Fascinating. I've been reading Alex Epstein's book Fossil Future and I think Oded's book helps explain the "hockey stick" graphs that Alex uses as a basis for his ideas on fossil fuel use leading to the explosion of human prosperity, longevity, etc.
Academics - Why summarize your theory in 5 minutes when you can spend an hour rambling on about it. BTW - This was HARD to listen to.
Snapshot: Innovation within a society is driven by that society's ability to attain the proper level of diversity and social cohesion for that time period. Currently, America has the optimal level of diversity and social cohesion and that is why it leads the world in innovation. Societies with a high level of diversity but that are not highly innovative need to develop tolerance for their diversity and stress social cohesion so they can realize the benefits of that diversity through increased innovation. Societies with strong social cohesion but that lack diversity, need to become more diverse in order to become more innovative. There was almost zero discussion supporting this conclusion.
Oded talked about the importance of geography, which he later seemed to question, the lack of earlier innovation's ability to increase average income per person within innovative societies, the impacts of agrarian societies on their peoples' cognitive function, a sketchy definition of diversity (when asked to define it), examples of diversity that seemed to equate it with ethnicity, blah, blah, blah.
He seemed to focus on the importance of economic systems (capitalism vs. centrally planned) and political systems and such but then seemed to ignore all of that when claiming diversity and social cohesion were the central tenants of innovation today. I would rather he start with his conclusion and then support it throughout the discussion but alas, that was not to be.
There's a lot I want to say, but since I'm responding on my phone I'm going to try to be brief. First, as I understood it, his claim is that the extractive nature of colonialism allowed the colonizers to focus more on developing human capital through education, which is then a key factor in advancing to a post-Malthusian era. If so, what is the difference between European extractive colonialism and Chinese or Roman extractive colonialism? Why did these empires not advance? The facts don't fit the theory very well, they support a more mainstream view that the industrial revolution was the primary driver of rapid increases in the standard of living. Second, on diversity vs homogeneity, a unified vision leads to strong action more easily than a fragmented set of viewpoints. I think he overstates the importance of diverse viewpoints on advancement; ideas won't change the material world unless translated into actions. The US built its wealth on A: the single minded push towards industrialization and B: the accident of geography that left us untouched by WW2. His focus on the ideas aspect of progress isn't surprising given that he's coming from academia, a sector focused on ideas, but for every ideas person, you need hundreds of people focused on implementation; it's more important to have enough implementors than to have enough ideas people.
In all, it was an interesting guest, but his ideas seem flimsy and I feel like he ignores contrary evidence.
Based on the conversation, Romans didn't have the population and time to advance.
Based on my memory or Chinese history, the Chinese were ahead. But they closed themselves off. Applying to the conversation, they created institutions that inhibited their growth and advancement.
Interesting guest. In Galor's vision of sustained economic growth, I wonder exactly how he pairs the negative population growth of technologically advanced nations with perpetual technological progress, particularly when he earlier imputes such progress to the exchange of ideas facilitated by population growth. The potential rate of human adaptation is almost certainly a limiting factor as well.
The whole episode made me think of the "punctuated equilibrium" model in biology, which can also be applied to language change, where for most of human history linguistic features appear to have diffused across small, heterogeneous populations toward a common prototype, interrupted only by large, sudden population expansions and splits. It is the latter scenario that fills the written record and informs the traditional study of historical linguistics and language families. Somewhere in there is a question for John...
The decline in fertility rates below the replacement level will inevitably lead to a decrease in the fraction of the working-age population. Additionally, with rising life expectancy, this trend will increase the dependency ratio, which is the ratio of dependents to the working-age population. Yet, these changes are not indicative of a decline in aggregate labor productivity and innovativeness, nor a reduction in the growth of income per capita.
The decline in fertility rates has generated several major benefits for the growth process. First, a reduction in population growth diminishes the dilution of resources over a larger population, increasing resources per worker and thus labor productivity and innovativeness per capita. Second, the reduction in the number of children allows for greater investment in each child’s education, contributing ultimately to the productivity and innovativeness of the working-age population. Third, fertility decline fosters female labor force participation further contributing to productivity and innovativeness per capita. Fourth, since the improvement in life expectancy is associated with a significant increase in the productivity of people beyond their current retirement age, labor productivity can be further augmented. Hence, while declining population growth decrease in the size of the working-age population, the productivity-adjusted size of this population may in fact increase sustaining innovation and productivity growth.
Thanks for your comment, Karl. I suppose it all makes sense in the abstract. In this model, is there a point at which falling fertility rates will level off again?
