The Joe Walker Podcast - The Doyen Of Economics Podcasting On Death, Lockdown, And The Art Of Socratic Dialogue - Russ Roberts

Episode Date: July 22, 2020

Russ Roberts is an economist and the host of EconTalk.Show notesSelected links •Follow Russ Roberts: Website | Twitter •EconTalk •Macroeconomic Patterns and Stories, by Ed Leamer •Fooled By Randomness, by Nassim Taleb •Systemic Risk of Pandemic Via Novel Pathogens -- Coronavirus', paper by Joe Norman, Yaneer Bar-Yam, and Nassim Taleb •'To philosophize is to learn how to die', essay by Montaigne •How Adam Smith Can Change Your Life, by Russ RobertsTopics discussed •When and how did EconTalk begin? 8:55 •Has interviewing over 750 people made Russ a better or more effective person? 13:59 •How to really understand an idea. 32:00 •What has Russ learned from Nassim Taleb? 35:43 •The Precautionary Principle. 42:03 •The lockdown dilemma. 48:38 •The Precautionary Principle again. 1:11:52 •Is Russ afraid of death? 1:18:49 •What has Russ done to improve his craft as an interviewer? 1:27:18 •Where was Russ born and what did his parents do? 1:48:21 •Why did Russ study economics? 1:49:52 •Narrative economics. 1:51:13 •Who are the most important economists for non-economists to know? 1:57:12 •How does Russ think about what he does? 2:02:31 •Vipassana meditation. 2:06:26 •When would Russ recommend economics as an undergraduate degree? 2:17:18 •Adam Smith's distinction between being loved and being lovely. 2:21:14See omnystudio.com/listener for privacy information.

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Not bad, right? www.blinkist.com slash swagman. You're listening to the Jolly Swagman podcast. Here's your host, Joe Walker. Swagman and Swagettes, welcome back to the show. I'd like to begin with an apology. I deeply apologize for the last three months of radio silence. My day job required special attention as a result of the pandemic. I've learned a lot about my ability to balance different responsibilities. The other thing I learned was just how much I missed running this

podcast on a regular basis. And thank you to everyone who cajoled and criticized and contacted me about the absence of episodes. I appreciate you and I appreciate this entire audience. Three months of radio silence is no way to treat an audience. And so here at the Jolly Swagman podcast, we're committing to weekly episode releases at a minimum. It will actually be more frequent over the next few weeks to let everyone know that we're back and more serious than ever. So promise that you'll save some time for me because there's a bunch of important episodes that are about to be released. Eventually, we'll settle into a weekly cadence with episodes probably being released at 6.30am Australian Eastern Standard Time on Monday mornings,

but I'll let you know exactly when the timing will be as we get closer to that point of a weekly cadence. If you value the Jolly Swagman podcast for rigorous, honest, fun, long-form conversations with important minds, then you, my friend, are in for a treat. Our best conversations truly lie ahead of us. There are so many of them that I've been dying to share with you, and this episode is one of those. It was recorded on the 24th of April, talk about those, but perhaps I'll treat that topic separately and properly another time. My guest is an American, an economist, and a fellow at Stanford's Hoover Institution. He's the author of several books, including How Adam Smith Can Change Your Life, An Unexpected Guide to Human Nature and Happiness, and his two rap videos on the ideas of John Maynard

Keynes and Friedrich Hayek, created with filmmaker John Popola, have had more than 11 million views on YouTube. But Russ Roberts is perhaps best known as the host of EconTalk, a weekly podcast which, in my opinion, is the best economics podcast in the world, although recently it's branched out into other topics. Two of my favorite EconTalk episodes are Russ's 2009 conversation with Christopher Hitchens on why Orwell matters, and his 2014 interview with Tamar Piketty on inequality. The latter is a lovely example of how to disagree with a guest respectfully.

I highly recommend it. This episode was a great episode. I had so much fun recording it and I do hope you enjoy it as much as I did. So without much further ado, welcome back and please enjoy this conversation with Russ Roberts. Russ Roberts, welcome to the show. Great to be with you. It's an absolute honor to speak with you. Obviously, you're someone whose intellect I admire greatly, but you also seem like a guy who I enjoy having a beer with as well. So, I think that's a very special combination. And Econ Talk is one of my favorite podcasts, has been for many years. As I said to you before we started recording, I don't really have a clear agenda, but there are lots of topics that I want to discuss with you. Obviously, the pandemic and unfolding around us, Adam Smith, one of your favorite thinkers and topics. And just generally, I wanted to ask

you about the art of podcasting because you've been such a success in that field. So maybe we can start there. When did EconTalk officially begin? Well, it started back in 2006, which I guess 2019 seems like about 40 years ago. But 2006 was 14 years ago, and podcasting was pretty young. I was early into podcasting. I was late into blogging, and I thought, I'm not going to be late into podcasting. I'm going to try this. And I started out thinking, I'll do it every once in a while, see how it goes, see how much work it is, see if it's fun. And I realized pretty early on

that if I didn't do it every week, I was going to have trouble just keeping the project going and keeping an audience. So pretty early on, I think the first few months, I decided to start releasing them every week. And at some point I stopped taking a break between Christmas and New Year's and so now we release about 52 episodes a year every Monday morning at 6 30 a.m eastern time and is it your do you own the show or under whose auspices does it operate no it's part it's part of the Library of Economics and Liberty, which is a website that has a blog, a podcast, an encyclopedia of economics,

and then dozens and dozens and dozens of classic economic texts, Adam Smith and others, David Ricardo. And it's a resource for anybody who wants to learn more economics tons of essays there and all kinds of of informational stuff so the podcast is just one piece of that uh and yeah it's been great have you ever been tempted to break off and start your own show so that you can monetize it uh well liberty fund the people who sponsor the library economics and liberty and run it they do pay me uh so it's not like i'm it's totally pro bono work but um i'm i've wondered whether i could make more doing something else

but i really like liberty fund i like being part of their ecosystem. I like the people there. They've trusted me from the beginning and they've let me branch out intellectually away from economics, which I've done in the last few years on the show. So that's really been wonderful to not just do episode after episode on Bitcoin.

Not that I don't enjoy the eight or ten episodes we've done on Bitcoin, but I do have listeners who'd like every week to be Bitcoin or modern monetary theory or what happened in the Great Recession, all of which we've done dozens and dozens of episodes. But after a while, I thought, you know, I don't think I fully understand all those things, but I don't have a lot more to learn. There's a paradox there. I've never really thought about it.

Let me try to say that again. I know I don't know everything there is to know, but I donest um most cerebral people who write about those topics i feel like i've learned what i can from them and i'm ready to learn about something else yeah so in that sense the show is kind of selfish which is to say you're just scratching your own itches which is very much how i choose my topics and my guests as well yeah exactly yeah and if you like if you if you itch where i itch uh you'll enjoy the scratching but uh you know and and you know i did an episode on jane austen uh this past year i've got one coming up soon on uh meaning and and with the physicist alan lightman it's not everybody's cup of tea

they're a little bit off the beaten track some of them yeah but that's okay i hope people like them same yeah i have an unusual amount of people email me saying that i need to speak with so and so about modern monetary theory and i'm afraid to say it's it's just not something that's particularly interested me yet um you know maybe it will at some point in the future but i hate to disappoint those people uh i do too but you know i've changed my tune on it a little bit people used to say to me you need to interview so and so on modern monetary theory and i used to politely respond i would but i just don't understand it uh i think i do understand it now and i just don't think it's right so you know and i've read about it it's not like i thought oh that's a silly

idea i don't want to learn about it i've tried to understand it it does not make intellectual sense to me so i might be wrong i'm not suggesting that my listeners should never explore it. I just don't get it. I think it's not correct. Do you know how many interviews in total you've done by now? A little over 725 or so, about 7, something between 7, around 730. Yeah. Yeah. Do you feel like being an interviewer

has made you a better or more effective person? Well, I was going to say it's made me more humble, but that sounds a little unhumble, I guess, to talk about how humble I am. Better I've gotten at humility because of EconTalk, but I think it's true. I think there's two aspects of hosting a podcast that are personally useful as opposed to, say, intellectually fulfilling or personally satisfying. It has made me a better listener. I love to interrupt, finish people's sentences.

