StarTalk Radio - Freakonomics, with Stephen J. Dubner
Episode Date: June 14, 2019Private vs public space exploration, asteroid mining, artificial intelligence, universal healthcare, and more ā Neil Tyson explores the stochastic world of economics with Stephen J. Dubner, author o...f Freakonomics and host of Freakonomics Radio, and first-time comic co-host James Altucher.NOTE: StarTalk All-Access subscribers can watch or listen to this entire episode commercial-free here: https://www.startalkradio.net/all-access/freakonomics-with-stephen-j-dubner/Photo Credit: StarTalk. Subscribe to SiriusXM Podcasts+ on Apple Podcasts to listen to new episodes ad-free and a whole week early.
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From the American Museum of Natural History in New York City,
and beaming out across all of space and time,
this is StarTalk, where science and pop culture collide.
This is StarTalk. I'm your host, Neil deGrasse Tyson, your personal astrophysicist,
coming to you from my office at the Hayden Planetarium,
right here at the American Museum of Natural History in New York City.
Today is a Cosmic Queries edition of StarTalk,
and we will focus on economics, not just any kind of economics,
freakonomics.
We have a special guest, Stephen Dubner.
Stephen, welcome.
Thank you very much.
And let me first introduce my co-host.
Please.
First time co-host.
First time.
James Altucher.
So, James, you are host of a podcast.
Yes.
One you've been on.
When I ask you the name of the podcast, I learned
it's the James Altucher podcast.
Yes.
I'm very egotistical.
I need my name everywhere.
Everywhere.
I forget it.
I think I'm getting older now and I start to forget things.
Everyone is getting older at all times.
So, so Steven, so Freakonomics, you have a podcast yourself.
I do.
It's called Freakonomics Radio.
Freakonomics Radio.
And so the book just
took over your life, huh? It did. Yeah. I liked writing books a great deal. But, you know,
interviewing people, which is, I mean, I'm a writer. I've been interviewing people forever.
I always felt bad about wasting the 95% of the conversation. When you interview someone for a magazine article or for a book,
you'd use the choicest bits.
So I really wanted to have an interview show.
So Freakonomics Radio is kind of a blend.
An interview show to put in all the stuff that is not choice.
Yeah, exactly.
That's what he just said.
Exactly.
But here's the thing.
Here's the thing.
Let me ask you this.
When you get written about.
Remember, you're not the interviewer here.
Go on. I'll let this one slide. Go on. This is a tick. Go on. I like to ask the thing. Here's the thing. Let me ask you this. When you get written about. Remember, you're not the interviewer here. I know.
I'll let this one slide.
Go on.
This is a tick.
Go on.
I like to ask the question.
But when you get written about, let's say the New York Times writes an article about
your vanity affair or something, and you read the things that you say, does that feel like
a good representation of you?
That's my question.
Of course not.
Right.
I would say two profiles out of 100 that I've read accurately capture who and what I am.
So I would argue that mathematically there's a very obvious reason for that verity,
which is that most articles have a little bit of the talker and a lot of the writer.
So there's a bunch of narrative around a little quote.
A podcast or radio show or interview show, whatever style it is, can flip that.
Yes.
And then the listener or the reader, whatever, the listener actually has what I feel is a
truer experience of what the smart person you're interviewing has to say.
And I like that.
Just call himself the smart person.
Right, right.
No, I'm being the opposite.
I'm the dumb person.
He is the smart person.
But you bring up an interesting point, which is that if you, the subject you know best
is yourself.
And if most of the articles written about you, you see are
98% wrong, that does suggest
that every other article that we assume is
correct is probably 98%
wrong. That's that famous adage,
every article is correct except the one that you know
something about. Right, exactly.
So fake news is actually probably the
average news story. Yeah, yeah.
So, James,
we've solicited questions from our fan base, and you've got them. I've never seen them. You've never seen yeah. So, James, we've solicited questions
from our fan base.
Yes.
And you've got them.
I've never seen them.
You've never seen them.
I don't think Stephen's
ever seen them.
He's definitely not.
I know I haven't.
I'm not sure you haven't,
but I'm going to believe you
because I believe everything
else you've told me earlier.
All right, I'm going to
ask a question.
James, give it to me.
So, this is related probably
to a tweet you did recently,
but Daniel J. Saltzman
on Instagram says,
what is the economics of meteor slash asteroid mining?
If you're able to bring back a huge meteor of diamonds,
for example,
wouldn't that immediately devalue the commodity?
Which is interesting.
Yeah, so, so.
Well, that's a particularly interesting, so the.
Well, let me quantify this.
So we have, there's more gold on an average metallic asteroid
than has ever been mined in the history of the world.
There's more water on a comet, on a typical comet,
than all humans who have ever been born have ever drank.
So the resources of the universe, of our own backyard, our solar system,
are extraordinary given what we're fighting over here on Earth to gain access to.
So it's wrong, I presume, we know, it's wrong to say here's the value of that resource using
today's dollars on Earth.
Because you're right, if you make a significant change in the quantity of a freely traded
resource that is made available, that changes the economics of a freely traded resource that is made available,
that changes the economics of it.
So what would you see as the future
if I bring down scads of gold to Earth?
So it's interesting.
Is there a free economic angle to that?
So you change it to gold.
So yeah, I would say...
Well, gold, just to take a benchmark example.
No, well, gold is a...
Because there's an actual market for gold.
Gold is a good example
because there's an actual market for it.
A free market for it. Unlike diamonds, which is a controlled market.
Well, not only is diamonds a controlled market,
but diamonds are not particularly rare.
And they're not, I mean, there are those who argue
that they are more beautiful, that their value is somehow intrinsic.
