“China has achieved both economic growth and improved air quality during the 14th Five-Year Plan period (2021-25), according to the Ministry of Ecology and Environment.

With GDP expanding by 30 percent, China saw its national average density of PM2.5 particulate matter fall by 20 percent over the past five years, said Li Tianwei, head of the ministry’s department of atmospheric environment, at a news conference on Friday.

During this period, the number of cities meeting national air quality standards increased from 206 to 246, a 20 percent rise, he revealed.”

From China Daily.

“Indian officials have been in a boastful mood lately. A government report in December argued that judging by real-time economic indicators, India had overtaken Japan as the world’s fourth-biggest economy. This was to become economic fact once the Ministry of Statistics and Programme Implementation updated how it calculates GDP. So in one sense, the new numbers released on February 27th are a disappointment: GDP was 3.3% smaller than previously thought. In other ways, though, they are a cause for celebration.

The methodological update, the first since 2015, reset the ‘base year’—which sets the weights for different parts of the economy—to 2022. It also added new data sources that capture a clearer picture of the Indian economy. The country looks more rural than before. Agriculture, responsible for 18% of GDP, appears bigger, largely thanks to more detail on fisheries and dairy. Finance and business services also produced a bit more output, while commerce, hotels and transport generated 26% less. The net effect is a service sector that looks 8% smaller than it did using the previous methodology, and makes up 41% of the economy. Manufacturing, which accounts for 15%, has also shrunk slightly.

On the bright side, India is growing even faster than previously believed. GDP expanded by 7.1% in the fiscal year 2024-25, up from an earlier figure of 6.5%. Other numbers show it has grown quickly since, despite facing high duties on exports to America.”

From The Economist.

Listen to the podcast or read the full transcript here.

Today, I’ll be speaking with Brink Lindsey, an American political writer and Senior Vice President at the Niskanen Center. Previously, he was Cato’s Vice President for Research and a dear colleague. Today, we’ll be discussing his latest book, The Permanent Problem: The Uncertain Transformation from Mass Plenty to Mass Flourishing.

I want to start by congratulating you on your excellent book. It is concise, thoughtful, and beautifully written. As a published author, I’m envious of your style, and I really recommend the book to our listeners.

Let’s start with the most obvious question. What is the permanent problem?

I stole that line from the British economist John Maynard Keynes, who wrote a fascinating essay called “Economic Possibilities for Our Grandchildren.”

That essay came out in 1930 in the depths of the Great Depression, but he was brave enough to argue that this global catastrophe was just a bump in the road in a much longer process of modern economic growth, which he believed would continue until his audience’s grandchildren were grown. By that point, he said that the economic problem, meaning serious material deprivation, would be more or less solved. With that done, he foresaw that humanity’s permanent problem would loom into view: how to live wisely and agreeably and well with the blessings that modern economic growth has bestowed upon us.

He got some specific things wrong. He imagined that by now we’d only be working 15 hours a week, which hasn’t panned out. However, he got the big picture profoundly right, which is that an abundant future was coming, and that moving from tackling the economic problem to the permanent problem would be traumatic for societies. That they would have to unlearn the habits of untold generations.

He imagined that this transition would be, in his words, something like a “general nervous breakdown throughout society.” That phrase struck me as a pretty good description for the predicament that the United States and other advanced democracies have found themselves in. We’re richer, healthier, better educated, and more humanely governed than any people have ever been before, yet economic growth has slowed to a crawl in most advanced economies, class divisions have sparked a global populist uprising against elites and established institutions, personal relationships are fraying, mental health problems are on the rise, faith in democracy is wavering, and widespread pessimism is one of the few things you can get people across the political spectrum to agree on.

So, the thesis of the book is that our predicament amounts to the fact that we are in this no man’s land between mass plenty and mass flourishing. That, having achieved mass plenty, we’ve moved the goalposts of what makes a successful life. It’s no longer just about having food, shelter, and clothing, but meaning, purpose, belonging, and status. While we are providing those conditions for a larger fraction of the population than ever before, for 70 or 80 percent of people, our current way of life is not providing the conditions for flourishing that one would imagine would go with our level of technological and organizational prowess.

