#154 - Steve Levitt, Ph.D.: A rogue economist's view on climate change, mental health, the ethics of experiments, and more

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My guest this week is Steven Levitt.

Steve is an economist and co author.

Of the bestselling book Free Economics and its two sequels.

He is the William B. Ogden Distinguished.

Service professor of Economics at the University of Chicago. He is also the founding partner of.

TGG, or the Greater Good Group consulting firm.

In 2003, Steve won the John Bates Clark Medal, which is one of the two highest honors someone can win in the field of economics, the other being the Nobel Prize.

This award is given to the most.

Outstanding econom in America under the age of 40. In 2006, Steve was named one of.

Time magazine's 100 People who Shape Our World.

He received his undergraduate degree from Harvard and his PhD from MIT before heading to Chicago, where he is currently a professor. In this episode, we talk about a lot of things Steve's path through the.

World of economics, why he chose it.

And how unlikely a candidate he was for such study. And then we get into the limitations of economics. We talk about one of the more controversial things that Steve has written about, along with his co author for Free Economics, which was climate change, and some of the confusion around what they wrote and the implications of it, and how.

Things have changed in the decades since they wrote it.

We talk about some of the tragedies that Steve has endured in his life and how his very unique disposition has allowed him to not only tolerate these things, but actually thrive through them. We talk about Steve's recent appreciation for mental health and the importance that he believes it plays in our education world. And we get off onto a couple of interesting tangents around things like golf and horse racing, which even if you're not fond of either, I think you'll get a kick out of. So without further delay, please enjoy my conversation with Stephen Levitt. Hey Steve, it's awesome to see you today Although I was really hoping we were going to be able to figure out a way to do this in person if we waited long enough. But at some point I just thought we just need to sit down and do this, and video's almost as good. So, anyway, thanks so much for making time.

So excited to be here. Really looking forward to it.

I feel like I haven't seen you in person and it's been too long. It's probably been four years, I think it was.

We drove around in that really noisy car of yours. Was the last time that I was with you that little tiny thing that made so much noise? You know what I'm talking about?

Yes, I sure did.

Didn't go very fast, but it made a lot of noise for going slow.

I think a lot of listeners probably are familiar with you. Of course they're familiar with you through, obviously, your books, podcasts, things like that. But maybe it's worth actually telling people a little bit about how you got interested in the study of economics. And obviously it's through that study that your work became available to a much broader swath of the population than just sort of economists. So what got you interested in studying economics?

So I was never interested in economics. I'm probably still not interested in economics. But the way I became an economist was really through the back door. I was the worst kind of student in college. I mean, I got good grades. I got into Harvard. I got good grades at Harvard, but. But I didn't care about learning at all. All I really cared about was gaming the system. And I had learned that the best way to pick classes was to find the classes that everybody took, because it turned out those were both really good classes in general and really easy. And it just happened that at Harvard, EC10, the introductory economics course, was exactly one of those courses. So I took it not because I was interested in economics, but just because my rule of thumb was to take classes like that. And I remember roughly, I don't know, the fifth or the sixth lecture was on this topic called comparative advantage. And as the teacher walked us through it, I was just disgusted. And I thought, my God, this is the easiest topic in the entire world. I have literally known about the concept of comparative advantage since I was five years old. I mean, I understood it deeply in my soul. I didn't know the name, like he was putting a name on it. And I remember at the time going through and actually thinking, this is such a travesty. My parents are paying this much per lecture at Harvard. It was a big number for this total drivel like this is just an insult. And as I was walking out of the room, my best friend at college was in the same class, and he walked out next to me and he said, oh, my God, that lecture was crazy. I said, I know. How could they teach us such drivel? He said, no, that was the most confusing thing I've ever heard. I don't think. I couldn't understand that in a million years. And I had this moment of clarity where I said, wait a second. I actually think like an economist. And even though I've never been interested in the topic, from that moment on it became clearer and clearer to me that I was just born thinking like an economist. And it's not advice I would give to other people in general, I don't think it's great advice to just do what you're good at. But I was so lazy and so intellectually unmotivated that for me it turned out not to be a bad path, was just to say, well, who cares what I'm interested in? Because I wasn't really that interested in anything. Let's just go be an economist. And I didn't go willingly. It took a long time for me to be an academic economist. I graduated, I did management consulting. It was only my deep disgust and hatred with management consulting, which, in desperation, as I looked for any exit, I thought, well, the only thing I can even think of to get out of here is to go get a PhD in economics, which is what led me to get a PhD in economics. And if I had known what it meant to get a PhD in economics, I never would have done it. It was only complete ignorance of what I was getting myself into that led me down that path, which turned out to be a lucky path. I mean, things could almost not have turned out better for me. But it was only a series of mistakes, miscalculations, and ignorance that led me to this lucky place.

But Steve, there's gotta be some challenge and pain and resilience that requires doing everything you just described. So, okay, maybe Econ 101, or whatever the course was was a breeze, but at some point you're taking senior courses at Harvard in economics. Were they challenging? Did you find them interest? I mean, what was kind of going through your mind as you're plotting your way through undergrad?

I didn't ever intend to be an academic economist, so I didn't approach it the way a normal, like someone who wants to be an academic economist approached it, taking a bunch of math. So it turns out at the highest Level economics is all about math. And I didn't take any math. I took exactly one math class at Harvard. It was called Math 1A. It was because I got a 2 on the calculus AP exam and I couldn't place out. And so it was really high school calculus. It was the lowest math class they offered at Harvard. And I did do quite well in that class. It was essentially me and the football team and the hockey team were the only people who placed into that. And I smoked those guys. So I just had fun. And honestly in college I just had fun. And I liked the economics classes and they were easy for me because the intuition, economic intuition, has always come from pretty easily, especially on microeconomics, pretty easily. And the classes just weren't that hard. They didn't require much math. I didn't know any math. And it was, I mean, college in general for me was just so much fun. I had good friends and good times and it was easy and I had independence. And I just, you know, for me, those were the best four years of my life. And I didn't take school too seriously, but I did well. So, you know, it was all that was just a breeze. It was the shock of reality, the. The real world. I had no idea how unfun the real world was going to be when I actually got into it. But college was fun.

That is so funny to hear you say that. I will forever maintain that college was the worst four years of my life. And I hope I can say that now, meaning that there will be no four year period that is still in front of me that's going to be as bad as those four years were. But I always enjoy hearing people talk about college being the best four years of their lives. You mentioned microeconomics. Maybe now is as good a time as any to explain to people the difference between micro and macroeconomics, because it is almost a disservice to talk about economics as though it's one broad topic.

Yeah, you're absolutely right in that. So let's start with macroeconomics because that's what most people think of when they think of economics. They think about inflation and banking, unemployment and economic growth. And those are really important fundamental problems, but they turn out to be incredibly hard problems because the degree of complexity in the macroeconomy is almost infinite. Right? So it's this complex system built up of billions of individual actors. And you've got companies, you've got. Look, it's just a mess, okay? And it turns out, just making a long story very short, that we haven't made much headway in really understanding it because we've approached the profession with a kind of discipline which says every model of macroeconomics needs to start with foundations that are really rational in the base. Micro foundations. And it turns out I think the problems are just too hard and that approach in the end isn't going to win. Okay, but what is microeconomics? Microeconomics is instead the study of individual decision making. So in a world in which there's scarcity and there's competition, how do I decide how to spend my income? How do I decide what job to do and how many hours of work I want to do? How do firms decide what to make and where to locate and things like that. So these are much smaller decisions and for me, much more intuitive decisions. And they're able to be analyzed both with the formal models of economics, which historically have been very heavily predicated on rationality simply because it makes the math easy. Along with the last 40 years of behavioral economics, where we've introduced a lot more psychology and mistakes and a lot more freedom into the models that we use. But anyway, really they're almost distinct micro and macroeconomics, because macro in the end is a really complicated. Not to make all my macrocogs incredibly angry at me, but very self referential models because the problems are so hard that you need to abstract so greatly to try to deal with the macro problems that I think we don't have a good handle on them. So I've really steered clear of the macro problems to focus on the individual decision making, which is, I think both in my own life, much more relevant. But also I got something to say because I have some intuition for it.

Is there a hierarchy within economics the way. So in physics you have the theoretical physicists and the experimental physicists and Nobel prizes will go back and forth between the two of those. How does that work in economics? Do a disproportionate amount of Nobel prizes or whatever, the highest, I mean, I guess the Nobel, it's not technically a prize, but it's close enough. When you look at the highest levels of excellence and awards that are given in the entire field, do they disproportionately lie on one side of those or the other?

So historically economics has been an entirely theoretical discipline. So the highest status positions historically have been in theory, where I make the distinction between theory and the analysis of data and econometrics and actually trying to take messy data and make sense of it. With the data revolution and the emergence of econometrics I think, a switch in the profession. So there are two big prizes in economics. There's a Nobel Prize, and then there's something called the John Bates Clark Medal, which is given to the most influential economist under the age of 40. American economist.

You've won that prize?

I did win that, yeah. And so that more reflects what's going on in the present time. And so those prizes, the Clark Medal has mostly gone in the last 20 or 30 years. Not always, but often to people at the intersection of theory and data, which I think really is where the action is in economics. It's people who can make sense of data, but are looking at it through a lens of economics and pushing economic thinking in that way. I don't know if anyone cares about this, but economics is really at a crossroads because it turned out when data analysis really started to emerge and we could start to say things about causality in ways we couldn't before, the empirical part of economics really took off. But all of the easy stuff has been done, and so we kind of estimated most of the parameters that we care about. And so the question is, what comes next? And what's happening in economics is that the push has been in the direction of, okay, it's not enough to just estimate what's happened in the world in the past. That's really what empirical economics is really good is saying, I can look at what's happened in the past, I can estimate a number, and then I can build models to try and say, why now? The task has become greater, which say, I don't just want to understand the past. I want to be able to build a model that has the flexibility to tell me what would have happened if instead of the US being a democracy, we were a dictatorship. Okay? So things that are so far out of the realm of what actually happened happen that it's almost like science fiction. And so what economists do now is they're asked not just to estimate parameters really well, but to embed those parameters into models which then have enough degrees of freedom that you can start to imagine if I turn this dial or that tile, what would happen. And I actually personally think that's a terrible direction because I think what has made economics great is that it's easy to understand the estimates we create, and you can say whether you like them or not, based on fact or the approach or whatever. But I think when we get into these more fanciful models, I think we're going to end up running into a huge dead end. Is that. Is that they're really Too complicated to be estimated. Well, and so we're just going to get into fantasy land of creating things that are really not grounded in fact.

