Into the Impossible With Brian Keating - Nobel Economist: The Market That Lets People Die

Episode Date: June 30, 2026

A Nobel laureate in economics argues the bans we pass to protect our morals are quietly killing people and the data backs him up. Why the line between a market we allow and one we forbid is mostly an accident of disgust. Subscribe if you want science with evidence, not speculation. My guest won the 2012 Nobel Prize for designing the systems that match kidney donors to patients who would otherwise die waiting. We cover why it’s easy to buy heroin but hard to hire a hitman, what surrogacy bans actually do to the babies they’re meant to protect, why paying kidney donors could end a shortage that kills thousands a year, and the trade-off statement he wants every lawmaker to say out loud. He has been called an organ trafficker. He explains why that’s the point. What you’ll hear: Why banning something that people want often makes it more dangerous The kidney market America won’t build and what that silence costs What the hitman vs. heroin ban asymmetry tells us about effective prohibition The McCormick statement: the trade-off acknowledgment most policy debates refuse to make How prediction markets are eroding the boundary between public and private information Whether Milton Friedman was right to be embarrassed by the economics Nobel There’s no such thing as a solution. There are only trade-offs. CHAPTERS 00:00  Who gets called an organ trafficker? 02:26  What makes a transaction repugnant? 03:14  Why bans without support create black markets 03:36  Heroin is easy. Hitmen are not. Why? 04:44  Prohibition, NASCAR, and moonshine 07:26  Surrogacy: legal here, criminal in Europe 12:30  When money turns something legal into a crime 14:28  Can religion corrupt a market? 15:56  Who actually pays for college? 21:38  The Enhanced Games: drugs as a marketing platform 25:30  Adderall, Erd0151s, and the science of getting sharper 30:58  Why AI makes market congestion worse before better 35:00  100,000 kidney failures a year. 30,000 transplants. 36:44  Portland decriminalized heroin. It failed. 39:22  The trade-off statement politicians refuse to make 41:14  Can you legalize sex work and shrink trafficking? 47:42  Kahneman chose to die. Who should decide? 48:30  Should we put GLP-1 drugs in the water? 56:12  America is the Saudi Arabia of blood plasma 01:00:54  Prediction markets and inside information 01:01:34  Sports gambling is more addictive than it looks 01:11:40  Peter Nobel called economics a marketing stunt 01:13:32  Is economics a real science? Get the transcript, fascinating bonus content, and my Monday M.A.G.I.C. Message: https://briankeating.com/yt Have a .edu email and live in the USA? You automatically win a meteorite: https://BrianKeating.com/edu Subscribe: https://www.youtube.com/DrBrianKeating?sub_confirmation=1 Support Into the Impossible on Patreon, get my weekly M.A.G.I.C. Message, unfiltered bonus content, and live monthly Office Hours with me: https://www.patreon.com/drbriankeating Join this channel for perks, monthly Office Hours, and your name in the Member Roster at the end of every episode: https://www.youtube.com/channel/UCmXH_moPhfkqCk6S3b9RWuw/join Get your three free gifts when you join my Multiverse of Minds: https://BrianKeating.com/cosmic Featured Guest: Alvin Roth website: https://web.stanford.edu/~alroth/ Moral Economics (book): https://www.amazon.com/Moral-Economics-Prostitution-Controversial-Transactions/dp/1541702018 My books: Losing the Nobel Prize (memoir): http://amzn.to/2sa5UpA Think Like a Nobel Prize Winner: https://a.co/d/03ezQFu Focus Like a Nobel Prize Winner: https://a.co/d/hi50U9U Galileo’s Dialogue (first-ever audiobook): https://a.co/d/iZPi9Un Twitter/X: https://x.com/BrianKeating Substack: https://briankeating.substack.com Blog: https://briankeating.com/blog Audio-only: https://briankeating.com/podcast #intotheimpossible #briankeating #economics #NobelPrize #AlvinRoth #marketdesign #podcast Learn more about your ad choices. Visit megaphone.fm/adchoices

Are you one of those media strategy people clicking through slides, scrolling spreadsheets? Yes? Good. This is for you. Because on Spotify, there's an audience that's different. Locked in. Loyal, invested. They're called fans. Fans don't just listen to music. They feel seen by it, like it belongs to them. So when your brand shows up on Spotify, that's who you're talking to. And you're right next to artists like me, Lizzo. So, are you ready to talk to fans? Spotify Advertising. You're among fans. A Nobel winning economist will tell you why you can buy heroin on any corner,

but you can't hire a killer and why that same logic means people are dying who don't have to. Why is it so easy to buy drugs but so hard to hire a hitman? We forbid, as most countries do, any effort to pay kidney donors. In Canada and in Britain, surrogacy isn't illegal, but it's illegal to pay a surrogate. People who need surrogacy service come to California. But they have no trouble bringing their babies back, because parental rights in surrogacy are recognized. My guest today won the Nobel Prize in Economics for designing the systems that match kidney donors

to patients. What he told me about the markets we're not allowed to have is going to make some of you uncomfortable and quite frankly angry. You're the first person I've ever had on the podcast who has been called an organ trafficker, but explain how that came about. Well, I talk about controversial transactions, and one of the things that my colleagues and I have helped medical professionals do is organize what's called kidney exchange. And kidney exchange, which we can talk about more, is a way of getting more living donor transplants than could otherwise be gotten. And that's important because there's a real shortage of transplants. The rate of kidney failure in the United States is at about 130,000 people a year. But we do fewer than 30,000 transplants a year. So it's important to get more

transplants. And we do this in a way that the U.S. Congress didn't find repugnant. They unanimously amended the National Organ Transplant Act to affirm that kidney exchange is legal in the United States. But not everyone is equally happy with it. And one of the funny things about transplant dogma in the world is that countries should be self-sufficient in transplantation. And one of the things about kidney exchanges, it needs big groups of patient donor pairs to work efficiently. And so, for example, I went to the United Arab Emirates for the first kidney exchange between the UAE and Israel. But the lady who calls me an organ trafficker thinks that countries should be self-sufficient in transplants. One of the things that I never really appreciated as explicitly as you make it in the book is sort of the unintended consequences of many economic actions that then have both political and economic and social ramifications.

Can you explain the relationship between bans and black markets? So one of the themes of the book is that to work well, markets need social support, and to work well, bans on markets also need social support. So often what I'm talking about in the book are transactions that some people would like to engage in and other people think shouldn't be allowed. And when you ban something that some people would like to engage in, often you're going to find that they try to find ways to work around the ban. And one way to work around the ban is to find another jurisdiction where the transaction you want to engage in is legal. A different way to work around a ban is to find people who are willing to violate the ban and commit criminal acts in order to further the kind of transaction that you're interested in. If you have a ban that protects moral purity, but then it creates a black market, I mean, that ends up hurting people. How do we judge if that's truly moral?

Well, one of the themes in the book is I think we have to judge the morality of the bans we make and the markets we support, not just by our intentions, but by the consequences. So one of the questions I ask in the book is, why is it so easy to buy drugs, but so hard to hire a hitman? And what I mean by that is we have, in the United States, we have bans on commercial murders. When we find hitmen, we put them in prison for as long as we can. And when we find heroin dealers, we put them in prison for as long as we can. But those two bands have had very different effect. There's almost no commercial killing in the United States. It doesn't make it into the national crime statistics.

But heroin is readily available in the United States. And we have not only lots of dealers and addicts, but many overdose deaths every year, many more than we have homicides of any sort. So the two very similar kinds of bands, you know, catch them in front. imprison them have very different effect. So I think we're doing fine on hitmen. We should keep it up. We don't need hitmen and we don't have them. But we're not doing fine on heroin.

We have a lot of heroin. And we ought to be experimenting with ways to reduce the harm that it does. Even if we can't ban it as thoroughly as we would like to. And of course, the United States has some experience with this from Prohibition in the 1920s and early 30s. We tried to ban the production and sale of most alcoholic beverages. And that didn't work well. And so after amending the Constitution to institute prohibition, we reamended it to end prohibition. And ending prohibition on alcohol hasn't solved the problem of alcohol.

