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How is market signaling tied to economic growth, and what will the introduction of AI do to the wave of economic development in the US and abroad? Will other surging economies surpass the United States as dynamics continue to change?
Michael Spence is a senior fellow at the Hoover Institute at Stanford University, also the author of a number of books, including The Next Convergence: The Future of Economic Growth in a Multispeed World and most recently, Permacrisis: A Plan to Fix a Fractured World.
Greg and Michael discuss Michael’s ideas on economic growth and signaling, exploring the early days of applied micro theory with key figures like Ken Arrow and Tom Schelling. They also cover the evolution of global economic policy, particularly the challenges and opportunities in an increasingly fragmented world. Michael shares insights from his books and emphasizes the importance of cognitive diversity in understanding and addressing global socio-economic issues.
*unSILOed Podcast is produced by University FM.*
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The scarcity of time as a signal
18:56: It turns out time is an incredibly important signal. In just an ordinary interaction, if somebody's willing to spend time with you, we always take this for granted because it's part of life, right? If they won't spend time with you, that sends a different signal. I mean, in the internet era, I think most people understand that the scarcest commodity is attention, not money, not other things. And so, the battle for people's attention, or time, or whatever you want to, these are slightly different, but it's pretty important. So, it's all there, but it did have origins well before the signaling and screening work.
Signaling model has to be visible
11:11: The core of the signaling model is that it has to be visible. It has to cost something; otherwise, everybody would do it. And the costs have to be negatively correlated with the quality; otherwise, it won't survive in equilibrium.
Navigating crises, inequality, and global interdependence
49:19: The way I approach that is try to look at the big challenges: maintaining some reasonable level of global sort of interdependence with the benefits that it brings without getting into big trouble, dealing with the various dimensions of the sustainability agenda, and dealing with sort of stunningly high levels of inequality, especially in wealth. Thomas Piketty's right; there's long cycles in these things, and maybe you just have to live through them. But, the last thing I did is look at the St. Louis Fed, which publishes pretty detailed data on American household net worth, assets, liabilities, and net worth. The top 10 percent has two-thirds of the net worth. The bottom 50 percent has 3%. Yeah. Sort of wonder, you know, can you really run a society that looks like that indefinitely, or if not, what's going to break and cause it to change?
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How are happiness and success intertwined when it comes to business? What crucial element do you lose as a company when the boss or the culture becomes one of stress or pressure?
Emma Seppälä teaches at the Yale School of Management and is a Scientific Director at the Center for Compassion and Altruism Research at Stanford University. She is also the author of several books, most recently Sovereign: Reclaim Your Freedom, Energy, and Power in a Time of Distraction, Uncertainty, and Chaos.
Greg and Emma discuss the evolving field of happiness studies, its application in business, and Emma's research on the relationship between success, well-being, and stress. Emma shares insights on how high-stress cultures in academia and workplaces undermine long-term performance and creativity and offers practical strategies for individuals and leaders to cultivate emotional intelligence and resilience through practices like meditation and breathwork.
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Self-awareness vs. self-criticism in leadership
18:17: If you want to be a good leader, compassion is so essential. It's a no-brainer. And I teach a lot of female executives, male too, but I would say both of them are highly self-critical. I differentiate between self-awareness and self-criticism. Self-awareness is, oh, you know what? My statistics are terrible. Like I actually need to hire a statistician to help me on my team. That's self-awareness, right? Self-criticism is, I'm a terrible accountant. I can't do this. Like, I'm just so bad, all that stuff is either going to make you feel less than and all the consequences thereof or make you feel like you have to make up for it by being a jerk or "narcissist." Everyone's a narcissist these days, according to everybody else. You know what I mean? But, like, yeah, both of those are consequences of profound self-hatred. That's why, you know, self-awareness is key. Self-criticism? Not so much.
Innovation starts with resilience and a sovereign state of mind
11:24: What we need the most is innovation, both in our young people, in our employees, and all around ourselves. We need to figure out the problems in our lives, and the best way to access that is to come back to, I'm going to call it, a sovereign state because when you're sovereign and you're sort of centered within yourself, and you're in a calmer state, and you're less frazzled, and also the whole antifragile thing. Well, it's antifragile psychologically, so you're in a state where you are most resilient to the outside world and most creative.
