Why The West Is Failing You - Tyler Cowen

The EU saw its steepest annual birth decline since 1961 in 2023, with fertility at just 1.38 births per woman. The US is close behind at 1.6, far below the replacement rate of 2.1. Americans now read an average of only 12.6 books per year, far below the average in 1990. US total factor productivity growth is now just one-third of what it was from 1920 to 1970. My question for you, Tyler, is why is the West and the US stagnating both demographically, culturally, and economically?

There are many different issues in what you raise. When it comes to birth rates, I think the United States is in a better position than the European Union because we do a better job assimilating our immigrants. So think over time is most of them coming from Latin America, quite a few from China, over time more from Africa. Uh, United States is pretty well positioned to deal with that. And furthermore, quite a few of those, especially from Latin America, are Christian. So I think we will keep a birth rate below 2, but manage to deal with it. I worry much more about smaller European nations. Now in terms of reading. There's a question of how many books people buy versus how many books people read. So if we're back to the 1990 level, as someone who was around in 1990, I can tell you that was quite fine. I think the actual problem is we're moving toward more of an oral culture. Oral culture, you sling around all kinds of accusations, conspiracy theories, you make things up, and there's not a clearly defined print medium with gatekeepers where you can argue through these things and get to some kind of social consensus. I think today people in America are reading more than ever before, but they're reading on their screens. Those are shorter pieces. Often they're less intelligent. Uh, literature and novels have become less culturally central. Uh, I do see those as problems. Now on productivity, the good news is that over the last 3 years, productivity measures have picked back up again. And with artificial intelligence developing rapidly, I think now we are probably on the verge of ending what I used to call the Great Stagnation. So a very mixed picture, a lot of social and intellectual chaos, but some parts of the world are re-exerting their previous dynamism, I would say. Mm-hmm.

And do you think AI is the spearhead of that almost de-stagnation in the US at the moment?

I think AI and also biomedicine. So we've had some pretty spectacular breakthroughs. The weight loss drugs, already tens of millions of people are taking them, but many more will. mRNA vaccines saved millions of lives during COVID We now have a pretty good anti-malaria vaccine. Uh, we're on the verge of being able to stop HIV/AIDS, admittedly with an issue of distribution. So those are some pretty big advances for what is essentially a 5-year period. And then AI is smarter than human experts in most areas. So that's all pretty impressive. And I think we're on the verge of seeing this new age where a lot of positive technological change comes, including to photography, of course, as you well know.

Of course.

Yeah. Well aware.

Um, it may put you out of, not out of business, but it will change what you do.

Oh yeah.

You know, the thing with AI is it's, I'm, I'm for it and Who knows really what the future leads in terms of that sense, in terms of negatives and positives. For example, for AI photography, it can be really good to use as a tool. And I think this may be a bit controversial for maybe some artists or some older photographers, but I think a lot of a new generation of artists and photographers will use AI to make unique pieces of work. So there's always benefits and drawbacks to it, right?

As photography had benefits and drawbacks. People said painting is dead. They were quite wrong about that, but a certain kind of portraiture did become much less significant, right?

Yeah, exactly. And do you think we're maybe in or going to be approaching an AI bubble similar to the kind of internet dot-com bubble and subsequent crash in the late 1990s?

I used to think that, say, a year or two ago, but now I'm more optimistic about the financial prospects of those companies. If you look at the ones who are doing it, well, Google and Meta are extraordinarily well capitalized. They're not going to go under. OpenAI has done very well raising money and has had this partial alliance with Microsoft, which is incredibly well capitalized. Anthropic has a strong alliance with Amazon, which of course is incredibly well capitalized. And then Grok is backed by Elon Musk, who I believe is still the world's richest man. So the commercial fortunes of these systems will go up and down, but to see them simply going under the way, say, Pets.com did, you know, when everything crashed, uh, I think it will go quite differently this time.

Hmm. And do you think, um, in the coming future, things already happening with the, for example, entrepreneurs or solo entrepreneurs using AI to make their own businesses similar to the like kind of internet businesses. For example, the guy who made that AI kind of calorie app where you take a photo of a piece of food and then it uses AI to show you how many calories it is. Do you think that's going to become prevalent in the next few years as well? Where there's small teams using AI to a great advantage or using AI solely to create their products?

There'll be a lot of that, and many of those businesses will be bridging the gap between having the AI and applying it to doing something else. But I think in the particular case you mentioned, I'm not sure we'll need a separate app. I think the core foundation model might already do that well enough that if you try to compete against, say, the ChatGPT app, because that one is famous, they might just beat you. So I think you'll need to bridge AI toward concrete physical real-world processes to have a successful smaller business in AI.

Hmm. So is it those big companies that you previously, previously mentioned that stand to gain the most from this new revolution?

Consumers will gain the most. Those companies have to compete against each other. Depending how you count, but there's at least 5 or 6 in the space, possibly more to come. Chinese companies may or may not be kept out of the market, but that's additional competition. So, uh, people who want to use it for something right now for $20 a month, you get incredible service. So that's gains for the users.

Yeah, exactly. And if America isn't stagnating anymore and you are coming out of that, How possible do you think it is still to achieve the American dream? And do you still think it's the best place in the world to migrate to as a foreigner?

