All Segments
Alex Tabarrok - Prizes, Prices, and Public Goods
70 segments available
Alex Tabarrok is a professor of economics at George Mason University and with Tyler Cowen a founder of the online education platform http://MRU.org. I ask Alex Tabarrok about the Grand Innovation Prize, the Baumol effect, and Dominant Assurance Contracts. Episode website: https://www.dwarkeshpatel.com/p/alex-tabarrok Apple Podcasts: https://apple.co/3TGYbIz Spotify: https://spoti.fi/3ADoIxq Follow me on Twitter to be notified of future content: https://twitter.com/dwarkesh_sp Follow Alex Tabarrok: https://twitter.com/ATabarrok Alex Tabarrok's and Tyler Cowen's excellent blog: https://marginalrevolution.com/ Timestamps: 00:00 Intro 00:34 Grand Innovation Prize 08:45 Prizes vs grants 14:10 Baumol effect 27:50 On Bryan Caplan's case against education 31:35 Scaling education online 48:50 Declining research productivity 52:15 Dominant Assurance Contracts 58:40 Future of governance 1:04:05 On Robin Hanson's Futarchy 1:06:02 Beating Adam Smith 1:08:35 Our Warfare-Welfare State 1:19:30 The Great Stagnation vs The Innovation Renaissance 1:21:40 Advice to 20 year old
Segments Timeline
The Role of Government in Innovation
Alex Tabarrok discusses the balance between wanting a small government while ensuring it can effectively respond to crises, particularly in the context of innovation during the pandemic. He emphasizes the need for government to act decisively and efficiently to support innovation and public health.
"look i want a small government but i want a government to be able to do what it's supposed to do at the time it's supposed to do it [Music] okay today i have the pleasure of speaking with professor al..."
The Role of Government in Innovation
Alex Tabarrok discusses the balance between wanting a small government and ensuring it can effectively respond to crises, particularly in the context of innovation during the pandemic. He emphasizes the need for government to act decisively and efficiently to support vaccine development and other critical innovations.
"look i want a small government but i want a government to be able to do what it's supposed to do at the time it's supposed to do it [Music] okay today i have the pleasure of speaking with professor al..."
Understanding the Grand Innovation Prize
Tabarrok explains the concept of the Grand Innovation Prize, which aims to incentivize rapid vaccine development during the pandemic. He outlines how traditional incentives for vaccine manufacturers may not be sufficient and discusses the potential of offering large prizes to accelerate innovation in healthcare.
"the podcast yeah it's great to be here awesome okay so first i want to ask you about uh the grand innovation prize can you explain what this is and i'd like to ask you some more questions about it sur..."
Understanding the Grand Innovation Prize
Tabarrok explains the concept of the Grand Innovation Prize, highlighting its purpose in incentivizing rapid development of vaccines and therapeutics during health crises. He discusses how traditional incentives for vaccine manufacturers may not be sufficient and how a large prize can motivate quicker action.
"the podcast yeah it's great to be here awesome okay so first i want to ask you about uh the grand innovation prize can you explain what this is and i'd like to ask you some more questions about it sur..."
Incentives for Vaccine Development
In this segment, Tabarrok elaborates on the challenges vaccine manufacturers face in ramping up production before a vaccine is proven safe and effective. He discusses the need for stronger incentives, such as financial prizes or upfront payments, to encourage faster development and manufacturing of vaccines.
"can say okay we're gonna pay some of your costs and there's pluses and minuses but the basic idea of a prize or advanced market commitment or advanced market purchase or paying for at-risk capacity is..."
Funding Vaccine Development
In this segment, Tabarrok addresses the challenges of funding vaccine development, particularly for innovators who lack initial capital. He explores the trade-offs between grants and prizes, emphasizing the need for a flexible funding approach to stimulate innovation in vaccine production.
"can say okay we're gonna pay some of your costs and there's pluses and minuses but the basic idea of a prize or advanced market commitment or advanced market purchase or paying for at-risk capacity is..."
