I have no background in economics. And I remember a time in my younger years when it felt to me like even thinking about money was somehow lame or worse. However, as I’ve gotten older, I’ve come to realize how inextricable economics is from so many of the things I care about in the world. Even including art.
If you haven’t read Paul’s Substack, I recommend it. One of the things he does most often is respond to the false narratives President Trump is constantly putting out about the economy. So I started there, jumping off from a video I made last year about Trump’s tax cuts for the rich called “Donald Trump wants to give me $70,000” and a very aggressive Australian pundit who tried to dunk on me for it.
We went on to discuss what AI means for creators, how new technology might or might not impact the whole economy, the pros and cons of Universal Basic Income, reasons to be hopeful about the future, and of course, more.
Here’s a transcript:
Joseph Gordon-Levitt: Alright, hey everybody, it's Joe. Today I have the honor and privilege of getting to speak with Mr. Paul Krugman. Paul's a Nobel Prize winning economist. I am obviously not an educated economist in the slightest, but I've run a business, I've learned some things as an engaged citizen, and I'm mostly just curious to learn from this guy's incredible mind. Paul, thank you for talking to me today.
Paul Krugman: Yeah, hi there.
Joseph Gordon-Levitt: Hi. Well, I thought I'd start off just kind of with a bang. You write a lot about Trump. I enjoy reading your Substack. I read you back in the New York Times before that. Last year, I made a video about Trump's proposed tax cuts that would benefit the rich more than most Americans. It was called Donald Trump wants to give me $70,000, because I’m in the extremely fortunate position, having had some success in show business, to be in a tax bracket where I would be getting most of the benefits from the Trump tax cuts which he would extend. And I guess by now he has extended. And I got quite a bit of pushback when I made this video from Trump supporters. And I actually, I found this one video that I'm just going to show you because it struck me as pretty funny. This is a woman on Sky News who really disagreed with me very strongly and said I didn't know what I was talking about when it came to taxes and economics. So I'll admit, I probably am not such an expert on taxes and economics, but you are. So I wanted to see what you thought here.
Sky News Clip: That money, nearly half of it is going to go to just the top 5%. Oh, wow, you got him there. Half of the tax cuts will go to just the top 5% of income earners. Could that be, Joseph, because they pay most of the tax collected? You do realise that's how the system works and you're not getting a gift from Donald Trump. You just get to keep more of the money you've earned. And if you haven't earned it in the first place, you can't get it back in a tax cut. This isn't hard. Let's make it even easier.
Joseph Gordon-Levitt: So, what did I get wrong or what did she get wrong or what's going on here, Paul?
Paul Krugman: So, I mean, there's the boring thing, which is to say, Hey, you know, there are lots of taxes out there. There's, for, about 70% of people, um, payroll taxes. FICA is actually bigger than your income tax. So why are we, you know, taxes, taxes that only affect the rich, or that mostly affects the rich and not cutting the taxes most people pay. Why are we cutting taxes? We have a huge budget deficit. We have long-term funding shortfalls for Social Security and Medicare. We have crumbling infrastructure. But anyway, this whole idea, the idea that cutting taxes on the rich is the path to wealth and prosperity and trickles down to everybody.
Joseph Gordon-Levitt: Trickle-down economics, right.
Paul Krugman: That is, I mean, I stole from some other people, but the concept of zombie ideas, which are ideas that should be dead, they've been killed many times, but they're still eating people's brains. And the idea that beautiful things happen, trickle-down economics is kind of the classic zombie idea. It has been tested so many times in so many places, it never pans out, you know? What was the best economic performance, best growth across the board that we ever had in America? And it really was the post-war generation period after World War II, up through the Kennedy years. And what were tax rates on the rich like?
Joseph Gordon-Levitt: Right. What? 80, 90% or something back then?
Paul Krugman: That's socialist Dwight Eisenhower. That's true. Most people didn't actually, there were ways around it, but still, in fact, effective tax rates on the rich were much higher than they are now. Corporate taxes were much higher. Didn't seem to stop people from creating, innovating, doing all kinds of stuff.
Joseph Gordon-Levitt: But now, if it was like that back then, we're talking about, what, the 50s and 60s, what changed and why?
