This episode of Hub Dialogues features host Sean Speer in conversation with James Pethokoukis, a senior fellow at the American Enterprise Institute and author of the regular newsletter, Faster, Please!, about the causes and consequences of what he calls the “Great Downshift” in economic growth and technological progress, the prospects of a conservative futurism, and the possible salience of a renewed “politics of progress.”
You can listen to this episode of Hub Dialogues on Acast, Amazon, Apple, Google, Spotify, or YouTube. The episodes are generously supported by The Ira Gluskin And Maxine Granovsky Gluskin Charitable Foundation.
SEAN SPEER: Welcome to Hub Dialogues. I’m your host Sean Speer, editor-at-large at The Hub. I’m honoured to be joined today by James Pethokoukis, the Dewitt Wallace Fellow at the American Enterprise Institute, a Washington-based public policy think tank, as well as the weekly host of the podcast, The Political Economy with James Pethokoukis, and author of the regular must-read newsletter, Faster, Please!.
I should say that he’s a refreshing voice on the American Right who’s eschewed the Trumpian turn and continues to advance an ambitious, positive-sum Reaganite vision of economic growth and dynamism. I’m grateful to speak with him today about these changes in American conservatism, why he thinks up-wing and down-wing are better ways to understand our current political moment than traditional notions of left-wing and right-wing, and what he thinks the political salience is of a “politics of progress.” James, thanks for joining us at Hub Dialogues.
JAMES PETHOKOUKIS: Sean, I’m delighted to be on. Thanks.
SEAN SPEER: In 2014, you and others, including some colleagues at the American Enterprise Institute, came to be associated with an intellectual movement known as “reform conservatism.” The basic idea was to modernize the conservative policy agenda to reflect new and emerging policy issues facing the American electorate. As you wrote for Vox in 2016, “What we got instead was Trump’s protectionist White identity appeal—a bizarro version of the reformicon agenda.”
Let me start with the two-part question, James. First, what was the key insight of the reform conservatives? Second, why do you think you failed to find political traction?
JAMES PETHOKOUKIS: I think the key insight was that the basic fundamental principles of modern conservatism on the importance of economic freedom to creating a world not just of—or creating an America—not just of faster economic growth, but hopefully more opportunity for everybody, that those principles needed to be supported by modern policies. That we just could not take what was perhaps the right formula in 1980 and just apply it unknowingly to modern times. Broadly, that is what the reform conservatism movement was trying to get.
Now, Donald Trump also believed that you could just not take those old ideas. Though, of course, I think he never much believed in those old ideas to begin with. He presented an update of conservatism, which was very, very different, that really not just redefined the policies of conservatism but also what that meant.
It’s no surprise to your listeners that it’s a drawbridge-up conservatism. It’s a very insular, inward-looking one that I think appeals to serve the worst in people. That is what we got. The reason I think there was some—I think you can blame the financial crisis for creating that environment, the following period of slow growth, concerns about China, an unappealing democratic nominee in 2016; all those factors together created a different kind of reform that I certainly would’ve preferred.
SEAN SPEER: As I mentioned, you are a powerful champion of economic growth and dynamism. Your newsletter is called Faster, Please! for a reason, but one gets a sense that Americans in general, and a lot of conservative voters in particular, have come to flinch in their face of growth and dynamism and instead seek out security and stability. Am I misreading things? If not, what do you think is going on?
JAMES PETHOKOUKIS: I think we’ve had a very long period, maybe a half-century, where there’s been a message I think coming from some politicians, I think from the media, from our culture, that progress is dangerous, and whatever benefits progress might give us the downsides, whether they’re the environment, whether they’re rising inequality, outweigh the upsides.
I think slowly that has really worked its way into our consciousness. And, again, to an extent that it’s elites making the case for growth like Silicon Valley, it wasn’t that long ago where you had Republicans who would say, “We’re Uber Republicans,” as in the ride-sharing company. Now, of course, Silicon Valley is bad to a lot of the Republican party because it represents these crazy left-wing Californians. Of course, for a lot of Democrats, they don’t like Silicon Valley either because they have their suspicion of corporate power.