But most people would say that that's not the case.
That it was a market that was created by a kind of very, very well done monopolistic endeavor.
So really, I would love to see the asteroid full of diamonds brought down just to break up the diamond cartel, which has convinced every...
Why are you so mean?
He doesn't like cartels.
I don't like cartels.
Diamonds have a cartel,
so they don't represent a free market.
By the way, there are places in the universe that also have scads of diamonds,
but not large, pre-cut.
They're very tiny.
Some of them are almost microscopic.
They serve the industrial marketplace for diamonds.
But tell me about gold.
I bring barns worth of gold to Earth.
What happens?
Yeah, it changes a lot in ways that I can't even begin to imagine.
Anyone that's even kind of pretending to work off a gold reserve idea,
which we don't work off an actual gold reserve.
We used to, I guess.
We used to.
But now we work kind of off the idea of it.
No, it's a precious metal that would change.
Is it precious because it's rare?
Or is it precious because it's useful?
That's a very good question.
Gold, historically, yeah, it's pretty useful.
It's soft.
It's beautiful, et cetera.
But silver has all the same uses, right?
No.
Well, gold is softer than silver.
Silver is also, is silver not antimicrobial too?
Or can it be?
It is.
That's why it's silver.
Well, I think it makes compounds that are antimicrobial.
But I would be more interested in water personally because gold, you know,
gold has functions and uses and it's beautiful and functional.
Diamonds, you know, mostly a decorative thing.
But water supply, so that's awesome.
So I would be, so if we're starting to talk about asteroid mining or resource mining, then yes.
I am, it would.
You're going for the water I would go for any resource
that is
necessarily consumed
by everybody on earth
way ahead
of gold and diamonds
so for instance
I've learned recently
you probably know
about this
I don't know anything about it
other than that
satellite imagery
now allows us
to map out
global water supply
in aquifers
that we never used
to be able to do
so that's really useful because-
It's multispectral imagery, you get different-
That's what I was gonna say, multispectral imagery.
I just didn't.
So the notion of asteroid mining or resource mining,
I think is revolutionary, generally fantastic,
and most so because it would help
put resources in the power of
the global citizenry as opposed to
the cartels or whatever
that have done a pretty good job of
monopolizing resources.
James, you're pretty socialistic there.
It's not quite so obvious
because, first off, there would be an enormous
amount of resources required to get
to the asteroid and mine it.
And bring it back.
And take it to the atmosphere.
Second, gold's primary use was because it was rare, it became a currency because it was hard to mine.
So it will, in the long run, affect the price downwards, supply and demand.
But I think the resources would be so difficult to get it.
It would be a long time.
This is why all the space resource people are talking about,
if you're going to get it in space,
it's to deliver to some other location in space
where there's a colony or there's a station getting built.
Because if you're building something in space
and you don't have to launch it from Earth,
then just build factories in space
and take all of your raw materials
and you can give them bottles of water.
This would be like Trump Hotel on Mars.
If he finds gold and then they make a hole.
He can move that gold to his hotel and gild everything in his hotel.
Right, like Trump Mars would be amazing.
Trump Mars would have gilded toilet seats.
Yes.
What kind of resources are most easily moved from out there to here?
Any?
No, it doesn't matter.
All that matters is weight.
To accelerate it, to slow it down, to move it from one point in space to another.
So it could be a pound of gold or a pound of water.
It'll cost you the same to move the thing around the solar system.
And depending on where it is in the asteroid, the mining effort would be the same, right? If it's, you know,
a few feet down or half a mile down in the
asteroid, that's effort. So liquid,
solid gas, none of that matters. Just weight.
There's not going to be liquid out there, but it'll just be the weight. Yeah,
the state of the matter doesn't... Yeah, you'd be bringing down
ice. You can't have liquid gold
like in the center of an asteroid?
No. You'd want to... You'd need
high pressure temperature, and you're not getting that in the center
of an asteroid. So here's the thing.
So gold, here's the problem.
Yeah, gold is very heavy.
It's one of the densest known things.
When we think of, when we joke about dense things,
we talk about lead, right?
You got a lead foot, you're driving fast on the highway.
Lead is nothing compared with the platinum group elements.
Osmium, platinum, gold, right?
So osmium is the densest of all metals.
And so one cubic foot of that weighs, last I checked,
I calculated this in middle school, I remember, 1,800 pounds.
Gold, just slightly less than that.
Might come in at maybe 1,650, 1,700 pounds.
So let me add something that I think you left out here,
that just because there's a lot of it
doesn't mean
it would become as devalued
as you think. Because there are
uses that previously
are
not economically tenable
that then become economically tenable
and the demand for that use goes up.
Fair enough.
What's a use?
A use.
Gold is one of the highest conducting metals.
Electricity, like, better than copper.
Okay?
So, in terms of electrical conductivity.
And another use is it's highly malleable.
So, that's why you have gold-gilded statues.
malleable. So that's why you have gold gilded statues
and so
there might be some need
to hammer gold
thin and layer it onto
something out there that could benefit from that
fact. Gold hardly
ever corrodes
if you need highly non-corrosive material.
The famous Voyager record
that was sent into space that contained
messages and sounds from Earth.
That was a gold record.
Gold record.
It would last a billion years.
So what do you have that's optimal?
Someone could invent a new reason to use gold.
Right.
And that would completely transform the marketplace.
So what about battery storage or energy storage?
Here's one.
So aluminum is a modern element.
It was not known to the ancients.
As common as it is today, you think they've always not.
No.
It was locked up in bauxite, the ore that who knew that aluminum was a thing to take out of it.
When aluminum was extracted, you know what the first person said after that?
