Hello, aud Loots listeners. We recorded an episode with our friends over at What Goes Up. It's live today, so go check it out. It's called the Adlots Crossover Episode.
Yep.
We chatted with the hosts, Mike Reagan and Vildona Hirich about a bunch of topics that are near and dear to odd Lots listeners, ranging from the growing power of organized labor, the trillion dollar coin, evs, bidenomics, and more.
You can find it on the What Goes Up Podcast, available on Spotify, Apple, or anywhere else that you get your podcast fix.
Hello and welcome to another episode of the Odd Lots Podcast.
I'm Joe Wisenthal and I'm Tracy Alloway.
Tracy, it feels like there are many things in the news these days that are like on the edge of reality and frankly science fiction.
More evidence that we're living in the simulation. Yes, no, you're absolutely right. So first of all, we had this influx of AI technology. Everyone got very into chat GPT and now everyone's talking about future AI applications. And then we had let's see, oh, we have the excitement over the possibility of a room temperature superconductor. And then even weirder. We have a lot of talk about aliens. We had the congressional hearings about UFOs recently. I actually saw someone
tie all of these things together recently. They thought that the LK nine to nine coming out like the week after the congressional hearings or the week of was evidence that there are in fact aliens and the technology has come from them.
So they take that with a grain of likes, like left this little trail of yes for us.
That's interesting.
Well, I think one of the conspiracy theories is the reason it feels like all of this is popping up now and sort of going into hyper drive is because the uh, I don't know, the powers that be are laying the groundwork for us to actually find out there are aliens. So they're sort of dripping it out and now the pace is picking up, and so it's coming Joe.
So here's the thing. I do not believe in it.
I'm like a deep UFO skeptic to the point where I've almost like tuned out all the news. If we do have a room temperature superconductor, I don't even know what that means. Like I see all these people like, oh my god, we are so back, this is going to change the world. I still don't really understand the significance AI. I think it's pretty cool, but I don't know what it's going to do and yet in terms
of the economy. So when you're faced with all these sci fi things, Tracy like, what kind of guests do you think?
Who comes to mind? Is someone who talking about Who's the.
First person I call? Yeah, well, I guess, uh, we have the perfect guests.
We have the perfect guest. We are going to be speaking with Paul Krugman, opinion writer for The New York Times, professor at City University of New York, of course, a Nobel Prize winner in economics. And I read on the internet that he was inspired to be an economist because of science fiction, at least according to a website I'm reading. And so I think to understand the economics, the implications, the thoughts are on aliens, AI, superconductors, what they mean
for the world and the economy. Obviously, the first name we calls Paul's. I think this is your first time on our podcast. So, Paul, thank you so much for coming on.
Odd lots.
Oh thanks, I think it is my first time.
I'm so proud that the first time you're coming on all thoughts is to talk about aliens. I'm so happy, I.
Know, of all the various things we should be talking about. But hey, I'm pretty bored with inflation.
Yeah, that inflation, the FED soft landing fiscal policy, the six hundred dollars checks. This recovery versus the other one is so boring. It's so tired. Paul. Do you think there could be a life elsewhere in the galaxy?
I would think that it's extremely unlikely that there isn't. I mean, it's there is an argument that says that, you know, particularly the complex life, may require some very very special circumstances, then we might actually be alone out here. But that's well, I guess that sounds unlikely. It doesn'tseem like that it should be that hard for there to
be someplace else where complex life has arisen. But here's an argument for that don't see very often, which is that if there is other intelligent life out there, just given the timescale of things, it must have evolved hundreds of millions of years before we did. So if there are aliens out there, they are if either wipe themselves out one way or another or are on a level so far beyond us that you know, the meaningful interaction
is impossible. So in terms of there being actual aliens, you know, landing and kidnapping people and all of that, that doesn't seem to me to be a very plausible story.
So can I ask a step back question, which is you know, Joe mentioned that he read on the internet always a reliable source, that you got into economics because of your interest in science fiction. I remember you wrote a paper, I think it's a very long time ago, a theory of interstellar trade. But why does this area interest you? How did you get into you?
Why did you pretty much?
