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I loved your book averages over can you explain what that phrase means and the implications of it average is over is both a book about the present and the future it refers to a world where there's a fundamental divide across
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workers uh is the computer enhancing your productivity in which case you'll do pretty well or are you competing against computers and smart software in which case you're likely to lose so I suggest this is already the case in the
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world and more and more it will be the case uh that you either acquire those necessary skills and talents or you don't and this is sometimes considered a pretty bleak prognosis but I actually think there will be some positive features of this world that people don't realize so the world will be a lot more productive because of Automation and smart software and this will give us a lot of consumer goods for free so we'll
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have the super sharp divide between the rich and the poor in terms of income but in terms of actual consumption the poor will do better than we might expect so it's a kind of mixed pessimistic optimistic message on where we're headed could geek out on that for a second like how do you see that playing out what type of jobs are going to lose out what type of people are going to gain and what could we be doing now that would
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allow us to better position ourselves well think of old style manufacturing jobs you work in a factory you didn't need a college education sometimes you didn't even need a high school education you had to work pretty hard and apply yourself but those jobs built a middle class that was great for America but that's mostly a past era so if you think of current and future jobs you need to work with information technology you
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need to work with software those Technologies they change all the time so you need to retrain yourself say every three to five years and retraining yourself is very hard for a lot of people so the skills you need are both a
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lot of things you were never taught in college but had to learn on your own anyway and then you need to stay current so the people who have a very strong work ethic who are very conscientious they will do extremely well in that new
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setting and people who are good at Tech the other group of people who will do well are those with wonderful people skills so there's always room for sales for marketing for management including in the distant future computers will not be doing that for us anytime soon and I think in terms of practical advice for a person you need to ask yourself like am I a tech person or am I a sales marketing persuasion manager person and
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be one or the other if you can be both you know that's someone like Mark Zuckerberg then of course you'll do very very very well but for the most part I think that's where job markets are headed do you think the nature of how we sell things will change of course it's much harder to get everyone's attention most of all people who have high incomes because there are so many demands on their time but there's your email flow
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there's Twitter there's Facebook there's being texted and that's just the beginning you know virtual reality may be coming television is much better than ever before so it's a far more competitive environment a lot of media companies of course have lost out so it rewards people uh who in some way are authentic or or dedicated or can Target a niche and and do something really interesting you see this on television like what are
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the top best shows they're not really quite mainstream products they're the reflection of some kind of individual vision of a director or Creator like The Sopranos or the wire and they they have some kind of cultural currency but you can't just put slop out there anymore you know it's not 1974. you're not just trying to fill the Airways with material what do you think the implications at the cultural and perhaps country level would be of this
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uh I'll handle country level and then ask you what you mean by cultural I think countries and also regions within countries uh we won't see so much convergence we'll see a lot of Divergence so it used to be in America in the post-war era America's poorer cities were essentially catching up to the wealthier cities but nowadays say poorer parts of Louisiana and Mississippi they're not catching up to Silicon Valley uh they're falling
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somewhat behind and I think that will be the trend looking forward you get these clusters of creativity where people interact the rents are very high many people want to live there not everyone can afford to live there and you'll
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either be in one of those clusters or you won't so you can call this Regional average is over uh parts of the world such as Eastern Europe uh you know Poland maybe is catching up to the west but most of it is being depopulated and
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emptying out and uh it basically will never catch up and that's a harsh Awakening it's a it's a kind of shock because economists had predicted well if you you free up these economies they'll converge we don't see that happening so tell me a bit more what you mean by cultural well cultural I meant if we have more leisure time or we have more time to explore the Arts would that how would that change culture and what would
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the implications of that be and also like if we were to add to that just one more thing the the implications perhaps culturally of having city-states almost competing for people at the wealthy end of resources and people not necessarily having physical access to those states in the way that they've had it before I worry about the future of some face-to-face creative interactions so I'm doing this interview from a hotel
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room in Manhattan and Manhattan has become so expensive most artists writers they don't live here anymore unless they're already well established so well some of those clusters move to Brooklyn but Brooklyn the nice parts of it are even the livable Parts they're now also quite expensive to so I think there are gains to clustering artistic talent and we're losing some of those downtown San Francisco Tech aside I'm not sure
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artistically it's such a creative area it just costs too much so I think that's the big loss the big gain is just how easy it is to access everything so you mentioned having more time for culture we do have somewhat more time but I think the real gain is we don't need as much time to get to culture so if I want to hear a song I go to Spotify or I go to YouTube it really just takes me a few seconds if I want to watch Netflix
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streaming uh you don't have to go out and do culture as much so you can pack more in in some ways the quality is lower because there's less live performance up if the information is denser and you just know about many more things and I think that's both the present and future of our cultural lives how would you kind of think about the pros and cons of like virtual tourism like say the difference between putting on a headset and walking around the
