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hello everyone and welcome back to conversations with tyler today i'm chatting with zach carter he's a senior reporter at the huffington post but more importantly this year he published a new book as biographer called the price of peace money
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democracy and the life of john maynard keynes and just last week publishers weekly selected this book as one of its best 10 titles of the year zack welcome let's start with a simple question wasn't kane simply wrong about the
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treaty of versailles man tough question out of the gate i i don't think so uh but of course they're they're um the people who made this case over the years um you can talk about the treaty of versailles as a in his critique of the treaty of versailles an economic critique or a political critique i think a few years after 1922 i believe after the treaty even signed keynes did a sort of follow-up analysis called a revision of the treaty which was
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basically 80 000 words if i told you so and he goes through the debt and resource numbers in detail uh and says look i was right i find that persuasive um there's a very uh prominent critique from the 1940s uh he by the son of the translator for uh clemenceau at versailles which says keynes is wrong about all the economic numbers um but i don't find that persuasive and i don't have it in front of me so i can't get into the exact details but i
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don't think so i think if you think about the treaty of versailles as a political document that sets the terms for international cooperation over the coming decade the imposition of scarcity across not only germany but also
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britain and the the victorious allies uh through the refusal to wipe out debt and to impose um de facto austerity on germany through high reparations levies um results in a lot of international discord people see their money going to other countries
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uh and it fuels nationalism and uh and discontent i think he's basically right about that but but do you not agree well if we look at the numbers it seems germany never paid more than 2.5 percent of its gdp in a given year in terms of reparations
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and that's less than what hitler asked germans to pay for rearmament so if keynes had simply made a political argument well this is going to irritate the germans politically but he made an economic argument that it's impossible and that
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seems entirely feasible there are plenty of countries back then 2.5 poorer than germany or more uh didn't keynes in fact lend some credence to the notion that germany had been stabbed in the back by the allied powers
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by britain's most prominent intellectual endorsing the notion and uh he had somewhat of a political critique but on the economics he was wrong well i mean you're right that germany never paid uh the reparations duties that were due but
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i think that's that's sort of inherent in the critique if they were unaffordable they weren't going to pay them and of course by 1923 germany is in a hyperinflation crisis so i think the idea that germany could afford to pay
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is is tied up in the the political circumstances of of the day well but again countries poorer than germany didn't have to hyper inflate right the germans brought that upon themselves plenty of eastern europe was more than two 2.5 percent poorer than germany
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they made various mistakes uh but in terms of what it interjected into german politics didn't keynes misread the situation thinking that his message ultimately would be supporting german liberalism what turned out is that europeans ended up more at each other's throats and again on the economics it just doesn't seem that convincing no one likes to pay 2.5 percent of gdp uh but you know you go to the ninth later 1920s there's the transfer problem
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debate with olean wasn't keynes wrong about that as well uh just just to stick with the with the 2.5 percent i mean the the task for germany was not just paying money it's holding together a democratic coalition so the politics of this are are i think inseparable from um from the economic numbers you know when we talk about mistakes the german government made in the 1920s whether it's up to hyperinflation or or even later and clearly i mean there
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are a lot of mistakes i think into the late 1920s germany is deflating in a way that i think is uh wrong-headed uh but but particularly early on i mean the the german government is trying to hold together a political coalition and if um
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that coalition those political realities i think have to be taken to account you have people who are suffering particularly the very early days of the post-war treaty um like serious material suffering throughout germany people literally
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starving to death it largely do the allied blockade but but also just because the war costs a lot of money and drained a lot of resources and so if you want to get people to support democracy under those circumstances remember germany is in literal revolt i mean they're executing communists uh in in 1919 and 1920. uh you've got to find some some way to tell people here here is here is a better future for you we are you do not need to turn to to
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authoritarianism on the right or the left we are going to provide you with things we are not going to raise your taxes and each of these political parties needs to uh you know to have to have its own sort of uh financial base so i i you know
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could germany have have raised more taxes and uh and shipped more money abroad yeah probably but but how much you know i i think i think keynes is right this this was a uh what was being asked of germany was was too much
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if we think of bertello lean's critique in 1929 he's actually saying keynes is oddly non-keynesian so olean is saying if you transfer the money abroad the german mark will weaken this will boost german exports and what
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later became known as keynesian open economy macro models germany gets back a lot of what it's sent abroad probably not all of it but quite a bit paul samuelson thought aleene was correct i mean was kane's wrong about the transfer problem in the
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late 20s oh i'm much more sympathetic to this uh this the sort of broader critique that that keynes is in 1919 is not keynesian i mean um he's looking at this from a very he's looking at these uh these transfers as a very uh zero-sum
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game right um what what britain can't you know what what germany ships abroad it can't it doesn't get back i mean there is a time problem here though if you accept this this critique it takes time for the money to come back to germany
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the money has to be lent back into the german economy by somebody right and and during the 1920s i think later on keynes is pretty clear about this you know the united states is lending money uh not only to germany
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but but to europe and so long as that game keeps going the cycle of funds is is sustainable uh but of course by you know the late 1920s that's no longer the united states stops lending money for for various reasons but you know right up into the into