That's the end of the silver market because you can make silver out of it for less, and there's more of it, right?
Although the cost, economic as well as environmental cost of extracting it is high.
But not anymore.
But anyhow, we've gotten better at it.
My point is, once aluminum rose up, it was like, oh, it's light and it's strong.
We can make airplanes out of it.
All of a sudden, you can do things that you never thought you could do before.
We can make airplanes out of it.
All of a sudden, you can do things that you never thought you could do before.
Do you remember Howard Hughes' famous airplane?
It was on display in Los Angeles.
The Spruce Goose.
You know why it's called the Spruce Goose?
Made of wood, I think.
It's made of wood because wood is light.
Right.
Okay, before a lot of aluminum was available.
And I always wonder, if we never discovered aluminum,
what would we be making planes out of?
Would we be making them out of wood?
I don't know. Would we have made so many planes? Yeah, we'd all be making planes out of? Would we be making them out of wood? I don't know.
Would we have made so many planes?
Yeah, we'd all be flying a lot less.
Probably is my guess.
Yeah, so the existence of a single element
and its properties,
unique on the periodic table,
birthed entire economic industries
that then created a demand
far above what you would ever declare to be its value
as a cherished object to put on your shelf.
It makes me want to ask you if you know anything about,
I know nothing about this.
So there's silicon chips, right?
So we've been doing well with it,
but what about organic semiconductors?
You know anything about that and the stuff that's used in those
and whether, is that a difficult problem to solve, you know?
Well, if it's organic, it's made of the most common ingredients in the universe.
Right.
So I'm not worried about rarity there.
Right.
But apparently we haven't yet found the ones that are cheap and pliable enough,
that conduct well enough.
Right.
So then either we will, and then that'll transform the industry,
or we won't, and it's just a failed.
But we don't need any asteroids for that.
Oh, no, no, no, no, no, no, no, no.
All the elements on asteroids, they're on Earth.
They're just in greater abundance.
So, what should we be... All the rare Earth
elements, they're on asteroids.
But they're rare here. Except in China.
Except in China.
It's common in China. China has
most of the rare Earth elements within
their borders. Which, by the way, is used heavily by the semiconductor industry.
Yes, indeed.
All right, another question.
Another question.
Give it to me.
It's from Arik Supermonium on Instagram.
Are there ways to notice the onset of another recession?
Is recession an inevitable event happening in cycles?
Ooh, I like that.
And actually, I'm curious about your answer first.
You're not going to get the answer to that until we return on StarTalk.
Unlocking the secrets of your world
and everything orbiting around it.
This is StarTalk.
We're back on StarTalk.
Cosmic Queries.
Economics.
Not just any kind of economics.
The Stephen Dubner kind.
Freakonomics.
And I got James Altsher.
Altsher.
Altsher.
I can't even say it.
James, first timer.
Yes.
Thank you for having me.
Yeah.
When he speaks, you're just listening.
You're supposed to interrupt him and tell him why.
He's very hard to interrupt.
I feel he's been interrupting.
We've been doing podcasts for 20 years.
I can't interrupt this guy.
So we entered the commercial break with a question about,
read the question again so we can have it.
Are there ways to notice the onset of another recession?
Is a recession an inevitable event happening in cycles?
So let me broad, Who asked that question?
Arik Suranyam from Instagram.
I feel, by the way, I get your cadence
all of a sudden when I'm talking.
Are there ways to notice the onset
of another recession?
Is that how I speak?
I don't speak like that.
Somebody in the house is speaking that way.
Let me broaden that by saying
why should economics have cycles at all?
Why isn't it just a straight line?
Why there's boom and bust?
Why?
Why?
Well, by the way, does,
is there such a thing as cycles?
I don't necessarily believe cycles is a thing.
Let me not even use that word.
Why do things go up and down?
I mean, the shortest answer I could give is because...
Give me a Freakonomics answer.
Because the world is stochastic.
It just is, right?
And then if you look at the economy...
So to answer the question...
Isn't the point of the Federal Reserve
to modulate the stochasticity?
Well, imagine how less modulated it would be
if there was no sin.
Stochastic to define for those who,
not everyone knows the definition of that word.
Randomish, I would say.
Yeah, yeah.
If something's stochastic,
it can be sort of predictably random
and analytically random.
It's not completely. The reason economics is a scienceably random and analytically random.
It's not completely.
The reason economics is a science is not completely random.
There's some things you can predict.
You guys do it in free economics. It's nice of you to say that economics is a science
because there are those who would argue that it's not.
It's a social science, technically.
But in answer to the question specifically about
can a recession be predicted?
So, like, you know, there's one saying
that economists have predicted
like 18 of the last three recessions, right?
That's a great line.
So there is such a thing.
There's a technical definition of a recession,
which has to do with, you know, a decrease in,
is it employment?
Is it, you would know that too.
But the National Bureau of Economic Research
declares a recession.
Is it a decline in GDP.
But James would know that because he has prior history.
He does have prior history.
We all have prior history of recessions.
No, Fessup, you're kind of...
So before you became a comedian...
I was a hedge fund manager.
Hedge fund manager.
And I was a hedge fund manager through two recessions.
And you weren't making enough money,
so you said, I'm going to be a...
Oh, no, I made enough money.
That's why I could be a comedian.
I was going to make a joke about that.
You totally messed up my whole joke.
I get it, I get it now.
Did you see the joke coming?
I didn't.
You didn't make enough money as a headline manager, so you decided to take up comedy.
Right, because performing in front of 12 people on a Monday night is so lucrative.
So, isn't it true that if everyone is right about what will happen,
they will bet in such a way that prevents it from happening?
That their behavior will be such that it won't happen.
