Growth is Progress
Growth is Progress
Perpetual positive progress for our species is far from guaranteed, but it can be enabled by proactive investment in innovation at scale.
The Shortcut:
We find ourselves in a 250-year period of unprecedented prosperity, a prosperity that we frankly take for granted. Without intentional effort, this period can very easily shift from new trajectory of our species into an outlier. In this piece, we delve into the actions required to ensure the continuity of progress by fostering investments in two interrelated forms of growth.
Read Time: 13 minutes
Introduction
Humanity’s incredible progress in less than three centuries has been widely reported and yet still under-appreciated. It is neither opinion nor conjecture to assert that twenty-first century humanity is fundamentally privileged to a degree unimaginable at any prior century of our meager existence.
Examples abound, like rates of the world living in extreme poverty:
Humanity’s positive progress coincided with and in many cases catalyzed unparalleled population growth (more on these two shortly), and yet - we have so much still to solve:
“We haven’t yet cured all diseases; we don’t yet know how to solve climate change; we’re still a very long way from enabling most of the world’s population to live as comfortably as the wealthiest people do today; we don’t yet understand how best to predict or mitigate all kinds of natural disasters; we aren’t yet able to travel as cheaply and quickly as we’d like; we could be far better than we are at educating young people. The list of opportunities for improvement is still extremely long.”
Though recent history has looked quite favorable for humanity, our species’ near- or long-term future is not guaranteed, nor is it guaranteed to be positive. We have no assurance that our Industrial Revolution-catalyzed ascendance is the new “species default” rather than a happy outlier.
Progress of the positive kind is not a given but instead emerges from proactive intention, which leads me to ultimately posit that, at least directionally, progress can be designed. Intentional design requires intentional study, which is why Patrick Collison and Tyler Cowen proposed building a “Science of Progress”:
“Progress itself is understudied. By “progress,” we mean the combination of economic, technological, scientific, cultural, and organizational advancement that has transformed our lives and raised standards of living over the past couple of centuries. For a number of reasons, there is no broad-based intellectual movement focused on understanding the dynamics of progress, or targeting the deeper goal of speeding it up.”
Studying and comprehending progress is a necessary prerequisite but it cannot be the end goal. No, the goal of such work is action - as I note above, if progress can be directionally designed, it is insufficient for such work to remain within the academic realm. It must be embraced by public and private sector operators alike. Again Cowen & Collison (emphasis mine):
“An important distinction between our proposed Progress Studies and a lot of existing scholarship is that mere comprehension is not the goal. When anthropologists look at scientists, they’re trying to understand the species. But when viewed through the lens of Progress Studies, the implicit question is how scientists (or funders or evaluators of scientists) should be acting. The success of Progress Studies will come from its ability to identify effective progress-increasing interventions and the extent to which they are adopted by universities, funding agencies, philanthropists, entrepreneurs, policy makers, and other institutions. In that sense, Progress Studies is closer to medicine than biology: The goal is to treat, not merely to understand.”
Progress Studies highlight a key theme of this newsletter, multi-disciplinarianism - the direct, explicit collaboration across the incredibly fuzzy lines of demarcation between different intellectual fields. Such a movement - more of a wish than a reality at present - is in equal measures under-appreciated and derided as unnecessary by hedgehogs who have spent their career diving deep into a specific niche1.
Nonetheless, progress does not care about human-drawn lines across reality. It is influenced only by effectiveness. And if we wish to effectively maintain the positive direction of progress, we must be far better at proactively designing the paths of growth, for there is no progress without growth.
What is Growth?
The impetus for launching this newsletter, and the underlying thesis for our firm, is the exploration and application of growth. When we speak of “growth”, we encounter some clear definitional challenges. Forgive the lengthy quotes, as Kevin Kelly provides much of the heavy lifting for us (emphasis mine):
“In English there is a curious and unhelpful conflation of the two meanings of the word “growth.” The most immediate meaning is to increase in size, or increase in girth, to gain in weight, to add numbers, to get bigger. In short, growth means “more.” More dollars, more people, more land, more stuff. More is fundamentally what biological, economic, and technological systems want to do: dandelions and parking lots tend to fill all available empty places. If that is all they did, we’d be well to worry.
So the first usage of growth is one of abundance, of quantity. The second is it’s close cousin, quality:
“But there is another equally valid and common use of the word “growth" to mean develop, as in to mature, to ripen, to evolve. We talk about growing up, or our own personal growth. This kind of growth is not about added pounds, but about betterment. It is what we might call evolutionary or developmental, or type 2 growth. It’s about using the same ingredients in better ways. Over time evolution arranges the same number of atoms in more complex patterns to yield more complex organisms, for instance producing an agile lemur the same size and weight as a jelly fish.”