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1922 1923 i mean i i think when when you have the the the french government um you know occupying the rhine um you know there are political instabilities there that make the flow of funds pretty pretty difficult uh and those
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political tensions are are occurring they don't just spring up in 1923 they're they're there from the moment the treaty is signed early in his career why was kane so keen to work in the india office right he chose that well i don't know if
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he was so keen he really wanted to work in the treasury uh the treasury department and it was sort of a disappointment to him he i think he'd come in second or third on his his you know big exams at the end of his time at uh at cambridge he wanted to be number one he's recognized as this brilliant fellow um so i think he wanted to be a treasury and he viewed the indie office as a bit of a disappointment um but i think one of the things he
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liked about working there was the way he could he he did seem to take to looking at the currency situation you know he wrote a book his first book is called i think indian currency in finance it's from 1912 or 1913. and it's it's sort of his first real
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serious analysis of the gold standard and the way the way it works um within the british empire and so i think he he finds it intellectually engaging in certain respects but it's not quite as it's not as prestigious as being in
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treasury which is what he really wants um and he feels a little bit guilty about that um that sort of sense of ambition his his friends in bloomsbury think that working for the government is this embarrassing sort of uh you know political thing to
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do he should be pursuing you know art and aesthetics and and writing and and philosophy instead of instead of government so i don't think he's super happy at the india office um but it is his sort of his introduction
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to the british bureaucracy and i do think he he enjoys being part of a british bureaucracy he likes being a man of affairs who's connected to to sort of the great problems of the day i don't think in the india office he feels like he is
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attached to the grandest problems of the day he feels like it's it's a it's a sort of lesser than kind of post what do you think of the substance of keynes's work for the india office it's interesting you know uh he has uh
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a lengthy report on you know i haven't reviewed this in years um he has a lengthy report on on conditions after uh a a type of sort of recession in india where he says essentially the the british government's response has been rather lackadaisical and a lot of um a lot of suffering has happened and you can see his appearance like this is this is a little bit a little bit too much can you tone it down and he does um i i i think of it as sort of
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he's at this point in his life he's thinking about he's thinking about liberalism and internationalism as uh he thinks the british empire is sort of this grand liberal enterprise that is bringing freedom and democracy and prosperity to the rest
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of the world and i i think he views the relationship with india as as like everybody in britain it's it's you know the essential british colony economically in terms of resources i don't think he ever really questions
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seriously what um the substance of that relationship means based on the economic relationships that he's analyzing he's looking at the india issue as a very technical and narrow issue um largely on you know how the gold standard operates
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and and how uh how india not not allowing the convertibility of gold within its borders um you know functions and it's it's sort of a technocratic it's a narrow and technocratic analysis i think he's missing i don't
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think he's focused on the the big questions with india the way he would later be when um when he would be working in treasury during the war you know i think of the india offices having been good for keynes that made him less conformist
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but if you look at his writings on malthus he was obsessed with malthus at the time he talked about competition between the races he was interested in eugenics he has a lot of remarks about india that show a bigger picture concern
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but one that's very non-egalitarian so i view keynes on india as decidedly anti-egalitarian would you agree with that no [Laughter] he never entertains democracy for india which was not that radical an idea then no i i agree with that um and yes yes i agree with that but i the the idea that keynes is um i mean look throughout his career he's talking about he views the british empire as this sort of force of benevolence throughout the world and he
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thinks that being part of the british empire is part is is a way for people from you know all wherever they are to participate in democracy and prosperity and that is very much part of the sort of liberal imperialist conception of the time um
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the idea that it's not egalitarian i that's that's where i you know i think i think he's confused about that i think he's just wrong um but i do think he believes the way that he thinks about um about joining the british empire i
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think he believes that that is a that is an egalitarian thing to do um which i think you know imperialists across time have believed uh when when they come from a sort of um progressive perspective and and of course that's you know it's just often
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not true and i think in the case of britain and india it's not but say in indian currency in finance gaines shows this remarkable knowledge of numbers and statistics from india which he had a phenomenal grasp on
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right so he must have known the indian growth rates under british rule were quite low which has been confirmed by later research was one of the big problems with colonialism not the only one so i think my implicit mental model of
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cain's consistent with his interest in eugenics is that he thought that india on its own was just intrinsically a slow growth nation and they'd have a slow growth rate under the british but they would do worse on their own do
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you think that's the wrong implied mental model of how keynes viewed this i don't i don't know that it's wrong uh i mean you know this stuff he clearly knows that something's not quite right otherwise he wouldn't be studying the financial system in india and india's relationship with with britain under the gold standard and the you know particular way that india not having convertibility i mean the basic subject of indian currency and finance
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so he does think that british rule can be improved um but but yeah i mean broadly i mean he's he's a liberal and purest he thinks that that britain is bringing prosperity and freedom around the world and so he thinks that if you join the british
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empire particularly at this stage of his life um that you are you are signing up for uh you know to be to be led into the light i have at least 20 different friends who studied the general theory keynes this book from 1936 the big