Do you believe that the human condition, and in particular the rate at which we can adapt to progress, places an upper limit on the advance of technology?
According to all models where fertility is a choice variable, fertility rates may stabilize at or below replacement level, but could decline indefinitely. However, as I explained above, even if fertility rates will remain below the replacement level, productivity per capita is very likely to continue to grow.
Our rate of adaptation could indeed constrain the pace of technological progress. However, future technologies, such as AI, are likely to foster our ability to adapt and therefore would mitigate this constraint on the pace of technological progress.
Posthuman tech seems like a pretty big wild card in a framework for sustainability. Also hard to imagine a future world in which our sexual impulses are almost entirely vestigial. I guess we're already most of the way there! It just feels like the modern era, as envisioned, eventually takes us somewhere that isn't fully human, in which case the definition of "standard of living" goes up for grabs.
Very interesting. I've been reading a lot on the "geographical journey of humanity" as discovered though genomes - modern and ancient. Prof. Galor's ideas have an obvious connection. I hope the book gets into the mixing of populations that have repeatedly occurred in our past. I had my Kindle version half through the interview.
Glen, you were bothered by Galor's remarks on human stagnation. Perhaps the way David Deutsch puts it in "The Beginning of Infinity" is more felicitous:
'Progress that is both rapid enough to be noticed and stable enough to continue over many generations has been achieved only once in the history of our species.'
No disrespect, Glenn, but you failed to probe deeper into some of his assumptions. For example, Galor keeps mentioning technology but speaks as if he is unaware that all technological innovations were only made possible with new sources of energy. For example, stone tools amplified the power of bare human hands, domestication of animals made possible using oxen to pull plows, taming horses increased human mobility a thousand-fold. Harnessing water power made many new processes possible. The industrial revolution could not have happened before steam engines, and so much of our lives today are unthinkable without electricity, etc.
Another example: like all living things, humans compete for resources. You, Glenn, succeeded because you not only outsmarted a whole lot of competitors, but you also outworked and outhustled them.
Many of these examples appear to mix cause & effect: Stones tools had not been crafted due to the discovery of a new source of energy. Yet, they reinforced the power of humans.
Domestication of animals had not been based on the discovery of a new source of energy. Yet they reinforced human mobility. The steam engine was not developed due to an earlier discovery of a new source of energy. Instead, it was a new source of energy that was conducive for industrialization.
Whether we define the use of fire, the domestication of animals, or the steam engine, as a technology or a source of energy has no implications for our understanding of the role of the “wheels of change” – technological progress, population growth, and human adaptation – in orchestrating the transition from stagnation to growth. Technological progress made people more productive and generated faster population growth and human adaptation, and population growth & adaptation, in turn, fostered greater technological progress. Some of these technological advancements have indeed been reinforced by energy production but the emphasis on energy is secondary for the understanding of the take-off from stagnation to growth. It is the change in the technological environment that generated the demand for human capital and brought about the fertility decline that freed the growth process from the counter balancing effects of population.
Brilliant guest and interlocution by Glenn. Learned a lot. Hope to read Oded’s work and respond by the end of the year with my own fine-tuned economic theory.
I listened to this episode last night and immediately ordered Professor Galor's book. This interview made me think of comparison's to Jonah Goldberg's book Suicide of the West. Jonah's book is about how what he called the "miracle" of liberal democracy is in danger from illiberal forms of populism. In some ways it seems like Professor Galor's book examines that miracle from another angle. But I will be better able to understand the similarities and differences once I finish Professor's Galor's book (and perhaps reread Jonah's).
In the meantime, I have a question for Glenn. Most of the discussion of economic inequality in the interview was focused on inequality between societies not within them. My degrees are in history and law, not economics. But from my understanding of economics, it seems to me that there is often a tension between policies that increase economic growth and policies designed to reduce income inequality. For instance, lower tax rates for investment income and capital gains promote economic growth, but also allow some very rich people to pay lower overall tax rates than working class people. I am thinking of the argument that Warren Buffet shouldn't be paying taxes at a lower rate than his secretary. Am I right that the tension exists? If so, so long as economic growth leads to improving standards of living for the poor and middle class alike, should it matter that Billionaires grow their wealth at a faster rate? Take this hypothetical. A teacher offers to either give every student in class $10, except for one student who would get $100 or every student but one $20 while that one student got $500. Which option do you think a class would vote for? Unfortunately, I couldn't afford to run this experiment when I was a high school social studies teacher. I suspect my students from the Bronx would have chosen more money, while many Ivy League students would choose fairness. I remember President Obama was asked once if he would support raising the capital gains tax rate if he knew for a fact it would lead to lower tax revenue. He said he would as matter of fairness. I would also be interested in John's opinion if you want to save your answer to the question show.
