35: Stagnation, Regulation and The Future with Eli Dourado

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Hosted by
Will Jarvis

This week, we got to chat with Eli Dourado about stagnation, regulation and the Future. You can check out Eli’s work at www.elidourado.com

Show Notes:

NEPA, National Environmental Policy Act

The last supersonic passenger jet, the Concorde.

The Space Launch System.

Transcript:

Will Jarvis 0:04
Hey folks, I’m well Jarvis, along with my dad, Dr. David Jarvis, I host the podcast narratives. narratives is a project exploring the ways in which the world is better than it has been the ways it is worse in the past or making a better, more definite future. I hope you enjoy it.

Well, hey, Eli, how are you doing today?

Eli Dourado 0:35
I’m doing great.

Will Jarvis 0:36
Well, well, Eli, thanks for coming on. I wanted to get started and just ask you, can you give us a short bio, just tell us a little bit about what you’re about and what your mission is?

Eli Dourado 0:46
Sure, yeah. So you know, one way I sometimes started, the story is about 15 years ago, I thought I wanted to be an economics professor. And so I went down that path and started a PhD at George Mason, and loved being at George Mason, but decided, you know, that actually, like, no, this was like a really bad plan to be a professor. So kind of pump the brakes on that one, and instead got into more of the policy world, you know, basically just have always been really interested in technology. And you know, that, you know, the policy issues that relate to it, but also just the technology itself, and ended up taking a job at the mercatus Center at George Mason University and working on tech policy of all time. So it was, you know, pretty much a great match, and ended up running that department for a few years and then leaving to go to boom, for a few years as a supersonic startup as the first policy hire.

And did that for a few years, and then, you know, left in 2019, and took a few months off, and then ended up at the Center for growth and opportunity where I am now. And, you know, it’s been great.

And in terms of my mission, so like, at no point in this whole process, have I known, like, what I’d be doing five years down the road, or they’ve been right or been right about what I would be doing five years down the road. So I don’t know about a master plan or anything like that. I don’t think that’s, that’s been in the cards. But you know, I like technology. And I like making things go faster. So basically, what I’m, that’s what I’m working on, I’m trying to, you know, accelerate economic growth through.

Will Jarvis 2:44
Moving moving technology forward. Excellent. And if I just from my perspective, which, you know, I don’t, I don’t really know, you, I just I know your work, just reading your blog, and, you know, following you on Twitter and stuff, I would say, it seems like you’re really focused on, you know, how do we solve this tech stagnation problem in the West in particular? Yeah, I think that that’s a fair reading. Yeah, yeah, totally. Yeah. So Tyler Callen was my PhD advisor, and he wrote the book, The Great stagnation. And like, yeah, that’s, that’s what I want to that’s what I that’s kind of my research agenda now is, is ending the ending the great stagnation and moving things forward. Awesome. Can you just describe what the great stagnation is what tech stagnation is? And then some potential solutions, perhaps? Sure. Um, so the, the way that one of the ways that Tyler defined it in his book, The Great stagnation is through looking at total factor productivity? Right. So total factor productivity is this sort of economic concept of, you know, once you’ve accounted for all the labor and capital in the economy, like, if you’re getting more, one year versus another, that’s due to something else that isn’t measured? Right. And, and that’s something else is, you know, technology or quality of institutions or something like that. And what’s interesting is that we see over time, if you look back from the late 1940s, which is when we started to have like modern economic data, like through the early 1970s, it was growing at about 2% per year, that’s total factor productivity. And then around 1973 or so that stopped, it went to like about about half a percent per year. And then, and then, you know, brief spurt in the sort of like late 90s, etc. From the tech boom, perhaps. And then in the, like, mid 2000s, it just fell off a cliff. It just, it’s basically there in the shell of its former self, it’s like, you know, growing at about point 2.3% per year, in over the last 15 years. So really slow total factor productivity growth. And so, one of the ways I think about the great stagnation is like, Can we get it to show up you know, growth and get to show up again, you

Eli Dourado 4:59
In that statistic, you know, growth that isn’t accounted for by just like more people entering the workforce. And you know, that happened, by the way, right in the 1980s are like a bunch of women who weren’t working before, like, like we’re working, right. And so you can get more output. If you work longer hours. That’s not necessarily what we want. We want more more productivity in the hours that we work. So So yeah, once once TFP starts growing really fast, like that’s when it will be like, okay, that the great stagnation is over.

Will Jarvis 5:31
Got it. And I tend to think just just for the listeners, and that, you know, I’d love to hear your your feedback, I tend to think a lot of our political problems are downstream from this. And that, you know, increasing polarization is kind of a symptom of the fact that the pie is not getting bigger as fast as it used to. So it’s like, there’s less to divvy up to particular interest groups to make everybody happy? I don’t know.