Oh? Yeah, so it's very specific. I read as a teenager Isakasimov's Foundation novels, and if anybody's ever read the novels, they're about how galactic civilization is collapsing but is saved by mathematical social scientists. And I wanted to be one of those guys. So that's how I got into economics, or at least that's the story I like to tell, which is also, by the way, why why I cannot bear to watch the Apple TV Foundation series, which completely
ditches the whole premise. There may not be good TV, but it has nothing to do with what Isakasimov wrote. So but anyway, wait, it was quite specific.
In science fiction Economists Save.
The World in one particular, a classic science fiction series, and they're not economists exactly, they're mathematical social scientists. But you know, that's as close as I could get is doing economics.
You did write a paper, as Tracy mentioned, on interstellar trade.
What did you What is that all about?
I mean, like, what is what would make say, interstellar trade any different between trade between yous and China.
It's the paper I wrote when I was very very young. I was a frustrated assistant professor, and it finally got published decades later. And so with mostly a blowoff steam paper, I was having so fun with the fact that, well, look, shipping times for interstellar commerce would be very very long. You know, not the time it takes to get from Sharing High to Los Angeles, but the climate takes to cross twenty life years and at that point the interest costs on shipping, yes, up in transit are going to
be a pretty significant part of the expense. But how much time is spent on transit Because of the theory of relativity we know that the amount of time received on the spaceship is going to be different from the amount of time perceived on a planet that remains stationary. And it's always all kind of silly. But you know, as I said, I think in the introduction that that the results of this paper will be true but useless, which is the opposite of what is typical in economics.
Wait, I thought that was typical, true but useless. I thought that was what's typical in economics. All right, Well, I'm sorry not to not to malign the whole profession.
Sorry, I had some fun and helped helped keep me more or less sane during those you know, pre ten year years that every academic has to go through.
Was it pure reviewed, I can't imagine.
But no. Actually, well, actually I sent it off The Journal of Political Economy used to have a joke paper section at the end, miscellany. I sent it and the then editor didn't get any of the references. There were, in fact, references to Isaac Asimov, and so he sent why why is the planet named Trantor? And I, you know, we need revisions, And I said, I'm not going to
do that, so I just let it sit. But it hits circulated kind of the samisdot for a long time, and eventually the Journal of Economic Inquiry contacted me and we said, we've heard about this paper you once wrote, can we publish it?
So I feel like not to keep diving onto this one paper. But you know, if it if it takes an incredibly long time to ship something from here to the other planet, is the But the people on the ship don't perceive it as long as those of us on Earth, right, because time is slower time, Okay.
And yes, that's the point. If you're traveling at close to the speed of light, you can do that, then none of this it makes any sense. Then the subjective time is going to be much And I actually then went on very fancy economic steer improving to say that that doesn't matter because the relevant opportunity costs is the time it takes on the planet.
Anyway, I'm looking at it now. I found it online.
There's some great it's really funny.
Yeah.
Also, like in a very dry way, there's a line that like interplanetary trade, while of considerable empirical interest, raises no major theoretical problems. Among the authors who have not pointed this out are Oland and Samuelson. I love that.
Yeah, Actually, Jeff Frankel, you may know that if Harvard wrote it. A sort of companion paper around the same time called is Their Trade with Other Planets, in which he pointed out that if you sum up total world exports and total world imports, you know, countries report the amount the export they don't actually match. Oh yeah, and that the world as a whole appears to export more than it imports. Yeah.
Every statistical agency around the world wants to flatter their numbers of exports and a little bit off the imports.
I guess, yeah, maybe there there are for right, Yeah, and a fair bit yeah stuff that is not Also that it's just if you smuggle stuff in past customs, it shows up as an export but not as an import.
Right Anyway, do you pay attention to things like the UFO hearings, like right now? Like how engaged are you? Like when you see these headlines?
I think We've got enough. You know, there's enough. There's enough weird stuff in the world. Although I will say that, by the way, the theory that says that the aliens are selectively releasing technologies that's a subplot in the movie men in black and I hope people remember this. But the agency that employees will smith is how they financed themselves by selectively releasing alien technologies. I think that Bell Crow was supposed to be one of them about that,
so that that's so you really should be. It should be even more conspiratorial than people are. It's not just that the aliens are doing this because they're about to be found out. It's that the government agents in black suits are selectively releasing these alien technologies.
