0:00
[Applause] [Music] [Applause] [Music] conversations with Tyler is produced by the mercada center at George Mason University Bridging the Gap between academic ideas and real world problems learn more at arcades.in conversations withth tyler.com
Search this video
0:22
[Music] today I'm very honored to be here with Russ Roberts Russ is an old friend of mine a former colleague he is one of the world's leading economic Educators if not the leading he is currently a research fellow at Stanford University's
0:44
Hoover institution Russ runs a very famous podcast econ talk he is the Godfather of Economics podcasting he has produced some amazing rap videos written numerous significant books including several novels outlining economic Concepts and has done much much more
1:01
welcome Russ it's great to be here Tyler can we just go home now I I don't think it'll that's the high point for me that introduction I appreciate that now you've argued in the past that the actual increase in living standards over
1:13
say the last 50 years it might be greater than what we're measuring or at least greater than what many people claim is the case if that's true and growth is so strong is there actually any case left for fiscal conservatism because if the growth rate of the
1:27
economy is higher than the government's borrowing rate which is the case even under the pessimistic numbers why do we need to worry about budget deficits I wouldn't say that's the most important thing to worry about you're right I do think that
1:40
the worry dour thing that I think is the sort of mainstream everyone knows worry is that uh a rising tide no longer lifts all boats and I think that's absolutely wrong uh I think a rising tide has definitely lifted most boats uh widely
1:56
across the income distribution and that the belief that is otherwise is the result of a of a selective use of of certain kinds of data that are imperfect but then if it's really true that our well let let me say let me say two things actually one is that my optimism
2:13
my cheery view of growth in the past isn't just that we've mismeasured inflation it's that we've mismeasured the gains to the average American because of changes in household structure for example which I think is probably the most uh important fact I
2:30
just take a simple example uh everyone's married and all households have two people in whether they're both earners or not but that makes it easiest just assume they're both working and now all of a sudden you increase the divorce
2:41
rate or lower the marriage rate two things that have actually happened in America dramatically over the last 40 years especially among low education individuals people who didn't finish high school or have finished high school
2:52
but didn't graduate college you start adding additional households in the leftand tail of the distribution that alone is going a disproportion and share because of that difference in the marriage and divorce rate that's going to pull the median down as I show that
3:05
the the median has moved to the left and I think that failure to recognize that is an extraordinary failure on the part of our profession that that so many Studies have been done on quintiles and medians now you should use the median
3:19
relativ the average because the median takes out outliers the high right- hand tail good idea but then you still have this other problem that people don't acknowledge or seem to pay attention to which is that your analysis is now going
3:30
to be distorted By changes in in household structure so my first claim is that yeah but say that's all true can the government just spend a lot more money and borrow and will just grow out of the debt not much crowding out well depends
3:42
what the government spends the money on I've always felt that uh the real cost isn't the interest payments but the uh activity of the government if the government just transfers uh which is I think probably not so distortionary relative to doing stuff maybe that's
3:57
okay but I think government does a lot of stuff that means lower consumption for the rest of us except the people who are the beneficiaries government if they don't spend the money wisely if they dig holes and fill them back in I don't
4:07
think that's a good idea so I I I don't think the I think the proper tax that the government is taking on the private sector is is the amount it spends not what it borrows or what it taxes so we have two ways to finance Government taxes today and taxes tomorrow and the
4:24
mix is is not as important to me as how what we do with the money that government actually spends unless of course we go to the point of bankruptcy which case you know that's a whole different story and I think it's bizarre to pick on our profession again it's
4:39
bizarre how many economists are willing to say it doesn't matter doesn't make sense to me if government spending had to be increased by say 20% what would you spend the money on do I still beat my wife what kind of a question is that
4:50
Tyler I don't understand that if it had to be it had to be and they call you in Russ how should we spend the money we know you think this is a terrible idea but we want to minimize we want to get the biggest bang for a buck one thing I
5:02
would do is I'd I'd seed some prizes and fund some prizes for for breakthroughs and Technology I think that would be a good use the money relative to what we what some Alternatives I try to think of some ways to um get better outcomes in
5:16
education using that money rather than just say increasing expenditure across the board and try to find some ways to incentivize schools to get that money not by scores to say on tests but by other uh methods uh what El would I spend it on well other than
5:31
infrastructure of course which were woefully inadequate I don't know if you know it but you know American Society of Engineers gave us like I think a d a D minus D minus well yeah they would so I don't you know there are some things of
5:43
infrastructure we could we could improve of course uh whe they're best done at the federal level would be a different question I don't think that's the case generally are there ways to use incentives to lower the rate of suicide which is today a rising epidemic or is
5:57
that a hopeless battle I'm going to pick on your question question if I could I I think the natural impulse of many economists is is to look at a symptom of a problem and figure out a way to play with that so for example um some workers
6:13
don't have enough skills they don't get enough education so they have a low Market wage so how do we fix that well we either pass a law that says they have to earn a certain amount or we give them a subsidy to that we don't spend as much
6:24
time I believe thinking about how would we improve the education and the skill set that people worry about that but that's not necessarily the central worry and I think it should be the central worry as you know there's there's a
6:36
number of people talking now about the failure of ssris uh the drugs that uh try to fight depression to be effective and recent article recent book I think uh and people writing about that book I think the author is Anne Harrison you know
6:53
making the point that in the old days psychiatrists had this model that mental illness was a a chemical imbalance and the this drug this um psychiatric uh attempt to fix it repairs the imbalance turns out it's not true we don't have
7:11
any clinical measures of imbalance that are responsible for mental illness some of the drugs might work there's a debate about how effective they are of course but they're definitely not doing what what they claim to do and when you ask
7:23
psychiatrists what what what about that claim that things were out of balanc they say oh just a metaphor so uh suicide is a symptom of of something horrible something very very wrong with us with people's lives and as you said you called it an epidemic I
7:43
