Tyler Cowen: Economic Growth & the Fight Against Conformity & Mediocrity | Lex Fridman Podcast #174

The following is a conversation with Tyler Cowen, an economist at George Mason University and co-creator of an amazing economics blog called Marginal Revolution. Author of many books including The Great Stagnation, Average Is Over, and his most recent, Big Business: A Love Letter to an American Antihero. He's truly a polymath in his work, including his love for food, which makes his amazing podcast called Conversations with Tyler really fun to listen to. Quick mention of our sponsors: Linode, ExpressVPN, SimpliSafe, and Public Goods. Check them out in the description to support this podcast. As a side note, given Tyler's culinary explorations, let me say that one of the things that makes me sad about my love-hate relationship with food is that while I've found a simple diet, plain meat and veggies, that makes me happy in day-to-day life, I sometimes wish I had the mental ability to moderate consumption of food so that I could truly enjoy meals that go way outside of that diet. I've seen my mom, for example, enjoy a single piece of chocolate. And yet, if I were to eat one piece of chocolate, the odds are high that I would end up eating the whole box. This is definitely something I would like to fix because some of the amazing artistry in this world happens in the kitchen, and some of the richest human experiences happen over a unique meal. I recently was eating cheeseburgers with Joe Rogan and John Donahue late at night in Austin, talking about jiu-jitsu and life. And I was distinctly aware of the magic of that experience. Magic made possible by the incredibly delicious cheeseburgers. This is the Lex Fridman Podcast. And here is my conversation with Tyler Cowen. Would you say economics is more art or science or philosophy or even magic? What is it?

Economics is interesting because it's all of the above. To start with magic, the notion that you can make some change and simply everyone's better off, that is a kind of modern magic that has replaced old-style magic. It's an art in the sense that the models are not very exact. It's a science in the sense that occasionally propositions are falsified. There are a few basic things we know. And however trivial they may sound, if you don't know them, you're out of luck. So all of the above.

But from my outsider's perspective, economics is sometimes able to formulate very simple, almost like E=mc², general models of how our human society will function when you do a certain thing. But it seems impossible or almost way too optimistic to think that a single formula or just a set of simple principles can describe describe behavior of billions of human beings with all the complexity that we have involved. So do you have a sense there's a hope for economics to have those kinds of physics-level descriptions and models of the world, or is it just our desperate attempts as humans to make sense of it even though it's more desperate than rigorous and serious and actually predictable like a physics type science?

I don't think economics will ever be very predictive. It's most useful for helping you ask better questions. You look at something like game theory. Well, game theory never predicted USA and USSR would have a war, would not have a war, but trying to think through the logic of strategic conflict, if you know game theory, it's just a much more interesting discussion.

Are you surprised that we, speaking of the Soviet Union and United States, And speaking of game theory, are you surprised that we haven't destroyed ourselves with nuclear weapons yet? Like that simple formulation of mutually assured destruction, that's a good example of an explanation that perhaps allows us to ask better questions, but it seems to have actually described the reality of why we haven't destroyed ourselves with these ultra-powerful weapons. Are you surprised? Do you think the game theoretic explanation is, is at all accurate there?

I think we will destroy each other with those weapons.

Eventually.

Eventually. Look, it's a very low probability event, so I'm not surprised it hasn't happened yet. I'm a little surprised it came as close as it did. Your general realizing it might have just been a flock of birds or it wasn't a first strike attack from the USA. We got very lucky on that one. But if you just keep on running the clock on a low probability event, It will happen. And it may not be USA and China, USA and Russia, whatever. It could be the Saudis and Turkey.

And it might not be nuclear weapons, it might be some other destructive weapons.

Bioweapons. But it simply will happen is my view. And I've argued at best we have 700 or 800 years, and that's being generous.

At worst, how long we got?

Well, maybe it's a Poisson arrival process, right? Okay. So tiny probability, could come anytime, probably not in your lifetime, but the chance presumably increases the cheaper weapons of mass destruction are.

So the Poisson process description doesn't take in consideration the game theoretic aspect. So another way to consider is repeated games, iterative games. So is there something about us, our human nature that allows us to fight against probability. The closer we get to trouble, the more we're able to figure out how to avoid trouble. The same thing is for when you take exams or you go and take classes, the closer, or paper deadlines, the closer you get to a deadline, the better you start to perform and get your shit together and actually get stuff done.

I'm really not so negative on human nature. And as an economist, I very much see the gains from cooperation. But if you just ask, are there outliers in history? Was there a Hitler, for instance? Obviously. And again, you let the clock tick, another Hitler with nuclear weapons doesn't per se care about his own destruction, it will happen.

So your sense is fundamentally people are good, but outliers—

A trembling hand equilibrium is what we would call it.

Trembling hand equilibrium?

That the basic logic is for cooperation., which is mostly what we've seen even between enemies. But every now and then someone does something crazy and you don't know how to react to it. And you can't always beat Hitler. Sometimes Hitler drags you down.

To push back, is it possible that the crazier the person, the less likely they are? And in a way where we're safe, meaning like This is the kind of proposition I've had. I had the discussion with my dad as a physicist about this, where he thinks that, like, if you have a graph, like, evil people can't also be geniuses. So this is his defense why evil people will not get control of nuclear weapons, because to be truly evil, but evil meaning sort of, you can argue that, not even the evil of Hitler we're talking about, because Hitler had a kind of view of Germany and all those kinds of— there's like, I— he probably deluded himself and the people around him to think that he's actually doing good for the world, similar with Stalin and so on. By evil, I mean more like almost like terrorists, to where they want to destroy themselves and the world. Like, those people will never be able to be actually skilled enough to do— to deliver that kind of mass-scale destruction. So the hope is that it's very unlikely that the kind of evil that would lead to extinctions of humans or mass destruction is so unlikely that we're able to last way longer than 700, 800 years.

I agree it's very unlikely. In that sense, I accept the argument, but that's why you need to let the clock tick. It's also the best argument for bureaucracy. To negotiate a bureaucracy, it actually selects against pure evil because you need to build alliances. So bureaucracy in that regard is great, right? It keeps out the worst apples. But look, put it this way, could you imagine 35 years from now the Osama bin Laden of the future has nukes or very bad bioweapons? It seems to me you can. And Osama was pretty evil and actually even he failed, right? But nonetheless, that's what the 700 or 800 years is there for.

And there might be destructive technologies that don't have such a high cost of production or such a high learning curve, like cyberattacks or artificial intelligence, all those kinds of things. Yeah.

I mean, let me ask you a question. Let's say you could, as an act of will, by spending a million dollars, obliterate any city on Earth and everyone in it dies. And you'll get caught and you'll be sentenced to death, but you can make it happen just by willing it. How many months does it take before that happens?

So the obvious answer is very soon. There's probably a good answer for that because you can consider how many millionaires there are, how many you could look at that, right? Right. I have a sense that there's just people that have a million dollars. I mean, there's a certain amount, but have a million dollars, have other interests that will outweigh the, uh, the interest of destroying an entire city. Like, there's a particular, you know, like, I mean, maybe that's a hope.

It's why we should be nice to the wealthy too, right? Yeah, yeah.

All that trash talking against Bill Gates, we should stop that because, uh, that doesn't inspire the other future Bill Gates is to be nice to the world. That's true. But your sense is the cheaper it gets to destroy the world, the more likely it becomes.

Now, when I say destroy the world, there's a trick in there. I don't think literally every human will die, but it would set back civilization by an extraordinary degree. It's then just hard to predict what comes next.

Yeah.

But a catastrophe where everyone dies, that probably has to be something more like an asteroid or supernova. And those are purely exogenous for the time being, at least.

So I immigrated to this country. I was born in the Soviet Union in Russia. And, uh, which one? Which one?

It's an important question. You were born in the Soviet Union, right?

Yes, I was born in the Soviet Union. The rest is details, but I grew up in Moscow, Russia.

Yeah.

But I came to this country and, uh, this country even back there, but it's always symbolized to me a place of opportunity where everybody could build, like, build the most incredible things, especially in the engineering side of things, just invent and build and scale and have a huge impact on the world. And that's been to me the— that's my version of the American ideal, the American dream. Do you think the American dream is still there? Do you think— what do you think of that notion in itself? From an economics perspective, from a human perspective, is it still alive? And how do you think about it? The American dream.

The American dream is mostly still there. If you look at which groups are the highest earners, it is individuals from India and individuals from Iran, which is a fairly new development. Great for them. Not necessarily easy. Both you could call persons of color, may have faced discrimination also on the grounds of religion, yet they've done it. That's amazing. It says great things about America. Now, if you look at native-born Americans, the story's trickier. People think intergenerational mobility has declined a lot recently, but it has not for native-born Americans. For about, I think, 40 years, it's been fairly constant. Which is sort of good, but compared to much earlier times, it was much higher in the past. I'm not sure we can replicate that because look, go to the beginning of the 20th century, very few Americans finish high school, uh, or even have much wealth. There's not much credentialism. There aren't that many credentials. So there's more upward mobility across the generations than today. And it's a good thing that we had it I'm not sure we should blame the modern world for not being able to reproduce that. But look, the general issue of who gets into Harvard or Cornell, is there an injustice? Should we fix that? Is there too little opportunity for the bottom, say, half of Americans? Absolutely. It's a disgrace how this country has evolved in that way. And in that sense, the American dream is clearly ailing, but it has had problems from the beginning for Blacks, for women, for many other groups.

I mean, isn't that the whole challenge of opportunity and freedom, is that it's hard? And the difficulty of how hard it is to move up in society is unequal often, and that's the injustice of society. But the, the whole point of that freedom is that over time it becomes better and better. You start to fix, like, uh, fix the, the leaks, the issues, and it gives It keeps progressing in that kind of way. But ultimately, there is always the opportunity, even if it is harder, there is the opportunity to create something truly special, to move up, to be president, to be a leader in whatever the industry that you are passionate about.

We each have podcasts in English. The value of joining that American English language network is much higher today than it was 30 years ago, mostly because of the internet. So that makes immigration returns themselves skewed. So going to the US, Canada, or the UK, I think, has become much more valuable in relative terms than, say, going to France, which is still a pretty well-off, very nice country. If you had gone to France, your chance of having a globally known podcast would be much smaller.

Yeah, this, this is the interesting thing, uh, about how much intellectual influence the United States has. I don't know if it's, uh, connected to what we're discussing here, the, the freedom and opportunity of the American dream, or like, does it make any sense to you that we have so much impact on the rest of the world in terms of, uh, ideas? You know, is it just simply because the English is the primary language of the world, or is there something fundamental to the United States that drives the development of ideas. It's almost like what's cool, what's entertaining, what's, you know, like meme culture, the internet culture, the philosophers, the intellectuals, the podcasts, the movies, music, all that stuff driving culture.

There's something above and beyond language in the United States. It's a sense of entertainment really mattering. How to connect with your audience, being direct and getting to the point, how humor is integrated even with science. That is pretty strongly represented here, much more say than on the European continent. Britain has its own version of this which it does very well. And not surprisingly, they're hugely influential in music, comedy, most of the other areas you mentioned. Canada, yes, but their best talent tends to come here. But You could say it's like a broader North American thing and give them their fair share of credit.

What about science? You know, there's a sense higher education is really strong, research is really strong in the United States, but it just feels like, culturally speaking, when we zoom out, you know, scientists aren't very cool here. Like, most people wouldn't be able to name basically a single scientist. Maybe they would say like, they would say what, like Einstein and Neil deGrasse Tyson maybe? And Neil deGrasse Tyson isn't exactly a scientist, he's a science communicator. So like, there's not, uh, you know, the same kind of admiration of, uh, science and innovators as there is of like athletes or actors, actresses, musicians.