Well, let me ask I guess the big question, which is, how would you, as an economist, you know, a rigorous, well grounded researcher in this field, how would you go about thinking or incorporating something like aliens slash alien technology into the way you think about the economy.
Yeah, the aliens, I have absolutely no idea. I mean again, it's just if there are aliens out there, if they exist, they almost have to be immensely more advanced, basically on a different plane. And it's not clear that they would have any interest in dealing with us. But the technologies, if there are for whatever reason, whether it's they're leaking out of Area fifty one where there are really big technological things happening. Of course, the technological progress is the
ultimately the main driver of economic growth. So these are important things things if they are if they pan.
Out, let's talk about technological progress as a driver of economic growth because it seems like that. So it's like, Okay, there is this thing that people are talking about, which is the possibility of superconductors that can exist at room temperature instead of really cold temperatures, which supposedly might have all kinds of implications for battery tech or power transmission or electricity consumption. I don't really totally get it. I'm
not a signed this, but it seems good. But on the other hand, technologies exist and they are exciting, but they don't necessarily show up in the economic aggregates. They don't suddenly make GDP growth grow from three to three percent to ten percent just because there's some new breakthrough. Why don't they Why don't we get technological inventions that suddenly caused GDP growth to grow at a much faster pace.
Oh? Well, me, we certainly do get inventions that make a difference that show up a lot. I mean, so if you think about, yeah, we have a pretty good idea there was an acceleration in US productivity growth for about ten years from the mid nineties to the mid naughties. That was something like one percent a year faster growth than before or since, which we think was because business
finally figured out what to do with it. And some of that's the Internet, it's it's just actually some of it is finally figuring out how to use barcodes to do effective inventory management, you know, more prosaic things. But basically there was a clear bump in productivity that's was associated with the rise of IT, networks and all of that. And you could say, well, that's it. All we got
was ten years of one percent faster growth. But that's a ten percent bigger economy, and there's almost no conceivable economic policy that would raise you as growth that much. Right, So, even what was relative to a lot of what people had hoped for or predicted, even though the results of it have been somewhat disappointing, there's still huge relative to anything that you know that any presidential candidate could plausibly promise to accomplish.
How good are we at actually measuring technology's impact on productivity? Because I remember this was a talking point a few years ago the idea that well, technology is in fact improving, but the way that it's improving and sort of feeding into the economy is not well captured by statistical methods.
There's actually true levels of that. First of all, the way that we actually of measure technology is god awful except not clear how else you do it. I mean, we think that we have ways of measuring the contributions of tangible stuff like an increased stock of capital to economic growth. And what economists do is they add up all of those things. That's growth accounting, and then whatever's left they say that's technology. You know, it's a really
pretty poor technique. It's basically, technology is the measure of what you can't explain otherwise. That's not great. But on top of that, then there's the unmeasured. As you say, we don't have a very good handle on. You know, what is the value of streamed entertainment one way or another? You know, for me, I'm really into live musical performances and can't get into you know, can't make time in my life to go to as many as I would like to. But I can watch a lot of live
musical performances on YouTube. That's a pretty big. I would probably be willing to pay thousands of dollars a year for that. As it happens, I don't have to pay that, but it's and that's not captured by the GDP statistics. And there's probably a bunch of things like that. To take something that's less sexy, but healthcare, the fact that doctors can treat lots of things that were untreatable before is a really big thing. But you know, it has always been true, but not always, but it's been true
for a very very long time. You know, if you if you start from the late nineteenth century when you started to finally get big improvements in public health because the people stopped getting their their drinking water from a well next to the outhouse, those are huge gains that are really not at all captured by our official statistics.
So probably it's the case. Uh, you know, there's been much more economic growth than the numbers show, or the much more, much more improvement than the quality of life anyway than the numbers show.
I'm glad you brought up the live music.
I was talking to Tracy earlier, and I have this memory of us running into each other. It might have been like twenty eleven or twenty twelve at some conference in New York City and everyone else is mingling and you were smartly in the corner watching I think a live video of the Arcade fire in twenty eleven.
Twenty jobs.
Who do you like the days any band wrecks?
Oh wow, it's fine.
