Tyler Cowen on "The Portal", Ep. #016 (w/ Eric Weinstein) - The Revolution Will Not Be Marginalized.

Hello, you found The Portal. I'm your host, Eric Weinstein, and today I get to sit down with one of my favorite conversationalists, Tyler Cowen, who's here from George Mason University where he's a professor of economics. Tyler, welcome to The Portal.

Thank you, Eric.

Now, when we were talking about what topics we could begin with, I didn't want to begin with economics, and you suggested The apocalypse is a great place to start. Now, the great benefit of this is that if we get past it, the rest of the conversation will be post-apocalyptic.

The apocalypse itself is economics, of course, but I was just thinking that virtually any good theory of politics needs some notion of the apocalypse. Let's say you thought the time horizon for the universe or human civilization were potentially infinite. You would then be so concerned with minimizing existential risk that nothing would get done. Whereas if you think, well, you know, mankind has another 800 years left on Earth on average, and by that time probably we'll have blown ourselves up or an asteroid will come, then you think, what glorious things can we do with those 800 years? And it's quite a difference in perspective. So an infinite time horizon might actually choke off rational thought about political decision-making.

So is there any possibility for keeping the apocalypse exactly 800 years away? Like a donkey with a carrot, uh, dangled in front of it at a fixed distance?

That would be the Straussian view, right? That you always think it's 800 years away. But think of it as like a problem from, from finance. So you write a naked put on a security. Well, it's going to bankrupt you at some point, but any given month, any given day, the chance of that happening is probably quite small. So the apocalypse may be like the proverbial naked put. It's out there, The chance is very small. The optimists always sound like they're right. In a sense, they are right, as Steven Pinker would claim. But at the end of the day, if the clock ticks for long enough, it's boom and bye. But in the meantime, let's do something grand and glorious.

Now, Tyler, you have a sort of a portfolio of different ways of communicating with the world. Have you ever dragged Steven Pinker onto a podcast, which you do under Conversations with Tyler, or have you discussed his bizarre notion of optimism on your famous economics blog, Marginal Revolutions, which you do with your colleague Alex?

My podcast Conversations with Tyler has an episode with Steven Pinker, and I sat him down in a chair the way you did with me, and I said, Steven, the cost of destroying the world by pressing a button is falling all of the time, every year. At some point it will only cost, say, $20,000 to take out a major city. How long do you think the world is actually gonna last given that demand curve sloped downwards? When prices fall, people do more of things. Destructive weaponry is becoming cheaper. How can you be optimistic? I asked him. No good answer. I would say evasion. He said, well, my theory's not predictive, it's just a way of thinking about da da da. So—

So it instantly falls apart.

It falls apart. I don't know if it falls apart instantly, because weaponry has spread more slowly than we might have thought. So you read nuclear theorists in the '50s and '60s, they think a Third World War might be coming quite soon. They were wrong. You read worries about proliferation from the '80s and '90s, they sound horrible. I wouldn't say it's been great. North Korea, no one's happy about that. But at the same time, the weapons have not been used. So there's something fundamental about the models we don't understand. You can ask the question, Why didn't Al Qaeda hire a bunch of stooges to go into a Tyson's Corner shopping mall with submachine guns and just cause some terror? That didn't happen. So, the logic of choice of wielding destructive power is one of the issues in social science we understand least well, I would say. And there is perhaps some hope of salvation. So, I'm not sure Pinker falls apart instantly, but I didn't feel Pinker defended Pinker very well. And on my blog, Marginal Revolution, I did review his book.. And my worry is that there's an observational equivalence with how you look at the data. So you could say, well, deaths in wars have been going down, will continue to fall. That's possibly true. But another model is the more destructive the weapons are, the less frequent the wars. Things will seem great for quite a while, but the next war when it comes will be quite a doozy.

So in some sense, uh, this is the Great Moderation, which last time was about market volatility, and here it's about the volatility of human violence.

And great moderations maybe contain the seeds of their own destruction. Well, again, I would want to be cautious there because we don't understand destructive decisions very well. Like, why did Hitler invade Russia? We know a lot about it in the documented sense, but I don't feel it's understood very well.

Agreed. And I agree that we don't know why so few reservoirs have been poisoned. Yes, relatively low-tech options, and it— the Las Vegas shooting, for example, showed what a small level of innovation in mass killing can do to really amp the body count if that's what somebody is trying to optimize. So I think that there is a huge mystery, but I don't think that Pinker, from what I understand of his basis for optimism, is really getting at that. People who listen to this podcast and have heard me elsewhere have heard me complain that it's as if he's neglecting a potential energy term, but for violence. And so the realized violence, as you were pointing out, has gone down, but the potential for violence is enormous, and as the cost falls, the access to violence of this particular nature seems to put it into far too many within reach of far too many hands.

One of our saving graces could be that the contagion effects for methods of violence seem pretty strong. So we're in a time where in the US shooting up schools is the thing to do. It happens more often by some metrics than it used to. In the 1970s, being a serial killer was somehow like the thing to do. So if you're inspired by what people have done just before you and you're not very innovative, It could be that violence and lack of innovation are somehow correlated, and contagion effects mean you'll kill, you know, a terrible number of innocent people, but it still will quite limit how much damage you do to the world as a whole.

Well, I mean, in terms of R&D, thinking about terror innovation is quite interesting. It seems to me that it's hard to remember that there is no known linkage between suicide bombing Islam before the Beirut Barracks bombing, if I'm not mistaken.

It came from Sri Lanka in the approximate sense, the idea from the Tamil Tigers. They're not the only ones who've done it.

I think that they— didn't they really perfect it after the Beirut Barracks bombing and then it sort of came back to the Middle East? Do I have that wrong?

I'm not sure on the timing.

But there are very few groups that have been using suicide bombing in the modern era.

Yes.

Maybe the Kurds, the Tamils in Sri Lanka, and various Muslim violent movements, jihadi movements.

The striking thing about 9/11 is how innovative it was. Right. So that's what really ought to scare us, but it does seem also such innovations are pretty scarce.

Well, that in some sense Afghanistan was like an R&D lab for al-Qaeda, and one of the things I believe I remember was that there was a taped conversation within al-Qaeda that had leaked, in which various groups were deciding— were trying to decide whether this was the greatest thing they'd ever done or whether it was a terrible move because it was going to cause them the loss of their R&D lab.

You know, Karlheinz Stockhausen, the German composer, he said, well, it was such a wonderful work of art, and obviously he got pilloried for that comment. I'm not sure what he meant by it, It's a terrible thing to say. I wouldn't say it, but it's still getting at some aspect of 9/11 that was quite different, that it was an attempt to innovate.

Well, I mean, could we, could we go there? I've talked in this program about message violence, which is violence that is made particularly theatrical for the purpose of underscoring a message. For example, affecting a position of kindness, which clearly ends up torturing somebody, like drowning them in a tub of their favorite wine or something like this. That there's something very perverse about certain kinds of violence whose— where the intention is to amplify the underlying harm in a way that animates the imagination. In some sense, the Jordanian pilot video, which was cinematically gorgeous and as sick as could possibly be imagined that was released by ISIS would be in this realm. Is there a sense in which we can look at 9/11 as deliberately theatrical and artistic?

Most likely it was, as I understand it, uh, and if you look at the targets chosen, the World Trade Center was not actually that economically important, uh, it certainly was not politically important, but they were the tallest structures. There was a theory they would collapse in a certain way, and it seems they did, they did. So it does seem artistically motivated in some sense. And there is this odd obsession of many dictators with the arts, which I think is also poorly understood, but it also gets at the notion that the totalitarian and violent impulses in us can be severed from innovation, but don't necessarily have to be.

Yes, you know, the passion inside of the passion play. Anything that can truly excite the spirit can easily be weaponized. So there's a way in which I guess I would expect the dictators would be very animated by, by the theater in particular.

But I think mass opinion in general tends to neuter some of that desire for artistic creativity. So if you look at passion plays around the world, If you go see one, say, during Easter in Mexico, they become something quite celebratory. It's for family and for friends, and people get together, people drink, people cook special dishes. So it's drained of so much of the actual passion story, and it becomes, among other things, less passionate. So it's hard to sustain the emotional violence behind the innovation of violence And that may be another one of our saving graces. And you see this with suicide bombers. When they're removed from their environments where they've been indoctrinated, it can be quite hard to get them to go through with what they've been told to do. And sometimes you get them to go through with it by not even telling them they're going to die.

Hmm.

I've read some accounts— I'm not sure how validated this is— that a lot of the 9/11 terrorists, they didn't know they were going to die.

—And maybe that ambiguity, I mean, presumably everybody signs up with an idea that martyrdom is part of the package potentially, but they don't know that the play is going to be called for any particular Tuesday.

—And the same was true for RAF fighters in World War II or any other very high-risk activity where you're pretty sure you're one of the good guys, but you don't want to die. So the fact that it's a lottery ticket of sorts, in some ways it piques your interest, it motivates you, it Gets your adrenaline up. It probably improves your performance. But at the same time, it's absolutely terrifying. And, you know, how much does that operate symmetrically on the good and bad moral sides of this equation? It's probably more similar than we would feel comfortable admitting.

Now, Tyler, I ran into an idea that I hadn't heard codified with— and labeled with a phrase before called strategic silence.— and I read about this in writings or speeches of Dana Boyd, who works with Data and Society Institute. The idea behind it is that if you have predictable, reliable news coverage, it allows somebody who, let's say, wishes to undertake a terrorist action to know that they can count on you to amplify their message because they have the ability to create news. Not just newstakers but newsmakers. In that realm, the news media has been experimenting with the idea that they will not do the bidding of the attacker by broadcasting things about motive, about name, uh, or about certain circumstances of the crime, so, uh, at least ostensibly as not to amplify the leverage of the attacker. Is that kind of a death knell for confidence in reporting, that if we report the facts straight, we give people too much leverage over our news, and if we don't report the facts, then we quickly erode confidence in our system?

I favor the experiment of not reporting the names of, say, mass shooters. I'm not sure we're really withholding facts. So the name of the person didn't— mean anything to the audience in advance. Whether the person's name is John Smith or John Brown, it's a fact in some way, but in another way it's not a fact at all. Whereas if it's a person who is already known, say back then Osama bin Laden, then you are withholding a fact if you don't say Osama bin Laden had a role in 9/11. My worry with the policy of strategic silence is that destroyers will innovate in ways to recapture the attention. So if they don't report your name, maybe you kill more people, or maybe you innovate with a new method of killing people. So you might be inducing innovation over the medium term. And I don't think we know yet. As an experiment, it does seem to me worth trying, but I wouldn't be all too optimistic about it because, as I say on my blog, like, solve for the equilibrium. And what's the equilibrium here? We don't quite know.

Although with somebody like the Unabomber, uh, who left us a manifesto, or let's say the Christchurch, uh, shooter in the mosque, we have a fairly detailed account of what was going through the person's mind while they were committing their crimes.

I don't know if that is what was going through their mind. It was what was going through their mind at some point in time, but was it their actual set of motivations I don't feel qualified to judge, but I wouldn't just take that for granted or take it quite literally.

But would you feel comfortable in suppressing the dissemination of such a document?

I don't think it's possible to suppress that the way the internet and other institutions have evolved. I wouldn't do it either. But in any case, it will get out there. So if we decide, oh, it's not going to be on Facebook, as you well know, there are other parts of the internet where it just can't be taken down.

This is an interesting place where I think I disagree with you. I don't disagree with you that we can't stop the document from being on the internet and a very determined person in their ability to find it. I do believe that there is a frictional coefficient that the search engines and the major platforms can control if they so choose to slow down the flow of information.— and whether it gets reified and discussed inside of what I've termed the gated institutional narrative is a big deal because those news organizations react chiefly to each other and special trusted institutions. And so many of us still have the idea when we're listening to that conversation that it's an open conversation when, if you're in a position like you or I may be, we're astounded by the number of things that simply can't be discussed in in that echo chamber and in those corridors.