Well, I think it's the very best place for highly ambitious people, but that's quite a minority of the world. So no, but the ones who come here tend to realize what the deal is and that you don't come here, say, for the social welfare state, though we have a fair amount of that. You come here to do very well, start a business, try to make a lot of money. But a lot of immigrants, you know, do better going to Western Europe because they're less ambitious, or Canada or Australia. So no, I don't think this is right for everyone. And I would also stress the point, only some sectors have come out of this stagnation. If you look, say, in the U.S. at the cost of constructing a house, the difficulty of getting the permits and so on, There have been some improvements, but we're basically still stuck. Housing costs too much. Most sectors, the nonprofit sector, are still mired in gross inefficiency, and they haven't been touched much by AI, or for that matter, biomedicine. So we have like two incredible sectors, AI and biomedicine, and the rest still meh, I would call it. Oh, energy has been quite good for us, right? I would count that too. So three.

What kind of revolutions have there been or innovations have there been in the energy sector recently?

Well, they haven't all come from the United States, but we're deploying much more solar power, much more wind power. We'll probably start using more nuclear again and just fracking and fossil fuels. America is now the, you know, the Saudi Arabia of the world, for better or worse. Uh, it may be bad for the climate, but it's very good for our economy. Very good for job creation.

Do you think fracking and using oil and fossil fuels will always be there, even if it's a significantly lower number in the future?

I suspect that is true, and this worries me. I'm not even sure it will be a lower number. So people like to say, well, coal, you know, for instance, in Britain, it displaced the burning of wood. Wood is a form of energy, but in fact, for the world as a whole, We burn more wood as a form of energy than we ever did in the 19th century. So one possible scenario is that all kinds of energy usage, the green ones, the not green ones, they all just keep on going up. I think we don't know, but I don't think we should dismiss that possibility. And again, it's quite worrying. It means green energy can go great, which I think it will, but we never really solve the climate change problem. Hmm.

But could AGI or even ASI help solve problems like climate change?

I don't know. I think whether you call it AGI, ASI, or just like really, really good AI, you could call it, it'll help us make solar and wind and nuclear much cheaper. And that those are big positives, but they also could help us make burning oil and coal and natural gas much cheaper. So there's a kind of race. If everything progresses, what's the relative balance? Again, I'm not sure.

Yeah. And speaking of nuclear, why has there been an aversion to using nuclear energy in the past few decades in some countries?

Peter Thiel's hypothesis is people so realized the horror of nuclear weapons, they turned against nuclear flat out. I'm not sure I agree with that. I think a lot of it is more mundane. You had one or two well-known nuclear accidents, or almost accidents, Three Mile Island, Chernobyl, and homeowners just get very nervous and there's a lot of NIMBY and they all say, well, nuclear power is fine, but put it somewhere over there away from my house. But if everyone says that, you never get it. So I think that's probably the main reason.

Yeah. And just touching again on kind of why moving to America is good for maybe them outliers and highly ambitious people. What do you think are the kind of cultural reasons for that compared to maybe the culture of the UK? Because my idea of America is everyone's super ambitious and kind of more supportive, maybe not everyone, but a lot of people. And in the UK, I see more kind of cynicism. And if you stick out from the crowd or you are highly ambitious, you normally get hit back down from society. So what do you think of the kind of cultural and psychological reasons for America being great for ambitious people.

I go to the UK every year and I was just there for a week and I spoke with many people, including about this issue. I think the ambition gap between the two countries is truly large. It's not just marginal. So you, you used the word cynical. I think there's high status in England, for instance, by being negative about things. Your market size is smaller. Your energy costs are 2 to 3 times higher. You're not well positioned to do tech. Uh, you're geared as if you're an empire, but you're just not an empire anymore. And then in the last 5 years in particular, more and more startups, they either get bought up by the US or they move to the US. So the people who might ignite this contagion of ambition we have a lot of them and that's very unfortunate. And London is so expensive and there's not quite an ideal second city or third city to live in. So Birmingham is not attractive. You know, Liverpool I like, but it's fairly distant and not so much is going on there. And you go on down the list. It's like, well, Cambridge is in some ways the second most attractive place. Uh, but that's really just part of the London orbit. So there's the super expensive part where even a pretty high earner won't feel that comfortable. And then there's all the rest where you feel you don't want to live. And then the U.S., you know, has 50 states and a lot of choice, and that's just hard to compete with. So I think all of those factors, and also we've done a better job attracting the more ambitious South Asian and Chinese entrepreneurs than any other country has. We don't have more of them, say, than Canada, but we get the ones who are most interested in doing very, very well.

Do you think it's also almost maybe, I dunno if this is the right term, but like a selection effect in the sense that the people that left Britain to go to America were naturally the more bold and ambitious people, and then almost like the people that stayed were the more negative and maybe less risk-averse? Kind of people in that cult, both of them separate cultures have almost compounded and we are where we are today where there's such a massive gap.

That's definitely true, but I also see the gap is widening. So if I think back to the 1960s or '70s or even the 1990s, the gap was much smaller. So something has happened since then where the benefits of scale for a nation have increased. It's also been very good for China, which of course has done well. And it's hurt really all of Europe, hurt the UK, hurt many, many other countries. Maybe has not hurt Canada so much. They're in essence a satellite of the US economically speaking. Uh, so with tech, scale is more important and not that many places have scale. That's driven a lot of it. I think also the suburbs are a big advantage for the US. We have better suburbs. So you have many Pakistanis in the UK. There's all sorts of, you know, either problems or perceived problems. You can debate how much is real, how much is exaggeration, but clearly there are problems. Uh, Pakistanis come here, they have above average per capita incomes. Uh, we have no enclaves. We, they're in the suburbs and they're in their cars, you know, they're not all clustered together and they've assimilated pretty well. And that too is a big difference.

