#39 Tyler Cowen: Thinking About Thinking
Shane Parrish interviews economist Tyler Cowen about the future of work, where average is over, and how technology impacts society. They discuss skills needed to thrive, improving judgment, effective reading strategies, and fostering resilience in children.
Deep Dive Analysis
30 Topic Outline
Introduction to 'Average is Over' Concept
Future of Labor and Essential Skills
Evolution of Sales and Media Consumption
Divergence of Countries and Cultural Implications
Virtual Reality: Pros, Cons, and Future Impact
Scarcity and Value in the Global Economy
The Future of Newspapers and Information Bundling
'The Complacent Class' and Societal Risk Aversion
The Perceived vs. Actual Pace of Change
Consequences of Complacency for Nations
Erosion of the Physical World and Infrastructure
Solutions for Traffic Congestion and Infrastructure
Cultivating Meta-Rationality and Good Judgment
Developing Judgment Through Mentorship and Online Experimentation
Accepting Feedback and Fostering Internal Motivation
Parenting for Resilience and Drive
Specialization vs. Generalization in Careers
Tyler Cowen's Reading Philosophy and 'Quake Books'
Practical Rules and Process for Reading
The Cumulative Nature of Reading and Learning
The Art of Thinking Well and Epistemic Modesty
Processing Disagreeing Information
Relationship Dynamics and the Futility of 'Being Right'
Lessons from Competitive Chess
Chess Education and Gamification
Television and Film Preferences
Long-Term Implications of Low Interest Rates
Minimum Wage Increases and Economic Effects
Advice for Saving and Future Investment Returns
Bitcoin, Blockchain, and Digital Assets
6 Key Concepts
Average is Over
A concept describing a future labor market where workers either enhance their productivity with computers or compete against them, leading to a significant divide between high-skill, tech-integrated jobs and those that are automated. This results in a sharp income divide but potentially more free consumer goods.
Meta-rationality
The ability to recognize one's own intellectual limitations and critically assess which skills will genuinely complement emerging technologies and sectors. It involves thinking beyond immediate self-affirmation to evaluate true value.
Epistemic Modesty
The wisdom of knowing when and how to defer to the advice and knowledge of others, particularly in an age of abundant information. This skill is crucial for judging the quality of sources and making informed decisions rather than always striving to be the smartest person.
The Complacent Class
A societal state where Americans have become increasingly risk-averse, exhibiting lower rates of mobility, heightened paranoia in parenting, and higher medication usage. This collective behavior results in a less dynamic economy, slower growth, and a 'screwy politics'.
Quake Books
Books that profoundly challenge and reshape an individual's fundamental worldview, often experienced more intensely in younger years when one's perspective is still forming. These books have an incredible, lasting influence on one's understanding.
Compound Learning
The principle that continuous, consistent learning accumulates over time, much like compound interest, leading to significant and accelerating intellectual growth and understanding. It emphasizes sustained effort in learning as the most effective long-term strategy.
15 Questions Answered
The future will divide workers into those enhanced by computers and those competing against them. Individuals should become proficient in tech, constantly retrain (every three to five years), or develop strong people skills like sales, marketing, and management.
Countries and regions will diverge, with clusters of creativity becoming more expensive and less accessible for artists. While access to culture is easier, face-to-face creative interactions may decline.
Virtual tourism could be beneficial for those unable to travel, but there's concern it might substitute for real experiences and lead to people inhabiting less productive virtual worlds. Bandwidth and the preference for simple online interactions over 'exciting' virtual worlds are current limitations.
National and regional newspapers are declining, replaced by a 'daily flow' of online articles from various sources. The traditional bundled newspaper format is inefficient for users, who prefer to pick and choose content.
Collective complacency leads to a less dynamic country, slower economic growth, difficulty funding the federal budget, and 'screwy politics.' It can also lead to increased segregation and a society that struggles to imagine a future different from the present.
Good judgment is developed by having trusted mentors who teach and guide, combined with intense online experimentation (using Google, Wikipedia, podcasts, blogs, Twitter creatively) to cross-check and investigate information.
Parents should expose their children, especially in their teen years, to many friends who can serve as positive role models, as parental influence becomes limited.
He reads classics cover-to-cover but doesn't finish most other books, often reading only the opening pages or half. He prioritizes reading for specific facts, cultural anthropology, or to understand people he's interviewing.
Reading quickly comes from reading a lot over a long period, as prior reading provides context and understanding for new material. The 'correct answer' for how long it takes to read a book is the reader's age, reflecting the cumulative investment in reading.
Recognize one's own limitations and be epistemically modest, understanding that others often know more. The key wisdom is knowing how and when to defer to others' advice, while also being a critical reader and evaluating the quality of online sources.
Try to be open and even happy about encountering disagreeing information, as it offers a greater opportunity for learning than content one already agrees with. Avoid the 'devalue and dismiss' intellectual move.