Funding Innovations: Grants vs. Prizes
Tabarrok addresses the trade-offs between using grants and prizes to fund vaccine development. He argues that while grants are common, prizes can open the field to innovative solutions from a broader range of participants, including unconventional thinkers who might not typically receive funding.
"vaccine is going to be the most successful and there's a whole bunch of different types you know there's the traditional live attenuated vaccine a killed virus vaccine there are some new vaccines usin..."
The Importance of Diverse Funding Mechanisms
Tabarrok advocates for a multi-faceted approach to funding vaccine development, including upfront payments for manufacturing capacity and the use of prizes. He highlights the need for a diverse portfolio of funding strategies to ensure that various innovative solutions can be explored during health crises.
"vaccine is going to be the most successful and there's a whole bunch of different types you know there's the traditional live attenuated vaccine a killed virus vaccine there are some new vaccines usin..."
Challenges in Venture Capital for Vaccines
In this segment, Tabarrok discusses the limitations of venture capital in the context of vaccine development. He explains the difficulties VCs face in assessing the viability of vaccine projects and the importance of timely funding to address urgent health challenges.
"advanced market commitment for the pneumococcus uh vaccine uh which probably saved 700 000 lives was given to millions of children and in that the primary tool was the promise of a fixed price if you ..."
The Role of Venture Capital in Vaccine Development
In this segment, Tabarrok discusses the potential for venture capitalists to fund high-risk vaccine projects. He highlights the challenges they face in evaluating which projects are likely to succeed and the time it takes to establish effective funding mechanisms.
"advanced market commitment for the pneumococcus uh vaccine uh which probably saved 700 000 lives was given to millions of children and in that the primary tool was the promise of a fixed price if you ..."
The Cost of Inaction During Crises
Tabarrok emphasizes the high costs associated with inaction during health crises like the COVID-19 pandemic. He argues for aggressive funding strategies to mitigate the economic and social impacts of such disasters, advocating for a proactive approach to innovation.
"the government i mean he had skin in the game but for a vc to learn enough about vaccines and to figure out to you know you got to be on on uh on presence uh to figure out which which are the scams yo..."
Throwing Money at the Problem
Tabarrok shares his perspective on the urgency of addressing the COVID-19 crisis, advocating for a proactive approach that involves significant financial investment in various vaccine candidates. He emphasizes the importance of diversifying funding strategies to increase the chances of success.
"the government i mean he had skin in the game but for a vc to learn enough about vaccines and to figure out to you know you got to be on on uh on presence uh to figure out which which are the scams yo..."
The Case for Prizes in Innovation
Tabarrok elaborates on the advantages of using prizes as a funding mechanism for innovation, particularly when traditional expert-driven approaches have failed. He argues that prizes can attract unconventional thinkers and solutions, fostering a more dynamic innovation environment.
"they're not sure whether it was due to the vaccine or due to something else but it's a danger and that that could happen i'm not saying the astrozenica vaccine is going to fail um i hope it doesn't i ..."
The Case for Prizes in Innovation
Tabarrok argues for the use of prizes as a funding mechanism in innovation, particularly when traditional expert-led approaches have failed. He explains how prizes can encourage out-of-the-box thinking and attract a wider range of solutions to pressing problems.
"they're not sure whether it was due to the vaccine or due to something else but it's a danger and that that could happen i'm not saying the astrozenica vaccine is going to fail um i hope it doesn't i ..."
Why Grants Dominate Research Funding
In this segment, Tabarrok explores the historical context of research funding, noting the decline of prizes in favor of grants. He discusses the implications of this shift and the potential for a resurgence of prize-based funding models in various fields.
"the money so it it's just incredibly frustrating um and i thought a prize because you can announce it even before you've you know gathered the funds or figured out who's going to be on the prize commi..."
Why Grants Dominate Research Funding
In this segment, Tabarrok explores the historical context of research funding, noting the decline of prizes in favor of grants. He speculates on the reasons behind this trend and discusses the potential for a resurgence of prize-based funding mechanisms.