I guess it's also because the UK is so much smaller, like you're saying about that cluster effect. And because it's just like, it's almost like a rich city connected to a poorer country in some regards. And the fact that you have so much choice in the US, like if you want to do politics, you maybe go to Washington. If you want to do finance, you go to New York. If you want to do tech, you go to California, but like you said, everything in the UK is condensed into one place and that makes it super expensive. So do you think the UK can ever catch up with the US in the next decades? Or is it literally just, if you are highly ambitious and you live in a country like the UK and you feel like there's more to life and there's more opportunities, it's best to go to the US instead?

I don't think you all can catch up. But since 2008, the UK has had virtually zero wage and productivity growth, and you certainly can do much better than that. So one thing I would do is really try to build out Cambridge as a much larger city. There's planning restrictions, but in principle that's quite possible, and I don't think you'd have to wreck much British heritage. And then in the north, you know, Manchester, Liverpool, They're not that far apart to turn that into a true number 2 city where that's like Dallas-Fort Worth or Minneapolis-St. Paul. Uh, there's even some moves afoot to do that. I think over time that will happen. But again, there's a lot of planning constraints. You need cheaper energy for a lot of that to be cost-effective. Uh, to some degree, I think those things will happen. I'm not sure at what speed, but those are some areas I'd focus on., to get moving again. And they're not at all impossible things. Britain has overcome much larger problems in the past.

Definitely. And why do you know any reasons why the energy is so expensive at the moment?

Uh, some of it is you don't have your own to the extent the US does, but a lot of it is just you restrict wind power. Uh, you know, you don't want to build nuclear. And there's a lot of regulatory issues, planning issues, permits needed, the number of years it takes to produce a new source of energy. Uh, it's just not attractive for investment. So you look at the figures for UK investment, they're very, very sluggish now for quite a while. Some of that is energy, but it, it, it's many different things and it's just not that easy to get things done. And you're kind, even though London is the world's financial center, In some funny ways, your capital markets are underdeveloped, at least compared to the US. Well, London finances many things other places, but your domestic venture capital market, private equity market, private credit market, again, they're certainly better than in most places, but they could be better yet. And to really drive further growth, I think those will all have to improve. Hmm.

And going back to AI. A lot of people that I speak to about AI, not necessarily on the show, but just friends, family, etc., they're more skeptical of it than maybe some techno-optimists, and they have a lot of opinions about AI, and they think that AI will steal everyone's jobs. How true do you think this actually will be, and do you think AI can actually create more jobs? What's your take on that kind of opinion?

I think jobs will do fine. Jobs will change a lot. Just like we were talking before, photography is changing because of AI. AI systems are imperfect and they don't operate in the physical world the way a human does. So we'll have an enormous number of new jobs integrating AI systems into business, checking AI outputs, making everything have more AI. Those will be new jobs for a long time to come. The AI sector consumes a lot of energy. We'll have a lot of new jobs in the energy sector. It will lead to a lot of new biomedical innovation. There'll be many more jobs connected with that. So jobs will change. I'm not saying everyone will like that, but that's not new in human history. And I think overall jobs will be fine, at least if you let your economy adjust. Hmm.

And I've heard you say maybe AGI is like porn. I know it when I see it and I've seen it. And you said AGI is already here, right? April 16th was your, the day you said you've seen AGI. Is that correct?

That was half tongue in cheek, but I still, I would say I meant it. Everyone has a different definition of AGI. People who are older, you know, when they were growing up, they were told if AGI can mimic a human being, Sorry, if AI can mimic a human being, that's AI. And clearly we have that. To the extent it doesn't mimic a human being, it's because it's too smart, right? But it gets jokes, it writes poems, it can converse with you, it can be your therapist. It also beats human experts most of the time, like on tests. So people keep on raising the bar for what's AGI, but by the common older definitions, we very clearly made it, at least with the best models. So that's what I meant. Like if I give an economics test to me and I give it to O3, uh, O3 beats me. It's not close really. Like I do better than most humans, but, uh, it's like playing chess against Stockfish. Good luck.

Yeah. And how would you define artificial superintelligence and the singularity? And are we going to be approaching that soon, do you think?

I don't have coherent definitions of those concepts. I think they lead to a lot of people getting swept off their feet by visions of either dystopia, utopia, it kills us all, we grow at 200% a year. Uh, I don't believe in any of that. There's human imperfections as a bottleneck and just how well the AI will ever work. I would just say we're not sure. So I don't know. I think those are still ill-defined concepts. I don't really believe in them.

Again, do you think we all know when we see it in that regard as well?

Yes. If it ever were to come, whatever it means, it would just kind of sit up and, you know, send you a text message. Here are my 10 new cures for cancer. You know, go ahead and build this stuff and you would build it and It would work. So yeah, we would know it when we saw it, but that seems not close to me. Hmm.

Do you think, you, you said you don't wanna speculate too much, but what could be the threats? Do you think the threats of them completely take, ASI completely taking over humanity, do you think that's a bit too far overblown?