So Kelly lays out a dichotomous classification of growth for us to consider as we explore the design of progress:
Type 1 is a measure of quantity, the standard economic measure.
Type 2 is a measure of quality, more difficult to capture in typical econometrics2.
The great folks at Our World in Data agree:
“Economic growth is an increase in the quantity and quality of the economic goods and services that a society produces.”
Let me take this one step further and assert unequivocally that:
Growth of both the Type 1 and Type 2 varieties is a necessary precondition for human progress.
The Case for Abundance
If Covid demonstrated anything it was the need for more - more protective gear, more vaccines, more politicians actually willing and able to do their fucking jobs (a more difficult type of growth) - more as a resilience function to ensure our species health even in the face of cataclysm.
Derek Thompson framed a solution for this need as the Abundance Agenda:
“An abundance agenda needs a target. One answer that I’ve given you is: essential goods and services where productivity rates are declining. But that’s a bit fusty and technical. Let me try to offer a simpler answer. We should aim for abundance of comfort, abundance of power, and abundance of time.”
Ezra Klein has in parallel written HERE, HERE, HERE, and (non-coincidentally) soon with Derek Thompson HERE, about a similar concept with a different name: Supply-Side Progressivism.
Putting aside the politically flavored moniker in dire need of a rebranding, the concept is directionally consistent. Rather than a demand-side approach focused on the distribution of a fixed supply of goods, services, and capital, a supply-side approach focuses instead on building more; on abundance.
“Supply-side progressivism shouldn’t just fix the problems of the present; it should hasten the advances of the future. Most liberals can list the programs they want the government to create or expand. Fewer can name the five technologies they want the government to finance or the five scientific challenges they want to see it mobilize to solve. But technology is central to how we make the future look different from the past. To leave that to the market, or to think it apolitical, is abdication.”
Brian Deese gave a stirring speech on “modern American industrial strategy” in which he largely concurred:
Our modern American industrial strategy reflects a commitment to make bold investments in key areas that everyone, from academics to business leaders alike, agrees are foundational to economic growth. These investments help accelerate and shape breakneck innovation, and they encourage private investment and market competition in a way that picks only one winner: the productivity, opportunity, and standard of living of the American people.
Altogether, we begin to see the makings of a governmental-level, policy-focused approach to incentivizing growth, based on the solid economic footing of a Nobel laureate.
Nonrival Ideas
The proposals offered by both Thompson and Klein owe at least a portion of their intellectual foundation to Paul Romer’s Semi-Endogenous Growth (SEG) Theory, which won him the Nobel Prize in Economics in 2018.
As detailed by leading SEG economist Chad Jones, the basic idea is that ideas are nonrival - they are infinitely usable. This infinite usability of ideas means that income per person depends on the aggregate stock of ideas, not the stock of ideas per person. Just as more autoworkers will produce more cars, more researchers and innovators will produce more new ideas.
People produce ideas and, because of nonrivalry, those ideas raise everyone’s income. This means that income per person depends on the number of people searching for ideas (i.e., researchers).
In the before prosperity times, the transmission of ideas was quite costly, and thus ideas were not nearly as universal3. The internet permanently reduced these transit times and transmissions to effectively zero.
Quantity Yields Quality
One challenge with such an Abundance Agenda is the focus on abundance itself, on Type 1 growth. Kevin Kelly again:
“Individually, corporately and socially, we’ve tended to favor functions that produce more. For instance, to measure (and thus increase) productivity we count up the number of refrigerators manufactured and sold each year. More is generally better. But this counting tends to overlook the fact that refrigerators have gotten better over time. In addition to making cold, they now dispense ice cubes, or self-defrost, and use less energy. And they may cost less in real dollars. This betterment is truly real value, but is not accounted for in the “more” column.
Indeed a tremendous amount of the betterment in our lives that is brought about by new technology is difficult to measure, even though it feels evident. This “betterment surplus” is often slow moving, wrapped up with new problems, and usually appears in intangibles, such as increased options, safety, choices, new categories, and self actualization — which like most intangibles, are very hard to pin down. The benefits only become more obvious when we look back in retrospect to realize what we have gained. Part of our growth as a civilization is moving from a system that favors more barrels of wine, to one that favors the same barrels of better wine.”
This last piece is subtle but important. Technology is arguably most valuable when it is broadly deployed across all domains and ceases to be considered technology; when it becomes invisible. As Jerry Neumann writes:
“Connecting a thermostat to the Internet wirelessly is awesome, but calling it an Internet-enabled thermostat will start to be like calling a vacuum cleaner an electricity-enabled broom. And if your thermostat does not connect to the Internet, it will be bought only by retro-chic hipsters.”
