Interview: Alec Stapp and Caleb Watney of the Institute for Progress
Two think-tank founders tell me their plans for speeding up U.S. growth
Two of the themes of this blog are A) the search for a growth-oriented progressivism, and B) techno-optimism. So when I found out that my friends Alec Stapp and Caleb Watney were starting a new think tank whose goal was promoting growth and technological progress, I naturally wanted to interview them! It’s one thing to blab about these topics on blogs and Twitter, but if we ever want to translate these big dreams into reality, we’ll need folks like Stapp and Watney working to get government on the right track. This is actually the third in a series of interviews I’m doing with think-tank founders, the others so far being John Lettieri of the Economic Innovation Group and Jason Crawford of The Roots of Progress. It’s a good time to be a pro-growth think-tanker!
Stapp has previously been the director of policy at the Progressive Policy Institute, a research fellow at the International Center for Law & Economics, and a technology policy fellow at the Niskanen Center. Watney was the director of innovation policy at PPI, and has worked at the R Street Institute and Mercatus. So they both have quite a lot of experience in think tank land. In this interview, we discuss Stapp and Watney’s ideas about what’s holding back U.S. growth (the main answer being NIMBYism), and what can be done to speed it back up, both in terms of policy and the political deal-making needed to get that policy passed.
N.S.: So, you guys are starting a new think tank. Tell me what that's all about!
C.W.: We’re launching a new Washington, DC-based research and advocacy organization called the Institute for Progress. Our mission is to accelerate scientific, technological, and industrial progress while safeguarding humanity’s future. There’s a few pieces to that mission, so let’s break it down:
The “accelerating progress” part is a direct response to the stagnation the US has been experiencing since the 1970s and a growing recognition that we need large-scale policy reform to break us out of our rut. Fortunately, there are many low-hanging technological fruits waiting to be plucked if we can get the public policy environment right — including novel mRNA vaccines, CRISPR, enhanced geothermal, advanced nuclear, and novel battery technology. We could be on the verge of another Roaring Twenties. But it’s not going to happen on its own — we have to take action to make it a reality.
The second part of our mission is about “safeguarding humanity’s future.” Some of your readers might recognize an effective altruist or longtermist sentiment there, which is intentional! We really respect how rigorous effective altruists are about deciding which issues to spend their time and money on. So we want to borrow their framework and focus on policy issues that are important, tractable, and neglected.
This means that as we’re working to accelerate scientific and technological progress through federal public policy, we will keep an eye on the potential catastrophic risks that humanity could face and work to proactively accelerate technologies that make us safer. A few examples: To respond to future pandemics, we need to be able to rapidly deploy new tests, vaccines, and therapeutics. To mitigate the effects of climate change we need to develop clean and abundant energy to meet baseload demand. We also need the ability to monitor and prevent comets that might hit Earth. In all of these areas, the US federal government has a huge degree of latitude to enable these technologies.
We are a multi-issue think tank, which means we will be working on a broad range of topics. To begin with, we’re focusing on three areas that we think have very high potential impact: (1) metascience, (2) immigration, and (3) biosecurity.
N.S.: OK, so I guess I have to ask you the question I ask everyone who's concerned with the future of technological progress: Why has it slowed down?
A.S.: As with any complex macroeconomic phenomenon, I don't think there is a monocausal explanation for why tech progress has slowed down over the last 50 years. But there are at least three main factors we can talk about — sclerotic institutions, demographics, and diminishing returns to research — and I’ll list them from the most to least changeable:
First, our governing institutions don’t work as well as they used to. Our wealthy, coastal technology clusters are refusing to build new housing. A proposal to build the largest solar plant in the US was killed by locals who claimed it would be “an eyesore” and that it “could curtail the area’s popular recreational activities” like biking and riding ATVs. We’re turning away brilliant international talent from our country by making them wait in a decades-long green card queue. Top scientists are spending 44% of their time filling out grant paperwork instead of actually doing research. Since the Nuclear Regulatory Commission was created in 1975, not a single new nuclear power plant that submitted a construction permit application to the agency has reached operation in the US. Across a wide range of areas, the number of veto points individuals have to navigate to create new things or change existing systems has been massively increased across the last several decades. Lots of these start off as small decisions that might even make sense in isolation, but the net impact of them is a significant anchor on the development and deployment of new technologies.