And I worry when I say this that I'm going to insult bands I love by forgetting to mention them. But the last concert I went to, which was just at the beginning of the summer, was Lark and Poe, which is a sisters from Atlanta who do mostly the blues and are just incredible. I'm away for the summer. I went to a little I won't get undisclosed located by way. I went to just a bunch of local musicians doing calling themselves the Grateful Dread regularly inspired Grateful
Dead covers, but which was great fun. But the next thing I'm going to do something called a band has been around for a while, old War Paint and does sort of vaguely psychedelic stuff. I mean, he's saying a boy genius. They've been getting quite a lot of play. But actually the troubling I like the more intimate concerts. Yeah, and the next Boy Genius performance is at Madison Square Garden. Sorry that's I love the band, but I wouldn't love that experience. So you know, there's a bunch. I mean,
that's the thing I subscribed to. I think around around forty channels on YouTube which are almost all indie musicians of one form or another, and.
I'm gonna have to check out Lark and Poe. I'm looking them up now. It looks really good.
It looks like the kind of thing that I would like. I want to go back.
We're talking about technological impacts on macro, and someone's going to get really mad. I've defended the fact the sort of famous infamous internet fax machine comment on the sort that you made, because it doesn't seem like one percent growth even over ten years, is really changes the economy like that much or as much as you would think, given there's sort of like huge upheaval that we've seen
that the Internet caused. Like, is there any way to sort of know early on or in real time what a technology is going to do to the economy or is it the only kind of thing where you can say afterwards?
This seems to be what happened here.
Okay. What people don't know, by the way, is that comment about the Internet and the fax machine was in the context of a piece that was meant to be funny.
I've taken a lot of flak on Twitter, Paul, and now I'm discovering that I was defending.
No. I think it is actually defensible, and I will agree with you on that. But what was actually happening was that was a piece where before I worked for The Times, so I was asked to write a piece looking back from one hundred years in the future at what had happened, and so I wrote that, you know a bunch of things, and many of them were deliberately counterintuitive, some of which have turned out to be true, and
some whatnot that they if you want it. The piece ends by saying that my day job is working at a vernet at a veterinarian, but I'm hoping that this piece will get me on the lecture circuit. But the other point was, in fact, if you're looking for the transformative economic effects of the Internet, they are pretty elusive in the data. Actually, take a even more extreme example,
the smartphones. The iPhone is introduced, I think in two thousand and six, and if you look at the official productivity numbers, the period since two thousand and six has been lousy for productivity. It's been a long productivity drought. The boom and productivity such as it was the boom let was between about ninety five and two thousand and five, which is more much more the fax machine era than the Internet era.
Okay, I have a really basic question, which is, if you get a brand new, world changing technology like the Internet or say a room temperature superconductor, would that count as like an exogenous shock or an indigenous.
I mean, at some level everything's in dodgeness, right, At some level it's all quantum mechanics. But in terms of being something that look that the long sweep of technological progress that begins in about two centuries ago or a
bit more, that's clearly endogenous. Given that we had whatever it was, the change in mindset, the change in the way that people behave that caused the Industrial Revolution and everything that followed, then of course there were going to be a lot of explorations of new possibilities, lots of new technologies. Any individual technology is there's a strong element of we stumbled on something, and so when you stumble on something that actually has big economic implication, that's even
more fortuitous. It's really not predictable in advance. Either way. You can have something like I think many people would have expected to see a much bigger visible impact on the economy from smartphones than we appear to have seen. But on the other hand, who would have thought that shipping containers would matter as much as they have turned
out to for the global economy. So it's really in the sense of being really hard to have predicted either that the innovation would happen or that it would matter a lot. Yeah, it's it's exogennous for all practical purposes.
You know, it's really important that we use the same gauge and size shipping containers as they do in China. I wonder how we would even coordinate that with another planet. They might have like a totally different size shipping container at their ports. That could be a very difficult container trouble.
And the trouble is that if they're forty years light years away, the negotiations to establish the common standard a couple of.