But I think the short term and the medium term are quite different here. So if Facebook and YouTube and Google all of a sudden decide they won't cover some awful video, that will have real impact. But I think, say, 4 or 5 years later, there'll be some new set of tools. Maybe they're only used to find the really bad stuff. But people will know there are sites or methods where you can go see, hear, experience all the really bad things, and then it still gets out. So I'm not at all opposed to people, say, who run Facebook deciding not to post something. I think it's fine. It's their website. More power to them. But at the same time, we should not infer too much from the short-run reaction. Because again, solve for the equilibrium. Institutions and searchers will adjust.

So you and I have a slightly different orientation about that. It might be fun to play with it for a second. I think I've incr— I used to hold a position that these companies had the right to do what they wanted. Yes. And I've started to change my opinion on that based on the idea that if I define the public space relative to private space, I can find only private space on the internet. I need to hire a company to allow me to get an on-ramp in the form of an ISP, and that in general, unlike a city with parks and institutions of government, I really can't find any public space on the internet. And so if the whole thing is private, I feel like it's absolutely essential that we place much more restrictive rules about what can and cannot be prohibited on the internet because there is no public space from the get-go. Am I way off?

The analogies of public and private space to the internet, I think, are quite complex. I would just start with a very simple question: who is it you would trust in politics to make those decisions better than what our current internet is giving us? And for me, the answer is no one—no party, no institution. So I would like to keep things more or less the way they are now. And have no liability for the internet companies. Let them decide. And the notion that Congress— did you see the recent testimony of Mark Zuckerberg before Congress? Caught a little bit of it, not much. It's remarkable how little people in Washington understand about tech at any level.

So what explains this? You and I spend a fair amount of time in Silicon Valley, and it's not like the government couldn't get help from the world's smartest tech people.

And they can and they do, but the actual decisions are made by Congress and by a president.

But what explains the lousy level of questioning of tech people and, you know, both scientific—

The quality of voters, right? So people get the leaders they deserve. Voters are poorly informed. Representatives want to parade a certain display of toughness or strength in front of those voters. So they're deliberately rude to Mark Zuckerberg. They ask stupid questions, which voters will let them get away with. In my Twitter feed, some of the very stupidest questions were being applauded, say, by PhD economists, like, oh, you know, get tough, you know, show Mark Zuckerberg. So even at that level, there's an expressive response that encourages this behavior, and that's why we get it. But when you then think, gee, this system is going to regulate speech on the internet, I say no way, you know. Zenger was right.

I think that's different. You ever watch giraffes fighting or bunnies?

I've seen bunnies fighting on the internet. I'm not sure I've seen—

Bunnies fighting is amazing, right? It's like, I think I got this from Joe Rogan, bunny UFC is just, they fight in such an intense fashion. I think people are cheering some of these hearings in the same way that they would cheer for like one rabbit over another.

Of course, it's like a cockfight.

It's just interesting watching people beat up on each other, particularly if you like one more than the other. I don't think that people are anywhere near as stupid as— I don't think we're getting the government we deserve. And let me give you an analogy which is plaguing me for many things. We used to think that TV was the idiot box, and we clearly just didn't understand long-form television of the form that has been discovered with Game of Thrones or The Sopranos. I think that there's a long-form politics that we want, and we're smart enough to know the difference between what we have and that, and we can't get it because it's really not in the interests of people who have more leverage than the rest of us.

I don't think it's the elites who are keeping this long-form politics from us. I think it's the voters. There are plenty of candidates on the Democratic side. Some of them are quite smart. You may or may not agree with them.

Who do you find quite smart on the Democratic side? We won't talk about dumb.

Mayor Pete and Andrew Yang, for instance, seem quite smart. I'm not familiar with all the candidates, so if I haven't mentioned your favorite, I intend no slight. That's fine. But they're obviously both quite smart. Their chance of winning is pretty small. They have gotten media exposure. I know Andrew Yang is sometimes kept out of the CNN graphics and so on. But Bernie's saying—

In and of itself, hysterically funny, as if it's, you know, we're back in 1994 and no one will be able to discuss this because we don't have a lively internet.

But the people who manipulate emotions are more likely to be the Democratic candidates than those two individuals. Huh. And that I don't blame on the elites. I'm not saying the elites are blameless, but it's mostly the voters. Do you know Frank Luntzwell? I've met him and I've heard him talk. I wouldn't say I know him well. I think he's very smart.

I think he's very smart too. I went to college with him, and for those who don't know, he was a Republican pollster who pioneered the use of particular phraseology for a common concept, and he more or less discovered that we don't actually have opinions about underlying law or facts or theory, but we have hugely different opinions divergent opinions based on how the same underlying stuff is presented to us, that death taxes and estate taxes may be the same thing, but we oppose the death tax and we're for the estate tax. Do you believe that this level of emotional manipulation would go away if we started getting tools with which to discuss it?

Clearly, that kind of emotional manipulation is higher in some countries than in others, so it's impossible to believe it's some fixed eternal constant. But the United States have— has a long history of emotional and sometimes populist politics. In the '80s and '90s, I view as an outlier kind of era where things were relatively calm and reasonable, even though at the time it didn't always feel that way.

It didn't feel that way to me at all.

But compared to the mid to late 19th century, my goodness, right? Yeah. Then you had people in Congress attacking each other, a lot of partisan media, a lot of outright lying. So I don't see America becoming like Switzerland anytime soon, but clearly it's not impossible.

Well, I think one of the things that really strikes me about that is that the Lee Atwaters and the Frank Luntzes who put a sort of a deliberate spin on this kind of mean-spirited emotional manipulation, were surprised that it didn't behave, let's say, like rugby, where you have a bunch of gentlemen take the field, play absolutely brutally with each other, and then going back to being gentlemen when the game is over. Frank Luntz has told me that he just hates the current state of our politics, that it's far too mean-spirited and destructive, and he can't locate anything that he's done to kick this into high gear. It's a very strange thing. There's a disconnection between working on these campaigns in a somewhat scientific fashion to use people's passions to sort of take over their decision-making, and then there's this inability to understand, well, how did we all become so uncivil?

I wonder if one of the problems in America is our temporal distance from war. So there was World War II, terrible event, but it did make us more instrumentally rational. And if you look at something like the Manhattan Project, phenomenal achievement, as you know, done really quite quickly. Would not have been possible outside of wartime, even in an earlier America. Then there's the Cold War. Now the Cold War, let's say it ended 1989, 1992. That's a number of decades. Young people today don't know about it. So without a common enemy, maybe the enemy becomes each other in some way, and we're more mean-spirited because there's a lack of a common enemy. That's to me the most likely single hypothesis for what's happened.

And it's evolutionarily rational that when there isn't a common enemy, you would attempt potentially to make your slice larger at the expense of someone else's slice who might be on your team, whereas During wartime, that would be seen as a sort of an unforgivable offense because you have something much bigger to organize around.

And I think it's interesting, the one issue where there is at least potentially a common enemy, maybe not quite vivid yet, but that would be China. Sure. Opinion on China, it's not polarized Republican versus Democrat. I've spoken to people in Congress on both sides about China. There's a mix of opinions, diverse opinions within each party. It's not that all the Republicans line up on one side and all the progresses on another. So there you see polarization actually not being so strong.

Well, I think China's done a wonderful job of manipulating us by making sure that most of their activity is below a threshold, um, so that it appears that they don't really have any global designs. And of course, there's a narrative that says China really cares only about China and it's not focused on the outside world.

My view is China has very strong Asian designs I'm not sure they have truly global designs, but I view them as a threat to liberty in Asia.

Sure. Now, I guess I have a question. Do you think we're living through a very unusual time in the last decade and really probably the last 5 to 7 years?

I'm not sure I would slice up the years that way. So I now see the 1980s and '90s as the unusual time of calm and feeling of triumph and that neoliberalism can do no wrong. And that's the outlier. The turning point for me is 9/11 and the financial crisis. And now you have Trumpism, a series of very strange events that are causing people to revise many things they had believed and were responding by being nastier to each other. So I see the cutoff point as 2001.

Do you see anything, for example, that's— to me, I view the apparent death of Jeffrey Epstein as one of the most bizarre news stories I've ever seen. It seemingly happened with every bizarre coincidence that would be necessary for somebody in protective custody to meet his end under a situation in which Everybody wants to know exactly who he was, how he was connected to the intelligence communities, where are his probable co-conspirators. They seem to still be alive. Nobody seems to be tracking this down. The news media seems preternaturally uninterested in it. And if you look at, like, top podcasts, there are lots of podcasts that are dedicated to the Jeffrey Epstein question. Anybody could make money even debunking conspiracy theories about murders of Jeffrey Epstein by the intelligence community. What the hell's going on that we're not even talking about?

I haven't followed the details of the Epstein death very closely, but in general it's very hard to get me to believe in conspiracy theories. Just looking at base rates, how many people kill themselves in prison versus how many people are killed by outside conspiracies in prison, other than the case of someone who snitches on, you know, the drug gang and they're shivved in the shower, that kind of thing, which is pretty common. So I'm not close to thinking that was a conspiracy. I would say I have an open mind since I haven't studied it. But I don't look at it and recoil and think, my goodness, this is so strange. No, I don't necessarily—

you don't have to believe it's a conspiracy. You can believe that there are two camera failures and that there's some guards that were asleep on the job and that a freakishly long period with nobody killing themselves in that facility happened to be ended because there's an arrival of an unpredictable event. What I'm trying to—

Yes, that is what I believe. Okay, that's great. You said it well.

Right. But my point to you would be, if that's what I believed, and that is a part of what I believe, but I have a probability distribution that puts far more weight on other things than I think your probability distribution does, I would be interested to discuss that and to show people just how the conspiracy theorizing mind is led astray. It would be a wonderful opportunity for a rationalist to take this on and to sell a bunch of papers by showing what nonsense this is. And even Michael Shermer at some point— But is the market for that so large?

People wanted to talk— It's hard to prove he wasn't murdered, right?

Well, no, but my point is people wanted to talk about this much more than papers wanted— why not do a special on what is known about Jeffrey Epstein's connections to the intelligence community? Just that. What is known? I'm not saying that he has huge connections to the intelligence, but what do we know?

I read about it in my blog comments all the time. I'm not sure how much of it to trust. But if I look back on history, to me it's remarkable how few successful conspiracies there are. And there can be a lot of circumstantial evidence that something was a conspiracy. Talk of Pearl Harbor, JFK assassination, many other cases, but they don't quite materialize.

How does McCollum memo on Pearl Harbor affect you?

Most historians think it was a series of massive screw-ups, and there were clearly pieces of information put on tables and left around, but there was no committee or individual such as FDR saying, I'm going to let this out.

No, no, I'm not saying that I don't think anybody wanted Japan to attack us with that ferocity in Pearl Harbor, but the question of did we want casus belli for World War II and was— Probably. And were we interested in potentially getting torpedoed in British shipping lanes or choking Japan, which is resource poor for natural resources, so as to induce them into some act of belligerence, hopefully much smaller than Pearl Harbor?

Sure, but that's not a conspiracy, right? That's a plan that went wrong.

Well, it would be a bit of a conspiracy to attempt to get someone to attack you so that you could enter the war claiming to have been attacked. I don't know.

To me, that seems standard military strategy.

Well, if that's standard military strategy, maybe this is the reason why you don't see as many conspiracies, because that's just normal operating procedure. I guess I'm always shocked by how many relatively large and complicated conspiracies have been proven to have existed, have not fallen apart. You know, all these standard things that you can't get a large number of people to do something without somebody squealing, that people have an urge to purge, so nobody keeps a secret. This has been, to my mind, clearly disproven just by proven conspiracies.

So what is to you the most dramatic large-scale conspiracy?

Well, COINTELPRO has to be the best of them. And what happened there? That the FBI had a dirty tricks department that actually fed misinformation to create fake news into the mainstream media with the intention of killing law-abiding Americans because the FBI didn't like their politics. That's pretty bad. Look, it's a large number of people too.

It's not what I see as a conspiracy. So we know, for instance, as a fact that the CIA supported abstract expressionism within the field of painting. Yes, because they thought it would neutralize propagandistic art and make America less communistic. I don't think that's seriously disputed.

Well, I got into a much more interesting discussion with an economist not too long ago who was looking at my work in economics and said, Eric, the person said to me, Eric, I can't stand to see you fighting the Chicago School of Economics, are you aware that this was really just a bulwark against totalitarian communism rather than a theory that was intended to be operational and descriptive with predictive power, and that now that the Cold War is over, the problem is we didn't tell the children that it was really a political project rather than an analytic one?