Well, you can become a celebrity scientist if you want to. It may or may not be best for science. And we have Spock from Star Trek who is still a Big deal. But look at it this way, which country is most comfortable with egalitarian rewards for scientists? Whether it's fame or money. And I still think it's here. Some of that's just the tax rate. Some of it is a lot of America is set up for rich people to live really well. And again, that's going to attract a lot of top talent. And you ask like the two best vaccines, I know the Pfizer vaccine is sort of from Germany, sort of from Turkey. But it's nonetheless being distributed through the United States. Moderna, an ethnic Armenian immigrant through Lebanon, first to Canada, then down here to Boston, Cambridge area. Those are incredible vaccines and US nailed it.

Yeah. Well, that's more almost like the— I don't know what you would call it— engineering, the sort of scaling. That's what US is really good at, is not just inventing of ideas, but taking an idea and actually building the thing and scaling it and being able to distribute it at scale. I think some people would attribute that to the general word of capitalism. I don't know if you would. Sure. What in your views are the pros and cons of capitalism as it's implemented in America? I don't know if you would say capitalism really exists in America., but to the extent that it does.

People use the word capitalism in, in so many different ways.

What is capitalism?

The literal meaning is private ownership of capital goods, which I favor in most areas. But no, I don't think the private sector should own our F-16s or military assets. Government-owned water utilities seem to work as well as privately owned water utilities. But with all those qualifications put to the side, Business, for the most part, innovates better than government. It is oriented toward consumer services. The biggest businesses tend to pay the highest wages. Business is great at getting things done. USA is fundamentally a nation of business, and that makes us a nation of opportunity. So I am indeed mostly a fan, subject to numerous caveats.

What's the con? What are some negative downsides of capitalism in your view, or some things that we should be concerned about maybe for long-term impacts of capitalism?

Again, capitalism takes a different form in each country. I would say in the United States, our weird blend of whatever you want to call it has had an enduring racial problem from the beginning, has been a force of taking away land from Native Americans and oppressing them. Pretty much from the beginning. It has done very well by immigrants for the most part. We revel in Schumpeterian creative destruction more, so we don't just prop up national champions forever. And there's a precariousness to life for some people here that is less so, say, in Germany or the Netherlands. We have weaker communities in some regards than say, northwestern Europe often would. That has pluses and minuses. I think it makes us more creative. It's a better country in which to be a weirdo than say Germany or Denmark. But there is truly, whether from the government or from your private community, there is less social security in some fundamental sense.

On the point of weirdo, that's kind of a beautiful little statement. What is that? I mean, that seems to be, you could think of a guy like Elon Musk and say that he's a weirdo. Is that the in which you're using the weirdo, like outside of the norm, like breaking conventions.

Absolutely. And here that is either acceptable or even admired, or to be a loner. And since so many people are outsiders, and that we're all immigrants, is selecting for people who left something behind, were willing to leave behind their families, were willing to undergo a certain brutality of switch in their lives, makes us a nation of weirdos. And weirdos are creative. And Denmark is not a nation of weirdos. It's a wonderful place, great for them. Ideally, you want part of the world to be full of weirdos and innovating, and the other part of the world to be a little kind of chicken shit, risk averse, and enjoy the benefits of the innovation. And you give people these smooth lives and 6 weeks off and free ride. And everyone's like, oh, American way versus European way. But basically they're compliments.

Yeah, that's fascinating. I used to have this conversation with my, like, parents when I was growing up and just others from the immigrant kind of flow. And they used this term, especially in Russian, is, you know, to criticize something I was doing that was suggesting, you know, normal people don't do this. And I used to be really offended by that. But, you know, as I got older, I realize that that's a kind of compliment because in the same kind of, I would say, way that you're, you're saying that is the American ideal. Because if you want to do anything special or interesting, you don't want to be doing in one particular avenue what normal people do because, because that won't be interesting.

Russians, I think, fit in very well here because the ones who come are weirdos. And there's a very different Russian weirdo tradition like Alyosha, right, in Brothers Karamazov, or Perelman, the mathematician. They're weirdos. And they have their own different kind of status in Soviet Union, Russia, wherever. And when Russians come to America, they stay pretty Russian. But it seems to me a week later they've somehow adjusted. And the ways in which they might want to be grumpier than Americans, not smile, think the people who smile are idiots. They can do that. No one takes that away from them.

Yeah. On a tiny tangent, I'd love to hear if you have thoughts about Grigoriy Grishapuroman turning down the Fields Medal. Is that something you admire? Does that make sense to you that somebody— We have the structure of Nobel Prizes, of these huge awards, of the reputations, the hierarchy of Everyone's saying, applauding how special you are. And here's a person who was doing one of the greatest accomplishments in the history of mathematics. It doesn't want stupid prize and doesn't want recognition, doesn't want to do interviews. It doesn't want to be famous. What do you make of that?

It's great. Look, prizes are corrupting. After scientists win Nobel Prizes, they tend to become less productive. Now, statistically, it's hard to sort out the different effects. There's regression toward the mean, Does the prize make you too busy? It's a little tricky, but—

There's not enough Nobel Prizes either to gather enough data.

Right. But I've known a lot of Nobel Prize winners, and it is my sense they become less productive. They repeat more of their older messages, which may be highly socially valuable. But if someone wants to turn their back on that and keep on working, which I assume is what he's doing, that's awesome. I mean, we should respect that. It's like he wins a bigger prize, right? Our extreme respect.

Yeah. Well, Grisha, if you're listening, I need to talk to you soon, okay? I've been trying to get a hold of him. Okay, back to capitalism. I gotta ask you, just competition in general in this world of weirdos, is competition good for the world? This kind of seems to be one of the fundamental engines of capitalism, right? Do you see it as ultimately constructive productive or destructive for the world?

What really matters is how good your legal framework is. So competition within nature for food leads to bloody conflict all the time. The animal world is quite unpleasant to say the least. If you have something like the rule of law and clearly defined property rights, which are within reason justly allocated, competition probably is going to work very well. But it's not an unalloyed good thing at all. It can be highly destructive. Military competition, which actually is itself sometimes good, but it's not good per se.

What aspects of life do you think we should protect from competition? So is there some, you said like the rule of law, is there some things we should keep away from competition?

Well, the fight for territory most of all, right?

The violence. Anything that involves actual physical violence.

Right. And it's not that I think the current borders are just. I mean, go talk to Hungarians, Romanians, Serbians, Bosnians, they'll talk your ear off. And some of them are probably right. But at the end of the day, we have some kind of international order, and I would rather we more or less stick with it. If Catalonians want to leave, they keep up with it, let them go.

But what about space of healthcare? This is where you get into a tension of between capitalism and more— I don't want to use socialism, but those kinds of policies that are less free market.

I think in this country healthcare should be much more competitive. So you go to hospitals, doctors, they don't treat you like a customer. They treat you like an idiot or like a child or someone with third-party payment. And it's a pretty humiliating experience often.

Yeah. Do you think a free market in general is possible, like a pure free market? And is that a good goal to strive for?

I don't think the term pure free market's well-defined because you need a legal order. The legal order has to make decisions on like, what is intellectual property? More important than ever. There's no benchmark that represents the pure free market way of doing things. What will penalties be? How much do we put into law enforcement? No simple answers, but just saying free market doesn't pin down what you're going to do on those all-important questions.

So free market is an economics, I guess, idea. So it's not possible for free market to generate the rules that are emergent, like self-governing?

It generates a lot of them through private norms, through trade associations. International trade is mostly done privately and by norms. So it's certainly possible, but at the end of the day, I think you need governments to draw very clear lines to prevent it from turning into mafia-run systems.

I've been hanging out with other group of weirdos lately, Michael Malice, who espouses to be an anarchist, anarchism. Which is like, I, I think intellectually just a fascinating set of ideas, uh, where the, you know, taking free market to the full extreme of basically saying there should be no, no government— what is it, uh, oversight, I guess— and then everything should be fully— like, all the agreements, all the collectives you form should be, uh voluntary, not based on the geographic land you were born on and so on. Do you think that's just a giant mess? Like, do you think it's possible for an anarchist society to work where it's, um, you know, this in a, in a fully distributed way, people agree with each other not just on financial transactions but, you know, on, um, on their personal security on sort of military type of stuff, on healthcare, on education, all those kinds of things? And where does it break down?

Well, I wouldn't press a button to say get rid of our current constitution, which I view as pretty good and quite wise. But I think the deeper point is that all societies are in some regards anarchistic. Yes. And we should take the anarchist seriously. So globally, there's a kind of anarchy across borders. Even within federalistic systems, they're typically complex. There's not a clear transitivity necessarily of who has the final say over what, uh, just the state vis-à-vis its people. There's not per se a final arbitrator in that regard. So you want a good anarchy rather than a bad anarchy. You want to squish your anarchy into the right corners. And I don't think there's a theoretical answer how to do it. But you start with a country, like, is it working well enough now? This country, you'd say mostly. You'd certainly want to make a lot of improvements. And that's why I don't want to press that get rid of the Constitution button. But to just dump on the anarchists is to miss the point. Always try to learn from any opinion, you know, and what in it is true.

I'm just like marveling at the poetry of saying that we should squish our anarchy into the right corners. Love it. Okay, I gotta ask, I've been talking with, since we're doing a whirlwind introduction to all of economics, I've been talking to a few Objectivists recently and just, you know, Ayn Rand comes up as a person, as a philosopher throughout many conversations. A lot of people really despise her. A lot of people really love her. It's always weird to me when somebody arouses, a philosophy or a human being arouses that much emotion in either direction. Does she make— do you understand, first of all, that level of emotion? And what are your thoughts about Ayn Rand and her philosophy of objectivism? Is it useful at all to think about this kind of formulation of rational self-interest, if I could put it in those words, or I guess more negatively, the selfishness, or she would put, I guess, the virtue of selfishness.

Ayn Rand was a big influence on me growing up. The book that really mattered for me was Capitalism: The Unknown Ideal. The notion that wealth creates opportunity and good lives, and wealth is something we ought to valorize and give very high status. It's one of her key ideas. I think it's completely correct. I think she has the most profound and articulate statement of that idea. That said, as a philosopher, I disagree with her on most things. And I did, even like as a boy when I was reading her. I read Plato before Ayn Rand. And in a Socratic dialogue, there's all these different points of view being thrown around. Yeah. And whomever it is you agree with, you understand the wisdom is in the coming together of the different points of view.

Yeah.

And she doesn't have that. So altruism can be wonderful in my view. Humans are not actually that rational. Self-interest is often poorly defined. To pound the table and say existence exists I wouldn't say I disagree, but I'm not sure that it's a very meaningful statement. I think the secret to Ayn Rand is that she was Russian. I'd love to have her on my podcast if she was still alive. I'd only ask her about Russia, which she mostly never talked about after writing We the Living. And she is much more Russian than she seems at first, even like purging people from the objectivist circles. It's like how Russians, especially female Russians, so often purge their friends. It's weird, all the parallels.

So you, you're saying— so yes, so I, um, assuming she's still not around, uh, but if she is and she comes into your podcast, see, can you dig into that a little bit? Do you mean like the per— her personal, uh, demons around the social and economic, uh, Russia of the time when she escaped?

The traumas she suffered there?

Yeah.

What she really likes in the music and literature and why?

Music and literature, huh?

And getting deeply into that, her view of relations between the sexes in Russia, how it differs from America, why she still carries through the old Russian vision in her fiction, this extreme sexual dimorphism, but with also very strong women. To me is a uniquely, at least Eastern European vision, mostly Russian, I would say. And that's in her, that's her actual real philosophy, not this table bounding existence exists. And that's not talked about enough. Yeah, he's a Russian philosopher.