To an extent that you identify the technology sector with progress, at least in that particular case, it makes it much harder to talk about progress, because people say, “Well, isn’t that Silicon Valley talk? They want us all to live in mile-high skyscrapers and eat mealworm dinners. They don’t care. They don’t care about the average person. They’re going to create some brave new world.” I think there’s always an inherent concern about change. There’s a cognitive bias of loss aversion, in which we feel losses much more deeply than we feel gains.
I think people arguing for change always have that burden. It’s easier. It’s easier to predict how ChatGPT will cost jobs than it is what new jobs will be created. I think, again, if you think that faster economic growth, more technological progress is what’s necessary not just to solve big problems, whether it’s climate change or global poverty, then that’s great. But you also have to make sure you also have to get over that hump that people just will worry about the downside. I certainly think it’s very important that we make that case. I try to make it in my own small way because there are big problems and big challenges, and I like to say I’m not arguing for creating a utopia but I would just like a better world that incrementally gets better.
SEAN SPEER: That leads me to your must-read newsletter from just over a year ago. I should say, James, that I checked, and it came out on March 23rd, 2022—we’re having this conversation on March 28th, 2023—in which you wrote, ”The politics of progress isn’t really about Left or Right, it’s about up and down.”
What did you mean? Is there room for a new Left-Right synthesis rooted in growth, dynamism, and even techno-optimism? If so, are there any current political figures who represent a politics of progress?
JAMES PETHOKOUKIS: The fool’s gold of American politics is talk about a third party. When it’s the summer and there’s not much going on, that’s a great time if you’re a political writer to say, “Let’s write about a third party.”
I suppose if it’s the summer and you want to write about a third party, you can write about creating a new pro-progress, drawbridge-down political party that would take the pro-progress folks in both parties. Listen, when Democrats and members of the Biden administration talk about wanting to increase the productive capacity of the economy, that’s great. That’s the kind of talk I like to hear. Those people who think that way, maybe their policies aren’t exactly what I would want, but if you’re thinking that way, that you think it’s important that the U.S. economy is more productive, great. Listen, we can have a fantastic conversation. I would like to think that there are enough people and they’ve been so repelled by the populists in both parties who tend not to think that way. These populists may disagree on cultural issues, and I think that’s why it’s hard to create a third party.
The Bernie Sanders voters and the Donald Trump voters, there’s a lot of agreement on trade, there’s a lot of agreement on immigration. They both have a lot of hostility toward major corporations. Theoretically, you could see parties—parties can change a lot. Listen, it wasn’t that long ago that you had the president of the United States, Bill Clinton, talk about the era of big government was over. It’s back. Parties can change a lot. I think it’s still likely that the main parties stay where they are. I hope that the pro-progress portion of both can eventually become bigger and more influential. Though that may not entirely be the case right now, particularly among Republicans.
SEAN SPEER: That’s a good segue to my next question. In a forthcoming book entitled The Conservative Futurist, you write that of what you describe as the “Great Downshift” in economic growth and technological progress, which has contributed to economic stagnation, declining aspirations, and a popular culture fixated on catastrophe. Help us understand this insight. What is the Great Downshift? How did it come about, and how is Western society’s real problem not too much growth in dynamism, but too little?
JAMES PETHOKOUKIS: If you go back into those immediate post-war decades in the 1950s and 1960s, even though there was a lot of pessimism coming out of World War II, “We’re going to go back into another great depression,” that obviously didn’t happen. We saw amazing inventions. We saw the beginning of the atomic age. We saw the space age, we saw—whether it’s television to every home, there was a ton of progress. People back then thought that was the new permanent normal, that what we saw in the ’50s and particularly 1960s, that’s what we were going to get in the ’70s and ’80s forever, that we had permanently solved the problem of rapid economic growth. Then it stopped. I think you can make a good case that the statistical stop and that downshift was in 1973.