Eli Dourado 5:53
Yeah, I totally agree with that. I maybe it cuts both ways. So I think that, like what you’re explaining is, like, for most of human history, right, we’ve grown up in this zero sum economy, right. And for hundreds of 1000s of years, humanity had a zero sum economy, right? Like, the only way you could get more stuff is if you take it from someone else, right. And, and, and so we economic growth breaks that equation, like we can all get wealthier over time. And so when you get to a world where there is technological stagnation, then you’re back to the zero somewhere, right. And like, all of our worst instincts, all of our most, you know, destructive instincts cut out. You know, at the same time, it may be the case that it’s, you know, primarily cultural changes that are, you know, the sort of, you know, if you want to think about what’s the root cause of this, I think that sort of, like, the proximate cause is a lot of policy stuff, which is why I’m interested in policy questions. But if you want to think Well, what’s the root cause behind all these policy shifts? Maybe it’s culture as well. And, you know, so that’s something I’m toying with now is why, you know, what, really is the root cause here? And, and, you know, noodling on that, that that’s really well put,

Will Jarvis 7:10
what do you think some of the root causes are? So you mentioned, you know, maybe policies have changed, you know, it does seem, to me, at least, that I get the sense I wasn’t around in the New Deal, but I’ve got, um, you know, so a great a great uncle, he’s 95. So he’s like, on the tail end of that, and he used to talk, He always talks about how, you know, things used to, it seemed like things worked a lot better. So, and when I think about the new day, I think of like, all the smart people going to Washington, building all founding all these institutions from scratch, and maybe there’s just like this entropy in organizations, and they just start to work less well, over time, you know, the bureaucrats kind of take over, and they get farther away from their original mission. Now, you know, I don’t know, it depends, if you’re more libertarian, you’re probably skeptical that it ever really worked very well. But you know, we were able to do Manhattan in this, like, crazy amount of time. But now the Department of Energy just like, really sucks from where I’m sitting.

Eli Dourado 8:04
Well, and so in terms of like, what’s the root cause, right, like, the cultural cause, or something like that. So what I’ve been kicking around is an idea that, so we’ve humans have always been sort of, like status seeking, right. And we care care a lot about about our status. If you were, you know, even in that zero sum economy, you know, that we evolved in, right, if you were the tribesmen that, like killed the biggest animal and right, you, you, you slaughtered the mammoth, and you’re trying to take a week off and like, just have a festival. And like, he was a man, right? Like, you, you, you, you got, you got tons of praise and stuff like that. And so we’ve always been very status conscious, we’ve evolved for that. You know, you could think about, like, in the world before mass media, yeah. That status, you know, mostly played out at the scale of like, your neighborhood or your town or whatever. And so, like, that status competition, right? It’s like, relatively small in scope, right? It doesn’t, it doesn’t, you know, it’s like, the disagreements aren’t that big, right? The, like, you hate your neighbor, because they have like, a slightly nicer car than you. And and there’s, like, there’s not really like a culture war that comes out of it. Right, it doesn’t occupy your thoughts as so much. Right. And then then you add mass media to the max. And, you know, I you know, you can think of the internet as like pouring rocket fuel on mass media. Got it. And, and, and we’re all like, focused on you know, this more national or maybe even global culture war. And it’s, that becomes like, the differences become so stark and where it’s all encompassing. And, you know, we whereas, you know, before, like, occupied a small part of your brain, but for the most part, like you’re still cared about material progress, like now it’s like, awesome. occupying your whole brain. And then and then like, every policy change that is suggested, you have to think about it first in terms of like, well, whose status goes up and whose status goes down with this change, right? Like, if we’re going to reform the Postal Service, right, like, whose status goes up and whose status goes down, or if we’re gonna, like, reform education, like, well, is that lowering the status of teachers, you know, like, like, and so on. And so like people react, I think negatively to, to these, some of these, like zero, some, you know, like status. The other thing is like, status is zero sum, right? Like, almost by definition here, when you’re raising, if you’re, if you’re at least at the level of, you know, a policy, the policy changes coming in and changing things, it’s going to raise the status for some people and lower the status of other people. And, and like, that’s like, our monkey brains, basically, reacting violently to it, and like, Nothing good

Will Jarvis 10:56
can happen. Anyone got it? Interesting. So it’s something like, it used to be if we both lived in a small town, you know, you could be the best physician, I could be the best attorney, and we could all find our own, like, niche, but now you’re competing against, you know, a billion people or something like that. And it’s suddenly much worse than that sense, like, hardcore.

Eli Dourado 11:17
Or it’s like, maybe like, you know, your, your physician position, and we hate each other. And like, we whatever we really, like, want to be the best and whatever. And we’re competing for status within our local community. But for the most part, like that’s pretty small, like small potatoes, a small, small thing in my mind, right? Like, like, I really care about getting new cars, and, you know, new TVs, and, you know, whatever, whatever the technology of the time was that, that people wanted to have, like, they still really cared about progress about material progress. I got it as they’re not. They’re not like a cultural war is not all encompassing, right, it doesn’t feel like those little skirmishes, little skirmishes at the level of the neighborhood where you actually like, mostly agree with the other person on those questions, because they’re, they live near you, and they’re pretty similar. That’s, that’s pretty different than then, you know, like, all the other questions that we get. Right. Right.

Will Jarvis 12:15
So wait, you know, do you have any thoughts about a way out of this? You know, it seems like just kind of, like, almost inbuilt, right. Like, it’s like, well, unless you just go blow up the internet or something, it doesn’t go away?

Eli Dourado 12:25
Yeah. So I think I think it’s going to, I think the only way that I can think of is like sort of hard policy changes that, you know, that, that, you know, like work working through sort of the, the actually more proximate causes of the of the stagnation so that, you know, that. So that’s, that’s why I focus what I do, I’m not going to fix the code, right. But I can, but I can do a deep dive on a particular policy issue, and, you know, convince a bunch of people that, that, you know, maybe it’s the right solution for this problem and make things a little bit better. And so maybe, maybe through that process, we can get growth moving again.

