KJF-2023. Day 1. Tyler Cowen. Interview

Let's begin. Yes. What are we talking about when we talk about the new Ukraine?

Ukraine has this glorious cultural past, which, by the way, was not a Russian construction, but a Norseman construction. The war consists of Russian aggression, but most importantly, it consists of Ukrainian resistance.

No one ever expected Ukrainians to be so united fighting the aggressor. I mean, these are very tough guys, right? Freedom. Freedom is a value which you are ready to die for. We want Ukraine to win. It could end this year.

Hello and welcome to the 2023 Kyiv Jewish Forum hosted by the Jewish Confederation of Ukraine and Tablet magazine. What impact has Russia's war against Ukraine had on the Ukrainian and global economy? A well-known American economist, Tyler Cowen, a professor at George Mason University, will share his opinions. I'm Jeremy Stern, deputy editor of Tablet magazine. I'm very pleased to be here today with Tyler Cowen, who needs no introduction. Tyler is simply one of the most influential public intellectuals in the English-speaking world and beyond. He blogs at Marginal Revolution, he writes at Bloomberg, he podcasts. Conversations with Tyler teaches at George Mason University and many other ventures besides. And the great thing about Tyler being a polymath is you can ask him pretty much any question about any topic and he'll have a learned and thoughtful answer. So this being the Kiev Jewish Forum, today we'll spend our time with Tyler talking about all things related to the current war in Ukraine. So Tyler, first of all, welcome and thanks for being here.

Hello, Jeremy. Happy to chat with you.

So let's jump right in. First question: you're a great reader of fiction, you're an observer of foreign policy. I believe you also have a Russian or former Soviet contingent in your own family. So first question: what can we learn, and what have you learned, from the history of Russian literature about Russian foreign policy?

Former Soviet would be the correct designation. My wife is part Jewish and part Armenian, grew up in Moscow. Now you ask about Russian literature. If you look at, say, you know, Pushkin or Lermontov or Tolstoy, the overall vision of Russian literature I take to be fairly Moscow-centric, fairly imperialistic. The same you could say for American literature, by the way, just to be fair. And, you know, you read something like Gogol's Taras Bulba, there's the sense of other parts of the empire being outsiders. Or being wild or barbaric, and maybe they're interesting or fascinating, but they're viewed very much as the other. And there's a sense that in terms of intellectual or political center of gravity, that they really don't compare to the center of Mother Russia herself. So I had an exchange on Twitter with Daniel Dresner. He did not predict the war in Ukraine, and I did predict the war against Ukraine. And I said on Twitter, well, if you had read Russian literature, carefully, you probably would have done better than most political scientists. And Daniel tweeted back at me that this is absurd, but it's not absurd, right? Ideas really matter, and ideas of a country are reflected in its literature. And if you know Russian literature, later Soviet literature, uh, you will have the sense that many people in Russia, not just, you know, Putin or small number of leaders, regard a lot of what is around them as in some sense theirs.

A favorite of mine, I think yours as well, is Hadji Murad. I take it to be a kind of late example in Tolstoy's life of kind of an attempt to be a counterexample to that tradition, some kind of acknowledgment of how the Russians treat the people that they consider to be on their periphery. What do you think about that story?

Hadji Murad is a complex novella. It's read many different ways. I think it's usually misread. I think of it as a critique of the myth of Hadji Murad, that he's supposed to be this very glamorous Osama bin Laden type figure who performs all these feats of daring-do and daring. But when you actually look at his life and dissect all the different accounts, the narratives are based on a lot of falsehoods, and he's in fact some bumbling guy, and that we ought not to glorify so much the opposition to the Russian Empire. Now, again, that's maybe an unusual reading, but I've taught Hajji Murad, I don't know, 7 or 8 times, and I'm pretty sure that's what Tolstoy had in mind.

Interesting. Okay. Next question. This is kind of about the future and potential of Ukraine. Do you think Ukraine could become the kind of Israel or maybe Singapore of Europe? In other words, what I'm asking is, are there any elements of the right kind of path dependency in Ukraine's history that would give you confidence in its future as a fully independent, self-governing entity with the state capacity to be economically successful and politically cohesive? What are your thoughts there?