I think if you go back and listen to the first hundred episodes, and it always makes me uneasy when someone says, oh, I heard about your podcast. I'll start at the beginning and work my way forward. I want to tell them, cut me some slack on those first few hundred because I was just kind of learning my way. Because I like, I actually enjoy with certain people and certain styles of talkers, I like crosstalk.

I like rapid fire banter. It turns out that's very hard to do on Skype without video, which is how I did my first few hundred. I did some over the phone in the early days, the different technology. But if you're doing anything over the internet now, there's a tiny delay. Sometimes the guest doesn't hear you when you try to interject. It sounds like they're rude because they don't let you cut in. So I finally, it took me a long time to realize I have to let people finish their sentences.

That's a good life habit. That's number one. And I'd say the biggest thing that's helped me personally for being a host is that if you've listened to the program, you know that I enjoy having people on I don't agree with. And people will write me after those episodes and say, how could you stay quiet when, how could you keep your cool when so-and-so said blah, blah, blah? And I always want to say, well, have my EconTalk hat on. And when I have my EconTalk hat on, I'm polite and respectful.

And I see my job is to help listeners understand what the guest has to say. And I hope at times to help listeners understand why I think the guest is not correct, perhaps. But it's not a yelling match, shouting match. And when I want to shout, I know that that's not conducive to my goals for the show. So I try to subdue myself. And that's been a useful habit outside of podcasting as well. So as I say, are the two personal things I've gained. In general, it's had a huge impact on the way I think about the world and in many, many ways. So I think it goes well beyond that. But just in terms of personal behavior, I say those are the two things that have helped me. Yeah. Just hold that thought about how

it's impacted the way you think about the world. Russ, I've had a similar experience to you in that it's made me a much better listener. I used to be a bad listener as well. I would, you know, finish people's sentences for them and I was very impatient. I'm not sure whether the podcast necessarily made me a better listener or whether I would have become a better listener anyway as I just got older and more mature. But I think it probably accelerated that development. The other thing is, you know, like you,

I jump around a lot of different topics with each episode, you know, both between episodes and within episodes. And preparing for each episode is a very humbling experience. And there's a quote, I think it's the, I think it's Rob Lee Evans, an MIT physicist, but the quote is, everything is more complicated than most people think. And I always reflect on that when I'm preparing for podcasts because you start to feel like you're getting a topic and you just realize you've barely touched the surface. Sure.

And you have to be careful about not being too certain about your knowledge going into an interview. Absolutely. Totally agree. So how has EconTalk impacted your broader worldview? Well, I'm an economist, so I'm trained in a certain way of thinking. And that hasn't changed much over the last 40 years. Literally, it hasn't changed much, but it's changed quite a bit in some subtle ways. So I think I'm less dogmatic about the

implications of my particular kind of economic lens for thinking about how the world works. That's not unimportant, but it's not so visible to an outsider that that change would have happened. My wife, for example, who understands the way I look at the world, I don't think she would say that my economics worldview has changed very much. It has. Inside, I have more nuance and subtlety and unease about my earlier, more confident views.

And that's part of, as you suggested, it's hard to know whether that's just getting older and growing up or whether it's an actual change. But I think there is a part of that that's important, and it ties into a larger change, which is that I did a couple of episodes early on where I realized that people who didn't agree with me actually thought they were right. You just assume, well, it's so obvious that I'm right. They can't be confident. They've got a bad position. Or my studies are ironclad that support my worldview, and theirs are foolish and inane and inadequate. And I think at some point, I had literally an epiphany. I sort of realized he's a nice person.

He also thinks his studies are good, and he doesn't agree with me. And when you come to that realization, I think any thoughtful person, whether it's about economics or political ideology or religion, it should open your mind a little bit about the uncertainty that surrounds your position. So that did that for me in a small way around the areas of economics. But then it started to grow. And, you know, you could attribute it narrowly. It'd be wrong, but you could attribute my change to exposure to Nassim Taleb. His work is very, he writes relentlessly on risk, uncertainty, probability, and how to think about those things in interesting and sophisticated ways.

And when I read his first book, Fooled by Randomness, I thought, this is such a great book. And I looked at what other people thought about it, and a lot of people loved it, like I did. Other people reacted to it by saying, oh, I knew everything that was in here. And I thought about it, and I thought, yeah, I kind of knew everything that was in there, too. I was trained somewhat in statistical techniques and methods, but I didn't really understand them until I read that book.

I interviewed a mathematician earlier on in the program who made this distinction. I really liked it between being able to define something and understanding it. So he said, randomness, I can write a definition of it. So, you know, he said, randomness, we can, I can write a definition of it. I could define it mathematically even in certain, with certain boundaries and parameters. But to really understand randomness, to get a rich appreciation of it, it's a lifetime's work. And even then you probably don't have enough. It's such a deep concept. I

feel that way about the idea of emergent order in economics, the idea that there are things that are not planned, but looked as if they're planned due to the interaction between individuals who don't have a central control, their decentralized bottom-up activity somehow creates a pattern that looks like it was designed. That is a, yeah, I just defined emergent order. You could define it as the results of human action, but not human design. So, oh, okay, now I know what it is. No, you don't. You don't. I gave a seminar on it once

to some people I really like and respect, and their reaction was, yeah, they were sort of disappointed. I said, well, we knew all that. And I'm thinking, no, you don't. You don't even know it now, even after my attempt to enrich your appreciation of it. I mean, it's such a deep, subtle idea that I still have things to think about and learn about related to it. So that, I would call it that landscape, the landscape of uncertainty,

the landscape of, you know, the fancy name for it is epistemological humility. It's a really fancy name, right? It means being aware of one's limitations and how well we know what we know. How do we know what we know? How do we think about the uncertainty surrounding what we know? And, you know, Taleb has a, he says it's a proverb from Venice. It goes something like, the farther from shore, the deeper the ocean.

And, you know, as you learn more and more, you realize how much you still have to learn. And that, again, very simple statement. Everybody goes, oh, yeah, that makes sense. I get that. Yeah. You know, it's back to what you said. What is it from Evans? What was the quote?

Everything is more complicated than most people think. Yeah, I'd say everything's more complicated than you think. Than I think. It's a version of the Feynman quote. The most important thing is not to fool yourself, and you're the easiest person to fool so that thinking about that idea again you could easily react to that by saying oh yeah yeah i know of course i know that oh yeah and yet i'm amazed at how often as often as i think about that i'm amazed at how often i fool myself so um i would say, if you say, you know, what's the most important thing I have learned

over the last 14 years from being the host of EconTalk, that's it. It's a richer appreciation of how data and evidence and the certainty and uncertainty around our perceptions evolves and how to think about that and how one should deal with that in one's own life. And lately, you know, it's taken a, my view of that has taken a, an interesting twist or side road where I think a lot about how much of what matters in life isn't quantifiable. And that's so uncomfortable to so many people. They want to know what to do.

And when you say, I'm not sure, they say, well, give me the data. The data aren't very good. Well, give me the best data we have. Yeah, but you should remember that the best data we have are prone to leading you down a false path. I don't care. I'll just be skeptical about it then when you give it to me. And the idea that you might struggle to adopt the right level of skepticism is such an important idea. So those are the things I've been thinking about lately, how our brain is fooled by numbers, how easily we're seduced by numbers, and how our focus on numbers causes us to undervalue other kinds of evidence.

Can I give you an example from the virus world we're living in right now? So, oh my gosh, what an avalanche, what a tsunami of data we're getting about this terrible disease. You know, we get data about the world. We get data about a country. We get data about a state or a federation. We get data about cities.