There are still alcoholics and drunk drivers, but you can't buy whiskey from gangsters anymore. The legal market has outcompeted the organized crime organizations that grew up in order to sell illegal alcohol. You're the second economist to come on who's written a book that has a brothel or prostitution in the title, Allison. I'm like her name, but she wrote a book called An Economist Walks Into a Brothel. And it makes me think that in America we prohibited the sale and manufacture of alcohol. That was nationwide. But we have a lot of, you know, cantons and, you know, kind of broken up districts and not just purely federal law. We have, you know, legal prostitution in Las Vegas, as I understand.

I don't have any per. I've never walked into a brothel. My, you know, physicists don't walk into brothels maybe as much possible. So just incidentally, the prostitution isn't legal in Las Vegas, but it is legal in some rural counties in Nevada. Ah, okay, good, good. Okay, so Vegas, that's right. Okay. So it shows you how little I know about prostitution now.

The fact that it's not legal doesn't mean that there's no prostitution in Las Vegas. Exactly. That is certainly the case. But my bigger point is that, like with taxes, like the state taxes here in California, we have a billionaire's tax that's being proposed or get your impression about that maybe later. But you can move to Florida, right? So you can move to Texas. You can do all sorts of things. In contradistinction to the ban on alcohol, which is nationwide, as I recall. So is that possibly enforceable when morality can vary from jurisdiction to jurisdiction to have an effective ban that will actually work in the real world, if ever? Well, it's hard to ban things that some people very much want to have. So during Prohibition, Fautnohal, there was production in the United States. There were illegal stills. And NASCAR, the Stock Car Racing Association in their museum has a still because some of their folk heroes are people who had cars that looked ordinary but were tricked out to carry alcohol and go very fast so they could outrun policemen. And also Canada used to continue to explore. spirits. So it was very hard to both stop the import from Canada and the production in the hills,

you know, by the light of the moon of moonshine whiskey. And that's true generally. One of the markets that I write about is the market for surrogacy. So in California, where you and I live, and throughout the United States, it's legal to hire someone to bear a baby for you. And in California, if you and your spouse, say, need the help of a surrogate, the California birth certificate will list you as the mother and father on the birth certificate, and there's no problem and bring the baby home or anything like that. But in most of Western Europe, surrogacy is illegal, and it's illegal because when you read the statements that go along with the laws that make it illegal. They think it's undignified and inappropriate for women to be treated as commodities,

which they think surrogacy does. So surrogacy is banned in most of Western Europe. But of course, when you have a ban that is porous, when you have a ban that people are looking for ways around, they may find them. And in the case of surrogacy, when you have a ban that doesn't work as well as you would like, it means they're going to be babies. And the babies have to be brought home. So while the constitutional courts in Germany and Spain and France say surrogacy is illegal, the family courts have to do the thing that family courts always do, which is decide with whom should this baby go home. And the natural decision is, why don't we send her home with her parents? And how should we do that? And the answer is, in Western Europe, the family courts have

pioneered ways for surrogate parents to adopt their own children so that they become the legal parents in a place where surrogacy is illegal. So, you know, the laws against surrogacy are often phrased as we're trying to protect vulnerable people. And the vulnerable people are women who might be tempted to become surrogate. But, of course, no one is more vulnerable than a newborn baby. So if you're interested in protecting vulnerable people, you have to take account of the fact that this ban is going to be porous.

So you ask a lot of uncomfortable questions in this book, but they're, you know, done in a very provocative and endearing way. I have to say, it's very easy to read this book, but it's not the topic selection. You talk quite frequently in the core of this book is about repugnant transactions. So first, could you define that for us, please? I talk about controversial markets generally, but one kind of controversial market is one that involves repugnant transactions, which by which I mean transactions that some people want to engage in, Other people think shouldn't be allowed and have the property that the harms to the people who think it shouldn't be allowed aren't easily measurable. So often the objections to a repugnant transaction are based on moral or religious arguments.

So, for example, same-sex marriage is that kind of repugnant transaction in the sense that some people very much want to engage in it. Other people who aren't involved directly in any way don't think it should be allowed. And it's a transaction that the people who object to it can't even tell has happened unless someone tells them. That's why people wear wedding rings to let you know that they're married because you can't tell by looking at people whether they're married or not. When I think about things that are repugnant versus disgusting,

like I hate fish. If it were up to me, we'd ban gefilta fish and herring and all sorts of things that many of my friends engage. Or driving slow in the left lane, Al. If you had a magic wand, what kind of thing that's disgusting maybe, but not repugnant? What would you like to ban and just wipe away? Well, so disgusting things we don't have to worry about banning normally because disgust, one way of thing about disgust is it's a more or less universal reaction to maybe to things

that could cause you to have infections. So, you know, human fluids and things like that. There's no law against serving drinks in California restaurants that are made of spit. But there is a law in California against serving horse meat for people to eat because in 1998, we passed a referendum, making it a felony to sell horse meat for human consumption. And of course, it's not because no one wants to eat horse meat. On the contrary, it's precisely because some people want to eat horse meat and other people don't want them to. So what would I ban? The things that I don't like often don't have to be banned, right?

There's no law against eating cockroaches, but no one's eating cockroaches. but no one's eating cockroaches. People driving slowly in the left lane has a negative externality, right? They interfere with traffic. So that's not what I'm worried about in this book. Those are markets that economists know a lot about. If I built a discotheque next to your house

that partied all night, that would harm your enjoyment of your house. And that's why we have zoning laws that probably say that you live in a neighborhood zone for residences. But it's easy to understand why you don't want a discotheque next to your house. It would harm you. It's harder to understand

but needs to be understood why some people don't like same-sex marriage or don't like plasma donors to be paid or don't like surrogates to be paid, right? So I already mentioned that in Western Europe, surrogacy is illegal, but in Canada and in Britain, surrogacy isn't illegal, but it's illegal to pay a surrogate. So there aren't so many surrogates in Britain and Canada. And people who need surrogacy service from Canada and Britain also come to California. But they have no trouble bringing their babies back because parental rights in surrogacy are recognized in Canada and Britain. But that's a case where something that's legal becomes illegal when you add money. And that's an interesting category of repugnant transactions. So it made me think of, you know, the famous paradox in physics, as experimental physicist, I think of everything through physics.

But sort of Shortener's cat, it's sort of this observer-dependent phenomenon. And so I ask you, you know, who does it matter that the transaction be repugnant to the participants or the observer society? So again, I'm using repugnant in sort of a technical way. So the participants in a repugnant transaction want the transaction. They're not repulsed by it. They're eager for it, like same-sex marriage, like surrogacy. Incidentally, prostitution is one of those transactions that adding money to the transaction, that's what turns sex into prostitution. How do we wait and bowels as a democratic process? Do we vote on it? Do we rely on religious, you know, figures to decide for us?

Well, so in the United States, we vote on some of these things. We elect legislators who create legislation about some of these things. And many, many of the morally contested transactions that I talk about in my book have made their way to the Supreme Court, the same-sex marriage, interracial marriage, whether contraception can be banned in the state of Connecticut. That was the case of Griswold versus Connecticut in the 19th. I'm anticipating that we're going to see a Supreme Court appeal to the many states that are now allowing medical aid and dying. So as a democracy with courts, we do things politically and legally. Can religious kind of overtones, can they corrupt markets? Is it possible to have something that both buyer and seller are interested in? Society is sort of okay with, but some religious phenomena maybe baked into the overarching DNA or framework. of the country or principality, that can supersede. Ultimately, the halo on your book cover,

is that the final arbiter? Well, I think the halo was designed to show that we're on the side of the angels. But religion affects, certainly what people think should be allowed and not. So I mentioned medical aid in dying, which come September when legal medical aid and dying goes into effect in Illinois and in New York,

more than a third of Americans are going to live in states that have legal medical aid in dying. But of course, that's especially when we think about death, Americans also bring up religious thoughts of various sorts. And so many of the objections to medical aid and dying, by no means all of them, but many of the objections are phrased in terms of religious objections. I think the same thing was true of same-sex marriage. Abortion is a subject that many people rely on religious intuitions about human life and when it begins. So yeah, I think that religious intuitions inform a lot of what we're talking about when we talk about morally contested markets.