Again, since I don't believe in ASI, I'm not sure how to answer. The hypothetical, uh, there'll be a lot of checks and balances and we'll use AI to control other AI. And I think it will be fine. And AI will be much more likely to lengthen your life than to shorten it. That's how I put it. Any new technology, there are risks. Other forms of AI, they already have led to drones. Drones kill a lot of people. That's very bad. Now, some of that is useful, like it's good that Ukraine can defend itself with drones. But there's no doubting how violent it is, and that risk will spread. Uh, so I'm most concerned about evil humans using AI for their own purposes. And we already see that Putin attacks Kyiv with drones very, very often, kills people. Uh, I don't have a solution, but clearly it's a problem.

Yeah. And you spoke about kind of advances in biomedicine and how AI is potentially helping that. Could you be more specific about some like examples of how AI can be used to extend our lives and improve our biomedical practices?

Well, it can scan the space of possible drugs and suggest promising new candidates, say in a week, in a manner that might have taken humans 10 years. It does not mean that most of those promising drug candidates will work, In many cases, none of them will work, but we'll know where to look, so to speak, for good ideas. It still might take 20 years to develop the drug, but the initial search process is being greatly accelerated, and we may see no benefit from that for at least 10 years, but I think it will be highly significant. The same is true in material science, like what is a new material we might try to build or invent? It's very hard to know where to start if you're just a plain old human. AI will help us search that space, find promising candidates. Maybe only 1 in 10,000 pays off. But again, I think we will accelerate progress in at least those two areas. And we've already started down those paths. The payoffs might be long-term, but people are doing this now. It's not science fiction. It's just a question of how effective that accelerated search process will be. Hmm.

And are they doing that for every kind of illness like cancer, malaria, et cetera?

The major ones at least. Now, rare diseases, those are much less profitable, but I think over time as AI gets better and cheaper, we'll turn our attention to those as well. And they receive so little attention because they're not so profitable. It could be finding good candidate drugs for those is not always that hard. So that's, those are less of a killer, say, than cancer, but it's pretty promising. And rare diseases in the aggregate are quite a few humans. So I think there's a good chance. I mean, you're 20 years old, right? You could live to 100 in terms of expected value. I, I suppose I expect you will. You'll die of old age rather than cancer. Again, I don't think this will come within 10 years, but if you're 20, say today, normally you'd live to 82, whatever. You have 62 years of progress to get behind you. Uh, you could live to 105. I don't know what the number is, but whenever you would die of old age is probably your future fate. So have a good day, you know? Yeah.

Well, I, I would be happy with that, to be fair. Um, I've, I've read some stuff about This might be a bit sci-fi, but the idea of Neuralink and uploading your kind of brain to the cloud, is that actually possible or is that going to be science fiction? Because there's a lot of people saying we might end up being able to live theoretically forever with advancements in brain-machine interfaces and another, like a tertiary layer on top of our brain that's connected to AGI or AI. Is that actually possible in your opinion?

I'm not sure I'm a good person to ask. I do know right now 7 people have Neuralink connections, uh, disabled people, and it works for them. So that's great. Obviously we'll see much more of that. With only 7, you wouldn't quite say it's proven, but look, we basically know it works for some number of people. Uh, I'm more skeptical about uploading your mind or brain into the cloud. Maybe you can copy whatever, but I just think it's not you anymore. It's a copy of you and you're still dead. Whether it's feasible to do the upload, I don't know. To me it sounds very distant, but again, I'm, I'm far from an expert in these areas.

Yeah. And I guess if they're investing quite a lot of money into Neuralink, maybe that's not the goal right now, is helping people with disabilities, but it doesn't necessarily break the fundamental laws of physics that it could be feasible.

And I don't want a Neuralink connection. Now, if I'm disabled, I do. Uh, but the notion that I could say, plug an AI into my brain and become much smarter, I'm not looking forward to that, even if it's possible. I want to stay who I am. So maybe there's some distant future where you have to do it, or all the other brainiacs outcompete you and you starve. I don't know, it's very hard to speculate about those scenarios.

Yeah. And have you kind of spent any time or read anything about the Mars missions, Mars colonization?

I think it's very difficult that the human body and mind and your, your eyes, your, your circulatory system, how it holds up under space travel, uh, different patterns of gravity. I think we have some very big problems to solve. And it's not good for humans to go to space. Uh, I'm not a pessimist. I wouldn't say we can never solve them, but again, to me it seems very distant. And frankly, I don't get all the economic rationales. Like you, you live in Cornwall. A lot of Cornwall's kind of empty in a beautiful way, but you don't need to go to Mars. Uh, go to Nevada in the US. My goodness, that's really empty., easier to live in Nevada than in Mars. So what's the unique thing we can do on Mars? I don't really see what it is. So the incentive to succeed there to me is absent. Hmm.

I know an argument for colonization of Mars is almost like a backup hard drive in case we completely mess up our planet, but because of ourselves or because of some natural disaster. What do you think about that kind of backup hard drive idea for colonization.

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I suspect Mars would be dependent on us for a long time, maybe not forever, but look, space stations, I'm not saying they're easy, but they seem way easier than Mars. On the ocean, underground. There's a lot of other alternatives that might give you some kind of backup value. Uh, and the other, you know, if Mars truly becomes self-sustaining, they're a potential enemy of sorts. Now, they could wipe us out. I'm not saying they would, but if you're gonna look at existential risk, I'm not sure that creating a new country with a lot of technology is is necessarily the way to go. And they can just throw rocks at us from space or something. Very hard to defend from outer space. I worry about this with the moon more than Mars. Uh, the moon may end up militarized, and that's a, a great existential risk.

How would they be able to militarize the moon?