"the money so it it's just incredibly frustrating um and i thought a prize because you can announce it even before you've you know gathered the funds or figured out who's going to be on the prize commi..."
Evidence of Prize Effectiveness
Tabarrok presents evidence supporting the effectiveness of prize funding compared to traditional grants. He cites examples of successful prize initiatives and discusses how less restrictive funding can lead to more innovative and impactful research outcomes.
"were much more common in the 19th century and then they kind of failed failed off or trailed off in the 20th century and they've seen a little bit of a resurgence uh in more recent decades one reason ..."
Evidence of Prize Effectiveness
Tabarrok presents evidence supporting the effectiveness of prize funding compared to traditional grants. He cites examples of successful prize initiatives and discusses how less restrictive funding can lead to more impactful research outcomes.
"were much more common in the 19th century and then they kind of failed failed off or trailed off in the 20th century and they've seen a little bit of a resurgence uh in more recent decades one reason ..."
Fast Grants and Their Impact
Tabarrok highlights the rapid distribution of COVID-19 related grants by Tyler Cowen, showcasing the potential benefits of fast grants in addressing urgent research needs. He reflects on the implications for future funding strategies in times of crisis.
"howard hughes actually tried to set up a tax dodge and ended up found founding the you know howard hughes medical centers um which have lasted much longer than his uh his tax dodge so he had some bene..."
Transitioning to the Baumol Effect
Tabarrok introduces the Baumol effect, setting the stage for a deeper discussion on its implications for education and innovation. He hints at the challenges posed by rising costs in sectors reliant on public funding and the need for innovative solutions.
"howard hughes actually tried to set up a tax dodge and ended up found founding the you know howard hughes medical centers um which have lasted much longer than his uh his tax dodge so he had some bene..."
Understanding the Baumol Effect
In this segment, Tabarrok explains the Baumol effect, which describes how certain industries, like education and healthcare, experience rising costs due to stagnant productivity. He contrasts these with progressive sectors that see increasing productivity, leading to higher opportunity costs for labor in stagnant sectors. This discussion sheds light on why prices in these industries continue to rise and the implications for the economy.
"you about uh the bamboo effect yeah bommel yeah so um so we have these industries uh where every year just the prices just seem to keep going up and up and up and up without without fail um and uh edu..."
Understanding the Baumol Effect
In this segment, Tabarrok explains the Baumol effect, which describes how prices in certain sectors, like education and healthcare, continue to rise due to stagnant productivity. He contrasts these sectors with more progressive industries that experience rapid productivity growth, leading to higher opportunity costs and consequently, increased prices in less productive sectors.
"you about uh the bamboo effect yeah bommel yeah so um so we have these industries uh where every year just the prices just seem to keep going up and up and up and up without without fail um and uh edu..."
The Impact of Skilled Labor on Prices
Tabarrok elaborates on how the Baumol effect relates to skilled labor, noting that while wages for skilled labor in sectors like education and healthcare are rising, overall wage stagnation persists. He discusses the opportunity costs faced by skilled workers, who may choose higher-paying jobs in more productive sectors, thus affecting the labor market dynamics in stagnant industries. This segment highlights the complexities of labor economics in the context of technological advancement.
"uh something good about the progressive sector that's why things are getting more expensive because you can you have to give up a lot more because this sector is becoming much more productive uh let m..."
Labor Costs and the Baumol Effect
Tabarrok elaborates on how the Baumol effect relates to labor costs, particularly skilled labor. He argues that while wages for skilled labor in sectors like education and healthcare are rising, less skilled labor faces stagnation. This segment raises concerns about the implications of automation and the future of labor in a service-dominated economy.
"uh something good about the progressive sector that's why things are getting more expensive because you can you have to give up a lot more because this sector is becoming much more productive uh let m..."