Second, the demographic changes in the last 50 years have led our culture to become more complacent. As we’ve grown richer and older our society has become less dynamic and more risk averse. The percentage of Americans moving between states has dropped by more than half since 1970 (from 3.5% per year to 1.4%). But perhaps the biggest demographic headwind is slowing population growth rate over all. Having lots of bright minds to throw at hard problems is potentially our main source of progress in the long run. And as our society (and basically every other industrialized society on Earth) continues to get older and have fewer children, we are becoming less dynamic and producing fewer novel ideas. The total fertility rate fell from 3.6 in 1957 to 1.76 in 1978 and has stayed below replacement level (2.1) ever since. While we’ve reduced misallocation of human talent by integrating more women into the workforce, we are quickly running out of steam there (male labor force participation is currently 67.7% and female labor force participation is 56.5%)
Finally, we have the baseline issue that good ideas might be getting harder to find. Empirically, it seems like maintaining a constant rate of technological progress requires increasing our level of research effort exponentially, at least within existing fields. As Caleb mentioned earlier, there is still plenty of low-hanging fruit that we haven’t picked yet — after all, mRNA vaccines were sitting on the proverbial shelf for a decade waiting to be deployed before the pandemic sparked regulators and pharma companies into action. But in general, we should expect some degree of diminishing returns to constant research effort as fields get mined for their most obvious and impactful ideas.
N.S.: So, let's talk about a couple of these factors you guys bring up. First of all, let's talk about America's noted failure to build things. Some economists have suggested that the build-out of the suburbs in the 20th century was uniquely conducive to fast productivity growth. If we manage to overcome NIMBYism politically, could we look forward to a building boom remotely comparable to what we saw last century? And if so, what would that look like?
C.W.: We’re both pretty big on technology clusters and YIMBYism, so a building boom could definitely play a major role in breaking us out of our malaise. Of course, there’s the famous Hsieh and Moretti paper that argued constraints on housing supply lowered aggregate US growth by more than 50% from 1964 to 2009. The key hurdle is that NIMBYs are mostly acting out of rational self-interest — they don’t want more traffic or noise or fewer parking spots in the neighborhood. They also know that artificially restricting supply protects the value of their most valuable asset. And a vocal minority of old homeowners with enough free time to attend local zoning meetings can shut down new projects.
I think policymakers who want more building can push in two directions: they can move key zoning decisions to a higher level of government (which can then overrule the objections of local rentiers) and/or they can push the zoning decisions down to the block or street level, which would flip the calculus and make YIMBYism positive sum for incumbent homeowners. If policymakers let the residents of each street or block vote on how they should be zoned, the dominant strategy changes. Now residents voting to upzone is the quickest path to increase property values (because their block will capture some of the pent up demand for housing in that area). Right now we’re stuck in the worst of all possible worlds where the zoning decision is too local for policymakers to properly account for spillover effects and aggregate growth but not local enough for individual homeowners to benefit directly from upzoning.
N.S.: Gotcha. Personally, I would like to have some concrete estimates for how much growth we could expect from different amounts of upzoning, at the state and national level. But anyway, that raises another question: If Americans can't use artificial scarcity to build housing wealth, how can the average American expect to build wealth over their lifetime? Currently, the American middle class has most of their wealth in their houses. What can we replace that with?
Also, let's talk a bit about culture. What could we do to make our culture more bold and risk-loving?
A.S.: You’re right that a housing abundance agenda might be a bit in tension with the popularity and visibility of the housing-as-wealth-building strategy, which is a reason why NIMBYism can be so entrenched.
But there are major issues with the current model beyond increasing support for NIMBYism. Notably, concentrating wealth in housing creates a high degree of vulnerability to localized economic shocks. It’s a real tragedy that the average American’s two largest assets — their home and their human capital — are both highly correlated with the ups and downs of the local labor market. We need to promote a system that can diversify away some of that risk, ideally through investments in the broader national economy.