Yeah, like she's—

or Soviet, whatever you want to call it.

And if she wasn't so certain, she could have been a Dostoevsky, where it's not that— that certainty is almost the thing that, uh, brings her the adoration of, uh, millions, but also the hatred of millions.

She became a cult figure in a somewhat Russian-like manner.

Yeah, yeah, it is, it is what it is. Uh, but I love the idea that Again, you're just dropping bombs that are poetic, that the wisdom is in the coming together of ideas. It's kind of interesting to think that no one human possesses wisdom. No one idea is the wisdom, that the coming together is the wisdom.

Like, in my view, Boswell's Life of Johnson, 18th century British biography, it's in essence a co-authored work, Boswell and Johnson. It's one of the greatest philosophy books ever, though it is commonly regarded as a biography. John Stuart Mill, who in a sense was co-authoring with Harriet Taylor. A better philosopher than is realized, though he's rated very, very highly. Plato/Socrates. A lot of the greatest works are in a kind of dialogue form. Goethe's Faust would be another example. It's very much a dialogue. And yes, it's drama, but it's also philosophy. Shakespeare. Maybe the wisest thinker of them all.

In your book, Big Business, speaking of Ayn Rand, Big Business: A Love Letter to an American Antihero, you make the case for the benefit that large businesses bring to society. Can you explain?

If you look at, say, the pandemic, which has been a catastrophic event for many reasons, but who is it that saved us? So Amazon has done remarkably well. They upped their delivery game more or less overnight with very few hitches. I've ordered hundreds of Amazon packages, direct delivery food, whether it's DoorDash or Uber Eats or using, you know, Whole Foods through Amazon Shipping. Again, it's gone remarkably well. Switching over our entire higher educational system basically within 2 weeks to Zoom. Zoom did it. I mean, I've had a Zoom outage, But their performance rate has been remarkably high. So if you just look at resources, competence, incentives, who's been the star performers? The NBA even just canceling the season as early as they did, sending a message like, "Hey people, this is real." And then pulling off the bubble with not a single found case of COVID and having all the testing set up in advance. Big business has done very well lately. Throughout the broader course of American history, in my view, has mostly been a hero.

Can we engage in a kind of therapy session? I'm often troubled by the negativity towards big business, and I wonder if you could help figure out how we remove that, or maybe first psychoanalyze it and then how we remove it. Feels like, you know, once we've gotten Wi-Fi on flights, on airplane flights, people start complaining about how shitty the connection is, right?

Yes.

They take it for granted immediately.

Yes.

And then start complaining about little details. Another example that's more— that's closer to like, especially as an aspiring entrepreneur, is closer to the things I'm thinking about. Is Jack Dorsey with Twitter. You know, to me, Twitter has enabled an incredible platform of communication, and yet the biggest thing that people talk about is not how incredible this platform is. Uh, they essentially use the platform to complain about the censorship of a few individuals as opposed to how amazing it is. Now, you should also You should talk about how shitty the Wi-Fi is and how censorship or the removal of Donald Trump from the platform is a bad thing, but it feels like we don't talk about the positive impacts at scale of these technologies. Can you explain why and is there a way to fix it?

I don't know if we can fix it. I think we are beings of high neuroticism for the most part as a personality trait. Not everyone, but most people. And as a complement to that, if someone says 10 nice things about you and 1 insult, you're more bothered by the insult than you're pleased by the nice things, especially if the insult is somewhat true.

Yeah.

So you have these media, these vehicles, Twitter is one you mentioned, where there's all kind of messages going back and forth and you're really bugged by the messages you don't like. Most people are neurotic to begin with. It's not only taken out on big business, to be clear. So Congress catches a lot of grief and some of it they deserve, yes. Religion is not attacked the same way, but religiosity is declining. If you poll people, the military still polls quite well, but people are very disillusioned with many things. And the Martin-Gurry thesis that because of the internet you just see more of things, and the more you see of something, whether it's good, bad, or in between, The more you will find to complain about, I suspect, is the fundamental mechanism here. I mean, look at Clubhouse, right? Yes. To me, it's a great service. May or may not be my thing, but gives people this opportunity. No one makes you go on it. And all these media articles like, "Oh, is Clubhouse going to wreck things? Are they going to break things?" New York Times is complaining. Of course, it's their competitor as well.

Yeah.

I'm like, give these people a chance, talk it up. You may or may not like it. Like, let's praise the people who are getting something done. Very Ayn Randian point.

As an economic thinker, as a writer, as a podcaster, what do you think about Clubhouse? What do you think about— okay, let me just throw my feeling about it. I used to use Discord, which is another service where people use voice. So the only thing you do is just hear each other. There's no face, you just see a little icon. That's the essential element of Clubhouse. And there's an intimacy to voice-only communication that's hard— that didn't make sense to me, but it was just what it is, which feels like something that won't last for some reason. Maybe it's the cynical view, but what's your sense, uh, is it about this— the intimacy of what's happening right now with Clubhouse?

I've greatly enjoyed what I've done But I'm not sure it's for me in the long run for two reasons. First, if you compare it to doing a podcast, podcasting has greater reach than Clubhouse. So I would rather put time into my podcast. But then also my core asset, so to speak, is I'm a very fast reader. So audio per se is not necessarily to my advantage. I don't speak or listen faster than other people. In fact, I'm a slower listener because I like 1.0. Not 1.5x. So I should spend less time on audio and more time reading and writing.

Yeah. It's interesting because you mentioned podcasts and audiobooks. The podcasts are recorded, and so I can skip things. I can skip commercials, or I can skip parts where it's like, "Ugh, this part is boring." With live conversations, especially when there's a magic to the fact when you have a lot of people participating in that conversation, but you know, some people are like, "Ugh, this topic." They're going into this thing and you can't skip it or you can't fast forward. You can go 1.5x or 2x. You can't speed it up. Nevertheless, there's a tension between that, so that's the productivity aspect, with the actual magic of live communication where anything can happen, where Elon Musk can ask the CEO of Robinhood, Vlad, about like, hey, somebody like holding a gun to your head, there's something shady going on. The magic of that. That's also my criticism of like, uh, there's been a recent conversation with Bill Gates that, uh, he went on platform, uh, and had basically a regular interview on the platform without allowing the possibility of the magic of the chaos. Yeah. Uh, so I'm not exactly sure. It's probably not the right platform for you and for many other people who are exceptionally productive in other places, but there's still nevertheless a magic to the chaos that could be created with live conversation that gives me pause.

Maybe what it's perfect for is the tribute. So they had an episode recently that I didn't hear, but I heard it was wonderful. It was anecdotes about Steve Jobs. Mm-hmm. That you can't do one-to-one, right? And you don't want control. You want different people appearing and stepping up and saying their bit.

Yeah.

And Clubhouse is 110% perfect for that. The tribute.

I love that, the tribute. But there's also the possibility, I think there was a time when somebody arranged a conversation with Steve Jobs and Bill Gates on stage. Right. I remember that happened a long time ago, and it was very formal. You know, it could have probably gone better, but it was still magical to have these people that obviously like had a bunch of tension throughout their history. There's— it's so frictionless to have two major figures in world history just jump on a Clubhouse stage.

Putin and Elon Musk.

Putin happens, and that's exactly it. So there's a language barrier there. There's also the problem that in particular, it's like, like Biden would have a similar problem. It's like they're just not into new technology. So it's very hard to catch the Kremlin up to, first of all, Twitter, right? Uh, but to catch them up to Clubhouse, you have to have the— Elon Musk has a sense of the internet, the humor, the memes, and all that kind of stuff that you have to have in order to, to like use a new app and figure out like the timing, the beat, What is this thing about? You know, so that, that's the challenge there. But that's exactly it, that, that magic of have two big personalities just show up. And I, I, I wonder if it's just a temporary thing that we're going through with the pandemic where people are just lonely and they're seeking for that human connection that we usually get elsewhere through our work.

But they'll stay lonely in my opinion.

You think so?

I do. So it is a pandemic thing, but I think it will persist. And the idea of wanting to be connected to more of the world, Clubhouse will still offer that. And all the mental health issues out there, a lot of people have broken ties and they will still be lonely post-vaccines.

Yeah, I, um, from an artificial intelligence perspective, uh, have a sense that there is like a deep loneliness in the world, that all of us are really lonely. Like, we don't even acknowledge it. Even people in happy relationships, it feels like there's like an iceberg of loneliness in all of us, like seeking to be understood, like deeply understood, understanding us, like having somebody with whom you can have a deep interaction enough to where you can— they can help you to understand yourself and they also understand you. I have a sense that artificial intelligence systems can provide that as well, but humans, I think, crave that from other humans in ways that we perhaps don't acknowledge. And I have a hope that technology will enable that more and more. Clubhouse is an example that allows that.

Are Turing bots going to outcompete Clubhouse? Why not sort of program your own session? You'll just talk into your device, and say, here's the kind of conversation I want, and it will create the characters for you. And it may not be as good as Elon and Vladimir Putin, but it'll be better than ordinary Klepez.

Yeah. And one of the things that's missing, it's not just conversation, it's memory. So long-term memory is what current AI systems don't have, is sharing an experience together. Forget the words. It's like sharing the highs and the lows of life. Together and the systems around us remembering that, remembering we've been through that. Like, that's the thing that creates really close relationships, is going through some shit, like going through struggle. If you survive together, there's something really difficult that bonds you with other humans.

And this is related to immigration and the American dream.

In what way?

The people who have come to this country, however weird and different they may be, They or their ancestors at some point probably have shared this thing. Right? US is not going to split up. It may get more screwed up as a country, but Texas and California are not going to break off. I mean, they're big enough where they could do it, but it's just never going to happen.

We've been through too much together.

Yeah.

That's a hopeful message. Do you think some people have talked to Eric Weinstein? You've talked to Eric Weinstein. He has a sense that growth, like the entirety of the American system is based on the assumption that we're going to grow forever, that the economy's going to grow forever. Do you think economic growth will continue indefinitely or will we stagnate?

I've long been in agreement with Eric Peter Thiel, Robert Gordon, and others that growth has slowed down. I argued that in my book, The Great Stagnation, appropriately titled. But the last 2 years I've become much more optimistic. I've seen a lot of breakthroughs in green energy and battery technology. mRNA vaccines and medicine is a big deal already. It will repair our GDP and save millions of lives around the world. There's an anti-malaria vaccine that's now in stage 3 trial. It probably works. CRISPR to defeat sickle cell anemia. Just space area after area after area, there's suddenly the surge of breakthroughs. I would say many of them rooted in superior computation and ultimately Moore's Law and access to those computational abilities. So I'm much more optimistic than say the last time I spoke to Eric. He moves all the time in his views. I don't know where he's at now.

He hasn't gained. That's really interesting. So your little drop of optimism comes from like, uh, there might be a fundamental shift in the kind of things that computation has unlocked for us in terms of like, it could be a wellspring of innovation that can, that, uh, enables growth for a long time to come. Like Eric has not quite connected to the computation aspect yet to where it could be a, a wellspring of innovation.

But you're very close to it in your own work. I don't have to tell you that. The work you're doing would not have been possible not very long ago.

But the question is, how much does that work enable continued growth for decades to come?

For all their problems, some version of driverless vehicles will be a thing. I'm not sure when, you know much better than I do, maybe only partially, but that too will be a big deal.

Well, one of the open questions that sort of the Peter Thiel school of area of ideas is how much can be converted to technology? How many parts of our lives can technology integrate and then innovate? Like, can it replace healthcare? Can it replace the legal system? Can it replace government? Not replace, but like, you know, make it digital and thereby enable computation to improve it. That's the open question because many aspects of our lives are still not really that digitized.