Millennias, That's what I was thinking, right, Like, it's hard enough to come up with common standards here on Earth. I want to pivot. I want to ask you about AI actually, and I'm curious like people, you know, every technology has its things like oh, people worry about which jobs are gonna get disrupted and so forth, And then with AI, it feels like there's like deeper angst that many people have because it can think and it can write. And I've expressed my own anxiety like, well, will I
be out of a job in a few years? Is someone who like does words on the internet for a living, because chat GPT is pretty good at doing words? Like does it feel different to you in some way in terms of or is it? Yeah, we have technically you know, we are always getting better at things and it's sort of part of a continuous process of technological gain.
Well, this looks like it. Maybe there are things that are kind of narrow gauge technologies that affect a very particular sector, but not that many peopleeople this stuff. Although we're what we're calling AI isn't really arguably, but the stuff we're calling AI anyway does look like it's going to affect a lot of activities. The pessimists say, or the skeptics say, look, it's not really thinking. It's not
creative or original. It's just sort of processing what other people say, and it's just basically super enhanced autocorrect, which is all kind of true. But then, how many people out there in the real world are in fact being creative? How much of the work that we pay people a lot of money to do is in fact a lot like super expanded or correct? And I think the answer is quite a lot. So this is potentially a really big thing, and it could displace a lot of jobs.
And interestingly, it's the jobs that it might displace are going to be ones that are kind of high prestige, high education. We're a very very long way, as far as I can tell, from being able to have robot plumbers, but we may be very quite quite close, in fact, may already be there to having robot journalists. So yeah, this is serious.
So you obviously talk and write about economic policy quite a lot from that perspective. What would be the best way to handle AI if you're worried about society, if you're worried about things like inequality, what would be the best economic policies to put in place?
I don't think this one calls for a lot of remedial policies other than simply having a strong social safety net. It's too pervasive and too diffuse. I think you know it's something when you have something like it's not technology, but in some ways similar. You have something like the China Shock, that period of about ten years where we had a real surge of import from China. The thing about that was actually a number of jobs displaced was probably not was a million, between one and two million,
but they were very concentrated. There were just communities that were effectively wiped out. And that's where the idea that you probably should have had some kind of remedial policy that tried to sustain or at least help these communities adjust or help them downsize or something so that the social impact would be less. That kind of made sense.
But now, if you have something that is going to be wiping out certain kinds of white collar jobs, but more or less evenly across the country, it's not going to be doing any a whole lot more or less in any particular region. It's not going to be affecting any particular social group, except in the sense that it may be devaluing certain kinds of higher education. I don't think there's much you can do about that, just trying to ban the technology altogether, which isn't going to work.
So I actually not sure that that, aside from the fact that we should have a society where you don't starve or go without medical care, if technology does have to take your job, I'm not sure there's much more you can do than that.
I'm going to break the pattern and actually kind of asking a question that might be relevant to the current economic data. But I was thinking about going back to the nineties and the sort of productivity boom that we saw in sort of the mid nineties and beyond. And the other thing about that time, beyond just the sort of advent of the Internet and a lot of information technologies, is it was a strong economy. It was a robust
it was robust growth, It was robust employment growth. And one theory that sometimes gets aired is that productivity is downstream of robust growth and tight labor markets, and that when there's tight labor markets that firms have to find ways to implement new technologies because they can't just hire someone cheaply. That forces the sort of like genuine productivity gains technology to actually be incorporated. Of course, we have very tight labor markets right now in the US. Like
how much credence do you buy that? I remember Jenny Yellen giving a speech and I want to say, like twenty fourteen, like the reverse history sists, and this idea that like, if we run the economy hot for a while, that it can really pay off in terms of these productivity gains, and we might be getting a test of that now, Like how compelling do you find that?
It's one of those things where I take it seriously and have absolutely no idea whether it's true. There is some case to be made that running of the economy depressed These two losses that you basically differ make up so that a weak economy for a sustained period of time leads to lower productivity growth for many, many years thereafter. And you can read some of the evidence from the two thousand and eight financial crisis in aftermath to say that,
on the other hand, that isn't always true. The Great Depression in the United States appears to have had zero impact on all of that. If you look at the economy in the late forties, it was just about where extrapolating trends from nineteen twenty nine would have led you to think it would Denail. It's true that we did run a very very high pressure economy for four years in nineteen forties, so maybe that was what.
Actually the original.