looked at the data recently it it's hard to believe the increase over a very short period of time often that's due to a change in the way data is collected or a change in the way data is collected across states that different states are
7:55
reporting in different ways the fact that it's going up Nationwide if it's really true and it's not a data compositional issue it is quite striking it should be almost all we're talking about trying to figure out why that is
8:08
what are the characteristics of of the and I think it's most I think the rate's quite growing quite rapidly among younger people that's correct and and that's deeply disturbing now some people have pointed out that uh you know TV
8:20
show may have stimulated some imitative Behavior yeah I think it's 13 Reasons Why that that was you know a show that encouraged kids to think it's okay I I don't know we don't know but wouldn't you kind of want to pay attention to that before you said let's try to alter
8:36
this this symptom so I'd want to go to the core if I could if I couldn't maybe it'd be worthwhile to subsidize uh so what would you do what would be an idea of a subsidy for suicide if you don't kill yourself we'll give you money if
8:48
you do kill yourself we'll burn down your parents house no that won't work that could go the other way that could be a a moral hazard problem what would be the what kind of what do you have in mind maybe lowering the sanctions for getting mental healthare so right now
9:01
there's some stigma oh stigma so culturally that's a good idea I like that we reduced it a lot in the last 50 years you could argue we haven't reduced it as far as it could be reduced uh we've done a lot to try to convince people it's an illness rather than a
9:16
lack of mental fortitude or whatever a lot of mental issues have have been put into the box of illness it's still a pretty big problem uh and I'd also argue I don't think we were that good at altering culture in knowable ways so
9:32
like the idea of it interesting which book by Hayek has influenced you the most that would be the Fatal conceit it's certainly not the road to serum which is the book that everyone tells me they've read uh or that they plan to read and I say don't read it
9:45
it's really slow goinging it's not that interesting the style is even more turgid than some of ha's other work uh actually I tell people to read his essays I think the right book to read is individualism in economic order is the
9:58
best place to get acquainted with haek but for me the Fatal conceit is um is an incredible book I think it's 108 pages in The Edition I usually look at or or maybe 118 it's a very short book so you think well that's accessible and you
10:13
give it to people I used to give it away a lot because I loved it and uh nobody read it theyd read a few pages the reason is is that every page is a little bit dense it's all interesting but if you don't if you're not really interested in it it's
10:28
pretty slowo but do love that book and I would say it's by far the most influential hak book I've read now there's somewhat of a hisory by the way some people said he didn't write it I should add of course Bill Bartley had some role but it sounds like Hayek to me
10:41
yeah uh some of it yeah I like the idea of it being Hayek there's a somewhat historicist argument in that book that successful sociey somehow of higher population I'm not even sure how hyek States it or what he meant but do you
10:53
attach any Credence to that at all no I don't and I he also when I read it I don't know 20 years or so 15 years or so ago I read it quite late and was totally taken by it but at the time I was uneasy with I think it's in there and it's a
11:08
number of his other books that you know successful societies will thrive in competition with other soes whether it's in population or other measures uh there's a lot of Ruin in a nation as Adam Smith said there's a plenty of wiggle room for for countries to fail
11:21
horribly and still quote do better than their neighbors or so I don't know that argument of cultural competition seems a bit over um confident which part of Behavioral economics has turned out to be the most interesting it's funny I'm
11:36
I'm not a big fan of Behavioral economics as a piece of Economics formal academic discipline I'm a big fan of it as a way to think about life and it seems a bit strange to make that division perhaps I feel like a lot of the behavioral economists play gotcha H
11:53
people aren't rational no kidding you know that there's this view that somehow our models whether that's our mine and yours or ours mine and somebody else's or mainstream economics or so-called price Theory microeconomics they rely on
12:07
perfect competition rational consumers and since those things don't hold we can ignore all the conclusions and I I will say that one of the things that I loved when I came to George Mason in 2003 uh was how happy people were to take a piece of Behavioral economics to
12:24
say well you know in this area people don't maybe work as rationally as other are is and therefore I can assume this that and the other as opposed to like wearing it as a religion in a form of clothing that you that you always had on
12:37
I also feel like much of the behavioral economics field has been um damaged by the replication uh crisis in Psychology now I would think that way because I'm not as big a fan of Behavioral economics as some people are and when I claim that people will offer
12:54
s and say well but this finding still holds up doesn't it and I'll think yeah sometimes in a laboratory in certain situations with a large enough sample maybe so I I think for me it's more of a perspective than a discipline in many ways I think it's its promise has
13:12
been disappointing right to to gore neoclassical economics by proving that people aren't totally rational seems like a very unexciting finding but it is greed with great Glee in some circles as a hayekian how can we do science better
13:28
I think that's a trick question um h of course was concerned with scientism the illusion that what we're doing was scientific I'm a big fan of the pretense of knowledge as Nobel Prize uh except in speech but not in the social sciences
13:42
actual hard science how can we as a society have a higher rate of scientific Advance you get to change things well I'll cheat for a minute and say what I'll change is for people to be uh more willing to accept the possibility that
13:56
they're wrong which is not a policy lever that we actually have control of you know I'm a big fan of Richard vaman's quote uh the first thing is not to fool yourself and you were the easiest person to fool we romanticize science a great deal
14:11
and I think we romanticize the objectivity of academics and scientific researchers they have their own pet theories their own fads their own reputations just it's very hard to do science very hard to do good science so if you ask me what policy level I choose
14:28
it's not obvious to me I will say that I'm not happy with the patent situation and particularly in the case of pharmaceutical so I think there is some research there you one thing alarms me in the pharmaceutical business uh right now I think is that the return to
14:43
certain research and development isn't as is too high the patent system I think and the restrictions on generics have made research in Pharmaceuticals less productive than it would otherwise be that'd be one thing I would like to CH I
14:55
would encourage changing the patent landscape I'm a big fan as I think you are of prizes uh to solve problems uh there's a wonderful website called incentive that uh just puts up prizes 10,000 25,000 I saw 100,000 I don't know
15:09
what I don't know if that's the top or whe they're probably some that are bigger where creative people from outside the field that's usually being looked at come up with creative ideas other than that I'm not sure what we can do uh nothing else comes to my mind what
15:22