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Vatican and actually going to the Vatican and experiencing it in in a different way I'm still a curmudgeon I have to admit on this and it could be I just haven't seen the product yet but before I owned a smartphone I thought well this is going to be great and I got an iPhone on the first day a virtual reality I worry it will make me dizzy and I worry it will substitute for other kinds of experiences so I'm not looking
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forward to doing that I may do it so I can write about it and think about it and it may turn out it's really truly wonderful my current life I'm able to spend maybe a quarter to a third of my time on the road and get to a lot of different places and I'm pretty happy with that but if I'm you know ill and stuck in bed and I'm 81 years old virtual tourism might be a pretty wonderful thing do you think it stops at tourism or do you think we we almost
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like if you're projecting into the future do we think we create this virtual world that people just inhabit that are maybe the less productive than other people and that's their form of entertainment I think there was a Disney movie about that like Wally or something yes there's quite a few movies in that direction you know I think bandwidth is still a problem so Virtual Worlds uh to be interesting they have to be pretty
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thick and you know we're doing a Skype call but we're not even having uh our images be sent back and forth because that can interrupt or interfere with the quality of the Skype call so if just my face creates a problem for Skype over a normal broadband connection you have to wonder well how far away is a good enough connection for virtual reality to be cheap enough to use I I don't have the answer to that question some people
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say the killer app will be some kind of virtual sex either with robots or people at a distance uh that's hard for me to judge I think my intuition is people like simple boring things uh much more than you might imagine I mean people just love spending time on Facebook and sending back and forth short silly or not very informative messages and that's been the killer app for so many things that's what's taken up more of our time
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uh not like the truly exciting and inspiring so I don't know I don't think we know yet but I know so many Americans you know right now they could afford to take an affordable trip say to Central America and they don't even own a
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passport so let's keep that in mind I think it was average over uh I started the quote because I wanted to read it back to you but I forget which book I pulled it out of you said in today's global economy uh you know ever value
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will go towards what scarce and here's what scares quality land and natural resources intellectual property are good ideas about what should be produced and Quality Labor with unique skills yes as you're thinking on that I would stand by those words has it evolved any since you wrote those well it's become a lot more extreme so land prices in top cities including London and Paris they've kept on going up the top earners have more
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and more Global markets to export to you know I say good for them uh but still the old days when if you had a product that was a big hit you might sell it to Western Europe and maybe Japan that's been replaced uh by a global setting where you can sell to billions of people across more than 100 countries and that really will increase those rewards to the scarce factors do you think that there's um a movement away from National
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newspapers and more Regional news I think there's a movement away from both so as you know uh younger people don't read newspapers much anymore they may read articles from newspapers online from say Facebook or possibly Twitter or email recommendations but it's not the same as reading a newspaper I don't think you can fund most papers by ads I think they will end up as Ventures owned or supported by the very wealthy uh New
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York Times and Wall Street Journal I think will be profitable I'm very happy with you know my employer Bloomberg I write for Bloomberg view but newspapers as we knew them I think are mostly already gone are about to disappear what do you think will replace them or do you think nothing will replace them I wouldn't quite say nothing I think our daily our daily flow is replacing them and the daily flow again has some pieces
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from newspapers there'll be a lot of local reporting on blogs or blog like entities and if you want to find it it will be there so if you uncover a scandal about some local official the world will find out I'm reasonably
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optimistic about this but I don't see why you should bundle it all together like the classified ads the sports page the local news the international news like who really wants that it's their bundle when you think about it uh it's
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it was always crazy and in a way thank goodness we've moved away from it into something more efficient for the user I don't want that bundled and this is like buy five books bundled together unless it's like a five volume set five different books no I pick and choose the books I want news is the same way it's only natural you also wrote a book called The complacent class which kind of highlights that there's a lot of changes
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going on which could have a lot of attention but our reaction to those changes is sort of neglected can you expand on what these changes are and how our you know seemingly well-intentioned decisions today uh may not have the desired effects well the key idea behind the complacent class is that Americans have become quite risk-averse uh they move around the country at much lower rates they're much more paranoid about how they raise
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their children they medicate themselves at higher rates our economy has less churn it's less Dynamic by many different measures rates of productivity growth have been down outside of the tech sector so a lot of these decisions to settle in and be safe and comfortable they're individually rational like it's it's good to be safe right stress is is a bad thing but when our society collectively makes this decision there
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are ways in which we're all worse off because we live in a much less Dynamic country our rate of economic growth is slower it's harder to afford the federal budget we end up with the screwy politics those are the basic themes of
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the complacent class and we become more segregated too uh if you mean racially segregated cities or more racially segregated suburbs or not so that's a mixed story uh but many parts of the country are becoming more racially
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segregated in a manner that I find discouraging it it strikes me as odd that the pace of change uh perceptually at least has picked up I mean I don't know what it was like to live in the the 1900s or before um we've become resistant more resistant to change despite the acceleration can you expand on that well I don't think it has accelerated so think of my grandmother who was born you know very early in the 20th century uh most people
