'm not sure it will be a more unequal world in terms of happiness. So it will be a more innovative world. Fewer people, say, will die prematurely of disease. In a lot of ways, there will be less suffering. And those new gains will be distributed, maybe not to everyone, but to more than just very wealthy people. So I think it will be a continuation of the current trend that incomes are more disparate, but actually happiness and opportunity, there's greater access. So in that world, how does the role of government change, you might ask? I would say that the best thing government can do is to make sure markets stay competitive so that when we have new innovations, there is competition to supply those innovations to many people. So the prices of those innovations become affordable. You know, do I think we're on the verge of seeing some big increase in government transfers? What's striking to me during the pandemic, which was a really dire time, you know, the Trump administration, Biden administration, they kind of did the same thing. So I don't mean this as a partisan point one way or the other. Kind of did the same things, but everything they did was temporary. Trump sent $2 trillion, Biden sent $1.9 trillion. It all was temporary. There was the big Biden plans to have this bill to do many different things permanently. We'll see what happens. It doesn't seem that popular. Again, whether you like that or not, so I don't see us on the verge of actually changing our basic system that much. I think the basic system is highly flawed, but I think Americans are actually digging in and being somewhat conservative in the literal sense of that word, not in the political sense of conservative. So I'd like to make sure we keep markets free, open, and competitive would be my main advice. Question?

Hi. Yeah, thanks for the talk, and thanks for coming to Boise. Um, I guess my question or comment was, um, I guess in terms of sort of comparing government versus big business in the context of sort of vaccines and fighting COVID, I guess it seems to me that, uh, you know, there's obviously a lot of government money that went into not only sort of developing early mRNA research, and I believe a lot of that came from the NIH and not necessarily from private corporations. And also on top of that, a lot of the scientists who then go on to develop vaccines, you know, are trained often at U.S. institutions and maybe receive money from places like the NIH. So, I guess my— I guess sort of how do you weigh that? Because it's sort of, in my eyes, you know, the government did sort of over the long term a lot of super important stuff that, you know, big business didn't, you know, didn't do. So I guess, what are your— how would you respond to that?

I guess the NIH did some things very well. So they supported Katalin Kuriko, who was one of the main scientists behind RNA vaccines about 20 years ago. They get full credit for that. That was great. The NIH has supported many different medical innovations over the decades. But I think you have to look at the trajectory of the NIH. It's a bureaucracy. And when an emergency came, you know, right up its alley, a pandemic, were they able now— not 20 years ago, but now— were they able to step up to the plate and make something happen the way, say, the U.S. government did in World War II? And I don't see that they did. So my fear with the NIH is that it is deteriorating in its effectiveness. And responsiveness and accountability. It's become more of a political football. Recipients of NIH grants are often the largest employers in those congressional districts. It's become a way of feeding money to the system, and I don't think it's as responsive as it was. So I'm greatly worried about the NIH. I would give it full credit for many wonderful things it's done, But again, when the crunch time came, where was it? I don't really see that you can even give them a C grade. So that would be my response. I think we need to fix the NIH. I do very much think it's a legitimate function of government. They've done great things in the past. It seems to me in danger of deteriorating as an institution. Question here.

We're all very now aware of the fragility of global supply chains. Is this likely to continue to accrue to the benefit of big business, or is there a point where business is so big that they become uniquely vulnerable with their interconnectivity?