Will Jarvis 13:08
Got it. And I want to talk a lot about those policy changes, but I actually have a kind of tactical question, you know, what does that look like? Is it just calling congressmen and just like, in educating them about how you know better to is it calling bureaucrats within the federal agencies like, hey, this would be better policy to create, what does that look like? Like, what does an effective kind of strategy and I know people do this? Because lobbying seems to be effective people pay for it? So.

Eli Dourado 13:34
Um, you know, I think that it varies on by the issue, and it’s like, it’s like, you have to be very, it’s like, a lot of it’s not so much a strategy is like, very tactical, a lot of tactical awareness and a lot of thinking about, like, Where are the opportunities, you know, lobbying, like, does work. But it’s interesting, the mechanism by how, by which it works, right, it works, because the staffers don’t have bandwidth, right to like, know about all these things. Right. So so it’s like, you know, educating the staffer on like, you’re not you’re not persuading a member of Congress, who doesn’t agree with you to agree with you. Right? You’re, you’re you’re, it’s called legislative subsidies. That is the model that sometimes talked about here, that, that what you’re actually doing is like, you’re finding a member of Congress, who would agree with you if they had the information or, like, already agrees with you, but doesn’t have the information to back up, you know, in a deep way, and then you’re providing them with the information like that. That’s like the model that actually works is that because the, you know, the offices or you know, are pretty small and so on. But I actually, I mean, I focus a lot on just convincing elites, right, like, like, I think that there aren’t, you know, like, first of all, we need to agree that we are stagnating right and like, there’s people who don’t agree with Right. And so, you know, and so, so you know, sort of like just convincing people like this is a problem that we need to like address. And it’s, it’s really bad, I think is an important piece of it. So I think a lot of that a lot of what I do is not really for policymakers, it’s for people adjacent to policymakers, who will sort of like affect the culture of, you know, policy adjacent people, right. So that so that they, they. So they all sort of internalize the idea. Okay, there is stagnation, there is stuff we can do like these. There’s like concrete technologies that are that need to be moved forward. And we need to we need to find solutions to make that happen.

Will Jarvis 15:44
Got it? Got it. In what ways I want to zoom out a little bit, in what ways has has policy failed and prevented a lot of innovation? Is it just, you know, I already mentioned the ntpa. legnica? Yeah, he but yeah. So what does that look like? I don’t know.

Eli Dourado 16:04
So, so NEPA is is, you know, it’s, to me, it’s my favorite no one right, because it’s it’s just so atrocious. Like what it does. So is a is a law that was passed in 1969, I guess took effect January 1 1970. And it basically said, you know, we care about the environment. That’s like Congress had a statement that said, we care about the environment. And and before any agency of the federal government takes any major action that could affect human environment, it’s required to do a detailed and produce a detailed statement of like, what the effects could be, right? No, no actual protection. In this have to do report you have to do you have to do a report guy and say, say what it would be? Now? I mean, so so there’s a few things that so like, one is, that like, major actions by a federal agency, has been interpreted to mean everything, right, every, like, yeah, like any, that could affect the human environment, has to go through a report. And so so so then, basically, if you want to also say that you don’t affect the human environment, and therefore you shouldn’t have to do this report, you have to do another report to prove that. Oh, right. So so it’s like, so so the, the report that Congress like wrote about that you have to do if you if you are affecting the human environment, is called an environmental impact statement. And then what this other report that you could do to show that you have no effect on the human environment, is called an environmental assessment. And, and so you have to do that, if you if you don’t want to do the environmental impact statement and show that you have no effect then, and so, you know, the environmental impact statement, you know, takes varying amounts of time, but like, like an average of something like five years, do t right. And then the environmental assessment, you know, is like one to two years, probably probably about two years, typically. And in both of these, with the regulations that have implemented NEPA, right, that, that have have sort of done this, like, have created, like, long drawn out processes by where there has to be public meetings, and you have to like, and you have to do so. So these documents, like the environment, environmental impact statements, can be like hundreds, or like with 1000, with appendices and stuff 1000s of pages long, right? You have to have public meetings to hear about this. And in like, when you get to the end of the process, the government can still say like, we know that this has bad effects for the environment, what we’re gonna do it anyway. Right? There’s no, there’s no, there’s no like, substantive environmental protection here. paperwork, it’s an in it’s popular with the law is popular with environmental attorneys, right, sort of like activist attorneys, because you can, you can stop any project by, you know, by like suing on these grounds or many products by stopping suing on these grounds, like the environmental assessment wasn’t carefully done enough, right? Or the or the environmental impact statement didn’t consider this. And you can get a court to like come in and say, Okay, we’re gonna send this back to the agency, and they have to do a better one. Right. So so it’s really bad because he’s roadblock

Unknown Speaker 19:35
anybody could just throw up.