And now, Professor Roth is about to turn that same scalpel on something closer to home for both of us, the university system. Let's take a brief detour into a favorite subject of mine and possibly yours, academia. Now, I don't talk about the morality, moral issues that come up in academia. So the first one is, I was a postdoc at Stanford in 1999. But I remember the tuition then was about I think it was about $12,000 or $13,000 a year. I think it's now 40. Yeah, tuition's outpaced inflation, you know, dramatically so. And the students there get a lot of financial aid. Stanford's one of the finest educational institutions in the world. And they also are quite generous. But they're not completely generous, right? I mean, there is sort of a moral question that I have is,

is it okay that you charge such high tuitions knowing that so many people will get a tuition reimbursed, but that is outpacing inflation for the families that can, quote, unquote, afford it. Is that a moral transaction that parents really have no choice with? I mean, if my kid gets into Stanford, it's going to be hard to convince him or her not to go there. So what are the morality issues around academia today? You and I will agree your moral issues, but I'm not sure that pricing is one of them. Let's think not about Stanford, but about University of California, which is a taxpayer-supported institution.

So that starts to get more into these questions of democracy and equality. and I don't know what the tuition is at University of California. I'm sure it's cheaper than Stanford. But out of state it's not. But also I'm sure that they give lots of financial aid. So let's consider the alternative, which is that the University of California should decide to be free. If University of California were free,

then we taxpayers would be paying for the education of everyone who goes to the University of California. When it's not free, so that would be a subsidy for the rich, because the rich are the ones now paying the full tuition and less prosperous families get lots of financial aid. So the question is, do we want to use our tax dollars to subsidize the rich?

And is it immoral not to? I'm rephrasing your question in a tough way. And there's part of our current political establishment in the United States that seems to believe that it is immoral not to subsidize the rich. And we should use tax policy to subsidize the rich. And I'm not sure that that's the only moral position about taxes. So when you look at University of California and you say they charge a lot to people who can afford it, I'm not sure that's a bad thing.

I mean, having people who can afford it pay for what they want and subsidizing people who can't afford it. It seems like it might, to me, like it might be a good use of our tax policy. Now, obviously there's, I think one of the biggest sources of debt in the country is student debt. So it's not all free and also it's the only form of debt that can't be discharged in bankruptcy, as I understand it. What about the moral and ethical issues raised by that? It's like singled out if there was a, you know, there's a tax on golf clubs. And if you spend too much on golf balls like I do, I lose too many to my son, which will hopefully go to Stanford and play in the golf team there. And I can't discharge it.

And if I don't pay it, it's 30% interest rate like vigor issues. So what about that, that you can't discharge it in bankruptcy? What does that do to young people who are scarcely really able, in many cases, to understand the contractor entering into at age 18? Okay. So those are two separate questions. The question about being able to understand contracts and what it means to have informed consent, I think there are a lot of things we could talk about there. But I'm not an expert on bankruptcy law, and I'm so I'm, you know, neither licensed to practice law in California, nor is that the part of economics that I study. But my understanding is that after you declare bankruptcy, there's some period of time in which you can't declare bankruptcy again.

And that's not meant to penalize you. That's meant to make you credit worthy. That is, if you're someone who declared bankruptcy, you might find that you have trouble getting a loan to restart your business, to start a different business. But your creditors are protected from that by the bankruptcy law, which says you'll have to repay these debts, at least for a while. And I think that's the thought behind making student loans not subject to bankruptcy. People who are 18 years old and about to go to college don't have great credit ratings. So you can easily imagine that they would find loans unavailable if on graduating from college they could discover that they were bankrupt. All they had was debts.

But I think the intention of making student loans not bankruptible is to allow people to get student loans even when they don't have any collateral. And that's part of the spine of the book. You talk about how these, you know, exceptions aren't really exceptions or taboos necessarily alone. They're diagnostics. They're really sharp test that when you see horse meat being banned, like you said, I never come across my, you know, my neighbor's horse and, you know, coveted it for lunch, right? But there must be people that do or else it wouldn't be needing to be banned. But before we move back to the spine of the book again, there's another phenomenon that relates to college, which is differential preparation before you go to college. So California banned the SAT as admission, and part of the rationale was, well, poor families can't spend time in preparation and go to the Princeton Review or any of these things that parents use.

It reminds me of the varsity blue scandal from about eight or nine years ago where these Hollywood families, some of which were married to hedge fund and venture capitalist, you know, paid a lot of money for college coaching that got them into the school that wasn't the kid's choice. The kid wanted to go to some, you know, like art school, and the parents wanted her to go to USC, and that's where she ended up going. But there was a great controversy about the legitimacy or morality of these college coaches and so forth. And it made me think of what just happened recently. There was an athletic competition called the Enhanced Games. Did you hear about that? So what do you make of that? Because you talk about performance enhancement, and now they've kind of taken into this extreme.

You know, now you can only participate if you're doing roids or. or whatever they're doing. So what did you make of this competition? Did it fascinate you as it did me as an economist? Well, I think it evolved a lot into something very different than it may have originally been intended to be because I think it ended up being a marketing platform for nutritional supplements and things like that.

So it was pretty shady in the end. And indeed, they didn't get the athletes who, with the help of drugs, could break world records. They had a swimmer who used a full-body suit. That's disallowed in the sport as being maybe too expensive barrier to entry for many swimmers. But let's talk a little about performance enhancement because I think sports have lots of reasons

to ban performance-enhancing drugs of various sorts because they want competition to be on a level playing field. So if you watch the Tour de France, you have the opportunity to each year see the first clean Tour de France, the first Tour de France that hasn't used any drugs. And we just had that one, the first. And in previous years, we had the first until the drug testing regimes caught up with the performance-enhancing regimes.

And then we discovered that some of the medalists had used performance-enhancing drugs that they weren't allowed to. So I have no quarrel with sports making the rule that it wants. That's what you can't bring a tennis racket to a ping-pump tournament. But in general, performance enhancement is something that we should be interested. in as progress in medicine, right? So this morning, I had a cup of coffee, and no one thinks poorly of me for that. Every now and then, I don't drink coffee for a day or two, and I have, you know, slight withdrawal effects, but it helps me start the day. It helps keep me alert. And a lot of science goes on over coffee. I think we wouldn't have any science if we didn't

have coffee. And it's a performance-enhancing drug, but we treat it as part of our nutrition, not a way to get ahead of your, you know, other physicists. So I'd be glad that. I'd be glad that to have more safe performance-enhancing drugs. One thing I see in the world, when I talk to undergraduates, I ask them, do they know anyone who uses Adderall or Ritalin when they're studying for exams? And to a man and a woman, they say, well, they don't use it themselves, but they know lots of people who do. Adderall is a drug prescribed for children who have attention deficit disorder.

And it's gone through clinical trials, and it's pretty safe. if we give it to nine-year-olds so that they don't fidget in class. So I'm guessing that some part of that, it's a cocktail of amphetamines of some sort, might be useful for you doing your work or me doing my work. And it's one thing to say, when you're about to get on your bicycle, for a bicycle race, you're not allowed to use it.

But it's another thing to say that we would reject a new subatomic particle if it had been discovered by someone who was on Adderall or a new mathematical theorem or a cancer cure. or peace negotiations in the Middle East, if it had been done after 36 hours of unslept negotiation. So, and of course, truck drivers and other people use amphetamines in ways that may or may not be harmful for their health. So I regret that a lot of the medical science

associated with performance-enhancing drugs is devoted to making them undetectable in athletic contests rather than to fully exploring, can you take these things when you're young and not have congestive heart failure when you're middle age, things like that, that would help us bring more performance enhancement into our nutrition? No, it is funny that you mention the coffee and then also drugs. There's a famous mathematician you might know, Erdos, who said that a mathematician is a machine that converts coffee to theorems, but he also was addicted to methamphetamine.