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famous one and i ask them what's the central message of the general theory they all give me different answers so i'd like to know what's your answer there's so much in the book right incredibly rich and multifaceted but
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what's the bottom line core of the general theory yeah you love the hard questions uh it's i think the bottom line i mean i wrote in the book uh that the the bottom line core message of the general theory is that prosperity is not hardwired
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into human beings that it has to be guided through political leadership uh and i think that traces back to some extent to what uh what you're just talking about about india i mean he views the state and the government
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as from a very early age um as this sort of guiding hand that that can it's you know in the case of india it's a bit paternalistic um but but also domestically he believes that government is sort of a necessary force um to organizing human affairs and i
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you know on on the general theory it's a complicated book right uh and and in certain respects it's it's not always consistent with itself but i think that that there's a political message which is that political guidance is needed for
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prosperity to exist for markets to function and i think there's also a re-evaluation of what economics is doing and how economics functions keynes is not focused on scarcity at this point and i think michael kollecki
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um has written about this um i think he's i think this this idea that keynes is refocusing the sort of nature of of economics and economic you know humanity from competition for scarce resources towards the idea that uncertainty about
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the future is the most important sort of psychological condition for for economics and if you believe in scarcity as the overriding issue you're going to come to different conclusions about how the world works than if you believe
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uncertainty is the overriding issue so i'm not sure which one of those is the most important but those are the two that i think are are key and at the the more specific level of macro economics some people will say it's wage and price stickiness
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some say it's fiscal policy uh some say it's the theory of liquidity preference that's what milton friedman thought right uh which of those makes it all work interest rates you know i look i i i think chapter 12 where he talks about um
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financial markets is a really really critical chapter for me um you know in in that chapter keynes is is saying if we want to we that's that's where the uncertainty really really comes to be key we don't know what the future
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brings and so if we don't know what the future brings the way that we think about um about markets as being things that correct for uh you know for errors or or you know or social problems really um is is is much more complicated
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um we we don't know what the futures what the future is is going to bring then you know we may hoard money when it you know may not be good for us to hoard money um we will we will make spending choices that are different i mean i i think paul krugman has a a fairly famous at least among liberal economist analysis of cancer he says there are these chapters one through four keynesians in chapter 12 keynesians i i don't really like that that
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breakdown i think i think chapter 12 is really essential to understanding the critique of stay's law which which you get in in the first four chapters did keynes have significant misgivings about technocratic governance
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and should he have had more misgivings even have british rule over india ant given how the post-war settlement went those people were by and large technocrats yeah and he with a lot of these questions it depends on um which canes you ask there's a great um
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just a great memoir that he presents to his friends in bloomsbury in 1938 i think where he says um you know when i was young i didn't realize that civilization was this thin crust that was preserved through the skillful
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acts of a few right that's a very not egalitarian way of conceiving of human progress um but at other times you know he he seems to think that uh that people are capable of you know this sort of spontaneous flowering of of goodness and light um
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through aesthetic achievements arts part whatever um and that and that people really i mean to to believe in um progress the way he does he has to have a certain faith in the ability of ordinary people to make good decisions he certainly thinks
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that good ideas will conquer bad ones and this isn't just because the smartest best people will be persuaded he thinks people in general have this sort of rational rationality about them or they will come to see things that are
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that are true uh that's true and you know i i think yeah it probably does have too much too much faith on the balance of his life in in the ability of technocrats to order uh to order affairs to the goods certainly he has
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much far too much faith in the ability of the british empire to order its affairs although you know i think the experience of versailles sort of jaundices that view for him a bit he sees the british empire in a new light after the war
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largely because his friends in bloomsbury are telling him he's you know this terrible horrible sellout for participating in the war um but he never totally loses that um that sort of sense of or at least the the desire to view the
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british empire as as this fountain of goodness and like even even in world war ii when he's much more influential i think as a policymaker you know he he's perplexed at the americans desire to to carve up the british empire he
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just sort of takes for granted that you know obviously we want to keep all these different colonies and territories under british rule that would be good for the world um and he can't he can't even really come to see that roosevelt is
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is going in that direction when it's really quite obvious at least in hindsight uh what what roosevelt is doing so yeah i think he probably does have too much faith in technocrats but also you know a lot of his legacy as a policy
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maker is forged by uh technocratic policymaking at the end of the war you know the the british national health service is still with us that's the innovation of uh of british technocracy at the hands of the uh socialist labor party at the time and and keynes that's what gaines is doing well i mean he does uh he is the sort of financial architect of it he's he works very very closely with getting getting the numbers right and having the papers to
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wave around to say that this is uh you know this is this this stuff adds up um and i think there's you know there's a decent argument to be made at the time that the numbers don't add up but but i i certainly think keynes is an important important player in that in that note do you think keynes was in some ways too flexible a thinker so you discuss in your book his 1933 essay on national self-sufficiency which is quite protectionist though
