Stuck Academia, US vs China, and Why Startups Work w/ Steve Hsu

Hey, great to be here, Erik.

Yeah, obviously academia is not monolithic, and you've already sort of gestured at that in your question. So to give you a full answer, as we say, I have to kind of break it down into different silos. One sort of just empirical finding: there's a lot of good work by a guy called Eric Kaufman, a British academic — well, he's actually an American or maybe Canadian, but he's based in the UK. He's carefully studied empirically the leftward shift of academia in general. So your chances of finding a professor in a social science or humanities department who is not left of center is very low, like maybe 10%. You know, any department that's not, you know, engineering or maybe some business departments is very, very left, and that tends to replicate. So it becomes sort of unacceptable for a candidate to be outwardly right-wing. So even if you were to say, 'I'm a Republican' or, 'Wow, Trump is not that bad, I didn't vote for him, but he's not that bad,' that could be disqualifying for you in a lot of settings. And in a competitive hiring environment, there would be people who would just say, 'We don't really want that guy in our department.' I don't see any way of reversing that. It's going to last for easily a generation. Okay, so you're just not going to have any representation of even, like, I would say, kind of slightly realistic hereditarian views, people who are really enthusiastic about free markets. There's just less and less of that in the academy, and I just don't see any change in that going forward.

In the sciences, the problem — you know, sciences are actually almost as polarized in terms of the left-right dichotomy as the humanities and social science. It's a little bit better in some of the fields I've mentioned, like maybe engineering or something, but for like physics or math, I think it's just as left-dominated. But those views don't come into the practice of scientific research quite as much because often we're researching some abstract thing like the properties of quarks or something, and your political sympathies don't necessarily affect that. But what it does affect is the commitment to meritocracy and the commitment to truth-telling. And so the swing away from meritocracy is very, very serious now. So I would say it's possible that the majority of departments now are not requiring GRE scores for graduate admissions. The professors who are familiar with the role of psychometrics or, you know, measurement of cognitive ability and its ability to predict success in difficult subjects, I think that's a very small minority of faculty now, and most of them would just be embarrassed or sort of afraid to talk about the vast empirical literature on this topic, which used to be taken for granted. So like when I started graduate school, you know, 30 years ago or more, people understood, like, why do we make the students take the GRE exam? Why do we make them take the GRE subject exam in physics? And what does it mean? And now, because there are in every department there's some fraction of people who are activists, they will literally shout you down. So if you say, like, well, you know, this study which was published in Science, you know, 20 years ago showed pretty good predictive power of GRE scores independent of undergraduate GPA and independent of socioeconomic status of the kid for success in our PhD program or, you know, in whatever, you would be shouted down. Like that would be considered, like, well, why is this guy saying this? Doesn't he realize there's a problem with this? Doesn't he realize this is really damaging to diversity for him to say something like this? So I would say the atmosphere is very bad, and for science and engineering it's only affecting efficiency of the operation of these departments on the margins. So you have slightly less good selection of students by talent, you have somewhat less good hiring practices, somewhat less good promotion practices. And gradually, though, I think there could be a cumulative effect where the overall commitment to truth, the commitment that we are going to let empirical evidence dominate our feelings, that cultural value is gradually being eroded, and that's the most dangerous thing. So that could cause not a negative effect around the margins, but it could cause like an order-one change around how the discipline is practiced.

Now I would say in social science and humanities, that's already happened. So their commitments to, you know, ground truth are very, very limited, and many of them, especially like empirically minded social scientists, would deny this. But when you actually start probing them, you realize they're very quick to avert their eyes from data that challenges their very sacralized beliefs, and maybe they don't even realize it. It's so ingrained in the culture now that, you know, if someone says to them, hey, you know, in Sweden or in Denmark they have enough statistics they can actually calculate the social cost of immigration based on some crude characteristics of the type of immigrant, and does that person contribute more to the national budget in their lifetime or are they a net negative impact on the national budget during their lifetime? And there's good statistics in some countries on that. That would be a very verboten conversation in a US econ or sociology department, and some people would attack you. They'd say, why are you particularly interested in that question? Right? They would be very quick to assert, very quick to imply, suggest that there's something bad or wrong about you, morally corrupt about you, that you would be interested in this really pretty fundamental question about how societies work and things like that. So I would just say it's not a healthy situation, and probably for your listeners, nothing I'm saying is at all — I'm just confirming what your listeners think. But just to offer my bona fides, I've been a professor for, you know, about 30 years now, and was a senior administrator at a Big Ten university for about eight years. So I think I have a pretty good feel for what's going on in the academy, and generally it's not good.