And one day his colleague, not Terry Tao, who I had on the podcast not too long ago, but an older colleague of his implored and begged him, you got to stop doing infamines. He said, I can stop anytime I want. And then his colleagues said, okay, fine, so stop for a month. And he did. He stopped for a month, and he came back to his colleague's door, knocked on it in Princeton and said,

congratulations, you've set back mathematics for a month. He couldn't prove theorems as well when he wasn't on math. I gave a talk in Hungary, and I mentioned Erdos and coffee, and they corrected me. They said that quote is attributed to Erdos, but it's actually due to Rhenyi, right? A lot of mathematics was Erdos and Rheni, and apparently the coffee comment is due to Renni also.

I wonder what people's Renni number is because it's the Erdorf number that gets all. And then there's the Erdush Bacon number if you've been in a movie about, you know, with Kevin Bacon. I found fascinating that, you know, doing some research, I think it's true that you trained as in operations in operations research, which is more akin to we used to call that industrial engineering or operations engineering.

And that's very different from, say, Wido, M-Benz, or other people that I've talked to on the podcast in economics, and that it's sort of more experimental physics like my audience might be used to. So when you're doing the type of work that you do, what do you view as your lad and what do you view as an experiment? Is there sort of that notion from your operations research? Okay, so I've been associated with market design, but also with experimental economics.

And economists now do experiment. So just incidentally, my most recently published experiment in PNAS also drew some repugnance. It was an experiment with a field experiment with the economics job market, the job market for new PhDs. And we had noticed that a lot of people who have social media accounts tweet the job market papers of their students. And one question was, does this have an effect on the job market success of their students? and does it have, therefore, an uneven effect on the job market if your advisor is a social media influencer, does that help your job market? We invited everyone on the job market, all the new PhDs on the job market, to come to a Twitter site that they organized to tweet their job market papers. And then we did an experiment where some of them and not others were retweeted.

and we looked at the different effect on the job market, and we found that to be tweeted and retweeted was good for women candidates, and women are sort of underrepresented in the economic, academic market. But some people objected to our doing that because they said, you're helping these women, it turns out,

but surely that comes at the cost of someone else. And our feeling is complicated about that. I mean, we thought about it a lot beforehand, and we talk about it a lot in the published paper. First of all, it's that job markets and other markets aren't zero-sum. When you make good matches, you can make the market work better and make people better off. Also, many jobs aren't filled in a given season.

It's hard to find the people who you want and interview them and make offers to them that they accept. So, because often a lot of attention is focused on the same people, so the people you make offers do get other offers and might accept the other offers. So we think that there's lots of positive gains, not just redistribution of jobs. That's an experiment. That is, we had randomized controls, we could measure the effects, and it had some moral objections to it. Some people thought you shouldn't be experimenting on economists, and other people thought you shouldn't be experimenting in a job market.

But in fact, economists do a lot of experiments now, and a Nobel Prize a few years ago went to, Michael Kramer and Abhijit Baner and Esther Duflo for experiments in development policy. That is, if you're trying to get insecticide-treated mosquito nets distributed in some country in Africa, you can't distribute them at the same time to all the villages, so you can randomize which ones you try to distribute them to one way and which one some other way, and then see which works better. So that won a Nobel Prize. I mean, the idea of using experiments to help evaluate policy, not just by their intentions, but by their outcomes.

Yeah, brought up a lot of questions in my mind, some of these issues in the book that reminded me of like different types of equilibrium and stability in the book. How does that come about? And you could be technical, talk about the different forms of equilibrium and stability and perturbations that arise in the types of matching experiments that you talk about in the book. So could you explain the role that these, you know, could. Concepts from thermodynamics or from Nash or other domains. How do they come to play in the research that you do? Okay. So economists talk a lot about equilibrium, but not as much as we should about

equilibration about how we get to equilibrium. Physicists probably have that problem a little bit, too. You know, you can tell when something is stable, when you drop a ball into a hole, it's stable when it comes to rest at the bottom of the hole. But there's a lot of motion beforehand if it's a bouncy ball. So often we have some idea what a good equilibrium, would look like, but not how to get there. And one of the things we're seeing, and we're going to see, again, with AI, but one of the things we're seeing, say, with computerization of markets,

is that it becomes cheaper to make applications for jobs, for college positions, for college admissions, it becomes cheaper to make applications faster than it becomes cheaper to evaluate those applications. So lots of job ads get many, many response. and it's hard to decide who to interview. Lots of college admissions offices get many, many applications, and it's hard to decide who to admit, who to make offers to, who to put on the waiting list. And so that's a problem common to many markets

that we call congestion. There's more things you have to evaluate than time you have to evaluate it. And so one of the ways we can sometimes deal with that in this age of computerization is we can try to make it cheap, make it cheaper, not just to make applications, but to process them. I've done work of that sort in the labor market for new doctors, done work of that sort in trying to promote kidney transplants through kidney exchange. So we're now in a world, before AI this is, we're now in a

world of smart markets, markets where the marketplace itself can do some computations to help the market reach equilibrium. So that's a little bit how market design interacts with equilibrium. What is the role of the non-experimentally subjectable quantities like trust or, you know, belief, things that you really can't quantify? What are the roles of trust play in markets? Well, a lot of markets involve a great deal of trust. If you sell me 5,000 bushels of wheat, I have to expect that they'll arrive if they have a date of arrival or whether I can sell them on a market if I want to. sell them before they arrive, you know, if we were dealing in a futures market. When the Berlin Wall fell, it was a little hard to spark commerce between Western Europe and

Eastern Europe, because in Western Europe, as in the United States, lots of contracts were payable 60 days after the invoice. So I want to buy a ton of ball bearings from you. You send me the ball bearings and an invoice, and then 60 days later I pay you. But in Eastern Europe, it was customary that I pay you first, and then you send me the ball bearings. And so they were these questions of trust. Can we really send you money for ball bearings before we've seen if your ball bearings are round enough? Can you really send us ball bearings without knowing whether we're really going to pay you? Those different concepts had built up across the two sides of the Berlin wall made it very hard to start commerce going because trust had different features on the two sides.

I remember people saying that the euro is going to fail because even in East and West Germany, these are, you know, relatives and they didn't trust each other. Like, not just from West Europe and East Europe. It's actually German, they were all Germans, and they were artificially divided for... But the divide in Germany was a pretty serious divide. They had reason not to trust each other. Were you surprised that the euro has so far succeeded? No, you know, I'm not a monetary economist, so I don't have a deep professional insight into that. It makes a lot of sense. It has some drawbacks, but we have the dollar throughout the United States, and it succeeds, and it has some drawbacks. When there's high unemployment in Mississippi, they can't devalue the

Mississippi dollar to make Mississippi products cheaper. They're stuck with having the same dollar as the rest of us. On the other hand, when you cross into Mississippi or out of it, you don't have to change money. So, you know, commerce goes smoothly throughout the United States. So we already had examples of continent-wide currencies. And, you know, it was a little funny for Europe to always have very different currencies wherever you went. Have you ever seen something that seemed elegant with respect to market design, but that society rejected? Well, you know, we can talk about organ trafficking again.

We have a real shortage of kidneys for transplant. I think I mentioned that there's 130,000 new cases of kidney value each year in the U.S., but fewer than 30,000 transplants. About 22,000 of those transplants come from deceased donors, and about not quite 7,000 of them come from living donors. Kidneys are a little bit special in that living donors have two kidneys. and can remain healthy with one. So if someone you love was dying of kidney failure,

you might be able to save their life. But there aren't enough donors. So if you potentially have kidney disease yourself, you might not be able to donate to who you want. One question that economists ask when you see thousands and thousands of people waiting for a deceased donor kidney is when you see long lines, maybe prices aren't being used to increase supply. And that's definitely the case in the U.S.