Paul Krugman: Ultimate level, what happened was the Civil Rights Act, believe it or not, which is, it used to be the coalition of Southern Democrats, who at the time were racist but populist, and Northern Democrats, and they were the ones, that was the New Deal in the end did a lot for everybody, a lot for African-Americans, but the, the political coalition that made it possible for us to have, you know, high income tax rates and, and social security and eventually Medicare, um, fell apart when, um, when, when Southern Democrats turned into Republicans. And, so, and ultimately happened and then ideology in this amount of, somewhere along the way, actually, we, we kind of know there's a, there's a whole timeline there. Um, rich corporations put a lot of long-term investment into financing think tanks, studies, to promote the idea that cutting taxes on them was great for everybody. And it's a business. It's a huge success in lobbying. And at this point, you owe something that looks like the tax rates we used to have during our era of greatest prosperity. And people say, oh, that would kill the economy. There'll be grass growing in the streets.
Joseph Gordon-Levitt: Right. Okay, so now these tax cuts were done by Trump in his first presidency, right? And then recently he's extended them. Has there been enough time to see, okay, we cut taxes for the rich back in whatever it was, 2017. Did it have the kind of benefits that Trump and his supporters were promising?
Paul Krugman: No, I mean, the growth rate of the U.S. economy, I mean, lots of perspective, but there is no upturn in the underlying growth rate from those tax cuts. The revenue loss was large. The claim that the tax cuts would pay for themselves was clearly wrong. And look, we've been through this so many times now. I mean, there have been... cut taxes and watch, we'll have a booming economy and we'll have more revenue. Instead, it actually grew slower than comparable states. And, in the end, the legislature overruled him, overrode a veto. Nothing has been so thoroughly tested as this claim. But, of course, they won't take no for an answer because who benefits from an ideology says…
Joseph Gordon-Levitt: People don't want to pay taxes, right? Okay, so can I get your support once and for all that the aggressive and condescending Australian lady was kind of wrong and I was maybe kind of right?
Paul Krugman: You were right. I mean, I want to say one more thing. You know, I'm here in New York City. And New York City has, in addition to federal taxes, there's a state and a city income tax. And if you work it all together, and you're not a private equity guy who can get all kinds of tax breaks, but you're actually just earning a living, but earning a good living. So if you're like in the movie Wall Street, $400,000 a year working Wall Street stiff, you pay a tax rate at the margin of something like 55%. You said 55% taxes, destroy incentives. And we all know how slow-moving and lazy New Yorkers are, right?
Joseph Gordon-Levitt: That's the fastest moving city I've put in, probably, with the exception of maybe Tokyo.
Paul Krugman: So this is all self-interested nonsense, but very lavishly funded. And so you can always hire somebody who can sound like they know something about economics to defend it. Although it's amazing, actually. If you ask how many, you know, academically respectable economists will support this stuff, the answer is basically none.
Joseph Gordon-Levitt: Is that right? Okay, that's interesting. So there aren't like a cadre of... right-leaning conservative economists that still stand by trickle-down economics?
Paul Krugman: I think of it as the pathos of the center-right economist. But there's quite a few reasonable, smart people who do good research who are politically on the center-right, who are what we used to think Republicans were like. And they are constantly waiting for the Republican Party to ask them for advice, constantly waiting to be offered jobs in a Republican administration. And they never get it. It's only the cranks and the hired guns who are wanted, because somebody who actually knows his stuff, even if he's politically conservative, you know he's not trustworthy, because he might actually be tempted to take a stand on principle. So it's only... the higher guns who advocate this stuff.
Joseph Gordon-Levitt: Got it. Okay, well, I want to turn the page a bit to sticking with our president and economics. I wrote a piece, and I'm particularly interested these days on AI and how AI will impact the economy and economics. And recently, Trump said, when he was proposing his administration's plan for AI, he was talking about the fact that AI companies use these massive, massive troves of people's content and data to build their models. And they don't ask permission and they don't offer compensation to all the people whose content and data they're taking. And Trump said that would be not doable, that it's impossible to compensate people. And in a way, to be fair, he's right. The companies who are building these models have not yet built the technological infrastructure that would be required to attribute what training data goes into what output from one of these AI products, much less pay those people. But isn't that the job of government to demand that they build that kind of infrastructure that they're not allowed to commit what I see as theft? I don't know if you've been following this issue very much. I have read that you've been thinking about AI. I don't know if you've looked at all at the training data issue.