So there's a famous physicist, and it's been attributed to so many that I actually don't know who really said it. But the spirit of the quote is all models are wrong, some are useful. And I feel like economics is certainly a discipline in which that applies and suffers greatly. Even something that I think was much simpler to try to understand was the extent to which coronavirus was going to be a problem. I mean, those initial models were out to lunch. I don't fault the people who tried to put those models together, the epidemiologists who worked on these models. But the sensitivity around so many variables was so great that you couldn't even begin to extrapolate. And when you did, the only thing I think the models helped you understand was how impossible it would be to predict what was going on. And if nothing else, it was going to show you what parameters mattered. But that was about the extent of what you could extract from that, which was the rate at which this thing spreads and the length of time that it can lay dormant. Those things are going to matter a lot. And by the way, what we should have taken from that is earlier and more aggressive testing was a better solution as opposed to trying to pontificate or estimate whether 60 million Americans were going to get it and 5 million were going to die versus 1 million were going to die. I mean, that was sort of the wrong thing to be thinking about. But again, all that's easy in hindsight. But I hear you in terms of how that could be frustrating in this profession.

Yeah, I mean, I have a very strong view about the relationship between data and theory. And my view is that the sensible way to do things is to make a really sharp distinction between the two that we should really understand. You go to the data and you just understand what the 3, 5, 9, 12 facts are. And in my view is that those 12 facts should be things that if any reasonable person looked at the data, you'd more or less agree on those facts. And to just establish that that is the role of data analysis is to understand those facts. And obviously you want to get it in the direction of causality and whatnot, but you never do that with the data alone. The data alone are never enough, except in a randomized experiment, to tell you about causality. And rarely in economics do we get to do randomized experiments. And then I think if you can all agree on the facts, then I'm all in favor of models going forward. Because if I write down a model that is built off of the 12 facts, I see it turns out it's really easy. The kind of models that economists write down for other economists to say, okay, I understand whether that's a good model or a bad model, what it's sensitive to and whatnot. And if you make this bifurcation between understanding the facts and then going into what those facts imply, because we really care not about the facts themselves, but we care about the implications of those facts for the future or what they tell us about causality or whatnot. I think it's a really powerful model. It's not the model that we use in economics and it's definitely not the model we use, say in journalism that it's often incredibly hard or in debate. So it's often incredibly hard when a debate is going on to understand are these people disagreeing about the facts or are they disagreeing about the implication of the facts? And so, like, if I had my dream about how we would do journalism, every newspaper article would basically have a separate little feature that just said, these are the five facts on which I am writing this article. And then it would be easy for me, say, if it's an area I'm expert in, to say, oh, well, those facts don't make any sense. Or for a fact checker to fact check them, or in a debate to say, hey, before we debate, I would like each of the participants to lay out the 10 facts that they believe to be true and, and see if they disagree with each other's facts. If they disagree about facts, then we're in a very different situation than if we disagree about the implications of those facts. And somehow I think that's gotten that distinction. I've never really heard anyone talk about it except for me, probably it's not important, but it strikes me as being really, really important.

Let's use an example of that. Where I think you and Dubner have got into some crosshairs of people is around climate change. I mean, you wrote about this. God, has it been 10 years ago now? I've lost track. Was it Super Freakonomics or.

Yeah, Super Freakonomics. So I think it's been about 10 years.

Let's start with some facts. What did you actually write? Because I think that's been very misconstrued over time.

Yeah. Okay, so one thing you can never trust is for people to tell you the truth about what they've done in the past, number one, because they're going to lie. But number two, they don't even, like, I don't really know what I've written. I haven't looked back at that book in a long time either. But here's what I think we wrote. We basically wrote that at that time there was evidence that the planet was getting warmer, but certainly it was not completely open and shut. And we said, but look, we're not scientists. And what we thought was that the people talking about climate change were asking the wrong question. What people talking about climate change were saying is, how do we reduce the amount of carbon we put in the air? Which actually wasn't the right question. The real quick question was, the planet is too hot. We're not happy about the planet getting hotter. What is the best way to cool down the planet? To me, that was really the right question. And like, the example I give is I have a lot of babies. I have six kids. So the kids, they poop all the time, okay? And it's a problem, okay? So they poop. If they poop on the floor all day long, it's a real problem, okay? So you could say, well, to solve that problem, let's figure out how to keep kids from pooping or how to stuff the poop back in the kit or whatever. But the answer is, how do you get the poop so it doesn't go on the ground? Well, it's a diaper, okay? And it's like very different answer than if you get worried about, like, well, poop shouldn't exist. So I think the same with carbon. Look, carbon's coming out and you don't necessarily have to stuff the carbon back in if you can find another way to cool the planet. Starting from that premise, we then talked to real scientists who knew something was, who are working on what's called geoengineering. So these are ways to try to cool the planet, okay? And look, they're not perfect in all sorts of ways, but these really smart guys have come up with a lot of clever plans that we might potentially be able to cool the planet. So things like putting sulfur dioxide into the stratosphere turns out super cheaply, couple hundred million dollars a year, we could put sulfur dioxide in the stratosphere. It mimics, but in a much more efficient way what big volcanic eruptions like Mount Pinatubo have done and that could cool the planet. The best idea I think that was out there was it turns out that certain kinds of clouds that have the right kind of reflectivity and the right level can actually reflect a bunch of sunlight back. And oceans are really dark, so they absorb lots of heat. Clouds are really light, they reflect a lot of heat. So a scientist had come up with a plan, never been tested Even in the 10 years since we did it, where a bunch of solar powered dinghies would troll around in the ocean controlled by gps, throwing up salt from the water, which then seeds the clouds, which then leads to a bunch of clouds over the ocean. Which his claim, their claim from simulations is that that would be enough, 10,000 of those dinghies would be enough to offset all of climate change, global warming. Look, all these are probably short term solutions relative to a real solution, scientific solution or behavioral solution to try and deal with climate change. But so that's what we wrote about and admittedly in retrospect, I regret that we wrote about it in such a light hearted way. I didn't realize that environmentalists had no sense of humor and so you couldn't like poke fun at mistakes they'd made in the past. And so we really aggravated a lot of people. But what we did was we unleashed this incredible machinery, there was a whole machinery around the environmental movement which, which basically decided we were enemy number public enemy number one and then set out to destroy us. Not really worried about what we actually said or whether we were right. I mean, I think, I do think 10 years later, almost everyone now thinks that geoengineering is likely to be part of the solution. It was interesting. One of the magazines, I think it was the Atlantic Monthly basically wrote an article about us saying that we were the most evil, stupid morons who've ever existed in the history of the planet. Four years later, the same magazine wrote essentially our chapter in our book with the exact same examples we had used, with no citation at all of the fact we had written about it, saying how geoengineering was going to be part of the future. So I think it's good not to worry about whether you're right or you get credit for it. I think you just have to be happy that the movement, although way too slow, it's been in the right direction. I think for what's, what's inevitable is that the problem of climate change is one which will not, I claim, ever be solved by behavior change because it's all about what economists call externalities, that my own behavior has almost no effect on me and a negative effect on the rest of the world. And I would say there's never in the history of mankind been a problem that is fundamentally about externalities which has been solved by Telling people you should just do the right thing and hoping that suddenly everyone's just going to start doing the right thing just literally has never happened. I don't see any reason to think it's going to start now.

Yeah, that's interesting. Can you think of any examples where humans behave in that way?

Where they do the right thing to help other people?

Yes. Even if it inconveniences them. Are there any.

I mean, there are social norms, like on the roads. People don't really cut in line very much, you know, a little bit. But I don't think it's because.

But is that also because there's direct feedback and.

Exactly. Because people yell at you because it's uncomfortable. I mean, so. But you know, there's very few things where we, where we have private benefit and look, little things we do around the edges and certainly we do it for family members and whatnot. But honestly, if you look at every big problem that's been solved for mankind, I challenge you to find one that wasn't solved by technology. And it goes from everything, from disease. You know much more about this than me. But if you think about the health benefits that have come from behavior change versus technology, invention, discovery, like I got to believe, you know, smoking being maybe the one example where in the face of overwhelming evidence, it still took what, 40 years for people to cut down on smoking. And still a lot of people smoke.

Well, and I would argue that it wasn't really due to just a straight. It wasn't the knowledge that tobacco killed that actually led to the reduction. In fact, if you look at the timeline of this, it's an interesting case study in behavior change. So I think the surgeon General's report on smoking, which was the first really unambiguous declaration that smoking killed. It had been suspected in the 40s and 50s, but it was, it wasn't until, I want to say about 65ish that you couldn't argue it anymore. I mean, we're talking hazard ratios of 14x.

Right?

Like, there's nothing in biology that produces a hazard ratio of 14x outside of parachuting without parachutes, that this is going to end in a bad way. And if there was really no change in tobacco use after that for five, six more years, the first real dent in tobacco use came with advertising. When a law was passed that said you couldn't advertise, a tobacco company couldn't advertise tobacco unless it was the commercial was juxtaposed with an anti tobacco ad. And it turned out the anti Tobacco ads were so successful that the tobacco companies voluntarily stopped advertising. And that was the first step in. In the reduction of tobacco. And then, of course, you threw in other things, which was laws that said, hey, you can't have tobacco sitting at the counter. It has to be way behind. And obviously then you had excise taxes that were imposed, and then you had other environmental things. You can't smoke on airplanes. And so you could even make the case that the reduction in smoking has been less about behavior change and more about a change in the default environment around it, which just speaks more to your point.

Yeah, no, I think that's true. And I think also what's changed in the end is, is it used to be cool to smoke, and now, look, if you smoke, people think you're crazy, right? It's like. So, I mean, I think that those social norms, again, speaking to your point, the costs and the benefits of smoking have changed dramatically. And if anything, it's surprising how little behavior change has followed that as opposed to how much. I mean, look at. I mean, again, we're in your territory, not mine. But look at diabetes and how little behavior change has been in response to diabetes. It's surprising in many ways.

Let's go back to this climate change issue because, again, it's very interesting. And it's one of those things, I think, like nutrition, where there's a very gray area between true scientific expertise and propaganda. What is it about the use of science as a propaganda? I mean, frankly, I think. In fact, I think I'm somewhat sympathetic to people who are kind of losing faith in the scientific process a little bit. I'm talking laypeople, people who have never studied science, but who are sort of sick and tired of hearing scientists stand up on TV and say something, and they're a little bit skeptical. And so if you're sort of an elitist, you look at them and you say, well, they're morons. How can they not believe in science? But. But the reality of it is they've kind of been a bit misled, haven't they? And you look at the. Using science as kind of a weapon, I guess, has become a bit problematic. Right.