We get data on cases, tests, deaths. And then all of a sudden in the middle of it, it's, oh, we're going to change the definition of deaths. then all of a sudden in the middle of it it's oh we're going to change the definition of deaths we're going to add in probable what oh okay well that kind of changes all how long you been doing that for i found that out that's been going on for about eight days in the united states really oh well that changes what i was thinking i get it and even then of, it's not literally an accurate count. There are people who die who are at risk of dying very soon anyway. There are people who die of something else, but COVID made them more vulnerable, so it could get misclassified. So

it undercounts and overcounts. But the more important point I want to make, and this is the, those are things that any thoughtful person who deals with data understands, that definitions are tricky, that which universe you look at is important. Are you looking at the whole United States or just a city? Averages can be misleading. Right now, and this has been true for a long time, New York and New Jersey are over 50% of the deaths in the United States. Well, that's weird. Okay. So when you talk about the United States, are you talking about two states or 50? Oh, well, you got to be careful there. But having said all that, that's to me not the most interesting thing. The most interesting thing is we don't understand how this disease spreads.

We think we do. It's through the air in some dimension. But is it in large groups, close together people? Does a mask work or not work? Don't have any data on that. Now, in the early days of the of the virus these people these people that tells you i don't have a high opinion of these people would say oh well there's no evidence that a mask works oh gee how about common sense if you know it's born by ear wouldn't a mask

kind of help so i was pushing for masks i don't know three weeks ago a month ago when cdc and the united states and the world health organization were saying they're not effective, they don't help. It's nonsense. You don't have to have a formal randomized control trial sometimes to learn something. And so that would be one example. There's speculation. I saw in an essay today that it's possible that a lot of the so-called super spreader events that we know about a handful of them where one or a few people or one event caused dozens of people to be exposed in a with a heavy

viral load a whole nother example we don't know whether a heavy viral roads loads important for mortality or whether it's irrelevant um but these super spreader events, they might be really important, but you can't measure them. You know, it's like, oh, well, so let's see, how do I quantify a wedding, a football game, a medical conference, and a after work celebration? You know, they're all different, I guess. I guess I can't deal with that that but that might be really important for how this thing spreads but because you can't put it in a chart or an excel spreadsheet it's going to get ignored for a while another thing that drives me can i just vent for another second please so you get another thing like um south korea is doing great because fill in the blank well there's about 90 things that are different about south korea

than say australia or the united states how do you know which 90 which of the 90 are important is it because they wear masks culturally in asia more comfortably is it because oh no no it's the testing how do you know a lot of asian countries i can't remember south korea is one of them they quarantine people centrally and didn't let them just go back to their families they forced them into a into a facility was that what made them so successful was it that they didn't socially distance is it because they don't hug and kiss when they greet each other i have no idea if they do or not but is it a coincidence that spain and italy which are very affectionate culturally in terms of greeting,

does that have anything to do with it? Say relative to Germany, which was doing better? I have no idea. There's 50 factors, and yet people constantly just list one thing and say, oh, one more. You know, Sweden's got a higher death rate than Norway. Well, they do. Does that mean that's, you know, that proves that the Swedish approach isn't working?

How do you know? First of all, that proves that the Swedish approach isn't working? How do you know? First of all, the so-called Swedish approach, I just did a tweet on it because I was curious. There are a lot of things going on in Sweden where people are reducing their interaction with other people. Just because the government didn't say they should doesn't mean that they're doing a laissez-faire approach, so-called laissez-faire. There are other places where there's lots of restrictions. Nobody pays any attention to them. So, you know, when you do your data analysis, people are going to put, well, so-and-so started around March 15th because there was a proclamation.

Yeah, but nobody paid any attention to the proclamation. Your data's meaningless. Anyway, so data's hard. Evidence is hard. Numbers are hard. Those are the things I think about a lot. Reminds me of Ed Lima's aphorism, which I think he writes in the beginning of his textbook,

Macroeconomic Stories and Patterns, which I always thought was just an epic thing to include in a macroeconomic textbook. But it was, you know, we're pattern-seeking storytelling animals. And essentially all we're doing is spinning narratives to each other um that often that fit a fit our preconceived worldview or ideology but as you say getting to the actual truth of what is going on here is a supremely difficult sometimes intractable task

yep and lives are at stake so we're trying hard i get it and we should yeah yeah uh russ you you spoke um oh god what did you you said something that triggered him oh yeah so so you were talking about how a lot of people give lip service to ideas like uncertainty but sometimes it takes a whole book or indeed a whole inserto to beat them into your head yeah i i love that idea i i was wondering about how to solve that a few years ago a friend and i um started building a website which you would add you know a few insights from books that you'd read and it would message them back to you periodically it was like the timing of the messages was based on the science

of flashcards and memorization so they were intermittent but but less frequent as time went on that's a great idea one of the reasons it wasn't as effective as i hoped it would be is the wording is always the same so you kind of lose sensitivity to the to the to the quote so i don't know how to solve that problem but it's almost as if you need to hear the same idea lots of different times in lots of different ways from lots of different people to maximally help it to sink in i I think that's an exceptionally deep insight about how the way we not just gather information, but learn how to think about the world, which is what we really care about. People sometimes complain that something I write is, quote, repetitive.

And I always want to say, well, of course it's repetitive. That's how you'll learn something. I'm trying to save you the problem, the challenge of having to read it three other times by three other people. I'm giving you three versions right now. And I'm trying to do it subtly so it doesn't – I don't just literally just repeat it. I come back to it later, and it helps you. I like to think that's an incredibly important idea that, you know, the way I think about it comes from, there's a famous Jewish sage from a few thousand years ago called Rabbi Akiva. And Rabbi Akiva, according to tradition, was a unlettered, illiterate shepherd until he was 40. I think it's 40. And then he

suddenly got excited about words and ideas, and he became one of the greatest scholars in Jewish history. And supposedly, he got his motivation when he was out shepherding and he saw in some stream how the rocks were worn down by the water. And he realized that any drop, any one drop on the rock doesn't do anything. But give it time and you can wear down a rock with water. And I think of my efforts to teach or to learn as, you know, it's a drop on a rock. It's just one thing. So Rabbi Akiva, that metaphor of drops on a rock, the first time you hear something, you don't even have any impression on you whatsoever. But the fourth time or the seventh time, all of a sudden, a picture emerges in your head or a connection clicks,

and you suddenly have a different or a fuller lens for examining things. And I think that's how we learn. It's, you know, I'm not talking about facts. It's true that you can forget a fact and by the third time it's more easy to memorize. I'm talking about something much subtler which is a a lens or a a concept like uncertainty or emergent order to to really start to understand it that first time definition is almost a waste of time uh but you need it because you're going to have to let the other

drops add to it and make a difference full by randomness was the first of tuleb's books which you read you mentioned that previously yeah uh so that was published in 2001 i assume you read it around that date i got to it late uh somebody recommended it to me and i thought i'd never heard of this guy i don't know what that is um i just ignored it and then somebody reminded me again and I finally went back and read it and I found it electrifying I loved that book. So was that a step function change in your epistemological humility or were you already well down the path? No I think that was a big event

it's not like a light bulb went on for me but it's back to what we're talking about of the drops. That drop had a big event. It's not like a light bulb went on for me, but it's back to what we're talking about, the drops. That drop had a big impact, but it wasn't like, oh, when I think about how I think now about data and evidence and uncertainty and probability compared to how I thought then, I look back at myself and say,

well, I didn't understand anything then. Really, I didn't. But I got a door open for me is the way i would word it um and again a door that i knew i knew the door was there i know about yeah i took a lot of statistics econometrics in in college and graduate school but it was a different uh i didn't know what the door really looked like until I read that book. And then I realized I wanted to go through that door. And through his work and the work of others, his later work is continuing writing, I got a much better understanding of what the ideas were. Yeah.

