Aug 21, 2018 · 55m · knowledge-project
#39 Tyler Cowen: Thinking About Thinking
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
Economist Tyler Cowen joins host Shane Parrish on The Knowledge Project to discuss economic divergence, societal complacency, meta-rationality, and the disciplined mental models required to think well and compound knowledge.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Shane holds 24.2% of the talking time here. How this is scored →
Shane as informed peer 3.9 Guest teaching 4.2 Guest disagreement 1.8 Shane pushing back 1.6
speaking balance: gold is Shane, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 14:36 Tyler disputes acceleration of technological progress
Tyler flatly rejects Shane's premise that technological change has accelerated, contrasting massive early-20th-century breakthroughs with recent relative physical stagnation.
Hardest push from Shane ▶ 26:02 Shane presses Tyler on intentional parenting methodsShane refuses Tyler's humble deflection regarding his daughter's success, pressing him to detail the deliberate environmental factors and habits he cultivated.
Biggest teaching moment ▶ 14:36 Tyler contrasts 50-year technological leaps across generationsTyler provides an extensive historical breakdown comparing his grandmother's era of antibiotics and electricity with modern domestic stagnation to prove innovation has slowed.
Shane holds their own ▶ 40:31 Shane delivers organizational insight on project convictionShane demonstrates sharp organizational expertise by explaining how committee meddling marginalizes project ownership and severely impairs worker motivation.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Shane as informed peer | Guest teaching | Guest disagreement | Shane pushing back | Why |
|---|---|---|---|---|---|---|
| Average Is Over and Future Workforce Skill Sets | 3 | 5 | 1 | 1 | Shane sets up the discussion by asking Tyler to unpack the core thesis of Average Is Over. Tyler explains the economic divergence between high-skill tech-leveraged workers and displaced laborers. | |
| Attention Scarcity and Differentiating Media in Modern Markets | 4 | 4 | 2 | 2 | Shane presses Tyler on the cultural and geographic implications of attention scarcity and talent clustering. Tyler challenges conventional economic convergence theories, noting that regional disparities are permanently widening. | |
| Virtual Reality Limitations and Everyday Digital Habits | 3 | 4 | 2 | 1 | Shane explores futuristic scenarios around virtual tourism and digital entertainment worlds. Tyler offers a grounded, skeptical counterpoint emphasizing bandwidth limits and the public's appetite for mundane digital habits over complex VR. | |
| Escalating Global Premiums on Scarce Economic Resources | 4 | 3 | 1 | 1 | Shane quotes Cowen's earlier work on scarce resources and transitions to the decline of traditional newspapers. Tyler explains the economic inefficiency of bundled news and why unbundling into bespoke information streams is superior. | |
| The Complacent Class and Declining American Dynamism | 4 | 6 | 3 | 2 | Shane suggests that the pace of technological change is perceptually accelerating. Tyler firmly disputes this premise, comparing the dramatic transformation of the early 20th century to the relative physical stagnation of the last 50 years. | |
| Geopolitical Shifts and Historical Cycles of Disruption | 4 | 5 | 2 | 2 | Shane asks about geopolitical disruptions, physical infrastructure decay, and whether autonomous vehicles will resolve traffic congestion. Tyler explains why dynamic congestion tolling works and warns that autonomous vehicles could worsen road congestion. | |
| Developing Meta-Rationality and Utilizing Online Learning | 3 | 5 | 1 | 1 | Shane asks how individuals should adapt to an algorithm-dominated future. Tyler outlines the concept of meta-rationality and epistemic modesty, advocating for aggressive internet-based self-education paired with trusted human mentors. | |
| Ego Management, Performance Feedback, and Parenting Strategies | 4 | 4 | 2 | 2 | When Shane asks about instilling resilience in children, Tyler deflects taking personal credit. Shane pushes back to demand actionable parenting principles, prompting Tyler to advise exposing teenagers to admirable adult role models outside the home. | |
| Specialization Versus Synthetic Knowledge in Executive Leadership | 5 | 4 | 3 | 3 | Shane introduces Charlie Munger's heuristic that professionals should dedicate 80 to 90 percent of their time to hyper-specialization. Tyler pushes back, arguing that executive leadership increasingly requires synthetic, cross-disciplinary generalist skills. | |
| Nonfiction Reading Habits, Physical Books, and Book Gifting | 4 | 3 | 1 | 1 | Shane and Tyler exchange personal habits regarding physical books, marginalia, and speed reading. Both share common ground on how gifting books can inadvertently send unintended social signals. | |
| Reading Speed, Bayesian Deference, and Evaluating Information Sources | 4 | 5 | 3 | 2 | When Shane asks how to think well, Tyler bluntly responds that he does not know anyone who thinks well. Tyler goes on to explain Bayesian deference and the paradoxical challenge of judging who is an authoritative source. | |
| Engaging with Disagreeable Views and Avoiding Devaluation | 6 | 4 | 1 | 1 | Tyler explains the cognitive bias of 'devaluing and dismissing' opposing views. Shane demonstrates domain expertise by illustrating this dynamic with a nuanced story from his government career on how micromanagement destroys project ownership and motivation. | |
| Chess Principles, Error Analysis, and Compound Intellectual Growth | 3 | 4 | 1 | 1 | Shane asks Tyler about his formative years playing tournament chess and how it shaped his thinking. Tyler discusses Kotov's error analysis technique and frames long-term intellectual development as compound learning. | |