Yeah, I'm not sure if readers will know about that, but yeah, the frying pan charts that I've been promoting through. But productivities did pretty well even during the thirties, even with the very depressed economy. It's possible right now, Denice to believe that by running a genuinely full employment economy, arguably for the first time since the late Clinton years, that we are setting the stage for an era of
good productivity growth. But I don't know that, and I think I can make a firm prediction is that we will never know that we were even though, you know, looking back ten years from now, if productivity growth was high, we won't know whether that was because finally we got sufficiently expanised very macro policy or because we just happened to luck into getting usable AI for the first time.
Yeah, Tracy.
If there's one thing I feel like I've learned from you know, sort of covering economics over the last fifteen years or whatever, is that debates never actually get resolved. It's you can have all the data and then there's just two people tell a different story.
Yeah, no, that is very that's the same.
Two people selling the same two different stories decade after decade. That's what really drives me crazy. It's always the same people on the same side. Whatever the data are, it doesn't actually speak too well for my profession.
Wait, since Joe asked a question that brought us back to more modern times and more relevant themes, I want to ask one too, which is would an alien invasion be deflationary or inflationary? Very serious question.
I think that we can say pretty almost surely with the inflationary wars almost always are an uncontested alien invasion. I guess it kind of depends on how they run the occupation. But actual wars have been in are always inflationary. I can't think of one that wasn't They always involved big government spending. Actually, they always involve a collision between large spending and at least temporarily reduced productive capacity. So yeah, you may recall that back when I was desperately leading
for more fiscal stimulus. Oh that's right, Yes, I said that the government should lie and claim that we were facing an imminent alien invasion and that in order to fight that imminent alien evasion, what we needed was better infrastructure. So a big public infrastructure platform. Two, because things that people would never agree to simply in order to make people's lives that are, they will agree to it in order to fight invasion.
It is interesting the degree, and you definitely see this over the last couple of years, the degree to which big public investment programs seem to go down easier politically if it can be couched in the language of geopolitical conflict. And so even like say, like some of the decarbonization efforts in the US, the IRA, a lot of it is almost either implicitly or explicitly oh because China is doing this too, and suddenly that that brings out the votes a bit more.
Well, yeah, I mean we have two big public infrastructure programs, well three. We have one which is the straight infrastructure, but that was to some extent said well, you know, we're falling behind and China need to do something. Then we have the Chips Act, which is explicitly about countering China. And then yeah, some of the IRA stuff has been
sold as being a national security concern as well. So sure it's crazy, but yeah, in order to provide people with just a better economy and a better life, you generally can't get that past the depths that's golds unless it's in the interest of fighting evil outsiders.
I want to ask another AI question.
I mean, I know you say, like, okay, there's not some obvious like medial policy, but it is interesting that there is this possibility that it disrupts a lot of currently like high status jobs, people with a high level of education, white color work, et cetera, which I guess in people's minds feels different than like a loom on you know, a shop floor or something like that, which
people think, well, this is different in some way. Historically, other examples that feel similar were like, no, this really disrupted something that at the time was seen as like very high status prestige work.
Well really high status prestige work, I'm not sure, but relatively high. I mean people we talk about the Bloodes, the Bludyes were not the poorest, least skilled workers. The blood Ice were skilled weavers who were actually relatively high waves. What had happened was that the factory production of yarn had created an abundance of yarn, but the weaving was still being done by highly skilled manual workers. Manual workers
but high high skill. And then along came the power loom, and suddenly the relatively high wage workers found their jobs disappearing, and that they were the ones who went out and rioted. So it's simply not the case that technology is always going to favor the higher wage people at the expensive lower wage people. And yeah, there's probably a lot of quiet stuff in there that this has probably been going
on to some extent. One of the things that about US inequality is that there was a time when people said, oh, it's all about education differentials, but the college wage premium hasn't really gone up for a long time now. But it's also true that a lot of information processing that used to require human being either doesn't or can be done by fewer human beings because machine assistance helps.
On the topic of inequality, it does feel like there is this pervasive sense that the US economy is doing worse in many ways for a large chunk of the population, despite everything that we've seen in some of the hard data recently, and a lot more discourse about the possibility of a soft landing, But what do you think is
driving that dissatisfaction? And then secondly, you know, how do you go about I guess like messaging that the economy isn't that bad to the general population so that aliens don't feel the need to invade the planet to make us all feel better or worse.