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usually keynes was a strong free trader and what's striking to me in that essay is not that he makes the keynesian jobs argument well you need terrorists to protect domestic jobs that you would expect but there is a whole section talking
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down the benefits of division of labor saying oh these aren't so great we don't need it didn't he too many times put on the hat of a kind of advocate and played too often the role of debator he certainly loved to play debater i mean he he's
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that starts very early he he loves being part of the cambridge debating union i think the liberal debating union um he loves debating conservatives in particular in the in his early days um you know i i think it's impossible to
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separate keynes the political activist from keynes the economic analyst i and i don't think i don't know that he would want us to separate those things at least at least from this stage in history i mean certainly during his lifetime you occasionally put
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on the hat like i'm just looking at the numbers this is just what the numbers say um but you know he comes from a he's a philosopher first and an economist second in in a lot of ways i think his economics are just
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this sort of dressed up kind of uh mathematical justification for for philosophical views that he's he's been wrestling with on a deeper level um particularly when he's at cambridge you know he's he's embroiled in these debates with bertrand
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russell and ludwig wittgenstein and and all of his friends in bloomsbury about what constitutes a good life and i think that social vision stays with him over the course of his lifetime and and the reason his economics keep
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changing is because he's trying to find some sort of intellectual justification for that social vision which i think is really paramount in his um in his worldview and in his work what should we make of the preface keynes wrote for the german language
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edition of the general theory where he basically says to the nazis well my ideas will work better under your system it's not at all that i think keynes was pro-nazi clearly he was not at all but is that another example of keynes in a sense being too flexible even philosophically he's he's aware i mean i think the precise languages like hayek never did that to pinochet right i mean he sigman well i mean what is the language the language is
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something like i'm i'm aware that in many respects uh my economic system is easier to operate under an authoritarian government something like that something like that but in german of course yeah right yeah um look i mean
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isn't that just true right like if if you're looking at keynesian economics from uh from a technical perspective i mean he is his it's a theory about how the state can organize resources uh better than uh atomized financial markets can right
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i mean it's the the dangers of the authoritarian government for keynes are not in the organization of resources but in what they're organized for in his letters his letter to hayek about the road to serfdom he he discusses this in greater detail and he he's clearly aware that this system can be uh can be abused but if you're just thinking about how how to you know create economic growth i mean yes certainly you don't have to deal with
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all of these inconveniences of democracy to just to just make things happen in an authoritarian system um i don't know if i read that as keynes being you know sympathetic to the german government or um he's not he's sympathetic to his own
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ideas and wants to promote them but to me there's a discord so milton friedman spends what 45 minutes talking to pinochet has a very long record of insisting economic and political freedom come together maybe even too simplistically rights
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against the system of apartheid in south africa and rhodesia calls for free markets there and people give friedman hell over that and keynes writes the preface for the nazis and favors eugenics it's all life and that's hardly ever mentioned i don't know that the way that keynes talks about eugenics is as salient as um you suggest i mean the best article that i came across on keynes in eugenics is by this guy i think david singerman it's in the
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journal of british studies it's a pretty in-depth look at the way keynes came to eugenics and what he did and did not support and it's very clear that keynes didn't didn't support eugenics in the way that you know americans sterilizing uh
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you know poor black workers in the south were were interested in in eugenics keynes was broadly interested in it from the perspective of birth control he comes to it thinking about this is a time when eugenics and
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genetics are not as clearly defined as they are today so he's thinking about heritability of eye colors how he gets involved in this stuff um and he never really supports anything other than um than birth control and when he actually has power as a policy
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maker he just doesn't do any of this stuff he he's working on uh the beverage plan he's working on you know uh financial stuff that that is much more egalitarian than um than what we think of when we think about eugenics so
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um but he is chair of the british eugenics society for eight years late in his career and he and he doesn't do much there right i mean there are big debates that are happening within that within that society and he's mostly setting them out i mean zingerman goes into this in in much more detail i think zingerman thinks it's been a while since i read the article but you know zingerman seems to think that this is a useful way of understanding um
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keynes's worldview but not that keynes is you know some guy who's going around wanting to sterilize people and uh and do the things that we think of with with the eugenics movement in the united states i don't think he wants to sterilize
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people but he has those essays on population which are not put into the collected works they're not mentioned by roy harrod and he is greatly worried that the people from some countries i think including india will outgreed
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the people from britain and this will wreak havoc you know on prices and ages and it's a big crisis and he even says we need to worry not only about the quantity of people but the quality of people in the world yes and and if you look at him in the
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1920s in particular i mean he has extremely disparaging things to say about uh about working people in general there's a essay in 1926 i believe where he is talking about um he's talking about the proletariat and
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the coming revolution and he says you know how can i how can i prefer a theory that holds up you know the working people who are the mud to the fish of the middle class he's very much a middle class uh kind of pugilist he he believes that the
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the british middle class that he comes from is the you know much the way that he thinks that the british empire's this fountain of goodness and light he thinks the british middle class is also superior but i do think those ideas