There was a New York Times symposium in April, which is not long ago, and they asked the so-called experts, when are we going to get vaccines? And the most optimistic answer was in 4 years. And obviously we beat that by a long mile. So I think people still haven't woken up. You mentioned my tiny drop of optimism, but it's a big drop. I have optimism.

Is it a waterfall yet? I mean, is it just—

Well, here's my pessimism. Whenever there are major new technologies, they also tend to be used for violence directly or indirectly. Radio, Hitler. Not that he hit people over the head with radios, but it enabled the rise of various dictators. So the new technologies now, whatever exactly they may be, they're going to cause a lot of trouble. And that's my pessimism. Not that I think they're all going to slow to a trickle.

When was the stagnation book?

2011.

2011.

Yes. It was the first of these stagnation books, in fact.

It's very interesting.

But even then I said this is temporary, and I was predicting it would be gone in about 20 years' time. I'm not sure that's exactly the right prediction, like 2030, but I think we're actually going to beat that.

So you think United States might still be on top of the world for the rest of the century? In terms of its economic growth, impact on the world, scientific innovation, all those kinds of things?

That's too long to predict, but I'm bullish on America in general.

Got it. Speaking of being bullish on America, the opposite of that is, you know, we talked about capitalism, we talked about Ayn Rand and her Russian roots. What do you think about communism. Why doesn't it work? What, uh, is it the implementation? Is there anything about its ideas that you find compelling, or is it just a fundamentally flawed system?

Well, communism is like capitalism. The words mean many things to different people.

Yes.

You could argue my life as a tenured professor comes closer to communism than anything the human race has seen, and I would argue it works pretty well.

Yeah.

But look, if you mean the Soviet Union, it devolved pretty quickly to a kind of decentralized set of incentives that were destructive rather than value maximizing. It wasn't even central planning, much less communism. So Paul Craig Roberts and Polanyi were correct in their descriptions of the Soviet system. Think of it as weird mixes of barter and malfunctioning incentives. And being very good at a whole bunch of things, but in terms of progress, innovation, and consumer goods, it really being quite a failure. Uh, and now I wouldn't call that communism, but that's what I think of the system the Soviets had. And it required an ever-increasing pile of lies that both alienated people but created an elite that by the end of the thing no longer believed in the system itself or even thought they were doing better by being crooks than by just say moving to Switzerland and being an upper middle class individual. You would have a higher standard of living by Gorbachev's time, not Gorbachev, but if you're number 30 in the hierarchy, you're better off as a middle class person in Switzerland. And that of course did not prove sustainable.

And so it's, what is it, a momentum of bureaucracy or something like that? It just builds up where you lose control of the original vision. And that naturally happens. It's just people.

And you can't use normal profit and loss and price incentives. So you get all prices or most prices set too low, right? Shortages everywhere. People trade favors. You have this culture of bartered bribes, sexual favors, or family friends. And you get more and more of that and you over time lose more and more of the information and the prices and quantities and practices and norms you had. And that sort of slowly decays. And then by the end, no one is believing in it. That would be my take. But again, you're the expert here.

The Russian scholar? Well, perhaps no more an expert than Ayn Rand. It's more personal than it is scholarly or historic. So Stalin held power for 30 years. Vladimir Putin has held power for 21 years where you could argue he took a little break, uh, but not much.

He was still holding power, I think.

And it's still possible now with the new, uh, uh, constitution that he could hold power for longer than Stalin, 30— longer than 30 years. What do you think about the man, the state of affairs in Russia, um, in general, the system they have there? Is there something interesting to you as an economist, as a human being about Russia?

Everything is interesting. I mean, here would be part of my take. As you know, the Russian economy starting, what, 1999, 2000, has really quite a few years of super excellent growth. And Putin is still riding on that. It more or less coincides with his rise as the truly focal figure on the scene. Since then, pretty recently, they've had a bunch of years of negative 4 to 5% growth in a row, which is terrible. The economy is way too dependent on fossil fuels. But the structural problem is this, you need a concordance across economic power, social power, political power. They don't have to be allocated identically, but they have to be allocated consistently. And the Russian system under Putin from almost the beginning has never been able to have that, that ultimately his incentives are to steer the system where the economic power is in a small number of hands in a non-diversified way. The system won't deliver sustainable gains in living standards anymore ever the way it's set up now. Though if fossil fuel prices go up, they'll have some good years for sure. And that is really quite structural what has gone wrong. And then on top of that, you can have an opinion of Putin, but you've got to start with those structural problems. And that's why it's just not going to work. But he had all those good years in the beginning. So the number of Russians say who live here or in Russia who love Putin and it's sincere, they're not just afraid of being dragged away. That's a real phenomenon.

Uh, yeah, I'm really torn on, you know, uh, Putin's approval rating, real approval rating seems to be very high. And I'm torn in whether that has to do with, uh, the fact that there is, uh, control of the press, or if it's a, which is the people I talk to who are in Russia, family and so on, a genuine love of Putin, appreciation of what Putin has done and is going to do with Russia.

But a lot of that would go away if the press were freer, I think.

Yes.

Well, Singapore realizes this. Anyone discussed by the press, no matter who they are, people in Singapore have done a great job.

Yes.

But if you're discussed by the press, you don't look good. Tech company executives are learning this, right? It's just like a rule. So in that sense, I think the rating is artificially high, but I don't by any means think it's all insincere. But that high popularity I view as bearish for Russia. I would feel better about the country if people were more pissed off at him.

Yeah, that's right. It's nice to see free speech, even if it's full of hate. Uh, I am also troubled on the scientific side and entrepreneurial side. It seems difficult to be an entrepreneur in Russia. Uh, like, it's not even, uh, in terms of rules, it culturally, the people I speak to, it's not easy to build a business. No, it's not easy to even dream of building a business in Russia. That's just not part of the culture, part of the conversation. You know, it's almost like the conversation is, if you wanna be the next Bill Gates or Elon Musk or Steve Jobs or whatever, you come to America. That's the sense they have.

Yeah. And history matters.

Is it history? Is it structural problems of today? What do you think? I mean—

It's all the same thing. So a history of hostility to commerce, which of course the old USSR is gone, but a lot of the attitudes remain, a lot of the corruption remains. You have this legacy distribution of wealth from the auctioning off of the assets, which is not conducive to some kind of broadly egalitarian democracy. And so you have these small number of power points that try to control information and wealth and not really so keen to encourage the others who ultimately would pull the balance of political power away from the very wealthy and from Putin. And they support that culture and the return of interest in Orthodox Church and all that. It's all part of the same piece, I think, because the old Orthodox Church is not that pro-commerce, you'd have to say. But it's traditionalist, it's pro-family, those are safer ideas. And then there's such a great safety valve, the most ambitious, smartest people, they probably will learn English. They can look like they belong in all sorts of other countries. They can show up and blend in. Super talented. They've probably had an excellent education, especially if they're from one of the two major cities. But even if not so, even from Siberia, and they go off, they leave, they're not a source of opposition. And that keeps the whole thing up and running for another generation. Yeah.

What do you make of the other big player, China? They seem to have a very different messed up but also functioning system. They seem to be much better at encouraging entrepreneurs. They're choosing winners. But what do you make of the entire Chinese system? Why does it work as well as it does currently? What are your concerns about it? And what are its threats to the United States or possible— what is it you said, like wisdom is when two ideas come together. Is there some possible benefits of these kinds of ideas coming together?

It's amazing what China has done, but I would say to put it in perspective, if you compare them to Japan, South Korea, Taiwan, Hong Kong, and Singapore, they've still done much worse. Not even close.

Yes.

And that's both living standards or— I hesitate to cite democracy as an unalloyed good in and of itself, but there's more freedom in all those other places by a lot. So China has all these problems of history, but they've managed, as actually the Soviets did in the middle of the 20th century, One of the two great mass migrations from the countryside to cities, which boosts productivity enormously and will sustain totalitarian systems. But they moved from a totalitarian system to an oligarchy where the CCP is actually, at least for a while, hey, have been really good at governing, have made a lot of very good decisions. You have to admit that. I don't know how long that streak will continue. With one person so much now holding authority in a more extreme manner, the selection pressures for the next generation of high-level CCP members probably become much worse. You have this general problem of the state-owned enterprises losing relative productivity compared to the private sector. Well, we're going to kind of hold Jack Ma on this island and he can only issue weird hello statements. It kind of smells bad to me. I don't feel that it's about to crash, uh, but I don't see them supplanting America as like the world's number one country. I think they will muddle through and have very serious problems, but there's enough talent there, they will muddle through.

Is there ideas from China or from anywhere in general of large-scale role of government that you find might be useful, like Andrew Yang Recently ran on the platform UBI, universal basic income. Is there some interesting ideas of large-scale government sort of welfare programs at scale that you find interesting?

Well, keep in mind the current version of the Chinese Communist Party post-Mao dismantled what was called the Iron Rice Bowl. So it took apart the healthcare protections, a lot of the welfare system, a lot of the guaranteed jobs. So the economic rise of China coincided with the weakening of welfare. I'm not saying that's causal per se, but people think of China as having a government that takes care of everyone. It's very far from the truth. And by a lot of metrics, I don't mean control over people's lives, I don't mean speech, but by a lot of metrics economically, we have a lot more government than they do. So what one means here by government-private control, I don't think you can just add up the numbers and get a simple answer. They've been fantastic at building infrastructure in cities in ways that will attract people from the countryside. And furthermore, they more or less enforce a meritocracy in this sense. Like if you're a kid of a rich guy, you'll get unfair privilege. That's unfair, but systems can afford that. If you are smart and from the countryside and your parents have nothing, you will be elevated and sent to a very good school, graduate school, because of the exam system. And they do that and they mean that very consistently. It's like the Soviets had a version of that, like for jazz and romantic piano, not for everything, but where they had it, Again, they were tremendous, right?

Yeah, exactly.

And Chinese have it in so many areas, a genuine meritocracy in this one way.

That moves people from the rural to the big city, and that's a big boost of productivity for some amount of time.

And when they get there, they're taken seriously. Jack Ma was riding a bicycle teaching English in his late 20s. He was a poor guy. Not a society of credentialism. Or in America, it's way too much a credentialist society.

As we were talking about, even with the Nobel Prize.

Yeah.

But what do you think about these large government programs like UBI?

The one version of UBI that makes the most sense to me is the Mitt Romney version, UBI for kids. Like kids are vulnerable. If their parents screw up, you shouldn't blame the kid or make the kid suffer. I believe in something like UBI for kids. Maybe just cash. But if you don't have kids, even with AI, my sense is at least in the world we know, you should be able to find a way to adjust. You might have to move to North Dakota to work next to fracking, say. But look, before the pandemic, the two most robot-intensive societies, Japan and the US, US at least for manufacturing, We're at full employment. So maybe there's some far-off day where there's literally no work. John Lennon and Imagine, it's piped everywhere. And then we might revisit the question. But for now, we had rising wages in the Trump years and full employment.

So I don't see automation as a threat that fundamentally shakes our society.

It's a threat in the following sense. The new technologies are harder to work with for many people. And that's a social problem. But I'm not sure a universal basic income is the right answer to that very real problem.

Well, this also, I like the UBI for kids. It's also your definition or the line, the threshold for what is vulnerable and what is basic human nature. Going back to Russia, life is suffering, that struggle is a part of life. And perhaps sort of changing, maybe what defines the 21st century is having multiple careers and adjusting and learning and evolving. And some of the technology in terms of, you know, some of the technology we see like the internet allows us to make those pivots easier. You know, allows later life education possible. It makes it possible. I don't know.