One of the things I found hilarious just inside myself when I was reading his books was suddenly all of the advice that my parents and grandparents had given me as a kid, which I'd scorned, suddenly became very sexy. Can you give me an example? A general sense of healthy skepticism, but also, you know, one of his deep insights, which is, you know, the way he frames it is don't cross a river that's on average four feet deep. Sure. You know, stuff like that, which, and again, maybe it's just because I was younger, so I was more of a risk taker. But the sort of advice you would get from older family members that you would just completely dismiss out of hand when you're young, suddenly very sexy when it comes from a Talebian critique. Yeah, I agree. And one of the things I've learned from him that,

what's fun about this conversation is that when you start to ask, well, what have you learned from him? It's hard to put into words, just like it's hard to, easy to define something. It's easy to say, oh, I've learned about uncertainty from him. But of course, it's much subtler than that. I think that he is very effective at is that expected value, that is the probability of something happening times the consequence of that happening, which is expected value, is often a very bad guide to life.

And economists forget that. And one of his themes, of course, is that it's easy to deal with expected values. So you tend to overvalue it because it's tractable. It's an easy P times V, the probability times the value of something happening, plus or minus, whatever its consequence is. And he reminds you that, well, you know, there's a distribution of events, and some of them aren't just not as good as the average. They're deadly. And you really ought to spend more attention worrying about what he calls ruin than, say, this average or the average from worrying about the standard deviation. And again, you know, when I say that, everyone says, oh, yeah, I get that.

Of course, there's nothing new there. But to really get it into your bones and live your life accordingly, I just take an example. I can't tell you how many times people have said to me, well, you know, the stock market's never gone down more than fill in the blank. So I know that the most I can lose is, no, it's not true. It's not true that the worst thing that can happen is in the set of things that have already happened.

And when you explain that to people, you know, for example, what's the worst flood that's ever, what's the highest the water's ever gotten in this neighborhood after a flood? Well, there's a sign over there and there's a marking. It's 14 feet. Well, I'll put my house on 15 feet and therefore I'll be dry. Well, you point out that the fact that the worst flood in the past has been 14 feet high, that this one could be 15 in the future.

Oh, yeah, I guess that's right. But how do you remember that before you build your house? Most of us forget that. In fact, worse, we're confident our house is going to be dry because we've looked and we've looked at the data and it's 14 feet. And I think that aspect of it is so powerful. Just how do you keep that in mind? And you just use the river.

He's really good at metaphor and examples that stick with you. And I think that's not irrelevant. Yeah. Another example is if I offered you the chance to win a million dollars playing Russian roulette, you might say, well, the expected value is 83.333% multiplied by a million dollars. Sure. But if you play that game enough times then you risk ruin and you can't do any more expected value calculations ever again yeah that's it that's a subtler uh version of what i just said even though it's pretty blunt right we all understand that there's a chance of dying in a six chamber pistol game of pistol game with Russian roulette that's too high,

and we generally don't play. But the deeper point that you don't earn the average because you might not be able to get back in the game is a really powerful, subtle idea. And I think about that a lot. I think it's really, really important. Yeah. So it does apply to our current moment with the pandemic.

And there was a note that Taleb published with Yenir Bayam and Joe Norman on the 26th of January, where they argued that we needed to apply the precautionary principle to the spread of coronavirus. Do you just want to summarize briefly for us all how uh you think about the precautionary principle or just define it for us firstly yeah so i i don't like to think of that as the um i don't like to use that phrase because i think it it is easily misused not the phrase itself but the idea behind it. So I'm going to reword it a little bit, the way I think about it, and the way I took that paper, Taleb, Norman, and Yenir.

What was it? Yenir Bayam. Yeah, so I thought, it's funny how my views on the virus have evolved in the relatively short time that we've been living through it, right? It really got my attention on around March 12th or 13th. When I started. What was special about that time? I think I read that paper probably but i don't want to say i read the paper and i realized uh-oh because that's not true i started

actually i think to start paying attention to the paper and the what talib and uh joe norman who i follow both of them on twitter uh what they were starting to say because of other things. I have a relative I will not identify, except to say that it's not a relative of my immediate household, but who assured me that this was going to be just like the flu. And I had seen enough scary things to feel it was not like the flu. and in particular i saw the talab point and i i started to consider uh well i guess i'd say it this way i saw the chinese data that came out the early chinese data and i saw that in my age group, the chance of death, if you got it, was about 5%.

And I realized, you know, I don't do anything in my life that has a one in 20 chance of killing me. So I don't really want to get this. So that's where I would say the precautionary principle kicked in for me, or whatever you want to call it, that, hey, this is ruined to be avoided, not just like, well, I'll just be a little more careful. I need to be very careful. Now, having said that, I don't think it's just like the flu, but I do think we misappreciated, we meaning most people, misappreciated the riskiness of this.

And to be blunt, I don't think we understand, come back to our earlier point, I don't think we really understand it much at all. You know, Johnny Anides, who's also been an EconTalk guest, who I respect greatly, came out very shortly after the Taleb-Baryam-Norman paper and said, you know, this is silly. We have no idea what we're dealing

with here. We're shutting down the U.S. economy. And he got savaged by Taleb and others for that. And I thought, you know, I thought, I'm kind of, I'm sympathetic to both views. And I think to some extent, we have underappreciated the consequences of the lockdown here in the United States. I don't know what it's like in Australia, but here in the United States, we have tens of millions of people who aren't working, and we're telling them we're going to give them money. Money's not as good as working. I don't think it's the same. I think a lot of the people who are working are not going to get money, who aren't working are not going to get money. And I think that's a horrible, horrible thing that we ought to be working very hard to find an alternative approach to.

I'm not saying, oh, it was a mistake. We should everything go back to normal. I understand that's risky, but this is risky too. And that's one of the challenges. That's why I don't like the precautionary principle, the way it's usually phrased, which is, you know, you should be really, it's usually phrased as, you should be really careful.

There's a lot of times, there's just two really unpleasant, risky things to choose from. And, you know, when people, when I say that, people say, yeah, but death, ha, death, well, there are things worse, there are a lot of things worse than death. And I'm not saying that to be coy or clever or... I don't mean that as a bit of sophistry. And I think it's often treated that way. What I mean by that is, if you take tens of millions of people and you ruin their lives and the lives of their children for the next unknown number of years, I think that weighs heavily in the balance. I'm not going to weigh them literally. I'm not going to say, and that's much more important than the deaths of people over

the age of 80. It's not. An 80-year-old dying is still a tragedy. Anybody dying before their time is still a tragedy. But it's also a tragedy to tell someone they can't provide for their family or themselves or their children, and they're going to be on the government dole for an unknown length of time. So I think it's a very hard thing to think about analytically. I think it's a mistake to think about it analytically. I was very critical of people who said, oh, we should just do a cost-benefit analysis. I think it's a mistake to think about it analytically. I was very critical of people who said, oh, we should just do a cost-benefit analysis. I think that's absurd when things that are at stake are things like, I would say, the American way of life. What's that worth?