I'm more favorable towards climate science than I used to be. So climate science suffers from the exact same thing that macroeconomics does, which is that there's observations, but really much of it is based on these models. And the models can't possibly have the kind of specificity because it's such a complex system to understand. So, like most of the leading models at the time we were looking at, it had carbon dioxide in it, but nothing about water vapor. And. And it turns out that many people think water vapor is more important than the interaction between carbon dioxide and water vapor would be more important than anything. But the model, just like computing power, and the complexity was too much. But I give some credit to. Look, there's a part of climate science which is focused on measurement, measuring the temperature of the oceans, the rising of the oceans, and I think that's been done. Well now. What you're talking about, though, is that there's such a blurring of the line between the job of measuring climate change and advocating on TV or in the newspapers for what that means for public policy. And those are very different tasks. And I think as a scientist, you want to be very careful about moving from one role to the other. And I think what climate science, as an observer, a pretty close observer, has done a very poor job on is helping people, lay people, understand when one is an advocacy role versus when one is in a scientific role. And the same people have played both roles. I think really, it's an unusual branch of science because the people who go into climate science almost always share this view that the climate's really important and we should protect it and we should be doing things not to have climate change. Which is different, I think, from, say, physics, where physicists don't have an inherent belief about whether the universe should be expanding or contracting or whether a particular particle should or should not exist. It's just like that's a different thing. And the other thing I think, which has been completely unrealistic and really problematic for climate science, is that they don't think about economics enough, and they don't think about the reality of human behavior and how difficult it will be to have behavior change. And they don't think well about the costs of changing our economy. So the costs of going to a zero car net carbon world are really, really big, and we pay those costs right away. And I'm not saying that we shouldn't necessarily try to do that. It might actually be a good idea to do it. But to ignore the fact that it's an incredibly expensive solution that's being offered, I think has been part of the problem, because it's been a mix of ignoring that or at the same time saying, look, those costs are good because we're immoral, humans are awful, humans are ruining the planet, and we should suffer for the fact we should have an enormous contraction in the economy. Like Al Gore was upset that there were Way too many kinds of cereal being sold in the grocery store. That's sinful that there are so many choices about cereal. But it's like a weird religious thing about we should suffer. And again, I think that doesn't work well to people who maybe aren't convinced or who don't want to suffer. So honestly, I think if I were able to do one thing in the world, and I tried to do it and I failed at it, it would be to have a sensible approach to figuring out whether there is a cheap solution to climate change. Because right now all we're talking about are incredibly expensive ones, like complete rethinking of capitalism, da da da, da, da da. And I don't think that the capitalist structure has worked well on trying to solve the problem of. If it were up to me, if I were president, the first thing I would do is I would have what I call a Manhattan Project for Climate Change, and I would try to convince the 1000 smartest scientists in the world to stop whatever they're doing and to work on climate change and to put them in a place like Los Alamos and to give them resources, because it's a hard problem and it's an interdisciplinary problem. And just say, look, for five years, let's just work and let's figure out whether or not there's going to be a great way to do carbon sequestration or to do something, I don't know, something out of the box to do it either. I think we'll get a solution in five years, or we'll figure out, oh crap, this is never going to work. We have no way out of this other than stopping to produce carbon or living in the world. Look, and that's important information to know, because if I knew that the only way out of this was we're going to have to live with the carbon we put in there, then the willingness of public policy to impose enormous costs on carbon producing behavior should go way up. But I kind of doubt that's true. I have a lot of faith in science. I think if we had the best 1,000 scientists within five years, we would come up with a reasonably cost effective way to deal with carbon. We'd pull it out of the air in some way, shape or form, and we kind of have the thing solved or we know we're never going to solve it. And those are two important things to know.

I don't disagree with you, Steve. I think where I'm a little less optimistic than you and I love the idea of a Manhattan Project for this, I'd back up one step and reiterate what you said earlier because I think it's so important I phrase it in a somewhat different way. But I like how you discussed it, which is we confuse the objective, the strategy and the tactics all day long. I mean, that to me is like if we were going to list the 10 human failures just as a species, it's that we are not wired to differentiate between objectives, strategies and tactics. That's why 10 years ago you were getting lambasted for talking about geoengineering, which is a tactic, because the only tactic that was being discussed was the reduction of carbon. And you were saying, well, wait a minute, we've lost sight of the objective. The objective is to slow warming and warming is a much bigger problem than just how much carbon is in the atmosphere. That also deals with insulation. So let's look at different tactics. Right, okay. So notwithstanding that problem, I think my biggest fear, Steve, is there's no question that in five years a well staffed, well resourced team could come up with what solutions might look like. I just don't know that it could ever be implemented from a policy perspective. I mean, for example, I don't think anybody who's really studied energy seriously disagrees that nuclear energy, next gen. I'm not talking about like the nuclear reactors of 70 years ago. I don't think there's anybody who doesn't think that next gen nuclear would play an important role in electricity generation. But it's just not a politically palatable solution. I don't know where geoengineering falls on that spectrum either, for that matter. So that would be. My fear is you'd come up with solutions, but then you'd still be at kind of a gridlock in the implementation of these things.

Yeah, so that is a good point. And that is possible. I do think, however, that even in that world there is a real insurance value in this investment now. So we might not be able to come up with a sensible policy now. But if in 20 years, all of a sudden the ice shelf on Greenland just like begins to slide into the ocean and things are desperate, my prediction is we will do something like my Manhattan Project for Climate Change. The question is just when will we do it? Will we do it as we're staring down catastrophe, or will we do it in advance and potentially either avoid catastrophe or at least get five years earlier? I mean, not that different than Covid, right? So for my podcast I interviewed Mancef Slaoui, and six or seven years ago he proposed well, why don't we have in the bank a vaccine for, like, everything we'd ever want, but not make very much of it. Just, like, have a little bit around so we know how to do it. And we have. And, like, look, and everyone laughed at him and said, how can you. How can you suggest that that would cost 500 million? We can't waste $500 million. Then you come to a world where the US government is bleeding $6 billion a day in deficits, and that would have been literally the best investment of all time, probably, if we had done it. So I think that kind of insurance policy, I think, would be valuable even in a world of gridlock and poor policymaking that we live in today.

I agree completely, because the one thing that I think we haven't stated here, but I think we both agree on, is this is such an asymmetric risk that it has to be taken seriously. And that's probably the thing that bothers me the most about the other argument. The people on the other side of the argument that say, well, we don't have enough certainty, therefore it should be status quo, business as usual. Ignore this. And it's true. I think the uncertainty, the error bars on these projections are bigger than people lead us to believe. But it's so asymmetric, it's so nonlinear if this goes wrong, that you have to take that seriously.

There are very few things in economics that shock me, but something that shocked me was an analysis done a long time ago, this was 10 years ago or more, where an economist, and I'm embarrassed, I can't remember exactly who it was, just worked through the kinds of utility functions of the basic models that economists use and said, in a world in which bad things happen, how much are you willing to pay to avoid bad things? And it is completely shocking. So I'm making these numbers up, but I think they're in the right ballpark. So if you have something like a 1% chance of dying, how much will you pay? How much would you pay of your total wealth to avoid a 1% chance of dying today? And it turned out the answer isn't 1%, it's more like 10 or 15%. And as it goes up to 5%, you're willing to pay, like, 50% of your wealth to avoid it, because once you die, you're like, done. And so there's this, like, otherwise really long flow, and it's very counterintuitive. It really caught me off guard, and it really changed my thinking about the importance of dealing with climate Change, because I was kind of a view. Look, you know, climate change is all in the future. We discount the future. Why worry about it? But once I saw that, I really changed my perspective on. So I've come to think that this investment and the other thing to stress is that the cost of R and D is so low compared to the cost of disaster and of implementation that to do the R and D is just a no brainer, right? So I think for a billion dollars a year, my guess is you could fund this Manhattan Project for a billion dollars a year. This is like the kind of money that actual philanthropists could do, as opposed to even government having to do. Look, if you actually wanted to put whatever solution is discovered into practice, it would probably be enormously expensive. But to figure out the answer, it's just like trivial. And the same is true of COVID like talking to people who did the vaccines. I think at Moderna it took them like a day or two to come up with the vaccine, you know, and all the costs are in the testing and the production. But the actual R and D part is so cheap compared to everything else that to not invest in it just seems like a real mistake. First order mistake to me.

Agree. I'm glad we got off on that tangent because I actually did want to talk about that at some point and it came up kind of quick. But I want to now go back to the beginning of the story, right? So you graduate from college, you go off to work in management consulting, which if I remember you described as only slightly less uncomfortable than a root canal without novocaine. It's so painful that it in fact exposes you to a PhD. So you go off to MIT. So you basically just didn't leave Boston. You went from Harvard to consulting to mit. So you really have a penchant for these cold winters. And then what did you decide to study in your PhD? Because now you got to get serious, right? You actually have to pick a problem and work on it.

So I have to say I didn't like consulting, but I learned something incredibly important, important in it. And I learned it from the guy who happened to have the cubicle next to me, a guy named Jeff Thomas, who I'm still friends with. And he taught me how to look at the world strategically. And it was weird. I never did that before. It never occurred to me to do it. But then I got to grad school and I did have a fundamental understanding while everybody else was really busy working on problem sets. And essentially these were all people who got in Straight A's their whole life. And they figured, well, what worked for me before, that's what I got to keep on doing in grad school, because that's how I'm going to get ahead. And I looked at it, and partly it helped that I knew no math, and I was completely overmatched. And I was like, the worst. I'm not exaggerating when I say that my classmates sat down about a month into it, and my friend Austan Goolsbee, who's now gotten famous as part of the Obama administration, later told me that they went through the list of people in the class and tried to decide who is least likely to succeed. And I was a unanimous choice that I was going to be the worst one. But I had a great approach, which is I understood that you had to create research. You had to go from being a consumer of knowledge to a producer of knowledge. And I also was kind of still, you know, I have to say, I wasn't internally motivated. So what I did was I said, well, look who's at the top of the hierarchy. I might as well try to be that guy. And it turned out that that was macroeconomics at MIT at the time. So for the first semester, I tried to be a macroeconomist. And it became so clear to me so quickly that I was never going to be a macroeconomist, because I always thought that nobody had intuition for macroeconomics until I started talking to some of the people at MIT who actually understood, oh, if the exchange rate between the euro and the dollar goes up, then that's going to trickle through, and how is that going to affect immigration? Like, oh, my God, it made no sense to me. I was smart enough, I've always been smart enough to fail quickly. So I realized I couldn't be a macroeconomic. The theorists were number two. And so I tried to be a theorist. And I actually spent a little longer being a theorist, actually wrote a couple papers being a theorist. And again, it became really clear to me that I didn't have what it took to be a theorist. So then I said, well, kind of the only thing left is doing data analysis. And it turned out I should have been smart enough to know that from the beginning because I was a weird kid. The only thing I liked to do was sit in my room and essentially study data. Like, as I look back on it, this is how weird I was. When I was maybe eight, I asked for and received a pocket calculator as my birthday present and was overjoyed when I was Maybe like nine. I graduated to a scientific calculator, and my pastime was I was into baseball. Is. I would go through. And I would. By manually typing into a scientific calculator, I type in a column of. Of wins for a team. And then one by one, I would type in each of the statistics, like the team batting average or the team number of triples and compute the partial correlation between those two. And what my dad. When my dad came home from work, he would ask me what the correlations were between the variables I computed. That was how I spent my time. So it should have been obvious to me that's what I wanted to do. And the other thing I did, I would use data to try and answer real problems. Like, when I was in college, I became obsessed with the racetrack. And I would try to use data to win at the racetrack, which wasn't very successful. But it should have been obvious to me that I should have gravitated to doing empirical research. But I didn't, because I was still caught up in this idea of a status. So finally I just said, look, I'll do what I'm good at. But honestly, I was so far behind the people around me. It was an interesting experience. It's kind of a sidelight, but it's interesting. I'd been used to being really good at most of the things I did, and academically, and it happens for almost everyone, where you get to a point where you look around and you realize you were the dumbest person in the room. And how you deal with that is really important. And strangely, and I don't know why, that was roughly the greatest feeling I've ever had in my life. When I looked around and I was the dumbest person in the room. It was this sense of joy. It was really interesting. Somehow. I think maybe I had felt pressure my whole life. Once I was the dumbest person in the room, I felt like, wow, I can do whatever I want. Like, I don't. You know, I can. It's just. It was such a joy to be around such talented people, and it freed me up to be myself. And instead of always trying to follow the crowd, I started doing what I liked. And what. And I thought, well, what do I like? And I said, well, I don't know. I like watching the TV show Cops. I love to show Cops. I watch it every day. Like, well, why don't I do research on it? So I somehow, like, found myself and I began just studying the things I liked. And much to my amazement, even though no other economists were really studying those questions. I really thought it was a one way ticket to getting a PhD and then doing something outside of academics. Because why would it be the case that if these were topics no one else researched, they'd be interested in? But I didn't, you know, I knew I couldn't compete on a level footing with these amazing people around me. So I had to compete in my own space. And in my shock, people liked it and they were excited about it. It got published in good journals. Honestly, I look back and I say I'm so lucky to have been so far below the bar that I didn't try to do what I think most people do and what I had a tendency to do, which was to try to figure out what I should be because that's what other people are. And I just was myself. And it was such a great lesson. And I've really practiced being myself ever since. Look at, sometimes it works and sometimes it doesn't. But the great thing about life is when things don't work, you can take a different path. And so I just try to be myself and I stop doing stuff when being myself isn't a good recipe for it.