Education's Role in Economic Growth
Tabarrok emphasizes the need to increase educational attainment in the U.S. workforce to combat declining growth rates. He contrasts the U.S. education system with that of European countries, advocating for a rebalancing of educational pathways to better prepare students for the job market.
"it can be part of a naturally growing um economy um there's a new good book on this uh you probably know it i've forgotten i should think of the title the author is going to be mad at me for not i'll ..."
Rebalancing Education in the U.S.
Tabarrok critiques the U.S. education system's imbalance, where a significant number of high school graduates pursue college, often leading to degrees in fields with poor job prospects. He argues for a focus on increasing high school graduation rates and vocational training, rather than merely pushing more students into college.
"it can be part of a naturally growing um economy um there's a new good book on this uh you probably know it i've forgotten i should think of the title the author is going to be mad at me for not i'll ..."
The Signaling Problem in Education
In this segment, Tabarrok addresses Bryan Caplan's argument regarding the signaling aspect of education. He discusses the inefficiencies in the U.S. education system, where many students pursue degrees in fields with poor job prospects, while emphasizing the importance of vocational training and apprenticeships.
"now my first guess on the podcast was uh your colleague brian kaplan and he would argue probably the opposite that he'd say you're just increasing the cost of signaling if you make people have a highe..."
The Future of Teaching: Online Education
In this segment, Tabarrok explores the potential of online education to revolutionize teaching. He discusses how platforms like Marginal Revolution University can scale education, allowing one instructor to reach thousands of students, and the implications this has for the teaching profession.
"uh friends then they go into journalism right which is like a terrible field or psychology right these are terrible fields to go into for for jobs um and yet these fields journalism and psychology in ..."
AI's Role in Personalized Learning
Tabarrok highlights the transformative potential of artificial intelligence in education, particularly through personalized learning experiences. He explains how AI can analyze student performance and tailor instruction to individual needs, enhancing the learning process.
"um because you know why should you the problem is education has always been difficult to scale right uh it's such a one-on-one kind of business and if you're able to scale education is actually we're ..."
The Future of Online Education
Tabarrok introduces the concept of online education through the Marginal Revolution University, discussing its potential to scale teaching and improve educational outcomes. He predicts a shift in the teaching landscape as online platforms allow for greater reach and efficiency.
"uh friends then they go into journalism right which is like a terrible field or psychology right these are terrible fields to go into for for jobs um and yet these fields journalism and psychology in ..."
AI's Role in Transforming Learning
In this segment, Tabarrok explores the transformative potential of artificial intelligence in education. He discusses how AI can personalize learning experiences and improve student outcomes by identifying specific areas where students struggle, thus enhancing the overall educational process.
"bad um for teachers uh you know we always complained that uh you know look how poorly we teach our teachers you know we pay them less than our sports stars right you know you know basketball or someth..."
Why This Time Might Be Different
Tabarrok addresses skepticism about the impact of online education, comparing it to past technological advancements that failed to disrupt traditional learning. He argues that the convergence of various technologies may lead to significant changes in education, making online learning more effective and appealing.
"for artificial intelligence and for you know video online learning and so forth so you give out these optimistic scenarios of how education is going to change but a pessimist might say well listen we'..."
Why This Time Might Be Different
Tabarrok reflects on historical predictions about educational technology and why he believes the current advancements in online education may lead to significant changes. He discusses the convergence of various technologies that could create a tipping point for online learning.
"key to learning so the students can advance much more quickly so i think there's huge huge possibilities for artificial intelligence and for you know video online learning and so forth so you give out..."
The Challenge of Signaling in Education
In this concluding segment, Tabarrok discusses the challenge of signaling in education, emphasizing that unless online courses can provide a credible signal of intelligence and conscientiousness, they may not replace traditional college experiences. He reflects on the need for educational systems to adapt to modern learning methods.
"but uh i don't want to speak for brian kaplan here but maybe somebody might say uh what if you're just solving the wrong wrong problem that people aren't really giving up four years of their life to g..."