Paul Krugman: Not specifically, but I actually have a couple of thoughts on that and some related stuff, actually, which you might find interesting. The first thing to say is that, look, specifically figuring out which content was being used may be very hard, but there are ways, there's lots of ways in which you can get... Look, AI companies could pay money, could be taxed to pay for a fund that is used in some ways to compensate creators. It won't be totally appropriate, but it would certainly at least partially offset the issue. We do that sort of thing all the time. You can't always make the person, on pollution, we don't say that the polluter has to find a precise person who was hurt by the pollution. We control pollution. In some cases, we require that power plants that emit stuff have to buy permits, and then we use the revenue from the permits. There are a lot of things you can do short of this extremely difficult technological thing. And the argument that says, no, that there's an inherent right to go ahead and use everybody's stuff that people have spent their lives generating without paying any price. That's clearly not, you know, that's a choice. That's not something that we have to do. The other thing to say, however, is, you know, this is not something that started with AI. As long as we've been getting digital stuff, the question of how do creators get rewarded for their creation has been there, as long as it was possible. I mean, you know, I watch a lot of musical performances on YouTube, and many of them, you know, there are some attempts to enforce, in some cases, property rights, but mostly it's not, it doesn't really compensate the creators. So I actually once wrote an economics paper about the music industry. Not that I knew anything about it.
Joseph Gordon-Levitt: I didn't know that. I'll have to look that up.
Paul Krugman: It's just circulating and, you know, it never got published, although I'm not even sure what published means anymore. But it was for a panel at SXSW. And a former colleague of mine, the late Alan Kruger at Princeton, had actually, seriously, he had a book called Rockonomics, which was all about the music business. And what he found was that even during the CD era, when the record companies were making money hand over fist, very few artists got very much out of it. What he found was that basically always, artists have, musical artists have, have earned a living through live performances. There's basically the Beatles, Rolling Stones, and nobody else. And I did a little original research, which was that we know what, the paper was titled Two Centuries of Taylor Swift. It was actually saying that, you know, if we actually looked at the, and I think it's not true about Taylor Swift anymore because she turns out to be a genius, but at the time I wrote it, it turned out that she was, relative to the average person's income. She was earning about the same as Jenny Lind, she was earning about the same as Mrs. Billington, the star of the London Opera in 1803. But the point was that...
Joseph Gordon-Levitt: Wait, before we move on, I'm sorry. This is a complete tangent, but I have to ask. You just made the claim that Taylor Swift turns out to be somewhat of a genius. I don't necessarily disagree. I'm not an expert in Taylor Swift. My wife is an enormous fan. Uh, can I just hear your, your creative thinking, your artistic opinion on what makes Taylor Swift a genius?
Paul Krugman: Oh, it's not about the music, which, I mean, she's, she's the real thing. I watched her Tiny Desk concert and she's no question that she's an actual, you know, but not, not especially to my taste. No, it was the way that she did an end run around the record companies, by re-recording all of her stuff.
Joseph Gordon-Levitt: That was a genius move, I must say. When I saw her do that, that honestly took me from the category of Taylor Curious, Taylor Tolerant, to Solid Swiftie, when she did the Taylor’s Version of her songs like that.
Paul Krugman: Somebody was close to her, but she knew at least the right people to listen to figured out that they owned the recordings, but not the songs.
Joseph Gordon-Levitt: No, it's the opposite. She owned the songs, but not the recordings, right? Yeah, yeah. So she needed to make new recordings, yeah.
Paul Krugman: But even so, I mean, if you ask about how it's... the big money even for the big stars is those giant, those stadium concerts, at the, with the $200 tickets and, and not even, and not royalties. And that's pre-AI. Now other fields. Okay. AI is kind of exacerbating what was already a problem with digital, but it turns out that even digital didn't make all... The era when you could potentially have made a lot of money through creation as opposed to in-person was never very long.
Joseph Gordon-Levitt: I want to try to zoom out past musicians and artists. Obviously, I care about that. That's what I've done for living my whole life. But my concern that I've sort of heard technologists and some economists talking about, I'm talking about Jaron Lanier, who's at Microsoft, and Glenn Weyl, who's his collaborator at The Economist. I don't know if you're familiar with them, but they express a concern that goes beyond artists and creators in the conventional sense of the word. And they talk about, as more and more work gets done in the digital world, as more and more of our economy is sort of mediated through digital technology, it will be not just creators, but kind of anybody who's doing any work. And you could imagine it certainly with academics or with designers, engineers, but you can even, especially once robots and autonomous vehicles start coming into further use, you can imagine sort of anybody's job that's powered by AI. Ultimately, they like to sort of do this sleight of hand move where they say, “Oh, it's AI. We invented an artificially intelligent computer program that can replace a human,” but they didn't, because these AI products can do absolutely nothing, have zero value without being fed a bunch of content and data that humans created. And so, you know, in the future, like right now, they say, be a plumber. If you want to avoid job replacement, by AI be a plumber, but eventually there will be a plumber bot. But that plumber bot is going to be powered by an AI that was trained by collecting data on what a bunch of human plumbers do. And so I'm curious where you see the larger economy going as we move into this phase where this technology becomes so ubiquitous.
Paul Krugman: Okay. So first, I do think it'll be a really long time before we actually have robot plumbers. That one specifically.