So when you got to Chicago, that must have been another difficult decision because Chicago is a powerhouse in economics, right? You could have taken your sort of offbeat approach to economics and gone someplace that is where you're not going to be surrounded by a bunch of Nobel laureates. So why did you, I mean, were you so secure in your off the beaten path approach that you said, hey, I might as well go to another cold winter city and be around smart people but not have to compete with them? I mean, what was the decision like there?

I had a lot of choices and I loved Cambridge and I had been at Harvard and MIT and I really, what had happened is I'd given a couple of presentations at Chicago and I had been shocked at how different the questions I got were. And I really went to Chicago because I wanted to get to know the enemy at that time. So Gary Becker is one of the most influential economists of the last 50 years and has since passed away, but was a real mentor to me. He was demonized when I first met him. I expected him to be a monster. And it turned out, well, he wasn't. He was super smart and he asked great questions. And so I very self consciously said, I'm going to go to Chicago and I'm going to get to know the enemy from the inside for a couple years before I go back to Harvard. And what I hadn't anticipated is that the thinking that goes on at Chicago, it looks like it's really simple. It looks like one could learn it. I thought look, I'm good at economics, I can learn this. But I tell you, even 25 years later, I'm still not very good at the kind of deep thinking that is done in Chicago economics. And I love it and I think it's powerful. But I'm still more of a spectator than an actual do over it. I really got co opted into the spirit of Chicago. But in some sense I will say that I've always been probably unreasonably overly confident in my own ability. And I was very, I was at ease, like I was going to do what I was going to do. And I thought I could do it better at Chicago than anywhere else. But I will say it was unusual. So at that time I think it must have been seven or 10 years since someone who had a lot of options had chosen to go to Chicago Economics over another place including the Chicago Business School which was really getting most of the town and one of my advisors. So I told one of my advisors at Harvard I was going to go to Chicago and he said if you do that, I will never speak to you again. And I said why? And he said because if you do that, it shows that you are so effing stupid that you're not worth me wasting my breath. And it was interesting. That was how weird it was to do that decision. But I did it and he was happy to talk with me. Never stopped talking to me. And I think he would agree I probably did the right thing. It's funny now because it used to be there were these enormous differences between departments. Now I think they're all kind of the same. Chicago, Harvard, mit, Stanford, Princeton. I mean there are Yale, there are like all these great departments. We've all like blurred the lines together. Not so different. But at the time there really was a distinctive personality that for me was really special. I'm so glad I did it and I think I've been a huge beneficiary of it.

Do you think the field is better that the elite 10 programs have become more homogeneous? Or do you think it did more for the field when you had these very distinctive schools of thinking and Stanford had its way of doing it and Chicago had its way and Harvard had its way?

Such a hard question. I remember maybe five or ten years into my coming to Chicago, Milton Friedman came back and he was bemoaning the fact not just that Chicago was becoming more like other places. But really that what was distinctive about Chicago, what's called Chicago Price theory, was basically dying out and how awful that was. And one of my colleagues, super smart colleagues, Casey Mulligan, said, milton, I thought you believed in markets. Sounds to me like pricery is losing. And I thought, wow, that is exactly right. And even Milton Friedman, in the end didn't really believe in markets when markets moved against him.

It sort of used to be that way in medicine, right? There was a very clear line between east coast medicine and west coast medicine. And there was a very different way cardiac surgery was done in Minnesota versus Stanford versus Boston. I mean, those were so different and they produced remarkable innovations.

I think you're right. I think these diversity of approaches are useful because number one, there's data, right? Let's especially take more. Something like cardiac surgery, where you get real data, look, you know, whether people are living or dying. And so you actually can figure out whether one is better than the other. So in that world, for sure, I think this diversity of views is really, really important. Now you might say, look, it doesn't have to be across departments, it can be within department, right? You have one brilliant surgeon innovating in this way or that way. But I do think in general that it's diversity of views is good. And it's especially good in a dynamic world, right? Because in a world that's static, it's kind of like doesn't matter as much. But when something radical happens, then often one model is much better situated than the other to deal with whatever this radical occurrence happens, some new disease or some, I don't know, maybe radical things tend not to happen so much in medicine, but sometimes radical things happen in the economy. Again, I don't know how interested your listeners are in macroeconomics, but I think macroeconomics is a case where Chicago style macro more or less won. And so all of the world of macro now looks a lot like what was going on in Chicago 40 years ago. And I think that's been a problem because I think there isn't this diversity of thinking that puts you maybe in a better situation as different kinds of macroeconomic problems arise to have a range of possible approaches and solutions to it. So I think it probably would be better if there were greater differences between the departments. But it's one of these things where the facts of life are that it's impossible to maintain that equilibrium because there are all sorts of private forces that are pushing for this homogeneity, that there's no easy way to fight it in Some sense. And so even though you wish it would happen, it's hard to see how to make it happen.

Let's go on to talk a little bit about a colleague of yours outside of the world of economics, Steve Dubner. How did you guys meet?

Dubner approached me to write an article about me for the New York Times. This is after I'd won the Clark Medal, but well before Freakonomics. And I really was incredibly hesitant to accept the invitation because I just didn't. I didn't really like to be written about. There was no. I didn't sell. So I didn't really. I wasn't in the business of trying to market myself. And in the end, I have this. My mom, though, really likes it when I'm in the newspaper and on TV and stuff. And so I really remember thinking, oh, God, I'll take this hit from my mom because it'll make my mom so happy if there's a piece about me in the New York Times Magazine. And then Dummler came out, and it was unlike any experience I had ever had with a journalist. I honestly think he had read every academic paper I'd ever read. I mean, I'm talking about, like, 50 papers. And he came out and he ended out interviewing me for, I don't think I'm exaggerating if I say maybe 25 hours over three days. And there was never a silence. So I would. He would ask me a question, I would answer it, and as soon as I answered it, he would ask me another question. And this went on for 25 hours. And it was unbelievably painful to me because it's like, it was the last thing I wanted to do. And I thought he was going to say for three hours, not 25. And one of the notable things about it is that I literally did not ask him a question for the first 24 and a half hours. And I only thought of him as, like, this parasite that was, like, sucking the life out of me. And after 24 and a half hours, I actually had the thought to say, well, like, who have you written about before? And he started telling me these fantastic stories. He was the only guy who had been able to interview the Unabomber, and he. He had been in a rock band, and he was really interesting. And I learned something there, which is, especially when you're tired of being asked questions, ask the questions yourself. It's almost always more interesting to ask the questions than to answer them. But still, we parted, and I would have said I would never see that Guy again. I mean, we were not friendly in any way. There was no meeting of the minds or anything. But he did write a piece about me in the New York Times that people loved. And he gets so pissed at me because I always say he created this personality about me as this incredible wonder boy genius who, you give me a problem, I type away at my computer, I solve it an hour later. And people love that Persona, even though it was completely and totally off. I mean, it wasn't right at all. But look, I've been riding that for the last 15 years, so I can't complain. I've milked it for everything I could and people loved it. And then we ended up, not through an easy bible. We ended up deciding to write Freakonomics together. Not because we had some passion to tell our story, but just because we both wanted to make some bucks and the publishers were willing to pay us to write this book. And in the end, we had an amazing agent, Suzanne Gluck, who I interviewed for my podcast, People I mostly admire. And we relive that story. But she just totally out negotiated the publishers and there we were with a super lucrative book deal and no idea at all what we were going to write about. We had no conception of what this book was going to be. And I think part of the fun of it was that we both assumed that we had just pulled off like a bank heist and that no one was ever going to read this book. And so we could do whatever we wanted because it wasn't like my colleagues cared what I wrote about this book that no one would read. And he was like a serious, you know, memoirist. And his, you know, people would understand he was just doing this to make some cash and they wouldn't hold it against him. And it freed us up, I think, to write a book that was very different than what we would have written if we actually had the fear that people were going to read it and judge us based on what we wrote. So we had a lot more fun with it than we would have otherwise. And we kind of broke a bunch of rules. And we were super lucky, I think, to be in the right place at the right time to have a book that ended up selling a whole bunch of copies.

Did it come out in 05 or 06?

I don't know. I have no idea. 05, I think probably. 05.

I'm so good at dates. Usually I can almost remember. I mean, I remember reading it as soon as it came out. I still remember where I first learned about it. I Remember? It's so odd that I would remember this, but I was in the OR waiting for a patient to wake up, waiting to come out of anesthesia. So we'd finished operating, and I was just sort of writing the orders to get ready to take the patient to the recovery room. The chief resident said, I just read this book, Freakonomics. You gotta read it. It is unbelievable. It's totally incredible. And he just started raving about it. So I just went and picked it up and I couldn't put it down. I mean, it was just. And it was very unusual for me to read anything outside of medicine. It was very hard for me to make time to do anything that wasn't immediately related to sort of what I needed to do for work. So I'm trying to think which my favorite one was in there. Which one did you guys get the most blowback on? Was it the seatbelt one? The car seat one? Did that create the most blowback?