So, in America today, things are so good that we are moving to the top of Maslow’s hierarchy, but on the other hand, we have a hysteria where people are saying basic necessities like food and shelter have never been more unaffordable.

Can both be true at the same time?

I think we are absolutely materially richer than any society before. People who are discontent with the status quo grope for something quantifiable that has gone wrong, and so they try to make an argument about material decline that just isn’t consistent with the facts. It is true that we are rich enough to take our basic material needs for granted. Nonetheless, we enjoy these blessings with a kind of asterisk, which is that we get them only by spending the bulk of our waking adult lives working 40-hour weeks.

The blessed 20 or 30 percent at the top have an arena for flourishing. They’ve got intellectually challenging jobs that offer a lot of autonomy and scope for creativity, and social status. The rest are in fairly low-autonomy jobs with a lot of scutwork, and they’re one stroke of bad luck away from losing their job and falling into a serious hole. They’re shadowed by both the precarity of their hold on mass plenty and also by the need to spend a lot of their lives in drudgery to pay the bills.

According to Gallup, life satisfaction in America remained pretty much the same between 1979 and 2025. Roughly 80 percent of Americans say they are either satisfied or very satisfied with their lives, while only 20 percent of Americans believe that America is going in the right direction.

So, how bad is it really, if 80 percent of Americans say that they are satisfied or very satisfied with their lives?

I don’t put much stock in self-assessments of life satisfaction. Psychologically healthy people make the best of things, whatever the circumstances. Plus, happiness and life satisfaction surveys have a lot of cultural variation. Latin Americans seem to report higher life satisfaction given their level of GDP than Scandinavians or Japanese.

What I look at instead is the conditions for a well-lived life. The chances to do work that is challenging, fulfilling, and interesting are very good for a considerable fraction of people, but they’re not so good for the majority. There’s a large divergence there between the well-off and well-educated and everybody else. That’s also translated into diverging odds of even being in the workforce: there’s been a small drop-off in male prime-age labor force participation for college-educated men from the mid-’60s to the present, and a big drop-off in labor force participation for non-college-educated men. There’s been a similar divergence in the odds of getting married and in the odds of growing up in a two-parent home. And finally, in recent years, we’ve seen a divergence in life expectancy. Rather than the poor catching up with the rich over time, they’re now pulling apart.

So, are we doing better than ever before? Sure. But I don’t think that exhausts the inquiry. In a society organized around progress, a purely backward-looking standard of evaluation isn’t dispositive. In some of the more intangible aspects of flourishing, there are warning signs that things are going in the wrong direction.

So, do you have in your mind a sense of what an agreeable life should be?

At least in broad outlines.

In the agrarian age, to quote Hobbes, “Life was poor, nasty, brutish, and short,” but it was not solitary. People were miserable and poor, but they weren’t atomized or alienated. Now, I think it’s a real liberation that we’re not stuck in the same place that we were born, working the same trade as our parents. We can choose our own lives, and that’s a great opportunity. The next question is, “Are we going to develop cultural and institutional supports in these new conditions that will help us to have satisfying lives?

It’s beyond serious dispute that for most people, the most important determinant of the quality of their life is the quality of their personal relationships. And once upon a time, when the world was poor, your face-to-face relationships with other people filled vital practical functions. Your spouse was a partner in economic co-production. Your kids were economic assets. Your neighbors were an insurance policy. The main source of entertainment was hanging out with your friends and talking.

Over time, as we’ve gotten richer, we’ve outsourced a lot of those functions either to the marketplace or the welfare state. Personal relationships with people have become just one consumption option in a sea of expertly marketed alternatives. Learning to live wisely and agreeably and well amidst riches requires cultural and institutional supports that push us to spend our time on what really matters, which is the people who are close to us. We don’t have those, so we’re seeing fraying human connection.

