Senior Research Fellow at the Center for Growth and Opportunity. Really into this whole progress thing.
elidourado
Karma: 98
Why progress needs futurism
I think TFP is not really ideas. It is deployment of production methods. New ideas give us new production methods, but they don’t really help us deploy them. For deployment, we need a lot of effort (1% inspiration, 99% perspiration) and also high-quality institutions.
How do you explain the TFP drop in Venezuela? Did they suddenly lose a bunch of ideas? No, their institutions deteriorated and their deployed production methods declined in quality.
Same in the US. The creation of the NRC reduced the quality of the production methods we could deploy. NEPA too. Lots of other things one could cite. Simply letting us use the ideas we already have as effectively as possible would increase TFP significantly.
So explaining your three data points:
Institutions really improved pretty significantly over the last 1000 years (Magna Carta, reductions in violence), leading to superexponential growth.
At a very crude level, the basic framework of economic institutions have been mostly static over your second period, leading to plain exponential growth. (NB: to make this fit, I would start counting after the end of slavery, and still would not wish to deny the importance of improvements in social institutions leading to greater racial and gender equality).
Since 1970, our legal and economic institutions have declined in quality somewhat, leading to slower TFP growth. Mystery solved.
Another way to put it is: are ideas getting harder to use? We know that if we put the magic rocks together, they get hot and can be used to generate steam and electricity. But if we’re not allowed to make effective use of that information, it screws us almost as much as if we didn’t have it in the first place.
Not to be a double contrarian, but I am also skeptical of a lot of econ research on institutions. Ha!
State capacity eats interest rates for lunch
Agreed, Jason. I’ll add that it’s trendy among the longtermists to speak of biosecurity, but it seems obvious to me that the FDA, not the legality of admittedly dangerous research, is the biggest obstacle to genuine biosecurity. We could have had vaccines for Covid by spring 2020, and without Eroom’s Law we might have had them by January 2020. And we could have had strain updates in real time. So an agency that was designed to make us safe made us less safe, and many people focused on safety in this domain continue to miss the forest for the trees. Often arguments about safety are problematic because of these kinds of failures, not because safety isn’t a valuable form of progress (it is).
Maybe a little bit of naïveté is good.
Yes, there are benefits to trying new hard things that are not captured by the entrepreneur, so we should want them to try even when the cost/benefit to them is marginal or even somewhat under water.
Eli Dourado AMA
I think the biggest obstacle is FDA clearance for these devices.
The FDA seems to be concerned about people using consumer-grade products to make medical decisions. Let’s say Apple or Google release a smart watch with non-invasive blood glucose capability. Maybe it’s not perfectly accurate, but still useful information for non-diabetics to see how their blood glucose spikes after eating and to monitor the speed at which the body clears out the glucose.
If a diabetic customer starts giving themselves insulin shots based on the watch instead of a measurement from a medical device, that could be bad. Therefore, FDA is very restrictive about devices that report medically-relevant facts, even if there are disclaimers that they should not be used for medical purposes.
So it’s a slog to get the new non-invasive tech to be as accurate as medical-grade tech, to prove that they are equally accurate, and/or to get FDA to sign off on disclaimers that say the data shouldn’t be used to administer medication, etc.
I still think we’ll get there. There’s some info online about the Apple/Rockley Photonics partnership. You can expect a future Apple Watch to have not only its current sensor suite but also measurements for blood pressure, blood alcohol, lactate, and glucose. Blood pressure in the next 2 years, the rest maybe a couple of years later.
Why aren’t insurance companies paying for it yet? I think the current device sensor suite isn’t high enough on cost-benefit for them yet. As prices come down and the new capabilities are added, it seems like a no-brainer. Like in 2035 a device with all the capabilities I described above might be $100. Probably worth it then.
I kind of did this analysis in 2019 on “how to move the needle on progress” and landed on health, housing, energy, and transportation as important sectors to fix.
If you think about it in productivity terms, in general equilibrium, low-productivity-growth sectors will tend to get bloated as a percent of GDP, while high-productivity-growth sectors will tend to shrink.
I still think the 2019 analysis is basically right, although I would emphasize one particular aspect of tractability, which is having a specific solution in mind. Tom Kalil talks about this as a test of policy maturity: suppose you have a 15-minute meeting with the President of the United States, and after the meeting the President is willing to call somebody and tell them what to do. Who do you have him call and what do you have him tell them to do? Until you have an answer to that question, your policy solution isn’t mature.
I think there’s a division of labor in the policy world between the more researchy and more activist groups. The researchy people should be working to discover mature policy ideas (in the Tom Kalil sense) and then the more activist groups should be working to get them implemented.
