In 2011, Foreign Policy Magazine named Tyler Cowen #72 in their list of the "Top 100 Global Thinkers."
He is a professor of economics at George Mason University and, along with Alex Tabarrok, he blogs at Marginal Revolution, one of the most popular economics sites on the internet.
His latest book is Average Is Over, which gives a fascinating look into where the country is headed, how income inequality, automation, and artificial intelligence will change the way we work and live — and who will be the beneficiaries of those changes.
Tyler and I spoke about the skills that will be important in the coming years, when it makes sense to order the worst sounding thing on the menu, and why the ending of Star Wars may be at odds with the future.
My conversation with Tyler was quite long, so for brevity's sake I'm only going to post edited highlights here.
Listen to the machines
Eric: One of the most compelling concepts in Average Is Over is "listening to the machine."
Tyler: The smarter machines become the more it shapes how human beings have to change. We used to be rewarded for sheer brainpower — smarts — but now if the machine is smarter than you or sometimes smarter than you there's a new scale, and that's knowing when to defer. It's about knowing when are you better and when is the machine better and, of course, increasingly, it's often the machine. I think of humility as a virtue, a practical virtue that's making a comeback.
Eric: Who is poised to do well in the future and what can we do to better prepare for how you see things going?
Tyler: The people who will do better are those who are very good at working with computers, programming, and software. That's a rather obvious point but I think as income inequality increases people who are very good at positioning themselves in service sectors with some kind of marketing plan or somebody that can grab the attention of wealthier people will do well. Basically, the scarce skills for the future are all about psychology because computers right now still don't do that very well. The good jobs will be about branding. They're all about figuring out how to get other people's attention and I think that's really the growth sector we're looking at.
Marketing and motivation: Do what computers can't
Eric: You talk a good deal about the importance of marketing in the future.
Tyler: Marketing, analytically speaking, for a neo-classical economist is a tough problem to solve. Some of it is about persuasion, which we can't model very well, and some of it is about what grabs a person's attention, which is also hard to model well. As more of our economy becomes about marketing, this will mean economic theory explains less and less of what's going on. I think what I call "the economic anthropologists" will rise in importance. It will be hard for them to show that what they're doing is as equally scientific as the traditional number crunchers, but nonetheless that will be the way to understand what's actually going on.
So I'm a big fan of someone like Grant McCracken, who is, in fact, an anthropologist. He spends a lot of his time working with companies, helping them figure out how they can understand what it is their consumers care about and how to grab the attention of those people.
Eric: You also call out motivators. You said people who can motivate others to action are really going to be more important in the coming years.
Tyler: Many more of us will become like preachers. Imagine a reverend or a deacon in a church trying to grab everyone's attention, get them to follow the religious moral code. "Come back to church", "Give money to the church" and so on. So again, the cheaper it is to produce things, which is clearly on the way, the more what matters is getting attention, getting people's resources, getting people's charity, just getting them to work. A lot of the jobs of the future will be a mix of making people feel either really good about themselves or really bad about themselves. Again that gets down to having a good understanding of these elements of human psychology.
"Information isn't what's scarce; it's the willingness to do something with it."
Eric: A personality trait you give a lot of attention to is conscientiousness. We're starting to see a lot of discussion about these non-cognitive skills, like in Paul Tough's book How Children Succeed and Angela Duckworth's work. Can you talk about how conscientiousness is going to grow even more important in the future?
Tyler: Paul Tough wrote this very interesting book about, basically, the returns to being tough. He's a well-named author for that. Here's a way to look at it: The more information that's out there, the greater the returns to just being willing to sit down and apply yourself. Information isn't what's scarce; it's the willingness to do something with it. So if you're an individual, say from China or India, and you're really smart and motivated, you're going to do much better in this new world than say 10 or 20 years ago.
