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Podcast: Remaining Realistic and Optimistic About the Promise of the Future, With Jim Pethokoukis

Podcast: Remaining Realistic and Optimistic About the Promise of the Future, With Jim Pethokoukis

The future will be much improved if society fights its fear of technology. Rob and Jackie sat down with Jim Pethokoukis, Senior Fellow and DeWitt Wallace Chair at the American Enterprise Institute, to discuss how the sci-fi fantasy of the future isn’t as far off as we think.




Rob Atkinson: Welcome to Innovation Files. I'm Rob Atkinson, Founder and President of the Information Technology and Innovation Foundation.

Jackie Whisman: And I'm Jackie Whisman. I head development at ITIF, which I'm proud to say is the world's top ranked think tank for science and technology policy.

Rob Atkinson: This podcast is about the kinds of issues we cover at ITIF, from the broad economics of innovation, to specific policy and regulatory questions about new technologies. So if you're into this stuff, please be sure to subscribe, rate us, tell your friends.

Jackie Whisman: Today we're talking to Jim Pethokoukis, a Senior Fellow and the DeWitt Wallace Chair at the American Enterprise Institute, known as AEI, where he analyzes US economic policy, writes and edits the AEI Ideas blog, and hosts AEI's Political Economy podcast. He's also a contributor to CNBC and writes The Faster Please newsletter on Substack. He's the author of The Conservative Futurist: How to Create the Sci-Fi World We Were Promised, which came out in October, and that's what he's here to talk about today. Thanks for being here.

Jim Pethokoukis: Delighted. Thank you for having me.

Jackie Whisman: Why don't you tell us a little bit about the book and why you chose to write it?

Jim Pethokoukis: Well, I think, like a lot of people whose books have come out probably in the past six to nine months, I had a little extra free time during the pandemic, no commuting, and figured I'd write about a topic I've had some interest in. I've always been interested in economic growth.

I'll admit it was a bit of a drearier book when I started writing it. It was going to be about why we aren't living on Mars, why we don't have flying cars, why the average family doesn't have an income of $200,000 a year, because of economic growth, and productivity growth, and tech progress have been slower than what we imagined 25 years ago and 50 years ago. But then, as I was writing the book, one, my naturally optimistic nature came through, plus things started popping: SpaceX, taking people into orbit, looking at what was happening with some genetic editing, and probably most of all what's been happening with AI. So the combination of those technologies really made it easier to write, I think, a fairly positive book about what the future can be if we as society make some better decisions.

Jackie Whisman: As somewhat of a Disney adult, I thought it was really interesting that you wrote that Walt Disney was perhaps the most important American futurist of the 20th century. Why do you think that?

Jim Pethokoukis: The creation of, I think particularly, Tomorrowland, as the first theme park that seems like a modern theme park was really important. It was able to create an image of the future that people saw, that they experienced. They weren't just watching a movie. They got to interact with the future, rides to Mars, in a way that was both interesting and fun, but was also rooted in science.

And I think it's important that people have a realistic image of a better tomorrow, something we've not done a very good job at. And that's what... Disney was an optimist, and he tried to meld classic American virtues, and he loves small town America with this view of the future. And of course, Epcot Center, what is now Epcot Center was originally going to be this massive, bubble-domed, classic 1960s sci-fi bubble-domed city in Florida. It didn't quite work out that way, but still, even if you go to Disney today you still see a nice smattering of the future, whether it's a space elevator rider or what have you. So it's super important in the first half of the 20th century.

Jackie Whisman: They also employ some of the most incredible technologists and engineers that we work with, that's for sure.

Jim Pethokoukis: Absolutely.

Rob Atkinson: So, Jim, I think you and I both agree that technology... There's a lot to be optimistic about with technology, a lot of new things emerging. Let's hope they keep going and emerge broadly used and diffused. But I think we're probably both a little more pessimistic about American society, particularly the elite class, and how they're responding to technological change.