Chess taught him that most moves are mistakes, even by good players, and that one must face up to personal imperfections without making excuses. This habit of self-analysis and improvement is rewarded and can be transferred to intellectual spheres.
It makes it harder for millennials to save, potentially leading to impoverished retirements, especially with federal budget problems. It also signifies a global wealth surplus with few safe places to invest, leading to dependence on foreign capital and a precarious national situation.
Minimum wage increases put people out of work, though sometimes a small number. While recipients may work harder and be more conscientious, the lost jobs and the dissipation of gains (e.g., higher food prices for other poor people) make him unenthusiastic about the policy.
Bitcoin is not a bubble and serves useful functions, but it's not a convenient currency. It's a store of value, like gold or fine art, and part of a portfolio for protection against risk. Its value may not increase, but it is a legitimate, enduring asset.
44 Actionable Insights
1. Embrace Compound Learning
Continuously learn and let knowledge compound over time, viewing it like compound interest, to achieve significant growth and progress throughout your life.
2. Cultivate Meta-Rationality
Develop meta-rationality by realizing your own limitations and critically assessing what skills will truly matter in emerging sectors and technologies, rather than just feeling good about yourself.
3. Develop Judgment via Mentors & Online Experimentation
Cultivate good judgment by learning from trusted mentors who teach you about different areas, supplemented by extreme and intense online experimentation (e.g., using Google creatively, reading Wikipedia, listening to podcasts, curating social media feeds).
4. Combine Online & Face-to-Face Learning
Combine intense online learning and experimentation with face-to-face learning from human mentors who can guide, inspire, motivate, and steer you, as this combination leads to success.
5. Identify Intellectual Mistakes
Actively seek to identify your intellectual mistakes, facing up to the fact that you often don’t make the ‘best move’ intellectually, as this is crucial for continuous improvement and avoiding ossification.
6. Work on Imperfections
Face up to your own imperfections and actively work on them, as this habit is consistently rewarded.
7. Take Responsibility for Problems
Take responsibility for your own problems and imperfections, even if external factors are involved, and focus on working on them.
8. Re-energize After Setbacks
Prioritize re-energizing yourself in the face of setbacks, recognizing that morale is increasingly important in today’s world.
9. Embrace Humility & Re-energize
Accept feedback and embrace humility by recognizing that you will rarely be the best, using this realization to re-energize yourself rather than becoming discouraged.
10. Cultivate Internal Motivation
Foster internal motivation by focusing on aspirations and what you want to become, rather than claiming to be the best, as the internet constantly reveals others who are superior.
11. Master Deference to Expertise
Develop the wisdom to know how and when to defer to the knowledge and judgment of others, especially given the abundance of information available online.
12. Know When to Defer to Algorithms
Recognize that in a world of algorithms and AI, attempting to ‘beat’ them will lead to more mistakes; instead, cultivate the judgment to know when to defer to their advice.
13. Practice Epistemic Modesty
Develop epistemic modesty, which means having good judgment about when to trust the advice of others (including algorithms and online sources), as this is becoming more valuable than raw intelligence.
14. Question Independent Opinions
Recognize that on most matters, someone else likely knows more than you, so question the need to always hold independent opinions and consider finding expert opinions to inform your own.
15. Be Less Certain of Opinions
Cultivate intellectual humility by being far less sure about many of your opinions, acknowledging the vastness of knowledge held by others.
16. Learn from Disagreement
When encountering information that offends or disagrees with you, avoid dismissing it immediately; instead, try to learn from almost everything, as dismissal prevents growth.
17. Seek Out Disagreeable Books
Actively seek out and read books you disagree with, as they are more likely to challenge and educate you than books that simply confirm your existing views.
18. Avoid Devalue and Dismiss
Consciously avoid the intellectual move of ‘devalue and dismiss’ when encountering ideas or people, as this habit significantly hinders learning and personal improvement.
19. Generalize in Source Evaluation
If you choose to be a generalist, prioritize developing expertise in evaluating the quality of sources across all online platforms, as this skill is rapidly increasing in importance.
20. Be a Critical & Modest Online Reader
Be a critical reader of online information, judging the quality of sources, while also maintaining epistemic modesty to avoid becoming ‘stupider’ in the age of the internet.
21. Acquire Tech & People Skills
Acquire necessary skills and talents, specifically working with information technology and software, or developing wonderful people skills (sales, marketing, management), to thrive in a world where computers enhance productivity or compete against human labor.
22. Continuous Retraining
Retrain yourself every three to five years to stay current with rapidly changing information technology and software skills.
23. Identify Core Skillset
Identify whether you are primarily a ’tech person’ or a ‘sales, marketing, persuasion manager person’ and focus on developing expertise in one of these areas to position yourself well in the job market.
24. Adopt Munger’s Specialization-Generalization Mix
Consider Charlie Munger’s advice to hyper-specialize for 80-90% of your time, dedicating the remaining time to becoming a generalist in ‘big ideas’ of the world.