Yeah, so the fraction of people that are really hardcore truth-seekers is relatively small, even among, I would say, researchers on campuses. I mean, a lot of people just have the feels that they want to help people, help students, further goodness. Notice none of those are really like pursuit of or trying to really delve into what could be emotionally difficult truths, right? And it's those factors that kind of drive people toward the academy — the idea that, oh, I'm helping people, this is a good institution, it does good things, it educates young people, it discovers new knowledge. Those are, you know, those are all good things. Doesn't mean that you have the kind of like difficult personality or commitment to truth that is required, you know, to study certain topics these days. So I think it's just not true that in general academics are all that committed to truth. A lot of them are just playing a particular game that they're based on their, you know, Big Five personality or desires, they kind of fit well into this system and they're just in a careerist way pursuing a trajectory through the system. Now, a lot of the people who would be making the big advances in STEM are the difficult personalities that are very truth-committed, maybe even a little bit on the Aspie side, and just a little bit too obsessed with the truth and facts. But what's bad about the current situation is those people are being selected out now, because if you have to write a DEI statement to apply for the faculty job, to get promoted, to get a raise, you have to write a DEI statement at many places now. And everyone who's kind of in the know knows how they should write that statement, but a lot of people who are principled maybe don't agree with everything that's going on, and it's harder and harder for that kind of maverick person who would make a big breakthrough in STEM to survive in the current system.

Yeah, so, you know, it's funny because for your audience this won't come as a surprise — like, I'm a weird guy because I both do startups, tech startups and innovation, and I do, you know, in some sense very esoteric academic research like in particle physics and stuff like that. And I can see today — like, I was just at Caltech, my alma mater, to give a seminar a couple weeks ago, and I talked to a bunch of young physicists, and I said, like, I'm kind of amazed that more of you aren't leaving now because there's so many exciting things which are impacting the world and moving fast, and also intellectually pretty deep, like artificial intelligence. And so what's happening, I think, is that a lot of people, you know, maybe if you're obsessed with some really specific question like, oh, I want to understand the genetics of human evolution in Malaysia, you know, 3,000 years ago or something, you have to do that in academia. But if you're sort of generally capable and you want to achieve something and you want to be in a kind of functional system where if you do something good people can tell it's good, it actually has an impact, if you create something good it's adopted and widely used, there's a big draw away from, I would say, academia today and toward the innovation economy, which is all good. I mean, in a way what we should do is just say, like, well, we have these academic institutions that are kind of not functioning well right now, they're kind of broken for the reasons that we're discussing. Maybe it's just good to kind of move a little bit of human capital away from that system and toward this other system which is actually kind of flourishing right now. That makes sense.

Yeah, that's a great question. So I've actually been involved with the University of Austin, which is this new university that they're trying to create in Austin, Texas, which is really focused on, you know, the core values that I think maybe you and I think are important. That is, of course, a very heavy lift, right? It's not easy to create a new world-class university, and it's also not easy to ensure that that university doesn't eventually just get captured by the same types of people that have captured all the other institutions of higher learning in the US. So I don't think it's an easy problem to solve. It's kind of, honestly, a generational type problem. What I hope will happen is society will start to realize that there is a problem with our academic institutions, and, you know, some kind of populist sentiment will force some changes on the academy. I think if I were a billionaire or Elon Musk, I would probably devote some money to trying to just focus the spotlight on the problems in academia, because the average person doesn't really know all the intricacies of how the university works, what's happening there, how things have changed since they went to college. And right now, the people who are trying to point that stuff out are a tiny minority. They're persecuted, and they're also easily kind of labeled as, like, oh, these are crazy right-wing nuts. Whereas if you have high-prestige, high-status people like, you know, billionaires, tech founders, people like this, who are committed to creating some mechanism by which we are just talking, you know, accurately, realistically about what's happening in the academy, and just making sure that that information is readily available for everybody to understand — like a parent trying to decide where to send their kid, or a 25-year-old trying to figure out what to do with their career — that would have some eventual, I think, positive impact. But whoever that billionaire is, or those billionaires are, they would have to put their reputations on the line because they're going to be attacked as right-wing loonies just for trying to spotlight what's actually happening.