I know we're here to talk about your book, but I'm going to talk about my book for one second. I've got a new book coming out in May called Technology Fears and Scapegoats: 40 Myths About Privacy Jobs, and AI in Today's Innovation Economy. And we go through, as you do in your book, there's so much misinformation about what's going on today, intentionally, in my view.

We have a poster at our office at ITIF, which is a reminder to everybody who works at ITIF, how we should be thinking about the world. And it's a poster of the 1892 Chicago World's Fair. It's amazing how, oh my, this and that, electricity and this. People were pumped. People came from all around the world. So in a way, it's sad you felt like you needed to write this book. It seems like techno pessimists have gotten a lot more powerful than they were. 40 years ago it was like some weirdo with a tinfoil hat and now it's editorial pages of the New York Times and many others. What's your take on all of that?

Jim Pethokoukis: It's interesting. It was not so long ago that Silicon Valley and the American technology sector was being criticized for the smallness of its accomplishments, that it was being criticized for only creating what ride-sharing, and social media platforms, and people were criticizing it. "Where's the new Apollo program? Where are these wondrous things that are happening?"

The ink was not dry on those kinds of editorials and things, when all of a sudden, guess what? There is a new space age, and there are miraculous cures in the pipeline, and we're creating possibly maybe the greatest invention ever created in artificial intelligence. So, here! Here you go. So here's the technologies. You want them, here they are. And now people are saying, "Whoa, whoa, whoa, whoa. Now we don't want those. We're scared. It's all happening too fast. Slow down, pause it."

It's amazing. You wonder whether those people were really interested in progress to begin with. And when I started writing the book, the classic example was nuclear power, in the way that we really shut down nuclear power, and now we're sitting here complaining about climate change when if we had coast to coast nuclear reactors, we wouldn't be having this conversation.

But I wasn't even done writing the book when we had a brand new, fresh example of this backlash, which now seems to be so baked into our national character. I think, as you mentioned, I think correctly, particularly among the elites, with artificial intelligence. We got to enjoy some of the cool stories about AI For about a week and a half after ChatGPT was released, "Oh boy, we can create these amazing images and we can do a rap song as if Winston Churchill did it. This is neat." And then it quickly became, "It's going to take all your jobs and then it's going to kill you."

And those strains have really, I think dominated the conversation with a dismissal, a hand wave, a way of, "Oh, I asked, sure. I guess it might help us, I don't know, cure cancer, or create miracle materials, and accelerate economic growth." Almost like that's not important. What's really important is that it may create a misleading video for YouTube. That's the issue.

Rob Atkinson: It's funny you say that because on the day we're recording this, the Head of Competition Policy in Europe, Margrethe Vestager, was at AEI, I believe. I think it was at AEI this morning, she spoke. And she referred to, I know I'm not supposed to laugh, because it's not polite, but she referred to AI as the singular moment compared to the development of the atomic bomb.

And you just have to ask yourself, "What? What are you talking about? We're in a world now, where AI is the atomic bomb?" I can't even get Siri or Alexa or any of these things to tell me the right answer to things, and we're worried it's going to be an atomic bomb. What happened?

Jim Pethokoukis: I think it is a combination of society that has been marinating in futuristic dystopia for a half century, and I also think it is a society which there is a deep river of hostility to economic growth, and, right with it, a hostility capitalism, because people fear that it will end up with humanity using up all the resources of the planet, creating a toxic atmosphere, that sort of environmentalism of the seventies remains with us, I think at a very deep level.

And I think the third thing is Europe is behind, and I would doubt they will ever catch up. What is it? America Innovates and Europe regulates. They view that as their comparative advantage. So if you are unable to master these technologies, if you're unable to create the companies that are leading the way, well then I guess you'll focus on what you're good at, and what they're good at is slowing things down, shackling these technologies.

It's a shame that too many people in the United States, policymakers, view Europe as creating ready-to-wear regulatory models for us to import to the United States. They can just, "What is Europe doing? Well, they're the regulatory leaders. That's what they do great over there, and maybe we should be doing that." Then don't be surprised if you end up with a similar result, which is a lack of innovation, a lack of economic growth.