This isn’t an area we’re necessarily planning to work on, but one interesting alternative might be a sovereign wealth fund that gives shares to all citizens (like Norway or Singapore have). Matt Bruenig’s proposal for a “social wealth fund” does a good job explaining how this might work. From an economic perspective, it’s not that different from just taxing corporations and redistributing the money to citizens. But, in practice, setting up a fund seems like it could increase political buy-in for a dynamic economy and directly tie economic success (at home and abroad) to average family wealth.
On culture, that’s a tough question. Culture is mostly a bottom-up phenomenon and very hard to shape in predictable ways. However, there are a few broad things we could probably do to make our culture more risk tolerant. First, immigration: choosing to move to a new country is inherently a very entrepreneurial, risky activity, so encouraging more immigration could help bring in some more dynamism to American culture — it could also expose more Americans to the “idea” of being an entrepreneur in the first place through role-model effects. Second, pro-natalism: a disproportionate share of startups, art, and and other creative enterprises are led by ambitious young people, so a society that wants to stay bolder for longer has to make sure people feel like it’s sustainable for them to have children. Third, leading by example: the government can do ambitious things that encourage the rest of society to dream big. In an era of low long-term interest rates, government involvement in moonshot projects might crowd-in rather than crowd-out private sector investment.
N.S.: The idea of youth as the driver of culture is interesting. What about helping Americans move around more? Mobility is down, we seem stuck in place.
Also, do you think partisanship plays a big role here? Conservatives should have celebrated Trump's successful Operation Warp Speed, and yet most antivax sentiment has come from the Right. It seems like when we're divided, we're always afraid that new technologies will help the opposite tribe. The Left's fear of electric cars -- which it associates with Elon Musk -- seems similar. To what extent is techno-optimism an outgrowth of a feeling of national unity?
C.W.: Removing barriers to labor mobility is another underrated mechanism for driving economic growth. The US is much more integrated than, say, the EU, but we are far from having frictionless labor mobility. The usual suspects — occupational licensing and zoning regulations — are some of the key roadblocks here. Almost a quarter of all employed workers hold occupational licenses and they’re rarely mutually recognized across states. When a worker moves, they usually have to engage in a costly and time-consuming process to obtain a new occupational license. Creating national standards and encouraging reciprocity agreements between states would allow workers to move to opportunity if they want. And of course, eliminating exclusionary zoning in highly productive cities would also increase labor’s ability to move to better jobs. In some cases, workers aren’t moving to more productive cities with good jobs because the higher pay would be more than eaten up by higher cost of living (with housing being the primary cost).
Increasing polarization is definitely causing some weird and counterintuitive bundling of issues – there’s no inherent reason we should expect views on progressive taxation and abortion to be correlated across the country. It doesn’t really seem like there’s One Weird Trick to solving polarization, but scarcity certainly heightens these tensions. New technologies can help us side step some of these issues through a politics of abundance.
Let’s take your example of electric cars. While it’s true that a vocal segment of leftist twitter is iffy on electric cars (and definitely hates Elon Musk), by and large the American public is excited about EVs and even thinks fondly of Musk. EVs are already cooler and faster than gas-powered vehicles and very soon they’ll be cheaper to purchase (and maintain) too.
Making environmentally friendly options so good and cheap that they aren’t even thought of as the “environmental” option is a much more plausible path to net-zero carbon emissions than moral scolding, and it’s healthier for the national discourse too. In other words, a feeling of national unity may be an outgrowth of techno-optimism rather than the other way around. It’s easier for everyone to go along to get along when the pie is growing quickly.
N.S.: Let's talk about distributing that pie. One of my ideas about techno-optimism is that in order for people to be enthusiastic about the future, they have to believe that it'll be equitably distributed -- that the benefits of new technologies won't simply flow to a few rich guys who can afford it. Electric cars seem reasonably egalitarian to most people (Musk-haters excepted) because most people own cars. But will most people be able to afford space travel? Genetic engineering for their kids? Personal air transport? Etc. etc. How do we reassure people that the benefits of new tech will be broadly shared instead of hoarded?
