This interview is about why US productivity growth has slowed and which new technologies could speed it up again. Economist Eli Dourado argues the problem isn't a lack of inventions but society's complacency—we value comfort over progress. He's most excited about SpaceX's Starship (which could cut space launch costs to that of a flight to Europe), deep geothermal energy (Sage Geosystems is drilling a test well, and the heat below is 50,000 times all oil and gas reserves), and mRNA technology (which lets you 'program' the body to make proteins for treatments). He also mentions supersonic jet startup Boom, noting that demand for premium transatlantic travel has doubled since the Concorde retired.
Economist Eli Dourado discussed on the Invest Like the Best podcast the causes of long-term stagnation in labor productivity and the innovative technologies that could reverse the trend. The core argument is that the slowdown in total factor productivity (TFP) growth stems from systemic constraints,
Eli Dourado is a senior research fellow and economist at the Center for Growth and Opportunity at Utah State University. The episode's main thread: the stagnation of total factor productivity (TFP) from a 2% annual growth rate to 0.3%, and the innovative breakthroughs in four key areas—biotechnology, energy, transportation, and space—that could reverse this trend. Dourado's core thesis is that the primary cause of stagnation is not the exhaustion of technological opportunities, but societal complacency—we value comfort and stability too much to pay the price for growth.
Dourado points out that total factor productivity (TFP) is a core metric for measuring civilizational progress—it represents "the quality of the recipe by which society transforms labor and capital into output." Historical data shows: TFP grew at about 2% annually from 1920 to 1970, fell to below 1% after 1973, briefly rebounded to 2% from 1995 to 2005, and plummeted to 0.3% after 2005, "rounded to nearly zero."
"TFP growth dropped from 2% to nearly 0%—this is the most fundamental growth indicator, and we are essentially not growing."
Dourado argues that the two main schools of thought explaining TFP stagnation are: Robert Gordon's "exhaustion of great inventions" theory (breakthroughs from the late 19th century, such as indoor plumbing, internal combustion engines, and pharmaceuticals, have already fully realized their dividends, and the next major invention will take decades to impact the macroeconomy) and Tyler Cowen's "complacent class" theory (society cares more about comfort, community stability, and historical preservation than material progress). Dourado explicitly aligns with the latter.
Key data: Healthcare accounts for about 18% of GDP, housing for 16-18%, and transportation speeds remain at 1950s levels—these "big-ticket" sectors are the primary drag on TFP.
Dourado argues that mRNA technology is "the computer programming of biology"—it allows human cells to produce any protein on command. The COVID vaccine was merely the starting point; the true promise lies in cancer treatment: by comparing genomic differences between healthy and cancer cells, identifying protein targets that the immune system can attack, and enabling the immune system to precisely eliminate cancer cells.
"mRNA is like computer programming—you can program the protein you want to build, insert it into a cell, and the ribosome executes it."
The breakthrough in protein folding came from DeepMind (a subsidiary of Alphabet). Proteins are defined by linear sequences of amino acids, but their three-dimensional folded structure determines their function. AlphaFold has "effectively cracked" protein folding prediction, which in the short term can accelerate targeted drug discovery, and in the long term will enable "protein design"—creating proteins that do not exist in nature for repairing the human body and extending lifespan.
CRISPR is a DNA editing tool, invented in 2012, which has since revolutionized laboratory research, but progress in human clinical trials has been slow. Dourado cites an example: a team at the University of Washington has used gene therapy to cure red-green color blindness in monkeys (a condition affecting 8% of American men), yet "it just sits on the shelf, with no one pushing it into clinical trials," due to cost and lack of urgency.
TFP Perspective: Healthcare accounts for 18% of GDP; if it could be compressed to 1.8%, that would represent a "massive improvement in real living standards."
Dourado points out that per capita energy consumption in the United States peaked in 1977-1978 and has been declining ever since, with society overly focused on "energy efficiency." He advocates for a shift toward a "doing more with more" mindset—provided energy becomes cheap enough.
"For the past few decades, we have been striving to do more with less. Now we should pivot to doing more with more—because energy has become so cheap that there is no need to worry about consumption."
Most favored next-generation energy source: deep geothermal. Traditional geothermal energy is limited to volcanic or hot spring regions, but the thermal energy stored within 10 kilometers below the Earth's surface is 50,000 times greater than all oil and gas reserves combined. Moreover, the heat replenished annually by uranium decay in the Earth's crust is twice the current global primary energy consumption. The "underground engineering" technology developed for shale gas extraction has made deep geothermal energy feasible. Texas-based company Sage Geosystems is drilling its first demonstration well, and once successful, the technology can be scaled.