would you do Tyler to encourage science yeah our scientific institutions are too bureaucratic they fund too many older scientists they have too many layers of bureaucracy I would unpack some of those and start all over again and have
15:35
mandates about funding riskier ideas younger principal investigators perhaps unlike you I think Government funding of science on average works though I don't think we're doing it especially well right now IP I have mixed feelings on some areas I think it
15:50
should be tighter others looser but I'm not sure that's the main problem it's the number of yeses you need to get something done that I tend to focus on as the main barrier yeah I well let me respond to the point about government I
16:05
obviously well-run government science is fabulous I the problem is it's not so well-run and we could talk about if we could actually make it better would it be more worth would it be worthwhile to spend even more money than we do now and
16:17
the answer of course is probably but it's really hard to do as you say it's too bureaucratic well there's a reason for that it's done through the government there's a certain way that you rise to the top of that hand out the
16:27
money game a certain set of reputations they're not big on risk-taking but it seems to me it was once better and something has changed and it may be there's never a way back but it seems some government institutions can refresh themselves over time don't you think
16:42
they get more sclerotic as time passes so one way to think about how to improve that is to Sunset them right just say we're g to start from scratch which is hard to do I'm not sure how that would be done and what would what would you
16:53
change you to me it's like uh the public school system certain habits of become ingrained in in our educational philosophy there's a lot of safety and lack of of risk taking obviously for good reasons on the part of the people involved but I'd like to fund more Risk
17:10
Takers more outside the box thinkers and of course one way to argue for that is to let foundations and philanthropic organizations do that and they are obviously there's a lot of R&D going on in in America right now that's funded not by the government not by
17:24
corporations but by foundations which is encouraging they too become sclerotic of course after a while which is a whole they're sometimes the worst offenders I think yeah well it's very hard to I find in my experience it's very hard as much
17:39
as I like the nonprofit world as an alternative to government and business in my experience they often tend toward Mission creep to expand budget rather than to achieve their what was their original goal what the problem they were
17:52
trying to solve and that's a tragedy uh it's evidently a very human tragedy it's very hard to avoid that so I think that's the very good reason for philanthropists to Sunset their foundations and have them die after a certain amount of time here's a reader
18:07
question quote in which areas are you more pro- regulation than the average American and they mean government regulation than the average American yes I can't think of any can you help me out there Tyler well I'm not sure I know all
18:20
of your views would you guess what would be give me some things to think about there in general I think government should be smaller and regulations should be Aller can I give let me give you a trick answer then I'll let you let you feed me some many people believe that
18:34
the um financial crisis was caused by deregulation and I think that's a misreading of the evidence it's true that some pieces of the financial sector were deregulated but government intervention in the financial sector was quite significant in the advance of the
18:50
crisis in particular the bailouts that we did of past failed financial institutions I think encouraged lenders to be more uh careless with how they lent their money both mainly to other institutions not so much to people out
19:03
in the world like you and me so I deregulation is a little bit tricky so I'm not so I just I want to get that in I'm not sure how that pertains to the question it does probably in some way but so give me something I should be
19:16
more regulatory about well one answer baseball baseball of course I would say Animal Welfare government should have a larger role but also what counts as a tax exempt institution I would prefer our government be stricter oh I mean with you there well that's more
19:30
regulation kind of I guess yeah kind of higher Capital requirements for banks okay I'm okay with that yeah that would probably be that's a good one if if we can't have I prefer a less a fair world for banks more or less if we can't
19:45
credibly promise not to bail out Banks we then if that's the case we live in a world where Banks get to keep their profits and put their losses on taxpayers bad world so a more regulated world would be better than the world we we live in not as good as my ideal World
20:00
though but there's a case where I would be in favor like you just said more Capital requirements you're on a rooll see what else you spending more money for tax enforcement especially on the wealthy not the worst thing in the world
20:11
yeah you can spend a dollar and bring in several times that I don't think rich people cheat on their taxes do you cheat's a tricky word but I think we could spend more money and probably collect more more than pay for itself it's probably true so we're actually big
20:23
fans of government regulation we've we've really expanded the tent here podcasting yeah what's the largest change of heart you've had as the result of an econ Talk podcast conversation I don't think it's any one talk what I have found extraordinary about
20:40
interviewing somebody once a week for now uh 13 years is it exposes you to an enormously wider range of ideas and insights than you would normally than I would normally have been exposed to I assume that's true for you too uh which means that in
20:57
I don't know 10 or 12 years TI you're going to be even smarter than you are now which is very cool but what I realized and you know it doesn't it's not a lightning bolt it's just over time I realized at some point that My Views
21:10
had changed on a bunch of things and if I had to say why it's because I've talked to a lot of people and read a lot of books and early on in econ not early on but at some point in econ talk I realized I wanted to be open about my biases and I discovered that by being
21:25
open about my biases I had to confront them a little bit because here I am saying them out loud and I realized well gee do I really believe this now uh was something I believed say a long time ago and so as a result of the accumulation
21:39
of those conversations my views on a number of things I think have changed quite dramatically and what's the net shift there how would you characterize it other than more diverse I'm less in love with economic theory than I was
21:53
when I was 26 years old fresh out of grad school I I used to believe that you know it's it's embarrassing to admit this and I hear people claim it and I think it was true of me that I actually thought my models describe the world as
22:07
opposed to gave me insight into the world I actually thought this is the way the world works and of course sometimes it does um but the Relentless application of of price Theory to the world which is the way I was trained at the University of Chicago proudly which
22:22
has helped me understand lots of things I wouldn't otherwise understand I think a little too overc confident and so I'm much more open to imperfect aspects of economic theory I've become disenchanted with economics in general in the following sense we tend to F we
22:39
have this idea which is a very strange idea when you go deeply into it which is we teach our students I stopped doing it in undergraduate but we most people still do and and certainly in graduate school we teach there something called
22:51