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temper over the course of his uh over the course of his career he comes to believe that prosperity is something that can be shared more broadly and that in sharing prosperity more broadly by prosperity i mean the type of life that he and his friends and bloomsbury lived around the turn of the century um where they're thinking about art and philosophy and you know doing all the stuff that intellectuals think of as fun and he comes i think he
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comes to think to believe that that can be shared by a very broad swath of the population but he does not believe that his his whole life certainly um is it fair that that um friedman gets in hike at a lot of flack for talking to pinochet and and uh
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kane's you know wrote a german introduction to his book you know i i i think that's up for for people to to make their minds about i i think all of these thinkers if you're trying to find a hero who fits uh you know some model for
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decency and goodness by today's standards um and you're looking at intellectuals from from the early mid 20th century you know you're going to find things you don't like about them um i certainly think you know joan
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robinson who is in a lot of ways one of i think the most important intellectual partners that keynes works with on the general theory you know what what joan robinson goes on to say about north korea is north korea is not quite as bad as it is
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today when she's praising it but certainly what she says about china and the cultural revolution i mean i i don't see how you know how you can really defend that stuff it's it's it's pretty bad um and particularly for a theory that's
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supposed to be you know as as i as i take keynes i i take him to be thinking about economics as sort of the field where liberalism can fight authoritarianism through economic policy making we can keep uh authoritarianism at bay
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without resorting to war and violence and all these these horrors that he's scarred by in world war one and if that's if that's the purpose of the project then when you come around and start talking about you know the cultural revolution is a good
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idea you know i i think you've you've lost the plot a bit so um there are a lot of these people who are super smart making great uh you know great innovations in their field who are also doing things that i think are just politically
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uh not indefensible by certainly by modern standards are you ready for a bout of underrated versus overrated tyler i'm enjoying this i hope you are yes okay first one overrated or underrated traveling in taiwan underrated i love taiwan i mean uh soup dumplings um it's just a it's a beautiful place big mountains beautiful ocean uh what what's what's not to like and other than taipei where should people go next well where did we go went to taipei
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and uh we went to a beach town i don't remember my wife's family is from shanghai and then taiwan and then the united states so we went on a trip with them god four years ago um and they were our their tour guides was incredible but
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yeah i really only know taipei i can't give you better advice the 1965 immigration reform act overrated or underrated wow wow you're going right at it uh so my wife who we i just mentioned just wrote a book on the 1965 immigration
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uh reform act tell us the title please it's called one mighty and irresistible tide the epic struggle for american immigration in 1924 to 1965. i don't i i find her book really complicated uh i don't come away from
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that law i think in general it's underrated because people just don't know what it is i would say under-appreciated maybe um it's it's just not very well known i think in in american society but you know there are things about this law that work
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there are things about this law that don't work some of the things that i think at least from a progressive standpoint today we'd say are good about the law or kind of an accident um that take place largely because the architects of the
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law don't intend them to to take away so the sort of significant increase in asian-american immigration is certainly the architects of the law aren't anticipating that um i you know look my uh my wife's family is here because of that
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law so it's underrated it's great i met my wife otherwise uh otherwise that wouldn't have happened that was important for me and from certainly from a narrow selfish standpoint it's underrated the sex pistols overrated or underrated god come on man um it's so hard because they they're a one-trick pony one album right the rest you can forget and it's really just one note i mean all the good songs in there are basically the same song rewritten
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um but look they change they change the the face of music um you wouldn't have the replacement i've been reading this um this bob mayer biography of the replacements which were my favorite band and just absolutely wouldn't have that band without the sex
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pistols i do think that people get that they're a big deal though you know i i i i think very highly the sex pistols i think i would say they're overrated people you know they're deeply influential but still overrated
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and that some of these former punk rockers now support donald trump is that a flip or is that actual consistency um it's tough you know with uh with johnny rotten john lyden you know he's uh it's it's hard to say i mean i
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the sex pistols are not you know anarchy for the uk right i mean that which kind of anarchy there's uh anarchy from the right from the left i think bodies is is certainly conservative from uh you know abortion rights perspective uh
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i don't know you know i'm the my next book is going to be uh is is a look at populism in the 1890s and i i do think you have to grapple with the way that these sort of radical um radical figures radical ideas you know
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there's always an interpretation that makes them look good um but do you think you have to wrestle with with the way that you know radical change is often flirting with stuff that's that's really not great and this is something i mean i really came
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to appreciate the conservative streak in keynes writing writing this book you know he he is very afraid of social change in in this way that contemporary progressives are not like he he likes edmund burke um and it's not
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it's not like a a con he's not putting on some sort of some sort of act so that he can you know get more conservative you know subscribers to his patreon um he really is worried about social change and social people and i don't think
36:59
um i don't think people who haven't lived through revolutions and war often appreciate how how bad things can go so with the sex pistols you know i i'm not sure that the sex like johnny rotten loving donald trump is a is a huge change from 1977
37:18
um but i also you know i didn't really follow public image limited and a lot of the stuff that he did in the 80s musically um it's not bad but it's not important i think yeah like it just didn't it didn't do anything for me
37:33