Why leadership begins with your well-being
33:25: People can't flourish around you if you're stressed, if you're burnt out, if you're showing up yourself; it's not going to happen. As a leader, people are watching you. They're very attuned to you because they're watching out for their own safety, and they're measuring where they are at, where they stand, and so it's critical. I think that's a place where people get lost. You're like, "Oh, well, if I just offer these perks or see these things, everything will be fine." It's like, well, really, people see through you. They see through you. And if you're not authentic, they know that.
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How did Chile's economic experiment reshape global economic thinking, and what can it teach us about the future of neoliberalism and populism in Latin America and beyond?
Sebastián Edwards is a professor of international economics at UCLA and writes about Latin American history, economics, and politics. His books include Left Behind: Latin America and the False Promise of Populism, American Default: The Untold Story of FDR, the Supreme Court, and the Battle over Gold, and most recently The Chile Project: The Story of the Chicago Boys and the Downfall of Neoliberalism.
Sebastián and Greg chat about the remarkable economic transformation in Chile over the last seven decades, the roots of neoliberalism and its global implications, the contemporary challenges facing Argentina, and what lessons can be gleaned from historical economic events like the U.S.’s default during the FDR era.
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Why could the U.S. justify a default while Argentina couldn't?
48:11: I think that the notion of excusable default is important. If there is an act of God, and the Great Depression was thought to be, in part at least, an act of God, that was one element. The other one is that I think the Supreme Court rulings were very detailed and pedagogical, and they explained that aspect of the justifiable default in a clear way. And the third one is that the devaluation was very large, from $20.67 to $35. So, the problem with Latin America is that most devaluation crises are very timid.
On Chile's horizontal inequality
56:01: Chile is one of the most unequal countries in terms of income, but also it's very segregated. [56:37] So, there is this horizontal inequality that I think is also important, and as the country developed and people got out of poverty, being treated in a disrespectful way by whiter citizens—there's also a racial component, but in Chile, it's not acknowledged all the time—but being treated without respect is not acceptable anymore. People get resentful, right? So, I think that all of that added to this quite unstable cocktail.
How inequality and slow growth created Chile's deadly cocktail
04:11: When you combine inequality with slower growth, then you have a really deadly cocktail. And that happened after 2014, and it made the criticism higher. And the third point is that there were some implicit promises that the supporters of the model made that did not happen. And that's mostly related to pensions—the fully privately run (not anymore, but originally) pension system based on individual savings accounts. The idea was that if things worked the way people thought they were going to work, workers would get a rate of replacement of about 70 to 80 percent of their income. It turns out they get about 25 percent instead of 70 or 75 percent, and people feel betrayed.
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Why do our most complex systems—from financial markets to corporate behemoths—consistently produce outcomes that nobody intended, and what forgotten science might hold the key to fixing them?
Dan Davies is an economist and author of the books, Lying for Money: How Legendary Frauds Reveal the Workings of Our World and most recently, The Unaccountability Machine: Why Big Systems Make Terrible Decisions - and How The World Lost its Mind.
Dan and Greg discuss the complexities of fraud in financial systems and why no individual seems accountable for major financial crises, how the historical and intellectual foundations of cybernetics and systems thinking can be applied to improving organizational design, and the role of information theory in management.
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Fraud thrives where trust exists
13:58: If you want to commit a big fraud, you don't go somewhere where there's low trust. You go somewhere where, as long as you show up, wear a nice suit, smile, and say please and thank you, people will assume that you're honest. But the thing is, that's what you want to do if you want to run a legitimate business too. So, people always say that the cost of fraud is never the amount of money that's stolen; it's the amount of legitimate business that doesn't get done. And that's just really saying that trust is an incredibly efficient way of organizing your economy compared to checking. Checking and trust are basically the only two kinds of technologies we have to ensure the integrity of information. And of the two of them, trust is a lot more efficient.
How fraud disrupts an economy
03:48: Fraud happens when not only does your assumption of perfect information break down, but there's some actual anti-information there. There's some actively false and misleading information that's been injected intentionally.