utility Theory and the real reason I think we developed utility theory in economics at the end of of the 19th century early part of the 20th century was to explain why people buy what they buy we're trying to generate demand curves and explain why when a price of
23:08
some good goes up you buy more of a different type of good we call that a substitute there might be uh you buy less of it we call that a compliment and so we were very focused on what what I would call Commercial Behavior what
23:18
people do with their money and that somehow we made a leap from that bizarre narrow made a bizarre leap from that narrow Focus to arguing that we have something to say about people's wellbeing and you think about how strange that is now if I said to you do
23:35
does what people buy contribute to their wellbeing of course it does and we want to buy things that add more to our well-being than things that add less we all that's reasonable most people would agree with that would you then jump to
23:47
the fact to the to the conclusion that what people consume determines how happy they are no that would be ludicrous Adam Smith understood that in 1759 that that isn't the case and say and if you you asked Economist is that true of course
23:59
not no when I mean utility I mean everything I mean the non-monetary aspects of a job for example and the non-monetary aspects of the the steak you cook at night for the romantic dinner it's the romance that's more important than the than the consumption
24:12
of the steak of course we all know that and yet somehow we've become the Arbiters of of how policy translates into into well-being and I find that really deeply disturbing when I was younger it it's it's it's like the fish in water I even know I was in that water
24:27
it was just the world I lived in but now I look at and I think you know I look at um the things that I think are important in America today that we ignore as economists tribalism the feeling of belonging the importance of community
24:41
conversation right now that we're having you and I across the table and you're actually paying attention for a minute there instead of look at your question it's hard being the host of a podcast folks I know how it works and those
24:52
things are what really make our hearts sing Pride dignity respect they're cliches but they're not in our models so then you say well yeah they're working in the background or we're holding them constant or they're not important for the question I'm looking
25:07
at but then we get to something like Universal basic income where we say okay we're worried say because of say autonomous vehicles or artificial intelligence that uh people aren't going to be able to find work but that's okay
25:18
lets give a check like who would say oh that's a good idea that's a good substitute for a feeling of Pride and agency and responsibility and dignity that a that a job well done provides we'd say well that's absurd and yet people on the left and the right have
25:31
adopted The Economist view that says there's a there's a function that translates stuff to well-being and I think that's just grotesque so where we talking about things I've changed on that'd be a big one obviously I've become much less enamored my listeners
25:47
know I've become much less enamored of statistical modeling which you know again when I was younger I thought well just the truth now it's true that the other side has their statistical models those are the bad models mine are the
25:57
good ones but I have the good studies on my side and I've you know I've come to reject that view I don't I don't think I don't think any them are very good and more importantly I don't think the reasons we hold the views we hold are due to the empirical results that we
26:10
find from our models it's true some people change their minds based on scci quote scientific evidence or studies but in general it's not really what happens much and so it's deeply disturbing to me that our field has become so focused on
26:26
Advanced forms of econometric as a way of understanding how the world works and to alter policy I don't think we have enough skin in the game to do that and I don't think we understand the relationships and causal connections as well as we think we do what's your
26:39
all-time favorite econ talk episode I have a couple Christopher Hitchens on Orwell was a thrill I did that face to face he is one of the great talkers uh of our age incredibly articulate Richard Epstein with the British accent you know
26:54
Richard Epstein I remember I interviewed him I think it was on property rights and I was was i' either I done two that day or I was just tired I thought I'm just going to let him go in the first I think nine minutes he reels out a
27:04
perfect set of paragraphs that could be an essay on uh on property rights interviewing Milton Friedman was a thrill one of my all-time favorites was the guy who does the potato chips for Northern California odono is his last name great episode where I learned a lot
27:22
about industrial production and Fredo strategies he does Fredo potato chips for Northern California he was in charge of it let see any others that jumped to mind it's fun to interview mark helin my favorite novelist living novelist that
27:36
was just a thrill interviewing Bill James who taught me to love statistics and data and baseball was an incredible thrill and to get him to say that we something like he said something like we know 1,000th of what we could know even
27:49
though baseball is a very narrow in baseball which is a very narrow controlled environment and you know I get a lot of flak for interviewing Nasim talb because he's online Persona seems to be different from mine as way I'll say it judiciously I've learned an
28:06
immense amount from him and we had a great interview with him I interviewed him a number of times where I said things to him repeating what he had said he agreed that's what he had said later I realized I don't think that's quite
28:18
what he said and I realized he' said something quite a bit deeper and I I've just found that I found that I find that really uh that really fun a few questions related to religion but feel free to pass of course how do you as a
28:30
podcaster economist and education specialist read the Bible differently I could say as an economist there's there's a lot of fun things in the Bible that are that tell us things about incentives and behavior in in ancient times that that's an untapped area I
28:46
think of there's a a paper two or three there of course a number of great economists have written either on the Bible or the tomed Robert alond most notably you know there's a classic problem in uh uh I want to say Leviticus where if your Ox Gores a neighbor's ox
29:03
or Gores a person if it Gores within your area versus a public area an exodus uh it's an exodus after the Commandments are issued and they're then elaborated yeah when I read that actually it's in um yeah it is it's right after the
29:19
giving of the Ten Commandments it's I think it's in Mish ptim is the section in the Jewish calendar but I look at that as a Kian and look at how there there's some aspects of the rewards and punishments in that area that are a
29:34
little bit puzzling and I think Co helps me understand that it's a little easier to enforce some of those restrictions and and and and punishments uh from having understood Co and most rabbis don't read Co so that's helpful I think other than
29:50
that not sure what else would come to mind can but that's Tor law basically is what those those you know those restrictions those Commandments are about Tor law EP are in the Book of Exodus I would say can one find Classical liberalism in the
30:05
Hebrew Bible uh yorm honei would say you could I don't know if you've read the philosophy of Hebrew scripture it's extraordinary interesting totally different take on on the the Old Testament there's Classical liberalism in the sense you know there's some
30:20