i'm not like against it um but i remember listening to it when i was you know 17 or 18 you know the age where you you get into this stuff and and it just it just didn't grab me so maybe there's there's a whole lot of
37:44
really interesting intellectual stuff happening there that you could tell a story about but i i can't because i just don't know the material samuel delaney overrated or underrated ah yes how do you know how do you know you did your research um
37:58
that's super underrated underrated why why is it important nova tell us why oh my god i love that book i just read it for a book club um nova is nova is a book about all these things we're just we're just talking about it's about radical change it's about economic competition it's about uh the shift in paradigms between uh in a society that is intellectual paradigms and material paradigms in an international society it's about all the forms of
38:29
social conflict and possibility that i think exists in a globalized world even though it's about an interstellar society it's about freedom and art and cruelty and truth and it's and it's also just a fun fun space opera i mean it's it's all
38:48
packed into a an exciting tale his later stuff where he you know nova is one of these you know 250 page sci-fi you know kind of thriller novels from the 60s his later stuff where he gets into 800 page books about about sexuality i
39:04
think are really good too but they're not fun the way nova is fun the bretton woods monetary system overrated or underrated underrated you know i think uh we only had it for about nine years you know once all of the uh of the rules have been implemented
39:24
and everything um so it's it's it's not like it was the this gigantic success for for so long but i you know i kind of agree with paul volcker like that was that was a mistake to blow up there were there were there was a
39:40
framework um for international cooperation and harmony i think that was that allowed for negotiation and um i i there was a sort of shared set of norms um that i think i think we missed today i think particularly the deterioration of the u.s relationship with china right now for instance difficult thing to imagine if you the us and china were part of of a bretton woods accord but didn't it have to blow up so wasn't the whole thing premised
40:13
on the notion that the u.s could just keep on printing dollars which actually the world wanted to have out there and that other countries but most of all the french would never take those dollars and convert them into gold
40:25
and once the french started going to the gold window which is inevitable it's a general way that a speculative pay gets broken it was all over and there were particular details to how it ended but speculative pegs i'm sorry pigs are
40:39
hit by speculative attacks and they fail right and and you know it's a story that you can do you see happening in the 1990s and all of the financial crises that that happened there so yeah yeah i mean it's it's there's a weakness
40:54
i i don't disagree with the critique but you know everybody got along until blew up uh maybe it didn't have to fail i mean kane certainly didn't like the idea of uh linking everything to the dollar and linking the dollar to gold
41:07
um but i don't i don't think he necessarily was worried about it predominantly from the sort of speculative peg caught money kind of kind of issue i think he was more just issued about what more concerned about the replacement of britain with america as a sort of geopolitical you know hegemonic issue but um but you know i don't know it it seemed to work okay until it didn't was the euro a good idea because if you like bretton woods you
41:38
might think the euro is a more enduring version of it but it's not obvious to me the euro has gone well no the euro has been a disaster uh but it was no good idea i mean which part of the euro the idea of these countries working
41:50
together and and um and having a shared kind of sense of cooperation and fair play that's good uh you know look you can't do the euro without you you need to have monetary flexibility within the euro and and look that's a that's a problem within the
42:09
bread and wood system too um but the euro is clearly just too rigid a system to to work and it i think it has that it is it has resulted in the opposite of what it was intended to do um but was it a good idea
42:22
you know uh well it hasn't worked let's say that credit card and debit card fees what is the incidence of those fees in today's america 2020 the incidence of credit cards who actually pays them in the end final analysis not where are they levied
42:42
up front with the actual incidents uh i'm but you have an article on this right so some people think consumers pay them oh oh oh we're swipe feeds white pieces yeah there are so many fees what i mean oh swipe fees yeah you know i think ultimately consumers
43:05
probably pay something i think debit card i mean my the significance of that are this is from 2011 those the swipe fee fight um you know i think the significance of that fight is that it that didn't really matter that much at
43:19
all consumers i do think ultimately pay some of those fees in in the form of of higher prices but retailers do their best to minimize that and capture those fees for themselves uh so who pays you know a little bit a little bit of consumer um a little bit of uh of the merchant but it depends on the fee in the merchant you know now let's say we made it completely impossible for credit card companies to stop merchants from offering cash discounts
43:51
and there are indeed right now many cash discounts wouldn't that solve the whole problem that if it were easier to use cash those gains would be internalized through a cash discount and buyers would decide credit debit card or cash
44:04
and receive different prices and things would be fine correct or not uh i sounds okay to me everyone just see what happens but then it's an easier problem right it's not a big problem in that worldview right i mean look i'm mostly an
44:21
empiricist on these things you just see what what happens um do do prices go up do people like you know you can look into the corporate revenues or not um i my general view about the swipe fee issue was not about you know whether whether merchants were taking it on the chin or consumers were taking on the [ __ ] it's just that it wasn't that big a deal and that particularly in 2011 when we were in the middle of a terrible depression um
44:50
the idea that that we were going to fight over this in the senate for six months struck me as extremely minor um you know we were talking about something that mattered largely not even to retailers in general but to large retailers that had to pay a
45:03
lot of these fees so you know walmart target um these these big companies these fees add up over time um you know what what you do about it depends on what works try something now as you know in keynes's street a sun money
45:21
he endorses naps state theory of money uh does the evolution of cryptocurrency show that an app in fact was wrong that money is a market phenomenon oh uh great question i don't think so i you know i'm very critical of cryptocurrency in
45:37
general i i don't um i'm very skeptical about it and i think it's often just a sort of vehicle for fraud um do we have cryptocurrency is cryptocurrency really a currency do people really use it the way they use uh dollars
45:58
and euros and and other currencies not i mean there are transactions that take place right there's a lot of gray market black market transactions but the point is they could right it's a kind of proof by existence you can have an asset that's fully
46:15
market-based you can't you don't i mean it's um you know we definitely have you definitely have cases of cryptocurrency disappearing frauds and the like i mean um there is but yeah among um among cryptocurrency users there is a sort of
46:35
common agreement that uh that this counts for something um can that be sustained as a social phenomenon outside uh you know some some niche users i mean particularly i think it really does matter that this stuff is happening out
46:53
that so much of the use of the currency as currency is happening outside the political system right i mean a lot of the stuff that's happening there is illegal um so we're talking about non-governmental activity um i i don't think that