It's a very good question. So as you all know, right now we have supply chain problems. The losers tend to be smaller businesses. So if you look at something like Christmas toys, often from China, but typically from abroad, companies like Walmart, Amazon, they don't necessarily publicize it, but they're just hiring their own ships with their own money. Like, this is an emergency. We need the toys. We need them by Christmas. They're paying a lot of money and doing the shipping themselves. There are still port holdups. US has some of the worst ports in the world. Did you know— you know, our ports are run by governments. Did you know that ports in Kenya and Tanzania rate higher than a lot of US ports? Like, how can that be? That to me is like the K-12 thing or the CDC not testing anymore for the variants thing. It's like inconceivable. That that could be our country. But what I think will happen with supply chain problems— markets do tend to solve them, even with government-run ports. But my big worry is that possibly China cannot really handle its Delta variant. I wouldn't say I have a prediction here. I don't have enough information to have a serious, well-informed opinion. But I hear many reports from China that make it sound like they're possibly— Delta is out of control. And the Chinese in response shut their ports or put them on very limited operational capabilities. And that could go on for a year or two. So I would get ready for some real inconveniences. Mostly we will get through it. We'll look for substitutes, buy from other countries, make some more things here, use some more 3D printing. Don't think it's the end of the world. But I would say the ease of purchase of everything that you as an American probably have enjoyed your whole life, for the next 2 years it will feel very different. The important stuff you will get, but even like, "Oh, I want to buy this book." Like, is there enough paper so the bestseller can go into the 3rd edition in its 7th week rather than 3 months later? That's going to be up for grabs. So I would say get used to that. It's a real issue, not a world-ending kind of issue. But for me, the key linchpin is, as the other things start to clear up, is China going to have its act together in fighting Delta or not? Again, I can't predict that, but that's the variable I would keep my eye on. Question? Thank you for giving this speech. I believe the last major copyright reform was about 20 years ago. So in a world that's increasingly reliant on software, What implications does this have for copyright law and intellectual property? And also patent law, of course. It seems to me our copyright and patent laws are ruled by a lot of lobbying and self-interest. I do believe in both copyright and patent, but I think they are most important, say, for prescription drugs, where there's a high upfront investment. I think for a lot of software, patent law should be much weaker. Because the upfront investment is smaller. So just to get, like, a new drug through the FDA— forget about finding the drug, but just getting it through regulation can cost $1 billion just for a drug, maybe not even an important drug. So then I think you need some pretty serious patent protection for a while so people can get that money back. But I think patents have become a barrier to entry. They're often a form of monopoly privilege. They can be anti-competitive, and we need to rethink all of our intellectual property law. And I would say do it right, and in a bunch of cases that will mean somewhat weaker patent law. I think copyright law, we just keep extending, like Mickey Mouse always has to be protected because of Disney. I wouldn't say it's a major problem we have, but I think it's a sign of our politics being captured by special interests. And I would let anyone make You know, Mickey Mouse, put it on a t-shirt and not have to go to jail. That's what I would do.

Yes.

So I heard you say something about how big business kept the United States fed during the pandemic. When this whole pandemic started, I lived in a town where there was a meatpacking plant maybe 20 miles away, something like that. And during the pandemic, they kept their workers working the same hours with basically no precautions, just working side by side in a very kind of moist environment, you know. And that's not— that led to a lot of people getting COVID. A lot of their workers got COVID. A lot of them died. So how do you reconcile all the people, all the workers that died in this pandemic, you know, which was obviously very bad, with the good that the big— that the big business also did? Because I think, like, yeah, it's good, um, all these things that, that big business did, but they also did a lot of bad things in the process too.

Well, I would ask the comparative question: overall, did big business or government do a better job protecting its employees? So right now, if you look at different police forces, you know, fire departments, there's a lot of vaccine mandates, and those employers have not done a good job encouraging their workers to actually get those vaccines. Rates of noncompliance are extremely high. Governments say, oh, you need to get a vaccine or you have to test. They're not actually making anyone test. People are rebelling against the vaccines. That seems worse in the public sector. If you look at the very major loss of lives in nursing homes, say, in the state of New York, Those are either government nursing homes, or the government actually passed a law saying that nursing homes had to take COVID patients from hospitals, which was again just mind-boggling. So government made many of those same mistakes. So did business, also big business. People didn't have to go to those jobs, right? But when I look at the comparative performance, it seems to me our governments have done worse at protecting their people, people in nursing homes, people who say work for police and fire, than our businesses have. Yes.