A.S.: Over the medium and long run, the benefits of new tech are almost always broadly shared instead of hoarded. To take some of your examples, cars were once only for rich people. But now, as you mentioned, most people own cars. If genetic engineering follows the same path as genetic sequencing, then it too will be accessible to the broad public shortly after the rich get it. The cost of sequencing a full human genome fell from $95 million in 2001 to $454 in 2021. As for space travel, we’re actually seeing major decreases in launch costs to reach low-earth orbit for the first time in decades thanks to SpaceX. If they are able to successfully deploy Starship, then costs will continue to plummet and commercial space will become more accessible to average Americans over time.
If you look at the adoption curves for most technologies, what you see is that a small share of wealthy consumers buy the product early on, and as economies of scale and learning-by-doing kick in for the manufacturing process, costs come down and the tech becomes accessible to the masses.
That’s not to say there shouldn’t be a role for the government to play in making sure that these technologies are attainable for the general public. Especially for something as fundamental to human development as genetic editing, we need to ensure that this technology is accessible to everyone to help break the loop between childhood advantage and parental financial status.
And of course, there’s more we could do in terms of inequality of resources. The wealth that companies and individuals accrue from inventing these new technologies can lead to unprecedented income disparities and the resulting structural changes to the economy can make previously skilled workers obsolete (and force them into unskilled labor). We need to make our welfare state more robust by providing much more ambitious wage subsidies, child allowances, and health insurance programs to ensure that a rising tide really does lift all boats.
N.S.: Some think tanks, like John Lettieri's Economic Innovation Group, try to get good policies done in a relatively nonpartisan way by flying under the radar and quietly appealing to a few movers and shakers. Is that going to be your think tank's strategy, or do you see yourself trying to assemble a more broad, popular coalition for some of your ideas?
C.W.: We’re big fans of EIG! And there are certainly issues where that kind of behind-the-scenes persuasion works quite well. Particularly for policy areas that are fairly technical and require convincing only a few individuals for change to occur. For other issues, we’ve found that there is a sweet spot in the middle between flying completely under the radar and trying to mount a loud, activist campaign.
We agree with the “Secret Congress'' theory of modern DC policymaking, which says that the issues most likely to gain traction are often the ones that get talked about the least on cable news and stay off the front page of newspapers. This is especially true of legislation but also holds to some extent for executive agency action as well. To make progress, you want to avoid activating negative polarization, which can cause your issue to get bundled into the ongoing culture wars — a kiss of death for getting much of anything done.
But it’s important to note that you don’t actually want zero attention for your policy ideas — you need just the right amount of attention in the right places. You want staffers and elected officials to understand that your policy idea is 1) within the Overton Window of their political party 2) worth prioritizing over other issues and 3) aligned with their preexisting goals. This process often plays out on Twitter, where influential writers and thinkers can endorse policy ideas and signal to their in-group that they are worth pursuing. A lot of Hill and agency staffers lurk on Twitter, and they see all your good (and bad) tweets. If you can sell your idea there (and again in-person over drinks) but keep it off Tucker Carlson or Rachel Maddow, then you’ve hit a sweet spot of salience.
And I do want to emphasize that while it’s much easier to focus on getting one side or the other riled up, it’s ultimately worth the extra work to build transpartisan support on these issues. Not only because you need 60 votes in the Senate to pass legislation outside of reconciliation, but also because it’s important to have a durable coalition that can survive while your preferred political party is out of power. For example, it would be totally counterproductive if the systems we set up to prevent future pandemics were only funded during Democratic or Republican administrations.
So, often the best way to advance your own agenda is to find an office or an agency with a pre-existing goal and show how you can be helpful to them (usually by providing expertise or a new way of achieving something they want). You need to be realistic about what’s possible and think in terms of expected value. In the best case scenario, one individual or think tank is only going to be able to make a few small tweaks to one of these omnibus, must-pass pieces of legislation or nudge a new rulemaking from a regulatory agency in a different direction. But the US government spent $6.8 trillion last year, and it regulates virtually the entire economy, so a few small tweaks here and there can massively improve the world!