You just throw rocks from the moon, and by the time the rocks land, they're more destructive than powerful nuclear weapons. And how do you stop the rock? Like we intercept missiles with varying degrees of success, but like Israel did pretty well, right? But a big rock from the moon, you're toast.

How big does the rock have to be to—

I don't think that big. Uh, ask, you know, O3 model, it will tell you how big. But, uh, over time they're able to do it.

Yeah, I, 'cause I've, I've seen a diagram of, um, an asteroid. And how big it had to be. And it was kind of like a graphic of Earth, like a— Oh my—

Oh, okay.

I think they just tested the fire alarm. Sorry about that. There was a graphic of Earth and there was a little dot and then it kind of zoomed in and said the distance and how big it was. And that single dot that was going towards Earth is how big an asteroid might have to be to like potentially cause a natural disaster. I think it was like a kilometer or a couple kilometers wide. 'Cause I always used to think asteroids had to be massive and just hurl into Earth, but that's not the case.

Oh, they explode. It can take out a city quite readily. We're lucky it hasn't happened yet. So apart from evil people on the moon throwing rocks, there's just some natural risk. Possibly an asteroid or comet, you know, hit Siberia early in the 20th century. Very few people were around, but that was highly destructive. And so far so good, but no guarantee that will last.

Well, isn't there also the threat of the kind of, um, not nuclear winter, but the fallout winter in the sense that can't an asteroid create a lot of dust which blocks the sun as well? Isn't that an existential threat potentially?

And if they throw a lot of rocks, you get more of that. Again, the degree of seriousness there, I would ask O3. Uh, but I believe it's quite a problem. Hmm.

So are we actually trying to colonize the moon right now or taking steps towards that?

It's a very complicated situation. So China is doing the most and we're afraid that they will use that for military purposes. So we are considering what we should do in response. There is a kind of new Cold War going on about the moon. India is getting involved. Remains to be seen how it all will be played out, but it's a very active issue. There's a lot going on. Some of it is secret. Uh, so the risks I'm talking about, they're quite concrete and they're fairly short-term. Hmm.

Is that, it set, actually, are we, are people planning to set up places, or they might've already done that? Are they setting up places for military purposes, but also to extract resources as well? Like, are there any valuable resources on the moon that you're aware of?

I think it's very hard to transport them back in a cost-effective manner. There might be more valuable resources on asteroids with the same problem. So when the Chinese are so interested in the moon, we tend to think it's for military purposes, which I suspect is not wrong. And, uh, we believe they have that plan. How serious they are, you know, not all plans are followed through on. They have their own resource constraints. They have other priorities, maybe incorporating Taiwan. Uh, we'll see. But again, it's a real risk. It's not some kind of phantom thing that might happen in 30 years. It's an issue going on right now.

And are there any other proposals or plans that countries like China have that might be even more of a threat in the short term to the West or the US?

Well, I've long believed China is intent on incorporating Taiwan into mainland China, and that quite possibly could lead to a major war since the United States has pledged to defend Taiwan. Uh, what actually would happen, I think no one knows. Would China invade? Would they blockade? Would the US in fact defend it? Would we make a deal? Uh, but even if the fall of Taiwan happened smoothly, People then start to doubt all of America's other military commitments around the world. So many more countries would buy or build nuclear weapons. It's very dangerous in all scenarios. And that to me is a significant threat right now.

Yeah. And why would China want to incorporate Taiwan?

Well, they think it's theirs. You can agree or disagree, but if someone had taken Colorado from the United States, which we think is ours. Uh, we would try to get it back. And you look at the map, China's huge, Taiwan is small. They think they can, and maybe they can.

Well, didn't China take Tibet a few decades ago?

Of course. And the northwest Xinjiang, uh, has not historically been a part of China forever and ever. And even Yunnan, which was, you know, more or less with consensus. But that's only been a part of China since I think the 17th century. So China has grown as an empire. And, uh, the real, the historical connections with Taiwan are complicated. Often Taiwan, you know, was colonized by the Dutch, the Portuguese, the Japanese. Does that mean it wasn't Chinese? To some extent it is ethnic Chinese, even though they have their own indigenous peoples. Uh, China thinks it's theirs. The citizenry agrees. And, uh, very dangerous situation.

Yeah. And haven't China in the last 10 years also set up, uh, like a, a, a naval port in Pakistan, like a warm water port?

Uh, they have ports all over. So yes, Sri Lanka, East Africa, Djibouti.

Highest in foreign direct investment in Africa as well. They're pumping the most money into Africa too.

By far. And some of that is for normal commercial purposes. A lot of it is very good, very good for Africa. So by no means is it all bad, but some of it is military. Um, and even Chinese military purposes, I wouldn't say they're all bad. It may stabilize parts of East Africa, but much of it is bad. And the U.S. is not doing much in the way of countering. And I don't think we can necessarily. There's just a lot of the world that's closer to China than to us. And I think we can't contest it. But Taiwan is super important for high-quality chips. It's a longstanding U.S. ally. It's a free nation. Uh, it's a more complicated situation. If the Chinese build some rail lines in Ethiopia, we can just say, well, fine, we're a little uneasy here, but what are we gonna do? This is just gonna proceed. But with Taiwan, I don't know.

Hmm. And what do you think about kind of, you've said it's a big threat, China, right? Um, what about like a world war? You said if Taiwan gets taken over by China, could that lead to a another World War I or another World War II?