And your earlier point about loneliness being this fundamental human problem, which I would agree with strongly, UBI, if it's at a high level, will make that worse. I mean, say UBI were high enough, you could just sit at home. People are not going to be happy. They don't actually want that. And we've relearned that in the pandemic. Yeah.

The flip side, the hope with UBI is you have a little bit more freedom to find the thing that alleviates your loneliness. That's the idea. So it's kind of an open question. If I give you $1 million or $1 billion, will you pursue the thing you love? Will you be, will you be more motivated to find the thing you love, to do the thing you love, or will you be lazy and lose yourself in the sort of daily activities that don't actually bring you joy, but pacify you in some kind of way where you just let the days slip by. That is the open question.

A lot of the great creators did not have huge cushions, whether it is Mozart or James Brown or the great painters in history. They had to work pretty hard. And if you look at heirs to great fortunes, maybe I am forgetting someone, but it is hard to think of any who have creatively been important as novelists, or they might have continued to run the family business. But Van Gogh was not heir to a great family fortune.

Yeah, it's sad that cushions get in the way of progress.

It's the same point about prizes, right? Yeah. Inheriting too much money is like winning a prize.

We mentioned Eric Weinstein. I know you agree on a bunch of things. Is there some beautiful fascinating, insightful disagreement that you have that has yet to be resolved with him? Is there some ideas that you guys battle it out on? Is it the stagnation question that you've mentioned?

That's one of them, but here's at least two others. But I would stress Eric is always evolving, so I'm just talking about a time slice Eric. I don't know where he's at right now. I heard him on Clubhouse three nights ago, but that was three nights ago. But I think he's far too pessimistic about the impact of immigration on US science. He thinks it has displaced US scientists, which I think that is partly true. I just think we've gotten better talent. I'm like, bring it on, double down. And look at Kuriko, who basically came up with mRNA vaccines. She was from Hungary and was ridiculed and mocked. She couldn't get her papers published. She stuck at it. An American might not have been so stubborn because we have these cushions. So Eric is all worried, mathematicians coming in, they're discouraging native US citizens from doing math. I'm like, bring in the best people. If we all end up in other avocations, absolutely fine by me.

Does it trouble you that we kick them out after they get a degree often?

I would give anyone with a plausible graduate degree a green card.

Universally. Yeah, I agree with that. It makes no sense. It makes so strange that the best people that come here suffer here, create awesome stuff here, then when we kick them out, it doesn't make any sense.

Here's another view I have. I call it open borders for Belarus. Now, Russia's a big country. I would gladly increase the Russian quota by 3x, 4x, 5x. Not 20%, but a big boost. But Belarus, small country, and they're poor and they have decent education and a lot of talent there. Why can't we just open the door and convert a Belarus passport to a green card? Open borders for Belarus. It's my new campaign slogan.

Are you running for president in 2024?

Well, write-ins are welcome.

Okay. What's the second thing you disagree with, Eric?

Trade. Again, I'm not sure where he's at now, but he is suspicious of trade in a way that I am not. I do understand what's called the China shock has been a big problem for the US middle class. I fully accept that. I think most of that is behind us. National security issues aside, I think free trade is very much a good thing. Eric, I'm not sure he'll say it's not a good thing, but he won't say it is a good thing. And I know he's kind of, eh. It's like, Eric, free trade. But look, on things like vaccines, I don't believe in free trade. Why? You want vaccine production in your own country. Look at the EU. They have enough money. No one will send them vaccines.

What's different about vaccines? There's some things you want to prioritize the citizenry on.

—You could argue it would be cheaper to produce all US-manufactured vaccines in India. They have the technologies, obviously lower wages. But look, there's talk in India right now of cutting off the export of vaccines. If you outsource your vaccine production, you're not sure the other country will respect the norm of free trade. So you need to keep some vaccine production in your country. It's an exception to free trade, not to the logic, a bunch of things the Navy uses. You can't buy those components from China. That's insane. But look, it would be cheaper to do so, right? Yeah.

Let me completely shift topics on something that's fascinating. It's all the same topic, but great. Everything is interesting. What do you think about what the hell is money? And the recent excitement around cryptocurrency that brings to the forefront the philosophical discussion of the nature of money. Are you bullish on cryptocurrency? Are you excited about it? What does it make you think about how the nature of money is changing?

No one knows what money is. Probably no one ever knew. Go back to medieval times, bills of exchange, were they money? Maybe it's just a semantic debate. Gold, silver, what about copper coins? What about metals that were considered legal tender but not always circulating? Yeah. What about credit? So being confused about moneyness is the natural state of affairs for human beings. And if there's more of that, I'd say that's probably a good thing. Now crypto per se, I think Bitcoin has taken over a lot of the space held by gold. That to me seems sustainable. I'm not short Bitcoin. I don't have some view that the price has to be different than the current price, but I know it changes every moment. I am deeply uncertain about the less of crypto, which seems connected to ultimate visions of using it for transactions in ways where I'm not sure Whether it be prediction markets or DeFi, I'm not sure the retail demand really is there once it is regulated like everything else is. I would say I'm 40/60 optimistic on those forms of crypto. That is, I think it's somewhat more likely they fail than succeed, but I take them very seriously.

So we're talking about it becoming one of the main currencies in the world. That's what we're discussing.

That I don't think will happen.

So, but, but the reality is that Bitcoin used to be in the single digits of a dollar and now has crossed $50,000 for a single Bitcoin. Do you think it's possible it reaches something like a million dollars?

I don't think we have a good theory of the value of Bitcoin. If people decide it's worth a million dollars, it's worth a million dollars.

But isn't that money? Like you said, isn't the ultimate state of money confusion? However beautifully you put it.

It's like valuing an Andy Warhol painting. So when Warhol started off, probably those things had no value, the sketches, early sketches of shoes. Now a good Warhol could be worth over $50 million. That's an incredible rate of price appreciation. Bitcoin is seeing a similar trajectory. I don't pretend to know where it will stop, but it's about trying to figure out what do people think of Andy Warhol? He could be out of fashion in a century, maybe yes, maybe no. But you don't think about Warhols as money. They perform some money-like functions. You can even use them as collateral for deals between gangs. But they're not basically money, nor is Bitcoin. And the transactions velocity of Bitcoin, I would think, is likely to fall, if anything.

So you don't think there'll be some kind of phase shift where it'll become adopted and become mainstream for the main— for one of the main mechanisms of transactions? Bitcoin, no.

Now, you know, Ether has some chance at that. I would bet against it, but I wouldn't give you a definitive no. And you would consider— Bitcoin is too costly. It may be fine to hold it like gold, but gold is also costly. You have smart people trying to make, say, Ether much more effective as a currency than Bitcoin. And there's certainly a decent chance they will succeed. Yeah, there's a lot of innovation.

I mean, with smart contracts, with NFTs as well, there's, there's a lot of interesting like innovations that are plugging into the human psyche somehow, just like money does. You know, money seems to be this viral thing, our ideas of money, right? And if the idea is strong enough, it seems to be able to take hold. Like there's network effects that just take over and Like, I, I particularly see that with— I'd love to get your comment on, uh, Dogecoin, which is basically by a single human being. Elon Musk has been created, you know, it's like these celebrities can have a huge ripple effect on the impact of money. Is it possible that in the 21st century, people like Elon Musk and celebrities, I don't know, Donald Trump, The Rock, whoever else, uh, can have can actually define the currencies that we use? Maybe can Dogecoin become the primary currency of the world?

I think of it as like baseball cards. So right now every baseball player has a baseball card. And the players who are stars, their cards can end up worth a fair amount of money. And that's stable, we've had it for many decades. Sort of the player defines the card, they sign a contract with Topps or whatever company, Now, could you imagine celebrities, baseball players, LeBron James having their own currencies instead of cards? Absolutely. And you're somewhat seeing that right now, as you mentioned, artists with these unique works on the blockchain. But I'm not sure those are macroeconomically important. If it's just a new class of collectibles that people have fun with, again, I say bring it on. But whether there are use cases beyond that, that challenge fiat monies, which actually work Very well. Yesterday I sent money to a family in Ethiopia that I help support. In less than 24 hours they got that money. Digitally. Yes. No, not digitally, through my bank, my primitive dinosaur bank, BB&T, Mid-Atlantic Bank, headquartered in North Carolina, you know, chartered by the Fed, regulated by the FDIC and the OCC. Now you could say, well, the exchange rate was not so great. Uh, I don't see crypto as close to beating that once you take into account all of the last mile problems. Fiat currency works really well. People are not sitting around bitching about it. And when you talk to crypto people, the number who have to postulate some out-of-the-blue hyperinflation where there's no evidence for that whatsoever, that's to me is a sign they're not thinking clearly about how hard they have to work to outcompete fiat currency.

There's a bunch of different technologies that are really exciting that don't want to address how difficult it is to outcompete the current accepted alternative. So for example, autonomous vehicles, a lot of people are really excited. Yeah. But it's not trivial to outcompete Uber on the cost and the effectiveness and the user experience and all those kinds of— Correct. Sorry, Uber driven by humans. Yes. And it's not, you know, that's taken for granted. I think that, look, wouldn't it be amazing? How amazing would the world look when the cars are driving themselves fully? You know, it's going to drive the cost down. You can remove the cost of drivers, all those kinds of things. But it's when you actually get down to it and have to build a business around it, it's actually very difficult to do. And I guess you're saying your sense is similar competition is facing cryptocurrency. Like, you have to, you actually present a killer app reason to switch from fiat currency to Ethereum or to Bitcoin.

And the Biden people are going to regulate crypto and they're going to do it soon. So something like DeFi, I fully get why that is cheaper or for some can be cheaper than other ways of conducting financial intermediation. But some of that is regulatory arbitrage It will not be allowed to go on forever, for better or worse. I would rather see it given greater tolerance. But the point is banking lobby is strong. The government will only let it run so far. There'll be capital requirements, reporting requirements imposed, and it will lose a lot of those advantages.

What do you make of WallStreetBets? Another thing that recently happened that shook the world, and at least me from the outsider perspective, make me question what I do and don't understand about our economic system, which is a bunch of different— a large number of individuals getting together on the internet and having a large-scale impact on the markets.

If you tell a group of people and coordinate them through the internet, we're going to play a fun game. It might cost you money, but you're going to make the headlines, and there's a chance you'll screw over some billionaires and hedge funds. Enough people will play that game. Yes. So that game might continue, but I don't think it's of macroeconomic importance. And the price of those stocks in the medium term will end up wherever it ought to be.

So these are little outliers from a macroeconomics perspective. These are not signals of shifting power, like from centralized power to distributed power. These aren't some fundamental changes in the way our economy works.

I think of it as a new brand of esports, maybe more fun than the old brand, which is fine, right? It's like push the anarchy into the corners where you want it. It doesn't bother me, but I think people are seeing it as more fundamental than it is. It's a new esport, more fun for many, but more expensive than the old esports. Like chess is a new esport, super cheap, Not as fun as sending hedge funds to their doom, but what would you expect?

The poetry of that. I love it. Okay. But macroeconomically, it's not fundamental. Okay. I was going to say, I hope you're right because I'm uncomfortable with the chaos of the masses that creates.

But I also— I think that chaos is somewhat real, to be clear. Yes. But it will matter through other channels. Not through manipulating GameStop or AMC. So you're seeing the real macro phenomenon. When people see a real macro phenomenon, they tend to make every micro story fit the narrative. And this micro story, like, it fits the narrative, but it doesn't mean its importance fits the narrative. That's how I would kind of dissect the mistake I think people are making.