But that's the problem is that they're very bad at predicting.
Yeah, we're bad at predicting.
There's also arbitrage.
So when there's an obvious opportunity for some people to profit from a downturn, right?
That gets baked into the,
maybe pulled out of the markets.
But bottom line,
we have gotten much better at,
we, like I have something to do with it.
The modern world has gotten better
at moderating or modulating
the way the economy works.
So what you're left with,
in fact, right when the Great Recession happened.
Which is when?
Which was 11 years ago now, right?
It began 12 years ago, 2007.
Okay, so 1929 was not the Great Recession.
Sorry, the Great Recession.
Oh, they're not the Great Recession.
Sorry, sorry.
I get my greats.
Yeah, I know.
There's the Great War, the Great Recession,
the Great Depression.
Great Generation.
The Great, oh yeah.
Great big gobs of feet.
Great Gatsby, yeah.
Grimy gopher guts. So tell me the Great Recession. The Great Recession. From 2008, yeah. Great big gobs of grimy gopher guts.
So tell me the great recession from 2008.
Yeah, 2007, 2008.
There were most economists who watched the macro economy at the time in the long run.
They were talking about the period that we were in right then, 2007, 2008, as what they called the Great Moderation.
They were trying to name our era then,
the Great Moderation.
What they meant by that is,
there will be no more big recessions.
So that's how good macroeconomists are
at predicting the future.
And they said the same in 1999.
In 99.
Right before the 2000s.
Yeah.
Although that one was in some ways, I don't want to say easier to see, but the proximate cause was staring us before the 2000s. Yeah. Although that one was in some ways,
I don't want to say easier to see,
but the proximate cause was staring us in the face more.
Yeah, but if it was that obvious,
people would have bet the other way.
Well, there were people who bet the other way in the markets.
There would have been more people who would have bet the other way
to have buoyed that effect.
But fear and greed sort of comes to place in maximums right before
recession starts. So this blinds everyone.
Maximum fear and greed happens
right before a cycle change.
So that's what happened in 1999 and 2006.
But what good is that for you to say it after the fact?
Nothing.
If you don't know when you are maximally
blinded by fear and greed, to say it
after the fact doesn't help anyone do anything.
Alright, so let's put skin in the game right now
and say here we are in 2019.
On a scale of, let's say, one to 10,
how vulnerable do we feel the American economy is
in, let's say, a five-year time window?
Oh, five years.
Let's say five years.
10 being catastrophic
and one being everything kind of great, okay?
I'd say...
On the scale, on a count of three,
we say our number.
Ready?
Ready.
One, two, three. Five. Okay? I'll tell you. On the scale, on the count of three, we say our number. Ready? One, two, three.
Five.
Okay, interesting.
Eight.
Okay, so eight.
But I will say
it's going to be great
for the next two years.
Right.
And then it's going to be
potentially horrible.
Would you bet on that?
Yeah.
You would?
Yeah.
Okay, so you're going to
short every stock in two years.
No, no, no.
I would just make sure.
That's betting on it.
No, being in cash
is betting on it
because I think it's going to be so bad. That's not betting on it. I would just make sure. That's betting on it. No, being in cash is betting on it because I think it's going to be so bad.
That's not betting on it.
I'm a conservative guy.
That's not betting on it.
It is because I think the value of cash will go up.
It's fine.
But if you really think everything's going to tank,
you will short everything
and you'll make even more money
as we all learned in the big short.
So you're not actually betting on it.
You're wimping out by pulling out your cash
and waiting for things to happen before pulling out your cash. Waiting for things
to happen before you jump back in.
Thanks for announcing to the world I'm an Omega
male instead of an Alpha male.
Stephen, am I correct that he's not actually betting?
I love that you're encouraging him to engage in
the most reckless behavior
possible. You could go broke shorting. Who's your
financial advisor?
You could go broke that way. Next question. What do you have?
Size of all these economic decisions. advisor. You could go broke that way. Next question. What do you have? Oh, by the way,
creative investments in science and technology
are reliable
engines of tomorrow's economic growth.
So, if you want to talk about
boom and bust, the busting
is usually going to happen when you don't
have some meaningful
return on your or no investments at all.
Well, this is related to our next question.
Industries that could actually keep you buoyant.
What do you have?
So this is from the Musial Studio from Instagram.
Do you feel that investing more in space exploration can help boost our economy?
Ooh.
God, yeah, why not? And by the way, I'm going to ask also, public versus private. Should the government be investing? Investing more in space exploration can help boost our economy. Ooh.
God, yeah, why not?
And by the way, I'm going to ask also, public versus private.
Should the government be investing or should billionaires be investing?
Okay, I wrote an entire book on this called Space Chronicles.
And I write books so that I never have to talk about that subject again.
So everybody just reads Space Chronicles. That's why I write books.
No, don't listen to the podcast anymore.
Can you write a book about politics then, please?
I never have to.
So I have an unorthodox answer to that,
and I'd like to get your, Stephen, your feedback on it.
So people think of spinoffs.
If you value all the spinoffs,
direct spinoffs from NASA relative to what we're spending on NASA,
they do not pay for NASA.
So the spin-off argument is...
What's a spin-off from NASA? Tang.
Oh, yeah.
Sorry. Very funny.
Do we sell $18 billion a year in Tang?
So, we're
talking about technology inspired
by the work, technology
derivative of
research done
to put people
and maintain their lives in space.
Okay, people and robots.
Space endeavors.
And creative people
have to invent something
to solve a problem.
Hey, this works on Earth.
One such example
is Tempur-Pedic mattresses.
A Tempur foam.
That was invented for space exploration.