47:14
i don't know to me the the experience with cryptocurrency points the other direction that uh that you need some sort of uh you know political management of this stuff for it to to have real meaning that otherwise it's
47:27
it's sort of a fleeting and uh and not particularly useful medium gaines works for i think seven years on treatise on money it's two volumes at the end what he comes up with is a tabular standard which i'm fine with by the way but is it
47:44
even a good book at all i mean hanson hayek they didn't like the model they more or less trash it high equal claim keynes repudiated his own book i mean what tim treat us on money yeah i mean i think he does repudiate his own book i mean how do you get
47:58
to the general i mean there'd be no need for the general theory if the treatise on money was right um you know i the treatise of money is a it's a big mess uh it's like 800 pages two volumes uh keynes himself says aesthetically
48:13
it's a disaster but he feels like he's come to right answer you know by the end of the book he's got this sort of weird uh justification for public works he's he's he's come to the conclusion by the time he's done with it that that public work spending and budget deficits are are necessary for getting out of the depression and he's just trying to he's just tying himself in knots to come up with uh an economic theory that will justify that um
48:44
that policy preference and i don't think there are many i mean these people may exist but i don't think there are many people who think the justification for public works in um and treat us on money is is more persuasive than that in
48:58
in the general theory he basically says this is sort of a a one-time thing that we have to do because of the way trade relationships have worked out at this particular moment in time um it's it's it's very ad hoc uh the the thing that's important about
49:12
the treatise on money is how much fun keynes has talking about the rise of capitalism in the 16th and 17th century and and knapp's theory the charterism theory of state theory of money i think that is really essential to the ideas
49:31
that he develops further in the general theory if you take um money to be a creature of the state rather than of markets as we're talking about um then you're just allowed to do a lot the idea of the market is something that
49:45
can function independently of the government becomes much blurrier and the idea of the state as sort of the thing that creates and guides markets um i think opens up a broader realm for government intervention um but god i mean it's a mess of a book
50:02
yeah he does there's there's the international system where he talks about the the bancor and the international superbank is his sort of um that's sort of his blueprint for what he's going to bring to bretton woods
50:15
later which he loses on all of those important fights um so that's in there but the whole thing is just a mess i mean he he himself is changing his mind so many times over the course of this book uh in response to political circumstances i i think you know i i think look even even the general theory is a bit of a mess too so it's not like you know he has one definitive statement that that is keynesianism i sort of reject that the school of
50:44
thought that it's all in the general theory um but i i think of it as sort of a a step along the road it shows that he's he's willing to change his mind but he hasn't really he hasn't figured it out yet for me keynes is one of the greatest
51:00
biographical writers in the entire english language ever what do you think is his best biographical portrait in essays and biography which is one of my favorite books i might add that's good isn't it i think my favorite is just newton
51:16
um because it's not he packs so many ideas into into the way he writes about about newton and he does a couple of different essays on him um but the the point about newton as a and look i don't know enough about newton to
51:31
know if his biography is accurate to be clear you know i i know uh the the big big points on newton's life but i haven't read several biographies but the the way that he talks about newton as uh as someone who is sort of a creative
51:47
genius the scientist as an artist who has a certain intuition about the way the world works um who then you know uses the math to to explain um why his his aesthetically kind of beautiful intuition about about you know god's plan or the nature
52:06
of reality um why that makes sense you know i think keynes is is maybe that's true about newton i don't know i just don't know the guy psychologically enough but i i think that tells us something interesting about
52:18
keynes's own psyche um i think that a lot of keynes's economic work functions in that way and i also think it's useful to think about the scientist as somebody who is not just a bloodless technician right that that scientific work is
52:36
creative work um and the great scientists are people who are doing something that is aesthetically significant in addition to being technically significant that they have an idea that they're possessed with i you know i we used to
52:49
think of scientists as people in lab coats who just you know never smile and that's not that's not the way people are did canes have good taste in art his friends didn't think so um what is good taste in art i think he had
53:06
excellent taste on apple sketches before people understood how wonderful they are some didn't pay that much for them suzanne and degas were not undiscovered artists at that time no but still he did get them in a fire sale i mean uh
53:25
so you know literally he went to paris and the the germans were getting close they were under bombardment that's why they were liquidating it um you know it i i like cezanne and degas as much as the next guy i think
53:41
his friends his friends were so fussy you know they they were envious of his sort of social position there and they couldn't do the economic work that he did it just was over their heads um and and so you know they art was their thing so they were always
53:58
telling him he had bad taste um but you know those apples those apples are pretty good and this is on right the um what's the the museum in philadelphia that there was uh such a such a fun though yes the barnes museum
54:16
so i never saw the barnes museum when it was you know before its transformation um there's so many you can just see there's so many different these these artists not every single one of their works was amazing sometimes they they had bad
54:30
they're bad around watch they are bad cezanne's so you know i haven't seen every single one of the sazons that uh that cade's talked up i mean in in the archives at um at king's college there's a lot of art uh
54:43
but it's most that's that's on display but it's mostly stuff from other bloomsbury people um so and there i think you know i think the bloomsbury themselves were probably overrated as as painters at least um but whatever these these these tastes
55:00
shift i think keynes was probably okay i don't think he was as bad as his friends said let me ask you the question ezra asked you in the time of keynes especially the earlier years why would anyone have defended the gold standard i think almost everyone did who thought about it um and i think it was tied up in a conception of liberalism and freedom that is very intuitively compelling to people who take enlightenment liberalism seriously um if
55:36
you believe that people ought to that that capricious sovereigns and governments shouldn't meddle in the affairs of the the people and and you know direct the flows of international commerce for their own short-term gains and
55:50
and political uh preferences then the gold standard is a way to put some put some breaks on the government and to and to say not only that we will um you know not meddle in in the currency for domestic purposes but we won't we won't
56:07
interfere with international harmony and with the exchange of goods and ideas across different cultures um i think there is it's very easy to to see why people from a progressive perspective would see that as a uh as a good thing