Priority for batteries: Dourado believes batteries should be prioritized for vehicles (at the edge of the grid) rather than for grid energy storage. Battery production faces supply bottlenecks, and even assuming rapid growth on the supply side, it cannot keep pace with electric vehicle demand. "You don't want to allocate scarce battery resources to grid storage."
Ripple effects of low-cost energy: Carbon capture (requires large amounts of energy), materials manufacturing (Iceland leads in per capita aluminum production due to cheap geothermal energy), seawater desalination (addressing water scarcity in places like Yemen), and vertical farming (LED lighting and water pumps are energy-intensive)—"If energy is free, we can grow anything anywhere."
Dourado previously led the policy team at supersonic aircraft company Boom for two and a half years. He argues that the core reason for the Concorde's failure was that it never achieved economies of scale: with only 14 aircraft in service, maintenance costs were extremely high, forcing ticket prices to remain elevated, which in turn led to insufficient load factors. However, since the Concorde was retired, demand for premium transatlantic travel has actually more than doubled — meaning there is now sufficient demand to support a supersonic fleet.
"Since the Concorde was retired, demand for premium transatlantic travel has more than doubled. If there is enough seat demand today, you can fill all seats at lower ticket prices."
On the technical front, modern supersonic aircraft have three major advantages: 1) Computational fluid dynamics has replaced wind tunnel testing (the Concorde relied on slide rules and six months of wind tunnel trials); 2) Carbon fiber materials have replaced aluminum (aluminum softens at speeds above Mach 2, and the Concorde's fuselage stretched by over a foot during each flight); 3) Modern turbofan engines are approximately 0.5% more efficient per year compared to 1969 levels.
Competitive landscape: Boom (Mach 2), Hermes (Mach 5, based in Atlanta), Venus Aerospace (Mach 12), SpaceX (point-to-point rockets, global travel within one hour). Mach 5 is considered a "meaningful ceiling" — going faster saves little additional time, as aircraft still need to circle and descend at subsonic speeds.
Second-order effects: Dourado explains this using the gravity model of trade — the volume of trade between two locations is a function of their economic sizes and the distance (including time cost) between them. If travel costs are reduced by 50%, economic activity between the two locations should double. Every time Southwest Airlines adds a new route, the number of co-authored papers between professors at the two endpoints increases — compressing time on a global scale would "greatly boost cross-space collaboration."
Dourado argues that SpaceX’s Starship represents "a cost reduction far greater than all previous innovations combined." The key parameters: capacity of 150 tons to low Earth orbit, with a target launch cost of $1.5 million, or $10 per kilogram — two orders of magnitude lower than Falcon 9, making "sending things to orbit as cheap as sending them to Europe."
"If Starship achieves its target cost, sending things to orbit will be as cheap as sending them to Europe. That’s a two-order-of-magnitude reduction."
Reusability: Both Starship’s booster and upper stage are reusable, and its fuel (methane) can be produced on Mars. In-orbit refueling capability means payloads no longer need to trade off fuel — 150 tons can be launched into orbit, refueled, and then sent to Mars, delivering 150 tons per trip instead of 4 tons.
Cascading effects of cost reduction: At current launch costs of $50 million, satellites must spend millions on reliability; if Starship’s rideshare cost drops to $150,000, consumer-grade hardware like iPhones can be used as satellite sensors, enabling faster iteration and stronger capabilities.
Other players: Blue Origin’s New Glenn rocket is larger than Falcon 9 but smaller than Starship, currently focused on suborbital space tourism (ticket price around $250,000). Bezos’s resignation as Amazon CEO may accelerate Blue Origin’s development. Relativity Space uses 3D printing to manufacture rockets, reducing part count, weight, and manufacturing time. Bezos has visited its factory, and Dourado speculates, "Could he just acquire it outright and fold it into Blue Origin?"
Space applications: Starlink (global internet coverage), Varda (in-orbit manufacturing — microgravity enables 3D printing of structures that would collapse under gravity, such as optical fibers, silicon wafers, pharmaceuticals, and organs), Axiom (private space station, replacing the aging International Space Station).
The Turning Point for Machine Learning: DeepMind’s breakthrough in protein folding marks "the first time machine learning has achieved superhuman performance on a truly important problem"—previous applications like playing chess or writing articles were merely "toy-level." Dourado argues this signals that machine learning "is shifting toward tackling important problems where it can genuinely outperform humans."