Why investors and economists lead in a data-driven era
58:40: A lot of the reason why economists rule the world in policy is the same reason why more and more companies are run by their investors or their investor relations departments. It's because they collect the data, and the economists collect the numbers that are used to make up the world of facts.
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Why have philosophers historically failed to think seriously about privacy? How do invasions of privacy really impact a person? What do we give up when we let our data be freely commoditized by Big Tech companies without being fully aware of how they’re doing it?
Carissa Véliz is an Associate Professor in Philosophy at the Institute for Ethics in AI, a Fellow at Hertford College at the University of Oxford, and the author of multiple books including most recently, The Ethics of Privacy and Surveillance.
Greg and Carissa discuss why philosophers have historically neglected privacy as a subject, the modern implications of privacy in the digital age, and the ethical issues surrounding data collection and targeted advertising. Carissa argues for a nuanced, objective approach to privacy that considers its deep evolutionary and societal roots. They touch on the tension between convenience and privacy, the importance of legal frameworks, and the responsibilities of both individuals and companies in safeguarding personal data.
*unSILOed Podcast is produced by University FM.*
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The hidden risks of sharing genetic data
34:40: Most people don't really realize what it means to give away your genetic data. Genetic data is something so abstract that I don't think our psychology is built to understand it. It's not something you can touch or you can see. I can't visually show it to you, I mean, except in a very abstract form. And so I don't think people think it through. I think in a society in which we are very respectful of private property, it's very intuitive to think that if we make privacy a question of private property, then we are being respectful towards privacy. And it just doesn't work that way, because when I sell my genetic data to one of these companies, I'm selling the data of my siblings, my parents, my kids, even my very distant kin who might get deported, who could have their insurance denied. So it's not a personal thing.
Privacy is a protection against possible abuses of power
06:09: Privacy is a protection against possible abuses of power. And as long as institutions are institutions, and people are people, there will always be that temptation to abuse power. We can see this very clearly because people who are more vulnerable to abuses of power tend to care more about privacy.
Can consent in data co-exist?
50:52: Consent in the data world just doesn't exist because it's not informed. You have no idea what they're doing with your data or where your data is going to end up. And it's not because you're uninformed; no data scientist would know it either. It's because of the way the data market works, and it's not really voluntary because if you say no, then you can't use the service, and not using the service might mean not getting a job or not getting an education. So, we need to change the kind of framework, and I propose an opt-in framework, in which you can opt in to have certain kinds of data collected, and that's effortful, and you only have to do it once.
Navigating privacy in a digitally-driven world
38:07: As long as the data exists, there's already a privacy risk. And that was my point with the iron law of digitization—that when you turn the analog into the digital, it might seem like a very neutral thing to do, but it's not because you turn something that wasn't trackable into something that's taggable, and that means it's being surveilled. That's what it means to surveil, to track something. And so, when we turn the analog into the digital, we're doing something very morally significant.
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What effects will generative AI have on coding and software engineering? Will it make anyone a coder? Will it just turn software engineering into copy/paste exercises? How will the top coders use AI to hack their own efficiency and productivity, and why is it so hard for the large tech companies to do the same things that the smaller ones do?
Clive Thompson is a journalist for the New York Times Magazine and Wired as well as the author of multiple books, including Smarter Than You Think: How Technology Is Changing Our Minds for the Better and Coders: The Making of a New Tribe and the Remaking of the World.
Greg and Clive delve into the cultural and societal impacts of the rise of coders, exploring how the coding mindset infiltrates various aspects of life and business. They also discuss the nature of work in software engineering, the shift towards iterative and agile methodologies, and the potential future shaped by generative AI and its implications for the field. Clive explains the paradoxes of efficiency, the challenges of maintenance over creation in coding, and how his life experience and interests converge in his upcoming book about cycling across the United States and the future of mobility.
*unSILOed Podcast is produced by University FM.*
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Why do coders need an intense level of focus?