Yet it's an entire industry of mattresses now. It's not an $18 billion a year foam, that was invented for space exploration. Yet it's an entire industry of mattresses now.
It's not an $18 billion a year industry,
which is approximately NASA's budget.
So that's not the argument.
But wait, let me just ask you,
what about, let's say, the computing effort
that were put into early space?
So there are a lot of people who say
that that computing environment
accelerated the development of computing generally,
which led to things like the development of the internet, et cetera, et cetera.
It made it happen faster, but it didn't create computers that wouldn't have been created already.
Well, it's interesting you make that argument because you made a sort of opposite argument
with like bringing in a bunch of gold, let's say.
In other words, we find uses for and grow, right?
We change our world based on the resources available.
I mean, how do you know that?
The computers that were used for NASA were not usable in your room.
Someone has to step up and say, let's make this a home computer.
But the internet was initially funded by DARPA,
Defense Advanced Research Project Agency,
which you could argue was affiliated with the space development.
Well, it was very useful in space.
And plus, the connecting computers
was invented by physicists
at a particle accelerator in Europe at CERN.
So this is, again,
the engine of tomorrow's economic growth.
My point is very different from all of these.
It's,
if we agree that innovations in science and technology
are tomorrow's engines of growth economies,
I don't think that's a controversial statement.
For the sake of argument, I'll agree with you.
Yeah, I don't think it's a controversial statement.
Then, if you have an active space exploration program,
which would require government investment,
private industry can't do what I'm about to describe,
you want to advance a space frontier,
and companies will fail at this
because there's no marketplace for advancing a space frontier.
It's too expensive, it's too costly, it's too dangerous.
Excuse me.
It's too expensive, it's too dangerous,
and the return on that investment is indeterminate
until it becomes routine.
Except for the last question where we did feel, oh, okay, let's get gold from the asteroids
and water from the asteroids and that will feed the world forever.
That's an engineering frontier.
We've already been to asteroids.
That's not advancing a space frontier.
We've landed on asteroids.
So now you just have to land and dig and bring it back.
So the government landed on an asteroid before private enterprise did.
That's the only point I'm making here.
All right?
Private enterprise is not going to do anything first in space
because to do something first in space
has no obvious next return on that investment.
But a government can do it
because a government has a much longer time horizon
than your quarterly report or your annual report
required of investors,
be they public or private,
in private enterprise.
So, point is, watch what happens.
We go into space in a big way.
We say we're going to put people on Mars.
Well, who, we're going to go there in 15 years.
Well, who are those astronauts going to be?
Well, they're in middle school now.
Let's go find them and have like the Mercury 7,
but now they're like 14 years old.
And they'll be in Teen Beat.
They'll be in all these magazines.
And we'll all be watching.
Are they eating well?
Are they not doing drugs?
Are they, what's their social life?
Do the teachers like them?
And we follow them into adulthood and they are heroes that we send.
And everybody gets jazzed about going into space.
And to do that requires advances because no one's sent people to mars before requires advances
in in electrical engineering mechanical engineering in physics chemistry biology
the entire portfolio of stem fields is stoked by an entire generation of students who have as their hero people whose journey is enabled by creativity in those fields.
That would transform our economy like no other force exists.
You know what we're doing now?
We got to go to country.
We need money to have a program to tell people that they should study science.
If you have kids selected who are going to be the first ones going to Mars,
people will be jumping over each other to try to learn science,
and you'll need a special program to make it happen.
So your answer to that question is yes?
In the way I described, yes.
What's the point of sending people to Mars?
There's no point.
All right.
Next question.
That might be the answer.
But, Stephen, let me ask you.
That might be the answer.
But Stephen, let me ask you,
does... How nimble is the investment community
in seeing opportunity
that could open up new opportunities?
Nimble is an interesting word.
They're super nimble,
but they're also fairly cowardly.
Well, okay.
That's an... So you have Amazon trying to put... So Jack super nimble, but they're also fairly cowardly. Well, okay. You have Amazon trying to put
Richard Branson.
So Jack be nimble,
Jack be slow.
Jack walk around the candlestick.
He's nimble,
but he's walking around the stick.
Here's an argument
that some people make
and that I find
has some truth in it,
which is that
venture capital
and private equity
have built a great reputation for funding a lot of innovations.
Of the Silicon Valley sort.
Of the Silicon Valley sort.
But also space.
SpaceX, charging a lack of blue origin.
That's a little bit different
because a lot of those are more vanity projects.
Not all, but some are, which is a little bit different.
I think they want to make money.
Yeah, yeah, but they're funded.
As Elon Musk said.
They're just funded differently at this point. As Elon Musk said, if you want to make money. Yeah, yeah, but they're funded. As Elon Musk said. They're just funded differently at this point.
As Elon Musk said,
if you want to make a small fortune in space.
Yeah, start with a big fortune.
Start with a big fortune.
But the argument is that
the story that we tell ourselves
about venture capital and private equity
is these are unbelievably brave pioneers
who seek out, right?
That's the...
Whereas in fact, what they are
are smart, motivated people
who take pension funds primarily
that have been earned by California school teachers
and find a place to park it
in something like an Uber or a Lyft.
And that's great.
And there's some upside to that.
But there is an argument to be said
that government funding of science,
basic R&D, bench science over the years in pharmaceuticals, in space and computing, etc., are wildly, wildly, wildly underappreciated and undervalued in part because it's the government's own fault for not getting a return on those investments.
But wait, when's the last time you took a drug that was made by the government?
Yesterday.
Every drug that's for sale now was basically funded by always the Institute of...
The first round is no return on the first round.
You have to know the thing exists first.
And that requires huge investment.
And often it happens in collaborations with universities, this sort of thing.