obvious places there's Classical liberalism you have to be careful you know the devil can quote scripture there's a lot of things in the Bible that you can take in different directions if you wanted to read it through classical liberal eyes you would
30:33
look at the decentralized nature of welfare so for example a farmer is not to cut the corners of the farmer's field to leave them for the poor if things fall that you're loading on your truck you have to leave those for the poor
30:47
then of course but there is a minimum expected 10% tithe to to go toward communal institutions and to the poor as well big negative thoughts on monarchy in the Bible uh and centralized power generally but I think you have to be careful when you look at Jewish law and
31:04
in particular tunic law uh you know it's written for a community structure where people know each other interact with each other in repeated ways so when we look at say the restriction on charging interest uh which is clearly a a
31:20
restriction to me it's clearly a restriction to get you to be a more Humane person to your neighbor as your neighbor gets more dist and it's harder and harder to feel that and so the rabbis found ways around that restriction because people were giving
31:34
last year the economist reading the Bible and the talmud people weren't as eager to lend out money as as they uh could be and so there were ways to to get around some of the um the interest restrictions or the restrictions of the
31:50
Jubilee year every 50 years all debts are you know are eliminated and changes in land ownership so it's a uh you know I think there's a lot of decentralized aspects to the uh to the Bible but you know a lot of people read it a different way what are
32:09
non-religious people missing in general oh we live in a very interesting time I think it's it's increasingly hard for a highly educated person to believe in God it's a cliche that with the enlightenment a lot of people lost faith they replac that Faith with a with a
32:25
belief in science and the belief of belief of humankind's ability to manipulate the world in Godly ways and yet religion has not died I think David Foster Wallace says it best everyone worships so we we as human beings like things that are larger than ourselves we
32:43
like belonging to causes that are more than just our daily lives his advice is to pick one of the good Rel one of the bigger actually any relig actual religion rather than say beauty or money or fame he says if you worship those
32:58
you'll find yourself deeply disappointed as you get older uh Adam Smith would I think say the same thing in the theory of world sentiments so when I ask what you ask what are people missing for me a lot of religious belief in the modern age is two things it's an
33:14
ability to embrace some a little bit of agnosticism a little bit of intellectual humility to say I don't fully understand as a Believer I don't fully it's not easy to fully Embrace a belie in God in today's age and that's makes most people
33:30
uncomfortable they tend to either be fundamentalism is very attractive and then there's nothing so those two extremes are very attractive the in between which says you know I'm not sure there's a God but I want to use religion as a way to express my sense of awe and
33:44
wonder being a human being alive in an extraordinary universe that's a tough cell that I think is the easiest cell to a thoughtful person in in many ways and it's a little bit like for me and my experience having an ear for music some
34:00
people don't have an ear for music Don't doesn't speak to them or for art or for um bitter beer it just doesn't appeal to them doesn't make their neurons fire in a particular way and I think religion may be like that as well I think there's
34:13
some people who are very prone to it who find either Transcendence or belief easier to embrace than for others and so um I would never say someone's missing something by not being religious not leading your religious life I will say
34:28
that in my case religion is a lot like marriage and I say this as someone who is very happily married now for almost 30 years we're doing this in front of a live audience wild Applause if you ever mention how long you've been married if
34:42
it's more than a year people applaud because it's such an achievement I guess they don't realize it could be my wife's achievement not mine but at any rate any one day you might wish it were otherwise you know any one day as you know as a religious Jew
34:57
there days I wish I could have shrimp there days I wish I could watch the game on Saturday morning Saturday afternoon on TV there are times I wish I didn't feel different but over a lifetime it's a very powerful enricher of the texture
35:14
of everyday life and I would say that's true marriage and religion uh any one day you might sometimes think it's it's a hard deal most days it's good or great and then more importantly over a longer period of time it's deeply satisfying and I think
35:31
in today's world those two those two institutions are struggling because for whatever reason people are more interested in today you know if I say to you forgo this pleasure today and you'll have great pleasure tomorrow that's a
35:46
tough sell in today's world you it's like saying uh in my case you know I don't look at my cell phone for 25 hours over the Jewish sabbath what and I it's crazy because on any non- Sabbath day I look at my phone compulsively really why would you give
36:04
that up how can you give that up and yet it's been a good trade for me so that's all I can say I can't say whether it's good for other people you know a lot of people I think find the Sabbath idea very appealing but if you don't believe
36:16
in God it's really hard to to keep it with any regularity so I think again I would emphasize you don't have to embrace fundamentalism to have a taste of of the trans it in your life and I think it's an important part of being a human being recently WR a book on
36:32
Neuroscience by um Robert Burton you know I think there are three ways that we stimulate our brain's love of the Transcendent psychedelics mushrooms and LSD direct brain stimulation you can give someone a an outof body feeling of being part of
36:48
something enormous I think through through a brain stimulus according to Burton and religion and the value of religion is it's better than a knife and it's probably better than mushrooms at least if you're worried about some of the side effects but I just think it's
37:02
part of being human and if you struggle to make that leap of faith which I think everyone should struggle you don't have to make the leap of faith you could just say I'm open to the possibility that the reason there's something rather than nothing is because
37:19
some Force started it and then you need to you need to choose a religion which you know you need an Institutional framework for experiencing that and it's that's you know works for me might not work for you let's try some overrated
37:33
versus underrated sa Bell so overrated for me it's interesting you picked him just talking to my dad loves Sal Bell my dad was a big influence on my reading habits when I was younger less so when I get older like my dad could never get into
37:46
John Updike I love John Updike stories he's like what's the point where's this you know he's an oh Henry fan or that's a cheap shot to some extent I like Oh Henry too but my dad loves saw B to my mind he's not a great writer in
38:00
the sense of of he's not a poetic elegant writer of sentences nothing happens in his stories he just follows around somebody who's a lot like him and writes down what they say and his interactions so I've always found him very disappointing I've read probably I
38:15
don't know three or four of his novels trying to like him can't do it the saber metrics revolution in basball overrated or underrated I think still underrated it's kind of amazing how far it's come I a sociologist maybe it's already been
38:28