Oh, within the macro phenomenon, are there Everyone's weird now.

The internet either allows us to be weirder or makes us weirder. I'm not sure what's the right way to put it. Maybe a mix of both.

You're probably right that it allows us to be weirder because— Okay, so this connects our previous conversation. Does America allow us to be weirder or does it make us weirder?

Say we're weird and somewhat neurotic to begin with, but the only messages we get are Dwight D. Eisenhower and I Love Lucy and network TV. Like, that's going to keep us within certain bounds in good and bad ways. That's obviously totally gone. And the internet, you can connect to not just QAnon, but all sorts of things, many of them just fantastic, right? But in good and bad ways, it makes us weirder. So that maybe is troubling, right? Like, if someone's worried about that, I would at least say they should give it deep, serious thought. And then it has a whole lot of ebbs and flows, micro-realizations of the weirdness that don't actually matter. So like chess players today, they play a lot more weird openings than they did 20 years ago. Mm-hmm. Like it reflects the same thing, because you can research any weird opening on the internet, but like, does that matter? Probably not. So a lot of the things we see are just like the weird chess openings. And to figure out which are like the weird chess openings and which are fundamental, to the new and growing weirdness. That's what a hedge fund investor type should be trying to do. I just think no one knows yet. It's like this itself, this fun, weird guessing game, which we're partly engaging in right now.

Exactly. And I mean, as Eric talks about on the science side of things, I mean, I said at MIT, especially in the machine learning field, there's a natural institutional resistance to the weird. It's very, as they talk about, it's difficult to hire weird faculty, for example. Correct. You want to hire and give tenure to people that are safe, not weird. And that's one of the concerns is it seems like the weird people are the ones that push the science forward usually. Right. And so how do you balance the two? It's not obvious because it's—

It's another area where Eric and I disagree. As I interpret him, he thinks academia is totally bankrupt. And I think it's only partially bankrupt. How do we fix it?

Because I'm with you. I'm bullish on academia.

You need up-and-coming schools that end up better than where they started off. And MIT was once one of them. Now they're not in every area. In some areas, they have become the problem. UChicago, you wouldn't call it up-and-coming, but it's still different. And that's great. Let's hope they manage to keep it that way. The biggest problem to me is the rank absurd conformism at kind of second-tier schools, maybe in the top 40, but not in the top dozen, that are just trying to be like a junior MIT, but it's mediocre and copycat. And they're the most dogmatic enforcers of weirdness that like Harvard is more open than those second-tier schools. And those second-tier schools are pretty good typically, right? Yeah.

But the mediocrity is enforced there.

Correct. Very strictly. And the homogenization pressures. Climb the rankings by another 3 places and be a little closer to MIT, though you'll never touch them. That to me is very harmful. And you'd rather they be more like Chicago, more like Caltech, or the elder Caltech all the more. Pick some model, be weird in it. You might fail. That's socially better.

Yeah, but so the problem with MIT, for example, is the mediocrity is really enforced on the junior faculty. So like the people that are allowed to be weird, or actually they just don't even ask for permissions anymore, are more senior faculty. And that's good, of course, but you want the weird young people. You know, I find too, you know, this podcast, I like talking to tech people, and I find the young faculty to be really boring.

They are. They're the most boring of faculty.

Their work is interesting technically, technically, but just the, the, the passion. They are drudges.

And it's—

well, some of them sneak by. Like, you have like the Max Tegmark, young version of Max Tegmark, who knows how to play the role of boring and, and fitting in, right? And on the side, he does the weird shit. Uh, but they're not— they're far and few in between. Which I'd love to figure out a way to shake up that system because—

You look at MIT's Broad Institute, right? Yes. In biomedical. It's been a huge hit. Yeah. I'm not privy to their internal doings, but I suspect they support weird more than the formal departments do at the junior level.

Yes, that's probably true. Yeah, I don't know what— whatever they're doing, it's working. But we needed to figure it out because I think the best ideas still do come from the So forget, my apologies, but for the humanities side of things, I don't know anything about. But the engineering and the science side, I think there's so many amazing ideas that are still coming from universities.

It's not true that you don't know anything about the humanities. You're doing the humanities right now. You're talking about people. There are no numbers put on a blackboard, right? There's no hypothesis testing per se. No. Yeah, that's right. However many subscribers to your podcast, all listening to you on the humanities, whatever your frequency is.

But I'm not in the Department of the Humanities. That's why it's innovative. They have very different conversations. There's the number of emails I get about, listen, I really deeply respect diversity and the full scope of what diversity means, and also the more narrow scope of different races and genders and so on. It's a really important topic. But there's a disproportionate number of emails I'm getting about meetings and discussions and that just kind of is overwhelming. I don't get enough emails from people, like a meeting about why are all your ideas bad? Let's, for example, let me call out MIT. Why don't we do more, why don't we kick Stanford's ass or Google's ass more importantly in deep learning and machine learning and AI research? What CCL, for example, used to be a laboratory, is a laboratory for artificial intelligence research. And why is that not the beacon of greatness in artificial intelligence? Let's have those meetings as well.

Diversity talk has oddly become this new mechanism for enforcing conformity. Yes, exactly. Right.

So it's almost like this conformity mechanism finds the hot new topic to use to enforce further conformity. Exactly. Oh boy. I still have hope. I remain optimistic.

But the humanities have innovated through podcasts, including yours and mine, and they're alive and well. All the bad talk you hear about the humanities in universities, there's been this huge end run of innovation on the internet, and it's amazing. You're right.

I never thought of— I mean, this is humanities. It's like you've been speaking prose all one's life and didn't know it, right? Yeah. I am actually part of the humanities department at MIT now. I did not realize this, and I will fully embrace it from this moment on.

Look, you have this thing, the Media Lab. I'm sure you know about it. Done some excellent things, done a lot of very bogus things, but you're outcompeting them. You're blowing them out of the water. Yeah. Like you are them. Yeah.

I mean, and I'm talking to those folks and they, they're, they're trying to, well, uh, they're trying to figure it out. I mean, they had their issues with Jeffrey Epstein and so on, but outside of that, there's a, I actually gone through a shift with this particular podcast, for example, where at first it was seen as a one, at the very first it was seen as a distraction. Second, it was a source of like almost like a kind of jealousy. Like the same kind of jealousy you feel when junior faculty outshines the senior faculty. Of course. And now it's more like, oh, okay, this is a thing. Like we, we should do more of that. We should embrace this guy. We should embrace this thing. So the, there's a sense that podcasting and whatever this is, and it doesn't have to be podcasting, will drive some innovation within MIT, within different universities. There's a sense that things are changing. It's just that universities lag behind. And my hope is that, you know, they catch up quickly. They innovate in some way that goes along with the innovations of the internet.

I think the internet will outrace them for a long time, maybe forever.

Well, I mean, but it's okay if they're, as long as they're keeping—

Yeah, and we're both in universities, so we have multiple hats on here as we're speaking. So we can complain about the universities, but that's like complaining about the podcasters, right?

Yeah. We be them. But speaking on the weird, you've, uh, uh, in the best sense of the word weird, you've written about and made the case that we should take UFO sightings more seriously. So that's one of the things that, uh, I've been inundated with, sort of the excitement and the passion that people have for the possibility of extraterrestrial life. Of life out there in the universe. I've always felt this excitement of just looking up at the stars and wondering what the hell's out there. But there's people that have more like, uh, more grounded excitement and passion of actually interacting with, uh, with aliens on this here, our planet. What's the case, they— from your perspective, for taking these sightings more seriously?

The data from the Navy to me seem quite serious. I don't pretend that I have the technical abilities to judge it as data, but there are numerous senators at the very highest of levels, former heads of CIA, Brennan, I talked to him, did an interview with him. I asked him, what's up with these? What do you think it is? He basically said that was the single most likely explanation. Was of alien origin. Now, you do not have to agree with him. But look, if you know how government works, these senators, or Hillary Clinton for that matter, or Brennan, they sat down, they were briefed by their smartest people, and they said, "Hey, what is going on here?" And everyone around the table, I believe, is telling them, "We do not know." And that is sociological data I take very seriously. I have not seen a debunking of the technical data. Yes. Which is eyewitness reports and images and radar. Again, at a technical level, I feel quite uncertain on that turf. But evaluating some of the testimony of witnesses, it seems to me it's now at a threshold where one ought to take it seriously.

Yeah, there's a— one of the problems with UFO sightings is that because of people with good equipment don't take it seriously. It's such a taboo topic. That you have just like really shitty equipment collecting data. And so you have the blurry Bigfoot kind of situation where you have just bad video and all those kinds of things, as opposed to, uh, I mean, there's a bunch of, uh, people, uh, Avi Loeb from Harvard, uh, talking about Oumuamua. It's, it's just like people with the equipment to do the data collection don't want to help out. And that creates a kind of divide where the scientists ignore that this is happening, and there's the masses of people who are curious about it, and then there's the government that's full of secrets that's leaking some confusion, and it creates distrust in the government, it creates distrust in science, and it prevents the scientists from being able to explore some cool topics, some exciting possibilities that they should be, be curious kids like Avi talks about.

Even if it has nothing to do with aliens, whatever the answer is, it has to be something fascinating. We already know everything's interesting, but this is fascinating. But look, that all said, I suspect they're not of alien origin. And let me tell you my reason. The people who are all gung-ho, they do a kind of reasoning in reverse or argument from elimination. They figure out a bunch of things that can't be, like is it a Russian advanced vehicle? No, probably pretty good arguments there. Is it a Chinese advanced vehicle? No. Is it people from the Earth's future coming back in time? No. And they go through a few others. They have some really good no arguments. Then they're like, well, what we've got left is aliens. This argument from elimination, I don't actually find that persuasive. You can talk yourself into a lot of mistaken ideas that way. The positive evidence that it's aliens is still quite weak. The positive evidence that it's a puzzle is quite huge.

And whatever the solution to the puzzle is, it might be fascinating.

And it's going to be so weird or fascinating or maybe even trivial, but that's weird in its own way, that we can't set up by elimination all the things that might be able to be. Yeah.

And just like you said, the debunking that I've seen of these kinds of things are less explorations and solutions to the puzzle and more a kind of half-hearted dismissal.

And Avi, as you mentioned to him on your podcast with him, he's been attacked an awful lot. And when I hear the idea carrier attacked, I get very suspicious of the critics. If he is wrong, just tell me why. My ears are open. I do not have a set view on Oumuamua. I know I cannot judge Avi's arguments. He cannot convince me in that sense. I am too stupid to understand how good his argument may or may not be.

And like you said, ultimately, in the argument, in the meeting of that debate is where we find the wisdom. Like dismissing it. That's one of the things that troubles me. There's a bunch of people, like Nietzsche sometimes dismissed this way, Ayn Rand is sometimes dismissed this way. Oh, here we go. Like, there's a, as opposed to arguing against her ideas, dismissing it outright. And that's not productive at all. She may be wrong in a lot of things, but like laying out some arguments, even if they're basic human arguments, That's, that's where we arrive at the wisdom. I love that. Is there something deeper to be said about our trust in institutions and governments and so on that has to do with UFOs? That there, there's a kind of suspicion that the US government and governments in general are hiding stuff from us when you talk about UFOs.

This is my view on that. If we declassified everything, I think we would find a lot more evidence all pointing toward the same puzzle. There aren't some alien men being held underground. Yes. There's not some secret file that lays out whatever is happening. I think the real lesson about government is government cannot bring itself to any new belief on this matter of any kind. And it's a kind of funny inertia. Like government is deeply puzzled. They're more puzzled than they want to admit to us, which like I'm okay with that actually. They shouldn't just be out panicking people in the streets. But at the end of the day, it's a bit like approving the AstraZeneca vaccine. Yeah. Which does work and they haven't approved it. When are they going to do it? When is our government actually, if only internally, going to take this more than just seriously, but take it truly seriously? Yeah. And I just don't know if we have that capability mentally. To sound like Eric Weinstein for another moment.