I can highlight some numbers. It was very shocking. I don’t know if you’ve ever heard of the book, Future Shock by Alvin Toffler, a bestseller. It sold 3 million copies. He warned that there was going to be so much abundant, so much economic growth that we were all going to be driven crazy by it. The real shock was that that didn’t happen, and you ended up with decades where the economy would speed up and slow down, but nothing like what they expected in those immediate post-war decades. I think there are sort of these big macroeconomic reasons why that happened. Part of it is stuff that we did, that we as a society made the decision to not focus on economic growth but to focus on other things, to focus on environmental regulation.
It’s not the whole story, but I think it’s part of the story. We decided that maybe we shouldn’t spend so much. What was the big national project in the United States that came after Apollo? Fine, we won the space race. We could have kept the space race going, but we didn’t. Was it followed by anything? What was the next big goal that would both inspire people, get people excited about science and technology? There really wasn’t anything. I think the combination of creating barriers to progress, and then also not doing some of the things that we need to progress, like lots of science and research, to name two, contributed significantly to this overall downshift in technological progress and economic growth. And then we just stopped believing it was possible.
I think it’s important what we believe about the future. I think having some, not necessarily a specific image, but an idea that we can create a tomorrow that we’d want to live in, that’s just not what we do anymore. It drove me crazy that we saw all the things going on right now with AI, space, with CRISPR, we had this nuclear fusion breakthrough, and the big new big budget show on—I’m not sure if it’s Apple TV or Netflix—is about environmental catastrophe. It’s about environmental catastrophe. It’s like nothing else is going on, and it’s that same playbook. You could write a story about environmental catastrophe, and also about how we can solve it, but I don’t think that’s what that show is going to be about. I think it’s going to be more sort of disaster CGI porn, and that’s what we keep getting. Being soaking in that as society decade after decade, I think we see the result of it. People are just very pessimistic, not just about the future, but about what we can do to alter that future.
SEAN SPEER: A ton of insight there, James, and we’ll come back to your observation about the role of popular culture. Before we get there, I want to take up your forthcoming book’s title, which may seem a bit oxymoronic to some listeners.
JAMES PETHOKOUKIS: Yes, it’s like military intelligence.
SEAN SPEER: Exactly. You yourself are a Christian with a big family, who at some level lives the traditional lifestyle, if I understand correctly. Yet in your political economy, you’re a champion for progress. How do you reconcile these tensions that run through you and conservatism more generally?
JAMES PETHOKOUKIS: We’ll take each of those words in turn. I’ll start with the second one first. I think there are big problems facing society. Again, whether it’s ones that directly affect us in Western rich countries, you could point to climate change, whether it’s ones that affect people in poor countries, poverty, its risks of a big asteroid hitting the Earth. I think those are things that everyone should be concerned about. Much like it’s impossible to figure out what the next great new jobs are, I don’t know all the opportunities and cool interesting things we can create. I would like my children to have maximum opportunity, and live in a society with a maximum amount of resources to make their dreams come true. Because that’s what an economy is. An economy is able to take dreams and turn them into crystals of imagination, physical objects. That’s what an economy does. I want an economy that can do that more efficiently. That is the future. I want to make sure they have maximum opportunity and that that opportunity is not snuffed out by big asteroid.
I think that part of the future fits in very well. In the book, you’re not going to find millions of different scenarios, and like “Here’s what ChatGPT can be in this year,” I get to that a little bit, but what my version of the future is, and this really gets into the conservative part, is creating an environment or an ecology of possibility that we make the decisions—I mean, some things we’re never going to be able to control, but except what we can appropriately control, creating that environment for growth and opportunity. That is my kind of conservative futurism.
Edmund Burke talked about the obligation that conservatives have both to the past and the future. I think it’s very natural, if you’re a conservative, to think about the future and the obligation that you owe to build upon the achievements to value the achievements of the past, but that we also want to build upon them. Even though it does have an oxymoronic aspect, which hopefully will make for a winning best-selling title, to me, they actually do go together. I mean, one of my favorites, if I can, is the late futurists Herman Kahn, who is probably best known to audiences as this cold warrior, he was a nuclear war theorist, he popped up in a couple of 1960 movies where they had characters based on him, including Dr. Strangelove and Fail Safe, but later in his career, he became this super optimistic technocapitalist, futurist.