Yeah, it's now it's an interesting question. I mean, if you actually are asking about inequality, have recent events hurt lower income people more in the higher income That's actually not what the data says. If anything. On the contrary, what we've seen is is a surprisingly fast narrowing of wage gaps. The people at the bottom of the wage distribution have done a lot better than the average. You know,
Aaron Doubay has been doing writing about this. The unexpected compression of wage inequality has taken place in the last couple of years. So that's not really the story of why people are feeling dissatisfied. If I had to try to say why people are dissatisfied, what if it is that Look, the return of inflation after a generation when people just didn't think about it. That was a big shock and people are going to take some time to recover from it. Then actually I think it's more than
two things. I'm going to turn Monty Python routine amongst the reasons, but then various partisan shit. It's just astonishing if you look at the surveys how much it's true for both parties, although it's even more extreme for Republicans. But an economy that was really great as long as Trump was in the White House suddenly becomes terrible, even though it's the same economy with a Democrat in the
white House. But then perceptions are shaped by narratives. There's just lots and lots of surveys now which you ask people, how are you doing, and they say fine, and how's the economy doing, Oh, it's terrible, which is this is relatively new in economics, but in other areas we know, we see that all the time. I look at crime, and an epic decline in crime between about nineteen ninety and the mid twenty tens really astonishing, and we have
still basically have no idea why it happened. But for some reason America became a much safer place and all through that surveys. If you ask for people what's happening to crime, they said it's increasing, Although if you ask them, How how do you feel about your neighborhood or your town? They were much more favorable. So there's we've got some kind of psychology where a lot of people now believe that really bad things are happening to somebody else, somebody I don't know.
I hope the media isn't culpable for any of that, you know, just going back to your point about how things like AI or things that may have compressed education labor is like, it's not really that new of a story. Germo Ruddy T Domingos, who has been on the show, He always likes pointing out that the word computer used to refer to a profession that like, there used to be like people who's type whose occupation was.
Computer, human Excel spreadsheets.
Human Excel Spreadsheeah Richard Fireman, Richard Fiman ran the computers at Los Alamos. You've just seen Oppenheimer and the Fireman, and actually what is clearly Fireman appears there playing the bongos but is not a speaking character. But he ran the computer section at Los Alamos, which was a bunch of women. How we're actually computing, right?
Can I ask?
We sort of glossed over this within the context of alien technology, but are you paying attention to the superconductor stuff? Like and you know you're really plugged in your online You're probably is like online and on Twitter as much
as me and Tracy is. And you see these videos of like a magnet flapping and people are like, oh my god, this is like the Holy Grail, Like, how do you This is like a question I've been asking everyone, like, how do you, as a sort of intelligent, plugged in person and try to process what's going on when you see things like this happening in the world.
This one is really hard. I mean, I am extremely online. Actually, I hate when when my phone tells me how much screen time I've had each day. I often feel that I can go online and get reasonably reliable assessments of stuff in areas of which I personally know nothing, because I kind of think that I do know enough to recognize people who have some idea what they're talking about. I know what actual research sounds like. This is one of those areas where I can't make it out. It
sounds like there are reasonable people on both sides. There's no obvious motivated reasoning driving this, and I'm kind of just saying I have no idea, and not only am I not entitled to an independent opinion, I don't know whose opinion to trust.
I just have one more sort of theoretical question, getting back to the beginning of this conversation and science fiction, But what's your favorite economic system in science fiction?
If you had to choose.
This, Oh, well, that's interesting. Most science fiction either doesn't specify or kind of assumes that it's not very different from what we have now, So there are very few sort of furious alternatives. If you look at the start Trek universe, that appears to be nobody says it, but it actually appears to be sort of idealized Marxian socialism.
Right, that's the one that you always see. I've heard that before, that that's like the literally live.
Long and well, actually that's actually the opposite. The America is the country where we we prosper and die and die early, but.
Live short and prosper.