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didn't finish high school there were no antibiotics you know there really weren't vaccines people didn't have cars radio hadn't been invented uh flying was not something people did and you can go on and on and on with the list then fast forward 50 years later uh when she's 50 in the 1950s every one of those things is completely different and what America looks like physically is not that different from the America we have now
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so every area everything has changed for her now I'm 56 years old if I think of my life now compared to when I was a kid you know age five uh computers are like one huge change but a lot of the rest you know I live in a house that's from 50 years ago I cook in a quite old kitchen it's not a problem uh I don't feel I'm really missing out on anything my car is safer and better than you know cars 50 years ago but it still looks
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like a car uh someone from back then could drive one of today's cars someone from today could drive a car back then without even needing any new advice or instructions so a lot of the world in this country change has slowed down do you think that's in part because there's a lot to be happy about there's a lot to be happy about we exhausted a lot of the low-hanging fruit from combining fossil fuels with powerful machines and
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electricity and Communications and that that's all to the better but we've now entered a world where people find it hard to imagine a future very different from the present and when people talk about progress they mean something like
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gentrification more nice restaurants you know somewhat higher level of safety if you read science fiction from the post-war era people imagine these radically different Futures often utopian today's science fiction tends to
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be dystopian and at an individual level you you I mean they seem to make sense but as you broaden your horizons to communities and countries perhaps what do you foresee as the implications well if you go to China China is very much a non-complacent society it has much higher rates of economic growth in the range of six to eight percent it's more volatile it's more stressful it's much harder to live in China there's a much higher level of
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air pollution so all things considered on any given day you would prefer to live in a complacent Society but that said a country cannot remain complacent forever and I argue that eventually you know something has to give you need a way to pay the bills you need dynamism again and you start seeing disruptions in your complacent life and I think already in American politics we're seeing some of these disruptions things
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we thought like just couldn't happen coming to pass the Trump phenomenon obviously so complacency is wonderful when you can keep it forever but that's never really an option but for the United States what are some of those
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other things that you see coming to pass that would indicate that there's cracks well the loss of pax Americana on the global scene I think is is the number one issue so we now live in a g zero World America cannot dictate uh world
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affairs our attempt to redo Iraq totally failed turned out to be a huge mistake and other countries you know will do what they want say you know in Syria Iran or Russia and they won't pay much heed to us so again on any given day this may not seem so terrible but as our influence slowly erodes I think we'll find decades from now that it could be really quite disastrous and do you think that becomes the natural kind of seesaw
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of life where uh you know we we start to lose our positioning which creates an urgency which kind of revives us and then is this unnatural or is this a like a different sort of cycle I think it's a natural process but that process of
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revival can be very volatile very pain painful very disruptive if you look at American history as a whole we have somewhat of a nasty history we have these decades the 80s and 90s where we had so many victories and triumphs and
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things felt so nice crime rates fell internationally communism more or less went away and we're used to those decades but they're not our historical Norm maybe in some ways we're going back to the America of the late 19th century with a polarized politics screwy media uh you know in some ways higher levels of violence and more dynamism too like I said I would personally rather live in the more complacent Society but I also
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realize it cannot last one of the other things you said in that book was we're removing ourselves increasingly from the physical world not only through Amazon and being able to stay at home and have our laundry done and we don't have to go out but I think you alluded to some implications on physical buildings can you expand on that well we've more or less stopped building infrastructure so in New York City significant parts of
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the subway line state from the 1930s or 40s like the signaling systems they're still in use it's great that they still work it's a testament to the creativity of our ancestors but that's a sign we're letting the physical world Decay and bridges and Roads we're not really maintaining or building enough of the new ones uh the idea that people prefer to live in homes from say the 1920s or 30s or the 1950s than homes built now uh
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you know no one prefers say a telephone from that earlier era so when it comes to building and reshaping our space we've somewhat given up or in some ways even gone backwards getting around takes longer than it used to there's traffic congestion we haven't really addressed that problem anywhere in this country it's basically just getting worse oh and I think that those are signs of a kind of inner sickness to some parts of the
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American psyche do you think that those problems should be addressed by governments or like the so take the car and traffic problem is that something that solves itself because we know in the you know the next 20 years there's a high probability of self-driving cars coming on the scene and we can assume reasonably that that will alleviate some of the traffic problem maybe not fix the the roads but is that problem worth
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solving now or what would you have people uh how would you think about that differently well I would have government price the roads during rush hour or in some places such as Manhattan maybe price them almost all the time uh one encouraging sign is outside of Washington Route 66 into Virginia they're now charging tolls and at rush hour the tall can be as high as 30 or 40 dollars it sounds terrible but without the toll you couldn't really use the
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road at all it was just a big parking lot so London has applied a congestion charge going into the Central City it has worked Singapore has congestion charges for its roads they have worked in this country we need to do the same thing self-drive driving cars could make the problem worse you know because you'll send out your car your vehicle on all kinds of errands oh go to Whole Foods and pick me up some smoked salmon
