Azeem Azhar's Exponential View
Tyler Cowen on how AI will reorder economies, schools, and spirituality
04 Jun 2025
Chapter 1: What is the main topic discussed in this episode?
The AI is already smarter than I am.
Chapter 2: What are the flaws in Silicon Valley's AI growth projections?
If there were some kind of like economics Olympics and I was up against O3, O3 would beat me. That's not hypothetical. That's today. What's interesting is how little it matters.
Did you have a particular oh shit moment when you were using these large language models where you saw something that you hadn't expected?
Chapter 3: What institutional bottlenecks hinder AI progress?
Real depth. So I use O3 a lot to ask it about classical music. I'll say, well, I'm going to listen to Sibelius's First Symphony. What should I listen for in the symphony? It's remarkably deep. You could almost say empathetic.
Chapter 4: Are we facing a significant job displacement due to AI?
It just understands the stuff better, I think, than any human source you would find.
A number of people are going out today saying we're on the verge of a great job displacement.
I do not expect huge job displacement. There will be an enormous number of new jobs incorporating AI into the routines of established institutions and also building out new institutions. Those new efforts will be a little slow.
Chapter 5: Is GDP still a relevant measure in the age of AI?
And in the meantime, a lot of employers will be somewhat skittish about hiring more people.
You said by 2030, AI could start to fundamentally challenge what it means to be human and cause an identity crisis.
Chapter 6: Who benefits the most from AI advancements?
I think it will change religion. Some people will start to regard the AIs as oracles.
Chapter 7: Will AI lead to a human identity crisis?
In some cases, even gods were in for some pretty big shocks.
I am so excited about my guest today, Tyler Cowen. Is he an economist or is he a polymath? I think he is both. He shapes conversations on economics, culture, technology, and everything interesting. I have been reading his blog at Marginal Revolution for, I don't dare admit.
Chapter 8: How is the education system failing to adapt to AI?
So wonderful to have Tyler here. Tyler, we're going to talk about AI and the economy and beyond.
I am ready. And we have met in real life, just so our listeners know.
Indeed, indeed. So let's get started. I'm just back from a trip to Silicon Valley. And I heard a lot of people there talking about the prospect of AI driving 10, 20, 25% of economic growth, there would be this bounty that AI would bring us. And I don't really agree with that. I think you don't agree with it either. But what are those projections getting wrong?
They're ignoring the all-critical role of human imperfections in systems and institutions. So the more powerful AI becomes, and I'm not a pessimist on that, the more it bumps against people who don't want to adopt it or institutional systems where that does not get incorporated into the workflows. It also hits higher energy prices, constraints from data centers, possible regulatory constraints.
The general economic point is that as one thing in your economy gets better, the remaining imperfections become all the more important. So they're not thinking about this like economists. We're used to working in one sector of the economy where, yes, a lot has changed very rapidly.
But when you look at healthcare, education, government, the nonprofit sector, as you work in these, as I have, you will see the rate of improvement is going to be pretty slow.
I certainly feel that in my first book, I talked about the idea of the exponential gap, which is the technologies can go exponentially, but human institutions are linear. They drag us down. As you say, people have different incentives. And there are places where there's just a lot of people that you have to shift and move around. But I'm curious about whether this time might be different.
And let me posit something to you. We can explore this. You know, we know, for example, that we had really meager economic growth really across the world until England in the 1620s. And then in England, we cracked a sustained 1% growth rate for decade after decade. And it had taken plagues essentially to give us better than zero growth.
The one exception perhaps were the Dutch when they figured out trade and moved in the 16th century to a trading economy. But we have seen the economic regime fundamentally shift. I mean, at least once, perhaps twice, right? Well, perhaps the first time was when we moved from intercities. And the second time perhaps is that period in England in the 1620s.
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