If this thing happens [in coding], it will change this other thing. If that thing changes, this thing over here has to happen, and that's also reliant on this other thing. And it's so hard to get the structure of this in your head that you might spend several hours just looking at what you're trying to do, just thinking about it, sort of, getting it in your head. And when it's finally there, then you can begin to do the work. And of course, a couple interesting things fall out of this psychology. One is that you want to stay there. It took you three to four hours to get there, so you don't want to leave. So, you want to stay there for 10, 15, 20, 48 hours.
The huge problem with managing coders.
[18:15] This is a huge problem with managing coders is that they love learning, in a weird way. You would argue, isn't this an ideal employee? Someone who is eager to learn. Constantly learning new things. Very few employees are like, “I am just omnivorous in my spare time when I'm not being paid, I'm going to do more of this.” I mean, how many accountants at your company go home, and then from eight o'clock at night to two in the morning, do more accounting for fun, just voluntarily? That's a coder, right? And what they're doing is they're going home, and they're doing crazy new forms of software that they're not really allowed to do at work, but they often try and bring that in, and they'll be like, “I'm now obsessed with this framework. Hey, boss, can we use this? And it’s like, “No! That framework is experimental and not reliable, and I want you to do the same old boring thing we've been doing for 30 years, because that is reliable.” And this is just a very hard thing. There's an excitement in the craft that a lot of software developers have that's not what the job requires.
An interesting analogy between law and coding
That's a great analogy that I'd never heard or thought of before, which is that law needs to be patched the way that software needs to be patched. Because it's the same challenge, which is that [in] writing code and writing law, you're trying to create a system that other people are going to use. Humans are going to use it. And so you, the author of the law, or you, the author of the code, have to try sitting at your desk to imagine all the things that those dozens, hundreds, thousands, millions, or billions of humans will do with this system. And you can't. There's no way you can. So, you have to just put it out there and watch and see what they do, and then fix it as it goes, basically. And, of course, the more critical the system, or the less critical system, the more or less you can get away with.
The mental character of coding is closer to that of an artist than it is to many other forms of engineering.
Coders hate being interrupted, and that's part of why they're regarded as being such irascible weirdos. [It] is like, if you tap them on the shoulder, they'll bite you.There's something delightful about that mentality of focus. There's something maybe even [to] be learned from it. It's one of the reasons why I realized the more I talked to coders about their attentional needs, and the sweep and drama, and a sort of, epic mental toil, that it reminded me of novelists, of artists, of poets, of temperament. The mental character of coding is closer to that of an artist than it is to many other forms of engineering.
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What more can be learned about a topic like the origins of economic growth that has been covered so extensively? When pulling back and looking at all the connected threads, is there an order in which things must happen to spark the change?
Mark Koyama is a Professor of Economics at George Mason University, Research Associate at the Centre for Economic and Policy Research (CEPR), and Mercatus Center, Senior Scholar. He is also the co-author of two books, How the World Became Rich: The Historical Origins of Economic Growth and Persecution and Toleration: The Long Road to Religious Freedom.
Greg and Mark discuss the recurring interest in the origins of economic growth and the Industrial Revolution. Mark lays out the various theories and factors that have shaped economic development across different regions and historical periods, such as geography, demography, culture, institutions, and political conditions. Greg asks why some regions like Europe succeeded in industrialization while others did not, and the role of colonialism in shaping global economic dynamics. Mark also offers insights into the ongoing relevance of economic history in understanding contemporary growth and innovation.
*unSILOed Podcast is produced by University FM.*
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The overlooked challenge of sustaining economic growth
04:45: Once you think about growth, it's hard to think about anything else. It's a question, I think, both for rich countries, which are stagnating. So, I mean, for the US in my view, but if you think about Germany or the UK, these are pretty stagnant economies right now. And so I think these are, you know, it's not just a "Oh, we've had this revolution. Now we can sit on this, wealth gradient.." No, this is an ongoing problem, and I think policymakers in most countries have totally neglected issues of growth. They've focused on all these other issues, which we think are important, and we might say we care about growth, but we really don't act like it. And, similarly, there's a need in developing countries, obviously, to sustain growth. Both the poorest countries in the world, but also middle-income countries, which can stagnate and fall into what's called a middle-income trap.
