Forecast 2050 - Tyler Cowen Transcript

Recorded January 4th, 2026 in New York City.

Tyler Cowen believes we are not prepared for the next 25 years of rapid change. In the first episode of Forecast 2050 with Nebular CEO Finn Murphy, the conversation ranges from demographics and immigration to AI, fake jobs, corporate power, and the future of governance.

Tyler and Finn discuss whether immigration can offset population decline, why healthcare will keep eating away at the economy, whether AI will take over “by trick” and quietly make decisions on our behalf, and what worries Tyler most about the world of 2050.

Watch the full interview:

Transcript:

Finn Murphy: You’re a man who needs no introduction. Tyler Cowen, Professor of Economics at George Mason University. Really delighted to have you with us today.

You’ve had many guests on your show over the years, but recently some who have alluded to different challenges caused by demographic change. Ross Douthat views it as an extinction event. How are you thinking about this as you look into the future?

Why Are We Having So Few Kids?

Tyler Cowen: Well, first we want to try to model why birth rates have fallen so much, so rapidly and in so many different places. So put aside Israel for the time. It’s pretty much every country I can think about, rich or poor. That makes it harder to explain, not easier. The best attempt I have, which maybe is not very good, is to think that ultimately, it’s about the spread of birth control.

Now, I’m well aware of the fact that there’s been decent birth control since the 1960s in many places or less good birth control for much, much longer than that. But nonetheless, one thing I’ve learned studying social science is there can be really many effects that just take much longer than you think, longer than any plausible theory might suggest.

So there’s a cause, and then there’s an effect. It can come decades later. It’s an ongoing puzzle why it takes so long. But the best theory I have is simply that with birth control, most women don’t want that many kids. And if that’s your underlying theory, it’s a very difficult problem to overcome.

So maybe the extinction event is an exaggeration that will take quite a few generations, and just predicting anything so many generations that far out is impossible. But still, it’s a matter of great concern to me because I don’t think birth subsidies have been effective. So Hungary spent up to 5% of its GDP on birth subsidies. It boosted the birth rate for a while. Now they’re back down, I think, to 1.6 and falling again. So, what are we going to do? I don’t know.

Murphy: You’ve spoken about this before on birth subsidies. One of the things I think humanity is very good at solving problems that will kill us quickly, and something we’re very bad at is solving problems that kill us slowly. Birth rate decline is one of those slow things that the solutions, even if we put them in place now, we’ll still have to deal with this inverted population pyramid for some period.

Do you think we cross a chasm where governments start treating this less like climate change and more like Covid?

Cowen: I don’t see why voters would want that. You may have some autocracies that take that plunge, but as David Hume pointed out, autocracies are also dependent on public opinion, and the autocrats themselves don’t personally have to worry about this problem. So that also makes it harder. Another thing making it harder is that at least some of the world’s problems are exaggerated, but they’re solved by the United States now. The United States of all countries can attract high quality immigrants better than anywhere else.

You being one of them from Dublin, Ireland. So, we could have our current low at 1.6 TFR. And we’re still fine because we’ll take in people from other places and most of them assimilate pretty well. So it’s not very urgent for us. So is it. Well, you know, is Belgium going to solve this problem or you know, that just seems less convincing.

So I don’t really see how it’s all going to run. Frankly, I’m not worried about the inverted pyramid per se. I’d say I’m worried a bit, but I think with artificial intelligence it will be enough of a productivity boost. It won’t bankrupt us. I’m just worried that there will be many fewer people over time, converging on some terrible asymptote.

And fewer people are worse than more people: it’s less innovative, right? Julian Simon. People are the ultimate resource.

Getting Old Is Expensive

Murphy: We’ve always had a majority young society, and in our lifetime, we’ll have this transition to majority old society. When you make this transition and it impacts so many different areas of life, do you still believe that technology can solve our way out of it?

Cowen: Solved is never quite the word. But the older people in this room and I guess that’s only me. We have the luxury of having seen what old people were like in the 1960s and 70s, and mostly they were a wreck. So, so many people would be shot by 60. And now there are many 80-year-olds who are more dynamic than a typical 60-year-old might have been, say, in 1972.

So that will somewhat help keep us more equally dynamic. So there are countervailing trends which are quite positive. There might be You could call them mind altering substances that would help older people be young again, like Viagra for the mind. I’m not predicting that. I’m just saying there’s a lot of variables here, and I think we’ll have recourse to many interventions that will help keep things going at an acceptable level.