done but a sociologist did study how that world changed and how it has changed Sports writing Sports reporting sports commentary and yet it's so hard for people to accept things that disagree with what they see with their own eyes and that Ops adjust that is
38:44
commonly used now is an extraordinary thing an incredible achievement of Bill James and the others John Thorne and um Pete Palmer the three people I associate with this Revolution and it's of course spread to other sports it continues to
38:58
spread the application of analytical technique so in that sense it's underrated that I think there's still some really bad Sports commentary it's overrated in that it's part of a revolution that I'm deeply worried about big data is part of that that everything
39:12
can be reduced to measurement we can measure everything important uh and if we can't we will and eventually everything will be Quantified and we'll get better lives as a result and I think that's a misreading of The Human
39:24
Experience and I'm not an optimist on that Penn Station in New York City overrated or underrated boy that's a tough call you've been there right a many way too many times I've stood under those it used to be an enormously large
39:38
thing that had the arrivals and departures and I thought it was going to crash and kill people and what I find remarkable about that space is how uncomfortable it is that there's no place to sit down except the asella waiting room which I've had the
39:53
privilege of being in maybe three times that these people are standing standing around often holding their bags on the shoulder getting ready to race to a gate so they can get a a seat that they already have reserved and I do it I'm
40:04
ashamed of it is uh is so strange and it's ugly it's ugly on the outside it's ugly on the inside but most people know it so it could be it could be underrated I don't think I don't think there's anybody who loves it I enjoy it I wouldn't say I love it by the way if you
40:20
pay them they will let you board first I don't do this uh but there is an implicit markets and everything go on here a bribe yes that's interesting to the station the person who's sort of standing there that's right if you just
40:33
say oh I need some extra help could you help me out here something they'll bring you down early oh well that's yeah that's the uh that's what are they called the the um anyway they have a name uh bribe is the name no no no no I'm talking about the people but I'm
40:46
thinking is there what if you don't have any luggage I guess you could still do it couldn't you yeah I need some extra help where is it sir it's imaginary it's virtual let's go here's a 20 dropping out of college underrated or overrated
41:00
another tough one uh that's a great example of where I think people misunderstand the heterogeneity of the people who make that choice I I normally would say it's greatly underrated I think finishing is over dropping out is underrated finishing is overrated I
41:16
think you and I have both written that I'll ask you how many books what's the ratio of books that you finish relative to the books you start well eventually it will be all of them right my latest book whatever that is I haven't finished
41:29
but don't you pick up some books and don't F reading books I thought you me writing them maybe I finish one out it's too good leave it maybe I finished one out of 10 I don't know right one out of 10 so when I was younger I found it
41:42
deeply disturbing not to finish a book I started uh it's an interesting rule right that says finish every book you start if you have that rule you will pick more judiciously ideally and be a little more careful but that was my rule
41:56
and I also had a rle not to write in my books because I found that to be sacrilegious in some sense to to face the book so when I finished and I never opened it all the way so when I finished a book in my youth it looked brand new but I had but I had read it I've changed
42:10
all those things I'm now I write in my books I don't finish lots of books and so quitting is is a good strategy if you know when to do it quitting school or I would even say not attending in the first place is uh is underrated except that
42:26
for a lot of people who don't finish they don't do very well you know I don't think the people I don't think the average is a good predictor for necessarily what's going to happened to you Tyler Tyler you could have not finished and I wonder what Tyler would
42:39
have H would have happened to Tyler my favorite example this outlier of course by definition is Kevin Kelly Kevin Kelly um who's just a wonderful writer and and on technology and and many many other things and a brilliant photographer by
42:52
the way also I don't think he ever went to college so most of our learning takes place elsewhere but for some people it's good what's the most underrated part of the Hebrew Bible well that's an easy one he said after a long pause of about a
43:08
minute and a half that would be the Book of Esther the Book of Esther comes across as a clown show a um a crazy King listens to his crazy anti-semitic adviser wants to kill all the Jews the queen who's a secret Jew a Morano in the court of aash veros entraps hmon the
43:27
adviser of the king and gets him killed uh and saves the Jews and Akash veros has written as sort of a a buffoon who's somehow manipulated by this wicked adviser and um it's there's some moments in it but a more careful reading I think gives you a
43:44
different impression yur hone wrote a wonderful book on it called the dawn which I think has now been written reissued under a different title but that takes it takes it more seriously so I think it's very underrated few questions about Adam Smith if I may sure
43:57
one of my best friends extensively on Smith does his notion of the impartial spectator beg the question because impartial by what standard so doesn't he need some external standard of Ethics which in fact he doesn't have yeah
44:09
that's bothered me actually it's a great I think a great Insight when I think of Smith's impartial spectator which is this idea that it's his his it's Smith's attempt to understand why we do anything for other people besides ourselves which
44:22
he he argues that we have perched on our shoulder or within our breast an observer someone that we we use or invoke to think about how that person would judge us and of course that person is going to be a lot like our friends and our friends are a lot like
44:40
the circle and society and culture we come from and what is Honorable and and and kind and thoughtful in one Circle will not be so in another there's no honor among Thieves the say goes so do thieves have a different kind of impartial spectator who would judge them
44:55
harshly for or keeping a bargain uh deal that they'd made with someone so I I think that's correct and I I think Smith's own Society of of Hume and and others is a pretty unusual one for on so many so many grounds so I think it's a
45:11
good point uh so I do think it's culturally subjective and at the same time I think it understands something deeply about the way we behave in the world which is that we look to how our friends judge us and how people who are
45:24
not our friends judge us the people our casual Circle who might observe our behavior and I think it's incredibly useful either as a way of understanding what people do or if you wanted to improve your own behavior to think about how you should behave if someone was
45:39
watching all the time in your own reading of Smith does the pursuit of approbation in fact make us happy and if not why do we do it if you praise them too much you don't make them happier well I don't think it's so much the
45:50
ratchet effect and I don't I have a different knit to pick about the approbation issue and and the love we have for the respective or circle of friends or or Associates or or acquaintances which is I think Smith's trying to say something quite subtle or
46:06