Yep.

I think you were comparing the Thiel Fellowship to UATX and pointing out that the Thiel Fellowship actually helps the kid establish a career path as an entrepreneur, and in a way is just as good — it gives you as much access to the ecosystem as, say, having graduated from Stanford.

I guess I'm saying that I think the Thiel Fellowship should become a college and compete for people who want to get into technology or work in startups in some capacity. I think it could be — I mean, it's just a question of commitment, because, you know, you could do something where, like, you create a new kind of degree program that has both a technical education component and a component which trains you to do startups and things like that. But again, everything is a heavy lift because at first it has no credibility and it's kind of weird, and people don't know how the credential is going to be judged in the future, how valuable is it for signaling. But I'm all for all of these things. I mean, that's why I participate in some UATX things, and I think I was even there for the big meeting for, like, kind of establishing their constitution. So I'm all for this kind of thing.

You know, okay, I think the politically incorrect way to say all this is that, you know, because traditional structures have broken down, people don't necessarily value having kids all that much. And, you know, people are socialized to pursue the development of me, you know, well into their 30s or whatever, rather than the idea that, no, it's your duty to have kids and that's the right thing to do, you're a failure if you don't have a family and kids by the time you're in your 30s. That fundamental change in values is difficult to change, right? I mean, I don't really know how even a government can go in and forcibly change that feeling. Around the margins, there are lots of things like making it cheaper to have a family, providing lots of daycare, free education, you know, maybe even direct monetary incentives to have children. You know, you could do things like that, and I think we'll probably see at least a few countries experiment with that kind of thing in the next 20 years. But there's this very fundamental thing that, like, look, I mean, what were these first-wave feminists saying to us? You know, you're too young to remember this, but when I was growing up, the first-wave feminists were saying, like, look, I'm not a baby machine, the highest aspiration for me in life is not like staying home and raising my children. When I was in elementary school, if even a single kid in my class came from a divorced family — this is totally true, Ames, Iowa, 1970s — if there was one kid in the class who came from a family of divorce, a broken home, the teachers would watch out for that kid, they would assume that kid is going to have a lot of trouble. Sometimes the parents of the other kids wouldn't want that kid to be the best friend because obviously he's from a broken home. So the social stigma, you know, related to things which are completely normative now are 100% changed. How could that not have an impact on, you know, TFR and fertility? It's going to have an impact.

Now, if you say, like, well, okay, I can be a first-wave feminist — I'm actually pretty sympathetic to women's rights, you know, as advocated back then, for sure. Like, you know, some women want to have careers, some women want to pursue higher education, some women don't want to be, you know, stuck with all the childcare duties. Like, fathers in my father's generation came home, you know, got their pipe out, put their feet up on the sofa, and didn't do anything. And Mom had been watching the kids all day and cooked dinner and did all the stuff, and Dad could focus on his important research or business ventures. So it was just a totally different world, and we've moved very, very heavily away from that world. And the idea that that wouldn't affect fertility is kind of crazy, actually. I fully would have predicted back then that it would affect the number of kids that people on average have. So I do think, like, people are dancing around this. Like, I could talk to you about freezing eggs and stuff like this, and just say, like, oh, we should make it free to freeze eggs, every 17-year-old girl should freeze 100 eggs, and then even if she has a high-powered career when she's 35, she'll thaw the eggs out and everything will be fine. And around the margins, that may be a good step toward improving fertility levels. But this fundamental question of families — for most of human civilization, families were built on the back of women's labor. You know, women were literally second-class citizens for most of the history of humankind and the history of this country. They were second-class citizens, and their labor was pushed toward the creation of an environment that was good for kids. You know, all the women who should have been PhDs and corporate researchers in the 70s were teaching high school or elementary school, or they were librarians when I was growing up. So you had a very, very high talent pool of women who were forced, because of the social values at that time, to basically be looking after kids, helping kids. And so therefore there were just more talented teachers around because of all these women whose careers were artificially stopped because of sexism back then. Now, that was terrible, I'm not really for that, but on the other hand, that created a very, very good environment — a much better environment in some sense for kids than we have now. So I think people don't want to recognize what was actually happening through most of human civilization, and they're upset about a second-order consequence of equality of the sexes, but they're not willing to say, like, that was the main driver for what happened.

