Tyler Cowen - The Great Reset

**Dwarkesh Patel** (0:00)
Tyler Cowen needs no introduction, so we'll just begin. I want to ask you about The Great Reset. So you wrote a book in 2017 called Complacing Class, and in it, you predicted a great reset. You wrote, quote, At some point, our country will face an immediate crisis, and there won't be the resources or more fundamentally the flexibility to handle it.
Now, how are you so prophetic, and is this The Great Reset?

**Tyler Cowen** (0:23)
You know, I think I need to reread that book. I didn't quite think The Great Reset was coming as soon as it did. It struck me as something five to ten years away.
But I do think it's here now. We can still borrow at low rates of interest, but we haven't shown the flexibility to adopt mask wearing or set up a serious enough test and trace regime. And the American regulatory state and executive branch and also Congress, it's failed. The Fed and Supreme Court, in my view, have been quite good whether you agree with every decision or not. But just as institutions, they're fully up and running and the rest is rotting.
And our willingness to just let things happen has finally caught up with us a little more quickly than I was thinking.

**Dwarkesh Patel** (1:09)
In the complacent class, you predicted that after the Great Reset, dynamism would be with us again. Are you predicting that we'll be dynamic again after following this crisis?

**Tyler Cowen** (1:18)
Well, predictions probably ought to be conditional. I think in the biomedical area, we will be incredibly dynamic. There's been so much research activity into coronavirus and associated problems, which involve virology, immunology, even the common cold, how to fight the next pandemic, how to do vaccines.
I think this will go down in history as a phenomenal blast of innovation in a very important area, and the tech sector is still innovative but has been for quite some time.
Other sectors, I'm not sure about. I'm heartened by seeing Tesla's stock so high. I guess I ought to side with the market there, though I don't quite see why it should be worth more than General Motors, Ford and a few other auto companies put together. But again, I'll defer to the market. So I think that the chance of that burst of dynamism has never looked better. But of course, we're still capable of blowing it, right?

**Dwarkesh Patel** (2:14)
And other than how quickly it happened, what surprised you the most about how the Great Reset has occurred?

**Tyler Cowen** (2:19)
Well, you may recall, also in the complacent class, I predict that racial issues and segregation will be a central part of it. Because American blacks are so often the most or among the most vulnerable members of our society and trouble will flare there early as a kind of warning signal. And that looks like a pretty good prediction, I have to say.
I don't think I ever predict that we'll solve the segregation problem, just that it will be like a real signal we should look for. So like I said, I need to reread the book, but it's sounding pretty good right now.

**Dwarkesh Patel** (2:53)
Yeah, for sure.
It was almost cathartic when I was reading it. But so at the same time, I was reading Stubborn Attachments. And there seemed to be a contradiction to me between the two books. Because Stubborn Attachments advocates for economic growth because of the stupendous returns it has over the long term, as long as it's continuous. But the complacent class advocates for a cyclical view of history, where ongoing progress and growth are not possible. So isn't the argument for economic growth much weaker under a cyclical view of history?

**Tyler Cowen** (3:24)
Well, it may depend on your time horizon.
So there will be periods of slower and more rapid economic growth. But if you keep reasonably liberal institutions, I think over quite a long run, let's say centuries, you can have steadily advancing economic growth. And I would favor that knowing you're going to have periods of time like that one that probably started in 1973 So maybe I'm cyclical in the short run, but I believe in a fair amount of persistence in culture and institutions. So I think the recipe of stubborn attachments over the much longer run still can be true.

**Dwarkesh Patel** (4:02)
And let's talk about the really long run. So you give a really interesting lecture at Stanford where you're talking about how time horizons influence how we should weigh sustainability and economic growth.
Before I ask you about that, can you just recapture the argument for us? I'll prompt you by giving a quote from Greta Thunberg. The myth of eternal economic growth is a perverse fairy tale, to which you respond.