That's about $42,000 per person. I mean, that's silly. That's intellectual golf. That is the most foolish type of misuse of how to think analytically about something. So I think it's a really hard problem. And although I salute Taleb and his co-authors for raising an alarm that I think was the right thing to be alarmed about. And I do think the swift reaction, even though it was relatively relatively slow but eventually the whole world has responded to this uh it's made some difference uh but it's not obvious what the quote right thing to do is

and i i think it's i think it's quite challenging there's a debate raging in the australian economics profession at the moment which is sort sort of bleeding over into the public about whether or not we should be lifting lockdowns as soon as possible. And people who are arguing they should be lifted as soon as possible are using cost benefit analyses and saying that, you know, we can convert the costs of lockdown into common currencies, which you would know well, Ross, things like the value of a statistical life or the quality adjusted life year or the wellbeing year. For the reasons you outline,

I'm very naturally cautious of cost benefit analyses, but it cuts both ways. So it's a really, really hard problem. I agree with you that lockdowns are inflicting terrible and unquantifiable costs on society. But that's why I always thought from the beginning we needed to do them hard and early, which meant that they could be short. So then combined with the right fiscal support, you would essentially enable people just by keeping them attached to their companies to just pick up the reins once the lockdown ended. And that would happen in the context of a well-designed exit strategy. Maybe you would maintain a ban on large events. Maybe you would keep your borders closed for a

while. So you would lift the countermeasures incrementally. You might need to have red zones and green zones, orange zones like Yanye Bayam's been arguing where some parts of the country where the infection begins to resurge, you seal off those parts of the country. And then of course, you also have mass asymptomatic testing, contact tracing and quarantining of the sort that appears in countries like south korea and singapore where you actually send the ill to a hospital like a

negative airlocked hospital like in singapore or if they're mildly symptomatic or asymptomatic essentially just a big dormitory which i think is what they have in in south korea and china but you're not enabling them to go home and self-isolate where they're almost guaranteed to create a family cluster um and and you know that was the best way to do it so that would actually cauterize the damage from the lockdowns um while suppressing the virus and possibly eradicating the virus. I think we actually seem to be in that position in Australia, but unfortunately, at least as I see it, the genie's kind of out of the bottle in America.

And I'm terribly concerned for your situation because it's just so sad. And lockdowns inflict a terrible burden on people. I think you said something very true recently, Ross. I can't remember whether it was on Twitter or on one of your podcasts. But basically, you know, the end game here is human flourishing. And you can't flourish if you're sick or dead. But equally, you know, social dysfunction and being trapped in your home and being jobless, having all your dreams dashed and broken, those are inimical to flourishing as well.

So, this chat about public health versus the economy is a very illusory distinction. But that said, Russ, and I want to come back to the precautionary principle here, I'm not sure it cuts both ways because the way Norman, Bayam and Taleb define it is very strictly in reference to a domain of ruin. And when they say ruin, they mean harm that is widespread and irreversible. So I'm not sure. What do you think? Do you think the precautionary principle

could also apply to the effects of the lockdowns? Or do you think it's only appropriate to apply it to the spread of the virus? First, I want to correct something or put a foot down on something i said i i mentioned in the early days of the virus i thought my chances of dying were five percent that was based on the chinese data it's probably not that high um that was probably very unrepresentative given that i am 65 but i don't have diabetes um i don't i'm not obese close but I'm not technically obese by U.S. U.S. definitions I'm

merely overweight oh phew but in general I don't I don't have the underlying conditions that seem to be the the worst for people but of course there's bad luck I mean a lot of people are there are people dying who are young and don't have any of these other conditions that's rare but it doesn't it does happen and that's it's a terrible. But I want to say my early reaction was something of an overreaction, and I've been recalibrating as I look at other data that emerge and thinking about, we haven't talked about wearing masks, just something I think is really important out in public. I think it has the potential for getting us back to some level of normalcy, even though it'll be ones where we're wearing a mask.

But I think the question is, you know, I think for Taleb, I think a lot of the precautionary principle stuff is, it's what you said. I think the key word there is widespread, meaning systemic, crossing, rippling through all of society and so on. It's not just global. It's not just a bad thing happening. He also is very against genetically modified organisms, GMOs, for that reason, does not find the evidence in their favor to be sufficiently compelling to enjoy, say, cheaper food in return for risking mass disruption of the food chain through genetic activity we can't fully understand.

So I'm sympathetic to that, but I would say that in this case, I think it remains uncertain and unclear what the full risks are involved of the two versions, two narratives we're talking about. Narrative one, almost everyone could get it, say in the United States, or up to half of America could get it. If the death rate's only 1%, that's 1.3 million deaths. You know, the original idea of the lockdown was to make sure we didn't run out of ventilators. Then all of a sudden, that became irrelevant. First of all, we never stressed the ventilator supply yet. We haven't. And secondly, it's not clear that being on a ventilator is that helpful. And then third, what's more important was sort of like, well, wait a minute. If we all stay home, it's not going to spread for a while.

Maybe it'll kind of die out. You know, when we go back, if we can social distance, it won't spread exponentially and so on. That there might be measures we could take. Maybe we won't go to a mosh pit concert, but we can sit in a restaurant across from a person we live with or whatever would be the in-between situation. Maybe our kids could go back to school and so on. But I think the bigger issue here, which is it's not as scary as 1. 1.3 million deaths, because you can't measure it. But I think what's scary here, at least for America, is a whole set of possible things that an extended lockdown would bring. I think you worded it extremely well, the original idea. And I was also very

enthusiastic about, even though it was uneasy, the idea of the government imposing on these restrictions. I thought, this is great. We're just going to take a one-month, three-week, maybe two-week vacation. We're all going to take it at the same time, except for the food supply workers and the healthcare workers. So that, whatever it is, 20% of the population, they'll keep going about their tasks the other 80 will shelter in place hunker down and we'll we'll we'll get this thing on the run and you know i think i did a conversation with tyler cowan about this and tyler said well yeah i think i think i might be misquoting him so don't don't hold this against him um but he this thing i'm remembering something

i heard from a lot of people and you still do you know, oh, it's way too early to relax the lockdown. And I'm thinking, okay, well, we're what, six weeks in? So we're six weeks in. Is it going to be too early in two months, six months? You know, do you think we have $2 trillion to spend every three months? I'm not sure that's enough by the way i don't think it did a very good job that first 2.2 trillion that the federal government spent you're putting us at risk of hyperinflation are you taking the group of people who are getting scorned

the group of people who have felt scorned in america for the last 20 years already and telling them that they don't matter. So here I am. I already work from home. I'm employed. I like sitting at home, actually, quite a bit. I'm a little bit of a loner at times. So this lockdown thing, you know, it's not hell. It's, you know, a little annoying, frustrating at times.

I'm a little bit scared sometimes when i go to the grocery for every two three weeks but this is really pretty pleasant you know and then i think about the people who don't work from home have been told by the government they can't work they're literally not allowed to go to work the business as you pointed out you said it very eloquently they're not going to have necessarily a job to go back to when we say it's all clear, even if it's not all clear. And then what's their political stance going forward? You know, do you think they're going to go just back to the same old candidates they've been going to? A lot of people think Donald Trump was the voice of the dispossessed, people who didn't think there was anybody speaking up for them. What do you think

the next person like that's going to be like? Who's going to get attention in this world politically in 2024 in America? Boy, that makes me nervous. I just think we've, and rightfully so, these people are going to be really angry. I think they've been abused. So it's one thing to say, you can't work. We will make you whole with money. That's not ideal because being made whole with money is not the same as working. But at least you're whole financially. You're not whole with your soul, but at least you're financially whole.

But here's what we've done in America. We've said, you can't work, and maybe we'll make you whole eventually. We're thinking of maybe $1,200 sometime soon. Oh, and you've got a small business, that dream you had for that coffee shop, that restaurant, that bar, that little artisanal place you've been making stuff. Oh, yeah, well, we got these small business loans. Oh, you didn't get one the first time? Oh, you mean the bank's buddies got all the loans?

That doesn't look good for the social fabric. And I look at the, I'm on Twitter a lot. I learn a lot from Twitter. But right now, to me, it's more interesting as a way to see what people's attitudes are doing. You know, this is not exactly a kumbaya moment in America. There are people, you know, it's, Donald, I won't use names because there's people, they use this, they say this about people on the left and the right, Democrats and Republicans. So-and-so has blood on their hands well you know that's a strong statement doesn't tend to lead to uh social cohesion for the people who like that person

you're saying it has blood on their hands um i'm not sure we're going to come together so beautifully after this is over so i i'm worried about all those things and i think it's um every week that this extends we're playing with fire so my view is we need to find we need more data so i'm not going to say it's you know i've been making fun of data and being seduced by data and all that but we do need to find out some things about how this spreads and what works against it which is very hard to do yeah so we need but ideally we we want to try to do that uh and then we need to try some cautious things and if they look like they're okay to push that envelope because this is not not i don't think it's sustainable yeah well yeah so i think and i think we agree on three things number one is to some extent lockdowns are inevitable and necessary um ideally you do them

early and you do them hard so that they can be short but you do need them at a certain point in order to bring the caseload down and bringing the caseload down actually makes the subsequent public health measures like contact tracing more effective because you've got more resources chasing fewer infections but the prop i'm sorry to interrupt your list and i'm a guest now so i can interrupt i guess um that's a wing i'm not sure contact tracing is going to fly in the united states just like i don't think centralized quarantining is going to fly in the united states yeah we're not that's not our social style like we don't like it when the government says, we don't like detention camps.