at least I hope he is I claimed he was I don't know if it's really accurate or not because I think it's hard to to know but what really motivates us is it is it really do I really want Tyler to think I gave a great interview is that why I'm
46:20
trying hard right now because I would like your approbation I'd like your to say oh great job afterward and I suspect you'll say that yeah I suspect you'll say that yeah I you'll say that regardless because it's the polite thing
46:31
to say but let's say I don't care about what you think I'm independent I'm not going to be motivated by that that that's rather uh consequentialist isn't it it certainly suggests a lack of Integrity on my part that I need your
46:43
todrey praise Tyler to to really make me do a good job here so I think there's a tension there I think about this a lot with Steve Jobs you know Steve Jobs claimed he didn't care what people thought of him and he acted that way a lot he he went Barefoot to the office
46:57
when he was young he was cruel he was incredibly demanding and didn't care whether he was loved by his employees and I think he would have said he was oblivious to the praise of others and yet he wanted to put a dent in the universe he wanted somebody's praise uh
47:14
I'm not sure whose but but my point is is that that's an aside but my point is that I think if we you can read Smith and I think this would be wrong but you can read Smith as saying people are dishonest they're not true to themselves
47:29
they they dissemble because they want the the praise of other people and I think that's wrong way to think about it as a human being I I don't again I don't know what Smith really thought but for me is when I think about how pleasant it
47:42
is when someone says something nice about me I try to discount it I try not to use that as a motivator for me I don't want to use that as a motivator I want to do it for its own sake the right thing whatever it is and I know I'm prone to manipulation through praise as
47:58
I think many of us are as human beings so there's a certain there's a tension that Smith doesn't write about so much that you know I think it's not easily resolved given that the latter sections of Wealth of Nations seem to be arguing
48:12
that the division of labor can in fact work out for both education and protection was the ultimate point of the whole book Wealth of Nations in a way to respond actually to Plato and Socrates is that the right way to read Wealth of
48:24
Nations because they said what well you need the Guardians education has to be centralized there's the danger of a decline of Martial virtue but for Smith you have firearms which gives you a standing army and that's favorable for to Liberty because you don't now have to
48:39
worry about being taken over by you know the Ruder peoples as he called them and that therefore division of labor and capitalist wealth was just fine for education and protection and therefore Plato Socrates they were wrong when you
48:52
say but labor though you mean more decentralized Solutions or not but also literally the division of labor right which is a theme in the Greeks and it's a huge theme in Adam Smith so it's partly commercial Society but just the notion that you have a separate set of
49:08
people protect the Republic a class right separate set of people who are teachers for profit of course in Smith which is taking the side of the sophists right yeah that's an interesting point I I don't know much Plato and Aristotle as
49:21
you might tell for my question but the part I do understand is I've start you know Kan said we're the we're the what does he say about the the Babbling of Mad Men I should know the quote by heart do you know it by heart no but I know
49:34
the quote right they were all the slaves yeah defun people defunct ideas and you think Ah that's something an academic would say to justify and feel good about himself uh because his ideas will be defunct down the road but I I am struck
49:49
by how the hand of of Plato and Aristotle reaches across so many things certainly modern religion certainly our love of mathematics as a perfect Source you know mention y Mazon again I think he makes the point that you there's no Circle in the real world circle is a
50:07
concept and yet the idea that that it's out there this human creation a mathematical definition is a very powerful I think influence on our thinking still maybe we're hardwired to think that way I don't know but so to come back to your
50:21
question I think it's a really interesting question in modern American America there are parts of America that have a respect for say military culture that are that's very scarce right there aren't a lot of places that have respect
50:36
for military South mainly right y it's the South the coast much less so and part of me wants to say yeah you don't really want to romanticize the Army that's a bad thing but we're blessed to live in a time where our enemies are very far away and if they were closer
50:52
maybe that's a really useful thing so in the meantime someone has to serve right the pay alone is not going to do it yeah probably not we could make it higher but I think you could get enough people in there eventually but maybe our political
51:05
process wouldn't like that higher pay interesting question I'm going to ask you a question Tyler sure do you think the volunteer army has reduced or increased the uh willingness of the president to use the Army as a uh to get
51:18
into more Wars think it reduces the chance of war or increases the chance of War depends what you mean by War if you mean any conflict at all I think it increases the chance of a lot of small scale activity a lot of it is led by drones and there may be ground troops as
51:32
support but casualties remain really quite low it's what we've seen in the world but if there were a truly major Nation threatening War I actually think it might be easier to go to war with the draft Army well you mean we' be more
51:45
likely to intervene that's correct so I think it's just I think there's a a tension there that most economists who like you and I were I don't know about you I shouldn't say you but certainly I was a very strong proponent of the
51:58
volunteer army and I used to quote Milton Freedman all the time when he testified it allegedly would you want a uh when when he was advocating for a volunteer army that would be paid to come to serve rather than drafted and they said you'd want you want to be
52:12
defended by an army of mercenaries and he brilliantly responded better than an army of slaves where you forc people to serve and I I was found that compelling given my libertarian youth but the argument in behalf of that of why that
52:25
was actually a good thing besides philosophically was well if we had to pay soldiers instead of forcing them to serve and paying them a pittance the budgetary cost of of enlarging the Army would start to bite and that would discourage a large army and I think
52:38
that's just I don't think not sure that's true and then the argument was well that you know if because on the flip side excuse me the other on the other side is that if the average American doesn't have to serve which they don't anymore then it's cheaper to
52:50
go to war so I don't know it's I think that tension is ignored by most of my friends who favor volun earing yes I I agree with that three simple questions to close super simple oh yeah if you liar liar pants on fire just a just a
53:03
guess if you were to pick a deceased person from the past but not going before the 20th century to have on econ talk to interview who would it be I really would have liked to have interviewed Robert Noak uh that would have been really fun you know Robert
53:18
nosak wrote Anarchy state in Utopia which was one of my favorite books when I was 22 years old extraordinary book loved it and he was a intellectual hero of mine and in his later years he became disenchanted evidently with Classical
53:33