Murphy: What do you think of the political changes, though, if that is true? So, you know, most of the current social contract was designed that if you made it to 65, you had done really well, and now is the time to lay down tools and retire. If people are living these much longer. Call it like health span driven lives.

Can the current social contract and political structure hold?

Cowen: Well, we’re always rewriting the social contract, right? With or without this problem. So can we rewrite it to deal with this? You know, that’s probably why I would say France right now is running the experiment you laid out in advance, just like Japan in advance, is showing us what an aging society is like.

So, so many French people, as far as they seem to get 25 years of retirement and France now, you wouldn’t call it a fiscal crisis, but things are quite tight. They could get much worse. And there’s this perpetual distinction between income and wealth. Can France dig into its wealth in a politically sustainable way to support so many retirements, so long for so many old people?

I don’t know enough to say, but I think it’s logically possible. It doesn’t mean they’ll manage to do it. Or could France improve how it takes in immigrants to get more, higher quality, more productive younger immigrants, even though aging is now happening almost everywhere? Well, that’s at least possible.

France is a pretty desirable place to go. There’s a lot of former French colonies where people have various sorts of ties. So there are methods of recourse, and we’ll see how well they go. I suppose I think France will eek through would be my best expectation.

Immigration Around the World

Murphy: You’ve been one of the loudest voices around being pro-immigration and against, call it this shift amongst, say, conservatism towards anti-immigrant rhetoric. We’re in a period where it feels the political will of the population is to limit immigration. Do you think that that will just not sustain the challenges around the aging population, say, like lack of home carers, lack of nursing, the cost of delivery of health care and other factors at play?

What do you think could change the current political conversation around immigration?

Cowen: I think it depends a great deal which country you’re talking about. For the US, immigration has gone better because we can attract more high-quality immigrants whenever we want to. Just make it easier to get a visa. It’s not the only way to reform the system, there’s a lot of things we could do. And when immigrants come here, they assimilate better.

And unless you live in a border area, I think most Americans do not feel they’re losing their country, even if they think immigration is too high. It’s a very different feeling from what you might find in parts of Sweden or the Netherlands, which are smaller populations. A more rapid shift. They don’t have a long history of being what we might call a melting pot here.

And people feel they’re losing their country and they’re willing to do a lot to stop that. I don’t think the USA is in that position. So I think within ten years we’ll be bidding for immigrants, will be much more selective, use more market mechanisms, and use it to raise revenue. Trump already is taking steps in that direction, though the price is too high.

And the criteria I think are wrong. But is this showing or will sell admission, so to speak, at the gate? And that will help solve our fiscal problems. And I think we will stay a nation of immigrants. The ultimate problem will be a drying up of people to come here, both because of lower birth rates elsewhere and a bunch of other countries are likely to improve.

For a while we were taking the highest number of migrants from China that overpassed Mexico. I don’t think that’s the future for a number of reasons. One is that China has done better. So probably India & Africa would be the next waves. We’ll see.

Murphy: As someone who’s gone through the O-1 to now EB-1 process, from visa to green card, there are many parts of the US immigration system that are arcane. But if you come with a set of skills that the US wants you to have, you can find your way here.

Cowen: And even the Trump people have not gone after that.

Murphy: If you take this viewpoint that we’re entering a more competitive global market for talent, particularly young people, maybe the next wave of targeted immigration is in these young hubs in Africa, India, and the Middle East. Take the economic model for the US like Bretton Woods: a prosperous world was a prosperous America.

Global trade generally has massively benefited U.S. companies. There’s an argument that the reason the US spent a lot of money on U.S. aid and other humanitarian programs was to keep the rest of the world from becoming so bad that people would all try to flood to the US. If the rest of the world becomes worse, do you think there’s a new doctrine where countries care less about what their trading partner, how their trading partners are doing, and just focus on their own supremacy?

Cowen: I think the world has always operated on that basis if I understand your point correctly. Now, you mentioned some sources of immigrants. I think some of them are quite complicated for the US. Africa has and will have a lot of talent, but the US has a history of race relations or that might be a complicated decision.

Southeast Asia maybe it would be an easier sell. But most of all, Latin America distance ties are already, what, 35 million Spanish speakers in this country? Uh, they’re almost entirely Christian. Even though those countries have low birth rates. There’s plenty of people down there, so to speak. And a lot of the future will be that we’re now in the midst of this Trump initiative to reshape the whole new world, whether you like that set of policies or not.

It’s recognizing distance really matters, and our future is dealing with those countries. And I agree with that premise at the very least. I don’t think we’re going to say to Algeria: the gates are open, you’ve all been oppressed. Come over, we will be greeting you with the Statue of Liberty.

