Tyler Cowen on Stubborn Attachments, Prosperity, and the Good Society

Episode Summary

Executive Summary: Tyler Cowen argues that political and economic policy should be judged primarily by whether it raises sustainable long-run economic growth, using a near-zero intergenerational discount rate. He defends free trade, deregulation, better tax policy, stronger scientific research, and selective redistribution, while stressing rights, the environment, and stability as constraints. Russ Roberts probes inequality, utility, philanthropy, universities, and freedom, highlighting both Cowen’s bold growth-centered framework and its moral tensions.

Main Topics: Growth as the central criterion for policy (Priority: 5/5): Cowen’s book argues that intergenerationally sustainable economic growth should dominate policy evaluation because long-run compound gains overwhelm static welfare comparisons. Discounting the future and moral aggregation (Priority: 5/5): He rejects discounting future generations at the usual positive rate, arguing that a zero intergenerational discount rate clarifies ethical tradeoffs and solves many aggregation problems in philosophy and welfare economics. Freedom, rights, and side constraints (Priority: 4/5): Growth maximization is not absolute; it must respect human rights, preserve leisure and environmental quality, and account for non-monetary aspects of well-being. Low-hanging fruit for higher growth (Priority: 5/5): The conversation highlights policy reforms Cowen sees as especially promising: free trade, tax reform, housing deregulation, scientific research, and better capital taxation. Urban clustering, mobility, and housing policy (Priority: 4/5): They discuss how productivity increasingly depends on clustering in cities like San Francisco and New York, making restrictive housing policy more costly and limiting worker mobility. Universities, credentialism, and nonprofit incentives (Priority: 3/5): The pair examines why elite universities do not expand more or franchise their brands, with Cowen emphasizing faculty scarcity, control problems, and nonprofit mission drift. Utilitarianism, philanthropy, and moral action (Priority: 4/5): Cowen treats utilitarianism as a starting point, but argues the best way to help the poor is to grow the global economy, innovate, and use effective private philanthropy rather than moralizing consumer choices.

Key Arguments: Sustainable economic growth is the best organizing principle for policy because over long horizons a higher growth rate benefits almost everyone more than static redistribution or efficiency calculations. A zero intergenerational discount rate is morally appropriate because future generations are not impatiently waiting to be born, so their welfare should count fully. Growth should be constrained by absolute human rights, and environmental protection matters because growth must be sustainable. Many redistributive policies can be growth-enhancing when they expand opportunity, such as public health programs or education reforms. Housing deregulation is a major untapped source of growth because modern innovation is increasingly clustered in high-productivity metro areas. The tax code, especially capital taxation and international profit shifting, is too distortionary and should be simplified to raise growth. Finance is a special case where laissez-faire is insufficient because deposit insurance and implicit guarantees create moral hazard, justifying stronger capital requirements. Inequality is not clearly the root cause of political instability; the evidence is mixed, and rising expectations may matter more than inequality itself. Utilitarian reasoning should be the first test for policy, but not the only one; justice, animals, and other concerns still matter. Helping the poor is better pursued through innovation, trade, immigration, health interventions, and private philanthropy than through guilt-driven consumption restraint. Universities face control, reputation, and nonprofit incentive problems that make large-scale franchising difficult even when demand for elite education is huge. Freedom is becoming less culturally salient, and Cowen thinks society should recommit to liberty, prosperity, and a long-term civilizational perspective.

Data Points: Podcast date: July 24, 2017 - Opening introduction to the episode Tyler Cowen appearance count: 10th appearance - Russ Roberts notes Cowen has become a double-digit guest Book-writing timeline: about 20 years - Cowen says he worked on the book over roughly two decades, intermittently Working cadence on book: a month or two a year - Cowen describes his sporadic writing process Intergenerational discount rate: zero - Cowen’s proposed ethical rule for comparing current and future generations Growth comparison: 5 or 7 times the GDP - Cowen says a society with this much higher GDP would be better for nearly everyone Philanthropy target: 10% of after-tax income - Roberts says he gives this amount away annually for religious reasons Alternative philanthropy benchmark discussed: 40% - Roberts notes Cowen suggests materially richer people may owe much more Extreme philanthropy benchmark discussed: 75% to 80% - Roberts raises the argument that someone in great comfort could be expected to give even more University growth example: from a few thousand students to 34,000 - Roberts cites George Mason University’s expansion as evidence that growth and quality can coexist

Pivotal Quotes: "We can actually solve the biggest issues in judging what makes a political or economic order right." — Tyler Cowen: Cowen states the central claim of his book at the outset "We should use an intergenerational discount rate of zero." — Tyler Cowen: Cowen explains the key methodological move behind his long-run policy framework "I am suggesting that we need a radical reawakening." — Tyler Cowen: Cowen’s book urges a cultural and ethical shift toward freedom, prosperity, and durable civilization

Implications: Listeners are left with a forceful growth-first framework for policy that favors openness, mobility, and long-run thinking, but also with unresolved tensions about inequality, institutions, and how to balance liberty, rights, and moral demands.