Thank you. You talked about the competitive nature of the world going forward. And I wonder, given if you travel around and you go to like the equivalent of a Best Buy in Tokyo or Singapore or Bangkok, you'll find a young person, a teenager maybe, sitting behind the counter fixing iPhones. Here in America, those same teenagers are streaming Netflix and playing video games. I wonder if you'd given some thought to the possibility of revising America and state youth labor laws so that we can be a bit more competitive and have a bit of a jump on the skills that young people need to be competitive on the world stage.

Well, I do think we really need to up our game in terms of skills. At all levels of education. I would say our higher ed is clearly the best in the world. Our K-12 is clearly quite mediocre. But I'm not so pessimistic about American youth. So the people playing games, that's actually very good training for what I think a lot of the future technological innovations will be. So gamers have gone on to do wonderful things with software, with gamification. Some of education will be gamified. A lot of different things we do are becoming more like games. So, I actually think it's a reason to be optimistic, most of all about South Korea. But America, there's plenty of games. Also, entertainment is a growth sector. We love entertainment. Maybe it looks a bit to outsiders we love entertainment too much. That's a mixed blessing, but I don't think it's entirely negative. So, countries where people get a disciplined education and just do a lot of rote work, They sort of feel like they're doing well because it's very disciplined. But I think culturally we're more creative, more diverse. And I'm— again, I'm not pessimistic about how this country is going to do, but we need to step it up, mostly at K through 12, but absolutely at all levels.

Yes. Dr. Cowen, thanks for coming to Boise. I enjoy it when you're on The Indicator podcast. I think you should do that more. So in that vein, overrated, underrated, employee shortage, and what do you see that needs to happen in the economy to get businesses that require employees on site versus work from home to a better spot?

I think people are underrating the import of employee shortage. I think it has multiple causes. Some will go away, some will not. So one cause is people just had saved up a lot of money during the pandemic. Because it was hard to spend. So now you can avoid taking that job you don't really like because you're living off your savings. That will go away in well under a year, and those people will go back to work. Some people think there is a great resignation because of crypto wealth. Maybe you traded crypto. You earned $100K off a limited base. You can just not work for a while. Eventually, that too will go away. I worry more that I think there have been a lot of mental health problems during the pandemic. They're hard to measure, hard for me to know how extensive that is. But people who realize they didn't like the job they had, I mean, that's fine, right? They hated the commute, they hated the boss, they hated whatever. And now they're kind of stuck because they don't know what to do next. And it seems to me a lot of those people are floundering. And they risk moving into a semi-permanent state, maybe not of unemployment, but of underemployment. And I think that will be with us for a long time as a legacy of the pandemic. People not really making the right mental adjustment. And the people I work with, people I know, it's striking to me, like, some have done incredibly well and some just haven't handled it mentally so well. And I wouldn't have predicted in advance, like, who would have fallen into which category. So I don't know how long it will take to undo that. I don't think we have the data or the experience that anyone does, even experts. But it worries me quite a bit.

Yes. First, I'd like to say thank you for coming and taking your valuable time and visiting Boise, Idaho, Dr. Cowen. My question is, and you asked, you said that we could ask any question. Do you think that that pandemic was a major cause for big business like Tesla for putting Bitcoin or cryptocurrency on their balance sheet as a result from the increase of the money supply last year?

That's a very specific question, and it's hard for me to be anything other than speculative. I think Elon Musk is like an A++ showman. I can readily imagine he would have done it anyway. You know, might the increase in U.S. money supply have been another reason to do it? Wouldn't surprise me at all. But he's done so many— I hesitate to call them stunts because they're often quite serious and often they succeed, but things that look like stunts. So to attribute that one just to this one particular thing would not be my inclination. But was it a factor? Quite possibly so. And we have time for two more quick questions here.

Please. Hi. So growing up in school, my teachers would always say that media was becoming another branch of the government. Obviously, media is owned by big business a lot. But if you could separate the two, which one do you think is becoming more influential?