Trend Toward Custom Chips: Apple’s self-developed M1 Max chip (a system-on-chip, SoC) and Tesla’s self-driving computer illustrate the move toward "full-wafer-scale systems" for machine learning—densely integrating all computer components on a single silicon wafer. "This will surpass Moore’s Law in the near term, making computing speeds significantly faster."
Ethereum vs. Bitcoin: Dourado has followed cryptocurrencies since 2011 and is "one of the earliest economists to write papers on cryptocurrency." He believes Bitcoin has shifted from a "revolutionary payment system" narrative to "digital gold," while Ethereum’s smart contracts, tokens, and identity systems offer far greater imaginative potential.
"Ethereum will become as ubiquitous as air—your phone will sync to the blockchain in seconds, obtain cryptographic proof, and then interact with this resource."
Most Intriguing Ethereum Application: Prediction Markets. Building prediction markets on the blockchain for "every question you can think of," inferring event probabilities from betting prices, then combining them into conditional probabilities (e.g., "If the US jobs bill passes, what will GDP be in 2025?"). "This could change the world."
| Position | Guest View | Key Data |
|---|---|---|
| Boom | Bullish (former employee, believes technology + market conditions are ripe) | Transatlantic premium travel demand doubled after Concorde retired; Mach 2, carbon fiber + modern engines |
| Hermes | Neutral observation | Mach 5, Atlanta-based company, 90 minutes to Europe |
| Venus Aerospace | Neutral observation | Mach 12 |
| SpaceX | Strongly bullish | Starship: 150-ton capacity, target $10/kg, two orders of magnitude lower than Falcon 9 |
| Blue Origin | Neutral to cautious | New Glenn not yet operational, focused on suborbital tourism (~$250,000/ticket) |
| Relativity Space | Neutral observation | 3D-printed rockets, Bezos once toured the factory |
| Sage Geosystems | Bullish | Deep geothermal demonstration well in Texas, scalable once successful |
| DeepMind (Alphabet) | Bullish | AlphaFold solved protein folding, first superhuman performance on a major problem |
| Apple | Neutral positive | M1 Max custom chip, system-on-chip trend |
| Tesla | Neutral positive | In-house full self-driving computer |
| Ethereum | Bullish | Smart contracts, prediction markets, decentralized identity |
| Varda | Neutral positive | In-orbit manufacturing (microgravity 3D printing) |
| Axiom | Neutral positive | Private space station |
1. The main cause of TFP stagnation is societal complacency, not technological exhaustion (Dourado) — "We care too much about comfort and community stability to pay the price for material growth." The rapid development of mRNA vaccines during the COVID crisis is itself evidence: crises reduce complacency and accelerate innovation.
2. mRNA is "biological computer programming" (Dourado) — It can program any protein for production inside human cells, and cancer treatment is an "inevitable application": compare healthy and cancer cell genomes, find immune targets, and let the immune system precisely eliminate them.
3. Proteins are "nanoscale machines" (Dourado) — "Anything that does something inside your body is most likely a protein. They are not static; they move, pump, and work like conveyor belts." The ultimate goal of protein design is Eric Drexler's "atomically precise manufacturing."
4. Deep geothermal energy is "50,000 times the energy of all oil and gas reserves" (Dourado) — The heat within 10 kilometers of the Earth's surface is 50,000 times that of oil and gas reserves, and the heat replenished annually by uranium decay in the Earth's crust is twice the current global primary energy consumption. Shale gas technology has made deep geothermal feasible.
5. Concorde's failure was due to never achieving economies of scale, not technological infeasibility (Dourado) — With only 14 aircraft, maintenance costs were extremely high, forcing ticket prices to remain elevated. Yet after Concorde's retirement, demand for transatlantic premium travel doubled, and today there is sufficient demand to support a supersonic fleet.
6. Starship's $10/kg will "bring the cost of space travel down to that of a trip to Europe" (Dourado) — Two orders of magnitude lower than Falcon 9. In-orbit refueling capability allows 150 tons to be sent to Mars per trip (versus 4 tons), and consumer-grade hardware (e.g., iPhones) can serve as satellite sensors.
7. Batteries should be prioritized for vehicles rather than grid storage (Dourado) — "You don't want to use scarce battery resources for grid storage." Even with rapid supply growth, it cannot keep up with electric vehicle demand.
8. Ethereum's prediction markets are "applications that can change the world" (Dourado) — Build prediction markets for every question on the blockchain, infer probabilities through betting prices, and then combine them into conditional probabilities (e.g., "If the bill passes, what will GDP be in 2025?").