So, yeah.
So, great point.
And here's something we all use.
Touchscreen monitors.
Touchscreens. That was invented on an all use, touchscreen monitors, touchscreens.
That was invented on an NSF grant at the Library of Congress to have people interact with a screen that didn't have to require a mouse.
And so some innovative people invented the touchscreen.
So the government doesn't toot its horn,
but what the government does do is release the patents
so that you make a boatload of money
and then you pay taxes back to the government.
Right, which, absolutely.
There it is.
But I'm very intrigued by your proposal
that if you had the Teen Dream Mercury team,
Mars team, what it would do.
I think that's really an interesting scenario to consider.
Do you...
They would come back heroes
as people who have been explorers
in the history of civilization have been.
Well, I'm also just interested
in what you're saying.
No one's ever had a ticker tape parade
for a robot.
Right.
But what their existence would do
to the next generations of people,
because you're right,
we tell people,
learn STEM because it's good for you
and it's good for us.
And they're looking,
why?
Because there's no
landscape out there for them
to arrive on
after they've actually gone through that exercise.
Could you imagine how annoying these kids would be, though?
Like, if you're
13, we're going to set up your Instagram
account also. Boom.
Like, you know, it's like quantum mechanics. Once you
start observing something, the behavior changes.
Now you're going to start observing,
the whole world's going to be observing the new right stuff.
They're going to be like all Lindsay Lohan or whatever.
I don't want those kids.
On that note, we got to take a break.
When we come back, more economics,
specifically Freakonomics on StarTalk.
This is StarTalk, we're back.
I'm Neil deGrasse Tyson.
I've got Stephen Dubner here.
I've got James Altucher.
Each of them has a podcast.
Only one of them named the podcast after himself, and that would be James, wouldn't it?
I feel like I have to apologize now.
I should have just called it like, I don't know,
Freakonomy.
The word freak is good.
Stephen W., Freakonomics, a best-selling book,
internationally best-selling book.
Just congratulations on that.
Hey, thanks.
For that supply.
That's really good.
Can I tell him one story, Stephen, about the book?
Yes, please.
Okay, so this is almost 18 years, 17 years ago,
whenever it was. The day before the book
comes out, Stephen and I are having lunch.
You were worried. I'm not going to say what
you said, but you were worried
you didn't know how the book would do it, and you were scared.
And I said, I was lying. I was just
being nice. I said, don't worry. It's going to be a big
hit because I read the galley, but I
just was being nice. I didn't know. And then you called
me a few days later.
You said,
check out Amazon's rankings.
And I figured,
oh, it'll be like
number 1,000,
number 2,000.
And you're like,
no, just check out the rankings.
Okay, number one was Harry Potter.
Number two, Freakonomics.
For the next year and a half,
it was number two
was Freakonomics.
I was really jealous.
But you were wrong.
Wait, wait, wait.
That's a story?
That's a story. He was nervous. It's were wrong. Wait, wait, wait. That's a story. That's a story.
He was nervous. It's really a story about Harry Potter.
Unfortunately.
All right, we got more questions.
Yes. We've only been through three
questions today. Let's see if we can get some more.
Okay, this is from Launchpad
Cat on Instagram. What is the
most important thing to look for when determining
if studies slash statistics
are trustworthy?
Great question.
Depends if you're a scientist or not,
if you know how to read the scientific paper.
I think there's anything a lay person can say,
which is how big is the sample size?
What are the confounding factors?
What are the alternate explanations?
And what is your degree of confidence in your conclusion?
Those are some basic questions.
I would say in physics, we have it easy.
In economics, they have it hard.
Because in physics, if we find a new law of the universe,
it will repeat every single time.
Whereas in economics, if you discover a new pattern
and then you invest knowing that pattern,
the act of investing changes what that pattern becomes.
Right.
True.
So you become, as James, you had mentioned earlier,
you become sort of a quantum participant in the experiment itself.
Yeah, and also I feel with economics.
The observer effect.
Most, right.
But most things are like bell curve statistics,
but there's also the power law of earthquakes involved, and you can never
predict that as the problem, which is why it's a
social science rather than a hard science. I would not say we can never predict
earthquakes. We just don't know how now.
We don't know how now, true, but it's a different kind
of statistics, as far as we know.
But in physics, okay, you're
an observational physicist. In theoretical
physics, I don't know if you can say
that about theoretical physics papers.
Say what? On the frontier's say you have a...
On the frontier, most are wrong.
But once everything agrees and it matches observations,
we have a new understanding of the universe.
It's why we have modern civilization.
All right.
Yeah, economics has about one law that's like a physics law,
and it's basically supply and demand and how price works within that.
But even that gets violated sometimes.
So, yeah, it's a very different kind of science next question go uh
james you're picking them i'm gonna pre-answer yes
okay private versus public health care what's what's better for the economy
um and what's better what's more more moral? I don't know.
I don't do moral.
You don't do moral?
I think it's a mistake
to do moral as a...
I think it's good
to do moral as a first step,
but then when you get
into analysis
and descriptive policy
and so on,
you got to turn off,
put away the moral compass.
Yeah, but the moral compass
could deeply influence.
For example,
in my field,
with regard to
possible future contact
with alien intelligence,
if an alien shows up on Earth
and it's smarter than us
and you kill it,
is it murder?
If it's not itself human, right?
So our laws only talk about humans,
but something more intelligent than you.
So these are things
I think are worth
folding into how you
think about the problem.
I think morality is hugely important, but when it comes to doing analytical...
Okay, here's a counter example.
I think morality is really, really important, but what kind of sentence is that?
Let me finish the sentence.
Morality is important and...