I don't feel that I'm very good at predicting the future from current margins. One amazing feature Israel had in its favor is just how much talent was pouring into Israel. One amazing feature Singapore had in its favor was it had a near-perfect location at a time when the rise of Asia more generally was such a thing. And it was, you know, a trading post, financial center, many other things. And it had, you know, developed high trust and a lot of political stability. It's not obvious to me that Ukraine will have those features. And I'm very worried about just how much talent is leaving Ukraine. Noah Carl had a very good piece online about the demographic challenges facing Ukraine. On the positive side, Ukrainian territory has for a long time been the home for a remarkable degree of talent. It's right in the center of Europe. It has a reasonable chance of joining the European Union. I haven't been to Ukraine since the war, but, you know, second, third hand, the notion that the war is leading to a true reshaping of the Ukrainian national identity and a new emphasis on actually succeeding because it's an existential question. All those are major factors operating in Ukraine's favor. So I can see some strong minuses. I can see some strong pluses. I think talent will, in a sense, be the ultimate battlefield. Does talent stay in Ukraine? You know, I myself working to try to help that out in a number of regards, but I don't have a prediction. I wish I did.

Can you tell us just for a moment about your efforts to locate and assist talent in Ukraine?

Well, I run a project called Emergent Ventures, which is a new way of doing philanthropy at very low overhead. And part of Emergent Ventures covers Ukraine. Uh, so just yesterday, uh, we made a grant to a group of two people in Ukraine to basically cultivate and train future Math Olympiad winners in Ukraine. And these are people working in Ukraine, and they now have some more financial resources So, you know, my vision that talent is central to the future of Ukraine and indeed just about everywhere else. So to help people in extraordinarily dire circumstances continue with their efforts to build up, recruit, and encourage talent, I think there's really nothing more important than that.

Let's stay on the issue of talent for a moment. You wrote a piece in 2018, so I assume this is the last time you were in Ukraine, about your favorite things Ukraine and just the list of Ukrainian composers, pianists, violinists, novelists, painters, filmmakers, etc., over the last, let's say, you know, 150 years is just incredible. How do you explain the enormous talent generated from what we now call Ukraine over the last century-plus? And if you have any particular favorites in mind, please do share them with us.

First, let's not forget chess players, right? Russian culture has been extraordinarily dynamic. Up until some point after the Bolshevik Revolution, what you could call Central European, Austro-Hungarian, Germanic culture, Polish culture has been remarkably dynamic up until some particular points in the middle of the 20th century. And Ukraine was sandwiched between those two, you know, major players of creativity. And Ukraine itself as a territory contributed a remarkable amount to so many areas. We can talk about those. If you'd like. So it's not at all surprising. Virtually everyone around them is part of this interchange with Ukraine being both the sender and receiver of new ideas. And so if you look at, say, classical music, you know, classical music, pianism, it's a favorite area of mine. Like, who's Ukrainian? Who isn't? If someone's Jewish, are they Ukrainian? Do they have to be fully Ukrainian? What if they were like, were born in Galicia and that later became part of Poland? What if they're part ethnic Russian? I mean, I can't sort any of that out for you, but just like territorially, you have Emil Galilei, Vladimir Horowitz, Richter, possibly the three greatest romantic classical pianists of all time, and they're all born in Ukraine. And what does that tell you? It's not an accident.

So let's just stay on that for one more moment. I mean, I know you don't want to make any specific predictions about the future, but What does it make you think about the future of Ukraine that the land of Ukraine itself has produced some of the greatest human capital in history, but also, as you say, that for so many of its greatest talents, it's still unclear whether they can be properly understood as Ukrainians? I mean, what does that historical pattern make you think about the current war and what the prospects are for Ukraine's kind of continued ability to remain independent?

Well, this is just my speculation. I'm not there. I'm not Ukrainian. Uh, but the notion that if there is going to be a turnaround in Ukraine, formation of a new and more solid and sounder national identity through the war itself has to be a big part of that. That would be what you might call my historical intuition based upon a lot of other instances of history, the places that were not seen as nations become nations. Also, the past really matters. So Israel, of course, is now Israel. The fact that there is a much older historic Israel was critically important toward Israel evolving how it has evolved, and that it didn't end up in Uganda or Madagascar or somewhere else that would really not have been well suited for those national aspirations. So the fact that Ukraine has this glorious cultural past, I do think will prove important for this attempt to build a new Ukrainian identity. But if it's the case moving forward that everyone's just confused, like, what's Ukraine? Are we Russian? Which parts really belong to Russia? I mean, that's probably not going to go very well. So some kind of flip of the switch is required. Again, from a distance, I feel like I'm seeing it, but I don't feel that I'm qualified to be the person telling you, oh, this is really happening.