While he did a lot of traditional futurists things, like scenario planning, fundamentally, his futurism was one of creating the foundation for growth. If you could get that right, and you could just make a few good decisions as a society, you’re probably going to be okay. That’s my version of the future. I don’t have a GDP forecast for the year 2089 or anything. But hopefully, it’ll be faster.
SEAN SPEER: That’s great. It sort of relates I think, James, to your observations about the impetus behind reformed conservatism. I think it was Reagan who said he didn’t want to go back to the past. He wanted to go back to the past way of looking towards the future. It seems to me, as you say, that that idea is entirely compatible with conservatism, particularly a North American conservatism which has come to distinguish itself from the kind of blood and soil conservatism of Europe through most of contemporary history.
To come back to another one of your earlier answers, is there a reason to think that we’re on the cusp of coming out of the Great Downshift? If so, what technological developments give you the most cause for optimism?
JAMES PETHOKOUKIS: I will not be giving investible advice. I will not tell you the proper ETF mutual funds to invest in. We’ve had this long half-century of really, I think relative—there’s been progress, I think, but of relative disappointment. We had the brief late ’90s boom, which back then people thought, “Ah, that’s it, this is the end of the downshift or the great stagnation.” Then that faded away. I’m hesitant, but yes, I’m really, really optimistic that we have this cluster of technologies in AI/Machine Learning now /Machine learning/Generative AI, genetic editing, CRISPR, massive, massive advancement. These space dreams of the ’60s, we can now make them happen. We’ve had this huge decline in launch costs.
I don’t think most people are fully aware of that, and that we have private companies who want to, many of them, who want to be part of building multiple space stations. A huge advance. That billions are flowing into nuclear fusion startups. We had this huge leap forward and huge advances in geothermal. These technologies, many of which were sort of the dreams of a half-century ago. Had we kept on it, maybe we’d be a half-century further along. Better late than never, I guess. That cluster of technology to me seems so potentially powerful that I think if we don’t screw it up, if we continue, if we make good decisions, if we don’t strangle these technologies sort of in their infancy, that we continue to do what we—government serves a role, which is, investing in areas it should invest basic research, maybe some applied research that we think hard about regulations. Are they going to be worth it? Will there be more downside to stopping progress? Are we creating regulations that assume the worst? Are we operating from sort of that launching point?
This is our third swipe at it. We had a swipe at it in the late ’60s, then in the late ’90s. Here we are again where we could really take a tremendous leap forward. Listen, there should probably be problems, but I’d rather be dealing with a different set of problems, not with the same old problems.
SEAN SPEER: Do you think climate change and the goal of an energy transition can be part of a politics of progress? Or is it merely about protecting against the downside of climate change, and therefore lacks the charismatic quality of a vision of progress?
JAMES PETHOKOUKIS: I think the issue of climate change is presented as avoiding something bad, which is one reason why you have people having to create a worst-case scenario about climate change in order to sort of sell people on policies. That does not seem to be working particularly well. What gets people excited, I think, is being able to generate lots of energy inexpensively that can power whatever we can imagine. I hate to think, and I’m not a crypto expert and I’m not sure the future of these cryptocurrency technologies, but I don’t want to have to not pursue them because I’m worried about how much energy they consume. I don’t want that to be part of the equation. I don’t want people saying, “We need to scale back our ambitions again because those ambitions will use too much energy. We need to not create, a, as Elon Musk would say, a multi-planetary civilization because we couldn’t figure out how to power it.” I don’t want that to be a factor.
I think producing abundant, clean energy that can power a much larger global economy, a high-energy planet, to me sounds like a much more attractive vision of what tomorrow can be than saying that we need to live less well. Our children have to have less ambition than we had because we need to use less energy. That sounds like an absolutely terrible message that’s going to persuade only the real hardcore people.
SEAN SPEER: What can policymakers do to revitalize science? How do we ensure that future Katalin Karikós aren’t lost under the weight of science bureaucracies and self-selecting peer review processes?