Okay, if you want to be an and guy instead of a but guy,
you're welcome to be an and guy,
but it's incredibly important to put aside your personal moral compass
when you're trying to analyze
like a particularly social issue
because, and this is why we see so much bad policy.
You see people making policy decisions
based on what they hope or wish will happen
or fear may happen.
And we humans are just
smart enough to find confirmatory
evidence of what we believe and ignore
evidence that would negate it.
And so I just go into situations
trying to think, you know what, whatever I feel about
this particular issue, gun control,
climate change, whatever I feel about it,
move it to the side and let's
try to look at the data first. So that's what I mean by
putting it in reality. But the problem is there's never any data.
Let's say the government says in 1965,
oh, we're going to back all student loans.
Nobody's ever done it in the US, so
there's no data. And now
tuitions go up 10x faster than inflation.
Well,
but you can't say that because a lot of European
governments do actually guarantee
universal education through college, like healthcare.
Use universal differently.
Sorry, sorry, sorry.
Earthwide education.
For everyone.
Thank you.
Universe is bigger than earth.
Noted.
Okay.
All right.
So for earthwide.
Miss Universe is like the prettiest person on earth, not in the whole universe.
Okay.
So earthwise, getting back to the healthcare question, the question, what's better?
I think the answer is,
I'm not going to say what's better or worse.
I think the answer is, it is bizarre
that the United States is the only rich country in the world
that A, doesn't have a national healthcare system.
I say bizarre, not terrible, bizarre.
And it's also bizarre
that we traditionally have had a healthcare system
that's been tied to employment,
which is basically an accident of history
going back to the second world war.
Do you think if people knew all of this,
they would all think and vote differently about healthcare?
Not really, honestly.
But here's where I think the conversation needs to happen.
I think if people want to talk about socialism being wonderful or terrible,
they need to understand what socialism is.
And most of the people who are promoting socialism as wonderful and terrible, for that matter,
don't know what socialism is.
So what they admire are socialist democracies like Scandinavia.
But that doesn't mean that the state owns the oil companies.
Right, exactly.
So when we look at like Scandinavia
and other countries that have good earth-wide healthcare.
Thank you.
I got to get used to that one.
It's hard.
It's really hard.
It's worth noting that that is not socialist
in the way that it's used as an epithet.
And so would it be better for the economy
for there to be some kind of a reform system
where costs could be controlled?
Then the answer is a gigantic huge yes.
The problem is, I mean,
I'm guessing you see this in your science
a lot more than we see it in our science.
When there's a lot of entropy or inertia or whatever,
how do you undo that?
The healthcare lobbies are really rich and really strong.
And why would they want to undo it?
So that's a big, big, big barrier.
And also look where government, like, does the FDA really help the drug approval process?
And this is even related to the scientific studies question.
How many drugs get recalled even after they've been through all the studies?
scientific studies question. How many drugs get recalled even after they've been through all the studies? I mean, some would say that the FDA for thalidomide per se was one of the best uses of
public science in the history of the world. I mean, that was actually, that was an FDA, you know,
thalidomide was widely used around in Europe and other places in the world. The reason it wasn't
here was because of, I think it was a single FDA officer, and she just said, I think we haven't seen enough data to make a call on this.
But even that really set the stage for the next 45 years
of maybe some reluctance or whatnot.
All right, another question.
Another question. Give it to me.
This question is from Ari Moody at Patreon.
How is AI going to change statistics and economics?
Ooh.
Yeah, where's AI landing right now? How is AI going to change statistics and economics? Ooh. Yeah, where's AI landing right now?
How is AI going to change statistics?
AI will become the richest thing there ever was.
Hmm.
I just want...
Divine thing.
I don't know what AI is.
It's not animal, vegetable, or mineral.
It's mineral, right, I guess.
So if I have an AI computer and it's smarter than I am
and it figures out the market
and it becomes a trillionaire overnight
and we'll just stare at it
and there it is.
It goes off on its private jet.
And wonder if it's going to kill us.
They have AI though that plays chess,
that flies planes,
but not a single AI can tell me if an apple tastes good.
So can they really replace humans?
I would say not yet.
Not yet. It's to come.
But get back to AI
in economics.
Isn't that kind of what these
complex trading programs are doing?
Yeah.
They're using hardcore statistics rather than
AI.
Well, they're making decisions on the fly
based on information it had never seen before.
Right.
But primed by what has happened in the past.
Right.
That's what any of us do, right?
So I'm not going to say that's not AI.
There's like strong AI, weak AI, and general AI.
Okay, we can slice and dice.
But if you have a computer making buying and trading decisions
based on information that it is getting on its own,
then it has the potential to be the richest thing in the world.
I don't know if that's true.
And we really do pretty much have that now.
That sounds like you know it's not true
when you say you don't know that it is true.
Are you being skeptical?
What's your skepticism?
The problem is in the markets,
there's one of the biggest factors in the markets
is human psychology.
So AI, I mean, we're always going to be better at that,
the machines, not at producing it,
not necessarily analyzing it.
Sorry, yeah, we won't be better at analyzing.
We'll always be better at producing it
because we introduce that chaos into the system.
But to me, the biggest gain,
I think about AI the way you were describing, let's say, we bring back boatloads, boatloads
full of gold. What does AI do for the human experience? We don't know yet. Will it expand
it and augment it and make it awesome? I'm sure on some dimensions. Will it make it very constricting?
I'm sure on other dimensions, that's true. I think, you know, dogs used to be animals of labor.
They did a lot of pulling stuff
and they did a lot of labor for us.
And then we found better things to do that,
including machines.
And then we turned them into pets.
So we actually have more dogs around now
than we did when they were workers.