But, I mean, I know or knew most of those people. They were, Economists, what they said they believed was true. They had careerist concerns. They wanted to make the world a better place. That's actually the best theory of the Chicago School of Economics. Well, I don't know.

I mean, you know, there's this very funny paradigm which I call earns as an X, spends as a Y. And, you know, for example, in physics, I would say that Edward Witten has earned as a geometer, but he spent as a string theorist. Okay. In economics, I would say Milton Friedman earned as an economist. He was a very fine economist. Sure. And he spent as a political theorist. And that in part, this game of earning in one place and spending somewhere else is depending upon how you view the history of a subject. It can be far more important to the participants how they spend rather than how they earn their credibility. Sure.

Look, Friedman made some mistakes. So he thought that educational vouchers would work easily and simply and be quite popular. That hasn't turned out to be the case. He was more optimistic about shock therapy than he should have been, though I would say on the whole, shock therapy has done well on average. Look at Poland, right? Poland is a successful, fairly free economy. But what explains that, I think, is just simply that Milton didn't see the future course of world history, and he was imperfect and maybe too optimistic about some of his own ideas. And you'll hear all kinds of accounts about the Chicago boys and conspiracy, or the Habsburg monarchy. You hear this from Lyndon LaRouche, okay, or the CIA funded them in Chile, or whatever. I don't feel those are the correct deep historical understandings. The more or less superficial account. They had ideas, they believed in the ideas, some of the ideas were wrong, a lot of them turned out to be really quite correct, their overall record is pretty good. That superficial account I think is fundamentally true.

So now that we've somehow found a way into economics after burning through some other stuff—

We were never out of economics, but please continue.

Alright, well that's the problem is that you can never— it's like you can't leave evolutionary theory. Can we talk— and again, let's feel free to turn any question around on me, although I'm not an economist. What I find astounding about the field of economics is that on the one hand, I can't get enough of it. I need to use its concepts, its terminology, some of its models. And on the other hand, I think it's an absolute abomination that has been not— it's not that the field is broken so much as that the field is fixed in the same sense that the World Series can be fixed. And I find that whenever I go into economics, um, there's this sort of Motte and Bailey type approach where there's this very defensible core of economic thinking, and then there's this absolutely tortured, uh, just-so story that we tell that almost always seems to flatter institutions and power and the structures that would be upended if we actually just let the field run and reach the conclusions that would emerge from the models.

It may depend on what exactly you're being upset by, but keep in mind, at least in the West, what you're calling institutions and power are the most successful institutions the world has seen ever. So there's something to be said on their behalf, right? Sure. And if economics, if our just-so stories are fairly positive toward those institutions, we shouldn't be repulsed by that. There may be margins where they're getting things wrong. So I would say no economist that I know of is really willing to write a critique of the National Science Foundation. Why is that? Hard to prove. But I think the logical reasons are the obvious ones. They don't want to alienate a potential funder. Well, the only major critique written was written by myself with Alex Tabarrok. Other than that, it's a virtually empty literature.

I've accused the National Science Foundation of specifically destroying the pipeline for STEM labor for the purpose of making STEM labor cheap for employers to the detriment of American aspirants.

Sure, I've read that, but within economics it's very hard to find criticisms of the NSF.

Virtually impossible. Okay, so here's an interesting question to me. Economists have been very comfortable turning the lens of economic theorizing on absolutely any group save one. They'll do it to priests, they'll do it to scientists, to politicians. They cannot imagine I mean, that this is going to escape notice forever. My wife has talked about economics squared. What is the political economy of economists themselves, and where are these papers? Now, you don't find it interesting, particularly, that this field doesn't exist.

I think they do it now on Twitter, so they accuse each other of having bad motives or being captive of their funders. So with social media, you're seeing a blossoming of this kind of attack. There are still criticisms I don't like being made. So there's the partisan criticism of people who disagree with you. But to say, criticize Chinese graduate students because they can't speak their mind about issues related to China because they fear for their own careers or for their family members back in China, that's somehow not acceptable to raise even as an issue. So I do think there are big blind spots. But just like attacking the other person, is now pretty common, typically done in a not very clever, sophisticated way.

Okay, but let's talk about making it cleverer and more sophisticated. If you were going to turn the lens of economics, and particularly the analysis of political economy, on the profession of economics, what would be the— assuming that there's sort of a Pareto curve here— sure, for the first 10% of my effort, I should get something like 70% of the of the bang. What would be the first thing to do in economic theory, using economic theory against economists themselves?

Well, you use the subjunctive, but I have in fact written this. The biggest problem is people overspecialize and write narrow, defensible papers to be published that are invulnerable to peer criticism but don't amount to very much. And there's a massive waste of human labor, and people do not direct their energy— energies toward actually solving problems and answering questions. That to me is criticism number one. I think it's absolutely correct. It concerns me greatly. A small number of people have voiced this.

That's sort of a— if I understood it correctly, and perhaps I didn't— that's a little bit of an opportunity cost, that we could have done a lot more and instead we settled for something that wasn't.

Or maybe those people should just not be doing economics. They're talented people. They could just, you know, build bricks, whatever.

True, but if I think about what really moved the needle in medicine, let's say, the whole concept of iatrogenic harm, which is harm done by healers, really focused us on the idea that certain hospitals kill more people than others. What about econogenic harm?

It depends at whom you point the finger.. But if you look at what is sometimes called the Washington Consensus, which is not a view I completely agree with by any means, but it's called the Washington Consensus for a reason. There's a recent paper by Bill Easterly that goes through and argues correctly, I think, that on average the Washington Consensus has done more good than harm. So the idea that economics is some great scandal, that we've gone around wrecking things— Binyamin Appelbaum argues this in his recent book. I like that book. I think it's smart, but I think it is more wrong than right, and it's overlooking the many cases where economic advice has done well. I mentioned Poland before, but Czech Republic, Slovakia. You look at Chile, which has been democratic since 1990. Economic inequality in Chile has been falling for some period of time.

The country started from sky-high rates and it has fallen somewhat.

It's in the middle of the Latin American distribution, but it's fallen, and the country has the highest real wages in Latin America by some amount. It's not a miracle, it's not perfect. Economists gave some bad advice there, but overall they did much more good than harm.

See, this is the thing that I'm very confused by. I understand— let me just say that I see that even though economists may do a lot of harm, pretified as doing pure good, that that's not the criticism that I would really level first at the profession. It's really something closer to academic malpractice, where the economists know the truth, the right way to set up the problem, and choose not only not to do that in public, but to demonize, to exclude, to blackball anyone who would make the correct critique.

In other words, they don't know the right way to set up the problem. We don't, we're too stupid. I totally disagree with this. What's the problem? We should be setting up the right way.

Let me give the, the, the example that I perhaps know. I, I know a small number of—

are we going to get to gauge theory now? You want to Well, first make your point, but at some point we need to get to gauge theory because I need you to present— All right, let me—

I'll change one. I'll do the gauge— I'll do a gauge theory example.

But that's complicated. Do your other simpler point, then we'll do gauge theory.

Well, I could do the Great Moderation. I could do STEM labor, and I could do CPI. These are things I've engaged with. If I did the CPI one, that's very clear. You have a small number of economists who in the mid-'90s became directed by Bob Packwood and Daniel Moynihan to find an overstatement of the CPI because tax brackets were indexed, right? And entitlement benefits, Social Security, Medicare, were indexed. And so what they found is if you could knock down the measurement of the CPI, you could raise taxes and slash benefits. And they backed out that 1.1% overstatement, if corrected, would lead to a trillion-dollar savings over 10 years. And they actually broke into two groups to come up with two separate numbers that would add together to 1.1, which to me is academic malpractice. That is, they started with the target And this is according to one of their own members of this Boskin Commission, Professor Gordon, who talked about the fact that somehow the two groups came up with the two numbers which, when added together, gave Dale Jorgensen, a Harvard professor of economics, his 1.1% overstatement. And that's what they went with. Now, to me, that's like saying we need to find an error in all the temperature gauges so that we can come up with different targets because global warming is a problem. You're not allowed to touch the temperature gauges, for God's sakes.

For sure, as in so many numbers, there's an error of exaggerated exactness. But if you look, say, at Google's price index, it's not so different from how we calculate the CPI. If you look at how central banks or other economic authorities around the world calculate their CPIs, it's not that different than what we have done. And you could say it's all one. Big, overly correlated system or a conspiracy. But I don't see that the current way of calculating the CPI is off by very much. And if it's off, it still may be overstating inflation a wee bit because there are perhaps more free goods today through the internet than we had in time. That's not a—

that's not a legitimate counterargument. What I'm trying to say is, is that assume that in fact there is a best CPI and assume that it was 1.1% overstated. It's still not legitimate to go into a quiet room in a closed commission and say, "Here's the target, boys. We have to find this number. Let's break into groups and put together that number so that our finding will raise taxes and slash benefits." You're not allowed to break the gauge to get the policy.

The gauge is the gauge. Politics is an ugly system, but it does seem they gave us a measure of the CPI somewhat better than what we had had. If you think that inflation has actually been much higher, you must think real rates of return today are astonishingly low. I mean, that will truly make you a mega pessimist, which perhaps you are. But keep in mind, people compare our measurements of rates of inflation to other economic variables and see if the whole picture makes sense. And if you think the true rate is very different from what we have, that implies some very radical conclusions, which I don't want to dismiss out of hand. But I'll just say there are multiple checks on this process. Do they fit in with our other judges?

I think we're in two different layers of the discussion, which is fascinating to me. One layer of the discussion is, did they point out some good things about ways in which the CPI could be done better? They did. And did they do some work? They absolutely did. Did they commit academic malpractice? Absolutely motherfucking yes, they committed academic malpractice. It's not in the same layer of the stack, Tyler, to me.

Is your objection just the process? So I don't doubt— Yeah, bad things went on in those rooms. I don't know. I wasn't there.

Well, they destroyed my wife's career over it, is my opinion. They went into something called the Harvard Jobs Market Meeting, which is a closed-door session during the time that the Boskin Commission was active. And she was talking about Two of the things that you can do to try to adjust the CPI to make it more accurate, one is to replace what's called a mechanical index, that is something that prices, let's say, a basket of goods in two different time periods, famous examples being the Paasche and Laspeyres Index, that you can either replace that with a human standard, which is like cost of living, what is the cost to make you equally happy between two points in time, time, right? Or you can do something called chaining. And chaining, given that your blog is called Marginal Revolution— Marginal Revolution was originally the introduction of the differential calculus into economic theory, and this is, uh, in the limit, uh, an application of differential calculus. And the fact is that these two things have never played well together because you can't chain tastes, uh, in economic theory. You have this doctrine that says that tastes have to be treated as if they were unchanging. And what we did, in collaborative work, was to bring in Gage theory, as you were stating, to make sure for the first time you had dynamic agents who were allowed to change their tastes as humans do, and still stay within the folds of what's known as ordinal utility theory.

I would say this: most people would admit, and indeed emphasize, that over a time period of multiple decades, the comparisons just don't work. And cannot work. There are various impossibility theorems for aggregating price indices over time. So if you ask, well, would you rather have—

You mean like the Ragnar Frisch's? Right.

Would you rather have $50,000 to spend in the Sears Roebuck catalog of today or 1900? Most people would rather spend it in the catalog of today. Now, that suggests there's actually been radical deflation, but I don't think that's exactly the correct conclusion. I think the correct conclusion is over very long periods of time, The comparability goes away. Intransitivity enters into the calculation. And you just need to be very careful and modest as to what you know and don't know.

Actually, there's an entirely different possibility. So what we're discussing, for those of you at home who want to play along— one of the things that's weird about this podcast is that I'm very willing to throw out pointers rather than to dumb things down to the point that nothing ever happens on the podcast. So there was a guy named Irving Fisher, who you can look up, who came up with lots of axioms. To find the perfect price index. And then Ragnar Frisch came up with an impossibility theorem that said if you took on Fisher's axioms, there was provably no measure that could satisfy all of the axioms. It was impossible. Correct. Okay.

Now let me ask you about gauge theory. Before you tell us what it is, give us the bottom line, you know, money shot. Let's say gauge theory is correct. Is the actual rate of inflation higher or lower than what we're measuring?