Eli Dourado 19:36
It is a massive roadblock. It’s like basically like nimbyism, you know, times a million. And, and yeah, so it slows down projects. And you can’t do any of the work on the project until this is done right. You’re not allowed to like do commit any resources to it like in terms of like putting a shovel in the ground. You can’t start digging. Like like the like. The you know, maybe maybe you can’t, you know, you’re going through an environmental impact statement for one element of the project, you can’t you’re not allowed to, like assume success of the of the environmental impact statement, or the decision at the end before you start doing so. So basically, you know, I think about like, an investor. Right. So the other thing I should say is, the law as written applies to federal agencies, but it also applies to any federal action. Right? So if the decision to know the decision to approve a permit, okay, right, so by a private company, so the private company says, like, we want, you know, so a great example is what the boring company is doing between DC they’re building a tunnel between DC and Baltimore, it’s super cool. Like it will take you, you know, in 15 minutes from DC to Baltimore, or vice versa. In an autonomous electric car underground, no traffic. Awesome. Sounds great, right, and super cheap. You know, to, for them to, for the, for the boring companies do that they’re going to the park service, I think they’re saying we want to do it under the Baltimore Washington Parkway, we want to that’s where we’re going to do it. And that and that right away. And so the government has to say yes or no to that question. And that the act of saying yes to that is considered a major federal action. Right, Jesus and so, so then, like, the boring company has to go through all the expense of producing essentially, the, I guess it’s the park services report, but like, the boring company has to do it. And like they have to shepherd it through the process to get it approved. As if they were the federal agency almost, right. So it’s so this doesn’t just affect the federal government, it basically makes our government very deliberately slow and stupid, in terms of like, being able to get come to a decision quickly. And, and, and creates opportunities for for you know, sabotage and, and uprising ism. All you know, all the fights about like the Keystone XL pipeline, those are all like, NEPA related, I mean, like, it doesn’t it’s not actually like in the in the news coverage, but like, that’s actually what they were fighting about was the the environmental impact statements and stuff like that. So it’s, it’s, I think it’s extremely damaging. And to, like, have this play out, but it’s, it’s also like, by environmentalist, it’s considered the Magna Carta of the environmental movement, and it is not going anywhere. So the best we can do is like, little tweaks around the edges, and maybe like slight reforms and stuff to try to get things moving faster. So so that’s so so yeah, so so are that’s why we’re stuck, like that, plus, you know, several other things that are kind of like that.

Will Jarvis 22:56
Gotcha. And it does seem like, it’s just so frustrating, right? Because at the end of the day, you don’t have to actually you just have to repeat it produce this report. Right. And it seems like, there’ll be some sense, like, if we could get the environmentalist on board to actually have like, you know, we’re actually going to do something that’s, you know, it’s much quicker process that actually, you know, accomplishes your goals and, and gets better outcomes on the environmental side, but also doesn’t, you know, destroy all our ability to do anything at all. It’d be really positive. But

Eli Dourado 23:26
if you can, I mean, you can weaponize this in so many ways, it doesn’t have to be environmental. So I just saw a proposal from viasat to put NEPA review on Elan musk and SpaceX is low Earth orbit constellation, because vysa operates a geosynchronous constellation. And they don’t want the competition from the low Earth orbit. Right. So it’s like you can you can like sabotage

Will Jarvis 23:51
it to just blow Yeah. Yeah, yeah, it’s horrifying.

Eli Dourado 23:56
Jesus.

Will Jarvis 23:59
It’s so interesting to me when there’s you know, there’s huge things like that, that, you know, you go through college and all your civics classes, and you’ve never even heard about it. And it’s it’s so important. Right?

Eli Dourado 24:09
Right. Yeah. And a lot of friends are like, Oh, the reason we’re stagnating is because, you know, basic sciences, you know, less productive or whatever. It’s like no. Like, it’s it is much more fundamental.

Will Jarvis 24:24
Right? Yeah, it’s really important. Have you ever speak of basic science? Have you ever heard of Don braven? This is an aside, and his book scientific freedom was just released by stripe press a couple months ago. Yeah,

Eli Dourado 24:36
heard of but that haven’t read it. Yeah.

Will Jarvis 24:38
So he was talking about tech stagnation in the early 2000s. And he he has this thesis he was he ran a program at BP called vision research. He was a physicist. He has this thought that funding funding model switched around 1970 where you could if you were a scientist and the university pre 1970, you could get like a little bit of money and just work on what Ever you wanted to, and complete freedom to like, per se every want, but then that switched and it has to be directed. And this is a great transition, the next question I have, and you have to spend all your time being a salesman, or you know, half your time being a salesman for grants, and then that selects all the weird people out, you know, like at the salesman, scientist, and there’s always slicer effects. And also, you know, the grant process is really messed up. Do you see any alternatives to the grant process? You know, it seems to me, like the grand prize, create this competition where you keep spending more and more to win the grant, you know, until you spend the, you know, up to the cost of the grant to try and win it. And I see this a lot in education, it seems like, it’s like, we’re hiring these grant writers. Yeah.

Eli Dourado 25:39
Um, you know, I mean, I think that there’s, you know, sort of the common solutions, there’s like prizes, there’s, you know, different different ways, you know, handout more money, and just don’t don’t ask a lot of questions and just see and see what the results are and stuff like that. I, you know, I think we should have like a ton of experiments on that. But ultimately, at the end of the day, like, it, it’s not, I don’t think it’s the science, right? I think like, think about, like my Twitter account, right is like full of science, science porn, right? Like, I will, like find some cool scientific study, and I’ll tweet about it. And I’ll be, like, excited about how great that scientific little, you know, mini breakthrough is or something like that. But like, ultimately, it’s got to translate to some sort of product, right directly affect productivity, right? And the same same root word. It’s, you’ve got to have that that sort of translation step of like, we’ve we’ve taken this breakthrough, and we’ve made it into, we’ve come to market, and you can now use this at scale, like if so if it’s if it’s so I think about something like CRISPR. Right. Huge scientific breakthrough. And we still can’t use it at scale, like there, isn’t it? There’s no approved treatments that use CRISPR. yet. Right. And, and and we’ve awarded a Nobel prize to the discoverers. And so, I mean, like, so I. So I favor a lot of experimentation in terms of how we how we fund the science. But ultimately, I think it’s only going to get us so far, because we’re hamstringing the translation into products. Yeah, not allowed.