We literally had, like, three lines on car seats. We had one paragraph on car seats. And that probably did create about as much negative feedback as anything, strangely. We really thought abortion was going to be the lightning rod and everyone was going to get upset about it. Abortion and crime. But the backstory is that when I couldn't control the story, like when the media reported on my academic results about.

Abortion and crime, which, by the way, that was in the late 90s, wasn't it? Or early 2000s.

Yeah, 2000. 2001. Yeah, in that decade. And we had no control over the way it was portrayed. It was deeply misportrayed. It was simplified, and it was a nightmare. It just triggered hostility from all corners of the right and the left. And it just kind of made us look stupid because it was easy to parody it. Because if you didn't understand how simple and obvious the things we were talking about and how powerful they were in the data, we kind of looked like we were crazy people. And in part because, look, nobody talks publicly about abortion unless they have a stake in it, right? So all of the conversation about abortion is either stridently pro life or stridently pro choice. But, like, we didn't have a stake. We were just doing something really different, which is. We said something simple, which is abortion was legalized in the US and it turns out that there's this really strong relationship between unwantedness. So if a kid is unwanted by his or her parents, that they tend to have a hard life. And after abortion was legalized, there appears to have been a dramatic decline in number of unwanted children. That were born. And so just like in a simple empirical like statement of fact, fewer unwanted children with legalized abortion should lead to less crime 18 years later. It's like gotta be true. It's not hard to see why that's true. It's just a matter of is it a big number or a small number? And back of the umbilical calculations showed us that it could be a really big number based on other studies of unwantedness. And when you looked at the data, not perfect. We obviously didn't want a randomized experiment. We didn't get to choose who didn't didn't get abortions. We looked at things like after Roe vs. Wade happened, you look exactly at some states it was easy to get an abortion, some states it was hard. And then you look 20 years later and you see that, well, for the first 15 years the crime patterns look really similar between those states. And they only started to diverge once the kids who were exposed to legalized abortion were old enough to have start committing crime. So it was a really simple, straightforward paper that almost anyone could look at the data and make some sense of whether what we were doing was reasonable and sensible. And so when we actually got to tell our story in Freakonomics, nobody complained. And what was really interesting, just not just from a data perspective, but from a storytelling perspective, is it was one of the great successes of storytelling in that people who were pro choice read that chapter and would pat me on the back and say how amazing, like what a great chapter that was and how it pushed the pro choice agenda. And people who are pro life would slap me on the back and say, you know, I'm glad someone finally told the truth about pro life. And it was interesting. The exact same chapter was read totally different and everybody liked it. I got to say of all the things I've ever done, that was one of the weirdest and most unexpected things that ever happened is that we wrote something that everybody liked when we expected everybody to hate it. So Freakonomics, we wrote all these stories and people just liked it. And we, you know, we kind of had this look, we offended lots of groups. Like we talked about how real estate agents were like the kkk, but like in a light hearted way that even most of the real estate agents didn't get that mad at us. And I got invited to speak at the National Realtors association. So it was like everyone's like a good sport about it. Then when we wrote a second book, people got super pissed off because I guess we hit a little closer to home with stuff like climate change. Then we wrote a third book and by that time we had alienated everyone. It turns out that there was someone.

The third ones think like a freak, right?

Yeah. And so by that time there was. Every person on the right and the left thought we were jerks. By the time we were done with the third one, which is more or less why we stopped writing books. Because we had gone from, oh, these are these fun loving economists who poke fun at everything, to like those jerks. They're offended me deeply and I'm never going to buy another book for them again.

And then remember one night we were having dinner, this was at my house in San Diego years ago, maybe six or seven years ago. And I think you were toying with the idea of writing a fourth book about the Freakonomics approach to golf. And you really spent the entire night trying to convince me to be the protagonist of that book. Do you remember this discussion?

Oh my God. Yeah. So I actually wrote large chunks of a book about the Freakonomics of golf and liked it and enjoyed doing it because I have, I love and loved golf and I wasn't that good at it. But at the age of 40, I really in, in a semi serious way, dedicated myself to becoming a professional golfer. And, and never got nearly good enough, but, but improved a lot. But I, I knew I couldn't do it based on physical talent. I knew I had to do it based on, on being smart and using data in a particular way. And so I've developed all of these sets of tools that I think could be really helpful to a golfer. And what I needed was I needed someone who had amazing physical talent and was a complete maniac in the sense that I know you are of, like willing to put 10,000% into anything that you started. And I thought, wow, what a great chapter it would be to take someone who's never golfed before and to see how good you could get that person could get in a year. And you were my number one student to try to do it.

We talked about it. Seriously. I mean, I really did consider it, just out of curiosity, which was if I devoted one year to this, like I had devoted one year to swimming, like, how far could you get in a year if you were willing to put in two to three hours a day of very deliberate practice, especially with your guidance, which, as I understood it was going to make a lot of shortcuts. But in the end, I think my fear was just the addiction that would come of that. Golf is one of those Things that just. It could consume someone like me.

It would be a terrible waste of your talent as well. I did eventually take on one student, and it's a funny story. So Larry Summers, who was the secretary of the treasury and the president of Harvard and whatnot. So she came to Chicago one, one time to give a speech. And this is not too many years ago when he was and is incredibly eminent. And I got an email that was addressed to five Nobel laureates, the president of the university, and to me, demanding our presence when he comes to entertain him or, I don't know, so he could hold court or whatever. And I was completely befuddled at how I got on this list of these folks. So I showed up. I was maybe the fourth one to arrive, and he was deep in conversation with a couple of our Nobel laureates and the president, and he literally, like, stopped. I walked in the room, and he, like, broke off the conversation, and he said, sorry, gentlemen, this is who I need to talk to. And I'm like, wow, like, my stature in the profession of economics is really going up. And he says, steve, I mean, I don't even really know him. I've talked to him, like, twice in my entire life. He says, steve, I have been needing to talk to you. I'm like, wow. I'm like, thinking, what? What? What am I going to tell Larry Summers? And he says, I've heard that you're the one guy in the world who can get my handicap from 20 down to five in golf. How are we going to do that? And it was hilarious that the thing he cared about was golf. And so I had failed with you, Peter. I thought, okay, what a great chapter this will be. I'm going to take Larry summers from a 20 handicap down to a 5. And he turned out to be the worst student that ever existed on the planet. He wouldn't do anything. I sent him all my stuff. We worked out. We were going to work out plans for talking, and he wouldn't practice. He was the exact opposite. The reasons I wanted you to be my student were the exact reasons that Larry turned out not to be a very good student.

Let's hold on to this. There may be a day, I don't know, maybe when my kids are in college or something and I have a little bit more bandwidth, I might be willing to pick this up, but you have me very intrigued by this. The title, Freakonomics. You got that from your sister, right?

I did. So my sister, who unfortunately has since passed away from cancer, she was a force of nature. It's funny, when you grow up, you're around a relatively small set of people and you kind of gauge your own stature in the world relative to the people around you. And my sister was so amazing that I always thought I must be below average in terms of creativity and things, because relative to her, I was awful. But she was also odd in the sense that she didn't really function that well in the world. She wasn't that successful in traditional metrics because she was kind of. She was a little bit like Robin Williams. The person most like her that I've ever met scene is Robin Williams. And that she was incredibly creative, but, like, I don't know, like, didn't necessarily fit in that well with how the world worked. So anyway, we tried to write this book about nothing, right? So this was a book where we. We didn't have a theme and we were just, you know, we didn't have a title, that's for sure. We had the worst set of titles. And I knew immediately my sister was the only one who would come up with the title for this book. And so I told her what we were doing and she came back a half an hour later with, I would say, 10 titles that were better than any title we had come up with. But she basically just said, look, but the title of the book is Freakonomics. And I'm like, you're right. The title of the book is Freakonomics. And even Dubner was, okay, yeah, Freakonomics. That works. So we went to the publishers and they just flipped. They're like, we paid way too much for this book to call it Freakonomics. They refused the title. They fought it. And it was months of back and forth before they grudgingly said that they'd call this book Freakonomics.

What were they advocating for? What were some of their titles? Do you remember?

Oh, my God, the one we were at. I think I always forget it. So I was, I think, one of the leading candidates. Just to put you where how bad we were off was E. Ray Vision, like where E. Stood for Economics. And I think that was a not ruled out title before Freakonomics. But in the end, I honestly think this same book with a different title might have sold no copies. Life in general, publishing specifically, it's just a huge luck component to it. I think our book Little Things Happened, that made all the difference. We got a good review in the Wall Street Journal. I went on the Daily show with Jon Stewart, and somehow he made it seem really cool. And like, little things happen with books that kind of determine whether they fly or they don't fly. And I think if we ran back time and thought about this book and it going on, I think 99 times out of 100, it would probably wouldn't have sold very many books. We're just, like, super lucky in a lot of things that happen. I mean, I think it was a good book. I might like the book. I'm not trying to say it's a bad book, but what is really amazing is if you actually sit down and read books. And so people send me books all the time time. Because they want me to blur them. It's incredible how good these books are. Like, you know, random books that I expect to be awful. There's so many good books and look at. Nobody reads them. So many good podcasts that nobody listens to. But it's just really hard in the clutter of this world to break through. And I think the tightness of the correlation between how good something is and how much attention it gets much lower than I think most people give credit for.

Steve, something you've been talking about quite a bit lately. We spoke about it when I was on your podcast. I've heard you speak about it on other podcasts. Is kind of our shared appreciation in mental health and how underappreciated it is. How long has this been something that's been, at least to you, as important as I think it is now? Is this recent, or is it something that's always really mattered and you've only come to appreciate how underutilized these tools are?

Look, I was raised by a father who was like, no nonsense. And the idea of therapy, I mean, such an embarrassment. Oh, my God. I mean, no real man would ever think about certainly crying. You were not allowed to cry.

You had a grandfather that committed suicide. Was it your father's father or your mother's father?

My father's father. No. But it wasn't a mental like my father. My grandfather's suicide was not a mental health issue. My grandfather, who loved life more than anything and was, I don't know, maybe 90 years old. His wife, who he loved dearly, had terminal cancer, and so he decided to commit suicide. Not out of unhappiness, just because he had lived a great life and he was satisfied and he didn't want to be a burden on people. So it was actually, in some sense, the opposite. In many ways, he was extremely far along in the mental health domain because he accepted death as being a natural part of the cycle of life and was not troubled by it. I think honestly, for me, the big change was I got divorced and I met my wife, Suzanne, who is much more in tune with these issues and got me thinking about them in a way that I never had before, whether it's the kind of more esoteric stuff in kind of the spiritual domain or purely about mental health. And I somehow shook off, like a lifetime of teaching, which told me that mental health was a joke and you just gotta, like, fight through it and came to appreciate it, you know, seven years ago, really, is when I started thinking about these issues. And I think you're right in saying that I've come to believe now that they are dramatically more important than our education system or our society has traditionally given them credit for.

You've spoken about this a little bit. I mean, you've spoken about it with me and you've explained that you'd be even comfortable talking about it today. But one of your children struggles with an eating disorder. How hard has that been for you? And how have you sort of navigated your appreciation for mental health with both her struggle and your struggle? Because I think that's hard for both of you in different ways, obviously.