You know, it's that you're measuring the wrong object. There's something that you would create which you might— so if we previously used these mechanical POSCH and Laspeyres indices, those are replaced by something called a CONUS index. Now CONUS comes in two flavors, but it's a cost of living which prices utility, the pleasure I get from items. Rather than the cost of the item. So if wine and beer are the same price per liter, and I'm indifferent between them, and there's a frost that kills off a bunch of grapes, if you pay me the money to rebuy my original basket, I'm gonna take the money, I'm gonna buy a mess of beer because wine has become too expensive, and I'm gonna spend the extra money on something else. So if you wanna get rid of that effect, you move to this thing called the CONUS Index.

And you adjust for quality better, but that's hard to do. There's a lot of people —Well, there's a lot of perfect— —of labor statistics who try to do this. It's a highly imperfect endeavor. The internet makes it harder.

But that's not where gauge theory really comes in. The really exciting thing about gauge theory in economics, and there's nobody I'd rather discuss it with than Tyler, is that economics should be the most interesting of subjects analytically and intellectually because it is the only place that I'm familiar with man's two greatest ideas coming into direct contact. The theory of selection, both sexual and natural, that governs us as apes.

Which we don't use very much, but continue. I agree it's a great idea.

I think if you allow a reinterpretation in which, let's say, utility maps to fitness and indifference maps to drift, I think you'll find that you're using it everywhere. In fact, what economics does is to give you a second layer using the fact that money uniformizes a lot of things to allow an as-if physics to arise, as in the work of Paul Samuelson. And so the weird thing is that you've got apes engaging in markets, which is really just selection by other means, using an as-if physics as the language of interaction.

See, I would say the best idea of economics is that demand curves slope downwards. Price goes up, people do less of something. Uh, selection is an incredibly important idea. We've done a bad job of incorporating it. Uh, no slight meant to the idea. There's a lot of pieces on selection in economics, but they tend to be big sprawling messes rather than useful. And most of the best economics pieces are based on pretty simple applications of the law of demand or income effects. But to get back to Gage theory, let's say everything you're saying is true. Is the actual real rate of return higher or lower than I used to think it is? That's what I want to know. Should I be more optimistic or more pessimistic?

Well, my guess is you probably end up more pessimistic, but the number of different things that would change— you see, there's a concept, let's say, in computer programming about how something is cast. If I have the number 3, I can either treat 3 as a symbol, in which case it's a string. I can treat it as an integer, in which case I'd call it an, you INT, or I could treat it as a float, 3.000, however much accuracy that the computer is willing to maintain. The question of what is, let's say, a representative consumer is not properly understood, in my opinion. I agree that the, the problem is the representative consumer should be a field, something like a temperature field or a field of wind measurements on the space of all possible consumers. Now you and I will explore hopefully on this podcast something about our difference in taste in music. I don't even know what it is, but I'm— We're gonna find out. We're gonna find out. It is the case that if you were doing inflation properly, you would be using gauge theory and you would be using field theoretic concepts for representative agents. You wouldn't be making these point, like you would never say what's the temperature today in America? Because it's, it's, it's— you've cast temperature, which should be a field displayed on a map, as if it was a single number like a float.

Okay, but again, let's say you're right. What's the actionable trade based on this information? I mean, you probably are already rich, but you should be truly, truly rich, right? Because there'll be an actionable trade if we're miscalculating real rates of return. Even if the variance of the proper estimate is higher than we realize, there'll be some kind of options play on that, and over time, it will systematically make money.

I mean, I think that my reluctance is that it's not really a sharp question. You have all sorts of questions like hedonic adjustments, which is, you know, the car that I call a Mustang today isn't like the car that I call a Mustang from 30 years ago, so I may have to look at how much luxury, trunk space, fuel efficiency, that series of different objects had and as it changed qualitatively. There's a question about why does economics focus so much on Pareto improvement as a gold standard where if you all get rich by an additional billion dollars and I get rich by 35 cents, I'm supposed to say that I'm improved? Any sensible human being looking at things like mate selection or scarce vacation property will know that I'm much worse off.

I don't agree with that, but that's a separate question.

But there's so many of those things, I don't know how to answer your question. In other words, the field—

But you should be short intangible capital if you think true real rates of return are lower than other people realize. Now maybe tangible capital, you can measure exactly how valuable the factory is, but intangible capital, which is hard to value, you should be more pessimistic about. So there's a bunch of firms with a lot of intangible capital. You could short those. If you want to be hedged to the market as a whole, you could be long or otherwise protect yourself against other developments by having some other long positions.

Well, except it's also the case that some of us who have attempted to form these broad theses— I can tell you that I didn't really appreciate what was going to happen. Between the collapse of Bear Stearns and, I don't know, several months after AIG was about to fail.

Sure. Hardly. Basically, no one did. Even people who saw some parts of the crash early on did not have good day-by-day predictions of how it would all unfold.

Well, and the issue of the interceding in the markets, you know, with a very visible hand to engage in pure acts of political economy to both stabilize the economic system, but also to defend very vulnerable institutional players. I no longer know how to make those kinds of trades, because I don't believe that I know what we can do artificially in the face of a crisis.

But if real rates of return are truly lower than is believed, The system cannot deny that either forever or even for that long.

Well, that's why I'm claiming that we're—

Just keep on buying puts on the appropriate stocks. Don't do it with leverage. Just toss money into those trades. Forget about them. Do it for 30 years. You're a young man. Maybe you're doing it, right? I'm not expecting you to tell the audience your financial position. I'm just saying there's a way of testing this view. It's not that hard. Most people in the hedge fund world are not doing this. Right. And they think very closely about— Well, I do believe that we are— —inflation rates and growth.

I believe there's about a 50-year bubble. I mean, so one of the things that unites us is I was thrilled that you were also focused on the early 1970s as a real and mysterious discontinuity with respect to growth and its—

It's one of the biggest puzzles. So 1973 comes. A lot of indicators crash. You can say, fine, the higher price of oil. That's great, but the higher price of oil goes away, and those indicators do not come back very well. What do you think?

Okay, first of all, let's just do this slowly. Sure. Is it mysterious that more people aren't focused on what happens around 1972 to '74?

Of course, 10% of the profession should be working on that. Instead, people are doing these little narrow things to publish, but it's hard to get a clear answer to the question we're discussing, so no one can publish on it. The referees will shoot down whatever you turn in. I would rather see people just write and speculate on the more important questions. But if you ask, what do I think happened? Clearly oil was a major factor.

Well, let me give you just a little bit of your due, which you can't do, but I can. Yeah. I think my favorite version of the graph that shows how violent this change was is something that you focused us on. It's not perfect. But it's measured GDP, whatever the failures we have of that measure, together with measured male median income. Yes. And those two things are going up in lockstep before 1973 or so, and then one of them flatlines and the other keeps going up.

Is that graph something that you developed? I presented it. Obviously the numbers come from other people. I've done a lot to draw attention to it, but I don't pretend it's original with me.

Well, I think it was a great observation that that graph was so clean that it caused people to stop denying that something happened. Sure. And then they almost immediately, in my experience, and correct me if yours is different, they go from not believing that something really big happened to immediately telling you exactly what it was that happened explains it, and the rich people stole it all or something. Yeah, or it's all about Bretton Woods, or it's all just about the oil shock.

But I think the missing variable— once you get through oil prices, overregulation, uh, a number of factors that people have already discussed— but I think the increasing feminization of society is a missing factor in this whole equation, that norms have changed. Women as a whole are more risk-averse We're much less likely to fight a war in a more feminized society. So in my opinion, this is very likely good on net, but change is harder to accomplish in some ways, and people are more comfortable with higher levels of regulation. And that's how things are. There's pluses and minuses, but it will slow down measured economic growth.

Now, can we talk about, uh, to use your term, a feminized economy without— in a public, in a public sphere, without having to celebrate everything that is feminized and demonize everything that was lost?

Well, it depends who the we is. Okay. I do think one should consider costs and benefits, and to a large extent men have accepted a more feminized society because it has very strong positives. So I'm completely sincere when I say on net, I think it's a good thing. So give me— both experimental evidence and portfolio evidence, women are more risk averse. And as a norm, my guess is not proven, but my speculation is that really matters. And it is in addition to other factors about productivity and regulation and spending more and fighting pollution and oil prices and so on, which are at this point more or less well known. And that's why I think the slowdown has mostly persisted. And I do think you will have extraordinary periods like 1995 to 1998 when information technology does so many good things it overwhelms the negatives. I think we'll have more of those.

So let's assume for the moment that both feminization of some kind has occurred, right? And let's also just stipulate for this purpose that it's also net positive, right, up until the present. Let's imagine that going forward, far fewer women choose or are able to form families and become mothers. Sure. How does that change the equation potentially? Could that tip this increased level of feminization negative? Well, could it?

Even now, forgetting about the speculation, it's a significant gain for elite men and quite possibly a negative for non-elite men. And you see that in the data very clearly. Due to marriage. Correct. So marriage as an incentive is much weaker for some subclass of men who seem to be fairly numerous. Religiosity seems to be down. Uh, total fertility is down. It's now, I believe, at about 1.8. It used to be at 2.2. And if you look at social indicators for a lot of men in the lower middle class income or educational category, you see massive problems. And that's part of the story.

What sorts of economic behavior do you see change with, let's say, lower status males really taking the brunt of some of the shocks to our modern economy?

Well, marriage is good for men on net. Uh, it feminizes them, for one thing.

Uh, suicide— so greater health, lower depression, correct?

Less drug abuse, uh, suicide rates lower, and so on. And we're seeing those variables for significant numbers of men move in the wrong directions. Median income, as you noted, as I presented, that has been stagnant for the median male earner. I think those numbers are, are across a long enough period of time, they're unreliable in some ways, But that there is a problem is completely indisputable. To say, "Oh, it's gone up exactly so much between 1970 and today," that is an illusion. But that it is a problem and indeed a crisis, that is very much a reality. And you see it again in many other indicators, not just the income numbers. That's how we know it's real.

What have women potentially lost from increased feminization, even if it's net positive for them as well?

Again, women is quite a large category.

So is men. Would you wanna break it up into low-status and high-status females, looking at some of the issues about how high-status females use low-status females to perform kin work that would otherwise have to be done?

I mean, there's— I would say this, there's evidence that stress levels for a fair number of women are higher. If you think women now have the chance to have better careers, which is great for the economy and, uh, very good for the person working, if you're in a career you enjoy, but at the same time it may be hard to convince the men they should take on a greater share of child-rearing responsibilities. So the woman ends up having to do both, and the income level is higher but the stress level is much higher. And I think there's both scientific evidence and anecdotal evidence that is true. I couldn't tell you offhand how large a class of women that is, but I do know it's been studied pretty extensively.

Why do you think it's so difficult to discuss costs and benefits and even the facts of gender within economic theory without it becoming so contentious as to effectively make the enterprise somewhat unprofitable?

Well, it's hard to discuss in many settings, not just in economics. I think actually economics is one of the better settings to be able to have such discussions. There are two areas in academia where you can still say things that are either counterintuitive or possibly politically incorrect, and that's economics and philosophy, and both are healthier for it.

So to me, not evolutionary theory.

I know that area less well. May well be true.

I would say that that's probably my, I mean, it's under a ton of pressure, don't get me wrong, but I do think that if you allow political correctness into evolutionary theory, there is no subject.

Probably true, again, I couldn't say. Economics is under some pressure now, but it's so data-driven that, results get out, right? They may be reframed in particular ways, or certain angles of it talked down or put in.

Do you have any thoughts about the wage gap?

Well, which one, between men and women? Let's take that one. If you adjust for demographics, it mostly goes away. I do think there is also discrimination against women in labor markets, but I don't think it's measured by the wage gap.

Well, that's, that's one of my problems. Like, I've, I've gone so far as to claim that academic tenure is increasingly withheld because a large number of females find childrearing so fulfilling that it competes, even if they're at the very top of their profession as researchers. And so by forcing people, both men and women, to wait longer and longer for a permanent job offer, what you do is you start selecting out against a very talented, usually female assistant professor who may discover the joys of raising 3 kids and will have a 15-year period of decreased productivity.