Well, media is a huge universe. And just to put my cards on the table, I work, or have worked, for a lot of it. I think too much of our media is too sympathetic to one particular point of view. But that said, I think there are really many alternatives out there. I think we're on the verge of inventing and implementing alternatives based on crypto, actually, that will be totally cancel-proof. So if you're worried about what if someone gets kicked off of whatever list of services, what are they going to do? I think, you know, within 5 years there will be options where just no one can kick you off. In essence, your output is encoded on a blockchain and enforced by the principles of software and computability lying behind that blockchain. And you can just say your thing and have your audience. And it's not quite here this year, but I'm very bullish on just diversity in media. And I get there are short-run trends that look unpleasant, but look, it is a market. There's a lot of services. There's going to be a lot more. Some will be left-wing, right-wing, libertarian, progressive, conservative, traditionalist, Catholic, whatever. I think it's just all going to flourish and there'll be plenty of opportunity to say your piece. But, you know, do I think too much of mainstream media has too conformist a point of view? Absolutely, I do. Last question. Oop. Just my water. Don't worry.

Well, first off, I want to say thank you for coming here. But my question was, could the reason— because you had mentioned productivity growing and all this stuff after the pandemic. And I was wondering if the reason that that was happening could have possibly been because the way we measure work has changed, like in terms of working from home or hourly wages, that kind of thing?

I think productivity went up for a few reasons. One is that some people stopped showing up or got sick or got fired, and when they were gone, we realized they weren't doing that much to begin with. And that's sad. It's like a big social problem. But it does mean we learned something and we need to find something else for them to do. It's not sustainable to have so many people contributing nothing. Need to have different jobs or different training or change something. I think part of it is that organizations went into a kind of emergency mode and they became more productive for the thing they make now, but they did less to invest in what I call long-run organizational capital, just like training their youngest talent who might be a leader 9 years from now. It's like, okay, but it's a pandemic. We've got to get the product out now. So they put aside a lot of things. Short-run productivity went up. Long-run productivity may not have gone up as much. As short-run productivity indicated. But the other thing is, I just think a lot of people are more productive from home or partly from home, and that's going to stick. And I think that's the biggest effect. And going forward, we're going to have that forever. And you can hire the whole world forever. You don't need to get them visas. You just need to get them a Zoom connection. Already well underway. And I just think that's never going to stop. You can collaborate globally in a way it was never possible before. It's totally permanent, more competitive for, you know, a lot of you out there. But I just think one of the biggest things that's happened in my lifetime, and we're just seeing the beginning of it. Anyway, thank you all for the questions, for coming. Last thing, yes?

Yeah, do you have time for one more?

Okay, one more. Last question.

Okay, thank you. So I was just wondering, you mentioned that big businesses, and correct me if I didn't hear this right, are becoming more like monopolies. And it sounded to me like that was a good thing. I was wondering if you could explain why you think that that's good for the Commonwealth, because I think oftentimes monopolies tend to raise prices for the common people. And so I was wondering what you thought of that.

I wouldn't say monopolies, and I hope I didn't say that word. I apologize if I did. I think they'll become bigger. So take Amazon. In all the areas it sells, Amazon is not a monopoly. In hardly any area does it have 15% of the market. Like Walmart is typically bigger than Amazon. It does in books. It has a lot of the book market. But even in books, Amazon is cheaper than Barnes Noble, or maybe equal. So I don't think the old category of monopoly applies. You have multi-product firms with enormous output, massive scale, and lower or equal prices, occasionally, as with Google, free prices. Your Gmail, it's free. How many people around the world use Gmail, right? It's, what, maybe a billion people. It's not a monopoly, it's free. So I think that's the new model. Huge scale, lower or equal prices. The companies will be really large. A lot of people will feel uncomfortable about that. I would have to say we already have it. Let's try to get a better version of it rather than a worse version. And I don't want to politicize those companies. I want to encourage and allow them to stay as politically neutral as possible. But anyway, thank you all for coming. Had a great time.