Will Jarvis 27:23
Yeah, that that’s really interesting. And that actually, that I want to run back a little bit. What is tweaking around the edges look like when you’re working with something like NEPA?

Eli Dourado 27:35
What? Yeah. So um, so there’s a bunch of things. So one is we can do what the Trump administration did last year, which was they revised the NEPA implementing regulations, God, so they, so they, so there’s these regulations that are housed in the Council on Environmental Quality, which is the White House Office, and they basically state how agencies are supposed to comply with NEPA. And you can, you know, you can tweak those regulations to make them to make them, you know, less burdensome, or, like quicker to do, or are you going to impose requirements in there, right. And so some of the requirements, you know, the Trump administration put in there, or we’re gonna have a clock, right, like, you’ve got to do if you have an environmental impact statement, you have two years to do it. And, like, two years, it’s a long time. But, um, but but that’s the, that’s like one kind of tweak you can. And there’s also some debate about which kinds, which, what’s the scope of all the effects, because, as we all know, from chaos theory, like everything affects everything else, right, like a butterfly flaps, its wings, you know, like, like, you could affect anything. Right. So how long does this report have to be? Right? And so, so actually, like cabining, the scope of that there’s a lot of case law on this, too. And so a lot of what the administration did was bring in the case law and like, tried to set definitions based on that was still very much opposed by the activists. But but that that regulation did go through, we’ll see if the Biden administration wants to change it at this point, or if it gets, you know, I don’t know where the court challenges are. I’m sure there’s court challenges to it. The other thing you can do is, you know, one thing I’m thinking about is, when there’s people in Congress thinking about it as well. Senator Lee, by the way, I should say has introduced a bill called the unshackle act, that would that would address some some finer points around around naeba. But one of the one of the things that I would like to see is just reporting, reporting on like, how many environmental Well, we pretty much know how many environmental impact statements the agencies are doing, how many environmental assessments are they doing? Right? I think the answer is 10s of 1000s. Right a year. Right, so so maybe maybe maybe, you know, hundreds of maybe 100,000% or more across the whole federal government. But we don’t know, nobody knows the answer to that question, as far as I can tell. And, and then, and then when you look at the, you know, if you had to, like a list of like, here are the, you know, 20,000 environmental assessments that we completed last year, like, are 5000 of all of them all, like basically the same thing. And if so, what you could do is you could require the agency to go through what’s called a rulemaking to do what’s called a categorical exclusion. And you could say, we have assessed like this set of facts, like these parameters. And as long as your project falls within these parameters, like we know, the environmental effects of that, and we don’t have to do a new study. And so they could go through rulemakings, that sort of like, reduce the amount of paperwork that they have to do in the future, or the people applying for permits and stuff. And so I would like to see a lot more categorical exclusions and some sort of forcing mechanism to make agencies actually do those rulemakings gotcha.

Will Jarvis 31:10
That’s really smart. It’s a smart way to handle that, and kind of work around the edges. I want to switch gears a little bit and talk about some blog posts you’ve written before. Sure. is America just too big? Do we need to break America up into smaller chunks? They’re more manageable. In

Eli Dourado 31:29
so probably we don’t I, you know, like I have, I wrote that post the week, you know, like, actually, the week before Donald Trump was elected. There we go. I didn’t I didn’t publish it until after, but, but I wrote it before, because I was just so horrified that that Trump had gotten this far as he did, right. And, and, and I thought I saw the like, you know, the sort of like, the, the cultural assumptions that were being made in different parts of the country and so on. Were just so so different. It seemed irreconcilable, right. And so, so I, you know, Hillary or Trump won, and then, and then I sat on it for a week and I said, Okay, I’ll still publish this. Change the opening paragraph, or whatever it was. And, you know, I think that the diagnosis is right, that we, we actually do have a lot of a lot of different cultures, like, we’re actually I think 11 cultures is what some people have said, are actually 11 distinct cultures in the US, they’re broken up geographically and so on. I think that that’s, that’s probably right. And that we shouldn’t, it’s not ideal that we’re all having to having to, like, you know, navigate through when you think about all the status stuff, right? Like we’re raising and lowering like certain certain things in status. And we, if you come at it with different cultural assumptions, you’re gonna disagree on a lot of stuff, and it creates a lot of unnecessary conflict. And so, so I think that that diagnosis is right, in terms of breaking up the country like I am, I, I think I even in that post, I wasn’t really coming out in favor, right. But I’ve come to even even more since then say, like, well, that’s not really a good answer, either. And a lot of the reason is just geopolitical. Like, I see, like, what would happen to the world and then if the US fell apart, like, the world would be screwed, right? Like, I mean, think about the the security services that we provide, you know, for the globe, essentially. Right? It so I, I don’t see it as a good solution. But I do see it as like, so like a pretty good diagnosis. Gotcha.