The Challenge of Signaling in Online Education
Tabarrok concludes by addressing the challenge of signaling in online education. He argues that unless online courses can effectively demonstrate a student's intelligence and work ethic, traditional college degrees will continue to hold value in the job market.
"but uh i don't want to speak for brian kaplan here but maybe somebody might say uh what if you're just solving the wrong wrong problem that people aren't really giving up four years of their life to g..."
The Baumol Effect and Education Costs
Tabarrok explains the Baumol effect in the context of education, discussing how rising costs in stagnant sectors like education and healthcare can coexist with increasing wealth. He highlights the paradox of higher spending on education despite its escalating prices, and the implications for productivity and research in the sector.
"will be spread out um because they'll be much more hierarchical um actually so you know one guy at the top will have this kind of hierarchy of tas and things like that i mean that's kind of how colleg..."
Research Productivity and Future Prospects
In this segment, Tabarrok reflects on the declining productivity in research and development, particularly in pharmaceuticals and technology. He discusses the increasing resources required for research and the potential for future breakthroughs, while expressing concern over the current trends in research efficiency.
"from a pharmaceutical than you did you know in the past it was more low-hanging fruit in the past right yeah as you know and as tyler cowan wrote about nicholas bloom and uh others wrote a paper where..."
Coaching and the Evolution of Education
In this segment, Tabarrok discusses the evolving role of educators in a digital age. He suggests that as traditional teaching becomes more online-focused, there will be a greater demand for personal coaches and tutors to provide individualized support. This shift could lead to a more hierarchical educational structure, where a few top educators reach many students through online platforms.
"depending on your point of view but georgia tech has taken a on a master's degree in computer science and successively brought it online to the entire world and that is a mark for the future uh now te..."
Understanding Dominant Assurance Contracts
Tabarrok introduces the concept of Dominant Assurance Contracts, explaining their significance in solving public goods problems. He emphasizes the importance of this concept in economic theory and its potential applications, setting the stage for a deeper discussion on the topic.
"so so let me ask now about um dominant assurance contracts uh before i ask you some more questions about it when we get in the weeds do you want to explain what that is sure um so uh so dominance it's..."
The Baumol Effect and Education Costs
Tabarrok delves into the Baumol effect, explaining how rising costs in education and healthcare can be attributed to increasing productivity in other sectors. He discusses the paradox of rising education costs despite more teachers being available, emphasizing the need for a deeper understanding of productivity in education and its implications for future growth.
"nicely has both of them and that is you know why is the stagnant sector becoming a higher price well it's becoming a higher price because the progressive sector is is growing more productive but that ..."
Research Productivity and Future Innovations
In this segment, Tabarrok raises concerns about declining research productivity in various fields, including technology and pharmaceuticals. He highlights the increasing resources required for research and development, questioning whether future innovations can keep pace with growing demands. The discussion touches on the potential for breakthroughs that could reverse current trends.
"from a pharmaceutical than you did you know in the past it was more low-hanging fruit in the past right yeah as you know and as tyler cowan wrote about nicholas bloom and uh others wrote a paper where..."
Innovative Governance Mechanisms
In this segment, Tabarrok explores the potential for new governance mechanisms in the digital age, emphasizing the importance of creating alternative institutions that can effectively produce public goods. He highlights the role of online experimentation in governance, suggesting that the rise of blockchain technology and decentralized systems could lead to innovative solutions for collective action problems.
"just become really really difficult and expensive um so dominant insurance contract does not solve all problems so it is a path for libertarian minded people like you and me to instead of having to li..."
Futarchy: A New Governance Model
Tabarrok shares his enthusiasm for Robin Hanson's concept of Futarchy, a governance model based on prediction markets. He advocates for more experimentation with Futarchy and other innovative ideas like Dominant Assurance Contracts, suggesting that the current digital landscape offers unprecedented opportunities for testing new governance frameworks and improving collective decision-making.