That's what it sounds like to us. We don't think of it as, you called it a dorm. We think of it as a detention camp that the government's running. We don't like those. When I say we, a lot of people don't. Some people would say, yeah, dutifully, yes, where do I go? Tell me my bunk. But other people aren't going to like that and i don't

you know there's a there's a really interesting cultural division right now that's growing between the people who think the government ought to make sure that nobody dies from this versus why don't you let us make our own choices and see how it turns out now both of those are dangerous and irresponsible by themselves but those people aren't going to talk well to each other. So, I'm sorry. So, go ahead. But Russ, on that, why can't political leaders just say, look, this is not the American way. I get it.

But just for the next few months or the next six months or the next year, we're going to have to pull together and suck it up and do this and then never do it again. Like, is that the speech that political leaders should give? Or is your point more that even if they gave that speech, people still wouldn't really cooperate? Well, what if they gave that speech and it turns out it's only the first wave and it comes back in October? Yeah. Oh, boy, that's a really dangerous road to go down. The other thing I think you have to think about, and it's, I don't know how to deal with this, but Paul Krugman said about, I don't know, six weeks ago, eight weeks ago, before this, I think it was before this started, that he thought there was, quote,

a 40% chance that Donald Trump would end up being a dictator in the style of the Hungarian leader right now. Really? 40%? That's a large number. If you really think that, I wouldn't want the government to tell me to do anything. You know, that's really scary. So, you know, here's the way I would think about it. In 1942, or whenever it was, 41, 42, FDR, Franklin Delano Roosevelt, the President of the United States, put Japanese Americans in detention camps. Most Americans today are deeply ashamed of that. They think that was a horrible idea. At the time, the only people who thought it was a horrible idea were Japanese Americans. It wasn't like, it was a controversial policy. It wasn't, I don't think. I don't think it was

controversial at all. So we've changed. I think if somebody tried to do that now, just like when we see it, you know, President Trump's tried to suggest restrictions against people from the Middle East and so on. That's not, there's no consensus like there was in 1941 that that was a good idea. Most people think it's a, a lot of people, not most, I don't know if it's most, but a lot of people think it's a horrible idea so a lot of civil liberty civil liberty violations that used to be sort of like acceptable in america under a wartime situation we're in a kind of wartime situation with this pandemic but i'm not so sure people will tolerate it just because it's a pandemic i think they're gonna go i'll take my chances all right so let me let me remove uh tracing. I'm quarantining from my list.

I don't know. I'm not saying you're wrong. I'm just saying, I just think it's tricky. Yeah. Yeah. I'm just trying to get the basic things we agree on out in the open. And Joseph, one more thing. There might be a leader who could make that speech. That person is not currently president of the United States. You know, maybe Ronald Reaganald reagan maybe fdr on the democratic side i i don't know i it's just we're not we're not in a very um cohesive time right now in america yeah yeah okay so so the first proposition is lockdowns are likely, if not inevitable. So do them well, do them early, keep them short. The second proposition is if you're telling people

they need to stay home and they can't do their jobs anymore, for Christ's sake, give them some money to tide them over. Think of it like disaster relief. Quickly. Quickly. Or you could think of it as a taking, like an eminent domain. You're compensating the resigning of the government. It's taken away from them.

Yeah, yeah, exactly. That's a good way to frame it, actually, because it's the government that's requiring people to stay home. And then I guess the third proposition is, if lockdowns are contingent on having better public health responses in place when we reopen that can keep a lid on the virus in the absence of lockdowns, then where is our epidemiological Manhattan project? Where's the huge government resources going to public health efforts? Why are we not on a wartime footing you know why aren't we treating this um in the same way that we were ramping up munitions and the

manufacturing of airplanes and weapons in world war ii so we that's a great point and i think um i would have added i would have said a little bit differently or taken a different twist on it. Yeah. I would have said, and as we try to emerge from lockdown, let's learn about the virus and see how that affects the path of relaxation. So if it turns out that 70% of the people who have died are over the age of 70, let's not relax the lockdown for people over the age of 70 let's have restaurants card people not for how young old they are but for how young they are

maybe to get into a restaurant you have to be under 40 years old for the first six months or the next year until other things come along so i think what we so far what we've done is we've imposed an extremely blunt weapon against an enemy that is quite subtle um ross do you think it's really that easy to have a age-based lockdowns like that uh it depends what you mean by a lockdown i think it's very easy to say uh people over the age of 70 need to look out for their health and should stay home as much as possible and be aware that their grandchild coming in from school maybe shouldn't see them for a while except through a window so i don't i don't think you can mandate it legally i think that's a mistake but i think we could have a set of guidelines you know i may have mentioned this earlier when people are comparing uh say sweden to

norway or sweden to denmark they act as if Sweden hasn't done anything. The Swedish government hasn't done as much as some other governments, but there are plenty of behaviors by the Swedes that are the equivalent of what has been done in other places. So I think it's tricky to expect any government policy to be honored 100%, unless you're in a police state um you know israel's been very it's not a police state but they're very used to a national crisis because they've had their existence talk about ruin israel's been in a number of wars over the last uh 60 years 50

something years that threaten the existence of the country. So they're used to a crisis. And they are much more comfortable with the army doing things, as is China, for whatever reason. I don't think it's the same as Israel's, but it might be, culturally, and I think but also fear of disobeying. And so you can do things in those countries and impose restrictions that are much more effective than you can in a different country. So even though Israel's a democracy, their trust, because they're a very close-knit country and small, it's much easier for them to not be afraid of their army. Their army is a people's army.

It is, everybody serves in the army. There's's no it's not like america so they don't see the army as as dangerous the way some people do in other countries so they'll tolerate things for the army that you know the army in the streets making sure nobody violates curfew americans are not going to be real keen on that but in israel it's like oh no big deal yeah we're used to this yeah so i think i think you have to be aware that most in a democracy, most democracies, policies are going to be imperfect. But I want to go back to your other point, if I may, which is the Manhattan Project point. I like to think that if I were, if I had been in charge, I would have done one of two things. Either a prize for a treatment of the virus,

but of course there is a kind of a prize, which is if somebody finds that they are going to make a lot of money in theory, although right now we're in a kind of anti-capitalist phase in the United States where I think if you found a cure or a treatment or a vaccine, charging for it would maybe not socially acceptable, And that's not a good thing. So that's going to reduce the incentive to find it. But you could have imagined that we could have convened, like the Manhattan Project, the 50 best biochemists in the country, in the world, to come figure this thing out. Now, I say that, except the thing I need to add is that it's kind of happening.

Now, they're not talking to each other the way they would if they were all in Los Alamos, in the same barracks, in the same compound. But I think the great minds of the world who understand vaccines, for example, they're working around the clock to try to solve this. The people who want to try to find a treatment, every single pharmaceutical company is trying to solve this problem.

Maybe we could do it in a more coordinated fashion, like a Manhattan Project, but it's not like we're missing the, you know, I think it would be fascinating to know how many people right now are working on this 24-7. I think it's a big number and they're really smart. Yeah. So it's just a really hard problem. Yeah.