A question you've posed many times in the recent past: Is Germany still a part of the Western alliance from what you've seen over the last year or so?

Maybe we need a Hegelian dialectical answer for a question about Germany. So no doubt Germany still thinks it's part of the Western alliance and feels like it is. Uh, but it seems to me a lot of Germany wants to have its cake and eat it too. So there was this rather cozy arrangement where Germany got cheap energy from Russia and exported a lot of high-quality manufactured goods to China, and Russia and China, not exactly the the two most friendly nations with America, NATO and the Western alliance. So Germany wanted to have it both ways. For a long time, it was able to have it both ways. At current margins, they can't really have it both ways now. I also think, and I speak German, I've lived in Germany, a pretty significant portion of the German public likes Russia in some fundamental way or doesn't like America, or at least sees Russia as a counterbalance to American cultural power and a counterbalance to the German military dependence on the United States. So Russia, even now, is not as unpopular in Germany as it ought to be. And some of the things Putin and other members of the Russian elite, you know, will say on TV about the United States, you hear related claims like that in German politics, and you have for a long time, even early 20th century. So Germany needs to up its defense spending. They seem incapable of really doing that. Get its act together, be more willing to arm Ukraine, realize they need to do a fundamental rethink of their entire national stance. And until they do that, they'll be a one-foot-in, one-foot-out member of the Western alliance. I think that's not good enough. But of course, you know, that's up to them. But I think they need to show more decisiveness along a number of margins.

There's been increasing speculation recently that maybe the center of gravity is going to shift east in Europe and in NATO and in the European Union, maybe as a result of this war. So Poland, maybe Ukraine a little bit on the outside, the Baltic countries, some countries in Northern Europe being more drivers of European policy than the traditional Franco-German condominium. Do you think that's, uh, It's too soon to tell, it's too speculative, or do you see a real future for that kind of arrangement?

No, I don't think it's a prediction. I think it's now a reality. Poland has become a remarkably important nation once again. Not talking about the future here. Poland roughly is growing at about 4% a year for quite some number of years. I'm not saying they'll keep the 4% rate, but, you know, on that trajectory, they can surpass, say, British living standards in, what, 10 to 12 years. Militarily speaking. They've just become leader of a region. They've been a leader taking in Ukrainian refugees. I was in Poland for, what, the third time just this November, just to feel the energy in the streets. I think they're building a remarkably effective nation. I don't agree with all of their decisions. I wish they were less— I'm not sure what the right word is, I wish there were less antisemitism there, would be part of it. I wish there was some kind of nationalism that they wouldn't take quite so seriously. But most, you know, they're doing far more right than what they're doing wrong. And we should all pay more attention to Poland.

How do you see Ukraine's economic prospects over the next, let's say, 1 to 2 years, given its financial constraints and its, you know, limited ability to get its hands on dollars and funding other than through official aid channels from America and Europe. I mean, unfortunately, if the war doesn't end sometime this year, and that would seem like an optimistic scenario, the question of financing both for the war itself and for things like pensions and the normal functioning of Ukrainian society is going to become a lot more severe. I mean, what are their options?

I think the economic front depends almost entirely on the military scenarios. I really cannot predict those. I don't have the knowledge. I'm not sure anyone does. But in my view, the long run for economic reasons favors Russia. So when I'm trying to assess how the conflict is going, I'm not so interested in, you know, the map where the troops are, where the lines are, but just if it continues through attrition, that in my view strongly favors Russia. So I view the situation as having a good deal of urgency. I don't know exactly who should do what. Again, above my pay grade. But the economic situation cannot go well unless the military situation goes not just well, but better. You could say, well, it's gone remarkably well so far. I think that's true relative to expectations, but it still in some way or another has to go better yet.

I know you've talked often and written often about how the question of some future use of nuclear weapons, whether related to this conflict or otherwise, is a kind of underrated concern in the world, or it has been at least up until the last year. I mean, how do you think about the nuclear question in relation to this war? I think there's been some concern over the last year that maybe the chances of a Russian nuclear strike might actually go up the more likely it seems that the Ukrainians could in some way be victorious in the war. I mean, how do you kind of game theorize these scenarios? I know it's terrifying to think about and talk about, but it seems like another issue of increasing urgency.