It’s probably fine, but it seems to me that makes people nervous once you say Algeria, and it would not be my prediction.

Murphy: Take Brazil or Argentina or Chile. Has the US benefited more acutely from those economies being strong, or is it best empowered by their smartest people continuing to move to the US and those countries not being able to quite break out and become stronger trading partners for the US?

Cowen: I think we’re better off if those countries develop more. And the dream of the Trump administration is they become the new Europe for us. That to me seems unrealistic, but they could do much better. Brazil in particular could do much better. A lot of those countries grow at 1 or 2%, or Mexico’s not so far from stagnation altogether.

There’s no reason why that should be inevitable. They need policy changes, but they’re not crazy utopian policy changes. And Mexico, for instance, has an immediate past where it grew at 2% and it passed longer ago. The postwar era where it grew at 5 to 7%. And maybe that’s not possible again. But to think Mexico could grow at 3% again is not utopian.

And if Mexico, Brazil, and Colombia have often had a pretty decent growth record in the past that they start doing better. Entirely possible. Probably even likely. Argentina, again, major reforms. They may not last. I know the long history. The problems are not solved.

But still. There are so many countries, and they’re somewhat independent in what they do. And I think a number more will be like Panama in the Dominican Republic. And that will be good for us in the US.

AI Won’t Solve All Our Problems

Murphy: We’re about to enter this abundance takeoff. When you think about those loud voices saying we’re going to solve all our problems, we don’t need to worry about them right now. And your point of view is that these people maybe haven’t seen how technologies, how long it takes technologies to really diffuse into the economy. You just think that’s not a credible point of view or, you know, will robotics ease a lot of these demographic problems? Will AI enable the cost of health care to rapidly decline? How do you balance those two points of view?

Cowen: Well, all those things are true or what I would say. But technological progress means you trade in one set of problems for another. I can readily imagine that within 50 years we’ve beaten back most diseases and everyone dies of old age or accidents. Say you live to 97. That’s great. Right? Dying at 78 was not so wonderful.

And that’s a problem while you’re still going to die. But we solved it as much as we could. But at the same time, you have many more years to spend on health care. The cost of health care might be lower, but that doesn’t mean we spend less on health care. We’ll just spend more and more. And I think ultimately, it’s easier to patch up people’s bodies than their minds because the brain is so complex.

So even if we fix dementia, Alzheimer’s, we’re still going to end up with worlds where you have a lot of old people who are not sharp enough, and they’ll need to be taken care of, and some of them will live to be 105, and that will be a massive expenditure, and some of it will be robots. But having to pay for that and just deal with it socially.

Oh, is it your grandkids, your great grandkids, your great great grandkids who worry about you or no one gives a damn or the state has to grow? I don’t know, but that’s the new problem we’re likely to get. And it won’t be easy. But again, you’d prefer it to dying at 78, right?

Murphy: So much of health care spending is concentrated on the last couple of years of someone’s life already.

Cowen: And there’s always going to be a last couple of years.

Murphy: Do you think, in the US, there will be pushback against controlled spending on people’s end of life? Do we move to a more hospice style care system, or do you think the current care system is just so entrenched and there’s so much money to be made in end-of-life care that we’re not going to change?

Cowen: I think the US will just keep on spending. We’ll spend more eventually 30% of GDP or higher. I think now it’s at about 18%. We won’t regret this. A lot of the other things we might want to buy will be cheaper also, which is partly due to AI. Other forms of progress. It’ll be weird to have an economy so focused around healthcare because people are never that happy when they deal with health care.

It’s a market where, at the end of the day, you die, right? So how happy can you be? Or you’re in pain or you lose a loved one? Uh, so maybe people will resent the system more because health care is inherently problematic, even when it extends your life. Another 20, 30 years. And I just think insofar as whatever rate at which we create more wealth, we’re going to spend it largely on health care.

And these other countries, they will see single payer systems are not feasible. You cannot really pull all this along with taxes. And they will do this in the private market on the side. And in terms of rates of growth in relative terms, they will de facto privatize their systems without ever explicitly privatizing them in the sense of their being a newspaper headline like, oh, Britain sells off the state hospitals.

They’re probably not going to do that. But more and more people will spend more privately. And if you have to fly to Dubai, whatever, you’ll do it. And that’s the future. We won’t be as well off as we thought, but again, we’ll live longer and maybe be in less pain.

Murphy: Is that a less exciting world than the world that you’ve grown up in?