Russ, I want to come back briefly to the precautionary principle. And I don't mean to turn you into one of its chief proponents. That's all right. But I just want to help people get their heads around it so i'm i'm conscious of the fact that a lot of our listeners are probably thinking that if we're saying the precautionary principle applies to problems of ruin covid19 isn't really an existential risk you know even if the you know the two percent of the world's population gets it yeah yeah yeah so, they're probably thinking, what are they talking about? You know, this isn't like a meteor hitting the world or, you know,

nuclear Armageddon or something like that. But is the point that Taleb et al are making that we don't have any longitudinal data on the virus? So, we could, in a a sense be picking up pennies in front of steamrollers i mean sure it's part of the family of coronaviruses but maybe it has some weird characteristic that was totally unexpected where everyone who's ostensibly recovered after a year just drops dead or something like that i mean or worse turns into a zombie that turns into i mean praise on children yeah yeah and obviously

these are incredibly fanciful but to leb's point is that if you take enough of these tiny risks over enough time you almost guarantee ruin um well you know you see some of this in the coverage the the news coverage this is i wouldn't say that the media has covered itself in glory um you know the politicians obviously haven't but the media hasn't either you know there was a story came out today ventilators hardly help at all i thought oh my god you know i've been worried about this for a while that they don't help much the data i've seen is you know the people who are in ventilators die. You know, they were treated as this life-saving thing as long as we had enough of them

and we had to make sure we didn't run out of them. And this new study came out that said almost everybody dies. I click through. That's not what the study says. It's really so much more complicated than that. It's designed to scare me and get me to click through, and I hate that. It's clickbait from a major news organization. Shame on them.

And I lost my train of thought. You were asking me on the precautionary principle if... Yeah, when we say ruined, does that equate to existential risk? Oh, no, sorry. I was going to say, you know, the media's played to this because, I don't know if you've seen this, but you said it was fanciful, your negative scenario. But there's these images of people's lungs

after they've had COVID-19. Yeah. It's like they're full of glass i'm thinking what does that mean exactly is that one person under after covet 19 that they found it look like that is that everybody who has it looks like that and what does it mean to say it looks like glass you mean it doesn't work because it's glass instead of a lung and i don't know it was the creepy you know it's it's really like a science fiction zombie movie it's like you know it oh there's here's another one this i hate to say i mean i i have to say it's important a lot of people with covet 19 have you know hallucinations and um delusions it could be affecting the brain yeah well no kidding, no kidding. My father passed away six weeks ago at the age of 89,

and some of his last three months, he was hallucinating. And you know why? Because when you're in your late 80s and you go to the hospital and you run a fever, your brain doesn't like it, and you start having trouble with hallucinations. It's a common phenomenon among older, not just in their 80s, older people who get an infection in the hospital. It's very common, whether it's pneumonia, urinary tract infection, other things. In COVID, it's an infection, and you run a fever of 103, 104, I guarantee you have delusions and hallucinations. My dad, when he was in the hospital another time before this, and it gets worse, by the way, if you've had it before, a year or so before he had a surgery, and after surgery, he thought the nurses were trying to abduct him, and he blocked the door to the nurses

with a garbage can. And when we told him that, he laughed at us. He said, oh, I wouldn't have done that. I said, you did, Dad. And then you tell that to the nurses, how embarrassing it is. They go, oh, it happens all the time. But, you know, I said, the old people in this ward, they're always thinking they have visions like that because they're running a fever. So, you know, I don't know how dangerous COVID-19 is outside of the fatality part of it, but it's scary.

They scare me. It's working. I'm getting precautionary right you know it's one thing to say you only you only die of it if you're old or mostly die of it if you're old but if you get it when you're young and it ruins the rest of your life that's horrible i mean it's just it's really bad yeah hard to know as we move through the pandemic and begin to understand the biological characteristics of coven 19 better, could the precautionary principles cease to apply? Well, sure. You know, people say it's like the flu because it looks like a lot more

people have it, and therefore the death rate's lower than we think. And I think 30 policemen have died in New York from COVID-19, a bunch of doctors and nurses. I don't think they die of the flu on a typical winter. I could be wrong about that, but I think it's worse than the flu. But certainly, the part that it is like the flu is that every year, tragically, from the flu, a lot of people die, a lot of them young infants. The only pleasant thing about this so far is that it kills very few people under the age of 18. So that leads to the important policy advice of maybe not changing people's birthdays.

We could lock the calendar at the current date, and that way nobody would turn it. That's just a bad joke. But seriously, the flu kills young people and infants and really old people. It's not a precautionary principle kind of event. I think the issue here is the mutation worry. I think it's the increasing frequency of it.

And that's why your Manhattan Project ideas maybe should be taken up a notch. Whatever level I said we're doing now, maybe we need to be a little more vigilant. Maybe the Chinese need to stop those wet markets. We don't really know 100% where this came from, but as Bill Maher, the comedian, said, if they can get people to only have one child, I think they can stop those wet markets. The Chinese government restricted how many kids you could have.

That's pretty invasive. Maybe they should stop letting people eat bats. I don't know. Yeah. Ross, you mentioned that your dad passed away six weeks ago. I'm very sorry to hear that. And obviously, you're over in there in the, you know, the eye of the storm during this pandemic. I imagine you've been reflecting a lot about mortality in recent weeks. Yeah. Are you scared of your own death? You bet. Although, you know, I said last night to my, I'm here with my wife and two of my college-age kids are home.

I have two other kids who are not home. They're sheltering elsewhere. But I did confess to the group. I don't know if it was a good idea or not. I said, you know, it seems really cruel that if you survive this thing yeah which is kind of on our minds right both i mean we had a our dryer broke um about uh a month ago in the middle when this was just starting my wife said think we can get it fixed i said it doesn't seem like worth it and dangerous right let's just not invite a stranger into our house to touch a lot of metal things that were the virus lives for like a year and i said we'll just hang up the clothes we'll put them on outside well and we did we did that

for three weeks a month whatever it's been and then yesterday the washing machine broke and i said that's it i can live in the america of the 1950s where we don't have a dryer but i can't live in the america of the 1850s where I don't have a washing machine. So we had a guy to mask, come in our side door where our washing machine and dryer are, and he fixed both of them in 29 minutes for $146. Somebody said, how much was it? I said, it was $1,000, but it was so worth it. It would have been. It was so worth it. It would have been. It was so worth it.

So last night, though, I was saying after we'd let this guy in our house, I said, you know, if we get through this, it's going to be such a relief. But, you know, you still die anyway. It's just kind of the way the game works. So I have been thinking about my own mortality. You know, I'm 65. All my previous landmark birthdays, like 40 and 50 and 60, 65 is different somehow. I felt a little older for the first time. And when you're losing my dad, certainly forced me to think about my own mortality as well and it's um it's a contemplative time yeah

it's funny going back to what we were talking about earlier in terms of being able to pay lip service to an idea on the one hand versus really having it sink deep into your bones on the other um somewhere behind me on the bookshelf i've got a collection of Montaigne's essays. And my favorite is his essay on death. And he talks about how, you know, how can you fear something which once it's come to pass, you're not even around to fear anymore. And, you know, I always thought that was beautiful and so intellectually persuasive. And I often read it and would feel quite emboldened in the moment and thinking, you know, yeah, I'm not afraid of death after all. And I understood this idea intellectually. But then, you know, later in different moments, I'm actually quite frightened

of the idea of, you know, life ending altogether all together and again it reminds me like it's it's very different to to understand an idea intellectually versus like actually deeply incorporating it into your psyche it's a great example because i don't think there are many people who think they're not gonna die yeah but they haven't fully incorporated it into their psyche um the psyche is designed probably insert not designed whether it's designed i don't know but it has the property of of tending to avoid thinking about that so uh it's hard to get it into your bones it's the bones are just are not eager to take it in. It is a, I've remarked on it as well, how strange it is that you care about the music at your funeral.

Yeah. Or who speaks at your funeral, or whether your kids get along after you die. But you do. And that's one of the, it's a very strange thing. I think thinking about mortality is a good thing, as long as it does not paralyze you with fear. I think it concentrates the mind, as Samuel Johnson said, right?