25. Be Authentic & Niche-Focused
In a competitive environment with many demands on attention, be authentic, dedicated, or target a niche to do something really interesting, as ‘slop’ will no longer suffice.
26. Prioritize Reading Time
For most books (excluding classics), don’t feel obligated to finish them; instead, constantly evaluate if continuing a book is more valuable than starting a new one, finishing only truly compelling works.
27. Pre-screen Books Ruthlessly
Start by reading the opening 20-30 pages of a book to quickly determine if it’s worth your time, discarding more than half if they don’t pass this initial test.
28. Fold Pages to Aid Memory
If you own a book, fold over pages with notable content to help you remember specific points, as the physical act can aid recall.
29. Curate Your News Consumption
Instead of consuming bundled news (like traditional newspapers), pick and choose individual articles and sources that are most efficient and relevant for you.
30. Leverage Easy Access to Culture
Utilize platforms like Spotify, YouTube, and Netflix streaming to easily and quickly access culture, allowing you to ‘pack more in’ without needing to physically ‘go out and do culture as much’.
31. Explore Foreign Films
Actively explore foreign films from countries like South Korea, Iran, or Latin America, as they offer diverse storytelling and can be a richer cinematic experience than current Hollywood offerings.
32. Prioritize Movies Over TV
Consider prioritizing watching movies over TV shows, as movies are often underrated and offer a higher quality experience than much of today’s ‘overrated’ TV.
33. Limit TV Consumption
Consciously limit your TV watching to very few, high-quality shows, or none at all, due to time constraints and the belief that movies are often better.
34. Adopt Rigorous Saving System
For those under 40, adopt a rigorous saving system with fixed rules, treating it ‘almost like a religion,’ to build wealth despite low-interest rates.
35. Live Off First Job Wage
Strive to live happily off the wage from your first job, banking any subsequent income increases, as this strategy in your 20s can set you up for life.
36. Minimize Spending with Internet Resources
Leverage the internet to find free or low-cost entertainment and resources, questioning the need to spend excessively and thereby facilitating saving.
37. Prioritize Function Over Status Purchases
Prioritize functional and reliable possessions (like a car) over expensive status symbols, even with a high income, to support saving and a deliberate lifestyle.
38. Avoid Bitcoin for Saving
Do not rely on Bitcoin as a primary means for saving or putting your wealth, despite its current interest.
39. Don’t Prioritize Being Right in Fights
In disagreements, especially with loved ones or colleagues, recognize that you are often wrong (or both sides are wrong) and avoid prioritizing proving yourself right, as this is usually a mistake.
40. Internalize Your Fallibility
Emotionally internalize even a small percentage of the realization that you are often wrong in disagreements, as this can significantly improve your interactions.
41. Expose Teens to Role Models
Expose your children, especially during their teen years, to many of your quality friends who can serve as alternative role models, as your direct influence as a parent becomes limited.
42. Promote Chess Education
Support and engage with initiatives that promote chess education, recognizing its value for developing thinking skills, though not necessarily making it mandatory.
43. Utilize Internet for Positive Gaming
Leverage the internet’s increased access to gaming, especially those with intellectual components, as a positive development for learning and development.
44. Be Cautious When Gifting Books
Be cautious about giving books as gifts, as the recipient might feel obligated to read it or misinterpret the implied message, unless you are certain it’s the perfect book for them.
8 Key Quotes
Average is Over is both a book about the present and the future. It refers to a world where there's a fundamental divide across workers.
Tyler Cowen
The wisdom in knowing how and when to defer is like the key wisdom of 2018, of our time.
Tyler Cowen
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.
Tyler Cowen
I don't know anyone who thinks well.
Tyler Cowen
Overall, I'm more interested in reading books I disagree with than books I agree with.
Tyler Cowen
You're bringing to bear your last 53 years of reading on the book. And most of your reading, your understanding results from your prior investment.
Tyler Cowen
Be epistemically modest, but also be a critical reader. And just having a general knowledge of how to evaluate sources... That is so important. And it's skyrocketing in significance.
Tyler Cowen
Most of the time you're wrong in this fight. And if you can carry just like 10% of that realization and internalize a bit of it emotionally, I think you can do a little bit better.
Tyler Cowen
2 Protocols
Non-Fiction Reading Process
Tyler Cowen- Read the opening 20-30 pages to determine if the book is worth continuing.
- If it passes, read as much as is interesting, even if it's only half, then move on.
- For truly excellent books, read them cover to cover.
Learning and Improvement (Inspired by Chess)
Tyler Cowen, based on Alexander Kotov's 'How to Think Like a Grandmaster'- Analyze a problem or game, writing out your detailed analysis.
- Compare your analysis to a high-quality expert analysis to identify your mistakes.
- Emotionally accept and get used to the process of recognizing your own errors.