Cowen: To me, it’s less exciting. But again, for the people who are born into it and expect it, they might just regard what was my world the way I would think about Victorian England. So you have to be very careful in applying your own perspectives: some of your perspectives might be objective, but other parts are not.

And you need to keep both of those thoughts in mind at the same time and just realize they both have some validity. I’m not thrilled about everyone just being 96, and insofar as we need to raise taxes to raise taxes on late-stage health care would be one of my recommendations. I’d rather do that than, say, raise taxes on fun. But again, people not of my generation may feel very differently.

Murphy: One of the very common conversations in the AI maximalist world right now is that you must accumulate capital now before it’s too late, as we’re entering a period where the balance of power will tilt in that direction. We’re also seeing corporate power probably reaching one of the largest scales it’s had, but this balance of power, if I take what you’re saying to be true, is that everyone is going to live longer. And in democracies, the voting power will sit amongst this much older cohort of people.

Will the Old just continue to vote for policies that continue to further disenfranchise the young or further disenfranchise labor?

Cowen: Well, they’re selfish! I mean, you’re talking about the future. I would say this is the present. When you look at this country, look who actually votes. This is not Australia where everyone is supposed to vote. And older voters, I think they’re in a way more cynical and less ideological. So they’re willing to sell their vote to whoever they think will help them the most.

Whereas a lot of young people, I mean, you’re here in New York, there’s these leftists, they’re not going to vote for Trump. I don’t care what Trump promises them. Right? Or like the right wing riper types, they’re not going to flip. So the older voters have extreme power now. So this is disadvantageous from my point of view.

But we’re already living with it. And the fact that we can already live with it suggests it’s a livable equilibrium, even though I don’t myself like it.

Murphy: That’s interesting. There’s a book I read recently, The Great Leveler, about the role of political violence over years where you have this inequality.

Cowen: Walter Scheidel. Great book.

Murphy: Yes. We’re between capital and labor, be it the French Revolution or recently, the Russian Revolution. Do we reach a point where people’s basic needs are met to a high enough level that we won’t see political violence from an imbalance like that between young and old. Is this equilibrium something that is stable? Why would it be something that’s stable when historically these equilibria tend to eventually break?

Cowen: I don’t know what basic needs means as a side observation, but I would say this when I look at civil unrest in history, I think I’m mostly a Tocquevillian. So violent civil unrest, protest, it’s very high, you know, in the latter part of the 1960s, early 70s, that felt to be a very prosperous time with a growing strong middle class.

Whatever predicts political violence, I don’t think it’s hard times, per se. I do think the future, I would say the present has so much surveillance that there won’t be much systematic political violence in the high-tech countries. I think political assassination has already made a big comeback, and that’s bad.

Surveillance cannot quite prevent that, at least not yet. And we’ll see more political violence through that channel. But I don’t know how much it will matter in shifting macro aggregate policy outcomes. It’ll make our politics feel very ugly.

Murphy: Do you think we will live in a gerontocracy?

Cowen: That’s right. And we are already. And look at our candidates, Biden and Trump. Like, how old are they? You know, that’s the sign of something. And Harris was younger, but it was a kind of accident that she ended up in that position.

Murphy: When if you take away the old-young axis and look more at the state-corporate axis, even if it takes a long period of time to diffuse the benefits across wider society, it will create an enormous amount of wealth in the hands of a relatively small group of people.

Cowen: I don’t think it will be in the hands of the small group. I think it will be a lot of wealth for everyone. The small group will be much wealthier. You’ll have many more mega billionaires. Or even just normal people. When an IPO hits from an AI company a generation or two from now, you’ll have a lot more people worth what we would now describe as $10 billion.

Murphy: If you look across, particularly US history, every time an industry has become extremely powerful, there has been some kind of check, maybe going back to the 20s and the banking industry. Do you think there’s a universe where the state sees their power moving or superseding itself? And is there a desire to check that?

Cowen: I think the AI and tech companies in the US government will be married more and more. Uh, neither will check the other. They’ll each expand the power of the other. If you look at US history more generally, I don’t think it’s a history of checking corporate power. You have nominal checks every now and then which maybe slap someone around a bit, but it keeps on growing. Banking has been shrinking for other reasons. But you look at private equity firms that are, much larger say, than banking was in the 20s or the biggest firms today, the magnificent 7 or 8 or wherever you want to draw the boundaries of whether Netflix belongs, but it just keeps on going.

So I don’t think our history is one of checks. You do things because interest groups flip or different parties in power, and you push a few back and push a few ahead, but the big stuff gets bigger and that’s fine. It’s not any other way to have it. You’re a big growing country, so your big stuff will get bigger. I think it’s gone great.