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I'm hungry and there may be fewer people on the road but the people are that are there could be in much slower traffic and it's so hard to get new roads built there's environmental review there's homeowners groups uh it's very very difficult in a lot of parts of the United States how can we prepare as individuals or what should we be taking into account in terms of this type of future playing out um what should we be doing well I think
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the future belongs to people who are what I call Met irrational that is people who realize their own limitations so not all the skills that you think are so valuable actually will matter in the future don't just feel good about yourself but think critically what am I actually good at that will complement emerging sectors and emerging Technologies uh the world of the future even the present will be a world of algorithms uh artificial intelligence
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will tell you what to buy and how to buy it and at what price uh people who think they can beat the algorithms will make a lot more mistakes so know when you should defer it's easier than ever before to get advice from other people including on podcasts right or you know go to Yelp when can you trust the advice of others having good judgment there is becoming more important than just being like the smartest person are having the
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highest IQ so a kind of epistemic modesty I think is showing much higher returns than it used to how in your opinion do we develop good judgment I think having people you trust who serve as your mentors and I mean that word in a very general way who teach you things about different areas and keep you judgment uh that's supplemented by you know extreme and intense online experimentation that's the way to do it what do you mean by
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online experimentation Read Wikipedia use Google creatively listen to your favorite podcast read your favorite blogs Twitter put time into having a wonderful Twitter feed whatever it's going to be it is worth investing time
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in and do a lot of it because today is the golden age for that for the first time in world history there's this new thing like internet culture the internet way of learning internet modes of writing uh right now is to that let's
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say you know the 1780s worth of classical music so enjoy it it's incredible online education as we have it is one of the world's greatest achievements ever and we've put almost all of it in place in say 15 years and Incredibly rapid trans transformation so do that but you cannot neglect face-to-face learning from other human beings who can like IU inspire you motivate you steer you it's really people who can combine those two things
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who will do well how do we collect the feedback for ourselves to realize our own limitations like there's two problems with that one is getting accurate feedback and the second is kind of moving out of the way of our ego and allowing ourselves to see it how can we be better at that well I think there's more feedback today than ever before so many jobs your performance is measured or can be measured in a way that wasn't
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true 20 or 30 years ago uh you know if you're a programmer it's not that hard to figure out how good you are you know there's GitHub and you can post what you've done and the world will want to hire you or they won't right so a lot of it's psychological how can you accept the feedback because you know none of us are actually that great and uh life is an experience of being humbled all the time so you're either discouraged or
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you're re-energized by that and I think learning how to re-energize yourself you can always go online and see someone who's like smarter or better looking or who can you know lift more weights in the gym than you can whatever the metric is unless it's magnet unless you're Magnus Carlson in his chest there's someone better than you and when knowledge and peer groups were more local in earlier periods of time that
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wasn't usually the case so attitudely adopting to never being the best uh I think is you know a new tough challenge brought To Us by the internet but I see many people up to it it can be re-energizing it's exciting how much new stuff there is to learn so be more internally motivated like I want to become something I aspire to something and be less like oh you know I'm the best at this I'm the best at that because you're not as a parent how did
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you Foster that in your kids uh we have one daughter she is now 28 and uh she's doing great uh I don't really claim credit for her that credit goes to her but as a parent you shape the environment and you have you do have
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some influence I mean was there anything that you consciously were doing in terms of building resistance and tenacity and internal motivation other than the platitudes here's what I recommend expose your child in teen years to as
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many of your friends who might be possible Role Models as possible like at some margin they're just not going to listen to you anymore they're not going to watch your behavior anymore they know what you're about they've taken from that what they're going to have them meet and spend time with some of your quality friends show them new Role Models that's what I tell people your influence is limited for better or worse
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I like that um do you think that we're becoming more specialized in this kind of menorrational world the world of algorithms uh most people are but I think there's a countervailing tendency so we have more managers managers almost by definition are generalist so as more people become more specialized there's a separate class who become more synthetic and and less generalized and more almost like philosophers the manager is like a
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philosopher they need to understand The Human Condition what motivates people which people can work well together which cannot those are very general forms of knowledge I think Charlie Munger said something last year at the Daily Journal meeting that struck with me on this and he said that most people would be better served by specializing hyper specializing with 80 to 90 percent of their time and then using the rest of
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that time to become a generalist in sort of the big ideas of the world to what extent would you agree or disagree with that I mean maybe most people but you know it's person by person and for some people it should be 50 50. and certainly at the higher levels I think generalists are important if you look at CEOs several decades ago most CEOs were people hired from within that sector and now CEO is much more often are hired
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across sectors to someone who you know worked for an oil company would then be hired to run you know a manufacturing firm so that's showing some kinds of knowledge are actually more General to what extent do those skills transfer
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successfully well the market has rendered the Judgment that they transfer more and more and American companies are pretty well managed and if you think while insiders have some kind of natural advantage in having you know an inside