Yeah, so I don't feel that comfortable being prescriptive, but I'll just throw some things out there. First of all, you know, these fertility technologies can help. You know, you and I are probably techno-optimists, so we feel like, oh, well, we have a problem here, technology will solve it. I'd like to think that's true, maybe that's true. But on the other hand, I think without changing this — I still have this nagging feeling that without having the society valorize and value the having and raising of children, you just won't get as many children out of the population. It's just like, full stop, right? And, you know, they're actually trying to do this. Xi Jinping is trying to do this in China. Like, he is — they're changing lots of language in the party documents which really emphasize, really honestly, the role of women in the family and things like this, and the role of masculinity and things like this. So they are trying to move the needle on these social issues, the values that undergird society. Now, it could just be that, like, maybe the next generation after the Zoomers will just kind of go completely the other way, and they'll have very tradcon values, and they'll just be like, wow, those crazy people in my parents' generation, you know, they were nuts. I want to have a family. I don't want to date a thot. I don't want to sleep with a thousand guys off of Tinder. You know, maybe there'll just be some kind of back reaction. It's very hard to predict. I don't feel I'm particularly good at predicting social trends. And remember, we had crazy things in the United States, like we had prohibition for a while. Like, can you actually imagine circumstances that would allow us to have prohibition? Well, similarly, things could swing completely wildly on these reproductive and gender issues, you know, 50 years from now, 100 years from now.

Yeah, so I thought it would be good to illustrate it with a little narrative instead of just giving some kind of abstract analysis. So I was in Manila for about 10 days, and that's one of the call center capitals of the world. So 8% of the Philippine GDP is this business process outsourcing or call center type work, because they speak English there and labor costs are pretty low. So 8% of their GDP, $40 billion a year, is that kind of work. And my startup builds large language model AIs, but within an architecture that suppresses hallucination. And so we can plug in, in effect, plug in a memory to the LLM and force it to answer questions in a constrained way, so it's sticking to the content of what's in the installed memory. And so we can take, like, the training manuals that they use. Like, one example where we built, you know, possibly the highest-functioning narrow AI of its type right now, with a global consumer brand, consumer electronics brand, we built an AI that can basically support-troubleshoot 300 different models of TV that they sell. And this thing has as its memory every product manual, every troubleshooting script that they've developed over 20 years as a company for troubleshooting these TVs. And the AI will just perfectly — we've tested it on thousands now of queries and things like this — it will perfectly troubleshoot your TV for you as well as a human could do it over the phone. And the fact that we're a small startup able to build something like that just tells me that a huge fraction of this labor in the Philippines is going to go away, because it's much, much cheaper to run the AI than to have humans paid to sit there. The number of resolutions of a problem like the kind I described which a human can do in a day is on the order of 10, maybe 15. So just imagine how many the AI can handle — just, you know, simultaneous calls and just crazy, you know, crazy numbers. So the whole time I was in the Philippines, I was just looking around saying, wow, this entire building which says American Express on the side — the entire work of the people in that building is dealing with, like, weird account chargebacks and sorting through documents and things having to do with your AMX card. And next to it is this, I think, JP Morgan building, which all they're doing is back-office work for JP Morgan. You know, maybe not all of that, but a very big chunk of that work is fully capable of being done by an AI now. And so it gave me a very direct, visceral feel for the near-term — not like five years from now, but near-term — impact of AI on very large sectors of human employment.