Well, it would be a world war. Keep in mind, we already have Russia at war with Ukraine, and U.S. and NATO and also UK are indirectly highly involved, and China is siding with Russia. So part of Europe is at war. And if you had part of Europe and part of Asia at war, I would say that's a world war, a somewhat arbitrary definition. But the conflicts are linked.

Yeah.

Now, is South America gonna be at war? Highly unlikely, but they were not during World War II either.

Yeah. And where do you see South America in the kind of global economy and maybe looking to the future? Do you think that could be a place where prosperity increases? I see, I, for example, Brazil, maybe could they come onto the global stage more?

Well, it— South America, all of Latin America, I think is quite underrated. A lot of the world never goes there. Not for me, but for many people it's quite distant. There's not a lot of English spoken there, unlike most of the rest of the world. But those are, as the poorer countries go, those are the richest of the poorer countries. You could say many of those parts. They have okay education systems. They've big problems with crime, often slow growth, a lot of complacency. But if you're looking around the world for places with potential, I think a lot of that you would find in Latin America. They're also quite insulated from war and foreign conflict. That will be a growing advantage the more that other places are fighting. There's really no major dispute. They need to worry about not being settled. They're discovering more resources there. They're getting much stronger ties with North America due to immigration. So I would be modestly bullish on Latin America.

Yeah. And do you think there could be another superpower in the next century, for example, that either overtakes the US and China or kind of competes with them and What country do you think that will be?

I don't see who it would be. So in terms of numbers, India obviously is a candidate, but their per capita income, it's somewhat over $2,000 per head using market exchange rates. That's so low. They just seem to me pretty far away and they have big governance problems. I'm not even sure it made sense to have India be, you know, one big nation. Uh, so I guess they're the candidate. Maybe they're a new superpower. Uh, historically India has not been expansionist, so they still strike me as most likely number 3, and US and China is the top 2.

But then they also, like you said, the advantage of South American countries is they're not in conflict with each other. Obviously, historically Pakistan and India have had squabbles, especially about in regards to the Kashmir regions in the northwest. Do you think that could potentially kind of keep them back even if they did solve their per capita problems?

Well, it massively keeps Pakistan back. Pakistan is quite stagnant, in some ways retrogressing. They're going through, I might be wrong on the number here, but I think it's their 24th IMF bailout. That's insane. Like, okay, you need it 2 or 3 times, but 24th, like, clearly something is not working. India has been growing at 4 to 6%, sometimes a little higher. Um, I mean, one interesting thing about foreign conflict, you see this in English history, it also gives you an incentive to run your country better. Like, get your act in order or someone takes you over. So England and France historically was actually good for England. England developed a navy, better governance, better ability to raise money through Parliament. Uh, a lot of South America doesn't have the same incentive, and I think that's one reason why they're stuck. So potential for conflict is not in every way bad for a region, provided at least it doesn't destroy you.

Yeah. And am I correct in saying that in recent history, at least, no country's been able to kind of conquer or fully take over Afghanistan. Is that correct?

Depends what you mean by takeover. I mean the US-backed forces, including the Northern Alliance, they took over from the Taliban, but still never ruled much of the country. But nominally they were the government, not anymore. So what really counts as a takeover? It's not really a single country, Afghanistan, so. Maybe in that sense it will never be ruled.

But why have countries like the US and Russia kind of put a lot of focus or, or at least some focus and resources in Afghanistan? What's kind of the benefit of that for them, for the big, bigger countries?

Well, Russia, I understand, of course they screwed it up badly, but Soviet Union is quite close to Afghanistan, or I mean, adjacent at the time, and they had a large and potentially restive Muslim minority in their own south, and they were afraid what might spread from Afghanistan to their own people. Now everything they did made that worse, but at least it's clear to see why they cared about it. Uh, the United States, if Osama bin Laden and 9/11 had not happened, we would not have gotten involved. I think we made a big mistake trying to run the place. I think after we, you know, got those forces at Tora Bora, we should have been stronger in attacking and killing them, and then just called it a day and gone home forever. That's not what we did. I just think it came at a funny time in American history where we had won the first Gulf War, and we had neutralized Yugoslavia, and we felt we could do anything. And that turned out to be quite wrong. Hmm.

And for Russia, what's stopping them from being a global superpower, do you think?

You know, I think about this question so much. My wife grew up in Soviet Union. We know many Russians, Ukrainians. There's something about the culture that's totally screwed up and lack of trust and authoritarian, but where it comes from ultimately, I mean, not enough seaports is one reason, but it has to be much more than that. Family structure is quite authoritarian. A lot of alcoholism. Eastern Orthodox religion, the form of it they have seems not so helpful. Too much a resource state. Their immediate past 19th century history based on conquering a frontier made them aggressive. Paranoia about being invaded from the West, Napoleon, Hitler, all those factors, ongoing loss of territory at different times in history. You add all those up, it's still incomplete, but you have somewhat of an explanation.

Yeah. And is it kind of the lack of warm water, open ocean port that it could be a reason for holding them back? Cause you mentioned seaports. And they obviously have one right now in Crimea, but you have to go through the Dardanelles Strait, which is controlled, I think, by Turkey, right? And then you have to go through the Mediterranean, past the Strait of Gibraltar. Again, that's quite a long way and a lot of people to go through if you want to set up a navy there. And then the ports they do have in the north isn't always accessible because of the ice. So is that a problem as well, not having that blue water navy?