"it's it's a governance mechanism right and uh we've now had you know 200 250 years of experience and we know it works well in some cases and less well in in other cases it's not a great preference agg..."
Understanding Dominant Assurance Contracts
Tabarrok introduces the concept of Dominant Assurance Contracts, explaining their significance in addressing public goods problems. He emphasizes the importance of this framework in economic theory and its potential applications in real-world scenarios, setting the stage for a deeper exploration of the topic.
"so so let me ask now about um dominant assurance contracts uh before i ask you some more questions about it when we get in the weeds do you want to explain what that is sure um so uh so dominance it's..."
The Role of Dominant Assurance Contracts
In this segment, Tabarrok considers the idea of dominant assurance contracts as a potential sixth form of governance. He acknowledges the uniqueness of this mechanism while recognizing that it may not fully replace traditional governance systems like democracy or monarchy.
"few turkey with dominant assurance contracts with kind of some of glenn wilde's radical exchange ideas um you know i want to see a lot more experimentation in these big ideas than we've had in the pas..."
Innovative Governance Mechanisms
Tabarrok discusses the potential for new governance mechanisms to emerge in the digital age, emphasizing the importance of creating alternative institutions that can effectively produce public goods. He highlights the role of online platforms and blockchain technology in facilitating these innovations and the need for experimentation in governance.
"and there's a you know there's a problem especially in the united states with why uh you know subways and construction and uh tunnels why they're so expensive here compared to the rest of the world ri..."
The Future of Collective Action
In this segment, Tabarrok reflects on the evolution of governance systems and the unprecedented opportunities for experimentation in collective action provided by online environments. He draws parallels between historical democratic transitions and the current landscape of digital governance, suggesting that new mechanisms could significantly enhance public goods provision.
"yeah yeah the optimistic scenario here is um elias rudowsky wrote a book called inadequate equilibria as i'm sure you know and then he detailed three ways in which like a civilization can feel asymmet..."
Teaching Economics to the Masses
Tabarrok shares his experiences in teaching economics through various mediums, including online videos and textbooks. He expresses his ambition to reach more students than any economist in history, reflecting on the impact of his work and the global reach of his teachings.
"that's pretty amazing yeah yeah um uh so let me ask you about uh though the different ways in which you've been creating content so you write papers you write books you've written a textbook with tyle..."
Exploring Futarchy as a Governance Model
Tabarrok shares his enthusiasm for Robin Hanson's concept of Futarchy, a governance model based on prediction markets. He advocates for more experimental approaches to governance, including Futarchy and Dominant Assurance Contracts, to address contemporary challenges in public goods and collective decision-making.
"as we are today it's really quite extraordinary like tasos has got its mechanism and you know ethereum has got its mechanism and so we're doing much more experimentation in how to organize collectivel..."
The Challenge of Economic Ideas Adoption
Tabarrok discusses the frustration of economists when their innovative ideas, such as dominant assurance contracts, are not adopted by governments. He reflects on the challenges of getting policymakers to listen and act on economic advice, highlighting the importance of effective governance.
"history of the entire world that is actually possible i don't know what's gonna i'm not saying it's gonna happen um but we're climbing the ranks oh i i don't know haven't uh have you not already done ..."
The State of Government Effectiveness
In this segment, Tabarrok critiques the current state of government effectiveness, particularly in response to crises like the pandemic. He emphasizes the need for a government that can efficiently execute its responsibilities and reflects on the failures of institutions like the CDC and FDA.
"would be uh what is it like to be an economist putting out all these ideas out there yeah it's frustrating at times for sure um like i just said you know the world has not caught up with um adam smith..."
The Role of Dominant Assurance Contracts
In this segment, Tabarrok considers whether dominant assurance contracts could be classified as a sixth form of governance. He acknowledges their potential as a mechanism but stops short of equating them with established systems like democracy or monarchy, while still advocating for more experimentation in governance.
"few turkey with dominant assurance contracts with kind of some of glenn wilde's radical exchange ideas um you know i want to see a lot more experimentation in these big ideas than we've had in the pas..."