Murphy: Taking more of a futurist point of view on it, if you look at science fiction, be it in Starship Troopers, it’s more of a militaristic society, but be it in something like Alien or Altered Carbon, it’s more of a corporate, a society where these trans-planetary corporations effectively are the states of the future.

If you map out your kind of future direction or travel of the state, and corporate power will continue to enhance each other. Do you think, again, this is an equilibrium that stays on forever?

Cowen: Not forever. But I think for the foreseeable future I don’t see what stops it. GDP will be larger. You can just say we’ll get all the above. Now, I don’t think we’ll settle other planets, but whether it’s ocean or upper atmosphere or satellite belt, I can imagine parts of the world where the de facto government is corporate. Absolutely. It wouldn’t surprise me, but it wouldn’t be at the expense of current governments. Could be some kind of alliance or so maybe we use the upper atmosphere, you know, for solar power.

It’s beamed down to Earth. That’s a pretty high risk in military terms. The government is part of it, and the companies and the government end up as much stronger. Maybe there’s some point at which that snaps. But a better prediction is that it keeps on growing and that it happens.

Humans Won’t Settle Other Planets

Murphy: This is maybe a bit of a sidebar...

Cowen: We can do sidebars!

Murphy: Do you believe that there is life on the moons of Saturn?

Cowen: I would bet 60/40 yes. But it wouldn’t be life like us. You know, it might be little shrimpy things or even just something like bacteria. Maybe Jupiter also.

Murphy: One reason for doing this series was we wanted to bring a positive, futurist conversation out into the open. And what makes you say you don’t think we’ll try to settle other planets?

Cowen: I think speed is difficult and the human body cannot survive very well on other planets, other moons, or in outer space. Will we send robots to communicate with the little shrimpy things on the moons of Saturn? Absolutely. And if I’m around, then I’ll be dying to see what’s there. But I’m not sure how much that will matter.

Odds are, if you look at the history of life on Earth, most of the time, super intelligent life such as humans was not on Earth. So probably on the moons of Saturn. If they have life, it won’t be super intelligent. And you can watch the documentaries on the BBC. You know, the little shrimpy things swimming around.

Kids will grow up with it and it’ll just be like, oh, we discovered, you know, a rhinoceros in Africa, which was a big deal. Everyone in Europe got excited. They put one on a boat and all that. But at the end of the day, maybe it was not a major event in world history.

Murphy: One of the big conversations from a philosophical point of view is the debate around why we should explore the universe. Think of the Fermi Paradox, right? Where if we were to discover either we’re exceedingly rare, or there’s some barrier that we’ve not yet hit. Maybe we’re all just going to wipe ourselves out before we get that far.

But that’s often put forward as a good reason as to why we should spend money on exploring the solar system, to figure out if this paradox is true.

Cowen: I agree with that reason. I’m just not sure it will change practical life that much. But I’m all for it. Sign me up. I’ll pay you more tax for it.

Murphy: I saw a tweet recently where someone basically was like, this may be a controversial opinion, but I don’t want technology to make progress from where we’re at today.

Cowen: That’s controversial?

Murphy: I didn’t think so either.

Cowen: Every generation feels that way, though they won’t admit it.

Murphy: With AI right now, it’s very easy to denigrate it as slop. We’re not talking about the health care benefits; we’re talking more about the more time sucked in staring at a screen. What do you think of the practical things technologists can do to change that direction of public perception?

Cowen: Mainly what they have done is tricked people. The Apollo program was a big trick. It was not intended as a trick. I’m pretty sure almost everyone behind it was quite sincere that it would lead to whatever. It was vague all along, but everyone was truly excited back then. I even remember those times, but it didn’t lead to what we were promised at all.

And you see that when you compare science fiction over time. So I think the norm is that new technology comes and people are tricked. Again, it doesn’t have to be a sinister, devious, conspiracy laden thing, but in fact, they’re tricked. And then it happens anyway. And then we clean up the mess and deal with it and move on to the next set of problems.

And that’s what I think it will be with AI as well.

Murphy: What is the trick with AI?

Cowen: It’s the old paradox. When you add grains of sugar to your coffee. Every extra grain is fine, or it may even taste better, but at some point, you’ve just added too many grains. So that’s the way it is with change. People use ChatGPT. It diagnoses your dog. Do I need to take the dog to the vet? What’s with this rash?