Dr. Loury, please have Dr. Galor on again.....this is great!
Around minute 42, Dr. Loury asks Dr. Galor why it was the West that colonized China and India.
But I believe from studies of ancient DNA and history that colonization is as old as slavery. And that prior to 1400 or 1500, it was China and India who for hundreds of years were actually more powerful than Europe.
Around minute 24, Dr. Galor describes how a larger population means greater number of tools (ie brains). And I am going to assume that it's especially brains that live way, way, way on the right-hand tail of a normal distribution. The John Von Neumanns of the world, let's say, who are extraordinarily rare.
So, if a society adopts at all levels a credo that eschews the rarity of high merit for the more demotic "equity", Isn't that society essentially dooming itself to be bashed by those societies able to cherish merit?
I don't know if this is addressed in his book, but you also have the plain fact that in industrialized nations, fertility is inversely correlated with IQ. We heard Galor speak primarily about differences *between* societies, not within them.
I have a related idea. Would Charles Murry type arguments use Dr. Galors theory, examples of future planning with farming especially, to explain differences in IQ by race/ethnicity?
From my understanding of evolution and intelligence, I don't think that's the best or even among the top explanations, but it seems it would support someone making a claim about IQ and race.
As I said above, Galor's work is new to me, but the wiki entry for unified growth theory would seem to imply this very thing, which was noticeably left out of the conversation with Glenn:
Unified growth theory explores the interaction between the evolution of the composition of human traits and the growth process. In particular, it advances the hypothesis that evolutionary forces had a significant role in the evolution of the world economy from stagnation to growth. The theory suggests that the Malthusian pressure, via the forces of natural selection, have shaped the composition of the human population. Traits that were complementary to the technological environment generated higher level of income, and therefore higher reproductive success, and the gradual proliferation of these traits in the population contributed to the growth process and ultimately to the take-off from an epoch of stagnation to the modern era of sustained growth. The testable predictions of this evolutionary theory and its underlying mechanisms have been confirmed empirically and quantitatively.
Fascinating. I've been reading Alex Epstein's book Fossil Future and I think Oded's book helps explain the "hockey stick" graphs that Alex uses as a basis for his ideas on fossil fuel use leading to the explosion of human prosperity, longevity, etc.
Academics - Why summarize your theory in 5 minutes when you can spend an hour rambling on about it. BTW - This was HARD to listen to.
Snapshot: Innovation within a society is driven by that society's ability to attain the proper level of diversity and social cohesion for that time period. Currently, America has the optimal level of diversity and social cohesion and that is why it leads the world in innovation. Societies with a high level of diversity but that are not highly innovative need to develop tolerance for their diversity and stress social cohesion so they can realize the benefits of that diversity through increased innovation. Societies with strong social cohesion but that lack diversity, need to become more diverse in order to become more innovative. There was almost zero discussion supporting this conclusion.
Oded talked about the importance of geography, which he later seemed to question, the lack of earlier innovation's ability to increase average income per person within innovative societies, the impacts of agrarian societies on their peoples' cognitive function, a sketchy definition of diversity (when asked to define it), examples of diversity that seemed to equate it with ethnicity, blah, blah, blah.
He seemed to focus on the importance of economic systems (capitalism vs. centrally planned) and political systems and such but then seemed to ignore all of that when claiming diversity and social cohesion were the central tenants of innovation today. I would rather he start with his conclusion and then support it throughout the discussion but alas, that was not to be.
There's a lot I want to say, but since I'm responding on my phone I'm going to try to be brief. First, as I understood it, his claim is that the extractive nature of colonialism allowed the colonizers to focus more on developing human capital through education, which is then a key factor in advancing to a post-Malthusian era. If so, what is the difference between European extractive colonialism and Chinese or Roman extractive colonialism? Why did these empires not advance? The facts don't fit the theory very well, they support a more mainstream view that the industrial revolution was the primary driver of rapid increases in the standard of living. Second, on diversity vs homogeneity, a unified vision leads to strong action more easily than a fragmented set of viewpoints. I think he overstates the importance of diverse viewpoints on advancement; ideas won't change the material world unless translated into actions. The US built its wealth on A: the single minded push towards industrialization and B: the accident of geography that left us untouched by WW2. His focus on the ideas aspect of progress isn't surprising given that he's coming from academia, a sector focused on ideas, but for every ideas person, you need hundreds of people focused on implementation; it's more important to have enough implementors than to have enough ideas people.