| Television Consumption Patterns and Narrative Depth in Cinema | 3 | 3 | 2 | 1 | Shane asks about Tyler's media diet and cinema preferences. Tyler critiques contemporary Hollywood's formulaic franchise structure and argues that modern foreign cinema offers superior narrative risk. | |
| Low Interest Rates and Retirement Risks for Younger Generations | 5 | 4 | 2 | 3 | Shane brings audience questions on near-zero interest rates, retirement viability, and minimum wage policies. Shane pushes Tyler on whether minimum wage hikes wash out through downstream consumer price inflation. | |
| Future Asset Classes, Bitcoin's Legitimacy, and Blockchain Hurdles | 4 | 4 | 1 | 2 | Shane asks about emerging asset classes and raises technical concerns regarding blockchain transaction and verification costs. Tyler validates Bitcoin as a legitimate store of value while expressing skepticism toward broader blockchain adoption. |
Statements from this episode (41)
Cowen: Automation will widen income inequality while boosting consumption for the poor
“So the world will be a lot more productive because of automation and smart software, and this will give us a lot of consumer goods for free. So we'll have this super sharp divide between the rich and the poor in terms of income, but in terms of actual consumpt…”
Cowen: Computers will not replace sales, marketing, or management anytime soon
“So there's always room for sales, for marketing, for management, including in the distant future. Computers will not be doing that for us anytime soon.”
Tyler Cowen: Capturing attention is hardest among high-income earners
“Of course, it's much harder to get everyone's attention. Most of all, people who have high incomes because there are so many demands on their time, but there's your email flow, there's Twitter, there's Facebook, there's being texted.”
Cowen: Media competition rewards authentic, niche-focused creators over incumbents
“A lot of media companies, of course, have lost out, so it rewards people, Who in some way are authentic, or dedicated, or can target a niche, and do something really interesting.”
Cowen: Regional economic divergence rather than convergence will continue
“I think countries and also regions within countries we won't see so much convergence. We'll see a lot of divergence. So it used to be in America, in the post-war era, America's poorer cities were essentially catching up to the wealthier cities. But nowadays, s…”
Cowen: Most of Eastern Europe is depopulating and will never catch up
“Parts of the world, such as Eastern Europe you know, Poland maybe is catching up to the West, but most of it is being depopulated and emptying out. And it basically will never catch up.”
Cowen: Simple, boring digital habits beat ambitious tech as killer apps
“I think my intuition is people like simple, boring things, ah, much more than you might imagine. I mean, people just love spending time on Facebook and sending back and forth short, silly, or not very informative messages. And that's been the killer app for so…”
Cowen: Global scale expands economic returns to scarce resources
“By a global setting where you can sell to billions of people across more than a hundred countries, and that really will increase those rewards to the scarce factors.”
Cowen: Most newspapers will become ventures owned or supported by the wealthy
“I don't think you can fund most papers by ads. I think they will end up as ventures owned or supported by the very wealthy.”
Cowen: Local reporting will shift to blogs and expose scandals
“There'll be a lot of local reporting on blogs or blog-like entities, and if you want to find it will be there. So if you uncover a scandal about some local official, the world will find out.”
Cowen: US productivity growth is down outside of tech
“Rates of productivity growth have been down outside of the tech sector.”
Cowen: Rational individual choices for safety make society collectively worse off
“So a lot of these decisions to settle in and be safe and comfortable, they're individually rational. Like, it's good to be safe, right? Stress is, is, is a bad thing. But when our society collectively makes this decision, there are ways in which we're all wors…”
Cowen: US cities are more racially segregated, but suburbs are not
“If you mean racially segregated, cities are more racially segregated. Suburbs are not. So that's a mixed story.”
Cowen: America exhausted the low-hanging fruit of early industrial technologies
“We exhausted a lot of the low-hanging fruit from combining fossil fuels with powerful machines and electricity and communications, and that, that's all to the better, but we've now entered a world where people find it hard to imagine a future very different fr…”
Tyler Cowen: Complacent societies cannot survive indefinitely without restoring economic dynamism
“But that said, a country cannot remain complacent forever. And I argue that eventually, you know, something has to give, you need a way to pay the bills, you need dynamism again, and you start seeing disruptions in your complacent life.”
Cowen: The world is in a G-Zero order beyond US control
“So we now live in a GZERO world. America cannot dictate world affairs.”
Cowen: The US is returning to 19th-century polarization and dynamism
“Maybe in some ways we're going back to the America of the late 19th century. With a polarized politics screwy media you know, in some ways, higher levels of violence, and more dynamism, too.”
Cowen: The US must adopt congestion pricing like London and Singapore
“So London has applied a congestion charge going into the central city. It has worked. Singapore has congestion charges for its roads. They have worked. In this country, we need to do the same thing.”