Will Jarvis 33:43
Yeah, it all seems to me like the the primary cultural distinction is between urban and rural now. It seems like there’s even if when you’re Yeah, it’s just like, it doesn’t geographically make any sense. But yeah, it is interesting that we do have these problems. It’s like no one seems to ever talk about their local governance issues anymore at all. Yeah. All about like what’s going on in Washington? It’s

Eli Dourado 34:05
like, yeah, yeah. You know, you hate the people on the other side of you at the national level and at the local athletes could buy Don’t even think about it.

Will Jarvis 34:15
Don’t think that at all. It’s really weird. Really hot. Should we care about it? aviation innovation. I know that you know, planes have been getting slower. I love the Concorde. When I was a kid, I was coolest thing. Yeah. Never got to fly on it because they got rid of the darn thing. Yeah. What happened there and what can we do to speed that up? I know people are finally working on that. You’ve worked on that a little bit.

Eli Dourado 34:37
Yeah. So I mean, yeah, I actually I spent two and a half years of my life startup working on this. Um, so yeah, so aviation has absolutely stagnated right. It’s if you look in the sky today, it’s all tube and wing designs. For for airliners, he actually the stagnation is even more obvious in general aviation. They’d like

Will Jarvis 34:58
to even keep the 730 sevens in there. anymore.

Eli Dourado 35:01
Yeah, well is that but I’m thinking about, like the two seater the two planes, four seater planes, right. But a small private pilot’s like, those are designs from World War Two, essentially, right? Like, they’re basically small tweaks, new avionics, and so on, but like, but basically, like, pretty similar to, you know, late World War Two, or early post war era, there were a lot of people who came back from World War Two, and pilots, you know, ability to pilot, like, learn, learn how to fly. And so people thought that was going to be like, a big thing. It’s like, Well, we’ve taught all these people how to fly, and now we’re gonna have like this booming general aviation sector, and it’s just declined, declined, declined. And the designs have gotten no better. And now maybe that’s changing a little bit with the ED told designs, for air taxis and so on. And then, and then the airline stuff, you know, a lot of it’s, you know, hopefully, changing soon with the SuperSonics and hypersonics. You know, I was at boom, they’re pursuing a Mach 2.2 design, you know, maybe, you know, I don’t know what the passenger number is now, but maybe like 60 passengers, you know, so 10% faster than Concorde maybe a little smaller to make it more manageable, both economic from the economic side, and from the, you know, manufacturing side. And, you know, that you, you think with, with modern, modern, modern tools, right, so the Concorde was designed on slide rules when paper with no computers, right, and wind tunnels, like every every, you know, like, with with, you know, computational fluid dynamics, you can take a airplane design and test it in, you know, a few hours on Amazon, you know, the Amazon cloud, whereas, you know, 50 years ago, right, when they were designing Concorde, they would take, you know, a model and put it through a wind tunnel and get data back in takes like six months to write to, like, study it. So it’s like they did they did Concorde, using those tools, right? And then aluminum versus carbon fiber, like, it’s just night and day, like, the Concorde would actually grow and shrink about 15 inches over the course of a flight. So you have this, the exterior that, that grows in the interior at the same size, and the whole thing has to be airtight, right. Like, it’s like, that’s, that’s crazy. And so with with carbon fiber, you don’t have that as much of that problem. So, so it should be a lot better today. Right? And, but we still don’t have it right. And it’s still gonna be, you know, I think, boom, is is forecasting entry into service at 2029 ariens, doing a business jet at Mach 1.4. They’re thinking like, 2026. So like, those are the earliest ones. So for the next five years, you can’t get on a supersonic plane, right. Like, and, and we had Concorde. So, so, so yeah, so there’s just so much we could do and you think about air taxis and, and, you know, flying around town, getting to the other side of town in five minutes, you know, if you live in a big city is a big deal. Yep. And, and you could do a lot more safely than helicopters do, because helicopters are really dangerous. So, so there’s tons of stuff we could do. That just your autonomy in aviation is something I’ve been thinking a lot about lately, because everyone’s focused on autonomous cars. But actually, roads are hard to be autonomous on, like, the sky is really easy. There’s nothing out there. Right. There’s like, you have to avoid birds. Right? You have to avoid like other planes who all have transponders. Yep. Right. Like, that’s, that’s not so hard. And so like, like landing, landing and takeoff, right, maybe a little challenging, but not that hard. Like, we have auto landing and auto takeoff systems already. So like, it’s a much easier problem. But, you know, we’re spending all our effort on cars. I think this is another regulatory issue, right? Everything on airplanes has to be certified before it comes to market. And everything on cars is for the most part, it’s you can do what you want, but then we might issue a recall. Right? So it’s like gotcha pre market approval versus post market surveillance. And that’s like another way that we are, you know, in aviation, where we’re kind of limiting innovation.

Will Jarvis 39:47
Got it? Is that a better model? Or do you think in general, just switching to post market surveillance valence versus?