You know, it's interesting that I. If there's one thing I'm really good at, it's I forget the serenity, the serenity prayer. I'm really good at understanding the difference between things I can and cannot control and not worrying very much about the ones I can't control. And if there's one thing that was clear to me that I could not control directly, it was my daughter's eating disorder and that no amount of trying to push or pull or whatever was going to do it. So it was weird. I approached it with a real calm. I mean, it was awful to watch, but I didn't struggle in the way that I think most parents struggle, which is the feeling of like I should be doing something about it. Look, these are often lethal. And she was incredibly accomplished. As an anorexic, she was extremely effective at torturing herself. And in a weird way, I think that calm was helpful in letting her be comfortable with me about it. And eventually, I think I played some very small role in her recovery. I mean, obviously, 99.999% for recovery was her own. It was odd. I mean, that's probably not the answer you expected me to give. But in a strange way, that was not. Maybe more generally with my adult children, I really am maybe better than most parents at understanding that they're their own people and that they live their own lives and that I'm just an observer and I can offer advice, but I have no control over it.

Where do you think that transition to takes place? Age wise? I mean, a friend of mine, Rick Elias, who was on this podcast once said something that has stuck with me. I don't think a day, maybe two days would go by that I don't think of what he said, which is raising children is playing a game of tug of war that you have to lose. And he said it more eloquently, but it was like you lose it gradually, obviously. So when you're holding the tug of war with your 5 year old, you're. You're still winning. And with your 13 year old, you're really starting to slip. And by the time the child's 18, it's their rope, right, or whatever. You seem to have navigated that better than most, perhaps.

I had a son who died when he was one and that was far and away like a thousand times harder than anything I've ever experienced. In part because your real job as a parent, in some sense your biggest job is to keep your children safe. And it was so difficult for me to navigate the knowing that I had not kept him safe. And he was my first son. And six kids later, I think that really affected my parenting. And you know, he didn't die because I was abusive or neglectful. He died because of a terrible disease, meningitis, that came out of nowhere and I couldn't protect him from it. And I think there's one or two ways you can go. You can become incredibly fearful. Like I just happened to watch Finding Nemo yesterday with my kids. And so like, you can be like Marlin, the dad in Nemo who becomes incredibly productive and doesn't want Nemo to do anything. Or you can just understand that the world is one of uncertainty and of loss and of risk. And I really, for whatever reason, I went that second way and I just said, look, I can't control the world around me and I'm just going to do the best I can knowing that that's true. So even from a very young age with my kids, I have a lot of acceptance of their autonomy and their independence and the fact that I can't mold them the way I'd like to or shape them. So even with, look, do I want my 4 year old to do what I tell her to do? I get super pissed off when she doesn't go to bed when I tell her, yes. But on the other hand, I put an enormous value on that Autonomy and that independence. And when I'm calm and quiet, I'm more or less, for better or worse, putty in her hands and will do essentially whatever she'll want. Because I think a big part of her growing up in life is, is learning to have control over situations. And what better way for her to learn about control than to be able to have some control in her interactions with me, which is totally different than the way I was raised, I think in the way that maybe I would have raised kids absent the death of my son Andrew. But I really have gone in that direction.

How deliberate was that process when he died that you made what sounds like a very conscious or even subconscious decision to accept it and move on without, as you said, basically. Well, look, I'd back up and say the following, right? I mean, I think one could say that many parents who lose a child are never the same again. And I don't say that in a glib way. You're not the same again. So let me rephrase that. No parent who loses a child is the same again. But you could make the case that many parents are so damaged after that that they're even externally never the same again. Most people, I mean, I know this about you, but my guess is many people would interact with you and never know that you'd lost a son. What strikes me about it, Steve, is that it's one of the core tenets of something called dialectical behavioral therapy, which I've become very fond of, which is this idea called radical acceptance, which is super hard. But as its name suggests, radical acceptance is basically just radically accepting things, not saying that they're good. Radical acceptance doesn't mean it's good that my wife got cancer. It's I radically accept that she got cancer. I work on this every day and it's the hardest thing in the world. It's super hard. It's even hard with silly things, by the way. You know what I mean? It's even hard with the most irrelevant things at times. So I want to understand that a bit more. How did you possibly come to that type of profound radical acceptance of something so awful?

So it certainly wasn't conscious, it wasn't from deep thinking or anything. I would say it happened. And in many ways I would say my hunch is that radical acceptance of big things must be easier than radical acceptance of little things because it's so obviously beyond control. Look, my son had died. There was definitely no undoing that. I have no real self awareness of how it happened. It just did and it wasn't. I didn't work at it, Let me put it that way. I didn't work at it. It wasn't something like where I went to therapy and I came to eventually accept it just happened. I mean, it was disjoint from the grief. I mean, the grief is one thing, the grief is real and is semi permanent. But how you behave in other situations, to me that's just, you know, I don't know why, but that's just how I reacted to it, if that makes some sense. It was really long before I consciously invested any time, effort, resources into thinking about mental health or about more spiritual things, for lack of a better word.

In the time that you've now come back and reflected more heavily on these issues around mental health, in the past, as you said, seven years, have you learned anything new about that experience when Andrew died?

I've never, literally have not thought about it. Obviously I think about his death all the time, but I've never tried to make any sense of it. That's the answer. I've literally haven't thought about the way in which I processed it. I haven't really talked about it. I mean, other than talking to you right now, I'm not sure I've talked about his death and the aftermath of it, but really never talked or in many ways thought about much about the implications of it. In a weird way, probably seems strange, but it's true.

What do you think would be necessary to infuse this idea of self care and mental health into education? You talked earlier about how this might be even more important than education, which I don't think anybody would argue is not itself important. How would you operationalize that? If you were education czar, whatever that might be, then you had hold over the entire K through 12 system. How would you infuse this type of thinking?

Let me take a step back and just first make the case for it, because I think that's worth doing. I think if we went back to square one and we thought about what we should teach children about navigating the world, we would radically overhaul the curriculum and like, we'd change math and stuff, but, but, but much more fundamentally, I think we would try to teach them the set of skills that will make them happy and able to resolve conflict with other people and to just get along in the world. I think, at least for my kids, I'm much more worried about that than whether they're really good at calculus. That matters less to me that they have good lives and they know themselves and they make good choices. I think that wasn't the spirit when we started school. And so our curriculum is very much built off of things from 100 years ago. And this wasn't in the air and maybe we didn't have the tools then. So that's my case for why I think we should be teaching. And that doesn't answer your question at all about how to do that. It's just my belief that as a parent or as a school, our goal should be that we raise well adjusted kids who have a set of tools that are helping them cope with the world around them. And that many adults like you and me have made a lot of investment in these tools later in our lives. And maybe we could reduce the need for that if we had invested more earlier as a society in that. How did that. I have no idea. I mean, it's like impossible, because it's impossible to change anything. What's the problem? The problem is that time during the day is scarce in school and every minute you spend focusing on mental health or self care, whatever, is a minute taken away from something else. And that's really hard to do. The second thing is, who in the world actually knows how to do this well? I'm not sure I know how to do this well. And even if I did know a person who knew how to do this well, do I know how to scale it? Absolutely not. I don't know what kind of training you give teachers or who you'd hire. So look, I think it's very amorphous in my mind. It's a belief that it's important, and I think it'll be a lot. Let's just say y' all agreed it should happen. It will be a long, arduous process. What I believe the right way to do it is for the Department of Education to mandate, like we have for the Common Core and Math, that we should have a Common Core in mental health and that there should be these 17 things that are hit each year, different ones for atheists. No, obviously this is the kind of thing where I think maybe you'd want to experimentation, right? So let a bunch of models run, see what seems to work and grow into it. I would be very much in favor of that. Where we encouraged subsidized school districts to try out things and encouraged innovation, but I think we're a long ways away from that. I had the privilege of talking to the Biden transition team not too long ago about education, and I threw out three or four ideas and they listened quite intently to Each of the ideas, except for the mental health ones, they could not get off that topic fast enough. I like total silence in the room when I suggested that as an important thing to do.

Have you ever gone back and spoken with your dad because your dad is still spry as can be? Doesn't he still work?

Yeah, my dad is still a practicing physician at the VA hospital.

So have you ever gone back to your dad and revisited this idea of mental health and his lack of interest in this topic?

I haven't. It's funny. So I'm actually thinking hard about interviewing my dad for my podcast. It's funny, I feel like somehow doing it via podcast should be the opposite, but I somehow feel like, well, if I am doing it on the podcast, I can ask my dad all sorts of questions that I could not ask him otherwise, which clearly, logically makes no sense at all. Why would recording something and playing it for hundreds of thousands of people put questions on the table instead of taking them off the table? But in a weird way, I think somehow it would be easier for me to ask my dad questions like this in the context of a podcast. We'll see what happens. He's a very reluctant potential podcast guest and I'm not sure he can do technology well enough to hit the button to actually record it on his end. So we'll see whether it happens. But no, I've literally never talked to my father about any of these issues ever. I've not talked to my father about my sister's death or his father and mother's death, or a family that doesn't talk about stuff like that. It was a nice enough family, but the word love never, never used in my household except with reference to the family dog. People love the dog. But you would never ever say you loved another family member.

Now how different is that with your current children and your current family? Is that different?

So I have self consciously been very different about that. I tell my kids and they tell me they love me every time we hang up the phone or whatever, which I don't know if that matters for anything, but it is like I don't do that many things self consciously in my life, but that is one that I very self consciously tried to propagate was the idea that you could express your feelings of love and affection in my family, the family, I'm the father figure.

So you're fond of decision making. What's the best decision you've ever made in your life? And what's the worst decision you've ever made in your Life.

I'm probably going to give you a terrible answer to this. I think my worst decisions I'm too embarrassed to talk about.

Okay, that's fine. I probably wouldn't be able to publicly.

Admit my worst, but I've made a lot of like. Look, I will tell you, all of my worst decisions have been about inaction, not action. I know that that of the hundred worst decisions I've made, I'm sure that 99 of them were not doing something as opposed to doing something. There are very few really bad things.

I've done, by the way. I feel the opposite, Steve. My worst decisions have been decisions of bad action, not inaction.

But that's interesting.

And what's the best decision you think you've ever made or a subset of the best decisions you've ever made?