So for the research side, who are starting out without mature policy ideas and trying to generate them, tractability isn’t really a concern, it’s more about importance. The goal is to generate something tractable. The more activist people need to think more about taking the mature policy idea and running with it, and for them, tractability (political viability, etc.) is more important starting out.
Progress is so hard to come by in the policy world that I don’t think we should disqualify anything for not being neglected. Even housing/YIMBY stuff, I’m happy for more people to go into it if it gets us over the line.
So policy researchers should work on big industrial sectors like health, housing, energy, and transportation (and major cross-cutting issues like immigration and permitting), and try to come up with mature policy ideas that increase productivity. Then the more activist groups should take the tractable ideas and amplify them and try to get them over the line.
If I’m writing a priority list for another org, the first question I’d ask is whether you want to be a more researchy org or a more activist org.
Given the trade you’ve laid out, I’d take the scientific breakthroughs.
I think there is no agency to regulate nanotech, so it would be a “born free” industry, and we’d see a lot of rapid progress. Benevolent AI too. On the cancer and aging cures, yes, FDA is broken, but they’d get through approval in several years, and then we’d have them.
I do think, however, that the policy environment is worth many years of R&D breakthroughs, perhaps 10 or more. We’d get a revitalized transportation and energy industry, dirt cheap housing, better consumer health tech, and a faster rate of R&D development going forward. It wouldn’t take much unbalancing of the scales to make me flip the answer.
1. Deregulate land use (YIMBY stuff)
2. Make transportation insanely great: eVTOL, supersonics, small airports with minimal screening, autonomous dynamic bus service
3. Lower the cost of clinical trials and expand freedom to go around the FDA through informed consent
4. Reform permitting/abolish NEPA/end vetocracy
5. Energy abundance/fix the NRC/fix the nuclear industry/expand geothermal/deploy solar
6. Make government that works and is run by grown-ups (I am a big fan of ranked choice voting for this)
7. Big increases in immigration, with concessions to the xenophobes that immigrants probably need to speak English and get deported if they commit serious crimes
8. End make-work policies that are embedded in almost every sector
9. Make sure safety rules are at least actually adding safety instead of safety theater
Great question.
I am glad the progress movement is still decentralized and organic. It’s more a community of fellow-travelers than a centralized organization setting priorities and allocating funding. I feel like I gain a lot from people in the community who are pursuing very different approaches than I am, and I don’t want that to stop.
I think being organic is better for influencing the culture in the long run. For getting specific things done, if we ever agree on what is to be done, we may need to think about some light centralization at some point.
As a writer: influencing other people, building consensus on what the problems are, building a network of people that are aligned.
As a researcher: coming up with highly-specific policy solutions to an important problem. Ideally, this would be a small, non-controversial provision that someone could slip into a bill unnoticed.
So for example, I have written a lot about the problems with NEPA and permitting, and I think there’s been a consensus developed among a big chunk of the political spectrum that it’s a real problem and we need to fix it. At the same time, I have been trying to push a specific fix for geothermal permitting, which is to give it the same categorical exclusion that oil and gas has.
Two different kinds of change, and I try to do both, but succeeding at the latter is rare and extremely valuable such that if you do it only a few times in your life that is a successful career.
On career switching: I would advise people to look less at creating a coherent career, where there is a logical progression from one step to the next, and to instead just find a job that interests and inspires you to do your very best work. My own career has been pretty haphazard: I was going to be a professor, then no just kidding I’m going to do nonprofit policy research, then oh no I am going to work at a startup, then back to policy research. None of this was part of a deliberate plan.
One heuristic that I think works well:
1. What do you think is the single most interesting thing going on right now?
2. How can you put yourself at the center of that thing?
I’m not sure what the privacy implications are, but they can definitely give you the devices for free if it’s cost-effective for them to do that.
A very important question is how long solar prices can continue to drop.
Assuming it continues a while, I have questions about whether it makes sense to transmit electricity long distances in such a world. A lot of smart people think transmission is very important to the clean energy buildout, but I don’t know. Transmission adds a fair bit of cost, and if solar gets cheap then it might make sense to pay the rooftop premium rather than the transmission premium.
So if solar keeps dropping in price, it may make sense to have rooftop solar everywhere + off-grid solar to power industrial applications.
Gigawatt-scale nuclear I think we could do for LCOE of 2¢/kWh if the industry and regulations were not so dysfunctional. Modular reactors will always be more expensive than that (maybe 4¢ best-case scenario), but the advantage of modular is that you reach some level of scale in manufacturing and deployment, which is where gigawatt-scale has really sucked (every gigawatt plant is bespoke). Modular is also better because you don’t have to do as much transmission as in a GW-scale plant.