This is cashing out most fatefully in the declining rate of people getting married and having babies. More than half of people now live in countries where the fertility rate is below replacement. That puts the whole demographic sustainability of liberal, democratic, capitalist, cosmopolitan, affluent civilization in doubt.

I want to ask you about the danger of presentism.

When we see a problem on the front pages of newspapers, we tend to extrapolate from it a broader crisis. In other words, we have trouble separating that which is fundamental to our civilization from that which is just a passing trend.

Let me give you a few examples. You write in the book that “we are getting fatter, dumber, and our mental health is deteriorating.” It certainly feels like it, right? But obesity is already declining in the United States because of Ozempic. Increasingly large numbers of young people are switching off social media. Apparently, Gen Z, the newest ones, are the best at that. Suicide rates are falling in rich countries outside of the United States, meaning this may be a particular American problem, or even simply a problem of measurement, rather than a general problem with modernity.

So, are we underestimating human adaptability and technological innovation?

That’s a very good point. We learn over time that some things that we thought were great turned out to be bad, and we put them behind us. Forty percent of American adults used to smoke, and we covered our walls with lead paint. And yes, we’ve got what looks like a deus ex machina for obesity, but the fact that the obesity wave happened at all is a good example of a more general challenge of being rich.

When we were poor, we developed a scarcity-based morality of self-discipline and self-control and resisting temptation out of necessity, but as those material constraints lessened, there was an inevitable and appropriate loosening. People could indulge their desires more. They could, to a greater extent than in the past, follow an “if it feels good, do it” kind of path. Well, it turns out that those qualities of self-discipline and self-mastery are still extremely helpful today, not for keeping you from falling into horrible poverty, but for keeping you focused on the things that really matter, rather than trivial, distracting desires.

Capitalism gives us what we want, and we don’t yet have the cultural supports that make sure it gives us what we want to want.

One set of problems that you identify has to do with the disintegration of personal bonds and the atomization of society.

Now, if I wanted to make grandparents more reliant on their children, to make neighbors more helpful to each other, and to increase church attendance, I would start by abolishing the welfare state, which I think has eroded the kind of mutual, voluntary reliance that people once had on each other.

This might irritate you, but I see the welfare state as an integral part of modern capitalism. Nowhere do we see a complex, technologically intensive, organizationally intensive division of labor without a strong welfare state. It’s possible to imagine such a thing, but it’s also possible to imagine a human being that’s 100 meters tall. If you actually had a human being that tall, he would collapse under his own weight. Plus, the libertarian movement in the United States has made zero headway in knocking back the welfare state, so I think libertarians need some kind of plan B.

The hopeful future I have in mind is more localistic and involves reimbuing our face-to-face relationships with family and neighbors with practical functions, which will allow people to live without the welfare state to a considerable degree. You can imagine a world of small modular nuclear reactors and 3D printing and vertical farming where small communities, with small divisions of labor, could have a degree of material affluence that today requires large-scale divisions of labor. But even in the here and now, if people are living together in communities, they can reassume duties of care that have been outsourced to private enterprise and the welfare state, such as taking care of little kids and elderly people and educating the young.

I wonder what is going to be more effective at driving culture change: appealing to people, or changing the incentives. When the government says, “We can pay for your child to go to a school,” you can opt out, but you will have to pay twice if you want to send your kids to a private school.

At the very least, I think we agree we will need to have competition. We could give the welfare state to the states and let them play around with it so that different jurisdictions can learn from each other.

Yeah. And, even more importantly, on the regulatory side. This is what I call capitalism’s crisis of inclusion, which is the weakening relationship between growth and widespread good conditions for the good life for people.