But there are a lot of people in the wealthier countries, I wouldn't describe them as lazy, but they're not super motivated. They think they can more or less get by. I think in relative terms those people are already starting to see lower wages because they're just not quite the prize commodities they think they are. They'll do okay. They'll be able to get jobs, but they're not really individuals who are going to see a lot of income growth, and I think this could be a rude awakening to a lot of people.
Eric: Given the vision of the future in Average Is Over, what should current students major in and what skills they should work on?
Tyler: Look at what you can do, what you're good at and what you'll enjoy. If you won't enjoy it, even something that sounds good in the abstract, I wouldn't push a person down that road. First they'll be unhappy, and second they probably won't be that good at it. I would stress the point, I think there will be a lot of so-called soft humanities roots that could have potentially big payoffs for hard, smart workers. It's not all about how we all become programmers, and a lot of that kind of work can be outsourced or given to smart machines anyway.
So I would just stress to people that the value of really beginning to understand how other people think, to the extent you can acquire that in education, if that's what you love, if that's what you're good at, that's great. Not everyone has to jump on the computer science bandwagon. Though, of course, many people should.
Eric: But even if they don't, they'll still need to understand how to "listen to the machines"?
Tyler: GPS is a good example of this. GPS is imperfect, but usually the imperfection is in us, it's not actually in the GPS programming. The more we rely on smart machines, the more we want to apply them, and that gives us an incentive to make our environment simpler and in a way dumber and more literal. That everything can be explained the way you can perfectly write out for a computer what's on the chessboard. So I think this is a big way in which our world will be changing, like how roads will change so driverless cars can use them, and we're not ready for this mostly. I think it's a big, big plus, but in some ways, the world will look uglier and feel stupider. It's a bit like those help menus. You can do everything right by pressing all the buttons. It pisses people off. It still gives you overall better service and a cheaper product than the old system of hiring operators, but as I think you know, most people really feel they do not like it.
Do not use The Force, Luke.
Eric: In the book you also discuss a future artificial intelligence app that might recommend things in the social or romantic realm, like the optimal time to kiss someone on a date. Do you think there will be a romanticist rejection of that? People who want to remain unscientific about these areas of their life?
Tyler: My guess is that will be half the people. The people who listen to the machines, they're going to do better. They'll have a better chance of being happily married. They'll choose better dates. They'll kiss at the right time or whatever it is the machine tells you. They'll have better portfolios. They'll have better diets. Whatever it will be, but I fully expect that something like roughly half of the human race isn't going to want to listen.
Eric: That's interesting. So it's not so much "being good at listening to machines" as "wanting to listen to machines." It's a philosophical choice.
Tyler: That's right. I guess because of humility, because the machine a lot of times will tell you pretty clearly what to do. So you don't have to necessarily be great at reading the tea leaves once you're attuned to the machine. But a lot of times it's going to tell you things that don't feel right. It'll say, "Hey, you live in Manhattan. Try dating this guy from New Jersey." You're like, "Aww, New Jersey. I live in Manhattan." On average, when that comes, one should figure, "Hey, give it a try." But the whole point of the machine is that it goes against your intuitions, which are flawed. So, of course, a lot of people will think, "Oh I know these machines are right, but they don't get me. This computer has never been to New Jersey. Come on." Then they will run off to Brooklyn.
Eric: What immediately occurs to me is the climax of Star Wars. The ghost of Obi-Wan tells Luke, "Turn off the targeting computer and use The Force. Trust yourself. Don't use the computer." The secular religion that Hollywood preaches is always to go with your feelings, go with your gut — and what you're saying is diametrically opposed to that.
Tyler: That's right, and Obi-Wan also tells Luke, "Finish your training in the Dagobah system," right? How many times did he tell him? Yoda tells him. Yoda. What does Luke do? He tells Yoda to get lost. So I think as humans we're somewhat programmed to be a bit rebellious and to not want to be controlled, which is perfectly understandable given that others are trying to control us as often as they are. But that's going to mean in those new settings, which we've never biologically evolved to handle, we're going to screw up an awful lot. Just like Luke did not finish his training in the Dagobah system.
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