We forbid, as most countries do, any effort to pay kidney donors. But it seems to me and to many people that we should try to be flexible on that score because there are thousands and thousands of deaths every year because there's a shortage of kidneys. What about the converse were something that society accepted, but that was horribly elegant and hideous to you as a professional economist? I'm a great believer in evidence. You know, you see what works, and you try to judge your policies on their consequences and not just their intent.

So, you know, we talked earlier about heroin, and there are lots of efforts to eliminate heroin, but those haven't been successful. And there are efforts to reduce its harm. And part of the harm that heroin does has to do with the fact that it's a crime and that people get arrested and communities get disrupted. And so some American cities and some Western European countries have started to explain with decriminalizing the use of small amounts of all sorts of drugs, you know, including heroin. And that has a certain elegance to it, but it turns out that, you know, not only are we losing the war on drugs,

but it won't even accept our surrender in cities like Portland, Oregon, where they briefly decriminalized, open-air use of drugs. They discovered that that has bad effects on the city, that having, you know, hypodermic needles on the ground near where your children play is not a good thing. So they've started to recriminalize some of that. And we're not, I don't think we have any good answers yet about how to reduce the harms that we're suffering from illegal drug use. But that's all the more reason why we should be experimenting. And in the United States and Canada and elsewhere, often the cities have been the laboratories

of democracy. So one harm reduction adaptation that has now come into wide use, despite the despite being vigorously opposed, is clean needle exchange. That is one of the problems with intravenous drug use is not just addiction and crime, but hepatitis and AIDS. And when you make available clean needles, the transmission of AIDS and hepatitis goes way down. So I think that's been a success. That is, we hate drug use. We wish there were none, but we also hate overdose deaths and hepatitis deaths and AIDS deaths.

So I think that's been a good thing. And there are other experiments going on, like safe injection sites that people can inject their drugs with someone watching them, you know, a nurse on duty so that if they lose consciousness, they won't die. And similarly, you know, a lot of drugs accessed from criminals are laced with fentanyl, which is cheaper than heroin. But it means you have no idea what dose you're getting. So if you're a heroin user who is used to injecting a certain amount, you can kill yourself. So there are cities where you can test your drugs for fentanyl. These are illegal drugs. But you should know maybe whether there's fentanyl,

whether it's relatively safe for you to take. And these are real half measures. That is, they don't satisfy our urge that there should be no heroin. But we've worked really hard for a long time that there should be no heroin and there's still heroin. So I'm in favor of thinking about harm reduction. Thomas Sol says something like, there's no solutions, there's just tradeoffs. And in the book, you described this very interesting style of really philosophical and intellectual debate, which is called a McCormick-style trade-off statement. What is that? And how could it improve the public debate around contentious issues?

Okay. So Frank McCormick is someone who's done a lot, an economist who's done a lot of work on the costs of transplantation versus dialysis and on the savings that would be accrued from making transplants more available. That is not just the lives saved, but the fact that we could afford to save these lives, even if it were expensive, because dialysis is so expensive. And Medicare pays for most dialysis. So end-stage kidney disease is 7% of the Medicare budget, and $55 billion a year, and almost all of that is on dialysis. But when you transplant someone, they come off dialysis. So McCormick, a lot of his work, McCormick's work is not a lot of,

only might it be the right thing to pay kidney donors, but we could afford it. But what he says is, he says, of course, some people disagree with that. But mostly they disagree by saying, I think it's wrong, let's not do it. And what he would like them to make is what I called in the book a McCormick statement, which says, although I understand that tens of thousands of people are dying each year in the United States, nevertheless, I think that paying kidney donors is so wrong that we should accept that death toll, and here are my reasons. And, And so what he wants is that people should acknowledge that there are trade-offs. For prostitution, I mean, how would that work?

I mean, would you say I acknowledge that men will go ungratified or something like, yes, you can say there'll be women that will have less money, maybe, perhaps, and it should be noted there are male prostitutes as well. So maybe I shouldn't restrict myself only to a female. But how could that be employed in this McCormick-like style? So prostitution is complicated. It's against the law in many places, not in every place. I once gave a talk in Germany about morally contested transactions.

And I used three examples, prostitution, kidney exchange, and surrogacy. And the reason that was a good thing for an American to talk about in Berlin is the German laws are exactly the opposite of the American laws. The only one of those three that is legal in Germany is prostitution. Surrogacy and kidney exchange were illegal when I spoke. Kidney exchanges presently, they're trying to push forward a law that would allow that. But the problem with prostitution is multiple, and partly it has to do with the fact that there are both voluntary sex workers engaged in prostitution and trafficked women and children who are also objects of the prostitution market but aren't willing objects. So let's think about those separately. We're not helping voluntary sex workers by making them criminals.

It turns out that outdoor prostitution, outdoor sex work, streetwalking is one of the most. dangerous jobs in the world at the level of homicides. It's dangerous to be a prostitute. And so there are places like the Netherlands where they've licensed prostitutes, legal prostitutes, but by licensing them, they're trying to make sure that they're not trafficked, that they're voluntary sex workers. They check their immigration status. They check various things in different cities in the Netherlands.

So that's one set of experiments. Now, if you were to legalize prostitution, you would enlarge the market for a prostitution, the risk of patronizing the prostitute will be less. And so there's the question of, is legalizing prostitution a complement or a substitute for trafficked women and children? You wouldn't want to increase the scope of trafficking in women and children. One of the things I talk about in the book is a proposal by my colleague Petra Pearson

who says, let's try, maybe let's experiment with a combination of what they do in the Netherlands, which is licensing prostitute, and in the Nordic countries, Norway and Sweden, where they've shifted the criminal burden. They've legalized the selling of sex, but criminalized the buying of sex. And that turns out not to be that popular among people who represent sex workers in Sweden,

because, as I said, sex work is dangerous, especially on the street sex work. And the way sex workers try to cope with the danger and mitigate it is by flirting. That is, you know, someone, stops the car, rolls down the window, and starts a conversation about maybe you'd like to get in my car and deliver sexual services at, you know, wherever we go when you have a customer. And by talking to the driver, they can try to determine whether he's a crazy person. But if it's a crime for the driver to be talking to them, the drivers don't want to flirt.

They don't want chit-chat. They want you to get in the car right away. And that makes the job more dangerous. Petra Pearson's proposal, which I like. I'd like to see it experimented in Las Vegas, for example, is why don't we license voluntary sex workers and have them? Part of that is discussions with social workers to make sure they're voluntary sex workers and health inspections or all those good licensing things. And make it a crime to engage with an unlicensed prostitute. And the idea there is to make the voluntary part of sex work safer and to shrink the trafficking part.

And I don't know if that would work, but I could easily see how it could be implemented in Las Vegas where, although prostitution isn't now legal in Las Vegas County, it is legal in other counties in Nevada. So it shouldn't be a tremendous reach for the Nevada legislature to allow that. There's a portion where you mention that, you know, we can agree to disagree. And it made me think of a colleague or, you know, a fellow Nobel laureate named Oman, I think is his name. Bob Oman. Yeah, Lamont, who said that you actually can't agree to disagree. And so if you can't agree to disagree, because no rational agent with the same Bayesian priors can come to a disagreement rationally, okay, we're not all rational actors, I'm sure. But how does that, you know, complicate the search for the hot of gold at the end of the McCormick rainbow? I mean, is that not going to really throw a spanner in the works, as they say? That's a great paper that Bob Alamon wrote. But it depends, it depends, as mathematical themes do on its assumptions. And the assumptions are that we have common knowledge of the same prior beliefs and that we're just updating our belief based on new information as Bayesian decision makers do.

So in fact, the reason that's a great title for the paper is it's got this very counterintuitive conclusion because we all know that we can disagree. What he meant is under very idealized circumstances in about very special kinds of disagreement, we wouldn't be able to disagree. There's another paper in that line called We Can't disagree forever. But we can disagree for a long time and maybe forever. And so what I say in the book is these are issues on which we're not going to reach consensus, right? There are some people whose objection to prostitution is that they object to sex outside of marriage of any sort.

