#39 Tyler Cowen: Thinking About Thinking

Episode Summary

Executive Summary: Tyler Cowen argues that technology is making society more unequal but also more productive: workers who complement software, sell, manage, or build niche expertise will thrive, while routine jobs weaken. He sees regional divergence, weakened newspapers, more mediated culture, and rising complacency in America. His remedy is epistemic humility, constant retraining, good mentors, and compound learning.

Main Topics: Average Is Over and labor polarization (Priority: 5/5): Cowen explains that technology creates a sharp divide between people who complement computers and those who compete with them. He says the winners will be tech-savvy, conscientious, or strong at persuasion and management. Regional and cultural divergence (Priority: 5/5): He predicts less convergence across cities and countries, with creative and economic clusters pulling ahead while poorer regions and depopulated areas fall behind. Cultural production is increasingly concentrated in expensive hubs. Media, newspapers, and the daily information flow (Priority: 4/5): Traditional bundled newspapers are fading, replaced by customized digital news flows, blogs, and social platforms. He argues the old print bundle is obsolete and not economically sustainable. Complacency, stagnation, and the limits of prosperity (Priority: 5/5): In The Complacent Class, Cowen argues Americans have become more risk-averse, less mobile, and less dynamic, contributing to slower growth, weaker infrastructure, and fragile politics. Judgment, epistemic modesty, and learning how to think (Priority: 5/5): Cowen stresses that no one thinks perfectly well; the key skill is knowing when to defer to others, evaluate sources, and avoid devalue-and-dismiss reactions. He recommends mentorship plus online experimentation. Reading, books, and intellectual development (Priority: 3/5): He distinguishes formative 'quake books' from later-stage reading for facts and context, favoring physical books, partial reading, rereading classics, and reading to understand interview guests. Policy, money, and future assets (Priority: 4/5): Cowen discusses minimum wage tradeoffs, low interest rates, saving habits, private equity, and Bitcoin. He is skeptical of minimum wage boosts and views Bitcoin as a legitimate store of value, not a bubble.

Key Arguments: Technology rewards scarcity: labor, skills, ideas, and land that are hard to replicate gain more value in a global economy. Most workers should identify whether they are more suited to tech/analysis or sales/marketing/management, and build around that strength. The future of media is unbundled and personalized; newspapers as a single package are economically obsolete. America’s decline in mobility, risk-taking, and infrastructure investment signals long-term stagnation and complacency. Good judgment comes from combining trusted human mentors with intensive online research, cross-checking, and experimentation. People should be epistemically modest because they are usually wrong more often than they think, especially in disagreements and policy debates. Compound learning matters more than one-time interventions; policies and personal habits should create cumulative gains over time. Minimum wage increases may raise wages for some but can reduce employment and pass costs on to other poor consumers. Bitcoin is not a bubble in Cowen’s view, but rather a durable store of value similar to gold or fine art. Self-driving cars may not solve congestion; road pricing and congestion charges are more effective responses to traffic. Reading changes with age: early life is for worldview-shaping books, later life for selective, comparative, and contextual reading.

Data Points: Retraining interval: Every 3 to 5 years - Cowen says tech workers need to retrain frequently because software changes quickly. Time on the road: One quarter to one third - He says he currently spends about a quarter to a third of his time traveling. Internet transformation window: About 15 years - He describes online education and internet culture as having been built extremely rapidly. America's productivity growth: Down outside the tech sector - He cites slower productivity growth as evidence of complacency and less dynamism. China's economic growth: 6% to 8% - He contrasts China’s higher growth with the U.S. as an example of a less complacent society. Typical traffic pricing example: $30 to $40 at rush hour - He cites tolls on Route 66 into Virginia as evidence that congestion pricing can work. Age when he started chess: 10 - Cowen says chess shaped his thinking after he began playing at age 10. Age when he quit chess: 16 - He stopped playing competitively after about six years. Years of reading investment: 53 years - He says the correct answer to how long a book took to read is the reader’s entire reading lifetime. Age of his current perspective: 56 - He compares current life to childhood and notes how much change has slowed.

Pivotal Quotes: "Average is over." — Tyler Cowen: His core thesis about technology-driven inequality and labor polarization. "The future belongs to people who are what I call meta-rational." — Tyler Cowen: He describes the advantage of knowing one’s limitations and when to defer to others or algorithms. "I don't know anyone who thinks well." — Tyler Cowen: He introduces his argument for epistemic modesty and better judgment.

Implications: Listeners should expect more inequality, less geographic convergence, and more demand for adaptable, self-aware, high-judgment workers. Winners will combine specialization with broad judgment; societies that stay complacent risk stagnation, weak infrastructure, and political disruption.