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track if companies are more willing to hire these Outsiders I think that's a clear sign that executive knowledge is becoming more General in nature more Global more a set of skills about communicating understanding how politics global economy internal management all tie together those are somewhat General skills you do need to understand something about your sector too though switch gears a little bit and talk about
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a subject I've been wanting to talk to you about for years which is reading um you used to read a few important books you call them I think QuickBooks and now you read many more books almost disposable like why the change
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when you're young it's quite easy to read books that will shake everything you know and those are the Quake books so for me you know a quake book was reading a Friedrich a Hayek a quake book was reading the early science fiction I
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read in my life a quake book was reading John Stuart Mill's autobiography and because you don't your world view is not as formed books have it's an incredible influence over you uh then as you get older say you know by the time you hit 40 I don't mean that you never change your mind about things you're changing your mind all the time but it's very hard for something to have the impact say like the first time you heard
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Beethoven or the first time you you know picked up Shakespeare it's just not possible anymore so you read more history books you read more biographies you read more for a particular facts you read for a kind of entry into cultural anthropology of different places or different industrial sectors and what reading is uh changes and books do in a way become more disposable like the books I still own or you know Homer Shakespeare some basic works of
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economics and I'm not ever going to give up those books but they're not necessarily the books I'm reading now I do reread them sometimes do you reread anything you've kind of read in the last five years uh Shakespeare I reread pretty frequently that's probably what I reread the most but any classic work I'm likely to reread over the course of say a 10-year period so James Joyce's portrait of the Artist as a Young Man I'm going to
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reread soon I probably haven't read it for 20 years I would guess what are your rules for reading I mean do you read cover to cover or do you how do you after you pick up a book what's your process like Classics I read cover to cover almost by definition of a classic most books I don't finish very good books I finish maybe one book in 10 I'll finish but I don't mean that as any slight to the books you've always got to
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think well you know chapter 7 in this book is it better than starting a new book altogether so much of my reading now is shaped by my reading for my own podcast series to interview guests so I just interviewed Matt Levine of Bloomberg and he writes on Law and finance but when he was an undergraduate he was a Classics major so I reread quite a bit of Horus you know the Roman essayist and poet to try to get into the
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mind of Matt Levine so that more than anything now drives my reading reading to understand other people I'm interviewing so with a typical non-fiction book are you reading introductions straight through or are you flipping around or I flip around you know I start the opening 2030 page just just to see should I read this book at all more than half of all books I get don't pass that test then there's plenty of books I'll read you know maybe half
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of and be quite happy with them but still want to read something else and then you know a really good book like the new Charles C Mann book The Wizard and the prophets about the history of debates over the environment I read all of that uh that kept my interest the whole way through there's certainly still plenty of books like that do you read mostly in Kindle or physical books uh I don't like Kindle sometimes when I
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travel I need to use it I can manage with Kindle I find it hard with Kindle to like turn back and I also remember things better when I think think physically what is their place in the book maybe that's silly but I think oh
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that was like early in the book and I see where it is in my mind in the book and I remember it and I can't do that with Kindle I have the same thing it's really weird I can remember oh I think it's like this part of the page you know
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between 70 and 80 but I can't do that at all with the Kindle for some reason that's a really strange uh do you write in the books I know what I sometimes do is fold over Pages where there's something notable that's if I own the
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book not a library book and then uh maybe I'll go back to it but usually I know just the act of folding over the page helps me remember it like I found that notable I'm telling myself and then it sticks with me better and then I'll
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you know give the book away or throw it out a while ago be careful about giving books away if you give a book away the danger is a person will read it just because it's a gift unless you think it's the book they should be reading it's actually slightly cruel act to give someone a book I've had that happen before where I've given people books and they've taken messages out of it like I was trying to send them a subtle uh
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subtle message that I was never intending to give them oh you think I'm this neurotic character well I'm sorry yeah that's exactly what happens and it it takes a while for it to come out and it's like hey what happened
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so giving books away you know it's overrated I think uh I also get a lot of review copies because I blog I cover a lot of books so a typical day I could you know five to ten books could come in the mail and uh you know I I need some
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way of dealing with those and I some I do give away and then there are people I know them well enough they trust me they know my giving them the book signals nothing and that's just like a beautiful relationship I usually take those uh Advanced copies preview copies review copies and Chuck them in the lending library right by my house which probably has you know it has more books coming out before they're actually out than
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people must love being around there um one thing that you said a while ago was that you read fairly quickly and you said to read quickly you should read a lot what did you mean by that I read nonfiction very quickly I don't read fiction very quickly maybe I read it a little quicker than most people uh the more you've read the more you know what's coming and the books you're reading so the easier and quicker it is
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to read them so like if I read a book now you know I'm 56 years old I started reading when I was three if someone asks me well how long did it take you to read that book the correct answer is 53 years it doesn't matter what the book is you're bringing to Bear your last 53 years of reading on the book and most of your reading your understanding results from your prior investment so that's the way to read well is uh you know stick