Rob Atkinson: I love that, when you hear all the journalists "We're falling behind Europe on regulation."

Jim Pethokoukis: I hope!

Rob Atkinson: When was that? The game, the race, we're falling behind. If we were falling behind on innovation them wake me up. Crazy.

Jim Pethokoukis: There is I think such a lack of appreciation of how bad policy can hurt innovation. Even though we've had a half century, I think, of disappointing level of growth and progress, certainly what people were expecting in the immediate post-war decades, and again, I think what they were expecting in the nineties, that we would be instinctively taking a very hard look at everything we do through the lens of, "Is this pro-innovation?" And not just dismiss how something can slow down the innovation, but yet again, we seem to be embracing those kinds of policies for the past half century. And my concern, and one reason I wrote the book is I'm worried we'll be doing it for another half century.

Jackie Whisman: Well, we interrupted each other to make the same point, because my next question was, I was going to ask you, what do you think the biggest mistakes the US has made since Rob's example of the Chicago World's Fair? Recognizing, of course, that other countries have also seen a slowdown in innovation.

Jim Pethokoukis: It is a phenomenon we've seen across rich countries. You have to be very careful about saying, "It is this one policy, it is this one reason." And I think the fact that it has been a cross-country phenomenon... You certainly have to start by looking at big macro reasons. Have we exploited the big gains of the industrial revolution? As we've climbed further up the tree of innovation have all the low-hanging fruit been picked so that we have to put more resources and money and researchers to find big ideas?

Those kinds of things explain, I think, why we've seen it cross rich economies. But I think there are specific things we've done wrong in this country. We decided to not follow up the Apollo program with anything else, and we decided not to spend at those kinds of levels. I would like to see where we'd be if we had done that. And one of my favorite TV shows is For All Mankind, which posits an alt-history future where the space race never ends, and they keep spending like that, and of course then they have nuclear fusion by the mid-nineteen eighties. And I think we've regulated, as I mentioned earlier, as if regulation does not slow down tech progress.

Now, to be sure, some people who've been for this regulation, that was their intention, but I think for most policymakers, they just assume that America would America no matter what we did, and it wouldn't matter if it became super difficult to build anything either quickly or cheaply in this country. Something that some people have been talking about for years, some of my friends on the left have noticed it, because now they realize that they have these grand green energy visions, but they can't build a transformer tower, or they can't build a transmission line. Or, forget about putting wind turbines offshore, it's hard to build the factory to build the wind turbines, much less actually locate them offshore. So I hope that there is a bit of a recognition across the aisle that we've made some mistakes and better late than ever.

Rob Atkinson: You mentioned the regulatory challenge. It used to be, Jim, you remember this, it used to be that at least people would, on both sides of the aisle, would say, "Okay, there's a trade-off. We're going to regulate, but we'll get some costs, we'll get some limitations, but it's a good trade. Maybe there's safety that happens and fine, we'll do the trade."

And you can argue at the margin about is the trade worth it or could you design regulations that are less innovation inhibiting? But what we see now is people actually arguing that regulation spurs innovation. You see the Europeans say that now, that if you regulate the heck out of AI, somehow people will adopt it. Do people forget that ChatGPT-III was the fastest deployed technology in world history that was unregulated? So we're in this weird situation where the other side, the anti-technology, the anti-progress side. And that leads me to your point, I think a really interesting frame in the book where you talk about up-wingers and down-wingers. Tell the audience what you mean by that.

Jim Pethokoukis: I say that the most important distinction, I think the one that has been important in American history, and I think was very important going forward, is not so much left-wing versus right-wing. I think it is up-wing versus down-wing. And by that I mean, there are people on both sides of the left-right spectrum who think technology's important, technology solves problems, economic growth is good, it raises people out of poverty, it creates opportunity. And now the people on both sides may not have exactly the same ideas about how to generate growth and generate that tech progress, but they think that's important, and they understand there's going to be disruption, and people may lose jobs, and businesses will rise and fall and cities will change, but through that tumult, we will be a stronger, more resilient country.