I believe it is. It's hard to prove propositions like that. But I very much agree with what you just said. And if you compare it to England, which has water everywhere, in a sense, I do think it's made the country more open and freer and more cosmopolitan. Hmm.

And again, in terms of their geography, is the prevalence of the great Northern European plain, that flat land that goes from Western France all the way through Ukraine, is that a reason why they're so defensive against the West because it's kind of left open for them. There's no mountains or geographical features that could stop the West from going into Russia like it has done in the past with Napoleon and the Germans, Kaiser in World War I and Hitler in World War II. Is that again, creates an existential threat?

It is my opinion. And each of those three times, the Western powers got pretty far in. They were eventually repelled, but it leaves a mark on a country and they view NATO as being aggressive against them through Ukraine and other places. They think NATO wants to split up Russia, cause it to decline and fall apart. So there's a lot of paranoia there.

Yeah. And how valid are those arguments for the Russian people? If you were Russian, would you probably feel similar. Like, I mean, it's hard to tell from a West, from two Western people speak about it, but how much of it is propaganda and how much of it actually is an existential threat from the, uh, from the West?

I think there's a circularity here given that Russia can be so evil. A lot of the West does want Russia to decline or break up or fundamentally change. I don't think we're intrinsically committed to the destruction of Russia by any means. But if they're going to act the way they do, how can you not want something different? So it's self-validating in that sense. So it's not completely paranoia, but I think the Russians have a hard time seeing that they've brought this on themselves. And there's plenty of countries, you know, say India, which is not so aggressive toward external parties. People in America are not longing for the breakup of India or wanting to be aggressive against India. They just basically let it be and it, it's fine from our point of view. So I think the burden of change is really on Russia. People are going to be afraid of it as long as it is the way it is. But it's wrong to think they're simply stupid and paranoid. They're not stupid at all. They do latch onto something that is quite real. Russia thinks they can win. That may or may not be correct. And they think the West will lose interest in defending Ukraine. That also may or may not be correct. One problem they've had, you know, to take over a country, you typically now need two things. A, control airspace, which they don't. Ukraine has U.S. technology for one thing, and its own drones. And then you need to send in soldiers to conquer a place. But any Russian soldier that crosses a certain line The drones can pick them off. Russia's losing men at some incredible rate. And how do you make progress if you can't send your people through? So you don't control the air, you can't send your people through. You have this hope that in the long run you'll win by attrition, but progress is very hard to come by.

Yeah.

And what is the ultimate goal, do you think, for Russia in the Ukraine war? Do they want to take over all of it, or do they only wanna take up the maybe more Russian cultural speaking regions? Like, do you know the overall goal?

Russia thinks it's theirs. But that said, in my opinion, and there are different opinions here, I don't think they're that interested in Western Ukraine, which they view in a sense as being like Poland and too hostile to be worth ruling. But the other parts of Ukraine, which have been ruled by Russia, Soviets, since Catherine the Great, just like China thinks Taiwan is theirs, Russia feels that is their birthright. And furthermore, they feel if they don't control it, it will be a kind of hostile spearhead pointed at their belly, and they don't want that. So again, however evil or terrible it may be, it is somewhat explicable.

Yeah. Yeah. And going back to the US, do you think the greatest threat is from within, or do you think it's from other countries like China?

I don't think there's any realistic chance of any other country conquering the US or even dominating it. So yes, our greatest threat would be from within. Uh, but still it's the case if China could push the US out of Asia and Taiwan, uh, we would have much lower standing in the world. And that would hurt American interests, but in fact, you know, we would get by. We'd still be a very wealthy country.

Yeah. And is it almost impenetrable at the moment from direct invasion just because of the sheer size, the geography of it, the fact that most of the population has guns and they're very patriotic and they have a massive army? Is it kind of not too much to worry about if you're an American citizen? In the coming decades.

That's right. Nuclear weapons also, if we had to, we could throw rocks from the moon. I am worried about things like terror drone attacks on US citizens. I think those could start fairly soon. It wouldn't be a large number of people, but it would fundamentally change public life. Well-known people might be afraid to just go outdoors. That would be a significant alteration in how things are.

And going back to space, aliens, intelligent extraterrestrial life, what are your opinions on that?

Well, it's a, it's a big galaxy and we are finding a lot of habitable planets. So I think there's some real chance Earth has been visited or is being visited by alien drone probes. I'm not sure how much it matters if they're here. They're not doing that much to us, which is good. They're not blowing us up. So, uh, I don't rule it out. Let's put it that way.

Yeah. But is there a possibility that we've made it past, or we're the only species that have made it past some sort of Great Filter event and that we're the only highly intelligent beings out there right now?

I would be shocked if we had made it past the Great Filter, given we can still destroy ourselves at any time. Uh, it strikes me as highly unlikely that we're the only ones when you look at the numbers, but it's one of these, no one knows, right?

Yeah.

And do you think it's a good idea to send communications out to space to try and contact aliens?

'Cause I know it's a terrible idea, but it's too late. Probably. We've done it. Uh, it was a big, big mistake. Let's hope distance protects us. Hmm.

When did we do it?

Well, TV and radio have been going into outer space for a long time. Now, how detectable they are with distance, I'm not sure. But we've also had explicit projects to say, hey, hi aliens, like, here's some Chuck Berry music, what do you think? And those to me seem like mistakes.

Yeah.

Um, I wouldn't keep on doing them.

Yeah, yeah, yeah.