I've argued we should abolish tenure to be more fair to women. There are other reasons, but that allows—

But you think that that somewhat lands? Absolutely. The frustration being that those of us who think of ourselves as concerned with actual discrimination against women in the labor force may not want to sign on to the, you know, women get paid 75 cents for every dollar that a man gets paid, because that's not a good argument.

And the elite men who benefit from tenure, they'll just call it meritocracy and somehow compartmentalize and not see how it's an unfair system. But another thing I would say that I would really want to stress, there's a lot of kind of tough talk on like the right wing about, oh, the claims of women about discrimination are overblown or incorrect and so on, and I get where they're coming from, but the discrimination against women in markets, it's very real, it's very significant, and our main self-image of ourselves should be as problem solvers who will reduce that discrimination and take on some kind of emancipatory perspective. To do that, I think you have to be objective about the evidence. But the goal is not, at the end of it all, to dismiss it, or the Democrats are wrong, or the left wing is terrible. It's really the wrong approach. Like, focus on the individuals, there's a big problem.

I tell people to come at it from a different perspective. I say come at it from greed. If you imagine the number of insights that are held between female ears, and putting up extra barriers within the workplace means that we have less, we have fewer minds that we can query, it definitely seems to me the case that given differential success rates, if you believe in anything like intellectual equality, there should be a bonanza to be unlocked from having women highly productive in the workplace. I mean, to me, greed rather than obligation seems to me to be the right strategy, and not everybody loves that approach.

Yes, but there is a collective action problem. So even if you as an individual, say an employer, are greedy, there may be social norms that make it hard for you to benefit from your insights Yeah, because the other people in your workplace, customers, may have screwed up expectations and norms, and you can't just wave a magic wand and kind of see through all the myths of gender and hire the right people and automatically succeed. There's some educational issue, a collective action problem, where large numbers of us need to understand what's going on better and see which are the actual discriminations, which I think are often matters of expectations and role models. And implicit biases, which can be very strong. Well, you asked about gauge theory earlier.

When we ran into trouble trying to introduce gauge theory into the core of economics, it was going to have a very unpredictable effect because it was going to be a backwards incompatible— sorry, a backwards compatible upgrade of the entire theory, with making it compatible also with the world's most beautiful mathematics found in particle theory, general relativity, and differential topology. Apology. What I found was that their economics was set up for it to be a battle, and that my wife and collaborator did not want the fight. And I was, I mean, I was just ready to, you know, to duke it out with these guys for the pure pleasure of shoving it down their throats. An extremely sort of male aggressive perspective on an innovation. And because it was under her name, given that it was her thesis and we would collaborate on part of it, there was no ability to actually have that fight. So that the norms of the profession favored conflict as a means of exploring something, and that because women may have different feelings about how conflict should be handled I worry that, like in this instance, where, you know, you had somebody from the developing world who's female presenting a new idea, that such ideas can get lost very easily if we don't have a more balanced workplace.

There's a lot of self-examination going on in economics right now about conflictual norms and how seminars are held. But I worry a bit will address the superficial aspects and be superficially polite. It's my concern. And not change actually being rivalrous in the way that is screwed up. We'll see how it evolves. This is a new movement, but so far I'm not yet optimistic that we'll get at the actual problem. You aren't? Well, we'll see. In all fairness, the people who raise it are completely correct to raise it. I'm on their side. But at the same time, we can't be naive. You've got to realize problems are deeply rooted, and to just focus on the superficial symbols of the problem, you can end up not fixing things.

So we've referred to this podcast as audio and video samizdat, that effectively this is pirate radio for a new generation. You were famous within economics for a couple of moves that seem really nutty to me, and I think the first one is that you turned down Harvard to go to George Mason as an undergraduate because you thought you could spend more time reading the great works of economics. Do I have my facts more or less right?

I didn't apply to Harvard. I had a very strong academic record. Oh. And this was back in the late 1970s. Believe I could have gotten into many top schools, but I only applied to George Mason, in fact. Okay, so my high school guidance counselors thought I was crazy. I had SATs, you know, top percentiles and so on, good grades. But for me, this was a version of homeschooling. I was choosing homeschooling. And most of all, I hated the idea of living in a dorm. I considered that so barbaric that as a 17-year-old, I thought, I want a life. I want a car, I want an apartment. George Mason was a commuter school. It had an interesting economics department, but most of all, I wanted my personal space and ability for classes not to be too hard or have too much homework. And I would just work on my own, like every day, all day long, morning through night. And I did it. Was it a great decision? Well, it's not for me to say. I don't regret it at all. I'm very happy I did it. But, you know, great by what standard? It could be a lot of decisions you make ex post you're glad— Yeah, sure. —turned out to be you, and you'll endorse them. But that's not quite as informative as actually seeing the ex ante trade-off.

OK, but then you went to Harvard for grad school.

Correct. And— Which was necessary for me to get a job. Right. And then— A tenured research job. And then you came back to George Mason. After a stint at UC Irvine.

That's correct. OK. And you start choosing to blog.

Yes, that's correct. That was, I think, 2003, though my memory could be off by—

okay, now this puts you in, in a group with people like Peter Woit in physics who are starting to really upset standard academicians, if I recall correctly, because the power of this blog to upend what had been thought to be the meritocracy. If you have somebody who can think and write very clearly in a lively fashion, suddenly they're able to have a different kind of influence than you might have through a journal like Econometrica or something like that.

But I'm not sure I upset people. At first it was not taken at all seriously, so no one was upset. And then it was very quick all of a sudden that it was taken very seriously, and then people decided they needed to suck up to me or to the blog. And there was not much of an intermediate period or I fought some kind of war against opposition. I didn't understand that.

So in general, the power of this blog, once it was realized, caused people to want to get along with you.

People are very nice to me, as I think they should be, but they're not always nice to each other. They're nicer to me than they are to each other. Huh. And that came suddenly, and before that happened, they just ignored me. There was never much hostility that I'm aware of.

Well, I tried fighting you on a couple of points, but I was very ineffectual, so I can see that You're disturbingly likable.

I don't feel I'm one of these people who's had to fight off this incredible opposition and, you know, I persevered and they told me this and I stuck with it. That doesn't ring so true to me. It was like I did my own thing. World, like, who knows? They weren't paying attention and then somehow magically it worked out.

And what do you think the current status of economics blogging— I mean, I just—

Most of the blogs have faded and have died.

Who's still in it that's worth reading?

It depends what you count as a blog, but EconLog with Bryan Caplan, Scott Sumner, and other people is great. Scott Sumner's own blog is very good. Arnold Kling, Ask Blog it's called. Paul Krugman is not really blogging anymore. The debates happen on Twitter, which I think is a less effective medium, but obviously it's quicker and in that sense, quote unquote, cheaper. And obviously Facebook, Twitter, and other social media have beaten out blogging. It's been great for my efforts. We've played a kind of last man standing strategy and done very well with it. So I'm not worried about the death of blogging. My view is like, bring it on, you know. There's the death of Tyler Cowen, that worries me. But until then, you know, the blog will continue. Just ask the question, how many websites can you go to every day where there's reliably interesting content. So there's New York Times, there's Financial Times, there's a bunch of others.

Well, do you think the comment section of Marginal Revolutions, your blog, is a large draw?

I don't know, I think it's pretty terrible. I hope it's not a large draw, but since it has a lot of comments, it must draw someone.

It does seem to draw a lot of interest where people really want to mix it up there. I don't know whether—

Yeah, people provide context for the post. So I shut down the comment section for like 10 days just as an experiment experiment. Yeah. And all these people wrote me, they're like, we know the comments were terrible, but they gave us context on your post because you would just say things we wouldn't understand, and we'd read the comments and now we know what's at stake. So now I think those people are doing something pretty valuable, even though like the actual quality of what is said is highly variable, to be generous.

Do you have the sense that we're part of a weird movement, um, of— I don't know how to call it— like thinkers who aren't much recognized by the standard structures. Um, like, for example, standard structures that you are not— like, you're, you're like Patrick Collison, for example, is somebody who a lot of our world that I share with you holds in very high— we hold him in very high esteem. I don't know how many people in the country think of Patrick as a mind rather than as a very rich CEO.

Patrick is one of the smartest people ever, but I think a whole bunch of people know that now. Yeah.

And, uh, do you think that he's being tasked by our government to really think through difficult problems in technology? I would, I would task him in a heartbeat.

Well, I don't know, uh, what our government has in mind, but I want to get back to this idea of like, who are the structures? So Marginal Revolution, it's a blog, but I don't view it as just about me. I view myself as editing a daily magazine for economists and other smart people, right? And like, it's the daily magazine for economists and related kinds of thinkers. So I don't view it as like an outside thing anymore. I know it has this funny, weird early years of blogging look, like a 1990s website. That's like a retro inside joke.

It's so cool. I like it. Yeah, yeah.

And I don't even know how to make it better without it looking kind of stupid and gross. But, uh, like, I'm the establishment, not the only part of it.

Okay, so you're going to pretend to be this? I'm going to pretend to be the establishment.

You can attack me now.

All right, well, who are the best heterodox thinkers that live sort of on the periphery of the consciousness? You— I don't know what to make of the term.

I'm serious. You Absolutely. I wrote a blog post about you and I said— You defended me. —before this podcast, I didn't just defend you, I said Eric Weinstein is one of the most interesting people to sit down and have an extended intensive conversation with.

This is why it's so hard to fight with you. You couldn't be kinder, but I'm trying to think about whose signal we can boost at the moment. Like, I think you remember when we went to that meeting on how to think about Measuring and Reforming Science for Higher Productivity. Laura Deming, for example, blew me away. I thought she had some of the—

Laura's great.

She had some of the best insights. I don't know how to boost her signal enough. She's somebody like Patrick that I want more people thinking about. We have a mutual friend who is incredibly generative and very dangerous, Michael Vassar, intellectually. I'm never sure what's up with Michael.

I've spent time with him and been very impressed, but I just don't know what he's doing. Yeah, you enlighten me. No, but that's a bad sign, right?

Or, you know, no, no, no. I can tell you that he's theorizing about woke as a concept. He's much more for it without buying it in its own terms.

That sounds like me, but what are his intermediate products? I don't know.

I mean, it's just there are these people who many of us talked to over the years.

Or Guern, you must know who Guern is. No, you don't know Guern? Just G-W-E-R-N. Just Google to Guern. He is a man.

Is he like the Daniel Schmachtenberger of our time? Do you know Daniel Schmachtenberger?

I don't, but I— you will. The way you put the question. Yeah. So Guern lives in Southern Maryland. Okay. And just like lives and he writes these essays on the internet and he collects information. He's a phenomenal guy, very friendly if you meet him, seems super nice. I don't know him well, but I have only positive things to say about my interaction with him. And his essays will blow your mind.

Yeah, Scott Alexander. But this idea— okay, so Slate Star Codex—

but there's no longer heterodox or orthodox anymore. Ideas come from the internet whether everyone likes that or not. Okay. For the last 10, 15 years, and the people we're all discussing are in various ways significant players on the internet, and of course it's diverse, but they're not like quite the outsiders anymore.

Neither are you. Oh, really? Really? I don't know that I can get my ideas inside of the institution. My claim is, is that when the heterodox thinkers are finally invited back in in. Like, I think—

where is it you want to be invited? The Council on Foreign Relations? They would bore the hell out of you.

Not the way I'd do it.

I don't know. I mean, I'm sure they're fine. They have a lot of smart people. I know a lot of people there. I like them very much. I enjoy talking with them. I've never visited the place. Okay. But as an institution, yeah, I don't think of them as changing anyone's mind on anything. Yeah. And I don't mind.

No, but that's part of what I think about, like, the National Academy of Sciences. I went for a meeting at the National Academy, and it's very clear that they weren't used to really heterodox ideas of a certain level in anything like the volume that we had them. And the problem that I, so I have this thing I call the DISC, the Distributed Idea Suppression Complex. And it has to do, and this has to do with our mutual friend Peter Thiel, who has a related belief bizarre version of a common idea that we've talked a lot about. His version is that the stagnation that he and I and you, I think, have all discussed is actually functional, that it's really important to retard the spread of great ideas because in some sense they may be so destabilizing to a fragile world. Fascinating idea, yes. It's a fascinating idea. Peter, I would say, would be one of the smartest people of our age. Absolutely. Again, too often he's referred to as something like maybe shadowy.