Meanwhile, though, we have a crisis of dynamism, a weakening capacity of the system to just keep delivering growth and pushing the technological frontier outward. Mancur Olson identified this problem a long time ago, which is that the richer you get, the more people you have with a stake in the status quo. For those people, the prospect of disruptive change is anxiety-provoking because it could knock them off their privileged perch, so they have an incentive to stop change. Also, the richer you get, the lower communication costs are, and the easier it is to band together with like-minded people and throw sand in the gears of creative destruction.

Meanwhile, the knowledge economy has created this large class of knowledge workers who desire to control and rationalize everything in their grasp. When something isn’t working, the solution is to add another layer of bureaucracy and process. Obviously, we’ve got lots of this kind of dysfunction in the public sector, but I think we also see it in the private sector, with the explosion of administrative staff on campus, the HR-ization of corporate life, and also in personal life, with helicopter parenting. These same professionals, on their off hours, deploy their managerial instincts to squeeze every drop of spontaneity out of childhood in the name of safety.

Those impulses are deep-seated, and they have contributed to an increasing drag on our dynamism.

One of the most effective ways to tackle this is inter-jurisdictional competition, allowing different groups to have different rules to limit the exposure of those different rules. Then, if that different set of rules really is producing better results, they can be emulated elsewhere. Beyond that, we’re just ineradicably culturally pluralistic people, especially under conditions of modernity. People are not going to agree with each other on what the good life is. They’re going to have different values. Having us all crammed together under one set of rules makes those value differences really high stakes and combustible and has produced a lot of the dysfunctional politics we’re experiencing now.

Last question.

My view of what living wisely, agreeably, and well may be very different from a guy who is perfectly satisfied living in his basement playing games and smoking a lot of pot. I would find such a life appalling, but who am I to tell this person that they are not living wisely, agreeably, and well?

In other words, aren’t you worried that even if all your hopes come to pass, the future may still contain a lot of people who will not be living wisely, agreeably, and well, just as they are today?

We can talk about flourishing at the individual level and then flourishing at the societal level.

In the book, I talk about projects, relationships, and experiences. Some people are really focused on projects and very light on relationships, and they do fine. Some people are great at cultivating amazing experiences, and they’re not very practical about anything else, but they live well that way. So there are a lot of different ways to have a good life.

At the social level, there’s a little bit less variety. To take one example, you can totally have a flourishing individual life without having children, but you can’t really have a flourishing society unless a certain number of people are having babies. So, I think you can’t have a flourishing society that isn’t a free society where people are the authors of their own lives, but a free society requires the freedom to fail. Some people are just not going to live wisely and agreeably and well.

I think we can create better conditions for people to choose well than we have at present. But that doesn’t mean we need to converge on one way of living well. That would be boring. Getting richer should mean a flowering of variety, not everybody converging on one way of life. And I think a more pluralistic, localistic institutional environment is most conducive to that end.

And it seems to me that living in a pluralistic society doesn’t mean that you are voiceless, that you don’t have a right to express your views about other people’s lives. Pluralism does not require total relativism. I can still say to little Jimmy, “Spend less time playing video games in your room and go out and explore the world.”

Ultimately, if we are going to be living in a pluralistic society where people can choose their values and how they want to live, it should be possible for people to persuade them that some ways of living, such as living up to their best potential, are better than wasting their lives.

This is the ultimate challenge for Homo sapiens: are we cut out for freedom? Are we cut out for being allowed to choose the good? Or are we just such a refractory species that we have to be lorded over?

The dystopian novel Brave New World, I think, is a much better fit with the predicament we’re in right now than 1984. The human spirit is being degraded, not by a regime of fear, but by a regime of cheap pleasures. At the end of that book, there’s this long monologue by the head of the society making this argument that human beings just don’t know what’s good for them and need to be taken care of. I don’t believe that. I have faith that there is a human nature that wants the good, that wants to connect to the outside world, and to other people, and figure things out. And we have the great privilege of living in a very rich, technologically advanced world that gives more people opportunities to do those things. We just need to structure things a little bit better to make it easier to make the right choices.

 

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