Eli Dourado 39:53
Yeah, I think, I think it’s a, I think it’s a much better model in most in many cases. You know, maybe not for like, I don’t know, nuclear reactors or something like that. But, but maybe even. But yeah, I think like in terms of like, like pharmaceuticals, right? Like, our tolerance for risk is way too low. And maybe it makes sense to like, say, Well, you know, this, this drug, you know, hasn’t been well studied. And you can take it if you want, and we’re going to do surveillance on it. And you know, you’re going to report your results if you take it. And if it turns out to be bad, we’re going to issue a recall, and people are gonna stop using it. That’s, that’s not that much different from clinical trials where you have, like informed consent of the participants, and you’re monitoring for data and so on. And so I think, I think, having that, that approach, it’s a little it’s a little riskier, but I think it also it balances type one and type two errors a little more. So like, like, like, FDA is very concerned about making a type one error, but they don’t care about making errors at all. Can you john Kelly, killing the distinction? Yeah, yeah. So they’re like they don’t want to they don’t want to make care much more about approving an unsafe drug than they care about not approving a safe drug. So So if there’s a drug that can save 1000 lives, and the FDA just sits on it, and doesn’t approve it, that’s not meaningfully different from the FDA, killing 1000 people by approving a drug whether it shouldn’t, right, like the same number of people die in the end, right. It’s the same. And, and the FDA is very concerned with one type of error, but not with the other. Because those are the incentives we’ve given them. Right. So I would, I would, yeah, I would like lots of talented people at the FDA, I want them to continue studying drug safety, right. But they could just do it in a post market sense, where they’re, they’re gathering data on, you know, here’s this patient that took this drug, and here’s the outcome. And, you know, here are the adverse effects and so on. And then and then forming a view over time, and then using that information to either inform the public or in some cases, you issue a recall and say, You can’t use this drug anymore.

Will Jarvis 42:12
Right? Yeah, I think that’s, it’s a great idea. And it’s just so frustrating to me when we had the Madonna vaccine sometime in late March or something like that. And it’s they sat on it, because in 1974, the story goes, you know, 100,000 people got Qian Bray, and the swine flu vaccine. And, you know, the public health establishment is like, we don’t want to go through that again. There’s one in 100,000 people, you know, we’ll kill 200,000 people in the interim. We’re fine with that.

Eli Dourado 42:37
Yeah, yeah. Well, yeah. And we actually, we actually had the maternal vaccine in January, even. That No, but I mean, but they’re, I mean, even even if you like, if you, you would still have to test the dosing and stuff and figure out what’s, what’s the right dose and so on. So, so, but yeah, I think, I think just making it possible to, for people to give informed consent, at least, and say, like, I want to try this, right, like, yeah, like I bioethicists. Jessica Flanagan is really good at this. on this issue, she wrote a book called pharmaceutical freedom, and it’s like, basically, if you have, you know, if you believe in sort of the right of the patient to, like, determine the course of their treatment and give informed consent, like, like, it just, it just follows very naturally from that, that you should let them you know, experiment with things that haven’t been approved, or, you know, like, you shouldn’t shouldn’t put the government in between the the doctor patient decision to, to pursue a treatment,

Will Jarvis 43:42
right? have his American just dismissed the thought to me, is America too litigious? And, you know, we allow people to just like, you know, like, Oh, God, you approved this drug, and then this bad thing happened, and maybe even into it or not even

Eli Dourado 43:57
I used to think like, that was like, a bigger piece of it, but but maybe not. Right, maybe it’s like, it’s not it’s not the lawsuits that people are worried about. In this case, it’s it’s Yeah, I mean, the government has qualified immunity, right. So it was like, like, if the if the government approves a drug and it turns out to be unsafe, like you can’t, you don’t have recourse, so it’s not like they’re, they’re afraid of that. It’s, it’s rather that I think that just we don’t want to, like we see the bad the bad things like seem worse than the good things seem good. All right. And so like, it’s just, it’s, it’s just very, it’s just conservatism, I think, on sort of, mentality of conservatism. And, and, yeah, why does it matter? Like, if something you know, as I said, like if the if the if the deaths are caused by approving a drug right, versus not approving a drug, right, like, intellectually, we know It’s not as bad but like emotionally. I think for people It seems worse to die from a drug that you thought was it was approved and you thought was safe. Got it?

Will Jarvis 45:10
Are you down for round of overrated? underrated? Sure. Okay, cool. And I’ve got this theory that, you know, if you’re a big EMH believer, they’re all like correctly rated except for

Eli Dourado 45:22
like, Okay.

Will Jarvis 45:23
Anyway, that’s the smile of funny faces for the day. So overrated or underrated? The Concorde.

Eli Dourado 45:31
A really underrated and so of course, everybody, you know, everybody, I think the sort of like, I would say, assess the conventional wisdom is like Concorde was a miracle of engineering for its time, but it was like uneconomical, like, yeah, you know, crashed one. And, and, and so on. But I think what the conventional wisdom gets wrong is like, if Concorde existed today, it would still be profitable. Right? So like, like, like, so if you think about the time that it in 2003, was when it retired. And in, you know, I remember looking at this data when I was at boom is like, in the 15 years since then, right, from 2013 to 2018, premium business class, transatlantic service, business business, and first class transatlantic service increased on Wednesday, more than doubled. in that in that period of time. So, um, so So basically, the problem that the Concorde suffered was they couldn’t fill the seats, right. So airline economics has this funny dynamic, which is that, you know, you you, if you feel, you know, charge one price, and you can’t fill the seats, you might be able to charge a lower price and feel more of the seats and make more money. The marginal, the marginal value, like the marginal cost of a additional passenger is actually zero, right. And so you might, so being able to fill the seats, at a potentially even a lower price would, would have made the whole thing a lot more profitable. And that would have made it possible for you to have more conchords and service because only 14 saw service. Gotcha. And if more of them were in service, then you would take care of the biggest problem that it had, which was maintenance costs. So like spare parts, right? Like, if you have a fleet of 14 jets, and you have to like create spare parts for them, that’s really hard. If you have a fleet that’s 100 times bigger, then it’s, you know, a lot more manageable, it’s a lot more scalable. So I sort of my view is like, if Concorde even as inefficient, as it was, by modern standards, in terms of, you know, engines and materials. If it existed today, like it would still work. Nice. That’s awesome.