Joseph Gordon-Levitt: When you say a really long time, like nowadays, ten years feels like a really long time. Like the next generation, like my kids growing up, you know, I have a ten, an eight, and a three-year-old right now. What are they going to do? You think it'll be longer than that before we have a robot plumber?
Paul Krugman: It might very well be or something. You know, you want to bear in mind... Don't always buy the hype from the tech guys about what their tech is going to do.
Joseph Gordon-Levitt: You're right. You're right. You're right. Right. Elon just said something like 80% of Tesla's value is going to come from the Optimus robots and it's going to happen real fast, but you don't quite buy it.
Paul Krugman: You know that we were, remember when we were all excited about the next generation of smartphones and the new iPhone is slightly thinner.
Joseph Gordon-Levitt: That's right. It's been the same iPhone for about 20 years now or something. You're right.
Paul Krugman: And dealing with the physical world is really hard. It's extremely difficult to adapt, especially to unforeseen circumstances. And so I think things like plumbing is going to be one of the last areas where we're going to really see. But look, on the other hand, artificial intelligence is not intelligence. And it's not all that artificial. It's mostly trained on stuff that comes from people.
Joseph Gordon-Levitt: I've heard it called collective intelligence. I like that term for it.
Paul Krugman: Yeah. There are really large language models is what the people are actually, and it can do something really impressively. But what it doesn't... I get people mad by saying it's really a super-powered autocorrect, which I think is still kind of right. But then there's a lot of human jobs that are basically just high-level autocorrect. What do you think most lawyers do? What do you think most insurance claim analysts do? And there's quite a few jobs that we're, large language models can take over. But this is not the first time this has happened. Right? You're in a world where machines have taken over all the jobs and its desperation. That's a 1950 novel by Kurt Vonnegut, Player Piano.
Joseph Gordon-Levitt: Oh, I haven't read that one. I'm a Vonnegut fan, but I have to check that one out.
Paul Krugman: And, you know, in the past, technological progress has always been something else that people can do. There's always been other things that people can do. And we do away with large numbers of some jobs, but something else comes along. In the modern world, once upon a time, we had farmers. And there are, to a first approximation, no farmers now. What happened?
Joseph Gordon-Levitt: You mean that because all the farming gets done by huge corporations and they're not like individual people with their family businesses? When you say there are no farmers now?
Paul Krugman: There's corporate farms too, but it's mostly that a family farmer now with lots of farm machinery can cultivate a lot of land and raise a lot of crops. Manufacturing is a lot like that, too. I mean, we do have a trade deficit. Part of the decline in manufacturing comes from that, but mostly it comes from the fact that the workers are more productive. But if you ask, and yet we have a higher fraction of of adults in their prime working years employed than ever before. What are they doing? Well, a lot of us are doing healthcare. Some of that maybe, will eventually go, but there's always been something else. So there, I think the idea when I have a universal jobs apocalypse, you know, maybe the media should get smart enough for that, but that's also when Skynet decides to kill us all.
Joseph Gordon-Levitt: Do you see any credence? You're saying that as a joke. There are folks who express, and folks who are working at the top companies building this technology, a lot of them that are expressing concern about that. I have my skepticism as well, but I'm curious what you make of it.
Paul Krugman: Skeptical, but if that's going to happen, that's actually one of those things where if we don't develop it, somebody will. That's a grim remark.
Joseph Gordon-Levitt: I'm sorry to interrupt you. That's actually really interesting to me, though, when you say, if we don't develop it, someone will, because a lot of the businesses, the AI companies that say they should be allowed to do whatever they want, they should be allowed to take everyone's data and content, they should be unregulated, there shouldn't be any safety rules and guardrails for them. The thing they often point to is that competitive race that they say, well, if we don't do it, then our competitors will, whether that's China or some other adversary. It strikes me as a bit overly simplistic and dishonest, which isn't to say we don't need to stay competitive with China, but it strikes me that part of staying competitive with China is making this technology not ruin our society, making this technology be good for everybody and good for the wider economy and not just good for a few companies. And if we want to stay competitive with China, that's the way to do it. But I'm curious, how persuaded are you when you hear them point to this sort of arms race dynamic and say we have to go faster or else?