So I like to think that we humans,
we could be lovely pets for the robots.
For AI.
Absolutely. I think we'd be, you know.
For the wealthy AI that's trading.
Here's the problem that happens,
is that once you have AI
that is making money,
everybody else sees it
and then they make AI to model that.
And so it gets,
you mentioned it earlier
in another question,
it gets arbitraged away.
So advantages change very quickly
and you always have to have
the next AI very
fast to take advantage
of that. Yeah, so it's
second-generation AI that
kicks the ass of the first-generation AI.
And then in the future, there'll be the hundredth-generation
AI that then controls
the universe. Let me get one last question,
and let me see if you're good at soundbites. Go.
Okay. Do you think that
the economy would react better to a moon base or a long-term mission to Mars?
Ooh, good question.
A moon base or a long-term mission to Mars?
Yeah.
How would the economy react better?
Moon base.
Moon base because of what you said earlier, rare earth minerals.
Yeah, you want a way station for bringing back theā¦
No, I said they're on asteroids.
No, moon asteroids have hardly any.
No, but you want a close place to process stuff, don't you?
Don't you want to...
That has value, but it has less ambition.
Yeah, but it's like an Amazon warehouse in New Jersey.
I don't need to come all the way from Seattle.
I need my coffee tomorrow.
You're right.
The moon is three days away.
Right.
So moon prime, if we want...
Of moon prime.
If we want our lunar rocks yesterday better for our moon delivered on
but by space drone right right okay well if you could go make a good point and i i i i retract
my statement about mars being cooler because the moon will be much more practical we can disagree
that's okay i'm comfortable with that arguments what's what's more interesting to you somebody
landing on a passing asteroid or someone landing on mars mars will take more more interesting to you somebody landing on a passing asteroid or someone landing on Mars
Mars will take more
more innovation to pull that off
and as a scientist that likes seeing the moving frontier
of our knowledge
Mars landing
but what if someone's going to use the asteroid
as their rocket to get to Mars
boom
it's better to just use your own rocket
really?
and if it is you're going to be dead when it hits Boom. Yeah, it's better to just use your own rocket. Really? Than an entire planet?
Because the asteroid will be headed straight for Mars.
And if it is, you're going to be dead when it hits.
So, yeah, it's just not a wise thing.
How worried are you about an Earth-ending asteroid strike generally?
A life on Earth-ending asteroid.
Earth will be here longer.
A life on Earth-ending asteroid.
Yeah, we should all invest some amount of money to mitigate that risk.
So, for all of our guests,
we give them a chance to ask me a question
if they've been harboring any sort of unanswered thoughts
about the universe.
I've been harboring.
I do have a question for you.
I think this is a really minor thing,
but it's something that I wonder about,
which is contamination.
I'm sorry if I smell.
So I know that at JPL, Jet Propulsion
Labs in Pasadena, California,
which does a lot of NASA research.
It's a branch of NASA, yes.
They and others are concerned
that everything
that we send into space
doesn't spread our microbes around
and that things that come back from wherever
don't. Is that
a major concern?
Oh, yes.
It's an entire office of NASA called the Office of Planetary Protection.
Right.
And it protects other planets from our microbes,
and it protects our planet from whatever microbes might come back
if we have what we call a sample return mission.
Or if we send astronauts, and they might come back contaminated.
The original Apollo 11 astronauts were put in a, what do you call that?
Containment, whatever, a quarantine.
Yeah, they were in quarantine, but I keep saying Winnebago,
but it was not a Winnebago.
It was a Gulfstream, you know, the metal.
Silver Airstream.
Airstream, thank you.
So the astronauts were put in like an Airstream,
and you can only talk to them through the window and through a telephone.
Right. And that was to make sure that they didn't bring any bugs back from the moon. So the astronauts would put in like an airstream, and you can only talk to them through the window and through a telephone.
And that was to make sure that they didn't bring any bugs back from the moon.
We learned that they didn't because life can't, as we know, it can't survive on the moon.
But it was still, the gesture was an important fact that,
look, people, we don't want to cross-contaminate.
When that has happened in the history of exploration on Earth,
it has never boded well for typically the people who got visited by the...
It would be so interesting to know, however,
if there were antibodies or
whatever, any kind of microbes that would be useful
in our Earth science here, right?
We certainly never evolved it in our bodies, though.
Well, we don't know that.
I mean, you know a little bit more about the Big Bang than I do,
but isn't there a chance that there's a
piece of that in all of us?
Yes?
A piece of what?
Whatever's in us is out there.
Yeah, atoms.
So theoretically, there may be some underlying principles of cancer
that we haven't yet understood well
because we haven't seen it modeled in a way that we can...
What we would do is do a download
on the brilliance of the aliens who have come to visit us.
They will know more about practically everything.
We got to end it there.
Guys, thanks for coming on.
Thanks for having me.
Throw a little economic twist to all of this.
Because as they say,
freshly minted graduates,
scientists, engineers, and economists,
and they pose a question to the life they're about to lead.
The scientist asks,
why does it work? The engineer asks, why does it work?
The engineer asks, how does it work?
The economist asks, how much does it cost?
And that is the civilization we have come to know.
You've been listening to, possibly even watching, StarTalk.
I want to thank Freakonomics' Stephen Dubner.
Stephen, thank you for being on. My pleasure.
I enjoyed it. James Altucher.
Recently married. Congratulations. Thank you.
Yeah. And thanks for coming on.
Thank you very much. Thanks for having me. Alright.
I've been Neil deGrasse Tyson and I still will be even after
we finish this podcast.
And I want to thank you for
listening to, possibly even watching
StarTalk. As always, I bid you to keep looking up