Elites are now awake to the risk, and they were not until recently. I've thought for decades we are strongly underrating the risk of potential nuclear conflict. Wouldn't have to be, you know, in or near Ukraine. But there's a recency bias in how humans interpret data. Well, this hasn't happened for a long time. HIV/AIDS aside, which is viewed as sort of a separate problem, unjustly, I would say, but it has been viewed that way. People thought, well, we can't all have a major pandemic. It hasn't happened in so long. That turned out to be wrong. The last time a nuclear weapon went off used against humans was 1945. It's a long time ago. So we developed the same set of pathological modes of thinking and start believing something like climate change, which I do take very seriously, to be clear. But we start thinking that's the existential risk, not nuclear weapons. And I think that's quite wrong. Now, I cannot, you know, game out for you Putin's thinking. And there's the general question, like, how rational is Putin? Uh, but I would just return to the point, ideas really matter, and countries truly believe things, for better or worse. Every— it's true for every country, whether you, you know, like or dislike what that country is doing. And to try to understand the game theoretic problems they face, start with what do the people in that country actually and truly believe. And I, again, without being there, but I worry based on what I observe, how many people in Russia, and I don't just mean Putin, believe that it is now their war or there's some justness to their territorial claims. And indeed, as you know, since Catherine the Great in the 18th century, most of the years since then, some version of Russia has in fact controlled some version of Ukraine. So there's also status quo bias in people's thinking. At some point, people start believing it is theirs. Again, America has a lot of the same problems. We took a lot of territory from Mexico. We now think it's ours. You can debate that, uh, but the point is Americans think it's theirs, and you're not going to talk them out of that. And I think that's a useful analogy for understanding why in some ways public opinion in Russia might be so sticky.

Let's close with two questions about the United States. Uh, first, how do you see support for Ukraine playing out as a US domestic political issue over the next couple of years? I mean, Do you see the more or less bipartisan consensus we've seen over the last year as being durable, or do you take the threats we've heard from parts of the GOP and elsewhere seriously?

As far as I can tell, the bipartisan consensus is durable. I think there's a tendency in media to latch onto any argument that they feel will make the Republicans look bad, either in their own eyes or the eyes of their readers. So if there's any blip of information that Republicans are hesitating in supporting Ukraine, that gets blown out of proportion. I don't see under anything like current circumstances the electoral gain for Republicans in abandoning Ukraine. So on that, I would very cautiously predict that something like the status quo will in broad terms continue. Now, if Putin uses a nuclear weapon, what happens to American opinion then? Again, I'm not sure prediction is the useful way to approach this, but historically, when other countries escalate America becomes more interested, you know, for better or worse, than less interested. So I think it would surprise me if America then said, oh, a nuke went off, we've got to get out of here. I wouldn't expect that.

Okay. Final question. And it's a complicated one, but kind of the ultimate one. I mean, from your point of view, what is the ultimate result that the U.S. is trying to achieve or should be trying to achieve in Ukraine? Is it some sort of clear Ukrainian victory, including the reclamation of all previously lost territories? Is it a negotiated settlement that includes the permanent loss of some Ukrainian territory? Is it guarantees of accession or non-accession to NATO and the EU? Regime change in Moscow? I mean, these are all the possibilities you hear about a lot. And I think it would be, it would be interesting for our audience to hear, you know, what is, what's your sense of what the US is actually trying to achieve? And what should it be trying to achieve?

I would, uh, be cautious about thinking of the US as a unitary entity in this regard, but the best way I have of modeling American governmental behavior is simply we look around, we see a number of options that appear entirely unacceptable, we rule those out, and then we do what's left. You can debate whether or not that's a good way of making decisions, but if the options that appear unacceptable are indeed unacceptable, Maybe it's all you've got. So that's where I think we're at. I'm not sure how good a way that is of making decisions, but I don't think we have a clear long-run vision across a lot of time horizons that may not matter. But at some point it has to matter, right? So we didn't have that with the second Iraq war, and it was a huge mistake and cost us very dearly. At the moment you can say we don't need it. That might be right. But again, eventually we need to get our act together. And figure out what we really want to happen there. I'm not sure we're capable of that. Maybe United States is better moving along the path of just ruling out all the unacceptable options, and we'll just see how good or bad that turns out to be. Okay.

Well, Tyler Cowen, this has been great. Thanks very much. And on behalf of the Kyiv Jewish Forum, thanks for your time, and we'll see you again soon.

And Ukraine has had great chess players. Thank you, Jeremy. Take care.