Paul Krugman: I think there's a balance to be struck. And it's tricky, but you should never use international communication as an excuse that says that, you know, corporations can rip off everybody at their will. And, you know, even, let me give you a, West versus Europe is an interesting thing where the Europeans have a lot more regulations than we do. That may be one reason why European technological, you know, why Europe lags behind the U.S. at the technological cutting edge. On the other hand, Europe's such a terrible place. I mean, Europe, they have lower GDP per capita than we do, though a lot of that is because they take vacations and we don't. Yeah. It's about four years later on than we do. So I'm sure that we made the right choice there. And so the idea that maximum license to steal is justified by international competition is certainly not right. So no, I'm not, I wouldn't, I think it's probably impossible to stop these large language models from, you know, being out there. Probably impossible to stop them from scooping up a lot of data, but there probably are ways to make at least the...
Joseph Gordon-Levitt: Yeah, I wouldn't want to stop them. I wouldn't want the tech to go away. I think actually there's a lot about the technology that's really inspiring. I just think that as far as the economic upside of this technology, it should be shared with all the human beings who are creating so much of the value.
Paul Krugman: Yeah, definitely. And for that matter, you can't stop technological change from displacing. You know, some jobs will go away, as they have many times before, right? And what you can do is you can try to make sure that losing your job to technological change doesn't mean losing healthcare, doesn't mean that your children are malnourished and that they don't get it.
Joseph Gordon-Levitt: Do you mean accomplishing that because the government would be providing health care for everybody and the food assistance that was just cut recently by the Big, Beautiful Bill? Is that what you're referring to?
Paul Krugman: Yeah. I mean, this is the way that you reconcile an evolving, always changing economy, where sometimes technological progress does mean that an old industry no longer provides the jobs it used to. It is by having a basic social safety net. That, you know, people are always going to be upset seeing things change, but we can at least, we're a very rich country. We can make sure that people aren't miserable. And part of that is kind of your thing about taxes. We have to tax people, and particularly we have to tax the very rich because they are, in a way, the biggest beneficiary.
Joseph Gordon-Levitt: Right, so when you talk about a social safety net what that reminds me of in terms of ai is this concept called Universal Basic Income i'm sure you've heard of this, they abbreviate it as UBI, and what you hear a lot in silicon valley is folks saying “Well soon, the AI will do all of the economically valuable work people will not have jobs, but we'll have a UBI, a Universal Basic Income that everybody just gets money for free.” And that's what will be necessary because no humans will be able to earn money anymore. And it's proposed as something sort of utopian that'll be great. People won't have to work for a living anymore. But I'm curious, have you looked into UBI or what do you think of it?
Paul Krugman: I've been through all this stuff a lot, and, so first of all that future where machines do everything appears to be a really long way away, and particularly one thing, aging population healthcare, you know chatGPT isn't going to change bedpans. So there's a lot of jobs that human beings are going to be doing for a long time. We're a long way off from that. And if we get anywhere close to that, then yeah. But the thing is, if you want UBI, then you have to advocate really high taxes on corporations, on corporations. Maybe on a handful of wealthy people to pay for it. The problem with proposals for UBI right now is that to give everybody a basic income now, when most people, in fact, there are a higher proportion of people in working age working than ever before, is that giving, it's very expensive. It's a lot of money. Well, either it's not really an income you can live on, or it's a lot of money. And that's not going to happen in the current political constellation. It's not going to happen under these conditions. We have to, for the time being, at least, and I think for the rest of my lifetime, I'm not a kid, so that may not be that long.
Joseph Gordon-Levitt: You look great, Paul.
Paul Krugman: But the thing is, it's going to be, right now, targeted anti-poverty programs. They just cost a lot less money. They can do a lot. And so for now, we're going to be talking about food stamps and Medicaid and educational aid and healing assistance. For the moment, targeted, means-tested programs are just so much cheaper than UBI, because UBI would be throwing a lot of money at people who don't currently need it. So UBI is, you know, I'm not opposed to it in principle. It's just that kind of the arithmetic doesn't work right now.
Joseph Gordon-Levitt: Well, I'm actually curious to hear why you're not opposed to it in principle, because it seems to me that in principle, it looks a lot like Communism during the USSR, where there's sort of a flat, central dole, and that would inevitably lead to a bad concentration of power if just the state is the only source of income for everybody. Doesn't that usually go bad places?
Paul Krugman: No. Remember, the whole idea of UBI, I mean, one of the attractive things about it is that there are no conditions. You just get it. And look, we kind of sort of have Social Security is a little bit like UBI. It's true that the amount that you get out does depend on how much you earn during your lifetime, although it's very nonlinear. Much more compensation for low earners than for high earners. But the great thing about Social Security and Medicare, Medicare is, you know, you just get it. You need it. When I turned 65, I got a letter from Medicare saying, you are now on Medicare. And then ran it through some stuff. When I turned 70, I got a letter from Social Security saying, you must now start collecting your Social Security benefits and not asking, “do you need it?” So there's a lot more dignity involved in a program that is entitled, or just entitled to be.