To stay on the same topic, although on the surface shifting completely, because it is all the same topic. You have written and studied art. Why do you think we humans long to create art? Human society in general and just the human mind?

Well, most of us don't really long to create art, right? I would start with that point.

You think so? You think that's a unique weirdness of some particular humans?

I think, I don't know, 10% of humans roughly, which is a lot, but it is somewhat weird. Yeah. I don't aspire to create art. You could say writing nonfiction, there's something art-like about it, but it's a different urge, I would say. Yeah. So why do some people have it? I think human brains are very different. It's a different notion of working through a problem. You and I enjoy working through analytic problems. For me, economics, for you, AI and other areas, or your Humanities Podcast. But that's fun. Yeah. For that problem to be visual and linked to physical materials and putting those on a canvas, To me, it's not a huge leap, but I really don't want to do it. Like, it would be pain. If you paid me like $500 to spend an hour painting, I don't know, is that worth it? Maybe, but like, I'm happy when that hour's over.

And would not be proud or happy with the result.

It would suck. I don't think I would do it actually.

Do you think you are suppressing some deep— Absolutely not.

Now, when I was young, I played the guitar as you play the guitar, and that I greatly enjoyed, although I was never good. But it helped me appreciate music much, much more. Well, this is the question.

Okay, so from the perspective of the observer and appreciator of art, you said good. Is there such a concept as good in art?

There is clearly a concept of bad. My guitar playing fit that concept. But I wasn't trying to be good. I wanted to learn how do chords work, how does jazz improvisation work, how is blues different, classical guitar, physically how do you make those sounds? And I did learn those things. And you can't learn everything about them, but you can learn a lot about them without ever being good or even trying to be that good. But I could play all the notes.

From the observer perspective, what do you— I apologize for the absurd question, but what do you use the most beautiful and maybe moving piece of art you've encountered in your life?

It's not an absurd question at all. And I think about this quite a bit. I would say the two winners by a clear margin are both by Michelangelo. It's the Pietà in the Vatican. And the David statue in Florence.

Why? Historical context or just purity of the creation itself?

I don't think you can view it apart from historical context. And being in Florence or in the Vatican, you're already primed for a lot, right? You can't pull that out. But just technically how they express the emotion of human form, I do honestly intellectually think they're the two greatest artworks for doing that. That's not all that art does. Not all art is about the human form, but they are phenomenal. And I think critical opinion, not that everyone agrees, but my view is not considered a crazy one within the broader part of critical opinion. Now, in painting, I think the most I was ever blown away was to see Vermeer's artwork. It's called The Art of Painting, and it's in Vienna in the Kunsthistorisches Museum. And I saw that, I think I was 23. It just stunned me because I'd seen reproductions, but live in front of you and huge, a completely different artwork. And again, Vienna primed. Yes. And I was living abroad for the first time in Vienna itself, the city and so on. Now, unlike the Michelangelos, that is not my current favorite painting, but that would be historically the one I would pick.

What do you make in the context of those choices? What do you make of modern art? And I apologize if I'm not using the correct terminology, but art that maybe goes another level of weird outside of the art that you've kind of mentioned and breaks all the conventions and rules and so on and becomes something else entirely that doesn't make sense in the same way that David might talk about.

I think a lot of it is phenomenal, and I would say the single biggest mistake that really smart people make is to think contemporary art, or music for that matter, is just a load of junk or rubbish. It's just like a kind of mathematics they haven't learned yet. It's really hard to learn. Maybe some people can never learn it. But there's a very large community of super smart, well-educated people who spend their lives with it, who love it. Those are genuine pleasures. They understand it. They talk about it with the common language. And to think that somehow they're all frauds, it just isn't true. One doesn't have to like it oneself, just like Clubhouse may or may not be your thing, but it is amazing and for me personally, highly rewarding. And if someone doesn't get it, I do kind of have the conceited response of thinking like, in that area, I'm just smarter than you are. Yeah.

So the interesting thing is, as with most—

We get back to Eric Weinstein again. Yes. Who is in general smarter than I am. This I get. But when it comes to contemporary artistic creations, I'm smarter than he is.

So he's not a fan of contemporary art?

I don't want to speak for him. I've heard him say derogatory— He's evolving always. He's evolving always. I've heard him say derogatory things about some of it. Doesn't mean he doesn't love some other parts of it.

So I wonder if there's just a higher learning curve, a steeper learning curve for contemporary art, meaning it takes more work to appreciate the stories, the context from which they're thinking about this work. It feels like in order to appreciate the art, contemporary, certain pieces of contemporary art, you have to know the story better behind the art.

I think that's true for many people, but I think it's a funny-shaped distribution because there's a whole other set of people, sometimes they're small children, and they get abstract art more easily. You show them Vermeer or Rembrandt, they don't get it. But just like a a wall of color, they're in love with it. So I don't think I know the full story. Again, some strange kind of distribution. The entry barriers are super high or super low, but not that often in between.

But you would challenge saying that there's a lot to be explored in contemporary art, it's just you need to learn.

Yeah, it's one of the most profound bodies of human thought out there. And it's part of the humanities. And yes, there are people who also don't like podcasts, right? And that's fine.

Yeah. You've also been a scholar of food. We're just going through the entirety of the human experience today on this humanities podcast. Another absurd question, say this conversation is the last thing you ever do in your life. I, wearing the suit, would murder you at the end of the conversation. So this is your last day on Earth. But I would offer you a last meal, what would that meal contain? We can also travel to other parts of the world.

Well, we have to travel because my preferred last meal here I probably had like 2 nights ago.

Which is what? Can you describe or no?

The best restaurant around here is called Mama Chang's and it's in Fairfax and it's food from Wuhan, actually. And they take pandemic safety seriously in addition to the food being very good. But this is what I would do. I would fly to Hermosillo in northern Mexico, which has some of the best food in Mexico, but I sadly only had 2 days there. So somewhere like Oaxaca, Puebla, I think they have food just as good, or some people would say better, but I've spent a lot of time in those places.

So the scarce— wait, is it possible the scarcity of time contributed to the richness of the experience? Of course.

But the point is that scarcity still holds. So I want one more dose of the food from Hamocillo.

Can we describe what the food is?

It's the one kind of Mexican food that at least nominally is just like the Mexican food you get in the US. So there are burritos, there's fajitas. It doesn't taste at all like our stuff. But again, nominally, it's the part of Mexican food that made it into the US, was then transformed. Yes. But it's in a way the most familiar. But for that reason, it's the most radical because you have to rethink all these things you know. And they're way better in Hermosillo. Hardly any tourists go there. There's nothing to see in Hermosillo. Nothing to do other than eat. It's not ruined by any outsiders. It's this longstanding tradition, dirt cheap. And the thing to do there is just sweet talk a taxi driver into first taking you seriously and then trusting you enough to know that you trust him to bring you to the very best, like food stands.

Where's the magic of that nominally similar entity of the burrito? Where does the magic come from? Is it the taxi ride? Is it the whole experience, or is there something actually in the food?

Well, you can break the food down part by part. If you think of the beef, the beef there will be dry-aged just out in the air in a way the FDA here would never permit. They dry-age it till it turns green, but it is phenomenal. The quality of the chilies. So here there's only a small number of kinds of chilies you can get. In most parts of Mexico, there's quite a large number of chilies you can get. They're different, they're fresher, but it's just like a different thing, the chilies. The wheat used, so this is wheat territory, not corn territory, which is itself interesting. The wheat is more diverse and more complex. Here it's more homogenized, obviously cheaper. More efficient, but there it is better. Non-pasteurized cheeses are legal in all parts of Mexico, and they can be white and gooey and amazing in a way that here, again, it's just against the law. You could legalize them. The demand wouldn't be that great. There's a black market in these cheeses at Latino groceries around here, but you just can't get that much of it. So the cheese, the meat, the wheat, all different. In significant ways, the chilies. I don't think the onions really matter much. Garlic, I don't know. I wouldn't put much stock in that. But that's a lot of the core food, and then it's cooked much better and everything's super fresh. The food chain is not relying on refrigeration. And this is one thing Russia and US have in common. We were early pioneers in food refrigeration, and that made a lot of our foods worse quite early. And it took us a long time to dig out of that because big countries, right? You've had an extensive rail system in Russia, USSR, a long time, which makes it easier to freeze and then ship.

What about the actual cooking, the chef? Is there an artistry to the simple? I hesitate to call the burrito simple, but—

And there's no brain drain out of cooking. So if you are In the United States, and you're very talented. I'm not saying there aren't talented chefs. Of course there are, but there's so many other things to pull people away. But in Mexico, there's so much talent going into food as there is in China, which would be another candidate for last meal questions, or India.

Oh, India. Let's not even get started on India. Unbelievable. I mean, there's a million things we could talk about here, but you've written about Jiro Dreams of Sushi, It's just a really clean, good example that people are aware of, of mastery in the art of the simple in food. What do you make of that kind of obsessive pursuit of perfection in creating simple food?

Sushi is about perfection, but it's a bit like the Beatles' White Album, which people think is simple and not overproduced. It's in a funny way their most overproduced album. But it's produced just perfectly. It sounds simple. It's really hard to produce music to the point where it's going to sound so simple and not sound like sludge. Like Let It Be album, it has some great songs, but a lot of it sounds like sludge. One After 909, that's sludge. I Dig a Pony, sludge. Like it's a bit interesting. It's not that good. It doesn't sound that good. White Album, like the best half, like Dear Prudence, sounds perfect, sounds simple. Cry baby cry. It's not simple. Back in the USSR, super complex. So sushi is like that. It's because it's so incredibly not simple, starting with the rice, you try to refine it to make it appear super simple, and that's the most complex thing of all.

Do you admire— I mean, we're not talking about days, weeks, months. We're talking about years. Generations of doing the same thing over and over and over again. Do you admire that kind of sticking to the— it does that, you know, we talked about our admiration of the weird. That doesn't feel weird. That seems like discipline and dedication to like, like a stoic minimalism or something like that.

I'm happy they do it, but I actually feel bad about it. I feel they're sacrificial victims to me, which I benefit from. But don't you ever think like, "Gee, you're a great master sushi chef. Wouldn't you be happier if you did something else?" Doesn't seem to happen.

That might be something that a weird mind would think.

Maybe it is weird people, and maybe they're really enjoying it. But to learn how to pack rice for 10 years before they let you do anything else. It's like these Indian sarod players, They just spend 5 years tapping out rhythms before they're allowed to touch their instruments.

Well, actually, to defend that— It's kind of like graduate school, right? Well, I think graduate school, perhaps. Graduate school is full of— every single day is full of surprises, I would say. I did martial arts for a long time. I do martial arts. And I've always loved— it's kind of the Russian way of drilling— is doing the same technique. I don't know if this applies into intellectual or academic disciplines where you can do the same thing over and over and over again, thousands and thousands and thousands of times. What I've discovered through that process is you get to start to appreciate the tiniest of details and find the beauty in them. People who go to like monasteries to meditate talk about this, is when you just sit in silence and don't do anything, you start to appreciate how much complexity and beauty there is in just the movement of a finger. Like you can spend the whole day joyously thinking about how fun it is to move a finger. Yeah. And so, and then you can almost become your full weird self about the tiniest details of life.

The thing you've got to wonder, is there a free lunch in there? Are the rest of us moving around too much?