Geography’s impact on economic hubs
13:55: Geography still has this massive role, basically, even today, in the where, like the location, which locations are going to be economic hubs. But obviously, you can’t explain the why, so it’s going to be insufficient on its own, but it could be interacting with other factors.
On markets and creative destruction
42:06: You need markets, which are flexible and adaptable, so they can be disrupted by new technologies and entrepreneurs. Other people will have a more statist perspective. They’ll think that you need, maybe, the state to do more on basic science, right? Maybe more even on actual innovation to support this. But I tend to think that you need these market institutions, basically, and they need to be sufficiently vibrant.
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We learn the skill of talking as toddlers and by the time we’re adults, most of us don’t think twice about the inner workings of a conversation. But the reality is, there’s a science and an art to conversing. And understanding that science could unlock so much potential in your professional and personal life.
Alison Wood Brooks is a professor at Harvard Business School and the author of the book, Talk: The Science of Conversation and the Art of Being Ourselves. She also teaches a cutting-edge course at Harvard called Talk where she helps students hone their conversational skills.
Alison and Greg talk about talking, including why this critical skill should be incorporated into more school curriculums, the complexities of effective communication, and the importance of small talk. Alison also offers tips for enhancing your conversation skills, whether in personal relationships or professional settings.
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Why aren't people experts at communication?
01:59: Language acquisition starts very early in our lives, and we spend almost all day long, every day of our lives, practicing it. And so we get to adulthood, and we feel like we should be experts at it, that we should be really great at it. And yet, as we all know, based on our own ruminations about our own lives, and from our observations of others, we are far from perfect at communication. And the reason that we're not experts at it is because, when you look under the hood, conversation is a lot more complicated and tricky than it first appears, and it takes some rummaging under the hood to understand what's really going on here and why aren't we—why aren't we perfect at it?
What makes a successful conversation
12:12: A successful conversation is about the combination of prep—what you do ahead of time—and then how well you improvise once you're there. It's the combination of preparation and flexibility.
Small talk is the start not the destination in every conversation
18:01: Small talk is a very important social ritual. You have to do it. You have to start somewhere, especially with strangers and people you haven't seen in a long time. You gotta start with, like, how are you? Like, what's going on? How are you? It'd be weird not to. The mistake that people make is staying there too long, not finding those off-ramps to move up the pyramid to something more meaningful and interesting.
The challenge of explicit goals in conversations
10:49: Often, we don't know what we want, and it might emerge as the conversation goes on or as a relationship proceeds. So that's a big problem, right? Like, we just can't possibly anticipate all of the many things that we might want. The second challenge is by making our goals explicit. Like, if we were to say all the things out loud, it would undermine much of the magic that we're actually looking for. We want a conversation to feel almost magical. [11:27] We want to get there and do the thing without having to say out loud what our goals are. And the things that go unsaid in a conversation really matter. If we were to make everything explicit, a lot of that delight would disappear.
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Where is the line between fact and fiction in the capabilities of AI? Which predictions or promises about the future of AI are reasonable and which are the creations of hype for the benefit of the industry or the company making outsized claims?
Arvind Narayanan is a professor of computer science at Princeton University, the director of the Center for Information Technology Policy, and an author. His latest book is AI Snake Oil: What Artificial Intelligence Can Do, What It Can’t, and How to Tell the Difference.
Greg and Arvind discuss the misconceptions about AI technology, emphasizing the overestimations of AI's capabilities and the importance of understanding predictive versus generative AI. Arvind also points out the ethical and practical issues of deploying AI in fields like criminal justice and HR. Arvind and Greg also explore the challenges of regulation, the historical context of technological hype, and how academia can play a role in shaping AI's future. Arvind also reflects on his previous work on Bitcoin and cryptocurrency technologies and shares insights into the complexities and future of AI and blockchain.
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What can the AI community learn from medicine about testing?