I don't know if you'd actually call it a decision, but the decision to not care what people think about me, it's not a decision in, like, oh, I went back to school. I didn't go back to school, but I somehow just made a choice. It's a choice. I don't know if you call it choice. I made a choice to just not care what other people thought about me, which was a big choice for me because like most high school kids, all I cared about was what other people thought about me. And at some point I just broke with that and was happy to live with the consequences. And it's just a great way to live. It just frees you up from so much burden. I think all my best decisions are ones that have relieved burdens. I'll give you another one. Which is trivial in comparison. But important is I used to be super cheap. I used to worry about every transaction I made and prided myself on being frugal and thinking about, oh, should I spend that dollar on a bottled water in the airport or not? And at some point I just said, hey, this is like, I could free up a lot of mind space if I just didn't worry about decisions that were like, under $5. And it was hard for me to do. But I said, look, I'm going to stop if it's under $5. When I start to go into this frenzy, I'm going to forget about. And then I moved it up to like 10 or 20. And like, the high. It's like, for me, it's like, the higher the better. And it is just so liberating for me that I this rule of thumb that, like, if it's under some ridiculously large amount of Money. I just don't worry about it. And look, it adds up. I probably, you know, I waste tens of thousands, if not more dollars a year because I'm not getting these decisions right. And that's awesome because I free up 10% of my time to do whatever the hell I want. And I love doing the stuff I do, and it's just super liberating. So I think many of the things I like are these things that have been liberating where I stop worrying about stuff. And maybe it's not that far off than your idea of radical acceptance. I don't know. It's not radical acceptance, but it's just a total acceptance that there's going to be these imperfections. I'm just not going to worry about getting things exactly right.

Do you think in general, we as a species are good at decision making? Is there a way to, to evaluate this?

Good compared to what? I'm not sure. But good compared to optimal? No, we're terrible. I mean, it's like behavioral economics over the last 40 or 50 years shows how bad we are at making decisions. And I think the best evidence of this is the people who know the most about decision making. So whether it's these really prominent economists who, who've thought enormous amounts about backward induction and optimized behavior in dynamic systems, or whether it's Danny Kahneman who has spent more time thinking about behavioral. These are the worst decision makers I've ever seen. I mean, Kahneman even is very forthright. He said, the reason I study decision making is I'm awful at it. And with everything that he's learned, he's still awful at it. And so I don't think humans are good at making decisions. And I think we can arm ourselves with tools. Like there are a lot of, like a lot of, A lot of economics is really common sense codified into helping you make better decisions. I think a fair amount of psychology and pop psychology is that as well. But look, and there's no one who talks more than me about how we don't quit enough and how people get through, get stuck in bad situation. I know that. And I. And I have so much trouble quitting. I mean, it's stuff I should quit. I eventually do quit it, but it takes me usually like on average. I know I should have quit it two years before I do it. Look, and I understand all of the problems. I understand exactly what the situation is. But to overcome the complexity of the brain and all these forces, this is super hard to make good decisions.

Do you Think there's an evolutionary force behind that.

When we were evolving, the kind of choices you had to make are so different than the ones that we face now that it's not a surprise that evolution would not necessarily be our friend in these kinds of decisions. I mean, just, I don't know anything about it really, but my sense is that evolution has not been our friend in the nutrition realm because we evolved in an environment of scarcity and now we live in an environment of plenty. And all the triggers we get from evolutionary degrees we get are the wrong ones. Probably that's the same with decision making. We evolved in settings where we were facing life and death problems all the time. I think one of the hugest problems that we face, mental health wise, is this trauma. And people are stuck in a trauma mode and reacting to trauma, which evolutionarily is probably fantastic. Because the kind of challenges we faced and when we were evolving were short term, incredibly intense risks that you needed to marshal everything in your body and your mind to fight. But now those aren't typically the kind of risks or challenges we're facing. Until people end up using the wrong set of tools. The body is just not configured well for the kind of chronic settings we live in of too many people, too much information, constant fears and threats around us. I don't know much about it, but I think there's zero reason to think that evolution is our friend when it comes to difficult, complex decisions, because we just didn't look how complex could the decisions have been when we were evolving. I mean, I look back at this is maybe off track, but it was something that really struck me. I went to Australia for a while and was talking with some guides as we went around Ayers Rock, Utheru, and talking about how basically the Aboriginal life had not changed hardly at all over the course of, I don't know, 5,000 years or something. And it was interesting to think about. Like you don't need much innovation at all. You innovate 1% per generation. And over 5,000 years life is completely transformed. So it's like there's literally no innovation going on. I mean, there are things like they didn't have the wheel because in the bush the wheel didn't do very much good. So like, it was interesting to hear about, but it just really hit home for me that observation which is modern life and this idea of progress and innovation and being better off than your parents, like that's a super, super modern idea. Not at all one associated with, with mankind's existence over huge, you know, except for this tiny sliver of. Of kind of post industrial life that we're in.

It makes it almost impossible to fathom what another hundred years looks like for exactly that reason. Again, the non linearity of what the acceleration technology has been like in 100 years and what it looks like going forward. Now. Speaking of a lack of progress, this is totally off topic, but what you said kind of made me think about this. Let's talk about horse racing for a minute. You're kind of a fan. Did you get to see Secretariat at one point?

I did, yeah. So when I was in college, I wrote my undergraduate thesis on Thoroughbred breeding and it just happened to be the best library was in Lexington, Kentucky. And that's where Secretariat was. And I didn't really understand how the world worked very well. I just figured I could show up at Claiborne Farms and they would invite me to go see. So I showed up unannounced at Claiborne Farms and I said, I would like to see Secretariat. And they looked at me like I was acting crazy. And like two seconds later, one of the part owners of Secretariat happened to drive up behind me and like walk up to them and say, hey, we were just going to go say hi to Secretariat. And for whatever reason, instead of like shooing me away, they said, well, this total clown here thinks he should be secretary too. Do you mind if he tags the line like, okay, why don't you? So I did. I did get the meet. Because, you know, it's funny, I was six when Secretariat won the Triple Crown. It's one of my first sports memory. Absolutely. I remember where I was. And I remember it in part because for whatever reason, in the Belmont, I had chosen Secretariat as the horse that I thought would win, probably based on heavy guidance from adults who had suddenly, like, led me to think he should win. And then that was the race. He won by 30 lengths or whatever it was. And I still remember that vividly. I'm not a very good sports fan in the sense that I'm not very good at remembering names of players and whatnot, or having heroes. But Secretariat was always one of my heroes. And then he died. I don't know when he died. I would have gone there in 1988. Yeah. So he didn't live very much longer after that.

Yeah, he was only 19 when he died. I mean, you wrote about thoroughbred breeding. Why do you think that Secretariat was the peak of thoroughbreds and they've never gotten. No horse has ever approached Secretariat's speeds. I mean, I think for the listener, just to put in context, what's the Triple Crown? You've got the Kentucky Derby, the Preakness, the Belmont. To win all three of those. And the three of those take place over, what, about six weeks?

Yep.

So to win these three races, which get longer, I mean, technically, I guess it's a mile and a quarter, a mile and three eighths, and then a mile and a half for horses, that's a pretty big difference in distance. So that's speed and endurance in a short period of time. I mean, it's very difficult to win all three of those. Secretariat came along and won in 1973, but did you know to this day has the record for the fastest time in each? I think in the Kentucky Derby, what to me is remarkable is negative splitting each quarter mile successively. So each of the five quarters was faster and faster and faster, faster and faster and faster. And then in the Belmont, not only running 224, which is like six seconds faster than American Pharaoh won it, but also winning by, whatever, 30, 31 lengths. No horse has come close to this. Why do you think that is?

So I don't know. A couple things to think about. So I've actually dabbled with trying to think about, could you, in a smarter way, do breeding of horses? So the way they decide what horse to breed to another is not extremely scientific. They kind of look at the horse and they have some ideas. And so my hunch is that it's not particularly well done. Although, just like with humans, there's an enormous amount of assortive mating. Right. So it's not like they mate the worst mares to the best studs. I mean, they make the best and the best, you know, in the same way that the best basketball players end up getting married to the volleyball star, and then who knows what kind of amazing offspring they're going to have? I think probably the best explanation for it would be that, in contrast to human sports, I'm not sure there's been any advances in training techniques for horses in the last 40 or 50 years. Now, maybe there have been, but they're not obvious to an outside observer. I have a few little secret dreams. And one of my secret dreams, which sounds like a Disney movie or something, is that I would buy a horse, an average thoroughbred, and I would train that horse the way Peter Attia trains for ultramarathons, and the horse would actually turn out to be really good. I mean, I don't really know much about horse training, but I don't think I'm greatly exaggerating when I say that the way that horses are currently trained is they stand in their stall for something like 23 and a half hours a day. And roughly once every day or two, they bring them out of the stall and they trot around and they run. And sometimes they run fast, but they don't tend to run fast for more than like three, eight of a mile. Even though their actual races are going to be a mile, a mile and a quarter. They only like when they train, they only run three, eight of a mile. And I don't. And I think these horses spend almost no time swimming. So you might say, look, their legs are fragile. Because their legs are fragile, you can't like run them all the time. But like in my little fantasy world, I've got a horse sized pool with a strong current going against it. And my, my horse Silver or whatever, you know, whatever the horse is that I have in my Disney movie is swimming in the water like four hours a day. And I've got him hooked up to oxygen monitors and he's doing whatever the equivalent of stretching or whatever.

That's an interesting point, right? You put some zone two training in him, build some aerobic capacity, mitochondrial efficiency. I don't know enough about it to say if what you're saying is correct or not, that there haven't been advances in 50 years. It's hard to believe there haven't been.

But I don't know, I mean, it would be interesting I think though if you. Let's forget about the golf project. I think it would be super fun if you and I, you already know a lot about how humans work and I'm sure you could figure out really quickly how horses work. I think it would be so much fun to claim, okay, because these horses, when they run, you can claim them for like $5,000. Take some total loser. Well, the problem is for the Triple Crown you gotta be a three year old, so you can't really do it. You just gotta take some completely unspecial horse. And what we'd really want to do is we'd want to win the Triple Crown like four years in a row doing our aerobic training. Because look, if it were humans, like imagine, just imagine you go back to the time when you know much more than me, but when Roger Bannister was running the four minute mile. And I think there's still not very good training going on at all at that time. I may be crazy, but is it not true that good high school runners in the US routinely break four minutes.

I think in the case of humans, we can definitely say that the biggest difference between Roger Bannister and a good collegiate runner today is knowledge of training much more than equipment or nutrition, for sure.

So it would be true if you could magically understand fitness and training and take today's fitness and training and take a relatively good athlete, but nothing special. I think he could have won the Olympic gold medal in a range of sports. That would be my conjecture. Take a good athlete, a good college caliber athlete, and the difference between, like swimming would be probably a good example. Like, I think you probably the hundredth or the thousandth best swimmer today is probably better than the best swimmer in the world 50 years ago. In terms of times, I don't know, you wouldn't know that. But anyway, that's what I'm talking about with the horse. So you take a good but not great horse and it seems like you could, if you could get the same kind of advances in training, you would just smoke the competition.