Yeah, he's really, he's really quite good as an original creative generative thinker and as a judge of talent, which are two related but separate things. Like, Peter could be the smartest person that I know.

Well, in part, to make that argument, what I would say is, is that Peter does a better job figuring out who generative heterodox thinkers are, your objection notwithstanding to the term heterodox, and then what he realizes very often is that they don't know the best way of putting forward their ideas. He's also got another idea that academicians don't understand, which I call maximally compressed, minimally distorted, where he takes some idea, and he's willing to give up a tiny amount of accuracy to make it extremely compact so that when unpacked, it tells you a ton. And because academicians overfocus on special cases, he very often runs the table where somebody will object to the idea that his principle isn't exactly accurate, but it's thematically so accurate that the heuristic is just of overwhelming power. And of course, he's used that to enrich himself. Quite considerably.

Patrick Collison may be the quickest learner, but I would say this, Eric: enjoy your triumph. So we live in this funny in-between world where the old structures are all still there, and we both have had the first half or so of our lives in only the old structures, second half of our lives in the world of the internet. We're the only generation that will be able to say— oh, I think that's a beautiful point. It's beautiful, but when the old structures fade away and you have more and more people who just grew up with the internet Like you are the mainstream and the Council on Foreign Relations is like the heterodox thinkers who don't have much influence. And I'm half teasing you. Yeah. But in fact, I'm mostly correct. And you just don't see it yet because these kind of status hangover is still there. Well, no, I mean— And they have like the thick oak desks, whatever, in their offices. It's not that we want that.

It's not that at all. It has to do with the fact that I've been in both worlds. I've been at Harvard and MIT and Oxford and I've also been shit out of luck, and the oscillation between being in the good graces and outside of the good graces has impressed me a great deal, I think more than it has with you, because you've just charted a heterodox path. I've never been out of the good graces.

Yeah. I've just been ignored at times. I've never felt like the stress or the failure.

Well, okay, I guess in terms of opportunity costs, A lot of us view you as one of the most insightful and encyclopedic minds out there. You do an unbelievable job of sifting for us, and you're an unbelievable expositor, and we would naturally see you as at the very highest echelons, and I think that view is now much, much more widespread than it was 15 years ago. Right? I mean, you've become— time has treated you pretty well.

It's gone well for me. Yeah, like if I'm just out in the world and I don't like go out to places much, like at least once a week someone will recognize me, or like more than once a day someone will write me and like express—

let's go clubbing on the Sunset Strip, people are going to recognize you all.

I'm not sure that's the place, trust me, but, uh I've had a lot of good fortune, I would say.

So let's talk about something. You're talking about being 17, uh, at a— choosing to go to a commuter school. You were playing guitar back then?

I think I started when I was 11 or 12. Yeah. And I quit like around the time I was 17 because I went to college.

And your musicianship, uh, informed you in terms of what the structure of music really is at its deepest level. You have strong opinions about, uh, music and culture.

I was always terrible on guitar. I wanted to learn different fields of music, and I thought to do that you needed to play something. Yeah, understand basics of music, music theory, chords, whatever. So I did a bit like classical, jazz, blues, every different kind of guitar, just a bit to have an entry point into the world of music. It was never to play or impress people. I never played for people and was never good, but I could play the notes of a song to see how it fit together.

Okay, there is a kind of relativism that has descended over musical taste where every time I say something is better than something else, I run into somebody instantaneously telling me I've committed— like I get a traffic citation— that you can't say, you that Bach is much more important or better than Scarlatti. And I just don't understand this complete abdication of any role in which, you know, informed judgment plays a role, that we have to have issues of taste that say this is better than that, and then you're allowed to take a— You're allowed to take a heterodox position on that, but we should be passing along our tastes and our prejudice and exposing it to discussion with other people rather than just finding relativist mush.

I agree, and I think the relativists often don't mean it. What they're really saying is, on objective grounds, I challenge the status of the person making this proclamation, and I will challenge the status by not accepting the judgment. But they're not actually claiming that all matters are relativistic. I don't think postmodern or relativism are these boogeymen the way Jordan Peterson says. I've never bought that argument. In Peterson's exchange with Žižek in their debate, I thought Peterson lost that part of the debate. Most people are objectivists whether they admit it or not. Let's just say what we think is correct and debate it. And David Hume in the mid-18th century wrote some wonderful essays on standards of taste and the test of time. I think he was essentially correct that matters of aesthetics are not objective in the same way that matters of fact are, that you can measure and confirm them. But nonetheless, there is something about the judgments that informed people make that expresses an intersubjective validity, and it can be debated and judged. And it's one of the things we're here on earth to do, so just to take in wonderful music What moves—

what moves your soul in music?

Well, let's start with classical music. My tastes are completely orthodox, so Bach, Mozart, Beethoven, Brahms. Uh, I'm quite fond of contemporary classical music, or mid-20th century.

Do you have anybody who isn't in the, uh, acknowledged highest, highest echelon?

I don't think so. I think my tastes are so remarkably close to what you would call the canon in these particular areas that they're boring. Uh, do you think I find a lot of music before Bach maybe somewhat overrated? So Palestrina is an important composer. When I listen to it, I just don't enjoy it as much as I'm supposed to. Maybe my defect. Guillaume de Machaut, it's fine.

I don't know.

Josquin des Prés, I like it, I don't love it. Anything from that period is fine in a slightly underimpressed manner. Do you think— and I think with Monteverdi and then Bach, things explode and become marvelous and amazing. Do you think even temperament is really the central—

is that ground zero for the specific beauty of Western music?

I think it's development of instruments through capitalism and markets and growth of a middle class. And having more people experiment at playing and composing. Pianos become much better, string instruments become much better. You have the modern orchestra, you have actual audiences, and the interplay of those forces as opposed to music being more in the church, maybe closer to pure vocal music. I just think it's much better. And almost everyone in their heart knows that. Yeah, yeah. No, that's the— but tell me the—

no, no, no, I'm actually— I'm processing in real time.

What excites you in classical music? I think Haydn's under— somewhat underrated. Closer to Mozart than people want to admit. Yeah, it's quite durable.

Um, gosh, I mean, I guess I—

Mozart is amazing peaks, but a significant portion of what Mozart wrote is boring. The younger works are mostly boring.

I, I often feel that I have— must have a hole in my soul because of the amount of Mozart that doesn't land, that I hear all of these people describing Mozart as this, you know, exact, exactly perfect balance. And there's something about the language that I find, um, somewhat repellent, so that I'm less likely to get along with people who are bananas over, over Mozart. If somebody's very clear about Bach, like Bach is like heroin, it's an addiction, you can't— you just can't get enough of the stuff. I relate to that much more. I often say that there are mathematicians who will claim that Bach isn't their favorite composer, and I never believe them.

But, you know, take Mozart's symphonies, which are obviously chronological. 29 is quite good. And then not until, you know, maybe 36, you could say 33, 34. But before 29, they're just boring. If they were somehow all gone, I don't think there'd be any great loss. So most of Mozart isn't that good. I don't think it detracts from him. But even with Bach, there's extreme selection which Bach you hear. You don't hear most of the cantatas very much. Most of them are boring. Yeah, that was the main thing he created. So there's some of that in Johann Sebastian as well. Don't exonerate him from the boredom charge altogether. Christmas Oratorio, it's pretty good. It's not an incredible work. So even Saint John's Passion, it's quite good. Not as good as B Minor Mass or Saint Matthew's Passion. Right. So there's extreme selection in the Bach you're hearing and thinking about.

I mean, you know, the funny thing for me is that I had to swim upstream from Segovia's translation of Spanish piano music onto guitar. I didn't realize that there was an entire world of Spanish piano music where the guitar wasn't originally thought of necessarily as a as a concert or art music instrument. It was more of a folk instrument. And so that's been a huge well of interest for me, like listening to Albanese on piano is amazing. Alicia DellaRocca, right?

She's a wonderful performer of that. But the guitar music, I find it very interesting to take some more modern, like ambient music, like Brian Eno or the whole movement from the 1970s and listen and think through what was going on there, right? And then go back to earlier guitar music, uh, Baroque, but also the Spaniards, and listen to it through that lens, and it just comes alive in a completely new way.

I had that with Robert Fripp, that somehow Fripp was evocative of, uh, earlier, like, vigüela music or something like that. And I've never traced down why I felt that.

Um, are you So, I'm a big fan of what is misleadingly called world music, just listening to as many different musics as you can, kind of figuring out their logics, and then going back and applying it to what you already knew from rock and roll or classical music or jazz and seeing it all, you know, quite anew. To me, that's a very high productivity activity.

Are you interested in oud music? Sure, of course. So, when I found Munir Bashir in Iraq, I just, my jaw dropped. I thought this was such gorgeous stuff. And then, and I sort of made my way to Munir Bashir through Fareed Al Atrash, who I think is unbelievable. And eventually I was listening in this Middle Eastern idiom, and I hear him start to play with blues and rock and roll on the oud. And it was fascinating watching somebody from Iraq who had studied in Europe, of course, watching you. There's a— for example, in, um, at Stanford University, there's this, uh, garden which I think has, uh, master carvings from Polynesia or Indonesia. And there's versions of Rodin's Gates of Hell and The Thinker in this, um, Polynesian or, or, or, uh Indonesian idiom. And it's just fascinating to see oneself regarded by the other.

Sometimes I think the more interesting question is which musics don't you like, and to think through those. So I'm going to ask you, Eric, what in music do you really not like or cotton to and you think is just bad or wrong somehow?

Uh, I have trouble with music that doesn't allow us to impart more emotion because it's too highly produced. And I'm pretty sure that has to do with the emotion, because I find Jimi Hendrix, uh, very emotional. I found that Cher's Believe, where she uses the Auto-Tune function as an instrument rather than as a correcting of the human voice, to be very emotional. Um, but when I hear very, like, computer-oriented, or, you know—

can you name a name? What do you reject? Point the finger.

No, geez, do I have to?

You have to. It's your podcast. Um, and let's hope the person isn't listening.

Well, I guess there was a time when I didn't like Amy Stewart's version of Knock on Wood, which was a great piano R&B song, because I found that it was so highly overproduced that I just couldn't cotton to it, um, that had to do with the disco influence. I'm choosing things now that I really dislike, but I've sort of maybe come around because I find— no, look, you find something in just about everything that you listen to. It's very hard to create music that's completely devoid of interest. And so if I spend more time with something Even if it's really bad, I'll usually be able to find something in it that, well, that's why it became famous and that's why it's being listened to. I've been down on EDM, to be blunt. I don't think that I've— at some point we had a car ride with a friend and I said, let's put on songs we can sing along with. The person puts on some EDM. There was nothing close to a campfire song inside of it. I found that kind of sad.

Do you buy into electronic dance music? I'm sorry, heavy metal, I meant to say. Heavy metal, such as—

I mean, there's a lot of artistry in it.

So I asked Ted Gioia this when I did my Conversations with Tyler podcast with him. He's one of my favorite music critics, a brilliant guy. You should have him on. But I asked him about heavy metal. I said, underrated or overrated? And he said, well, it's underrated. But I couldn't get him to admit that he actually listened to it.

Okay, so you want to go there. I think it's underrated from technical musicianship, and I think it's often overrated in terms of what it does to heart. Paul Gilbert—

that's exactly what he said, in other words.

Okay, so Paul Gilbert has a beautiful riff on this. He's a, you know, obviously fantastic guitarist, but he says you can take a great blues guitar guitarist, teach them a lot of scales, and turn them into a shredder devoid of interest but with fantastic technical chops. I think that that's really sad. Um, I think that what— one of the things I'm very concerned about is the fall-off in interest in musicianship. Like, in guitar at the moment, we have these fantastic guitar virtuosos who live on YouTube and Instagram, and the guitar universe is paying attention to them. But the outside universe is not. There's this guy Guthrie Govan, uh, who lots of people I know have never heard of this guy, and he's an unbelievable gift to the guitar. Where is he? What, what group is he part of? What are his main songs? You know, he can, he can be anyone, and then he can be his own thing.

He's like the Guerin of guitar, I guess.