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around on this Earth and keep on reading that's by far the best advice I think keep at it stay alive I like that what would you say is the way to think well I don't know anyone who thinks as well uh I I think you were a piece a while ago or I seem to remember this which is um the work required to have an opinion I think you alluded to writing an article from the point of view of someone else yes there's a basic dilemma
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from what's called Bayesian statistical Theory why should you ever hold an independent opinion like on almost any matter maybe any matter there's someone out there who knows more about it than you do so you should in a sense just find other people's opinions to copy but then how do you judge who's the person who knows the most or understands it the best there's a paradox in that because if you don't know the right answer it's
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hard to judge who is the best judge so one implication is we should just be far less sure about a lot of our opinions but also this point I referred to it earlier the wisdom in knowing how and when to defer is like the key wisdom of 2018 of our time and this is under publicized what do you mean the wisdom to knowing how to defer or when to defer well you can Google to such a high percentage of the world's information
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and again this is pretty new so when you know how to judge the quality of something on the Internet sometimes said you know the internet makes Smart people smarter and stupid people stupider so it gets back to average is over like which
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category do you want to be in be epistemically modest but also be a critical reader and just having a general knowledge of how to evaluate sources getting back to being generalist versus specialist if you're going to be
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a generalist one of the best things to be a generalist in is evaluating the quality of sources in your Twitter feed online everywhere that is so important and it's skyrocketing and significance most people they're not getting that much better at it how do you think about that how can we improve our ability to judge I think again if this triangulation with really good face-to-face people you trust and who knows something and then intense uh use
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of the internet to like cross check and investigate things and just kind of bounce back and forth and do that around and around in a circle as much as you can as quickly as you can and you get better and don't think you know it all you know if something offends you don't assume it's wrong I would also recommend I'm not saying it's right but if you dismiss it you won't learn from it so try to be able to learn from almost
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everything so when you read something that disagrees with your thoughts or opinions how do you how do you process that information uh I try to be happier about it it's not always possible we're all imperfect creatures but I would say a lot of times I succeed and overall I'm more interested in reading books I disagree with than books I agree with a lot of books I agree with they could be quite good but they tend to bore me and
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I that's one thing about myself I feel good about books I agree with tend to bore me I view that as some kind of like minor tiny Victory I've achieved in life I think this is a pretty big victory do you have a mental state before you read the book as in like this is my position and then after a book you maybe disagree with and view how your position has changed I don't know I think I'm more blase than that like there's a pile of books on the
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floor and probably my wife thinks the pile is too large but if I put them away I'll forget where they are so I want the pile to be smaller and I'm I'm more focused on very mundane things than like the grand ideological struggle of our time whatever and uh you know to focus more on the mundane things maybe is also helpful for reading the books because you don't get too caught up in being offended or like oh I've heard this person isn't like
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doesn't know this or that and I can dismiss them there's an intellectual move which I call devalue and dismiss and uh you know try not to do devalue and dismiss you learn much less and it's always Justified right uh again unless it's Magnus Carlson playing chess or maybe a computer program playing chess you can always devalue and dismiss oh that person he didn't you know understand this event 10 years ago you know he or she doesn't know very much
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always possible don't do it are we doing that to discredit them or relatively position ourselves better I think both but mostly the latter people want to feel good about themselves they want a kind of easy path to Virtue to truth to feeling in control we love to feel somewhat in control speaking of your wife I think in one of your books you brought up fighting with your spouse over a bed or something and I I think the context was you like the
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bed 10 better uh and so you fight about it and you win and you're a bit happier but it costs you a lot because your your spouse is unhappier can you expand on how we can think about this and how we should bring that to our own relationships well this gets back to epistemic modesty and not just with your spouse your children your friends but you know in fights both people can't be right all the time on average maybe
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you're right half the time I would say on average you're right less than half the time because there's so many fights where both sides are wrong so trying to be right or establishing being right or proving being right it's usually a mistake most of the time you're wrong and it's hard to keep that in mind if you have a disagreement or fight in the workplace but it's true most of the time you're wrong in this fight and if you
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can carry just like 10 of that realization and internalize a bit of it emotionally I think you can do a little bit better no one like can really truly believe that like we all actually think we're right but you can sneak a little bit of it into your Consciousness I used to witness a similar phenomena when I worked for the government which was people would come in and they would have to present project plans and they would
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present these plans and the person would have a hundred percent conviction because it would be their plan and then the people around the room would try to add value to that plan and they would inevitably say the plan was 90 complete
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and now it's 95 complete but the end result was actually worse because the motivation of the person who brought that plan had gone you know from a hundred percent to 50 because it was no longer their plan yes morale is you know
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increasingly important in our world this idea re-energizing yourself in the face of setbacks I think it influenced me a lot that I was a chess player very early in life because you learned pretty quickly in chess like you don't really have excuses for losing and most of the time you're making the wrong move maybe your moves are better than your opponents but you go back you study your game like most of your moves are in fact