In all, it was an interesting guest, but his ideas seem flimsy and I feel like he ignores contrary evidence.
Based on the conversation, Romans didn't have the population and time to advance.
Based on my memory or Chinese history, the Chinese were ahead. But they closed themselves off. Applying to the conversation, they created institutions that inhibited their growth and advancement.
Interesting guest. In Galor's vision of sustained economic growth, I wonder exactly how he pairs the negative population growth of technologically advanced nations with perpetual technological progress, particularly when he earlier imputes such progress to the exchange of ideas facilitated by population growth. The potential rate of human adaptation is almost certainly a limiting factor as well.
The whole episode made me think of the "punctuated equilibrium" model in biology, which can also be applied to language change, where for most of human history linguistic features appear to have diffused across small, heterogeneous populations toward a common prototype, interrupted only by large, sudden population expansions and splits. It is the latter scenario that fills the written record and informs the traditional study of historical linguistics and language families. Somewhere in there is a question for John...
I second the question for John!
The decline in fertility rates below the replacement level will inevitably lead to a decrease in the fraction of the working-age population. Additionally, with rising life expectancy, this trend will increase the dependency ratio, which is the ratio of dependents to the working-age population. Yet, these changes are not indicative of a decline in aggregate labor productivity and innovativeness, nor a reduction in the growth of income per capita.
The decline in fertility rates has generated several major benefits for the growth process. First, a reduction in population growth diminishes the dilution of resources over a larger population, increasing resources per worker and thus labor productivity and innovativeness per capita. Second, the reduction in the number of children allows for greater investment in each child’s education, contributing ultimately to the productivity and innovativeness of the working-age population. Third, fertility decline fosters female labor force participation further contributing to productivity and innovativeness per capita. Fourth, since the improvement in life expectancy is associated with a significant increase in the productivity of people beyond their current retirement age, labor productivity can be further augmented. Hence, while declining population growth decrease in the size of the working-age population, the productivity-adjusted size of this population may in fact increase sustaining innovation and productivity growth.
Thanks for your comment, Karl. I suppose it all makes sense in the abstract. In this model, is there a point at which falling fertility rates will level off again?
Do you believe that the human condition, and in particular the rate at which we can adapt to progress, places an upper limit on the advance of technology?
According to all models where fertility is a choice variable, fertility rates may stabilize at or below replacement level, but could decline indefinitely. However, as I explained above, even if fertility rates will remain below the replacement level, productivity per capita is very likely to continue to grow.
Our rate of adaptation could indeed constrain the pace of technological progress. However, future technologies, such as AI, are likely to foster our ability to adapt and therefore would mitigate this constraint on the pace of technological progress.
Posthuman tech seems like a pretty big wild card in a framework for sustainability. Also hard to imagine a future world in which our sexual impulses are almost entirely vestigial. I guess we're already most of the way there! It just feels like the modern era, as envisioned, eventually takes us somewhere that isn't fully human, in which case the definition of "standard of living" goes up for grabs.
Very interesting. I've been reading a lot on the "geographical journey of humanity" as discovered though genomes - modern and ancient. Prof. Galor's ideas have an obvious connection. I hope the book gets into the mixing of populations that have repeatedly occurred in our past. I had my Kindle version half through the interview.
Glen, you were bothered by Galor's remarks on human stagnation. Perhaps the way David Deutsch puts it in "The Beginning of Infinity" is more felicitous:
'Progress that is both rapid enough to be noticed and stable enough to continue over many generations has been achieved only once in the history of our species.'
No disrespect, Glenn, but you failed to probe deeper into some of his assumptions. For example, Galor keeps mentioning technology but speaks as if he is unaware that all technological innovations were only made possible with new sources of energy. For example, stone tools amplified the power of bare human hands, domestication of animals made possible using oxen to pull plows, taming horses increased human mobility a thousand-fold. Harnessing water power made many new processes possible. The industrial revolution could not have happened before steam engines, and so much of our lives today are unthinkable without electricity, etc.
Another example: like all living things, humans compete for resources. You, Glenn, succeeded because you not only outsmarted a whole lot of competitors, but you also outworked and outhustled them.
Many of these examples appear to mix cause & effect: Stones tools had not been crafted due to the discovery of a new source of energy. Yet, they reinforced the power of humans.
Domestication of animals had not been based on the discovery of a new source of energy. Yet they reinforced human mobility. The steam engine was not developed due to an earlier discovery of a new source of energy. Instead, it was a new source of energy that was conducive for industrialization.