Yeah, but it's very odd to me that, um, or for example percussive guitar. There's a guy named Justin King who did a song, oddly enough, called Knock on Wood, which just showcases how many ways you can now interact with your instrument through harmonics and various, you know, patterns of drumming on the wood, the way the flamenco guitarists used to, brought to a high level. I can't get a lot of people interested in all of the weird innovations that are taking place, a little bit like Rodney Mullen and skateboarding, where originally you're skateboarding on four wheels, and then his point is like, well, okay, well, what else can we do? You're thinking, well, what do you mean? Well, maybe we could skateboard on the bottom side or on the sides of the skateboard. And you're thinking, does that even make sense? And he says, well, here, I'll show you. Well, that's what percussive guitar has been for me. It told me that I didn't understand the instrument more or less at all. Something else I'm really enthusiastic about is Sugar Blue on harmonica. Do you know this guy?

Not known to me at all. Is it on YouTube?

Do you know the song "Miss You" by the Rolling Stones? Sure. Right, well, that harmonica is Sugar Blue. This is a guy who can thread the, if you break the harmonica into 3 registers, he can thread the top register like nobody's business, and he and John Popper of Blues Traveler are sort of locked in some artistic conversation the rest of us can barely understand. That excites the hell out of me because you're taking an instrument so limited. And you're saying, well, it's only limited to you because you haven't figured out what you could do with it.

Other than Bach, maybe South Indian classical music is the closest we have in music to mathematics. And at times I think we should only listen to that because I would have said it's purer somehow.

The North Indian?

No, the South, the Carnatic.

Yeah, I think that the North Indian— I mean, look, this is just a world that I knew nothing about. And I chanced upon this, uh, book of a musicologist named Neil Sorrell called something like Indian Music in Performance. You can find it on the internet with lots of little sound files that he made for a cassette way back in the day. And he took an entire performance of Ram Narayan, the great sarangi player, the Indian violinist. Man, this, this just— how did I not know there was an entire universe of Indian classical music. You may be partial to the South. I'm very partial to the North.

But South, North, along with Bach and maybe the Beatles, it has the only other serious claim to being the best music, period.

All right, the Beatles, defend yourself, sir. What's your take on 3 Beatles songs that are at least current in your thinking and that really show off how deep that canon is?

Was it 1966, "You Won't See Me"? It's basically a Paul song. But the melancholy, how the background vocals operate, what's done with the piano, the bass line, it operates on so many different levels at once. Just sounds like a simple ballad, but every time you listen to it, there's something new in there, complex emotionally. And then it's just over. You never give me your money. The last 10, 15 seconds are just phenomenal. Paul had been listening to John Cage and Stockhausen and just sound and what's the dividing line between sound and music. And he just sticks that in the end of a Beatles song with a lovely melody and the whole thing just dissolves. And then you get back to marching through the Abbey Road side 2 medley. Hey Jude. This is so many Beatles songs that I think are just phenomenally better than what other people were doing. And they synthesize more different parts of music than anything Bach did. That's their claim to greatness in terms of lyrics, vocals. Okay, so the Beatles, mostly Lennon McCartney, they're composing these songs and they're playing them. And they're singing them and they're producing them and they're A+ excellent in all of those dimensions on their best material. And Bach was a composer, probably an excellent player. We don't really know, but he was reputed to be very good. Easy enough to believe. The Beatles take on and added 3 or 4 dimensions that are not in classical music and master them. And then every album they change their style, every song they change their style. They hardly repeat themselves. Yes, they have a lot of clunkers. They had the two best voices in rock 'n' roll— John and Paul. Whoa! All right, so they were pretty impressive.

All right, let's have a small fight.

We'll get back to Aretha Franklin on The Rolling Stones. Paul, she's wonderful. Uh, what would you have said? She's less versatile than that.

I would have gone with Freddie Mercury and Roy Orbison.

Where am I wrong? Roy Orbison has 8 or 9 amazing songs which are incredible, and The Beatles themselves loved, right? But that's kind of it. Then it's Freddie Mercury, sir. Freddie Mercury has one album, two albums you can listen to straight through. His vocal affect is most of the time broadly the same. Uh, he's one of the top vocalists, absolutely. And I know you're partial, uh, maybe to Parsi culture and where he comes from. You could drag that in. Uh, But in terms of versatility, I don't think he's close to the Beatles. And I love Queen, and I went to see them play, not with Freddie Mercury but with Adam Lambert, who did a fantastic job, I thought. Uh, I still listen to Queen. I'm a big fan. But they're wonderful with their material.

I don't think that's true. I think that they've got maybe two dimensions.

There's like the shredder, early punk, semi-metal stuff, and then there's the ballads.

Oh, I just think—

Love of My Life, You Hurt Me, 39.

I feel like Brian May is so incredibly tasteful. I agree. He doesn't have to play a note more or less than he wants. He's just not needy. I agree. And then, you know, Roger Taylor's I'm in Love with My Car, I think, is one of the most comically brilliant songs I've ever heard. So, and I don't even listen to that much Queen. Are you familiar with the voice of Eva Cassidy, given that you were in the Washington area for a long time?

Only marginally. But I've never heard it live, if that's what you're asking.

Just— there's an album called Live at Blues Alley where she does a version of Stormy Monday that just tears my heart in shreds and barely puts it back together by the end. It's just unbelievable performance on a song I thought I've heard everybody's version of it. And just, just said, well, you haven't heard this one. Apparently she was sick while the recording session was happening, and so some magic happened to her voice because of the illness.

It's really interesting. Cecile McLaurin Salvant is my favorite jazz popular song vocalist, and she's active now. I've seen her 3 times. I think she's better than Ella Fitzgerald. She's in her prime. She's maybe about 30, plays, you know, around in clubs very often, has plenty of CDs.

I love Ella Fitzgerald and never put her on. Why is that?

It's a little exaggerated and mannered, and she was trying too hard. Her technique is incredible. But it's always excessively conscious of what the audience is thinking. For me, you know, I used to— I enjoy it when I hear, but I also never put it on.

I use it as like the gold standard for lots of things, like Cole Porter. And then at some point, I don't think it is. Yeah, I don't— I think that there's something in my tastes that have changed with the time, and I now just never— I never reach for it. But, you know, and like Art Tatum, I always enjoy him when I'm listening to his piano work, but I never think, boy, am I in an Art Tatum mood? Because how can you be in an Art Tatum mood? It's so exacting and demanding on the ear that, like, that's not something that happens.

He might have been the one of the two greatest jazz pianists with Monk, but I— or Cecil Taylor. I don't hear new things when I hear Tatum. It's just perfect, right? It's just, it's just— and it contains every style of its time and then some. But I don't feel the need to go back to it. I'm okay with that. Yeah, it hasn't gone down in my eyes, but I think—

well, I feel like nobody was ever really able to work with— there's a guy now named Eric Lewis who I think I connect to Tatum, and I start to say, oh, well, maybe if I saw this as being part of a, uh, of a lineage. But it's— there's something about the fact that, you know, Hendrix didn't really leave descendants on the guitar, and I feel like Tatum didn't really leave descendants on the piano, although Monk really surprised me.

In some ways, he's a funny descendant of Tatum, more than you would think. Monk. Monk. He has very little technique, but the idea of integrating styles and making jokes— he was, in my opinion, highly influenced by Art Tatum. He just didn't play the piano very well, but as a composer, he's phenomenal. I don't know. It could be the best jazz piano album that there is, and I still listen to it.

Do you have a take on, um, the weirdness of Miles Davis' generosity to us all in terms of leaving this beautiful legacy and his being a complete dick?

Well, a lot of wonderful creators have been complete dicks. There's a long list of those— Picasso, uh, some people have said John Lennon. I don't know the full list. But he's not some unusual data point to be explained. Partly there might be correlations between creativity and having unusual brains, right? Right. And then once you're succeeding, you can get away with a lot more. And then drugs enter the equation for Davis and Lennon, and bad things happen. So this is not a huge surprise.

All right, so getting back to the Beatles, okay, um, When Lennon writes the song, what is it, How Do You Sleep, right, uh, after the Beatles have broken up, he, he makes a reference to you, something about you didn't see Sergeant Pepper's, or Sergeant Pepper's took you by surprise.

You'd better see right through that mother's eyes. Yeah, he means Paul McCartney. So he admits Sergeant Pepper was Paul's album, which it kind of was. That's quite an admission.

Well, is that—

Paul was the workaholic in the Beatles. Yeah, that's the key point here.

So what I hadn't understood, and this is only because I happen to weirdly be friends with John's son Sean, is Sean points very clearly to Strawberry Fields Forever as being the discontinuity in Lennon's ability as a composer. I agree with that. What— okay, how did I miss this, and how do you see that? Well, I don't know that you missed it.

I did miss it. So early Beatles is John's group. You look at Hard Day's Night album, it's There's hardly any Paul songs on there. There's Things You Said Today, which is amazing, but it's a John album, and it's pretty close to perfect. Even John's, like, first real song, Please Please Me, one of the best Beatles songs, completely visceral, hits you in the gut, still sounds amazing. But I think after Strawberry Fields, John stopped innovating. He had an amazing voice emotionally, which he still could use. You have songs like I Am the Walrus, which have a kind of even melodic line and a bit of pulsating. But when you start to hear John songs through the lens of if you applied machine learning to them, there's a similar structure to a lot of the melodies. They don't move around that much the way Paul melodies do. And Paul, being the workaholic, just gets better and better and better. And Paul learns from George Martin, and Paul learns orchestration. Paul even became a good classical music composer. That's phenomenal. And by the time of Sgt. Pepper, it's Paul's group and Paul is calling the shots. Abbey Road, side 2 is, you know, basically Paul's work, Paul's creation, even with the John songs. A piece like Tomorrow Never Knows, which is John singing, John composed, a very flat melodic line, but the whole construction of the sound was mostly Paul, and Paul will take credit for that. So it becomes Paul's group. John feels more pushed out. It's the start of the Beatles breaking up and so on.

Yeah, so there are these dynamics within the group that I'm not— I, I never actually studied the Beatles enough, but like songs like Across the Universe don't really impress themselves upon you as being—

it's that same kind of even, not much varying melodic line carried by John's voice and mood and the fact that it's the Beatles. I like the song, uh, but Paul is experimenting much more by then. I see. Very interesting. But here's the thing about How Do You Sleep by John. It was— I learned recently it was actually Paul who started that feud. Yeah, Paul had a song, uh, Too Many People, you know, that was your lucky break. And he was really mocking John, like, oh, it was lucky that you, you know, hung out with me. And John was retaliating. People think John is the aggressor in that, but Paul was like super passive-aggressive.

All right, so then I want to put together a data series and I want to get your reaction to it. It. So I'm gonna start with Gilbert and Sullivan. I'm gonna have Jagger and Richards. Yeah, Lennon and McCartney, Perry and Tyler and Aerosmith. What the hell's going on with these dyads that are so combustible, both really benefit from the antagonized relationship, and And we end up with this incredible music, but it's, it's so effing personal.

Well, it's rivalry. It's what really motivates people. Yes, it's the money also, of course, but wanting to do better than the other and having the other as a mental audience. I think it was Peter Thiel who had this in one of his talks once, that he has these different images of people sitting on his shoulder. What would this person think? What would that person think? I have an Eric Weinstein and a Peter Thiel sitting on my shoulder, among others, right? We all have Tyler Cowen on ours. So I call it, you know, like Phantom Eric Weinstein or Phantom Peter Thiel.

Do you run me in emulation?

What do you mean by that?

I try to run you in emulation sometimes. I think about Tyler, like I start to get emotional about something, Tyler is not gonna fall for that. He's gonna be even-keeled, he's gonna think about what's likely to be true, he's not gonna think about how to make the biggest splash. And like, I have these rules that can't generate you and what I consider to be your brilliance and contribution, but it can, it can generate a kind of thumbnail sketch of you without you needing to be present.

Oh sure, but it's harder to have a phantom Eric Weinstein because a phantom Eric Weinstein is about being generative, and that's harder to model than a phantom Tyler Cowen. So if you think of part of me is even-keeled, Even-keeled might be hard to achieve, but it's not that hard to model. It's just like, calm down, right?

I can't, I have such, I'm so driven by passion.

