That is Tyler Cowen’s latest book, which I just finished. I will probably re-read parts of it and have more to say, but for now:
1. Tyler sees the tech sector as dynamic, while the education and health sectors have been stagnant, in part because of government control. In some sense, the difference between The Great Stagnation and his new book is that the former emphasizes the sectors that are doing poorly and the latter emphasizes the tech sector.
2. In part because of this shift in emphasis, this book came closer to reflecting my own views.
3. Tyler uses an arresting metaphor of a billionaire riding in a taxi in Calcutta, surrounded by beggars seeking his attention. One can imagine rich people being able to afford a lot of personal servants. The constraint on that will just be the time and effort needed to manage personal servants.
3. Tyler uses Freestyle chess (humans working with computer programs to compete) as a metaphor. There, I thought he stretched it a bit too much. He envisions a sort of Freestyle economics emerging. But to me there is a big difference between chess and economics in terms of what James Manzi calls causal density. In chess, there are a finite number (in fact, probably a small number) of important factors. Sorting through tens of thousands of games, a computer program can arrive at precise weights for those factors. To us, it is dazzling to see an early bishop sacrifice that a human would consider speculative, but the computer knows, based on “experience,” that this is the sort of position in which one can do without a black bishop.
But in economics, we are dealing with high causal density. This is particularly true in finance and macro. I am not convinced that sheer data analysis is going to produce dazzling results. Sure, a new data-crunching paper may add more value at the margin than a new JET paper, but that is not saying much.
4. For me, the most interesting chapter was the one on education. Tyler points out that the content-supplying and testing/grading functions of a professor can be automated relatively easily. The main role for humans is to supply motivation, coaching, and inspiration. I am reminded of an experiment in India in which grandmothers with no subject-matter knowledge are recruited to encourage young children to learn by praising their work.