Unknown Speaker 47:51
Bitcoin.

Eli Dourado 47:54
I think it’s overrated by its proponents, but I think like the idea of blockchains in general is like most as like, still underrated by a lot of people. So, you know, Bitcoin is this weird thing where it’s like, you know, somebody, you know, Satoshi invented, like Internet money. And, and then, you know, like, sort of people who were interested in it, were basically two kinds of people who were interested in it. One was sort of like, technical people who saw the technical achievement and were intrigued by it. Yeah. And really, like hard money people like, like gold bugs and stuff like that. Right? And like, they like found each other on the internet. And, and, and, like, infected each other with their ideas. Yeah. And so basically, like you have this like entire, you know, group of people who like Bitcoin and now are totally convinced that like, sort of, like hard money theories are correct. And they aren’t. Very clearly they probably Yeah. And and so you know, I think it’s unfortunate that that’s because it Bitcoin has become like such a strong meme and like this sort of like, like limited supply and so on, like, it becomes such a strong meme that it’s, it’s, it’s hard to overcome. But Bitcoin is basically a meme coin at this point. It’s, it’s, it’s valuable because of the Bitcoin meme. And there are other blockchains that are being developed to do more interesting things. And on which, by the way, you could implement something that is technically superior to Bitcoin, as as like as a token or whatever, right? You get it fixed supply you can do to get as hard money as you want. And you can just do it as a token on another blockchain. But, but the Bitcoin meme has gotten very strong. I think the idea though, the core idea of blockchain is still very, very strong, very, very interesting. The idea of a logically unified but physically decentralized In therefore unstoppable resource, right that the whole world can use is super interesting and valuable. And for things, so I spent a few years working on internet governance and in like those at the center of any fights over like the domain name system, yeah, if you can just do the domain name system on a blockchain and like be done with it, right. Like it’s like you don’t have to have you could have this sort of like centralized resource logically centralized, physically decentralized, and and don’t worry about like states coming in and overtaking it.

Will Jarvis 50:36
Definitely. It’s, it’s really interesting. Yeah, my my most interesting comment about Bitcoin is that 60 some odd percent of mining capabilities in China. And if you know how good that, you know, PRC is at solving collective action problems in Korea, right things you should be concerned about this currency must be completely, you know, abstracted away from governments, right. Anyway, right? The Space Launch System?

Eli Dourado 51:01
Oh, man, it’s, it’s poorly rated, but probably still overrated. And, and the way the reason I’d say that, is that, like, I think the conventional view is that it is. It’s a bad rocket, right? It’s like, it’s like, not not high value for money. It’s $20 billion. So far, you know, it should have cost like half of that or less. And, you know, whatever. But, but I think it’s actually like, potentially, like really unsafe, and like, I don’t know, I’m worried about it. Like, we like the marginal cost of launch, even even after we’ve spent all the development. Yeah, marginal cost of the launch is still going to be in the billions. Jesus, Jesus. You know, you think about SpaceX coming along with starship. And you know, launch cost is going to be something like, I don’t know, like, like, you know, throw out numbers like one and a half billion dollars for the starship. Take more for pass the

Will Jarvis 52:01
hat around.

Eli Dourado 52:03
Right, right. So it’s, it’s I mean, I don’t I don’t know if it’ll be that. But it’ll be at least it’ll be less than 50 million on starship. And so you’re talking about a 20x capability reduction versus starship on on Space Launch System.

Will Jarvis 52:17
Jesus Christ. What a mess. What about one more gmu, econ?

Eli Dourado 52:23
Oh, well, I loved my time at JMU I think they’re still underrated. That department is phenomenal. And I think you know, it just interesting questions, interesting ways of thinking about the world that almost no one else is doing. And although you know, maybe, maybe I’ll say like doing a graduate degree is overrated, right. Like, like people. Like, I don’t necessarily encourage everyone to go out. And, you know, follow my path and get an IndyCar PhD, but if you do, do it a gmu was a great, it’s a it’s a great, great community of people.

Will Jarvis 52:59
Great. Well, Eli, thank you so much for coming on. Where can people find you? And do you have any parting thoughts?

Eli Dourado 53:07
Um, so you can find me online, on Twitter at Elijah Rado? And on my website at Elijah Rado, calm and, and my sort of professional work is at the center for growth and opportunity. The ceo.org parting thoughts, man? It’s been a great conversation. I, you know, I just, I think it’s just such so important that we actually, you know, get get moving. And definitely always talked about a number of ways that a number of reasons it’s not happening, and then we have to find solutions. That’s great. Thanks, Eli. Thanks for having me

Will Jarvis 53:42
on. Well, that’s our show for today. I’m William Jarvis, and I’m Will’s dad. Join us next week for more narratives.

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