Hard to achieve, but not hard to model. So you might reject your Phantom Tyler Cowen.

Well, that's true. One of the things I do is it has a very strong filter which says if the emotional register has been exceeded by this much or that much in either direction, Tyler wouldn't do that. Call up Phantom Tyler Cowen.

He's right there. Answer the phone. Even the real Tyler Cowen will probably answer the phone. But you're harder to model for that reason.

I'm incredibly flattered, even if that isn't your intention. The idea that you would have a hard time doing that means a lot to me. Peter is an insanely difficult person for most of us to model because I don't think it's even consistent session to session. Peter is so driven. By the search for something new, that whatever it is that he's thought last is now incorporated into, well, that's old, where do we go from here? I mean, it's just, it's a constant series of—

But that's part of the model. So I have my own Peter Thiel model. Now you know Peter much, much better than I do, but I think of it as you really do need to incorporate everything you know into your current view consistently, or you're failing. So your views should be a kind of random walk, because if you can predict their direction, it means you should already be where you're headed, and there's something wrong if you're not. And the other part of my Peter Thiel model is the way in which he is an intensely moral thinker, and how the moral element of his thought interacts with the cognition and strengthens it. And again, you know Peter better than I do. If you tell me that's wrong, I will retreat, but that's how I model Peter.

He's moral, he's religious.

But it's not just that, it's how the moral and the cognitive are integrated. He knows so well.

No, no, but I'm picking up on this weird feature. So I had him as the inaugural episode of the interview episode of the show, and I would say that one of the reactions that people had is, "Wow, I've never seen this side of Peter." And of course—

I've never seen any other side of Peter.

I've never seen any other side of Peter. The delta between the private and the cartoon— the private person and the cartoon character that the media portray has got to be one of the largest deltas I've known for any other human being. Sure. Yeah. Anybody else you think we're getting wildly wrong if we go by their media?

Well, most people, I think, and plenty of these are people I don't know, but my default assumption is if they're very well known, the media is getting them wrong. Right. Not true in all cases, but it's a better default assumption than the opposite.

So I agree that that's true, but what I'm looking for is where is the distortion most severe?

Well, Charles Koch would be an example.

Tell me about Charles Koch. So I have the experience, people perceive me as being somebody who's not going to be friendly to the Koch brothers certainly the image of the Koch brothers, and a lot of people I respect think very highly of the Koch brothers, and I notice in myself that I have a module that says anything Koch-related has to be seen as the work of the devil. Like, it doesn't— I don't even have a thought before the word Koch starts to tell me that this is something I can't even entertain, which is fascinating because of my political milieu. Just noticing metacognitively, wow, I didn't install that module. Where did it— how did it get there?

Just to be clear, uh, Koch Foundation is a major donor to my university and programs I'm connected with. Peter has supported some things I've done, just for our listeners. Uh, Charles, I think, in terms of being an executor, an integrator, and synthesizer, is the most impressive human I have met, as far as I can tell. No kidding. That the, uh, high returns of Koch Industries over such a long period of time. And it's not in a sector based on a kind of like trick. Well, Google obviously has done very well. I don't want to call Google a trick. No, no, no. Look, they figured out search. It's a kind of natural monopoly. Yeah, they've done a wonderful job since then and YouTube and all that. Yes, but Koch Industries has worked in pretty competitive sectors and earned high returns through competence and execution and understanding and developing processes which are replicable on a much larger level than the individual of Charles Koch or anyone else, in a way that all the other impressive people we know have not done. So that is his and their most impressive contribution. But he is a man of the utmost integrity, and to make it clear, on issues such as climate change, I don't at all agree with him, But I've known Charles for a long time. He's absolutely a straight shooter and does what he thinks is right and is a great American and is very much a person to be admired.

Wow. And that's reason enough to invite him onto the portal if he'd come.

And there's, you know, plenty of things I disagree with him about, just to make it clear.

Charlie Munger, is he somebody that you have had interactions with? I had—

I've never met Charlie.

I had a dinner with Charlie and I was very impressed by. I've heard that from many people. He's a very tough, tough-minded individual, but there's a big payoff. Yeah, it's probably true.

Yeah, I don't even know what his media reputation is. Is it the opposite of that?

I don't know. My, my sense of it is that he is happy to be overshadowed, uh, in the media by Warren Buffett, but that to those who know, he's a powerful independent mind. I noticed that in my own work relationship with Peter Thiel, people who don't like me will say, oh, they always talk, use the word boss. Well, your boss did this, your boss said this. Like, they'll really emphasize the hierarchy, which is something that Peter has never done, bizarrely. And it allowed me for a long period of time to move somewhat more quietly while Peter got more of the attention. And I don't know that there isn't a version of that at a different level with Munger and Buffett, where Munger is known by everybody who should know who he is, and Buffett gets most of the headlines. Yeah. Yeah. But any other famous— are there great arbitrage opportunities with other people whose reputations mask incredible contributions.

Well, I don't know if it's arbitrage, because if the people are famous, they've already been doing things, right? So it's not that you can come along and hire them for minimum wage.

Like, you know, Charo, who used to do the Gucci Gucci act, right, was a student of Segovia and a fabulous, very talented classical guitarist. Dolly Parton, you know, some kind of a genius who happens to hide behind, you know, a physique that draws most of the attention. But she's, she's really just an incredible thinker. Correct.

Artist on multiple dimensions. Yeah.

Who else like this?

Well, this is a controversial name, but Michael Jackson, and I don't at all mean to excuse the things it certainly seems he has done, but as a musical talent, uh, Even before the bad news came out, he's been grossly underappreciated. Getting back to the theme of creative individuals often having these highly problematic elements, right?

Well, this is, this is this thing that I don't know how to get at. In mathematics, I think we do an unbelievably good job of not removing the names of despicable people from their own work. So for example, I'm very partial to the work of a guy named Pascal Jordan in the algebra of quantum mechanics and quantum theory, who was a committed Nazi. And there are tons of Nazis whose names are discussed along with their work, even at places like Hebrew University, where I was for a couple of years. So it's a culture that says we don't get to change choose who brings the gifts, and we don't get to choose whether or not we acknowledge them just because they did something in the rest of their life that was untoward.

I think we should stop with the ex post purges, which are in any case highly, highly selective. But that said, I'm never sure what is exactly the right policy looking forward. How do we do that, do you think? I don't think we figured it out. When I hear any side in that debate, I think, "Oh, they're wrong." But they can't all be wrong, or maybe they are all wrong, but I don't think I have the answer.

Well, have you heard my strategy for this? I'd be curious to get your take on it. I think that we Jews should call for the destruction of the Arch of Titus that commemorates the sacking of Jerusalem and the carrying off of Jewish booty by, I guess, Roman hands, with the idea being that this is so preposterous that we should tear down this ancient arch, even though, you know, Jews have always hated this arch. Sure. Um, that it will evidence to people just how insane it is to attempt to, you know, do this excision or exorcism— I don't know what you want to call it— retroactively, when we obviously have a society built on structures of oppression.

I don't think it would show people that. I don't think it would be digested or interpreted properly. And here's my worry. So you can say, well, we're going to have a moratorium on canceling people in the past, right? But the past and the present are not so neatly separated, and there are people who are a part of the past but also part of the present. Uh, number of people in comedy, but many others who are either active or they would be active if they would be allowed to be active. Uh, and in those cases, I'm not sure what we should do.

Do you have a strong feeling on Louis C.K.? He seems to be the case that a very large number of people want to see him return, and a very large number of people want to make sure that that does not happen.

I don't know all of the details. It may be he's done things I would find worse than I thought, but the marginal cases I tend to believe we should allow for rehabilitation. In general, I believe in second, third, and additional chances. And it's striking to me how many people in the political debate will be, oh, ex-convicts, you know, we need to allow them to have jobs and rehabilitate them and welcome them back into society. But these other offenders, often they're white men, by the way, they cannot in any way be allowed back on the concert stage or wherever. Now maybe you think they, you know, ought to be working in a cafeteria somewhere, I don't know, but I'm pretty sure those emotions and intuitions are not consistent. Are you conflicted yourself? I'm conflicted myself. My gut, which I'm not saying is correct, right, clear, is for second and third chances. But I understand incentives matter as an economist, and if everyone gets, you know, an N number of chances, then penalties, uh, don't matter so much. So that's why I'm conflicted.

I was thinking about having I keep threatening to do this. Somewhere I have a list of like 20 paradoxes which I've called the Hilbert problems of social justice, named after the famous mathematical problems. And that there are certain intractable problems that have to do with contradictory impulses where you can show people that there's no way of solving these puzzles, but they still insist on trying to apply these axioms and heuristics as if they they lead to a compatible social ordering. Is there any way in which people can be dissuaded from trying to purge themselves of the fruits of all oppression by showing them what that would actually mean, do you think?

I don't know, but again, the view that we purge nothing may be problematic as well. My own podcast series, Conversations with Tyler, I'm doing one in 2 days with a fellow, Shaka Senghor, who's a convicted murderer. Oh, I love Shaka. I haven't met him yet. Spent 19 years in prison, 7 years in solitary, 36 times was written up for in some way treating guards badly, uh, has, you know, confessed to, you know, these charges. And I had to think long and hard, like, should I do a podcast with Shaka?

Oh no, you're making— you're making a great decision. And that was the conclusion I arrived at.

But it's still a question, right?

No, you— I, I found Shaka to be I mean, I've only— it's very weird. There are all these people in my personal and private life who are now coming up potentially in the context of should I have a podcast with them. I think Shaka, you can ask almost any question about his time in prison, about what the transformation has been, and I think you'll get a very credible answer. I found him incredibly thoughtful. As a theorist about the entire system. That's also my sense.

But the question of, does the fact that we can learn from someone in any way exonerate them? I would still say I don't have a clear answer to that. It's true, but I guess it matters for me at the margin. For selfish reasons, it matters. I'm really looking forward to talking with Shaka, but if you try to generalize, I don't know where we're left.

So let me give a really clean example because the person is no longer with us, and I think that the artistic contribution is more fascinating than we care to admit. Have you ever heard the song by Charles Manson called "Look at Your Game, Girl"?

I've heard that there are songs by Charles Manson, but I've never heard it.

I don't think so. I struggle with this because it's an incredibly beautiful performance to my ear, and the human being who created it is obviously almost synonymous with a level of madness and depravity that we wish to insulate ourselves from. I don't know how to reconcile that because I see the sensitivity and the gift, and my feeling about it as a song, if you could just disembodied, I think it'd be a great song. If you actually think about what it is that you're choosing to promote. This is not a very famous song because of its association. I think it would be a huge disservice if its popularity came to have us reevaluate its author.

When the John Lennon song "Run for Your Life" comes on the radio, which is a song about wife beating, it seems, I do actually change the channel. I'm not sure I'm consistent, but it bothers me. And that's John Lennon. And I don't want to listen.

Uh, are we not entitled to some hypocrisy? I mean, like, we are, but we need optimal hypocrisy.

So you need a kind of consistently inconsistent optimal hypocrisy, and no one's found that yet.

Well, I really like that because I, I, I feel that I can't get through a day without my hypocrisy, and people are always trying to take it away from me, and all I really want to do is to minimize it and to make sure that it's functional rather than just a complete dodge.

But we also need some hypocritical sanctions against hypocrisy. So there are multiple layers here, right? So you can't just sit content in your hypocrisy, even if it's optimal.

Tyler, I could have you here, uh, for the rest of time. Can I instead say that you are welcome to come back anytime? I would in fact love to talk to you about Gage theory and other matters of how do we push the economics profession forward. But, you know, there are a million topics I could talk to you about have absolutely nothing to do with our area of professional overlap. Will you consider coming back?

I would love to come back, and I'm still planning on having you on my podcast, which we absolutely will do and might have even happened now if you hadn't invited me onto yours.

Well, I would be completely honored. It would be a fantastic adventure. So thanks very much for that. Let's make that happen.

Eric, it's been a great pleasure.

Okay, you've been through the portal with our guest, Professor Tyler Cowen. Make sure that you subscribe to this podcast on Apple, Stitcher, Spotify, or wherever you listen to podcasts, and go over to YouTube and try to find our channel, and make sure that you both subscribe and click the bell to be notified when our next episode drops. Thanks very much. Be well.