Joseph Gordon-Levitt: That's not how it used to work under communism in the 20th century?
Paul Krugman: Well, no, the whole, what made communism was the secret police, right? You know, in a society where math men can just grab you off the street. And anyway…
Joseph Gordon-Levitt: Certainly that was part of what made Stalinist Russia terrible. But wasn't it? I mean, speaking strictly to the economics, is it not sort of shown? I guess from my layman's perspective, it seems like a demonstration that a more market economy where there's incentives for people to strive and do well and rewards for those who do ultimately performs better than a kind of a flat economy with the central state that just gives everybody the same.
Paul Krugman: Well but that's we're not nobody's really talking about going to that point. We're talking about a situation where um people who the you know it's imaginary future where robots are doing most of the jobs which I think is still probably generations away, but the people who do have jobs and presumably make a lot of money at them would be able to allow to keep some of it, but they would be paying, you know, a 70% tax rate, which is not actually all that terrible, and everybody receiving a lot of things as basic rights. You know, Denmark has universal healthcare and very generous social benefits. And last I was there, Copenhagen didn't look very Stalinist to me. This is confusing what the issues are. I'm not worried about the political oppressiveness at all. Actually, I worry just about the feasibilities. Getting the rich to accept that they benefit so much from society. They have to pay some share of its upkeep.
Joseph Gordon-Levitt: Right. And the idea, what you're saying is if there were a UBI, it would be so expensive that it would necessitate the rich paying much higher taxes.
Paul Krugman: Look, I remember Andrew Yang, but when he was talking about UBI, it was about $1,000 a month. But it is not really possible to live in America on $1,000 a month. And so trying to raise it to something that you could live on, it's a lot of money.
Joseph Gordon-Levitt: Right. It takes a lot of money. I guess when you say, I guess part of the tension here is that, first of all, maybe it's hype, but there are a lot of folks in the tech world who talk about exponential growth just around the corner, that it's hard to imagine things that change at exponential rates, and that a maybe not fully autonomous, but almost fully autonomous economy is closer than you're estimating. So that's part of the tension. But even, I guess, once we do get to that fully autonomous economy, they're imagining that so much wealth is being generated by these autonomous systems, AI and robots and everything else, that there'll be enough to go around.
Paul Krugman: Raise the taxes and do it. Now, there are all kinds of existential problems with that, which are not that it'll become tyranny. The problems are that money isn't the only thing we get from work. People want purpose in their lives. They want jobs. There's actually even quite a lot of studies that show that the damage to perceived, you know, to your well-being from losing a job goes well beyond the financial side.
Joseph Gordon-Levitt: That's really interesting to me. This resonates with me because, I'm taking us off on a little bit of a tangent, but this is fascinating for me. I worked as a kid. I was an actor from a young age. And I got lucky and was on a hit TV show when I was a teenager. And so by the time I was 20 and I went to college, I had made quite a bit of money. And I had to sort of think to myself, okay, what do I want to do? And do I want to keep working? If so, why? It's not necessarily for the money. I mean, I didn't make so much money, I guess, that I could have retired in comfort for the rest of my life. But if I had invested correctly, I probably could have, to be honest. And I've spent a lot of time ever since then thinking about what's the purpose of all the effort that I put into things and I've spent my career as an adult not really optimizing for money, I've made money, I've been in some hit movies and things that paid me well. I've been in some movies that weren't hits that paid me well to be honest. But money was never my North Star. And I take that as an extremely fortunate privilege. It's just happened to be that I made money young. And I wonder about I mean, I'm actually curious before we extrapolate to what that could mean in a world of like, technologically provided super abundance. You retired from writing for the New York Times and you've started doing what to me feels like really great work, I read your Substack and I don't imagine you're doing that for the money. Why are you doing it?
Paul Krugman: Because I care, I wanted to weigh in. There's stuff going on I wanted to… now what is funny is, I definitely had no intention of doing it for the money and the people at Substack had to argue with me. This was kind of a two-month-long argument about introducing a pay subscription.
Joseph Gordon-Levitt: Oh, really?
Paul Krugman: And it's partly because their metrics, their bestsellers, are based on paid subscribers. They said you want to be...
Joseph Gordon-Levitt: I'm not on any of the lists because all my Substack stuff is free. It's true.
Paul Krugman: And I've held it down. I have one post a week paywalled. Six days a week is free. And now it's turned out that I am, in fact, making a substantial amount of money off it.
Joseph Gordon-Levitt: Well, congratulations. You write good stuff. I have to admit, I'm a free subscriber. I'm not a paying subscriber to your Substack. Maybe I should start paying.