If we get good at drilling holes in the ground, I think 3¢/kWh almost anywhere on the planet would be a good target for advanced geothermal. Also comes with the advantage of not having to worry about spent fuels and nuclear proliferation. Geothermal is also fantastic for low-grade heat needed for certain industrial processes like paper mills.
Wind is already pretty cheap, but it relies heavily on long-distance transmission, which as I’ve noted is a headache.
For mobile applications, high-density batteries are definitely possible. Batteries that have near the energy density of liquid hydrocarbon fuels have already been made in the lab, the challenge is switching over the manufacturing system and reaching scale.
Synthesizing liquid hydrocarbons is a great solution, especially until really high-density batteries arrive. I believe I bought the first quantity of zero-carbon jet fuel in the world when I was at Boom.
I got interested in wireless transmission for space-based solar. A lot of people have had doubts for a long time about whether the math works for space-based solar, but both panels and launch prices have plummeted, so people are giving it a second look.
One of the things about wireless transmission that could add value to space-based solar is being able to shift output on the fly from one receiver on Earth to another on a millisecond-to-millisecond basis. I thought that was pretty cool.
I haven’t really looked at it for terrestrial applications, though.
IRA:
- Very expensive, and we should take fiscal responsibility more seriously than we do.
- Has some good stuff in it.
- Will only translate into significant change in the real world if it is paired with permitting reform and other policies focused on deployment. Right now we are basically subsidizing companies to push through the headaches associated with getting to market, but it makes more sense to reduce the headaches.
- It is more protectionist than I would like, but Europe is the most mercantilist place on Earth, so I don’t have a lot of sympathy for them on this.SMRs:
- The lowest possible LCOE that you can get with SMRs is higher than the lowest possible LCOE that you can get with gigawatt-scale plants.
- That said, SMRs could theoretically solve the biggest problem that we have in nuclear, which is that we don’t churn out identical plants in high numbers.
- Also, SMRs allow lower-scale plants, which means less reliance on transmission infrastructure, which is important.
- I’d like to see ultra-small reactors become a thing. Kilowatt-scale. Generator replacements. Portable.
- To really make nuclear portability work, it would be good to have solid-state thermal conversion, like thermoelectric generators or thermophotovoltaics. These would be more compact than turbines, and could come down in cost faster.
It’s true, the Supreme Court has ruled against vetocracy with NEPA every time, usually unanimously. I think for potential litigants, there isn’t much value in going all the way to the Supreme Court. It’s possible the court won’t hear your case, so you have to take steps to comply with the lower court’s ruling anyway. Once you’re doing that, spending more on litigation isn’t going to get you anything; you can always just fix the EIS and move forward.
In other words, taking a case to the Supreme Court for the purpose of setting a new precedent is a public good, and a lot of people don’t supply public goods all by themselves.
Stuart, I’m not seeing how it is a conflict per se to prescribe actions that would generate progress and also study what has worked to generate progress.
In the example you give, certain advocates of charter or public schools skew research on what creates valuable opportunities for children when they give advice. But the problem is that their true objective function isn’t aligned with their stated objective function. They claim their goal is to advance opportunities for children, but what they really want is to promote or impede charter schools. So they skew their advice in service of their real motive while couching it in terms of their stated motive.
This could happen in progress studies as well. Suppose a progress studier’s true commitment is not really to progress, but rather to libertarianism or leftism. Then they might put forward policy solutions in the language of progress studies that actually advance their other political commitment at the expense of progress. We should be wary of this.
Yet to fully separate the functions of research and advocacy will never work. It may be fine if there are at least a few people working in ivory towers who are solely studying what works to produce progress. But things immediately get muddier when you introduce any advocacy at all. Suppose I tried to be a pure advocate, and that my true goal is to advocate for policies that advance progress. Where am I supposed to find these policies? Probably I will need to read a lot of stuff on what works to drive progress. Even if there is a well-functioning pure academic progress studies community, I would at minimum need to read a lot of the papers and evaluate the literature, essentially doing my own meta-analysis. That’s basically research. Given the current state of the field, advocates probably have to go even deeper than just this minimum level of research.
I think I could accept some softer claims.
1. It would be good if there were at least a few people who as pure academics study what works to produce social progress. These people could serve as a check on advocates misconstruing research to advance some other agenda.
2. We should be attentive to the fact that as a movement becomes politically successful people might use the language of that movement to push for other goals. This matches the charter schools example, using the language of opportunities for children to drive an ideological victory for or against charter schools.
Curious to know if you or anyone thinks I’m missing anything important here.