And then there are people on both sides, I call them the down-wing people, who are allergic to that disruption, who wonder if economic growth is worth it. They think all it will do is either benefit the 1%, or it will only benefit companies but not workers, and it's bad for communities, and it's disruptive for families, and they think that the downsides of growth simply aren't worth it.

And again, the up-wingers on the left and right, Democrat Republican and the down-wingers on left and right, Democrat and Republican. And I think once you look through that framing, one, I think you can understand there are people you should be able to work with on the other side of the aisle, maybe there's less than there used to be, then you also see unfortunately how there are people on both of the aisle who seem like they would've nothing in common, but actually have quite a bit in common. And I worry that those bits of our political landscape are growing rather than retreating.

Rob Atkinson: I a hundred percent agree. I think that's a really important insight. You and I both know Adam Thayer. I've known Adam probably 20 years professionally, and he is way more conservative than I am. He's more free market than I am. I think he was at George Mason, I don't know where he is now, R Street or someplace.

Jim Pethokoukis: I think it's R Street.

Rob Atkinson: Which is a right-of-Center think tank. And I wouldn't call myself a conservative I'd call, maybe a moderate, maybe slightly left of the center, Clintonite. But Adam and I, and you and I, we all are up-wingers.

Jim Pethokoukis: I agree.

Rob Atkinson: That's why I can have debates with Adam and I can agree with Adam on a bunch of stuff. And then when I say, "Well, we need maybe a little bit more industrial policy to support growth and innovation." Adam's like, "Well, I'm not so sure that's the right way to do it." Fine. We're arguing about the means not the end. We both and we all three of us want way more innovation, way faster.

Your point about it that maybe those groups are shrinking, one of the things that we see, and I'd love your insights on it, because you're closer to that community than I am, but really troubling messages from Conservatives and Republicans in the last few years. Sohrab Ahmari, he had that new book, which was basically, as far as I can tell, it was a criticism of capitalism, and big companies, and John Judas who's a... I think John is an up-winger by the way, even though John's a pretty liberal guy, journalist, he wrote that Amari, "takes what amounts to a classic Marxist position."

And you see the same thing with some of the Republicans in Congress who appear... They don't like big tech, at least historically. The Republicans to me, were always... At least they wanted growth. At least they were supportive of innovation, and we're not seeing that as much anymore. Do you agree? And if so, what's going on?

Jim Pethokoukis: I think about it every day. I'll be honest with you, that is not the Republican Party, the Conservative movement, the American right that I've existed in my whole life or was aware of my whole life. I certainly think part of it is the kind of folks who are now voting Republican, who many Republicans at least think are a core of their base, elected officials are telling them that "We will use government to shield you from anything bad. We will protect you, we will protect your jobs, we will protect your communities. You should never have any expectation that the company you work for will ever go out of business, or will ever send a job to overseas, or even elsewhere in the country. We will provide security."

So now it's become an economic security-based policy agenda. And once that is the framework and then you have a brand new group of enemies, your enemies are, they're immigrants. That immigrant could take your job, or maybe he'll start a company that will then put that company, the company you work for, out of business. Your enemies become CEOs of big companies who tend to like immigration. So then you got to be against those companies, too. I'm probably giving the most charitable version of this. There's a darker and more nefarious version, I think, of this story. But that is how you now get political power on the right. Those are your voters, and that is the message you need to tell them, "We will protect you. And forget about small government, limited government. We will use government every way we can think of to protect you. So please keep voting for us."

Jackie Whisman: You also mentioned that...

Jim Pethokoukis: I don't like saying this. I grew up during the age of Reagan optimism. That's what got me interested in public policy about how can America can grow, because as you know, back in the eighties, there was a period which we thought that the good times were really over, and then we became optimists again in the nineties. Man, I would love another nineties. I would love that.