Teaching Economics to Millions
Tabarrok shares his experiences in teaching economics through various mediums, including online videos and textbooks. He expresses pride in reaching students globally and discusses the ambitious goal he shares with Tyler Cowen to teach more people economics than anyone in history, reflecting on the impact of their work at Marginal Revolution University.
"that's pretty amazing yeah yeah um uh so let me ask you about uh though the different ways in which you've been creating content so you write papers you write books you've written a textbook with tyle..."
The Need for a Shift to Innovation
Tabarrok argues for a shift in government focus from warfare and welfare to innovation. He discusses the historical context of government investment in innovation and the need to respond to global competition, particularly from countries like China and India.
"i i find that very comforting that you're being consulted with because all i see is paul romer just uh getting incredibly upset at how little his advice is listen to and then i feel bad that if other ..."
Concerns About Government Dysfunction
Tabarrok expresses his concerns about government dysfunction and the complacency that can arise when political power changes hands. He warns that without addressing systemic issues, the government may fail to respond effectively to future challenges.
"of the cdc and the fda uh all at trump's doorstep you know congress has completely failed as well right congress is the one supposed to be passing the law where's congress's testing plan where is cong..."
Catching Up to Adam Smith
In this segment, Tabarrok humorously compares his and Cowen's efforts in economics education to historical figures like Adam Smith and Alfred Marshall. He discusses the challenges of surpassing their influence and the importance of making economics accessible to a wider audience through innovative teaching methods.
"that is actually possible i don't know what's gonna i'm not saying it's gonna happen um but we're climbing the ranks oh i i don't know haven't uh have you not already done this because i don't know ho..."
Competition as a Catalyst for Improvement
In this segment, Tabarrok discusses how competition with other nations can drive improvements in government effectiveness. He reflects on historical examples, such as the space race, and advocates for a renewed focus on innovation to maintain global leadership.
"dysfunctional that anything is possible um and it's well i am worried yeah i'm i'm worried and it's not just about the pandemic but i think that is just the canary in the coal mine which tells us that..."
Frustrations of an Economist
Tabarrok candidly addresses the frustrations economists face when their ideas are not adopted by policymakers. He reflects on the challenges of communicating effective solutions and the need for government to be responsive and effective, particularly in light of recent failures during the pandemic.
"would be uh what is it like to be an economist putting out all these ideas out there yeah it's frustrating at times for sure um like i just said you know the world has not caught up with um adam smith..."
The Dysfunction of Government Response
In this segment, Tabarrok critiques the government's response to the pandemic, highlighting failures of agencies like the CDC and FDA. He discusses the broader implications of these failures on public trust and the effectiveness of government, emphasizing the need for a more competent and responsive administration.
"i i find that very comforting that you're being consulted with because all i see is paul romer just uh getting incredibly upset at how little his advice is listen to and then i feel bad that if other ..."
The Innovation State vs. Warfare-Welfare State
Alex Tabarrok discusses the need for the United States to shift its focus from a warfare-welfare state to an innovation state. He argues that historical competition, such as the space race with the Soviet Union, spurred significant investment in innovation. Tabarrok emphasizes the importance of rekindling this spirit of innovation to maintain global leadership, especially in the face of rising competition from countries like China and India.
"but one thing which i think is going to be helpful is actually competition with other countries uh such as china and india you know like what really made us why did we go to the moon okay we went to t..."
Global Competition and Innovation
In this segment, Tabarrok highlights the role of international competition in driving innovation. He expresses concern over the U.S. falling behind in technological advancements and stresses the importance of maintaining a competitive edge. He advocates for a cooperative approach to global challenges while igniting national passion for innovation, suggesting that competition can be a catalyst for progress without leading to conflict.
"investing much less in research and development federal dollars in research and development than we used to um and i would like to see it to shift us away from warfare and welfare and towards innovati..."