Paul Krugman: But Sundays, I have, or I say we have, because my wife is very involved. We're co-authors of a textbook, and so this is almost textbook material, which is long, detailed.
Joseph Gordon-Levitt: Well, I know. I read the opening paragraph, and then you cut it off at the paywall, and I haven't quite taken the leap to say, I'm going to actually read all of this and pay for it.
Paul Krugman: Yeah, well, those are a hell of a lot of work. We probably wouldn't do those if they didn't.
Joseph Gordon-Levitt: That makes perfect sense.
Paul Krugman: The point is that it was, well, you know, what am I doing with my life? I'm paying attention. I want to be out there. I want to be part of the discussion. And it's work, but it's kind of, it's not my choice. Now, the truth is, most people, a lot of people take social security at 62. You get less, but you can retire at 62. And not many people hold out to 70, which maximizes it. It's that actually many people don't love their jobs. Many people don't. And for them, there are other things to do with your life. We have more retired people with adequate incomes than ever before in the history of the world. And most of it, they do fine. They have, they, you know, they do stuff at home. They play golf, which I don't get that. But anyway, I'm not a golfer. But, you know, so it's not as if life is purposeless, but there will also be, certainly when you're younger, most people, I think, feel some need to justify to themselves their existence. And work of some kind is how people define their identity.
Joseph Gordon-Levitt: So then do you see a future where technology gets advanced to the point where fewer and fewer people have to do work and there's fewer and fewer jobs and people are needing to find something else to do with their time and something else to sort of identify with as who they are than their job?
Paul Krugman: I don't know. I mean, people have predicted that sort of thing for many, for generations now. The workless future has been a trope of science fiction and speculation since before I was born. And it keeps not happening. And look, we could, in the United States, we could postpone that day of reckoning for a long time just by reducing the work week. People used to have 80-hour work weeks, and it dropped to about a 40-hour work week in the United States and then flattened out. And in the rest of the advanced world, actually, work weeks continued to get shorter. And people's vacations got longer. In the United States, they did not.
Joseph Gordon-Levitt: I lived in New Zealand for a little over a year. And yeah, people take a substantially greater amount of time away to be with their families. They come home in the evening and make dinner with their families. And there's a lot to be said for that.
Paul Krugman: Yeah, I mean, if we would just live like civilized people do in the advanced world. I mean, you know, which country appears to have the fewest working hours per working person? I think the world. Germany. Those famously, you know, lazy...
Joseph Gordon-Levitt: Nein!
Paul Krugman: Try to go any place else in Europe during high season and found it impossible to walk is because the streets are full of German tourists. But anyway, all of this stuff is very far distant future. And for now, if we would sort of resume our historical path of actually spending more leisure time giving ourselves a little bit more relief that we could easily—I don't even think we're at that point now. I think at this point we are actually talking more about just shifting the mix of jobs. More health care, more probably jobs that involve dealing with the physical world one way or another are going to last to be seriously automated.
Joseph Gordon-Levitt: And fewer jobs where people sit at a computer and provide value with their mind and their output in the digital world.
Paul Krugman: Yeah, and I would say that moving on from our current society where the basic way that people spend their lives sitting in a cubicle staring at a screen would not be a terrible thing.
Joseph Gordon-Levitt: When you put it that way, it sounds kind of optimistic. It's funny because you read a certain amount of people that are really worried about what's coming with this technology and what it's going to do to the economy in particular, threatening jobs. And you make it sound less scary.
Paul Krugman: I have, there are so many, I mean, partly maybe I just, you know, have read too much economic history in this. We've just had these predictions over and over again. And, you know, I guess at some point you get lucky or whatever. But you'd be amazed at how many people during the Great Depression were saying, well, the reason that we have mass unemployment is that given the wonders of modern technology, there are no jobs anymore. You know, this is like life. And so we're very far away.
Joseph Gordon-Levitt: Yeah. So does that make you feel optimistic about the future in general?
Paul Krugman: Oh, no. I mean, I'm actually terrified about the future. But AI isn’t a thing that terrifies me.
Joseph Gordon-Levitt: What is a thing that terrifies you? Well, first of all, climate change. It's just, you know, that hasn't gone away. This is one of these things where actually we do have a technological miracle. Which has made it possible to do a lot to reduce the catastrophic climate change, which is the rise of renewable energy. And we have a government in the United States that now is trying to kill it. You know? And ban wind power, and solar power is next. And so climate change is the biggest existential threat. And then I worry about politics. I mean, it's doubt that the inner demons of human nature do keep manifesting. And they do so even if you do all the things I want us to do, which is have a very generous social safety net and universal health care and all of that, still, I mean, the extreme right is on the rise in Norway, which has got everything. So I'm scared about the... I'm basically scared about climate change and fascism. I'm sure I can come up with some other things there.