And, you know, maybe they think that God disapproves of that. And if that's what they think, then they're never going to vote for legislation that might make sex work less dangerous for voluntary sex workers. But it used to be, maybe still is in many places, that the people who see themselves as representing the interests of voluntary sex workers are often feel that they're opposed by the people who feel they're representing the interest of trafficked women and children, because on one side, they're willing to tolerate that the market would get bigger if it got safer, and on the other hand, they're not willing to tolerate that it should get bigger. But the nice thing about this hybrid Dutch-Swedish proposal is it could potentially gather support from both parts,

That is, it's intended to make voluntary sex work safer while shrinking the role of trafficked women and children. And so you can start to think about forming political coalitions, doing what democracies do to make sex work less dangerous, since we've failed pretty much everywhere in the world at making it go away. We can make it illegal, but I don't know of any society that is completely free of prostitution. You open the book with another fellow laureate, Danny Conneman, who chose medical aid, in dying two years ago, exactly, I think in March. You use that to kind of examine autonomy and law and the different roles of morality

and variability with geography. But I want to ask you, what do you think? Who should control the end of a life? Who should have the most say over it? The individual, the state, the church. Where do you come down? I don't want to tell you who should have final authority on your life, but I think I would like to have

some autonomy about the end of life. This is incidentally an old controversy. You know, some of the controversies I talk about, like about surrogacy, have to do with new technologies. You couldn't have gestational surrogacy without in vitro fertilization, and that just happened in the 1970s. But Hippocrates, the ancient Greek physician who had his students swear an oath, one part of the oath, it wasn't just first do no harm. One part of the oath was I won't prescribe a life-ending medicine, which means that even in the time of Hippocrates, around 3,000 years ago, medical aid in dying was controversial. People dying in pain and suffering wanted to help to make a quick exit. And Hippocrates didn't think his students should help supply it.

So it's an old controversy, not one that comes about with new technology, but new medical technology has allowed us to extend the dying process quite a bit. So it's complicated. And of course, like other things that are illegal in many jurisdictions, there's covert medical aid in dying. I believe there's quite a bit of covert medical aid in dying. because the same medicines that relieve pain can shorten life. It's a question of dosage.

There's an American medical association of palliative doctors. I forget their exact name, but these are the doctors who man hospices. They have a position statement as a professional organization that says they're studiously neutral about medical aid and dying, and they acknowledge that there's covert medical aid and dying. But their concerns, they say, and I thought it was a nice statement of the, of one of the common concerns when we talk about bands.

Their concerns is that allowing doctors to aid in death and not just preserving life would disrupt the delicate equilibrium between patients and doctors. And loosely speaking, I think that's true of many people who don't want to relax the guardrails around certain bands. They worry that as a society, we're in a complicated equilibrium that's not so bad, but if we relax the guardrails too much, we might slide down a slippery slope towards a less sympathetic society than we would want to live in.

And I think the converse sort of progressive position is we're in a complicated social equilibrium that's not as good as it could be. And if we relaxed some of the guardrails, we could climb up that welfare gradient to get to a better society. So a lot of the disagreement has to do with not necessarily just with a subject at hand, but what would follow from that? And of course, economists think about, not just about tradeoffs more than other people do, but about equilibrium more than most other people do. And so I think economists are sympathetic to both points of view. You know, you see a book, an economics book. If you're a layperson, you say, oh, you know, do I really need to, you know, it's not homework. Why should I read this book? But it is so enjoyable.

It's such a romp through all these really pertinent questions, not just for, you know, the economically minded in the audience, but for everyone in society that thinks clearly, rationally, and morally. And I wonder if you could do what you're not supposed to be done. But we love to judge a book by its cover. Hey, book lovers. We're judging books by the covers. We know we're not supposed to do it. But it into the impossible, there's nothing to it. Let's take a look and judge some books. Could you take us through the title, the subtitle, and the artwork on this wonderful new book? So the title, when I finished the book and sent the draft to my publisher, the title was something closer to controversial markets and morally contested transactions. And that describes what the book is about, but my publisher didn't think that was a good title. So he proposed moral economics. And the trouble with that as a title is it wouldn't clue you into the fact that I'm not talking about capitalism versus socialism.

I'm talking about morally contested transactions. So that's where the subtitle came from prostitution to organ markets, what we learn from controversial markets and contested transactions. I'm going to give a warning and a spoiler alert. We're going to talk about the Torah. We're going to talk about the Nobel Prize in the remaining 15 minutes or so. the Al's generously given us. So that's not your thing. I understand, but I can't resist when I have an intellect like Al's to grapple with and to discuss as a haversa and do some halakic interlocation. So, you know, the book has many different religious kind of aspects to it, discusses Jehovah's

Witnesses and Islamic Law, but it deals with a lot of day-to-day practical sorts of issues. I wonder, as an economist, you know, looking at the Talmud or the Torah, do you see things that are, you know, just prescient or do you see things that are really antiquated? Let me take a couple examples. One is indentured servitude, you know, which would have a provision that you could work for somebody to discharge your debts. Was that an immoral thing? Leaving aside the fact that some claim it led to chattel slavery, which most rabbinical

scholars, including me, I'm not a rabbinical scholar, but I've thought about this a lot. It's clear the Torah eventually says that, no, all slaves go free in the Jubilee year. Is there a morality to slavery? How does a professional economist look at questions raised in these ancient texts? Well, so debt slavery is much more modern than that. It's not confined to biblical history. There were debtors prisons 200 years ago in England, and there were debtors' prisons in the American colonies

when we were British colonies. And by and large, we moved away from thinking of debt, of failing to pay your debts as sin, to thinking of it as maybe bad luck. So we have bankruptcy laws now that allow you to reorganize your business, which might be profitable, if only you didn't have the big debts that you'd assume. So we've changed our view of that, which is related, incidentally, to a whole long religious discussion about interest on loans. You know, should debts come with interest? Is it okay to make money from your money? You know, Aristotle thought it wasn't, and it's not clear in the Torah what they think, but maybe they think you shouldn't be charging your, your, your advancement interest.

But indeed, you know, in much of medieval Europe when the Catholic Church thought that it was wrong to charge interest on loans, but when sovereigns and other people needed loans, you know, Jews and lombards, communities that allowed themselves to do finance, did finance and, you know, lent money, often with moral opprobium. But we'd hardly have the global capitalist economy that we have in the world today if you, if you, if you, if you, couldn't charge interest on capital. So mostly even the Catholic Church, which has been very opposed to interest on loans, allows mortgages and all the nice financial instruments that make it easy for people to trade over time, to look forward to their future prosperity and buy a house now. Incidentally, Islamic law still doesn't like interest on loans, but there are things called Islamic mortgages where instead of borrowing money from a bank, paying interest on it, and using it to buy your home, the bank buys the house and charges you rent, and when you've paid enough rent to

own the home. So those have very similar on the equilibrium path outcomes, and finance is an important part of the world economy. That's the story about bankruptcy. We used to have debtor's prisons in the American colonies and we don't anymore. We still worry about high-interest loans. There are payday loan services that give loans to people who live paycheck to paycheck. And when they have an emergency like a car breaks down, they might take a loan at a pretty

high interest rate, a regulated, but high interest rate, that might take them several paychecks to pay back. In the United States, we pay for blood plasma, which is why there's not a shortage of blood plasma in the world. We're the Saudi Arabia of blood plasma, and we export tens of billions of dollars of blood plasma products each year, which is why there aren't massive medical deaths in Western Europe, where many countries forbid paying plasma donors. But a couple of economists did a study where they looked at new plasma donation facilities

in the United States, new places where you can get paid for plasma. And they found that the incidence of pay-day loans goes down when a plasma facility opens up. So the same people who might have to live paycheck to paycheck can support their income in different ways. If you were around during the writing of the Ten Commandments, you were back at the source code meeting on Moses was receiving the Torah. Would you have been surprised?