Whether we define the use of fire, the domestication of animals, or the steam engine, as a technology or a source of energy has no implications for our understanding of the role of the “wheels of change” – technological progress, population growth, and human adaptation – in orchestrating the transition from stagnation to growth. Technological progress made people more productive and generated faster population growth and human adaptation, and population growth & adaptation, in turn, fostered greater technological progress. Some of these technological advancements have indeed been reinforced by energy production but the emphasis on energy is secondary for the understanding of the take-off from stagnation to growth. It is the change in the technological environment that generated the demand for human capital and brought about the fertility decline that freed the growth process from the counter balancing effects of population.
Brilliant guest and interlocution by Glenn. Learned a lot. Hope to read Oded’s work and respond by the end of the year with my own fine-tuned economic theory.
I listened to this episode last night and immediately ordered Professor Galor's book. This interview made me think of comparison's to Jonah Goldberg's book Suicide of the West. Jonah's book is about how what he called the "miracle" of liberal democracy is in danger from illiberal forms of populism. In some ways it seems like Professor Galor's book examines that miracle from another angle. But I will be better able to understand the similarities and differences once I finish Professor's Galor's book (and perhaps reread Jonah's).
In the meantime, I have a question for Glenn. Most of the discussion of economic inequality in the interview was focused on inequality between societies not within them. My degrees are in history and law, not economics. But from my understanding of economics, it seems to me that there is often a tension between policies that increase economic growth and policies designed to reduce income inequality. For instance, lower tax rates for investment income and capital gains promote economic growth, but also allow some very rich people to pay lower overall tax rates than working class people. I am thinking of the argument that Warren Buffet shouldn't be paying taxes at a lower rate than his secretary. Am I right that the tension exists? If so, so long as economic growth leads to improving standards of living for the poor and middle class alike, should it matter that Billionaires grow their wealth at a faster rate? Take this hypothetical. A teacher offers to either give every student in class $10, except for one student who would get $100 or every student but one $20 while that one student got $500. Which option do you think a class would vote for? Unfortunately, I couldn't afford to run this experiment when I was a high school social studies teacher. I suspect my students from the Bronx would have chosen more money, while many Ivy League students would choose fairness. I remember President Obama was asked once if he would support raising the capital gains tax rate if he knew for a fact it would lead to lower tax revenue. He said he would as matter of fairness. I would also be interested in John's opinion if you want to save your answer to the question show.
Western culture is the triumph of hope over experience, nevertheless I have no intention to denigrate any human being.
Dr. Loury, please have Dr. Galor on again.....this is great!
Around minute 42, Dr. Loury asks Dr. Galor why it was the West that colonized China and India.
But I believe from studies of ancient DNA and history that colonization is as old as slavery. And that prior to 1400 or 1500, it was China and India who for hundreds of years were actually more powerful than Europe.
Around minute 24, Dr. Galor describes how a larger population means greater number of tools (ie brains). And I am going to assume that it's especially brains that live way, way, way on the right-hand tail of a normal distribution. The John Von Neumanns of the world, let's say, who are extraordinarily rare.
So, if a society adopts at all levels a credo that eschews the rarity of high merit for the more demotic "equity", Isn't that society essentially dooming itself to be bashed by those societies able to cherish merit?
I don't know if this is addressed in his book, but you also have the plain fact that in industrialized nations, fertility is inversely correlated with IQ. We heard Galor speak primarily about differences *between* societies, not within them.
I have a related idea. Would Charles Murry type arguments use Dr. Galors theory, examples of future planning with farming especially, to explain differences in IQ by race/ethnicity?
From my understanding of evolution and intelligence, I don't think that's the best or even among the top explanations, but it seems it would support someone making a claim about IQ and race.
As I said above, Galor's work is new to me, but the wiki entry for unified growth theory would seem to imply this very thing, which was noticeably left out of the conversation with Glenn:
Unified growth theory explores the interaction between the evolution of the composition of human traits and the growth process. In particular, it advances the hypothesis that evolutionary forces had a significant role in the evolution of the world economy from stagnation to growth. The theory suggests that the Malthusian pressure, via the forces of natural selection, have shaped the composition of the human population. Traits that were complementary to the technological environment generated higher level of income, and therefore higher reproductive success, and the gradual proliferation of these traits in the population contributed to the growth process and ultimately to the take-off from an epoch of stagnation to the modern era of sustained growth. The testable predictions of this evolutionary theory and its underlying mechanisms have been confirmed empirically and quantitatively.
Fantastic!!!!
Once again, you cause me to expand my Book List - and my mind. Thank you Glenn and Oded - I'm looking forward to the thought explosion!