liberalism and and a small government or at least some form of libertarianism and I'd love to know why I'd love to ask him about that maybe he's written about it I haven't read it but so that'd be an obvious one Hayek is an obvious one
53:45
although he's hard to understand his German accents pretty thick so tended to get the same from Hayek when you asked him questions I met Hayek I knew noic I would go further I mean I would pick Canes without a doubt um I think that doesn't excite me I don't have much
54:00
romance for canes although he's articulate and witty and that would be fun I think for a minute anybody else but we know enough people who knew Hayek and noic we can in essence reproduce what it would have been like where can's
54:15
right we are quite in the in the dark in some ways that's true I guess I'd like to interview my old philosophy Professor Robert SMI who taught me about pragmatism and I didn't really understand it till I got to be old enough that he wasn't alive anymore I'd
54:29
love to chat with him I chatted with him once he he taught a great class on the philosophy uh of pragmatism and I took three I think I took three classes from him and later in my life I was probably 50 or so I realized a lot of Hayek is
54:46
echoing this view that reasons overrated which is one way to summarize pragmatism in a sentence sure and I I tracked him down and I called him and he said uh I said do you read Hayek have you ever read haak of course yeah because I'm an idiot yeah of
55:02
course he's read haak that was lovely but I'd love to talk to him some more I miss him it's an interesting thing when when someone who has an intellectual influence over you uh that you don't realize until years later I just think
55:12
about it for another we take another 15 side what I think that's a good question give me some more candidates well there are political leaders they would not be my piics but they're plausible for many uh philosophers in the earlier part of
55:24
the 20s Century great scientists Einstein right you you'd have a lot of downloads for him I would yeah exactly that's that's a good line Norman borag the people behind the H bush process fertilizer right people in technology not so interesting to me I'd like to
55:40
think about somebody like um oh I here's a fun one I'd like to interview Eric Hofer you ever read Eric Hofer sure True Believer yeah great book and the ordeal of change is a great writer and and a working class writer right and an
55:54
interesting human being I would suspect uh I don't know if it'd be a good interview anybody else I think composers conductors would be very interesting oh yeah actually the gers ones if I could get the gers ones on to talk about collaboration and well actually uh and
56:10
you know uh Rogerson Hart would be good aotto clamper Cole Porter would be fun I haven't I tried Steven Spielberg didn't didn't not get him for Recon talk but he responded to me because I had a mutual friend who who' set it up the at least
56:24
the contact I don't know in a sentence where has Classical liberalism gone wrong it's ironic I'm going to cheat and answer a few sentences our age right now this may change but our age right now is obsessed with inequality and it disturbes me deeply
56:41
that inequality is conflated with poverty they're not the same thing a lot of people blame the condition of the poor on inequality as if the world is a zero some game if you press the person who says that oh of course I don't mean
56:52
that but I think there's an implicit idea a that the inequality comes at the expense of the poor I don't think that's the there are cases where that's true of course where rent seeking and other privileges that people have taken from
57:05
the government from government power have allowed them to impoverish impoverish others but uh most people who are poor are poor because they do not have the tools the skills to contribute in the modern economy they have circumstances that keep them from rising
57:22
and I've been deeply saddened by the failure of people on so-called our side the people who believe in smaller government to think at all about that to think at all about human flourishing at the um in the by the people who are
57:36
struggling and I think that is just a ter been a terrible mistake at the same time we failed to make the case for freedom and to the extent that even saying that seems foolish I'm going to it's not literally true but the last prominent politician I think who made
57:53
the case for Liberty and freedom in and of itself was was Maggie Thatcher Reagan to some extent also but Maggie Thatcher did it relentlessly and that's so out of fashion in our times uh we've become so consequentialist the idea that that
58:10
Liberty as a principle worth defending in and of itself is is really really difficult and I find it strange that people tie small government to the Republican party uh the Republican party doesn't make the case for liber it loves
58:25
to spend Republican politicians love to spend money I like to say that the only difference between republ both Republicans and Democrats like to spend money on their friends they just have different friends except they have one friend in common which is the financial
58:37
sector so they both coddle the financial sector because that's where the money is and uh so we don't have a political home for our ideas and I think the intellectual home has failed badly for our inability to make the case either
58:50
for Liberty and and of itself and for the uh to understand understand how how and why people who are being left behind by our economy and and what policies might help them and I think that's an utter failure of our of our side and um
59:07
it's just it's a tragedy and last question what is your next book or project so I have three things I'm working on I'm working on a video series on data and thinking about numbers uh that uh is actually the latest episode comes out today but in terms of books so
59:22
that project is an ongoing project but in terms of books think of writing a book on data and our need for certainty and our challenge of interpreting numbers authentically and correctly I think it's really hard for us to consume numbers we tend to see them as facts
59:37
they're not facts some of them are most of them aren't and we're prone to to manipulation I think from the use of of numbers it causes us I think to look under the lamp post which is I think a a huge failing where the light is rather
59:52
than maybe out in the dark a little bit we need to add Edge out into the dark where the numbers aren't so that's one book I'm thinking I'm trying to start trying to write a book on prayer for people who struggle with prayer and I
1:00:04
think most people do at least the ones I know and then uh I'd like to write a book on forgiveness and the virtues of forgiveness which is totally alien to me totally if you had said to me five years ago you're going to write a book on forgiveness I would have said
1:00:19
forgiveness is a really mixed bag you know you should bear a grudge I've changed my mind on that and I want to see if I can make the case for for forgiving yourself and forgiving others more readily and how that might actually work rather than it's a great cliche
1:00:33
it's a great you know uh cliche it's you need to you need to forgive yourself so you can forgive others but most of us struggle to do that I think and I'm not sure the connection is not so obvious um so you the same thing you need to love
1:00:45
yourself before you can love others that seems counterintuitive to me so those kind of interpersonal human aspects of life I think are fascinating and maybe I can say something about it Russ Roberts thank you very much thanks Tyler thanks for listening to
1:01:00
conversations with Tyler you can subscribe to the podcast in iTunes Stitcher or your favorite podcast app and if you like this podcast please consider rating it on iTunes and leaving a review this helps other people find the [Music] show