JAMES PETHOKOUKIS: When I talk about spending more, it’s not like we don’t spend a lot of money, particularly here in the United States. We spend a lot of money on science. Why I think we need to spend more, I think it is incumbent on people who do want to spend more to talk about how do we get more bang for the buck, even if we want more bucks. Clearly, we have systems that are overly bureaucratized. Not a lot of innovation as far as how we do science. That’s what was so interesting about the pandemic, is that we started thinking about that. “Oh, how can we get these vaccines developed into the market really fast?” We created this Operation Warp Speed. Necessity is the mother of invention thinking, we need a lot more of that.
Whether it is thinking a lot harder about where else we can apply that Operation Warp Speed model, where else can we apply models like we’ve seen in Darpa, using things like changing how we distribute funds from the government, perhaps changing the peer review process, lotteries. We need an innovation in science of doing science. I think that needs to be absolutely a part of it so the good ideas don’t get lost and we have a very cautious science research system. Again, I think that’s part of it. I would make it incumbent that before we spend a lot more money, that if we want to spend more money, that needs to be part of it. Those two things need to go hand. I think that’s ultimately the only way you can really sell those kinds of spending increases.
SEAN SPEER: James, if I may just follow up, you lamented the loss of the Apollo project and the failure of American policymakers to conceptualize a replacement. What do you think of the growing interest in so-called “missions” or “challenges” as a basis for orienting or organizing science and R&D public spending? Are those worthwhile exercises, or do they risk becoming top-down centrally planned models of public investment?
JAMES PETHOKOUKIS: I think they can work. I think you need to be cautious about them. I think they need to be in areas where time is of the essence. I think that’s why climate change ends up being one of the best cases, because if you think it’s a real problem, and we don’t have unlimited time, then yes, then maybe you want to start thinking about a moonshot for a carbon capture technology.
Thank goodness that with a lot of these technologies, there’s a lot going in on the private sector, so it’s not as if you have to start from zero. Even with, let’s say, an area like advanced geothermal, there’s a lot going on in the private sector. When I talk to those people, they say, “Yes, but government could still help us by doing more research on material science for drill bits,” or what have you.
There’s still a lot government can do without even creating a necessarily a big moonshot. There might be some moonshots we should have. Space is obviously another one where the economic case isn’t as clear or obvious or immediate. I would want government’s going to have to be part of any initial Mars colonizations. There are moonshot ideas out there.
Again, one of my favourite stories is that, you mentioned Reagan, after the Challenger Shuttle blew up in 1986, that actually blew up on the day of President Reagan’s day. The unionists said, “Cancel the address.” A week later, he finally gave it, and of course, he started it by talking about the hero astronauts. Then he talked about how we were still going to go forward. We were not going to cancel the mission, we were going to continue to go forward. Then he talked about something he called the Orient Express, which was going to be a space plane that was going to go 25 times the speed of sound that would be able to go from Washington to Tokyo in 20 minutes or something. I forget the exact number. He spent a lot of time talking about that. Now, we don’t currently have that, and Bill Clinton canceled it, but why? Because it costs $2 billion? It doesn’t seem like a lot of money right now. That’s the attitude and direction, that when we have a problem, fine. We have a problem, we solve it, we move forward, then we solve the next one, then we solve the next one. Too often I think there’s a problem. That’s it. We’re done. We’re not going to solve it. We’re going to retreat. I think fundamentally I talk about a politics, not just of progress, but to frame it like this, no longer a politics of retreat. I feel like there’s been a lot of politics and retreat and stasis at best.
SEAN SPEER: Does a renewed great power competition with China help or hinder your vision and agenda for greater progress? How do you think about the place of post-Cold war globalization as a cause and effect of your story, and what will happen if we revert to some form of globalized political economy?
JAMES PETHOKOUKIS: I’m certainly worried about less productive economies, less efficient economies, where you don’t have countries taking advantage of what they do best and compete with each other. We love competition. Competition brings out the best of us and also in other countries. I’m very worried about this retreat from globalization, and obviously this brewing China tech cold war is part of it. The downside is, I worry about us becoming more insular-looking and being less willing to trade with other countries, less willing to accept talent from other countries. That’s bad.