The Need for an Innovation State
Tabarrok advocates for a shift from a warfare-welfare state to an innovation state, arguing for increased investment in research and development. He draws historical parallels to the space race and emphasizes the importance of innovation in maintaining global competitiveness, particularly against rising powers like China.
"okay but you cannot blame the failures of the cdc and the fda uh all at trump's doorstep you know congress has completely failed as well right congress is the one supposed to be passing the law where'..."
Globalization's Impact on R&D
Tabarrok addresses the paradox of the Great Stagnation occurring alongside globalization. He explains that while globalization should enhance research and development, there are countervailing factors that hinder progress. He discusses the need for increased investment in R&D and the challenges of extracting value from existing technologies, suggesting that future breakthroughs may emerge from new fields like biology and quantum computing.
"kind of a uh the leading nation of the world not just in terms of innovation but also in terms of freedom and liberty and you know uh racial and sexual equality all of these things which in many respe..."
Competition as a Catalyst for Improvement
In this segment, Tabarrok discusses how international competition, particularly with countries like China and India, can drive improvements in governance and innovation. He reflects on the historical context of the space race and the need for the U.S. to respond proactively to maintain its leadership in technology and innovation.
"anything is possible um and it's well i am worried yeah i'm i'm worried and it's not just about the pandemic but i think that is just the canary in the coal mine which tells us that this government is..."
Advice for the Next Generation
In this segment, Tabarrok shares valuable advice for young adults entering a rapidly changing world. He emphasizes the importance of education in technology-complementary fields and the rising significance of data analysis skills. He encourages embracing opportunities in sectors like data science and design, highlighting that combining technical skills with creativity will be crucial for future success.
"um and you already see in china um leading technologies at 10 cent and so forth baidu and things like that so they're already investing a lot in these technologies which are public goods artificial in..."
Cooperation Over Conflict
Tabarrok concludes by emphasizing the importance of cooperation over conflict in international relations. He expresses concern about the current dysfunction in government and the potential consequences of complacency, advocating for a proactive approach to governance that prioritizes innovation and effective policy.
"competition with other countries uh such as china and india you know like what really made us why did we go to the moon okay we went to the moon because we were competing with the soviet union because..."
The Value of Creativity in Technology
Tabarrok concludes with insights on the importance of creativity and design in technology. He argues that artistic skills, when combined with technical knowledge, can lead to innovative solutions and enhance user experiences. He stresses that the future will require individuals who can bridge the gap between technology and human needs, making creativity an essential asset in the evolving job market.
"or to yourself when you were 20 or just a generic 20 year old yeah well i have a generic 20 year old i got two of them um so uh look uh the world is changing faster um so probably my advice is becomin..."
America as a Beacon of Innovation
Tabarrok envisions the United States as a 'shiny beacon on the hill,' advocating for the country to lead not only in innovation but also in values like freedom and equality. He discusses the potential of attracting global talent and fostering an environment that encourages diverse contributions to innovation, reinforcing America's role as a leader in the world.
"not just in terms of innovation but also in terms of freedom and liberty and you know uh racial and sexual equality all of these things which in many respects not not all by any means but in many resp..."
The Great Stagnation and Globalization
Tabarrok addresses the paradox of the Great Stagnation occurring alongside globalization. He explains that while globalization should enhance research and development, there are countervailing factors that have led to diminishing returns on innovation. He discusses the need for increased investment in R&D to harness the benefits of a larger global market.
"united states be yeah yeah i had the pleasure of interviewing caleb watney which who made a similar point as you that the path dependence of technology is very important and so it's important that it ..."
Advice for the Next Generation
In this segment, Tabarrok shares valuable advice for young adults entering a rapidly changing world. He emphasizes the importance of education in technology-complementary fields, such as data science and engineering. He encourages embracing skills that allow individuals to work alongside technology, highlighting the growing value of data analysis and design in the modern economy.
"um and you already see in china um leading technologies at 10 cent and so forth baidu and things like that so they're already investing a lot in these technologies which are public goods artificial in..."