I mean, all these things still have relevance. You talk about Leviticus, about their prohibition on incest and blood and the blood. The dom is the nefesh. It is the soul. That's why we can't eat it. in those of us that keep kosher. You talk about reproduction, onan.

Are you shocked that these things, which were surely in equilibrium back then, are really important back then, are still so relevant to today. If you were around back then, when you say, come on, guys, we don't have got to put this in. No one's going to care about like onanism

and surrogacy or eating blood. I mean, would you have been shocked that it's persevered for 3,000 years approximately? Well, so blood seems a little arcane in some ways, but adultery and reproduction Those are very common concerns. You know, the putting them in the Pentgrammans didn't ban adultery, incidentally. I mean, it didn't make it disappear.

It banned it without making it disappear. When you talk to rabbis who do a lot of pastoral work, you know, one of the things I've heard is, you know, the main problem in my congregation is adultery. There are things that are hard to ban. And thinking about reproduction, you know, is still very hot item. You know, the Supreme Court just overturned 50 years of Roe v. Wade and sent the permission to ban abortions back to the states as opposed to saying it's a right of individual women to decide whether to terminate a pregnancy. Incidentally, reproduction, you know, when I talk about repugnant transactions, the whole reproductive chain has been in front of the Supreme Court at some point, you know, whether contraception can be banned.

That was a 1960s Supreme Court decision that it couldn't, the state of Connecticut couldn't ban the sale of contraception. Well, surrogacy hasn't been in the Supreme Court yet, but it might. Abortion obviously is. These are questions about do women have the right to prevent a pregnancy, to initiate a pregnancy, IVF, to terminate a pregnancy? All of those are controversial. If Hashem had had a longer tablet, he could have had some more relevant commandments. Well, that's like Mel Brooks, you know. and he comes down from the mountain.

I bring to you these 15, and he drops on tablet, 10 commandments, you know, the good news is, you know, I got them down to 10, but the bad news is adultery still is prohibiting. Exactly. You know, but you ask, are there any things that surprise me in this? So not quite biblical,

but in my career, the study of matching markets has become very important and become more and more central to economics. And that wasn't always the case. When I sent a paper years ago in the early 1980s, on the economics of matching to a famous economics journal edited by someone who

later that year won a Nobel Prize. He sent it back to me with a note that said, your paper, The Economics of Matching is, you obviously worked very hard, it's got very interesting results, but the only economics is in the title. And what he meant was the markets I was looking at

had to do with building relationships much more than they had to do with using prices to clear the market. But, you know, when you read in the Talmud, when you read Vajara Rabah with the commentary on Mavidicus, there's a wonderful story about Rabbi Yossi Barlafta who has a conversation with a Roman matronita, and she says to him,

how long did it take Hashem to create the universe? And he says, six days, and he rested on the seventh, and scholar that he is, he gives her the citation. And then she asks, what has he been doing since then? And the answer is he's been making matches. That's funny. Speaking of modern incarnations, maybe,

of what Hashem, you know, could only dream of perhaps. What's your take on the unintended moral consequences of prediction markets? I'm thinking about Kalshi, a polymarket, you know, people of betting on people being living and dying, and what are some of the moral, you know, concerns as you have about these new markets? So my main concern about prediction markets

is the fact that it seems to be crossing a lot of borders between what's public and what's private. And so people are trying to make money by having inside information on what is going to be tweeted on truth social, things like that. And that just suggests to me a breakdown of public order in Washington, and it's not just prediction markets.

I don't think I have a particular concern with prediction markets as such. One thing closely related that I talk about in the book is sports gambling. and sports gambling when it was illegal or even in places where it was legal often involved placing a bet before the beginning of a game on what the outcome of the game was going to be. But when gambling is available on your phone and you can bet on who will make the next point or will the next attempt at a basket go in, it's addictive apparently for some people.

So just as there are organizations like Alcoholics Anonymous, there's an organization called Gambler's Anonymous now. And it also causes gamblers to try to influence particular athletes to make bets come out. So that threatens the integrity of some sporting contests. Both of those are things we should worry about a little. I wouldn't mind seeing some consumer protection regulations of gentle, you know, nudges of the sort that say on your gambling app before the game begins, you can put in, if you wish, a limit, say, once I've lost $100,

I want the app to go black. I don't want to bet anymore once I've lost $100. And I think that might help some people, for example. Yeah, gambling is supposedly the one of the hardest addictions to break because it seems completely innocuous on the surface. If someone has a heroin addiction, it's pretty easy to spot them going downhill. But a gambling, you know, it's pretty hard to keep that close to the vest.

It has the illusion that, you know, I'm down $100, but if I just bet some more, I'll get even again. The gambler's fallacy, yes. Yes, I think I could win a Nobel Prize. for that. I want to get back just briefly to academia before we segue to the end with the Nobel Prize, kind of very venally self-interested questions on my part. But let's talk about academia. It's full of different markets. It's full of zero-sum games. I mean, undergraduate, getting into college, you know, getting into graduate school, grades, tenure once you get a faculty job,

if you can get a faculty jump, then the prestige, chaired, loans, AI, you know, faculty poaching, tenure, startup. What is the most repugnant market? sub-sub field in academia. And what's driving it? Is it knowledge, status, credentials, prestige? Who gets what? So let me first take issue with calling all those things zero-sum. Some of them are distributive, right? There's a job that you could have that I could want and only one of us could have. But that doesn't mean it's zero-sum, that if neither of us had that job, the world might be worse off. They'd be less physics or less economics. So I don't think those things are zero-sum. But they're distributive. There's competition. I think the thing that's most

Worrisome is when the competition leads to scientific fraud because the thing that isn't zero-sum is we're doing science, we're learning things. I mean, for STEM fields at least, we're trying to make progress. We're not just conserving the past and passing it on to future generations the way maybe a Shakespeare scholar does. You don't make new Shakespeare. But I'm more worried about the people who do make new Shakespeare. That is, I discover an ancient manuscript which I've now washed in my washing machine and buried in my garden to make it look ancient. And I say, here's a Shakespeare play that you never read. And it turns out not to be a real Shakespeare play.

That's probably a crime. But every now and then in science and in other parts of academia, we see the pressures for promotion and tenure and publication lead to things like that. And that's, of course, very disturbing. And it works against what the productive parts of academia. I want to close with maybe a connection between Judaism and the Nobel Prize, which, you know, I've been fascinated with. You're the 26th Nobel laureate I've been honored to speak with.

It's just such a treat because I do think that, you know, you're kind of members of societies, intellectual, SEAL Team 6, and we need people, you know, like you. And I've criticized the Nobel Committee, but not the Nobel laureates. I've never done that. Many of them are good friends. I've written forwards to my books, and I hope you will be included in my next volume of interviews with Nobel laureates.