Joseph Gordon-Levitt: But that's also this is actually why I'm the most scared of, and I shouldn't say scared, this is my greatest concern with AI is things like climate change and fascism, because it seems to me that if we're going to solve problems like climate change, if we're going to have functional democracies and move past these authoritarianism we need to be able to communicate. We need to have a consensus reality. We need to have information with integrity. And we've already seen for the last 10, 20 years how social media has damaged our ability to communicate and cooperate. I wrote a post sort of along these lines recently. And I think all that damage that social media has done, AI is going to do, but way worse because the same sort of engagement optimizers, the same attention maximizing algorithms that drive social media will drive AI, already are driving AI. And it's going to lead to the same breakdown in public discourse. I'm quite worried that unless we're able to really kind of get a handle on this technology and make it serve the public good instead of just the profits of a few companies, that this technology will really make it very difficult for people at large on national or international levels or even at municipal or state levels to come together, have a productive conversation, identify problems, come to solutions, and do what modern society demands people to do to solve these problems. So this is where I'm the most concerned about AI.
Paul Krugman: Well, yeah, I would say that, again, AI is just ratcheting up something that was already happening. I mean, social media was already, in many ways, affecting what we're concerned about, which is amplifying the craziness. And before that, there was talk radio. And before that, what we really in some ways need as a society is we need Walter Cronkite back. We need trusted gatekeepers for information. And AI didn't destroy that. A lot of other things destroyed that, but AI probably makes it harder to ever recreate anything like that.
Joseph Gordon-Levitt: I think that's right. I might push back a little bit. I don't know that the right gatekeepers will solve the problem because Walter Cronkite in the age of television also had his big problems. I would argue that television made public discourse a lot worse than it was before television existed. The invention of the telegraph and the photograph arguably also made public discourse worse because, again, all of these technologies were applied to businesses instead of applied to serving a productive public discourse. There are examples of technology being used to facilitate robust democracy. I'm really inspired by Taiwan. I don't know if you've ever looked at Taiwanese democracy. One of my heroes is the first Minister of Digital Affairs of Taiwan, Audrey Tang who implemented these incredible systems, digital technology, social media even you could call it, except it was not social media set up by a business and driven by advertising, it was social media set up by a state-run ministry to facilitate public discourse. And by all these measures, Taiwanese democracy is stronger than almost any in the world, and so I feel like we have the capability, we have the technology to communicate and cooperate, but we're not using it. Right now, it's just being used to make money.
Paul Krugman: Oh, you could easily imagine a sort of, and I'm just doing this on the fly, but you could imagine a chatbot that was run as a public utility, kind of like the BBC in its work. ChatUSG, sort of US Government, that would be...
Joseph Gordon-Levitt: ChatUSG, that's funny.
Paul Krugman: Trained to avoid factual errors, to give a fair hearing, you could easily, in our political environment, no one would even, it's completely outside the bounds of anything that might happen. But yeah, if you actually think about the base of this stuff, then there actually is why this technology couldn't be harnessed to actually improve public discourse. One of the things that, I don't know whether this is a nightmare scenario or hopeful, is that there is the sludge apocalypse, where more and more of the data that AI is trained on is actually itself generated by AI, and crumbles into a stinking pile of garbage. But anyway.
Joseph Gordon-Levitt: The slop problem. All right, well, we're almost to time. I know you've got errands to run. Could you leave us on a note of credible optimism. I grant your concerns about the future, but I'm curious, in your moments where you need to find some reason to be hopeful about the future, what do you think about it?
Paul Krugman: Wow. Food has gotten an incredible amount better. American food, anyway. No, I mean, look, I said climate change. The thing is, the United States appears to be deciding to give up. But we are not the world. And the fact of the matter is that the green technology revolution is happening. Trump is trying to stop it from happening here, but we are not the dominant player in the world in the way we once were. And I think there's a pretty good chance that we will manage to save civilization despite ourselves. And also, we are not the world politically. This retrogression that's happening here politically, first of all, I will not accept that it's permanent. We will fight it. And lots of other places have also got values. But I think the biggest, the renewable energy revolution is still the single thing that I think has done most to make me feel less doomed than I did a few years ago.
Joseph Gordon-Levitt: That makes a lot of sense. Well, thank you for your time, Paul. I really love the chance to get to talk to you and hope we get to do it again sometime.
Paul Krugman: Hey, take care.
Joseph Gordon-Levitt: All right. Bye-bye. 🔴