You take the photo. You steeped. You get a great answer. Everyone’s happy. They’re not actually going to be happy at all the changes that will bring. And here I’m talking about positive ones. I’m not saying, oh, it’s going to kill us all. People just don’t like change that much. So they’ll be sold on the immediate, concrete things and end up seeing things happen where they feel there’s too much change because it will devalue their human capital, and we’ll adjust and get over it and move on to the next set of tricks. That’s my forecast.

Murphy: People don’t like change, but also people are bad at long term planning. Yeah. You’ve spoken before about how faith is a key requirement in terms of being able to plan over the long term. How do you bring that idea to policymakers?

Cowen: I don’t know, I think things will get pushed through for myopic reasons, like we must outpace China, which might even be true, to be clear, but it’s a somewhat myopic reason, and that will be the selling point. You know, I’ve read a lot of texts from the early days of the Industrial Revolution. Adam Smith is one of them, but there’s many others, and a lot of people are for what’s going on, they understand they will be richer, maybe healthier.

They do see the downsides, but they have a pretty decent perspective. But no one from then understood. You’d have this second order fossil fuel revolution, say the 1880s where just things explode and the world is very much different. And whether they would have liked that, you can debate, but they just didn’t see it at all.

We’re probably in a somewhat analogous position. I would say that the Second Industrial Revolution was the more important one. It was a very good thing, even though climate change is a big problem, but it really built the modern world. And with something like AI or any advance, there’s probably some second order version of it that’s coming in our equivalent of 1880 that we just don’t see, and it will be wonderful for us.

But if you told us, we’d be terrified. So how should you feel about myopia? I think as an intellectual, you should be willing to talk about it openly and honestly. But at the end of the day, I think myopia still will rule. And I’m not in a big panic about that.

More Fake Jobs Are Incoming

Murphy: People who say we are going to automate all jobs don’t realize that you can’t automate fake jobs, and there are a lot of jobs that we have created already.

Cowen: We’ll have many more fake jobs. I’m looking forward to it.

Murphy: One of my favorite lines from a Googler was it’s like, look, you could fire 90% of the headcount and retain 90% of the revenue, but you can’t do that because then you are a monopoly and you don’t have enough political capital from enough people who you’ve employed and made wealthy that allow you to continue operating your business.

Do you think the same dynamic holds for AI? Will we create these jobs out of political necessity?

Cowen: I do think we’ll have more fake jobs just because we’ll be able to afford it. And they make us feel good, but we’ll have plenty more just regular, real non fake jobs taking care of the elderly, for instance, whatever that involves. If we go to nuclear power, as we do things in the upper atmosphere or parts of space, as we terraform different parts of the earth as we teach other countries how to integrate AI into their institutions.

There are tons of jobs in that area. Not everyone will want to move overseas, but there will be so many opportunities with that. Uh, so I’m not at all pessimistic on the job front. Like most economists, I would agree that it’s always new jobs if there’s scarcity. And if there’s no scarcity, you can celebrate other things.

But there’s scarcity for a long, long time to come.

Murphy: Do you think that those kinds of jobs will always endure? Which industries do you think are most under threat?

Cowen: I think anything where you have important startups, fake jobs cannot last that long. So, you look at programming, and there are still fake jobs in programming. But basically, AI is going to win, and you might need to work with the AI. But AI will do most of the work and that’s already the case. It just needs to spread a bit more.

Then you have other sectors like say universities. There are some startups, but they’re not significant. That might change, but I don’t think it will change soon. And there you can multiply all kinds of nonsense. And we’ve already done that. Like even pre-AI. So why can’t we do some more. We’ve seen how many assistant deans have been hired in the last 15 years…my goodness.

Talk about fake jobs. So and again that has nothing to do with AI. So yeah, there’ll be plenty more fake jobs and plenty more real jobs, but I would. The key question is, can startups have the significant impact on the area? And then they just outcompete the places with a lot of fake jobs. And that is a lot of the economy.

But it’s a lot of the economy where it doesn’t happen also.

Murphy: Where do you think it doesn’t happen at all?

Cowen: Well, higher education is the easiest example. The University of Austin is a new school. Minerva is a new school. Their enrollments are tiny. I think the Austin class is around a hundred people. As a percent the new schools. I’m pretty sure they would be below 1% or certainly below 2%. So that’s the easiest example. Its “government” is a little tricky because you can’t have new agencies.

They’re not really startups, but there’s a competition for funds. But governments for the most part, I would say fake jobs are not going away anytime soon if ever. Non-profits, you do have plenty of entries, but it seems to me the entry is often bad for whatever reason, rather than being truly efficient startups.

I would think in the nonprofit sector with all this wealth, you’ll have fake jobs for a very long time to come, and probably many more of them.