We'll discuss that when it comes down in a year or two. But before, you know, I go too much further, I have to take issue with one of the main things that disturbed me most about the Nobel Prize, which is that if you look at what Alfred Nobel wrote, it's what we call in Hebrew Zava'a. It's an ethical will. And it said, basically, I distilled it into three major categories. It said the prize shall go to the person who contributed the greatest benefit to mankind. He said mankind and then the Swedish Academy changed to humankind recently. But I want to talk about the morality of changing someone's will. But before we get there, so he said to the person, meaning a singular person, who in the preceding year, contributed the most to the benefit of mankind. And by the way, he also didn't include economics, as you know. Do you find any of these to be, you know, kind of troubling, you know, from a Judaic standpoint, the wishes of the dead are sacrosanct, right? We're not supposed to even leave a dead person alone. We're supposed to escort them and be with them and bury them immediately. So what do you make of this, that we, that the Nobel Committee, what they, what they,

changed, modified, added to it? Are those benign? Am I making too much of it? Or is there some moral concern that we should have? So I'm, along with not being licensed to practice law in California, I'm also not licensed to practice law in Sweden, nor do I read Swedish. And I don't know what the Swedish law about starting foundations is. But one of the things Alfred Nobel did is he didn't direct who should win prizes. He founded a foundation. And he wanted to, he wanted this to last forever, and he gave the foundation lots of discretion. Now, I don't know exactly what the Swedish law says about the nonprofit Nobel Foundation, but when you found a nonprofit in the United States, it has a charter. And the charter typically is for producing some public

good, and that allows it to be tax exempt. You know, you have to apply for tax exempt status, and it gives the foundation discretion to carry. that charter into the future. So although Nobel wrote about giving the prize to, you know, that person who the previous year conferred the most benefit, you're a physicist. Think about the Higgs bosom for, it's not the right word for the particle. Higgs predicted a particle, but we didn't know that that was an important advance in physics until someone verified that the particle existed. And of course, that didn't happen in the previous year. And his, his His discovery wasn't in the previous year to when the particle was observed, and it was more

than one person who did it. I can well imagine that the foundation is in good faith trying to fulfill Nobel's wishes, but it turns out that particle physics didn't exist when Nobel wrote his will. But he had the foresight to delegate the responsibility for fulfilling his wishes to a foundation. So I don't think there's necessarily anything immoral about the fact that you can't read from, you know, from the simple words that are in the public declaration. I bet the documents founding the Nobel Foundation are much longer. There's so much death, you know, associated with the Nobel Prize. I just put a video out called the only near-death experience, I believe, in the headline that he saw in Paris that was actually his brother's death that called him or associated him with being a merchant of death.

And actually, it led to the wording of the betterment of mankind because the editorial doesn't say the merchant of death is dead. It says that the person who can hardly be said to have benefited mankind died yesterday in Cannes. And it was really his brother Ludwig. But, of course, his youngest brother died because he was trying to experiment with nitroglycerin. And then Nobel himself made his money, his vast fortune from dynamite and other weapons of war, like his father, Emmanuel. But there's so much death, you know, and you got the prize on December 10. which is not his birthday, but his death day, right? So, and the flowers come from his mausoleum in San Remo,

not from, you know, local Swedish Stockholm flower fields, although December, that's pretty hard. But the one thing that kind of puzzled me always for a prize that's so saturated in death is that the posthumous, you know, prohibition, that you can't win it. And that was only Institute in 1974 by the Nobel Committee, you know,

meets every now and then. But that was actually the most recent time, you know, 52 years ago now. And so many people, you know, who surely could have won it if they weren't dead. Like Vera Rubin, she discovered the best evidence we have for dark matter, and she died long after the evidence for dark energy in 2011. She was still alive.

She could have won it easily. And so there are many people in that camp. So I guess is this a market? Can we look at this as a market? What is the Nobel trying to do? And then, you know, how in concert is it with its stated goals or implied goals? The area I work in is called market design, and I'm partly responsible for spreading that.

word, but a word I prefer is marketplace design. And because marketplaces are small parts of large environments, and you have to think how the marketplace contributes to the market, how it interacts with the market. So I don't think of the Nobel Foundation as a market, but it's certainly a kind of marketplace in the large market for science. And that market has lots of parts to it and is very complicated, right? A lot of science is open source. When you discover something you write a paper and you might even have to pay a publication fee, depending on the journal you send it to, but your object is to make that discovery widely available. But of course, it's not just altruism that makes scientists do that.

I'm employed by a university and they're glad when I publish papers and, you know, they raise my salary or they give me tenure or they don't take it away. So there's no question that prizes are part of the ecology of science and therefore part of the economy of science also. And within market, you know, design is marketing, you know, this notion of marketing. And I guess I want to close with, maybe it's uncomfortable, but I think I can tell you're a very good-spirited person. And you won't be offended by these questions. But Peter Nobel died on the 26th of May just a couple of weeks ago. And he called the economics prize a cuckoo's egg in the Nobel Nest. And he called it a marketing PR coup by economists.

So first, how do you react to that? Is it a marketing stunt and as a marketplace designer? What do you look at it as the Nobel in economics? The Reese Bank Prize, yeah. Yeah. So I actually didn't know that Peter and Nobel had died until you sent me an email the other day saying that you wanted to ask me about that. And I looked him up in Wikipedia. And what his Wikipedia entry says is he's principally known as an opponent of the Nobel Prize in Economics.

He was a lawyer. He was a Swedish lawyer. He was a Swedish lawyer. And he was the great grandson, not of Alfred Nobel, but of his. brother who pre-deceased him. So I can imagine that as in many estates, the family that didn't get Nobel's inheritance. Instead, he gave a big portion of it to a foundation, which he started. At multiple generations later, they can have strong feelings about that. But Nobel wanted a professional foundation to be the custodian of the prize and not the great-grandson

of his deceased brother. But I can see that, you know, his name is Nobel. He lived in Sweden so that every year there was a giant week-long celebration that featured his name. I can see that that could be annoying to him. The final thing I want to bring up his fellow Nobel laureate, Milton Friedman, who's sort of supernatural to many of us, or at least it's... But he said he was a little bit embarrassed. He said he was uneasy with it. And he said, eventually with this gun-armir-dahl,

who I don't know who it is, but he sort of regretted accepting it because they felt like it wasn't science. But tell me, no, you're clearly doing science. Your research reaches every boundary between what good empirical epistemology and rigorous academic research should have to be. Has economics progressed? Should we make sense of their comments in their time? And has economics really become a science? More thanks to work by you and your colleagues in more recent decades.

It wasn't reasonable for Friedman to be embarrassed back then, but not so now. Well, economics is an early stage science. There's lots more we don't know about economies than that we do. But, you know, chemistry was once an early stage science. When Archimedes did physics, it was a pretty early stage science. But looking back at Archimedes, we can see the science in what he did, although there may have been other things, too. And, you know, the early alchemists, you know, they tried to transmute light into gold, but they also figured out how to make dyes that would survive washing, you know, steady dyes. So they did real chemistry also.

So the alchemists weren't scientists, but we can see. the science that emerged chemistry from their work. So I think that economics is an early stage science. We're learning more and we're becoming more scientific and I hope to see continued progress. Al Roth, congratulations on this wonderful new book. I encourage everybody to read it. I listen to it. The audiobook is fantastic. It's an easy read, which I can't believe I'm saying about an economics book. Thank you so much for spending this time with us and I can't wait till we finally meet in person someday. Okay. Well, thank you for having me. Nobel Prize winner Alvin Roth just argued that letting people die to keep a market pure is a moral choice we're making by default.

If that reframed how you think about markets, subscribe and turn on notifications too, please. Then let me know in the comments, would you let someone sell a kidney to save a life? And go deeper into the morality of modern life. My conversation with Sam Harris. It's three hours long, and it's linked right here. Hey there, you cosmic beauties. I've got three gifts waiting for you. at briankeating.com slash cosmic.

First, you'll get a free copy of Flatland, the little book that inspired me to become a scientist and still shapes how physicists think about higher dimensions and the nature of reality. Second, you'll be entered into a monthly drawing to win a genuine meteorite from outer space, 4.3 billion years old, older than the Earth. And finally, you'll discover your cosmic personality

with a short quiz that points you towards books, videos, resources, and ideas, paler to your cosmic curiosity about life, intelligence, and the universe itself. Go to Briankeying.com slash cosmic. It's all free, and I'll see you next time on Into the Impossible. Hey there, you cosmic beauties. I've got three gifts waiting for you at briankeeting.com slash cosmic. First, you'll get a free copy of Flatland,

the little book that inspired me to become a scientist and still shapes how physicists think about higher dimensions and the nature of reality. Second, you'll be entered into a monthly drawing to win a genuine meteorite from outer space, 4.3 billion years old, older than the Earth. And finally, you'll discover your cosmic personality with a short quiz that points you towards books,

videos, resources, and ideas tailored to your cosmic... Curiosity about life, intelligence, and the universe itself. Go to Briancating.com slash cosmic. It's all free, and I'll see you next time. on Into the Impossible.