A positive sign of human progress is when our “life altering technology” quietly fades into the background, assuming its forever role as a necessary but un-special portion of our daily lives.
Electricity was once considered transformative technology. So to were the computer, the internet, and soon enough, AI. It’s a clear sign of progress that such patterns represent the inevitable outcome of our technology, even if this “fading progress” is difficult to measure.
Though I agree with Kelly that traditional economic focus on Type 1 growth, on counting statistics, does indeed belie the underlying (and potentially greater) value of Type 2 growth, on quality of production, I don’t believe one should take a hard stance for one and against the other.
Quantity and quality are inextricably linked. Research4 shows at the individual level that higher volumes of ideas yield higher total levels of creativity.
It is rare indeed that an inventor (whether that be individual or collective) gets it right the first time. No, truly groundbreaking invention and innovation emerges from the countless failed attempts to build. That is, quantity begets quality.
This is not to say that the quality returns from quantity are infinite - surely they are not. But note that at a species level, we’re less interested in the efficiency of such efforts5 as we are the volume - we progress when the net total returns of our innovation increase, regardless of whether the “success ratio” of such innovations was comparably low.
Designing for Growth
Three primary mechanisms have historically driven this communal idea pool according to the SEG faction:
Population growth
Higher educational attainment in the population
Better allocation of resources
Moving forward, SEG predicts that there are a few ways that we can increase the number of researchers/ideas (each of which is, frankly, worthy of a standalone piece):
Finding Einsteins. Full-time researchers are under 10M for more than 7B people globally. Independent of total population growth, we should certainly have capacity for more people focused on idea creation.
Rise of China, India, et al. Population here is a quarter of the world, but historically with much lower education standards. How many more ideas should we expect to emerge from these under-utilized populations?
Childhood exposure to innovation. Girls, BIPOC, and lower income have far less exposure to innovation and therefore are far less likely to innovate. Increasing early exposure should create more researchers.
Women. Another huge pool of underutilized talent is women. Brouillette uses patent data to document that in 1976 less than 3% of US inventors were women. In 2016, their share was still less than 12%. He estimates that eliminating the barriers that lead to this misallocation of talent could raise economic growth in the United States by up to 0.3 percentage points per year over the next century.
Each of this is massively fertile area of further exploration, and I’ll non-coincidentally start to tackle each of these next week with a deeper dive on the last bullet here - on the future, necessary impact of women on global innovation.
Finally, “Why it matters if ideas get harder to find” identifies the implications of SEG models:
By default, we should expect idea production to fall over time. Idea generation is “default dead”, as it were.
The main thing that can push against this dynamic is a fast enough increase in the number of people trying to have ideas.
This could be caused by population growth, or by "effective population" growth: growth in the number of people who have a "decent shot" at being innovators (something like: they have adequate nutrition, education, and access to people and cultures in which they can learn to innovate).
The author expounds further on this last point:
“We might get "effective population growth" if we could do a better job making "innovator" paths open to more people - for example, by lowering barriers for people in poor countries, or for women in currently-male-dominated fields. Improving culture and institutions could help with this too. In the long run, there's only so high the "percentage of the population with a decent shot at being innovators" can go.”
Growth is Progress
We need more research, more invention, more building. Such work is necessary for the perpetual continuation of the positive progress of our species. Progress is certainly not guaranteed, especially when so many (mostly) from the left are intent on pursuing degrowth efforts under logically fallacious and ideologically inane grounds.
An Abundance Agenda, or Supply-Side Progressivism, or whatever end-state branding is ultimately applied to a Romer-esque focus on scaling ideas production, is worthwhile precisely because its focus on Type 1 growth would also trigger Type 2 growth.
By attempting to increase the total supply of idea generation, especially by incentivizing growth in the total supply of idea generators, we as humanity will be better suited to continue pushing humanity forward.
To continue the positive march of progress.
Some hedgehogs prefer that narrow focus, but so many, especially within academia, actively despise having been forced into such a narrow band by a system designed for pigeonholing.
We can pretty easily apply Moore's Law-like metrics, but it's not clear that such exponential improvements are directly usable as measures of Type 2 growth. Directionally for sure - but I would likely propose that the growth impact of Moore's Law yields something closer to linear results. I need to do more research here.
Only in practice - Romer’s work only makes the claim about the ideas themselves being non-rival, not that ideas are uniformly usable.
I realize I’m committing a cardinal sin here of cherry-picking one article favorable to my argument. Hopefully I’ll remedy this transgression in future writings.
At least not as a primary measure.