The plus side, assuming it doesn’t turn to a war, is that it’s very easy to make the case for doing pro-growth things if you use China as the boogeyman or as a reason for doing things. If China is spending money on AI, how can we not spend money on AI? Of course, the concern is they haven’t been very productive in many ways and some of their emerging technology, frontier pushing technology, so I don’t think we want to copy that model, but thinking hard about competing with a geopolitical rival on the technological frontier, and what we should do, frankly, what the West should do to compete. I think that’s thinking hard about what our inherent strengths are. I think our inherent strengths are open societies where people are rewarded for effort. I think now we are seeing that China is creating a societyKatalin KarikóI just don’t see how a authoritarian/totalitarian surveillance state is ultimately going to be a great place for creative and imaginative people to prosper. That does not seem like an ecology for growth.
SEAN SPEER: A penultimate question. I recently recorded an interview with Jason Crawford from Roots of Progress that will air in the next week or so. In it, like you, he makes the case that we have to focus on changing the culture, including books, film, et cetera. How has popular culture become hostile to progress, and how can we overcome it?
JAMES PETHOKOUKIS: It’s hard to remember that there was a time where it wasn’t hostile to progress. You have to be probably at least a Gen-Xer or to really have lived through that time where it was hard to avoid it. Oftentimes in my newsletter, I’ll do interviews and I’ll say, “Give me some examples of your favourite pro-progress media.” Then I have to say, “But it can’t be Star Trek,” because they always say that. But It’s just hard. You have to think a little bit to come up with examples. It’s not just like movies and films. We used to do Worlds Fairs. There used to be a huge thing here in the United States, and they would use it to not just get people excited about the future, but they would show new technologies, so a lot of people interact personally with new technologies.
Then we got out of that game. We haven’t had a World’s Fair in this country since the ’80s. Even then, they became infected by this anti-growth environmentalism, and they became less interesting, if you’re interested in an optimistic future. Boy, I think we can get back to that. I would like to be able to go to a World’s Fair that would show me the wonders of modern technology and where we could go. I think that an in-person experience would be fantastic. To have not done that, to have forgotten about how we got here, to now immerse ourselves in just the opposite? Some people say, “Well, it really doesn’t matter what movies, the culture are like.” No, I think it absolutely matters. Even personally, if you can envision a good future for your future self, it helps you to aspire and do things you need to do to make that vision possible. I think it’s the same thing with a society.
SEAN SPEER: Let me wrap up by returning to the first question I posed to you. We discussed how the reform conservative movement failed to secure political traction, and ultimately Trump and another populist filled the political void. How optimistic are you that your vision of conservative futurism will find resonance and salience in today’s current political moment?
JAMES PETHOKOUKIS: I think nothing would help it more than people believing it’s actually possible. We had a period. So, it’s sort of the chicken and the egg. In the late 1990s, the acceleration of the U.S. economy was a huge surprise to people. We had all these things which had been lurking in the background, and they came to fruition, and then people started imagining these next steps and that it would never end. I’m hoping that those building, those technological building blocks, at least, are in place, and that we don’t quash these things, and that we continue to encourage these advances. I’m hoping that the combination of real-world technologies coming to fruition, plus I think this geopolitical competition, and I hope as a society we can look back on the past decade since the global financial crisis. That’s a world of very stagnant, slow growth. What did that get us? What society is there? What would another decade of that be like? Or two or three? I think we can point to what that looks like. Hopefully, people who, like ourselves, can at least create some image of a future that will excite people.
SEAN SPEER: The work that you do is crucial to that end. I want to thank you for joining us at Hub Dialogues. James Pethokoukis, the DeWitt Wallace Fellow at the American Enterprise Institute. I’d encourage listeners to check out your newsletter Faster, Please, and plan to pre-order your forthcoming book, The Conservative Futurist. You’re an important voice at a key moment, and I’m grateful to have had the chance to speak with you.
JAMES PETHOKOUKIS: No, it’s been a pleasure. Thanks a lot.