And if we did become— encounter aliens, what are the chances of it being almost mechanical, like a robot, like a drone? Do you think there's a high chance of it being a machine they've created rather than a physical kind of biological organism that reaches Earth.

Yeah, very high chance. It's so much easier to send AI. We know AI works, right? The aliens could have advanced AI. To pack up little green men for many generations of space travel, I don't see the point.

Yeah. And, um, I know you read a lot of books. I was just wondering how your reading, how your reading habits might have changed in the last few years?

Well, with AI, I'm more likely to read fewer books and keep on asking the AI about what's in the book and the questions I have about the book. And I find that more efficient than just reading more books because I can focus. It's like I create a new mini book every time I ask the AI something. And that's great. I love that.

Yeah. So do you, do you read parts of the book and then ask AI, or do you just see, oh, I like the look of that title. Me about it and then ask follow-up questions. How does that process work for you?

I'll read parts of the book or sometimes the whole book, and as I go along, typically I have many questions and I just keep on asking, and I may end up going down rabbit holes that are not those of the book, but that's fine. You know, I'm doing what I wanna do, so it's been great.

Yeah. And am I correct in saying you are writing a new book titled Mentors?

Correct. Absolutely.

Which you said could be your last?

I'm not gonna stop writing, but if the world is changing very fast and it takes 3 years for a book to come out, I'm not sure it makes sense to just be writing books. So yes, it could be my last.

And without revealing too much of the content of the book, what are some effective ways to mentor young people?

A lot of the content of the book isn't there yet, for one thing. How to be a good mentor, how to be a good mentee, what are the dangers for mentors and mentees, those are some of the themes I cover. The most important thing, I think, is just to be trustworthy. That's the first piece of advice I offer in the book. A lot of it I'm still working out. I've spent my life both being a mentee and a mentor. So I think I'm relatively qualified, but there's not a clear, easily accessible body of research on the topic where you just tell people, well, here's what we've learned, here's the science. It's not like that. It's fairly subjective.

Yeah. And how do young people nowadays find mentors? Is it kind of not like, hey, be my mentor. Is it more of an informal kind of relationship? How does that work and how do you think young people can find more mentors to to help improve their lives?

It's typically informal. I think usually it's a mistake to say, I want you to be my mentor. It scares people a little, like it's an obligation. You should think of it in terms of a mutual exchange. And what benefit can you bring to the potential mentor? Like, you should be mentor-worthy. And today, a lot of meeting is done online, of course, but I think simply volunteering to fly somewhere to meet someone for lunch There's no downside. Probably they'll tell you no, but I've met many great people that way, and there's not that much cost to trying, and it can change your life. So I recommend that strategy.

Take that into account. Definitely. Um, there's probably about 100 of these, but for a few final questions, this one specifically, what topic, hobby, or area has recently, uh, has recently, you've recently been obsessed with?

Romanesque medieval churches, how many beautiful works in Europe were created at more or less the same time in a common set of styles, how much they cost relative to national wealth, just how many of them are truly beautiful and stunning. In the UK, I went to Durham to see that cathedral, which is fantastic. Go if you've never been. And this wave of just genius at such a scale. Really has wowed me to learn more about that. It's not that I didn't know before, but when you study something and go see it, it has a different impact on you.

Yeah, for, I completely agree because luckily I've lived near Canterbury my whole life or in Canterbury and down the road from the cathedral and just seeing the scale of it compared to the surrounding buildings, the kind of not sculptures, but the works of art, the gargoyles, the stained glass windows, the paintings. And I just think, how were they able to do that?

That's right.

In those days, how was it possible? Do you know, did, how long did it take usually for these massive cathedrals to be built?

So many of them. And the more you look at it, you realize there's just hundreds. They're not all as good as Canterbury, but they're generally really quite good. So the quality standards across so many different areas, that to me is part of the puzzle. If there were just 2 or 3 great ones, like one in London, one in Paris, you'd be like, okay, you know, but man, it's all over certain parts of Europe and none of them suck.

Yeah, it's very true. And I think I probably take it for granted living here. I feel like if I was living in a different country where there weren't those incredible piece of architecture, I definitely appreciate it more. So next time I see it, I'll definitely be more grateful for it. Last question. If you could give one piece of advice to your 20-year-old self, what would it be?

I would just say, keep on going. It's gonna work out. And I guess I did. So maybe that's superfluous advice, but it's worked out.

Yeah.

No, no, that's great advice. I kind of replay that in my mind Sometimes when I feel like not necessarily quitting, but I feel less motivated, I just think in my head, keep going, don't stop. So if you do that for a long period of time, it compounds, right?

Yeah. I also would say, uh, go to Iran while you can before it becomes impossible. What? Because I never did that and I could have and I should have.

I was gonna say it's never that easy, but I could have done it.

Yeah.

I thought you meant now go to Iran now.

I was like, oh no.

No, you can't go now. Yeah. But there were times, like I think in the 1980s when I could have gone, I would've had to go like with a German tour group different ways, but there were ways you could do it. It was quite safe and I would've seen the country and I just thought, no, it'll clear up. I'll have these other chances. Now, I don't know, it's not looking that good. We'll see.

Yeah, we will see. Tyler Cowen, ladies and gentlemen, Tyler, really appreciate your time. Really appreciate your wide knowledge on so many different topics, and I hope the audience learned as much as I did today. Thank you very much.

Thank you very much, Jacob, and please keep me posted on how your own work goes.

Brilliant. Thank you very much.

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