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wrong compared to the perfect moves and I could have learned that when I was 12 and that's always stuck with me so that was formative what age did you start playing chess uh 10 and I quit by about 16 but for about five of those years I played very intensely and in competitive tournaments and put in a lot of time and it's one of the biggest things that has shaped how I think how has that shaped how you think this idea again that most
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chess moves are mistakes even if they're made by very good players the idea that uh you know you can't blame other people for your own problems even though some of your problems maybe are their fault right but you need to face up to your own imperfections as a player and try to work on them and that habit is rewarded and chess is brutal you talked about you know measuring your own results or talent and Chester is this thing in
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numerical rating and ELO rating and it really does measure how well you're doing remarkably exactly and you wake up in the morning and you know where you stand in the pecking order and you can either be discouraged by that or re-energized and for as long as I was playing I was re-energized at some point I guess I wasn't re-energized anymore and it just seemed to me like economics and other social sciences were more
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interesting than Jess but then I tried to transfer some of my learning techniques from chess to those other areas what were your learning techniques how did you go about learning tests there was a book written by Alexander kotov called how to think like a grand master and it argued like just reading Just Books maybe had some use but the really useful thing to do is to try to analyze a game and write out your analysis and then compare that to a
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really good analysis by a top Grand Master so you could see how rotten yours was and it suggested you needed to get used to that process emotionally and the people who did that would improve and in intellectual spheres there's the same thing you want to really figure out what are your mistakes you're like most of the time not making the best chess move intellectually speaking and if you face up to that you'll improve if not at some
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point you'll ossify and you can play devalue and dismiss and there will be people stupider than you or more wrong than you and you can Lord it over them and you know try to make a career out of that but again at some point you're going to stop improving but if you the other way to think about it is the value of compound interest I refer to it as the value of compound learning like just keep on learning let the years pile up
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in your favor learn X percent a year it will compound and stay alive on this Earth and maybe you'll get somewhere and part of that learning process is putting yourself out there to opening yourself up to either criticism or other people um making your work better sure and just learning from them like what have they done that has made them you know successful or smart or talented I think the internet has opened so many doors in
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that respect absolutely would you change the education system them to include chess for all students or how would you go about changing the education system uh Gary Kasparov has a foundation devoted to spreading more chess
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education throughout the world I think that's a very worthy project I wouldn't want to make it mandatory for everyone or in all countries but I think we should have much more of it uh I mean the good thing we're living in a world
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where there are more games and a lot of gamification and that's mostly a positive development it doesn't necessarily have to be chess uh maybe some games they're addictive in bad ways that it somehow the virtual world of the game that pulls you in rather than the intellectual parts of the game uh but the internet gives you a lot more access to gaming and that's a big positive too I have to ask you a different question
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changing gears a little bit here and then I want to get to some trigger questions before we go but uh why do you only watch one TV show at a time uh sometimes it's zero and occasionally it's two just time I would like to watch
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more TV uh the show The Americans and Westworld are right now the two that we watch and if neither is running we're not watching anything if both are at the same time we watch both I love The Sopranos I'm a big fan of Curb Your
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Enthusiasm uh most TV shows bore me I think movies are actually much better than TV TV now is a bit overrated and movies underrated uh but a great TV show is a wonderful thing you can do it in short bits do it at home and you look
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forward to it all the time what would be your equivalent of like Quake movies or movies that you absolutely love uh Bergman movies from Sweden you know starting in the late 50s but his entire career all of those for me were at work
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were Quake movies uh Star Wars I saw the premiere on opening night I guess that was 1977. I had never seen anything like that I knew you know in the first few minutes like I'm a fan of this for life even though I don't like the recent one so much what don't you like about the recent ones I think they're okay but of course they're Disney fied both literally and figuratively they feel less serious there's so much repetition
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of themes the idea of suspense about the story is drained away and maybe story suspense is just hard to pull off in 2018 with social media but like when I saw Empire Strikes Back the second installment which I guess now is called
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part five and when Darth says Luke you know I am your father everyone watching it was shocked this was an incredible moment I don't think we can do that anymore like what could they tell you now an installment number you know 19
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when it comes along that really can have any kind of equivalent meaning like oh I'm I'm the third cousin of you know Darth Sidious you know who would care and how do you prevent those spoilers if you were to create them in the cinema from reaching you I don't know how to do that other than by being walled off which I I cannot manage but I think if you watch a lot more far in films they rely Less on that kind of Revelation and
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that was a wonderful time to watch films from South Korea or Iran or Latin America all sorts of places and the Hollywood is in a bit of a dry spell too many Tempo franchises too many superhero movies uh Black Panther though I'm very excited about I love the preview I will see it right away I expect to like it very very much I'm excited about that one too uh one of the questions we got on Twitter was what do you think that
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the long-term implications of interest rates being near zero so anybody who's basically under 40 at this point has never experienced interest rates above I don't know five or six percent in their lifetime it's much harder for Millennials to save and I fear they will have impoverished retirements especially since the fiscal budget on the federal side is problematic as well and I think those rates staying so low is a sign