56:24
why weren't they just correct so christina romer has shown gdp volatility was not higher before the fed and if countries had stayed on the gold standard they couldn't have fought world war one that sounds pretty good to me well if
56:38
she's right then then she's right i i think ultimately politics exist and it's it's hard to it's hard to create a system that says when your back gets up against the wall you've just got to deal with it because people will break the rules um
57:01
the keynesian argument against it by the time he gets to treat us on money at least is is that you have to do something about the social the short-term social pressures that are caused um that when when you are up against
57:18
deflation essentially that unemployment um social unrest that is that is something governments will have to respond to and if they don't what you get will be worse um than whatever you would it will prevent the long run from coming to be
57:31
this is you know this is one of the sort of philosophical dimensions of the in the long run we are all dead claim he's he's not just saying you know we can make things better in the short term and that's important um he's saying
57:45
if you don't fix things in the short term the long term may never actually happen you you have an authoritarian takeover or war or something um so i think particularly once you see lace for keynes once he sees what the state of deprivation that's
58:00
happening across europe after the war he just thinks that this is an untenable system before the war you know if the gold standard had been managed wisely i mean we never would have needed keynesian economics right
58:12
i mean it would have nobody would there would have been no need for for keynes to come up with a complicated economic explanation for uh deficit spending or to just try to focus on uncertainty as this key concept to just
58:25
you know things just would have would have worked out in a famous essay as you know economic possibilities for our grandchildren i think it's 1930 cain's predicted we i'm not sure who the wii is here would be working 15 hours a week
58:41
what did he get wrong or was he just off by a few decades well i think you know there's the um benjamin friedman i think did uh did the analysis most recently um bob solo did one 2007 2008. um if you take living standard to be
59:01
you know something like gdp per capita then the actual productive output of society is pretty close to what to what kansas talking about in economic possibilities for our grandchildren but the distribution of that um of that output is isn't is not
59:18
egalitarian so you know the the answer i put in my book that i think is basically right is that most of these games are captured by people at the top and so as a result we have people working all the time um but median family income in the u.s
59:32
was is now still past the range where keynes would have predicted 15 hours of work a week right so they didn't uneven distribution but median wage in keynes's time was pitifully low and now it's still pretty high i mean
59:48
you know you can see the um the the decline in working hours is is pretty steady over the late 19th and um into the 1940s so i think he writes that essay 1928 it's published in 1930 maybe 1926 when he actually writes it
1:00:05
but but it's published in 1930 you know even in the depression you can see this decline in in working hours it's it's it is uh it is very pronounced and then it just kind of stops in the 1960s 1970s um and you know i that that to me is
1:00:23
do we want to be working this this long i mean most of us at least i don't want to be working 40 hours a week you worked much more than four years yeah but i would you know you wrote a book that just made a top 10 list right that's not easy
1:00:34
what your wife does her book is very highly regarded she's an editor for the new york times yes it's an incredible amount of work so you and she are going way past 40. yeah so what's the deal yeah well you know i think um the books
1:00:50
the books are an interesting question like does that count as work um you know when i write about politics and economic policy and specific issues uh that people are fighting about in washington that feels like work it's
1:01:06
stressful it is uh i have to learn things um that i don't necessarily enjoy learning um doing the book the research the history that was fun um that was that was exciting that was uh that was joyful in a certain way now once we had
1:01:24
our daughter uh almost 15 months ago um congratulations thank you uh you know my purple freak my interest in historical research has waned a bit um and and so i don't know if i would think of if i think of historical
1:01:39
work and work on the next book is the same sort of just pure expression of like what i would do with my free time that i did um this book i would probably rather be you know hiking in the woods with my daughter or um you know reading through books about
1:01:52
bears or what you know whatever she's into it that my my priorities have changed um but yeah i know like there's there's an argument that um i think joe stiglitz makes this in part and there's the whole book on on economic consequences
1:02:07
economic possibilities for our grandchildren came out about 2008 with all these different essays from people you know investigating um what keynes got right and what he got wrong and one of the answers is that you know people
1:02:16
actually like working and that there's a certain class of people who do work that's not really work and i certainly consider myself to be in that class of people and it's true that i like that work um but even even the type of work that i
1:02:30
do i have once uh once my daughter arrived i would just like to do less uh and i and i think a lot of people with families that's that's that's the case you you know you um you would you wouldn't work as much as you
1:02:45
do if you could if you could work less and feel a sense of security about the future um and that sense of security about the future is a is a tricky thing because what constitutes security you get accustomed to a certain you know
1:02:55
standard of living you want that for your children uh so that they admit that there's there's a gray area there but or it's not even grey it's just kind of fuzzy um but but yeah i think a lot of people choose to work more than they they
1:03:07
probably should uh and i'm sure that as my daughter gets older you know whether i want to be writing you know more books or coaching basketball will be uh you know a major decision last question what is your next
1:03:22
overwork project overworked project uh the current working title is called fields of fire um it's a look at the populists of the 1880s and 1890s and right now looks like we're gonna tell it through the lives of two two white populists and two black
1:03:42
populists from georgia and north carolina and but we'll see you you kind of got to go where the research takes you with this stuff but in a lot of ways i think what the populists are are working through in the 1880s and
1:03:53
1890s is very similar to what keynes is working through their economic proposals are a bit different but they see themselves as inhabiting an era of crisis in which the economic system is not working and it's the same economic system really
1:04:09
it's the they're they're writing about the gold standard and it's at its outset keynes is is writing about it it's maturity uh and they're trying to come up with ways to reformulate politics to make the economic system work
1:04:21
um and i think there's as with keynes an enormous amount of promise and also an enormous amount of danger in in what they're doing and i think in the way the same way you talked about keynes being um enamored with the uh the british
1:04:40
colonial system uh at least overly enamored with it um i think the pop there's a lot of intellectual stuff happening with the populist this period of time which is inspiring but also also dangerous um and uh they just find it a fascinating era so hopefully the book's it's not a biography but it will it will try to try to work with a lot of the same currents and themes that were in the keynes book that carter thank you very much thanks tyler