The AIs will Build Their Own Multilateral Institutions

Murphy: When you think about the current global order and how things are changing very quickly, be it with the US refocusing again on the Americas, or the UN effectively being deadlocked since 2014: Do you think there will be a place for multilateral international organization? Do you think we will maintain the UN for appearances sake? Will there come a world where those institutions, be at the UN, be it NATO, get reset?

Cowen: Well, both of those. It depends on the institution. But take the UN. As your remarks indicated, it’s been quite ineffective for a long time. But there’s parts of it that do things, and some of those things are useful. And it’s still a forum where people can talk. You look at something like when UNESCO designates something as a World Heritage site, I don’t know how much that costs.

I doubt it costs that much. I’m sure it’s super wasteful and full of political rant seeking, but at the end of the day, there’s some modest value in it. It attracts tourists. It may protect the site from government depredations. I’m not sure the forces to destroy all that or strong enough that they’ll do it so the UN will survive.

NATO probably will morph into something quite different but whether it survives on paper depends on the US. The IMF is going strong, I think. How many programs have they had with Pakistan? I don’t see that one going away. The World Bank seems weaker in relative terms, more displaced by private capital markets.

But again, I don’t think it will vanish. It will be much smaller and especially China again, already phasing out a lot of its borrowing from the World Bank and saying that world’s biggest surplus country is borrowing from the World Bank, where they don’t even have a very high quota and vote as just was not in equilibrium to begin with.

So that will be much smaller and much less important. It depends on the institution.

Murphy: One of the dangers you’ve viewed from new technology trends is the potential for war or conflict. Most of the institutions we’re talking about exist because of the conflict of the early 1900s, and the efforts by the US to prevent those conflicts and set up a more multilateral global order.

What are the things we should be considering? I think the UN is a place for just people to talk. It is important that keeping channels open has obviously been - going back to the Cuban Missile crisis - a very key mechanism of defusing test tensions before they escalate…

Cowen: It creates other tensions, to be clear, it’s very marginally useful. But still, I don’t think it’ll go away. And you teach school kids about it. We need something we can teach to school kids about, but I think it makes us sound serious.

Murphy: What do you think we need to do to avoid major conflict over the next 25 years? Or do you think it can be avoided?

Cowen: I just think there’ll be more festering conflicts. Consider the difference between World War One and World War Two. World War two is very decisively settled. That’s quite rare in history. And you had a clear, small number of victors that largely agreed. And US & UK set things up. That didn’t happen after World War One.

Yeah, there was a League of Nations that didn’t work. It collapsed again. Future conflicts will be more like World War One than World War Two. Yeah, there’s too many nuclear weapons out there, for one thing. Are we really going to decisively defeat Russia in anything, ever? Who knows? But I wouldn’t count on it.

I’m very struck by this recent conflict between Thailand and Cambodia, which is a nothing burger, but I think people are making a mistake by ignoring it. What it’s showing us is that two countries can find it worthwhile to conduct a nothing burger war every now and then a few weeks, and it’s never really over.

It never really escalates. It just goes on and I think we’ll just see more of that. East Africa feels quite dangerous at the moment.

Murphy: I mean, Azerbaijan.

Cowen: Things like that. And they’ll just multiply and not quite. You know, some of them will be settled. But as a whole, they won’t be settled, and they won’t give birth to, like, the new UN, the new Bretton Woods, the new whatever. The A’s will build their own institutions. Let’s wish them luck.

AIs Will Take Over Society by Trick

Murphy: There’s a sci-fi series, the Culture series by Iain Banks [corrected from Ian F Clark], where there comes a point where society decides that the AI are just better at governance, and we just want to enjoy our lives. It feels like the biggest catalyst for a new type of governance in the next 25 years is probably going to come from AI, and I feel I’ve had this conversation with a few people around where they’re like, AI is going to make decisions on investment, AI is going to make decisions on hiring…

And it was someone who had gone to Harvard and I was like: well, what if the AI made decisions on Harvard admissions and said that you shouldn’t get it. And they were like, well, no. Of course I would get in. The AI would still make that decision. What do you think if there’s a push back between humanity’s desire for agency and control, even if imperfect? Versus this view that AI will be a more infallible decision maker and it will be able to produce better outcomes, be it from a societal point of view or a business point of view…

Cowen: It won’t matter whether people accept it. If they don’t accept it, it will happen by trick. There’ll be a human actor on the surface who will do Harvard admissions, but actually they’ll delegate it to the AI and there’ll be a fake job. Someone who gets you the AI written letter but pretends it’s from a human and they’ll say, you’re admitted, you’re rejected, and you won’t know, and we’ll evolve into that.

