Tyler Cowen: Prepare for the Brave New World | Knowledge Project Podcast (Audio)

KEYPOINTS

• 01

  'Average is over': you either work with smart machines or compete against them.

  The divide Cowen describes is whether computers enhance your productivity or replace you. Old factory jobs that needed no degree built the middle class, but that era is mostly gone. Today's work means relearning technology every three to five years, which many people find very hard. Two groups do well: the highly conscientious who are good with tech, and people with superb people skills in sales, marketing and management, which computers won't take over soon. His advice is to figure out which you are and be one. Doing both, like Mark Zuckerberg, is rare. The outlook is mixed: income gaps widen, but automation makes many goods nearly free, so the poor consume better than you'd expect.

• 02

  Regions and countries are diverging, not catching up.

  After World War II, poorer American cities caught up with richer ones. Now poorer parts of Louisiana and Mississippi fall further behind Silicon Valley. Creative clusters form where rents are very high, and you're either in one or not. Much of Eastern Europe is emptying out despite the economists' convergence story. Even the clusters suffer: most artists can't afford Manhattan, or now Brooklyn. What we gain is access to culture in seconds through Spotify, YouTube and Netflix. It's denser, if less often live.

• 03

  Global markets push value toward what's scarce: prime land, good ideas and unique skills.

  Since he first wrote that, Cowen says, it has become more extreme. Land prices in London, Paris and top US cities keep climbing, and a hit product that once reached Western Europe and Japan can now sell to billions in more than 100 countries. Attention is scarce too, especially for high earners, so media rewards authentic or niche work like The Sopranos or The Wire: 'you can't just put slop out there anymore.' He expects most newspapers to depend on wealthy owners, with The New York Times and The Wall Street Journal among the few that stay profitable. Bundling classifieds, sports and world news together 'was always crazy'.

• 04

  America has become a 'complacent class': individually rational safety that makes the country collectively worse off.

  Americans move less, worry more about how they raise children, medicate more, and run a less dynamic economy, with slower productivity growth outside tech. Every item on that list makes sense individually. Together they mean slower growth, budget strain and 'screwy politics'. Change has actually slowed. His grandmother saw antibiotics, cars, radio and flight arrive by age 50. At 56, Cowen lives in a 50-year-old house and drives a car anyone from 1968 could operate. Post-war science fiction imagined utopias; today's is dystopian. Complacency can't last, and he cites the Trump phenomenon and the loss of Pax Americana as early cracks.

• 05

  We've stopped building the physical world. Price the roads instead of waiting for technology.

  Parts of New York's subway signaling date from the 1930s and 1940s. People prefer homes from the 1920s–50s, though no one wants a phone from then. Getting around takes longer than it used to. Cowen favors congestion pricing: tolls on I-66 into Virginia can hit $30–40 at rush hour, but without them 'it was just a big parking lot'. London and Singapore show it works. Self-driving cars could make traffic worse if people send empty cars to fetch smoked salmon from Whole Foods.

• 06

  The future belongs to the 'meta-rational': people who know their limits and when to defer.

  Algorithms will increasingly tell you what to buy and at what price, and people who think they can beat them will make more mistakes. The key skill is knowing when to trust Yelp, a podcast or an expert. 'Epistemic modesty' now pays off more than raw IQ. Build judgment by combining trusted mentors face to face with 'extreme and intense online experimentation': Wikipedia, creative Googling, blogs and a carefully curated Twitter feed. Online learning built in about 15 years is, he says, among the world's greatest achievements, like 'the 1780s for classical music'.

• 07

  Learn to be re-energized by never being the best. Chess taught him most moves are mistakes.

  Online, someone is always smarter or stronger, unless you're Magnus Carlsen. When peer groups were local, that wasn't so obvious. Cowen played tournament chess intensely from about 10 to 16. Following Alexander Kotov's How to Think Like a Grandmaster, he wrote out his own analysis of games and compared it with a grandmaster's 'to see how rotten yours was'. An Elo rating tells you exactly where you stand every morning. He calls the lesson compound learning: keep learning a steady percentage a year and 'stay alive'.

• 08

  Avoid 'devalue and dismiss', and assume you're wrong more often than you think.

  Bayesian logic says someone always knows more than you, but you need judgment to pick whom to copy. So hold opinions more loosely and become a generalist at evaluating sources, since 'the internet makes smart people smarter and stupid people stupider'. If something offends you, don't assume it's wrong. Cowen prefers books he disagrees with, because books he agrees with bore him. In arguments, including with a spouse, you're right less than half the time, since often both sides are wrong. Internalizing even 10% of that helps.