4 min read

What makes humanity prosper

Exra Klein and Patrick Collison dive into what makes humanity prosper; another paper looks at what caused the recent inflation; dynamic zero-COVID in action; and what Nostradamus and Fukuyama can teach us about forecasting.
Prosperity cartoon.
Prosperity is a moving target. Source.

1—What makes humanity prosper

The NYT's Ezra Klein sat down with Patrick Collison, the co-founder and CEO of Stripe, for a long discussion on his views of the world. Here's a small snippet on growth and welfare:

"I worry a lot about the basic stability of a society that does not successfully generate and make sufficiently broadly accessible the benefits of economic growth. The world simply has too little prosperity. And if it is not the case that people in the U.S. or people in any country — if they either feel like things aren't progressing, or if they feel like maybe somewhere distant from them, things are progressing but they personally will never be able to benefit from it, I think we put ourselves in a very dangerous and likely unstable equilibrium.

And if you go back to — well, you don’t have to go back very far in history to see, obviously, plenty of instances where this kind of instability brought the whole house of cards down. And so as a consequence of that, I worry a lot about, how do we simply make sure that — or one of the small things we each individually can do to try to make sure that society is generating enough economic gain and enough broadly experienced welfare gain that the whole compact can be maintained?"

Then there was this on whether funding for science is being allocated appropriately (Collison runs Fast Grants, which makes a decision on whether to provide a research loan within 14 days):

"But much more specifically and narrowly, if you had complete autonomy in how you spend whatever grant money you're getting, how much of your research agenda would change? And our intuition was that maybe a third of people would like to be doing something meaningfully different to what they actually are.

But of these scientists, and these are really good scientists, four out of five told us that they would change their research agendas, quote, 'a lot.' We gave them three options. Not much, or not at all, a little, and then a lot. Four out of five chose the maximum option on our survey. So I just find this incredibly thought-provoking.

Basically, we seem to be in a situation where most of our top scientists aren't doing what they think would be best for them to do."

There's much more in the full discussion, to which you can listen or read the transcript here (~66 minute read).

2—What caused the inflation

Robert Barro last month claimed that the recent bout of inflation came from the pandemic's debt-financed fiscal spending binge and aggressive monetary policy. Now there's a new working paper from the Chicago Fed which comes to very similar conclusions:

"The recent fiscal interventions in response to the COVID pandemic have altered the private sector's beliefs about the fiscal framework, accelerating the recovery, but also determining an increase in fiscal inflation."

The authors suggest that central banks might have a tough time controlling the present inflation without governments also fixing their post-pandemic spending and debt problems. They warn that without a credible fiscal plan, tighter monetary policy could lead to stagflation as "agents expect that the increase in the fiscal burden will also contribute to generating future inflation".

You can find the full paper here (44-page PDF).

3—"Dynamic zero-COVID" in action

Image showing people queueing for a flight back to China in full hazmat gear.
China is stuck in 2020.

4—Nostradamus and Fukuyama

"Never trust doctors who dabble in futurology."

That's according to Scott Alexander (not his real name), a doctor, who wrote a post dissecting some of Nostradamus' most famous prophecies and concluded that they were probably just him "kind of saying random stuff and some of it's sticking by sheer luck".

That then leads him to Fukuyama, a political scientist who in 1992 wrote a book arguing:

"...that liberal democracy was the last form of government we would ever need, everything would get more and more liberal democracy over time, and history - in the sense of a constant progression of paradigms and worldviews and political-economic systems - would settle down and stop, in favour of everything just being liberal democracy all the time."

Alexander gives that prediction a C minus, but also dubbed Fukuyama "a sort of anti-Nostradamus":

"Nostradamus said some meaningless vapid stuff in a way such that everyone insists on interpreting as him being a genius; every time something new happens, it always proves Nostradamus right. Fukuyama said some (no offense) kind of vapid stuff in a way such that everyone insists on interpreting as him being a fool; every time something new happens, it always proves Fukuyama wrong. It's hard to imagine what series of events could ever debunk the former or vindicate the latter."

You can read Alexander's full post here (~15 minute read), in which he attempts to place other forecasters such as Nassim Taleb and Gary Marcus on the Nostradamus/Fukuyama spectrum, before providing a sort of framework by which forecasters can actually be judged "on the truth or falsehood of their statements".

5—Further reading...

🖼️ "In what might be a first, a New York-based artist named Kris Kashtanova has received US copyright registration on their graphic novel that features AI-generated artwork created by latent diffusion AI."

🤖 Tesla's Optimus robot is due to be unveiled today. In classic Elon Musk style, there's a very good chance that it has been overhyped.

🕵️‍♀️ The International Monetary Fund took the unusual step of "urging the [UK] government to 're-evaluate' the plan and warning that the 'untargeted' package threatens to stoke soaring inflation".

💸 "Joe Biden's plan to cancel up to $20,000 in student loan debt for federal aid borrowers is expected to cost about $400 billion, according to the Congressional Budget Office."