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that there's all this wealth out there in the world Russia China but not really that many safe places to put it so they buy U.S government securities which is perfectly understandable but it lowers our rates for reasons which are somewhat artificial and I don't know that that's going to change soon the real remedy would be for China Russia Argentina to become like truly safe predictable countries that seems to me somewhat far
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away and so how does that change in terms of a democracy if you have a large voting block of people who uh who maybe don't save and view the social system as being a safety net now like how do you foresee that playing out over the next 120 30 years will you become more dependent on foreign Capital the nation is in some regards mortgaging its future uh people expect things from governments that governments cannot always deliver upon
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and I think it's a very precarious situation and we have become very dare I say complacent about this state of affairs what do you what are your what's your take on minimum wage increases and the implication on not only the people
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receiving them but uh in terms of the broader economy in general and do they have an effect what is that effect uh minimum wage increases put people out of work sometimes it's a small number of people sometimes it's a large number of
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people but I think jobs are very important and I would look for a different way is to raise wages which we do need to do the productivity would be the way is I mean it seems productivity is cumulative and minimum wage increase is not it's one-off you know ultimately it will be chipped Away by inflation or other factors you need something cumulative it gets back to the power of compound interest compound learning if I look at
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a policy I just ask does this policy really involve compound learning of some kind and if it doesn't like it still might be good but I'm probably not going to be that enthusiastic do you think it minimum wage increases improve the quality overall of the people receiving them or is it just net neutral and then there's a smaller labor pool no I think when people get a minimum wage increase they probably work harder and they're
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somewhat more conscientious and that is an argument in favor of the policy I don't think it makes up for the lost jobs but I do think there are some positive effects if they have a criminal record they may be less likely to end up in prison say I guess that uh presumes that they're and I don't know the answer to that this so I'm really asking like does it actually benefit or does it work out as a wash like because minimum wage
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goes up so you get a higher wage and then you start paying more for all of your goods because like do you end up ahead oh a little bit but not as much as it looks so if you raise minimum wages say that raises food prices there's good evidence for this and other poor people have to pay more for their food and a lot of those apparent first round gains get given back and they dissipate so that too is another reason not to be
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super enthusiastic about boosting minimum wages what advice would you give to somebody under 40 who's uh never been rewarded for saving I don't know I mean can I say don't listen to me is the advice I think the people who save well have methods and systems almost like a religion you know our daughter there was recently a week ago a Marketplace article about her and her husband and how much they saved and I was very very proud to see that and
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their method is to treat it like fixed rules almost like a religion I think that that's really good advice what I tell people is usually live off your first job and then if you can be happy living off that wage than anything else you can bank and you'll you'll live a long life and if you do your 20s right you're set up for life and especially with the internet there's so much refund like what do you need to spend all that
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money for anyway and you know I'm at a point in life I have a reasonably High income but I don't buy a nice car my part my car is a piece of crud you know that's fine it drives it gets me there it doesn't break down where do you think money will go for returns in the future is it going to be the same classes that we've had before which is fixed income equity and maybe a property or do you think that that changes to somewhere different I
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think private Equity is a wave of the future already the present they take over firms and improve how they're managed there's so much low-hanging fruit for improving management uh now ordinary investors cannot easily get in
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on private Equity Real Estate but in select areas areas that a lot of people already can't afford to buy into so I think this is a big problem how do you save where do you put your wealth it's one reason why there's so much interest
51:43
in Bitcoin which I would not recommend for that but it's a sign there aren't too many other good options for a lot of people out there do you own any Bitcoin uh no I do not but obviously that was one of the many many mistakes I've made just like all those mistaken chess moves well I have you looked into Bitcoin what do you think about the idea of a currency that is uh non-government regulated well I don't think it's a
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bubble I think it serves some useful functions I don't view it as the currency it's not convenient to spend it's a store of value a bit like gold or maybe a work of Fine Art part of the portfolio a protection against risk I
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think it's a perfectly legitimate asset that will endure and have a high value I'm not sure its value is going to go up any at this point uh but it's for real and it's not a bubble and do you differentiate that from the blockchain
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do you do you know much about the blockchain I don't like what would be the implications about blockchains that you foresee the blockchain is a way of organizing information where you can verify and can confirm things without needing a boss I don't think we found killer apps for the blockchain yet other than Bitcoin and we've had blockchain for 10 years could we use it to register property titles maybe but the other
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methods we have actually don't seem that bad at least if your quality of government is good enough so I would say the blockchain is actually more unproven than Bitcoin at this point is there like the transaction costs seem high if I'm if I'm understanding this correctly in terms of the energy costs to verify the words people understanding the system so at any institution you have to ask like do people need to understand this to use
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it sometimes the answer is yes sometimes the answer is no but I think with blockchain like at least some critical mass of people have to understand it and that understanding is hard to come by lawyers cannot easily understand blockchain unless they specialize in it most economists I know don't understand blockchain so I think there are still quite a few hurdles before it's some kind of proven innovation