28:51: Let's talk about what we can learn from medicine and what maybe we shouldn't take from them. I think that the community internalized a long time ago that the hard part of innovation is not the building, but the testing. And the AI community needs to learn that. Traditionally, in machine learning, the building was the hard part, and everybody would evaluate on the same few sets of benchmarks. And that was okay because they were mostly solving toy problems as they were building up the complexities of these technologies. Now, we're building AI systems that need to do things in the real world. And the building, especially with foundation models, you build once and apply it to a lot of different things. Right? That has gotten a lot easier—not necessarily easier in terms of technical skills, but in terms of the relative amount of investment you need to put into that, as opposed to the testing—because now you have to test foundation models in a legal setting, medical setting, [and] hundreds of other settings. So that, I think, is one big lesson.
Replacing broken systems with AI can escalate the problem
08:36: Just because one system is broken doesn't mean that we should replace it with another broken system instead of trying to do the hard work of thinking about how to fix the system. And fixing it with AI is not even working because, in the hiring scenario, what's happening is that candidates are now turning to AI to apply to hundreds of positions at once. And it's clearly not solving the problem; it's only escalating the arms race. And it might be true that human decision-makers are biased; they're not very accurate. But at least, when you have a human in the loop, you're forced to confront this shittiness of the situation, right? You can't put this moral distance between yourself and what's going on, and I think that's one way in which AI could make it worse because it's got this veneer of objectivity and accuracy.
Foundation models lower costs and could shift AI research back to academia
27:22: The rise of foundation models has meant that they've kind of now become a layer on top of which you can build other things, and that is much, much less expensive. Then, building foundation models themselves—especially if it's going to be the case that scaling is going to run out—we don't need to look for AI advances by building 1 billion models and 10 billion models; we can take the existing foundation models for granted and build on top of them. Then, I would expect that a lot of research might move back to academia. Especially the kind of research that might involve offbeat ideas.
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Raising boys in post-MeToo times is beyond challenging. So how do moms balance societal pressures with the desire to raise happy, healthy, and emotionally intelligent boys?
Ruth Whippman is a journalist and author of the books, BoyMom: Reimagining Boyhood in the Age of Impossible Masculinity and America the Anxious: How Our Pursuit of Happiness Is Creating a Nation of Nervous Wrecks. In BoyMom, she weaves personal anecdotes with data and reporting to capture the complexities of raising emotionally healthy boys in today’s world.
Ruth and Greg discuss the cultural expectations and modern pressures around parenting, the problem with labeling traits either feminine or masculine, the nurturing gap for boys, and why patriarchy harms men just as much as women.
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Can we just allow everyone to be fully human without gendered traits?
39:02: I think there's all these attempts to rehabilitate masculinity and redefine it. And it's just like, can we just give it a rest and just allow everybody to be fully human? Stop assigning a gender to human traits and values. Every human needs power, agency, strength, and courage, and every human needs nurturing and relationships and care, those feminine-coded virtues. Why are we splitting them up? And when we try to say, oh, well, actually, caregiving is masculine, what are we even doing there? I mean, at what point does it just become meaningless? And we should just give up on those things altogether. At what point is it just reinforcing this idea that it's so important to be masculine that we come up with any kind of logical hack to make it work, to preserve it?
Are boys missing out on feminine-coded values that impact well-being?
08:24: Before you can encourage boys to take on those more feminine-coded attributes, you have to truly believe that those attributes have value. But I do believe that boys are genuinely missing out. I do believe that those feminine-coded values have huge worth and are hugely important for our psychological well-being and for living a happy, healthy life. And so I feel like this project of realizing that boys and men are losing out in this system is a really big part of what we need to do here.
Should we stop reinforcing masculinity as the be-all and end-all?
40:38: We should stop trying to push this positive masculinity framework. And it's not because I think it's great if people present as masculine; if they naturally like to embody all those virtues, if they come, if that's who they want to be, great. There's nothing wrong with masculinity per se. It's just that when we keep reinforcing it as the be-all and end-all of how a boy or man should be.
Understanding the invisible cultural baggage around gender
04:09: I think with kids, there's this sort of superficial idea that you can just choose whatever gender you are, but there's so much invisible cultural baggage going on in the lives of kids and adults with what we're all doing in terms of gender, all the invisible things and baggage that we bring to this project. [04:44] We're operating with this idea that we have this huge amount of control over all of these things. And both culturally and biologically, and in all kinds of different ways, we have far less control than we think we do.
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