N.S.: What is your strategy for fending off the inevitable accusations from the Left that you're a bunch of libertarian techbros looking to line the pockets of rich tech company owners? And what is your strategy for fending off the inevitable accusations from the nationalist Right that you are neoliberals who are destroying jobs and trying to replace the working class? And what is your strategy for fending off the inevitable claims from the libertarian Right that industrial policy always fails?
A.S.: To our friends on the left concerned that we are Silicon Valley techbros, I say that we come to our focus on progress from a place of dissatisfaction over “tech” as it currently exists. There are lots of ways in which the software revolution has been beneficial, but there’s definitely something true about the sentiment that "the best minds of our generation are thinking about how to make people click ads."
We want to accelerate innovation that serves many progressive ends — a society that can feed the hungry, house the homeless, cure neglected diseases, reduce animal cruelty, and solve climate change. Building that future will require strong public involvement in the financing, goal-setting, and oversight of new technologies. In terms of our personal motivations for this project, we don’t accept any funding from corporations — and the individuals and foundations that have generously supported us are all listed on our website. But if we were trying to make money, there are far more lucrative fields than think tank work.
To the nationalist right, we would point out that our focus is an explicitly pro-America one. The U.S. is the most important country in the world right now, and we want to strengthen our nation. Rather than “replace the working class” we want to rebuild American capacity using ambitious science funding and high-skilled immigration to accelerate the next generation of cutting-edge industries and firms. An America that builds geothermal energy plants, abundant housing, supersonic planes, new mRNA production facilities, (and maybe even space elevators) is one with lots of jobs for the working class.
To the libertarian right, I would say that we are well aware of the limitations of industrial policy. We want to make sure that our interventions are grounded in a discussion of specific market failures, public goods, and externalities – but I also think our libertarian friends underrate how pervasive these “gaps” in the market are.
For example, we cannot expect private companies to stockpile supplies on the off chance that this year is the year we get the “once-in-a-century” pandemic. Likewise, we can’t expect them to maintain redundant manufacturing capacity without some form of government subsidy. In a purely free market, the companies that don’t stockpile or keep excess capacity or invest in basic research will have an advantage over the ones that do. Building resiliency into our economic system requires intentionally creating more slack in certain areas of our economy.
N.S.: Well, I have to say, I'm pretty sold. So how can various people get involved with this movement? If you're a young person looking to work in this space, or a wealthy individual or organization looking to contribute, where can you make the most impact? And what other types of people need to get involved, and what do they need to do?
C.W.: Great questions! First, I’d point them to your recent post about the “New Industrialist movement”. I’m not sure if that name will stick, but we agree wholeheartedly with the individuals, organizations, and publications you listed. To highlight a few of our favorites, people should subscribe to these free newsletters: Works in Progress, Faster, Please!, Construction Physics, and New Things Under the Sun (the latter two of which are written by senior fellows at our think tank). If you want to get a flavor of what the effective altruism community is thinking about, you should subscribe to Holden Karnofsky’s blog Cold Takes and Robert Wiblin’s podcast. You can also check out the EA Forum, which has become more active of late with higher quality posts.
If you’re a young person interested in these topics and you’re trying to figure out what to do with your career, I highly recommend checking out 80,000 Hours, an organization dedicated to helping people switch into jobs that will maximize their positive impact over the course of their career (which is, on average, about 80,000 hours long). If you’re a wealthy individual, you should donate to effective charities and causes that can do the most good per dollar spent. Two sources for ideas: check out which groups GiveWell and Open Philanthropy donate to (disclosure: Open Philanthropy is one of our donors).
If you’re an ambitious person with a generalist skill set, you should seriously consider starting your own organization (could be non-profit or for-profit with an eye toward social impact). We need more founders building things in the real world! If you’re not the right kind of person to start an organization, you should consider going into government instead. We need smart, conscientious people to implement the policies that will accelerate scientific, technological, and industrial progress while safeguarding humanity’s future.