Cowen: Autonomous vehicles could worsen road traffic congestion via errand trips
“Self-driving cars could make the problem worse, you know, because you'll send out your car or your vehicle on all kinds of errands. Oh, go to Whole Foods and pick me up some smoked salmon. I'm hungry. And there may be fewer people on the road, but the people t…”
Cowen: AI will soon outmatch human consumer decision-making
“Artificial intelligence will tell you what to buy and how to buy it, and at what price. People who think they can beat the algorithms will make a lot more mistakes, so know when you should defer.”
Cowen: Epistemic modesty delivers higher returns than high IQ
“Having good judgment there is becoming more important than just being like the smartest person or having the highest IQ. So a kind of epistemic modesty, I think, is showing much higher returns than it used to.”
Cowen: Online education is one of history's greatest achievements
“Online education, as we have it, is one of the world's greatest achievements ever, and we've put almost all of it in place in, say, 15 years.”
Cowen: Expose teenagers to quality adult friends as external role models
“Expose your child in teen years to as many of your friends who might be possible role models as possible. Like at some margin, they're just not going to listen to you anymore. They're not going to watch your behavior anymore. They know what you're about. They'…”
Cowen: Modern managers need philosophical knowledge about human motivation
“As more people become more specialized, there's a separate class who become more synthetic and less generalized and more almost like philosophers. The manager is like a philosopher. They need to understand the human condition and
What motivates people?
Which p…”
Cowen: Books lose their world-shaking transformative power as you age
“When you're young, it's quite easy to read books that will shake everything you know, and those are the quake books. So for me, you know, a quake book was reading Friedrich A. Hayek. A quake book was reading the early science fiction I read in my life. A quake…”
Cowen: Finish only one in ten books you start reading
“Classics I read cover to cover. Almost by definition of a classic. Most books I don't finish. Very good books I finish. Maybe one book in 10 I'll finish. But I don't mean that as any slight to the books. You've always got to think, Well, you know, chapter seve…”
Cowen: Giving someone a book is often a slightly cruel act
“If you give a book away, the danger is a person will read it just because it's a gift. Unless you think it's the book they should be reading, it's actually a slightly cruel act to give someone a book.”
Cowen: Source evaluation is a vital skill, yet most people do not improve
“If you're going to be a generalist, one of the best things to be a generalist in is evaluating the quality of sources in your Twitter feed, online, everywhere. That is so important, and it's skyrocketing in significance. Most people, they're not getting that m…”
Cowen: Reading agreeable books is less interesting and often boring
“Overall, I'm more interested in reading books I disagree with than books I agree with. A lot of books I agree with, they could be quite good, but they tend to bore me.”
Cowen: The 'devalue and dismiss' intellectual habit severely impedes learning
“There's an intellectual move, which I call devalue and dismiss. And you know, try not to do devalue and dismiss. You learn much less. And it's always justified, right? Again, unless it's Magnus Carlsen playing chess, or maybe a computer program playing chess, …”
Cowen: Trying to prove yourself right in arguments is usually a mistake
“I would say on average you're right less than half the time because there's so many fights where both sides are wrong. So trying to be right or establishing being right or proving being right is usually a mistake. Most of the time you're wrong, and it's hard t…”
Cowen: Intellectual improvement requires actively confronting personal analytical errors
“You want to really figure out what are your mistakes. You're like, most of the time, not making the best chess move, intellectually speaking. And if you face up to that, you'll improve. If not, at some point, you'll ossify, and you can play devalue and dismiss…”
Cowen: Incremental learning compounds over decades to create massive intellectual advantages
“Another way to think about it is the value of compound interest. I refer to it as the value of compound learning. Like, just keep on learning. Let the years pile up in your favor. Learn X percent a year. It will compound and stay alive on this earth, and maybe…”
Cowen: Contemporary television is overrated while movies are underrated
“I think movies are actually much better than TV. TV now is a bit overrated and movies underrated.”
Cowen: Millennials face a high risk of impoverished retirements
“It's much harder for millennials to save, and I fear they will have impoverished retirements. Especially since the fiscal budget on the federal side is problematic as well.”
Cowen: Global demand for safe assets keeps US rates artificially low
“And I think those rates staying so low, Is a sign that there's all this wealth out there in the world, Russia, China, but not really that many safe places to put it. So they buy us government securities, which is perfectly understandable, but it lowers our rat…”
Cowen: Minimum wage increases put people out of work
“Minimum wage increases put people out of work. Sometimes it's a small number of people. Sometimes it's a large number of people, but I think jobs are very important, and I would look for different ways to raise wages, which we do need to do.”
Cowen: Minimum wage hikes raise food prices and dissipate initial gains
“So if you raise minimum wages, say that raises food prices, there's good evidence for this, and other poor people have to pay more for their food, And a lot of those apparent first round gains get given back and they dissipate.”
Cowen: Successful saving requires dogmatic, rule-based personal finance systems
“I think the people who save well have methods and systems almost like a religion.”