Rob Atkinson: Tell me about it. And by the way, it's not just the right, the Progressive left has gone... There was always a progressive left, but the left used to be a Labor Right left. And what the Labor Right left wanted... They were great. They were fine with innovation because it meant bigger companies, maybe more union jobs, better jobs, higher-wage jobs. What the labor left always wanted was just, "We just want to make sure we get our share of the pie." Cool. They weren't against this. Whereas the progressive left today, it strikes me as anti-capitalist, a lot of them, anti-capitalist, anti-company, anti-innovation, even more protection for people than maybe some of the new Republicans. So it's a strange coalition.

Jim Pethokoukis: Even though, again, they may not look like they have much in common because you could point to, well look how much they differ on abortion or some of these other cultural issues, but when you start talking about economics, sometimes you could say, "Which of these politicians said this politician?" And I don't know. And there are politicians ripping Silicon Valley. "What have you done for us lately?" Those were Republicans writing for the Wall Street Journal who were saying, "This crazy, left-wing, Silicon Valley, and they're trying to store our kids' minds with social media, and they're not building rockets anymore." Even though at the exact same time they were writing those editorials, they were building rockets. That was the right, it's an astonishing turn of American politics.

Jackie Whisman: You've said that innovation and Conservatism may seem like an oxymoron, but it's not, at least traditionally. Why not? And maybe we'll close after that.

Jim Pethokoukis: Well, I think anyone who uses the phrase "conservatism" or calling themselves as Conservative, they have to answer this question, "What the heck are you trying to conserve?"

Are you trying to conserve the social and familial arrangements of, say, the 1950s? I think some, not trying to conserve, but return to that and then keep it like that. That's not what I'm trying to conserve. I'm trying to conserve the bountiful inheritance of free markets and liberal democracy that came from the 19th century, and is responsible for the West as we know it. A place of, again, political freedom and economic freedom. That is what I am trying to conserve, and that is what I am trying to then bequeath to future generations, hopefully in better shape and in stronger shape.

So that liberal tradition is what I am trying to conserve. And I thought that it was an easy case to make, and I wouldn't even have to really think too hard about it. But boy, oh boy, there are plenty of people who don't like that tradition at all, and have deep reservations about liberal democracy, and even deeper reservations about modern capitalism.

Rob Atkinson: A hundred percent agree with you on that.

However, I would argue there's two other things that we should conserve, and this is where I think some of the new conservatives get it right, where they get a lot of other things wrong. One is patriotism. I do think we need to conserve that. It's a great country we live in, we should be proud of it, and there's a lot of people who want to tear the country down. And the second is a system of meritocracy, which to me has been baked into our system, and I actually see those as related to innovation, and markets, and everything else. So I'm just curious what your thoughts are on that.

Jim Pethokoukis: I think that's a wonderful addendum that I would not disagree with at all.

Rob Atkinson: Okay, great.

Jim Pethokoukis: Great.

Rob Atkinson: Well, I really enjoyed this conversation partly, because there's a declining minority of people on the up-wingers, if you will. Maybe we're...

Jim Pethokoukis: Darkest before the dawn.

Rob Atkinson: Exactly. Maybe we're all just cowed and the silent majority, let's put it, that's what it is.

Jim Pethokoukis: I hope this podcast marks the actual inflection point.

Rob Atkinson: It is.

Jackie Whisman: Can we rename this podcast, The Up-Wingers?

Rob Atkinson: Up-wingers, you have nothing to lose, but your pessimism.

Jim Pethokoukis: We're on the rise. Thanks for having me on so much.

Rob Atkinson: Thank you, Jim.

Jackie Whisman: Thanks, Jim.

Jim Pethokoukis: Thank you.

Jackie Whisman: And that’s it for this week. If you liked it, please be sure to rate us and subscribe. Feel free to email show ideas or questions to [email protected]. You can find the show notes and sign up for our weekly email newsletter on our website And follow us on Twitter, Facebook, and LinkedIn @ITIFdc.

Rob Atkinson: And we have more episodes. Great guests lined up and, we hope you continue to tune in.

Jackie Whisman: Talk to you soon.

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