Yeah, but if we know the replicator, you just say tea earl Gray hot and there it is. And supposedly it's an economy of total abundance. Although you know, I'm occasionally attempted to yell at the screen, but services are most of the economy, and replicators can't do that, although I guess androids can. But other than that, it's really hard to see very much. People are not very original in trying to think about economic systems. There is a
real paucity of ideas for something different. I mean, we've seen there's are little sort of central planning fantasies out there in economics. There are some people who try to invent or some kind of system of points or so on, But what they don't seem to realize is that what they're actually doing is reinventing capitalism. Other than that, I haven't seen a whole lot of interesting speculation. It's possible that we've already explored all the possibilities there are, but
I don't know. It's really the one thing I had to see is a fair bit of sort of fairly thoughtful science fiction just kind of assumes that the future, that future societies have a kind of a Scandinavian welfare state, that whatever else there is, there's always basic income to fall back on. And actually, if too much too much information, but the expanse if you watch that science fiction series, which was one of those things where the TV I
think was better than the novels. But anyway, the Earth's economy and the expanse appears to be a kind of a UBI society, except that it sounds like what everybody receives if they're not employed, and they apparently they have mass numbers of people who just have no jobs. But what they did, what they get is they get the basics to survive in kind rather than in cash. So
that's a few but it's not a utopia. It's kind of portrayed as being kind of grim, but that's kind of where if you look for real, seriously alternative economic systems, I can't think of one in any of the science fiction I've read.
Paul Krugman is so great to finally have you on Odd Lots, and it was so great to talk about things that are not just the sort of day to day what's the Fed going to do next week? So I really appreciate you coming on. That was a really fun conversation, so much fun.
Okay, take care and yeah, that's great, great stock.
That was fun, Tracy.
I absolutely love it that Paul Krugman's first appearance on this podcast is to talk about aliens. You can't be I.
Hadn't thought about the challenge that would pose, which is at the.
Time the productivity statistics.
Yeah, or and the challenge that would pose of like well the time, like the rate of interest for people in normal time versus like the payment that people would demand who are like on the ship itself moving at a different time. Very interesting theoretical questions that to his point. But I think that probably much of economics does not have much practical application.
You know, it would blow your mind if you start thinking what interstellar finance would actually look like, like currency exchange markets and things like that, where you have spot and forward markets and things.
Well, anyway, can I just say something, I Foundation for Economic something fee dot org, which is Fundation for Economic Education, which I think is like this sort of like libertarian like pro capitalists, like think Tank, they have a they have an article a Star Trek is not socialist, They're really like because I did, that was one of the first hit first things that came up, is Star Trek really socialist?
Knows So some people push back on that.
I do think there clearly there's a gap in the market for like a really well thought out piece of science fiction that's like predic on a very specific and creative economic system.
It's funny to think about like these sci fi writers like, oh, it's gonna be a points and blows, like, bro, you invented money, you reinvented the dollar.
Well done, well.
I mean it does also get back to you know. Paul made the point that a lot of science fiction seems to default to this idea of Knesyan abundance, right like most scarcity, but if anything in twenty twenty three, like, yes, there have been a lot of technological advances, but there are serious concerns over basic resources and their availability and how they're distributed and things like that.
And services because we have so much good AI, but we don't have good robots, and so it's like when we talk about like childcare, elder care, etc. It's like, we really need these robots to come along, and we're going to get that true abundance.
Hopefully the aliens bring the robots.
Yes, okay, please bring robots.
Shall we leave it there?
Let's leave it there all right?
This has been another episode of the Odd Thoughts podcast. I'm Tracy Alloway. You can follow me on Twitter at Tracy Alloway.
And I'm Joe Wisenthal. You can follow me on Twitter at the Stalwart. Follow our guest Paul Krugman on Twitter He's at Paul Krugman. Follow our producers Carmen Rodriguez at Carmen Arman and Dashel Bennett at dashbot. And check out all of our podcasts at Bloomberg under the handle at podcasts.
And for our Odlots content, go to.
Bloomberg dot com slash odlots, where we have transcripts, a blog, and a newsletter. And if you want to chat about like everything we talked about in here, from energy scarcity and abundance to AI to other stuff, check out our discord we'll channels for all this stuff. People are chatting twenty four to seven Discord dot gg, slash od loots.
It's a lot of fun.
And if you enjoy odd Lots, if you like our conversations about alien technology with Nobel Prize winners, then please leave us a positive review on your favorite podcast platform. Thanks for listening in
In