Yeah, exactly. They sure feel like they found a free lunch. The people meditate, they're onto something.

I tend to think it's like artists, that some percent of people are like that, but most are not. And for most of us, there's no free lunch. My free lunch is to move around a lot in search of lunch, in fact.

Well, with all the food talk, you made me hungry. What books, 3 or so books, if any come to mind, technical, fiction, philosophical, would you recommend had a big impact on you or you just drew some insights from throughout your life?

Well, 2 of them we've already discussed. One is Plato's Dialogues, which I started reading when I was like 13. Another is Ayn Rand, Capitalism: The Unknown Ideal. But I would say the Friedrich Hayek essay, The Use of Knowledge in Society, which is about how decentralized mechanisms can work, also why they might go wrong. And that's where you start to understand the price system capitalism. And that was in a book called Individualism and Economic Order, but it was just a few essays in that book. Those are maybe the three I would cite.

Can you elaborate a little bit on the—

Say the price of copper goes up, right? Because there's a a problem with a copper mine in Chile or Bolivia. So the price of copper goes up all around the world. People are led to economize copper, to look for substitutes for copper, to change their production processes, to change the goods and services they buy, to build homes a different way. And this one event creates this one tiny change in information. This gets into your AI work very directly. And how much complexity that one change engenders in a meaningful, coherent way how the different pieces of the price system fit together. Hayek really laid out very clearly, and it's like an AI problem and how well, not for everything, but for many things we solve that AI problem. I learned, I was I think 13, maybe 14 when I read Hayek.

The distributed nature of things there.

And it's like your work on human attention, like how much can we take in? Very often not that much. And how many of the advances of modern civilization you need to understand as a response to that constraint. I got that also from Hayek. And what's the title of the book again? It's reprinted in a lot of books at this point, but back then the book was called Individualism and Economic Order. But the essay's online, Hayek, Use of Knowledge in Society. There are open access versions of it. Through Google. And you don't need the whole book, though it's a very good book.

Again, one of those profound looking over the ocean, maybe sitting on a porch, maybe with a drink of some kind, and a young kid comes by and asks you for advice.

What advice would you give? Drink. That's my advice.

I'm serious. So, okay, after that, What advice would you give to a young person today as they take on life, whether career and academia in general or just life, which is probably more important than career?

Most good advice is context-specific, but here are my two generic pieces of advice. Good. First, get a mentor, both career, but anything you want to learn. Say you want to learn about contemporary art, People write me this, "What book should I read?" It's probably not going to work that way. You need a mentor. Yes, you should read some books on it, but you want a mentor to help you frame them, take you around to some art, talk about it with you. So get as many mentors as you can in the things you want to learn. And then—

Can I ask you a quick tangent on that? Presumably a good mentor. Of course.

Is there— Begging the question in there. Complicated, right?

Well, it is complicated. Is there a lot of damage to be done from a bad mentor?

I don't think that much because it's very easy to drop mentors and in fact it's quite hard to maintain them. Good mentors tend to be busy. Bad mentors tend to be busy. And you can try on mentors and maybe they're not good for you, but you still, there's a good chance you'll learn something. Like I had a mentor, I was an undergrad, he was a Stalinist. He edited the book called The Essential Stalin. Brilliant guy. I learned a tremendous amount from him. Was he as a Stalinist a good mentor for me, Fanafayek? Well, no, but for a year it was tremendous. Hmm. Yeah. He introduced me to Soviet and Eastern European science fiction because he was a Marxist. That's what I took from him among other things.

Any advice on finding a good mentor? Daniel Kahneman, As somebody just popped this to mind, as somebody who was able to find exceptionally good collaborators throughout his life, there's not many bright minds that find collaborators. They often, which I ultimately see what a mentor is. Yeah.

Method to it. Be interesting, be direct, and try. It's not like a perfect formula, but it's amazing how many people don't even do those things.

Be interesting, be direct, and try.

What you want from a better-known person, I would just say be very direct with them. Yeah.

Beautiful. What's the second piece of advice?

Build small groups of peers. They don't have to be your age, but very often they'll be your age, especially if you're younger, with broadly similar interests, but there can be different points of view. People you hang out with, which can include in a WhatsApp group online, and every day or almost every day they're talking about the thing you care about, trying to solve problems in that thing. And that's your small group and you really like them and they like you and you care what you think about each other and you have this common interest.

That's for human connection or that's for development of ideas? It's both.

They're not that different. Like Beatles, classic small group, right?

But there's so much drama.

The Florentine artists, of course there's drama and small groups tend to split up, which is fine. Just like entering relationships often end. But it's remarkable how little has been done that was not done in small groups in some way.

Speaking of loss of beautiful relationships, what do you make of this whole love thing? Why do humans fall in love? What's the role of love, friendship, family in life? In a successful life or just life in general? Why the hell are we so into this thing? There are multiple layers of understanding that question.

So the lowest layer is the Darwinian answer. If we weren't this way, we wouldn't have been successful in reproducing and building alliances. It's important to realize that's far from complete. The highest understanding would be poetic, like read John Keats or many other love poets.

So who do I go to to find out, to learn about love? In terms of poets? I would say start with John Keats.

But given that you're fluent in Russian— Yeah, let's go Russian literature for a second.

You keep mentioning Russia. What's your connection? What's your love in Russia?

Well, first, it's all interesting, but more concretely, my wife was born in Moscow.

Sokolniki was her neighborhood. Oh, wow. Yeah. Wow.

And she grew up there. I married her here. My daughter, I adopted her. I'm not her biological father, but I genuinely raised her. She was born in Russia, though she came here when she was 1. Wow. So you're basically Russian? No, no, no. I'm a New Jersey boy. That's the same thing. I'm very sorry to report my father-in-law passed away a week ago. He lived with us for 6 years. He lived in Russia till he was, oh, 70. Saw the Stalinist era. His father was brought to a camp, lived through World War II, much, much more, had an incredible life, never really learned how to speak English. So I absorbed something Russian from him as well. He was part Armenian. So that's my connection to Russia.

A bit of the Russian soul too.

I don't think I have it. I think I appreciate it. But there's division of labor, right? Others in the family take care of that. I'm more superficial.

You mentioned Keats and that higher version, that non-Darwinian love. What's that about?

That it's the highest form of human connection and it's intoxicating and it's part of building a life. And most of us are very, very strongly drawn to it. And it's part of the highest realization of you being what you can be.

Yeah. You mentioned you lost—

But ask a Russian. I mean, this is superficial New Jersey boy who grew up listening to Bruce Springsteen and that was his romanticism.

Bruce Springsteen. What's your favorite Bruce Springsteen song?

I think the album Born to Run has actually held up the best, though it's very fashionable to think the earlier or later works are actually better and that's the overproduced super pop album. But the quality of the songs, to me, Born to Run is just far and away the best, then Darkness on the Edge of Town. And those are still my favorites. Born to Run is an incredible song and perfectly produced in a Phil Spector kind of way. Every detail is right, every lyric. What else is on the album? Thunder Road, Jungleland, 10th Avenue Freeze Out, She's the One, unbelievable.

Yeah, Bruce Springsteen. Leading Across the River. I really like when he goes into love personally, like I'm on Fire.

That's a very good song, Dancing in the Dark. A lot of the later work, I find the percussion becomes too simple and kind of too white somehow and a little clunky. And it's still good work, he's super talented, but it doesn't speak to me. But when it all bursts open into the open road like it does on Born to Run, that's magic. Yeah. Porros alida.

Have you ever seen him live? Yes, twice. I wonder what he's like live when he was young, right? Those years.

I saw him live when he was young. I was young. New Jersey. I was a little disappointed actually. Yeah? I think what I like best from him is quite studio. He certainly played well. I don't fault his performance, but it's like when I saw Plant and Page of Led Zeppelin, tremendous creators, and they showed up. They were not drunk. They were paying attention. But I was underwhelmed because Led Zeppelin, like the Beatles' White Album, is much more of a studio band than you think at first.

And in the case of Bruce Springsteen, I don't know about you, but for me, he's somebody that I connect with the most when I'm alone and there's a melancholy feeling. And actually, drive— my folks live in Philly. I went to school in Philly. And so, you know, I've, uh, I think I—

you're almost worthy of New Jersey then.

Yeah, well, you're, you're almost worthy of, uh, of Russia. So we're— we can connect, uh, in that aspect. I mean, I love Jersey. It's something, um, I feel like, um, I feel like— I don't know, it's, it's always— there's this beautiful— like, there's a diner, Olga's Diner, that closed down. I used to, uh go there. There's a melancholy feeling to me. Of course—

A thickness to culture in that part of the world, which is oddly similar to some elements of the thickness of Russian culture. And when you see Russian characters on The Sopranos, it totally makes sense, even though they're these complete outliers. Exactly.

It totally makes sense. You mentioned you lost your father-in-law last week. Do you think about mortality? Do you think about your own mortality? Are you afraid of death?

I don't think about my own mortality that much, which is probably a good thing. I think death will be bad. I wouldn't say I'm afraid of it. For me, the worst thing about death is not knowing how the human story turns out.

The full human story. The full human story.

So if I could, right before I die, read like a Wikipedia page called the rest of human history and have enough time, just like a few days to absorb it, think about it and know like, oh, well, 643 years from now, that's when all the atomic weapons went off and here's what happened between now and then. I would feel much better dying. But that's not how it's going to be, right? That's unlikely.

It's almost like the Hitchhiker's Guide. They kind of have What is it? They have a 1 or 2 sentence description of the human, of what goes on on Earth. It's kind of interesting to think if there's a lot of intelligent civilizations out there that in the big encyclopedia that describes the universe, humans will only have 1 sentence.

Probably true. Yeah. But it's the only one I can read and understand, right? And it may be hard to understand the human one past a number of centuries. Yeah, with the theology. Yes. How many years from now will reading Wikipedia be like trying to read Chaucer? Which I almost can do, but I actually can't. I need a translation. Probably you can't do it at all.

Yeah. Maybe reading will be outdated. It might be a very silly notion. Maybe we're fundamentally— We think language is fundamental to cognition, but it could be something visual or something totally different that we'll plug in.

Neuralink. Yeah.

But in that story, that Wikipedia article, do you think there'll be a section on the meaning of it? I hope not.

Because that section we could write now and it's just not going to be very good, right?

What would you put in the section on the meaning of human existence?

I don't know, links to a lot of other sections. I don't think there are general statements about the meaning of life that have that much meaning. I think if you study different cultures, the arts, travel, mathematics, whatever your thing is, you'll get a lot about the meaning of life. So it's there in Wikipedia in some bigger sense. But I don't want to read the page on the meaning. I bet they have such a page, in fact. The fact that I've never visited it, none of my friends, "Oh, here, Tyler, here's the page on the meaning of life. I know you've been wondering about this. You got to read this one." No one's ever done that to you, have they?

It probably has. Well, actually gone to that page. It does in fact have a lot of links to other pages. Okay. Uh, so that, that's it. Uh, the meaning of life is just about a bunch of self-referential or, uh, citation needed type of statements. I think there's no better way to end it. Tyler, this is a huge honor. I'm a huge fan. Um, thank you so much for wasting all of this time with me. It was one of the greatest conversations I've ever had. Thank you so much.

My pleasure, and delighted to finally have met you and, uh, that we can do this.

Thanks for listening to this conversation with Tyler Cowen, and thank you to Linode, ExpressVPN, SimpliSafe, and Public Goods. Check them out in the description to support this podcast. And now let me leave you with some words from Adam Smith. Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism, but peace, easy taxes, and a tolerable administration of justice. Thank you for listening and hope to see you next time.