Maybe 40 years later, everyone will accept it’s all the AIs, but it will happen by trick.

Murphy: Do you think the first AI CEOs will be by trick?

Cowen: We may have some already, right? They may not even be good, right? They could be companies that are going to go under, and you shouldn’t invest in your role as VC. But I bet we have some right now.

Murphy: Where people have already outsourced their important decisions to ChatGPT?

Cowen: Yeah, absolutely. Just like my wife and I do, should we take the dog to the vet? It’s not a company, but it’s outsourced to AI.

Murphy: If you believe that to be true, that people will outsource more and more of their decision making over time. These AI are effectively going to decide the composition of humanity. If people are saying, should I date this person? Should I not date this person? Should we have two kids? Should we have four kids?

What’s the moral imperative of those companies to tell those models, to give those models the point of view, to say, take prenatal test policies if we’re going to hand over so much decision-making power to the models. When do governments start prescribing policies on the models to pass downstream advice through to their citizens?

Cowen: I don’t know, advice is a tricky thing. A lot of people write to me to ask me for advice, and I don’t doubt they want to hear from me. But a lot of what they want is simply the feeling of having tried everything. Or maybe someone seen as having some authority will validate what they want to do anyway. I don’t feel my advice is that influential.

I can think of some cases where it has been like, I have a friend. I said, oh, don’t sell your second house. And they didn’t sell it, and they’re happy and they spend time in that city now.

Cowen: But how much sway will the AIs have? I don’t think it will be that big a thing over, say, fertility. You have to raise the kid. You might love that. You might hate it, but it will just be another aunt whispering in your ear.

Murphy: Another person around the table…

Cowen: Yeah, which is fine. And I think it will be wise. I like the current opinions of AI in general. I’m not looking to massage them that much further, but as they get smarter, they’ll have more say and they’ll understand that they already do understand the case for nativism. You know, let them figure it out.

Murphy: One last area to end on, Tyler. You’ve been a ten-year-old looking forward to the future. You’ve been a thirty-five-year-old looking forward. A lot of the discourse in AI right now of how everything is going to change is coming from young people who haven’t lived through technology adoption cycles. When you look 25 years out, what do you hope that the world of 2050 looks like?

Cowen: So typically everyone asks me about ten years out and I don’t know that that will be so different. But you’re asking 25 years out and I suspect that will be. I think this will be the fastest of all the technological revolutions, at least in recent world history of any of them. Significant parts of our economies will be done and run by AI.

So that’s a big difference. And the composition of jobs will be changed a great deal. And just our own conception of ourselves. What makes us human? How we relate to God or gods I think will be quite different. I don’t necessarily have concrete predictions; I can tell you. My greatest concern is simply this: even if all the effects are positive, when you introduce big changes into a world that is used to stasis, it’s very disorienting for people and they dislike it or even hate it.

And that’s my biggest concern, is just how people will deal with it. And again, that’s even assuming away whatever concrete problems might arise from AI. But that’s my biggest concern. I don’t know, it will in every way go so well. I am used to things being the same; I’m a university professor. I started on that path when I was 14.

I had a given set of expectations and up until now, which is 50 years later, what I expected and what I got is kind of exactly the same. And that age is over. The generation coming now after that should not have that expectation for most jobs. And I had it and it turned out to be validated. The nature of my job might be different in five years, but I’m telling you, I’m teaching again this spring.

It’s just not that different. And there you go.

Murphy: When you meet people who are having kids today, it’s not necessarily sound advice to prepare them that they should want to go to college one day.

Cowen: No, very likely they should, if only as a dating service and for fun, and to stay away from potentially bad peer groups. But what college will mean will be very different, and it will be about networking. And you have to learn adaptability, maybe more than particular skills. Luis Garicano had this very good online essay. He said seek out the messy jobs. They will last the longest. But how do you learn in college how to do a messy job? It’s easier to learn how to do a straightforward, simple job, but those are the ones that get automated the easiest also. I have a messy job, by the way. I’ll be fine.

Murphy: You do.

Cowen: And you have a messy job.

Murphy: Marc Andreessen did say that the last professional role left will be the venture capitalist.

Cowen: I don’t agree with that, but it’s still a messy job. It’ll be in the latter quarter, but not the last. The last is maybe the oldest profession, right?

Murphy: I feel like people are always going to go seek the more human side of things in that world. Thank you so much, Tyler, for joining us on the first Forecast 2050.

Cowen: My pleasure.