The other thing is, how much of an outlier was Secretariat? Right? I mean, I think there's still some debate about was his greatness, how much of it was due to the size of his heart. Unfortunately, his heart was not weighed at autopsy, but the same vet that did the autopsy on Secretariat several years later did the autopsy on Sham, who was the horse that finished second, was basically the second best horse in the world in 1973. And Sham had a pretty large heart. And he said Secretariat's heart was at least 15% larger, which basically put Secretariat's heart at twice the size of a normal heart. And it's interesting that has been linked to an X chromosome, which may partially explain why Secretariat's immediate male offspring weren't that special. Because his male offspring would have got his Y chromosome, his female would have got the X. And only if that X made it into a male two generations later would that have been a particularly fast horse. Which I think also gets to your point about the lack of sophistication around breeding. I don't know why I find this stuff so interesting. I think there's just something so beautiful about these horses. But in particular, Secretary, I've always been so enamored with. And in fact, when our middle son, before he was born, I was really lobbying hard for the middle name Secretariat that didn't even get a prayer. But I lobbied really hard for it.

Maybe if you lived in Communist Russia, you would have had a better chance with the middle name Secretariat.

Okay, Steve, a couple last questions for you here, because I've been taking up too much of your time. What do you think is the most interesting question on your mind? That you don't have a clue of what the answer is.

So this is just pure weird, but something I think about, actually I think of it with you because it's your influence that led me in this direction. Because you introduced me to Sam Harris's work. And there was a few paragraphs in Sam Harris's book Waking up which have intrigued me, which I don't really know anything about. But I find them intriguing. So this is what I find really interesting. So he talks about how the left side of the brain has the ability to speak and the right side of the brain doesn't have the capability to express itself through speech. And I'm sure there's a lot more to it than that. But it's a starting point. That simple observation I find interesting because it got me thinking about the degree to which our lives are mediated through speech. Obviously, when I talk to you, I have to use speech, but my own inner life is incredibly dictated through speech. So I'm putting words on everything. Like every as I go through my life. It's not just this idea of chatter in the back of our head and like, is there some monkey on my back telling me I'm a loser or whatever. That's not really what I'm talking about. It's much more about that in general. When I look at a computer, I put the word computer on it, okay? So then it just got me interested in the question of. Well, he kind of makes a little suggestion that it's possible that you could think of the right side of the brain as being held as a slave dominated by the left hand side of the brain. Like the right hand side of the brain has all sorts of interesting things it could do. But because it can't speak, it's relegated to this awful subsidiary role. And so I just got interested in the idea of how could I introduce myself to the right side of my brain? How could I actually get to meet that part of my brain which I don't even like. I know nothing about how the brain works. I don't even know if that makes sense. But like given infinite time, which I don't have, it's actually, I think that's one of the things I would pursue. So I pursued it like in a little way, which is I found it was actually quite easy with concentration to train myself to be silent.

Silent and thought, you mean.

No, I want to think. I just don't want to think with words. Okay. It's really. So it's a way. So I think it's slightly like I don't understand meditation and all the different kinds of medicine. But I think what I'm trying to do is slightly different than what most people are trying to do. I'm not trying to quiet my brain. What I'm trying to do is I'm trying to observe the world with all of my senses, but observe them without, but free of language. Okay, so that, look, it's totally possible as I, I don't know, peel a potato. Like I know how to peel a potato without calling it a potato without using the word peel in almost everything we do in life. Even I think in some sense listening. Well, I don't know about listening, but like most things I can do on my own, I don't need language, but I constantly have language as my partner. And so it was an interesting and surprisingly easy task to on demand be able to try to put words aside and be word free. I won't say that I can do it like at will or perfectly, but I was better at doing that than I thought I'd be. And what followed was kind of interesting and intriguing and increased my interest in the question as opposed to decrease it, which is, I find that it's very difficult for me to be unhappy or angry without words, that words are really critical to feeling victimized to feeling. It's not that I don't feel anger, but I feel very, very differently in the absence of words than with words. And I can process the. So anyway, that's probably a crazy answer to what you just asked, but it's something. I have a hunch that it might be important. I have no clue about how to actually do it. Well, I'm sure there are probably gurus out there who could maybe help me do it, but I've actually never really heard anyone else talk about it explicitly in that way. So when I'm trying to go to sleep, it's kind of thing where when I try to go to sleep at night, I spend maybe five minutes a day playing around with this. And I think it's been good for me in a weird way.

Well, I think that last observation about how the reduction of nomenclature around a negative emotion or an emotion, not that anger is a negative emotion, but a negatively valenced emotion at least can reduce its impact. That alone is super interesting as an observation. The other thing I'd say is that strikes me as something that could be probably augmented by medication. There could be certain plants or Drugs or chemicals that would probably really augment that state.

That's interesting. That's really interesting. Maybe you can help me with some of those.

Last thing I want to ask you, Steve. You've mentioned numerous times that the random controlled experiment, the rct, the gold standard of medicine, is a tool that is virtually never available to the economist for obvious reasons. The scale would be enormous if you could put all of that aside for a moment. If you truly had billions of dollars and all the time in the world, what experiment would you conduct?

So it's funny, I don't actually have big ideas about economics. I think economics isn't where I would go with something like that because in some fundamental way I think we understand what's understandable about the economy. I mean, it isn't. It's not a lack of resources that makes it hard to understand the macroeconomy, it's the fact that we have exactly one of them. Right? So absent a set of parallel universes, I don't think we're ever going to find out through data or experimentation. So look, if you give me a different choice, which is if you could be God and create enormous number of parallel universes, then I would have a bunch of interesting macro experiments that I might want to do. So for me, when I think about big problems, they're much more off. They're rarely about randomization. I'll give you an example where maybe this isn't what you're really talking about, but I think how we really blew it with COVID So what have we done? Well, we used randomized trials to figure out that we have really good vaccines. I fought with Moncef Slavi about this, but look, I think we were idiots not to do challenge trials where we actually went out and learned much more quickly by giving people vaccines and giving them Covid and seeing if it works. I think we were foolish given the stakes not to do that. But much more fundamentally, I think that we have ruled out medical ethics and societal views, have ruled out really sensible, like when we want to know the answers, the best way is randomized experiment. Okay, so there's so many. And you and I have talked about a little bit on my podcast. Well, there's so many cases around Covid where we just don't know the basic facts about like I think you made a big point about the 6ft thing, like 6ft away, like somebody just made that up and we live with it. Or another one that just came up is there's a great op ed piece that said, well, why Is everyone still wearing terrible masks? Because, like, at the beginning, people, you know, like, we're told, well, don't wear a mask because a mask won't help you anyway. Which was obviously idiotic because we were really being told that because they didn't want us buying up all the good masks because they wanted to give them the frontline health professionals. Of course, if they didn't work, why are the frontline health professionals wearing them? The real missed opportunity in Covid was not to take the approach that I think is 100% accepted. Which is the best way we are able to learn, given the constraints of society about COVID is by doing clever little natural experiments where we look at some particular airplane and some particular person we know got Covid, and then we go and do contact tracing to figure out how bad it was. Look, the best way to figure out whether airplanes are dangerous is to put people on airplanes, some who have Covid and some don't, and to figure out who gets it. And people are like, oh, you can't do that.

This brings it back to the field of economics. You would argue if you pay people enough as volunteers, there's going to be a subset of people that are going to say, yeah, my risk of getting Covid and something really bad happening is sufficiently low enough that I'm willing to be one of the healthy volunteers on that airplane who risks getting Covid. And of course, we would argue, well, that might not be medically ethical, but you're saying desperate times call for desperate measures. There's a way to solve these problems economically.

Yeah. And then Moncef Slaoui, who ran Operation Warp speech, said, yeah, but that's no good, because then you just have the healthy people. And that might not tell you anything, but look, there are plenty of people who are really, really sick and who are worried about their dependency and what's going to happen to their family. Look, there are plenty of people who know their life expectancy is four months who are going to be willing to get exposed to Covid if you say, we'll take care of your family, you know, if you die from. So, look, I think. I know I'm completely out of step with mainstream medical ethics on this, but I think medical ethics gets it really wrong. Because when they think about money, they think about small amounts of money, and it's probably wrong. If you're willing to offer people $100 to do this, then the only people are going to do it are going to be drug addicts and uneducated people who don't understand. But look, if you. When the stakes are as high as Covid, you can offer people $10,000, $100,000. I mean, you can offer enough money that everyone's going to be lining up to do it. And if everybody's lining up, then I think medical ethics no longer has a real stake in this, because it's just a different problem when everyone is volunteering to do it. Volunteering because you're paying enough money. Look, then almost every issue of medical ethics fades away when you got a surplus of people volunteering.

You know, I never thought about it that way until you said it, Steve. That is a fantastic point. Institutional review boards, IRBs, are adamant about making sure honorariums are very small in studies to prevent coercion. That's their big shtick, is you can't overpay people. Otherwise it's coercive. But the irony of it is it is coercive if it's low and it disproportionately targets the most vulnerable.

Exactly. It's so true. And on organ donation, this has been something I've harped on for a long time. People are really terrified of the idea of a market for organs, for live donors and kidneys. And every horror story they tell is a horror story that's embedded in the idea that it's going to be exploitative. And that's because the market price would be too low. It's actually an odd case in which you want to enforce an actual price which is way above the market price, because the value to our, you know better than me, the amount we spend on dialysis and the amount of suffering associated with it, it's like some even, like, measurable percentage of GDP, like 1 or 2% of GDP or some crazy thing like that. And the value of a really good, healthy live kidney to society is enormous. It's, you know, on the order of, I don't know, you know, hundreds of thousands of dollars at least. So you could easily pay people $100,000 for a good kidney. And if you did that, I think you might have, I don't know, might have 10 million people who would. 50 million people who would sign up to be kidney donors in that world. And in a world in which Wall street stockbrokers are signing up to donate their kidneys. Not donate. I mean, not altruistic. They just want 100 grand. Look, in that world, the whole medical ethics is turned upside down. And the weird thing is, I cannot get anyone to take that scenario seriously, even though to me it seems completely and totally obvious that if we could get, I don't know, Guatemala or Singapore or Mozambique or someplace to just do that in one place, I bet it would work great and that one example could lead the rest of the world to follow. But we are so far from any place being willing to try it. I mean, the closest is Iran. Interestingly, ironically, Iran is the one place on the planet that's paid for organs, but not the way I would do it. Not that it's the most important problem in the world. That is a fantasy. Along with training that horse Silver to win the Kentucky Derby, that's another of my fantasies is a world in which I create this market for live donors.

All right, so on that note, Steve, we've got three huge problems to follow up on. We've got to in order figure out how to create a really good scratch five golfer in 12 months. We've got to figure out how to take a B player horse as a one year old and get a Triple Crown by age three. And we've got to figure out a market for organ donation with a really, really really high price premium paid for kidneys.

Let me just add number four is we got to figure out how to do this Manhattan Project for Climate Change.

That's the most important one. I'm going to personally spend more time thinking about that one than the other three, but that's awesome. To come out of this podcast with four great problems to work on is more than we bargained for.

My prediction, the only one we're going to solve is going to be that five handicap golfer when you get burnout and you you get tired of doing everything else. The other three I'm not too optimistic about.

Steve, thanks so much for sitting down today. It was awesome.

Thank you Peter. Awesome. It's always so much fun to talk.

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