Samuel Johnson said, when a man knows he's going to be hung in a fortnight, it concentrates the mind, as Samuel Johnson said, right? Samuel Johnson said, when a man knows he's going to be hung in a fortnight, it concentrates the mind wonderfully. And knowing that your life is finite is a good thing to remember. Regret is a tragedy that can be avoided. Disappointment can't be avoided. There's inevitable disappointment. But regret, failing to take advantage of what your time on this earth is that's given to you is um is a shame no reason to do that live live fully

grasp it embrace it totally changing our tone yeah i want to ask you one more econ you want to talk more about death it's a real i mean the listeners most people have already shut this thing off already it's like they're talking about death again i'm actually i'm trying to find the um trying to salvage the audience i get it it's a good idea let's change the subject actually i'm trying to find the uh the quote of montane's here i'd like to see it i have i've read a little montane i'm not much so i'd like i have it i'm gonna makes me want to go down and read some is it called on death the essay is called uh to philosophize is to learn how to die. Oh, nice.

Okay. All right. Here we go. All right. So, quoting Montaigne, how absurd to anguish over our passing into freedom from all anguish. Just as our birth was the birth of all things for us, so our death will be the death of them all. That is why it is equally mad to weep because we shall not be alive a hundred years from now, and to weep because we

were not alive a hundred years ago. Death is the origin of another life. We wept like this, and it cost us just as dear when we entered into this life similarly stripping off our former veil as we did so nothing can be grievous which occurs but once is it reasonable to fear for so long a time something which lasts so short a time, living a long life or a short life are all made one by death. Long and short do not apply to that which is no more." End quote. Deep thought. It's interesting. While you're reading it, though, it reminded me of the fact that through much of human history, religious faith sustained people in the fear, in the face of the fear of death, the face of death, because they thought there's something after this.

So, you know, Montaigne was wrong. Oh, it's not over. Of course, if you think you're going to hell, boy, that's even worse than dying. I believe it in the afterlife. So I'm not sure that was, as a comfort, it was really that effective. But it is a, I actually think it's deep in our psyches that there is something else. I don't think it's, it might be wishful thinking, simply an example of wishful thinking. But whatever it is, it's very hard for, I think, most people to accept Montaigne's summary there. They go no no no no i can't i can't feel that doesn't work for me i don't know but it's a great it's beautiful and it's well said i remember the first time i read that i was

sitting um under a jacaranda tree uh in a street in darlinghurst in sydney and i thought oh you beaut that is just so true and I'm not afraid of death anymore. Then, you know, two weeks later, I really don't want to die. Yeah, just words. Yeah, just words. So, Russ, let me ask my final podcasting, the craft of podcasting question. Apart from learning to be more patient and not interrupting people during the flow of a conversation, are there any other things you've done to improve your craft as an interviewer? For example, like let me give an

example from my own journey doing the podcast, which by the way, I never thought I would do, but my mate Angus kind of badgered me into doing it uh in 2017 but what we used to do after an interview because our early interviews were absolutely terrible we didn't even know how to use microphones for some of them we drank um we would interrupt guests yeah never a good idea um but we would listen back and one thing we would always try to improve was you have to ask open questions, not closed questions. And we'd listen back to the interview and point out like, oh, there, that was a closed question. You asked a closed question. We need to work on that.

You can't do that next time. As an interviewer, I realized that, you know, sometimes like a well-placed closed question is necessary just to quickly establish a premise so that you can move on to a more important part of the conversation. Or sometimes, you know, a closed question is fine because the person kind of gets the point and they're savvy enough and capable of improvising well enough that they can deliver a response, even though you didn't give them the perfect open question. And that learning very much reminded me of an adage, which is that boys know the rules, old men know the exceptions. And so, I found myself improving and then doing 180 degree turns in weird ways like that. But do you have any quirky little tips, tricks, tactics that you've worked on or discovered as you've tried to hone your craft?

Yeah, but I'm kind of taken by that expression. I don't think it's true. In fact, I think it goes the other way i think it's boys knows boys know the rules and old men keep the rules you know it's okay right because boys think ah just some silly rule i don't i can have a potato chip i don't have to i won't eat 50. and it takes a lot of years before you realize you can't even have that first one because you're gonna eat 50 um it's very relevant in the covid situation because i used i still work from home but now i have my wife and two of my kids home so now if i snack grotesquely somebody sees me so it deters grotesque snacking so i'm losing weight

but they they used to be at work or at school and now they're home where all the snacks are and it's harder for them they're having trouble um more seriously uh take your question seriously about podcasting i think um there's a bunch of things i the challenge for me is, you know, I've done it for so long, it's really easy to get in a rut. So I have certain styles of how I create my questions in advance. There's some really basic things I learned early on that are really important. I'll just run through a few of those.

One is I always script the first question verbatim. I went back to my early episodes, and I'd hear that my first question would be, I'd be flumpin' around, I'm kind of nervous, and it's horrible. I just read it now. I have it written out. The first things I'm going to say, I read them off a script, and I think it's helped a lot. Somewhere along the line, I decided my goal as an interviewer was to help the guest roll out their ideas in a way that I thought listeners could absorb them.

So that means skipping some ideas that are in their book. It means gliding over certain things that I don't think are so interesting. It means focusing in on the part that I learned the most from. So those are things that I've just become, they've become habitual to me. And I don't know if they're all good. Some of those things are not good. So I did, I sort of about, ironically, about three months ago, maybe a little longer, but not much longer, decided to try to make my conversations more spontaneous. Not in a sense that I was going to deviate from the questions. And I do all the time. I mean, I did before. It's not like I didn't deviate from the questions. And in fact, I strive for conversation. But I decided to try to let the conversation. Here's the way I would describe it. I decided to try to be more present for my guest and be less concerned about my agenda as the interviewer in rolling out the ideas now obviously every guest likes to hear their ideas they don't mind that that that that's

the thrust of the interview but i wanted to try to create like we're i think we're having i think this is a very high quality interview we're having uh and it's over zoom i can see your face uh and despite some of the books on your bookshelf that i'm not going to identify. I think I feel a certain rapport between us, right? And when that happens in my show, when that rapport works, those are the ones, those are the episodes that I don't just say, oh, that was good. I cherish them and I worry that the recording won't have picked things up. You know, there's a handful of interviews where it's so precious that, you know, it's like going to a great musical or a great play or reading a great book. It's like, oh, that was such a good interaction.

I hope that gets, you know, I've never lost an interview, maybe once, but almost never lost an interview. It's not an actual fear, but you realize that it was an extra special conversation. So I thought, you know, some of those are just due to the guests are really good. You know, it's not anything I did at all. But some of it is just the way that I just did a better job. And I started to think more in the last few months about why that was. What makes that happen?

What makes that possible? Is it just serendipity or are there things you can do to increase the likelihood of having that kind of conversation? So what I started doing, which was really hard for me, but I was so eager to actually get outside the box a little bit, is until recently I always tried to avoid face-to-face interviews this is before the virus i just thought and most people think face-to-face is better than over the phone or over skype with just just audio the problem though is that a lot of people i interview are not normal you know they're peculiar they're academics they're gifted authors they're not so socially comfortable talking. They're gifted authors. They're not

so socially comfortable talking to a stranger for an hour face-to-face. They like the anonymity of a phone call or a Skype audio only or Zoom audio only without the video. They don't like me looking at them. They don't like it when I don't look at them because I'm looking at my notes or I'm trying to figure out what's going on. It distracts them. So one of the things I started doing about three months ago is I started scheduling a bunch more face-to-face, taking advantage of people coming through Washington or outside D.C. where I live. And I do this in the summer as well when I'm out in California. They're mostly face-to-face.

But I realized that when I was doing face-to-face, I was just doing them as if I were on the phone, and that's the mistake. You have to treat the face-to-face ones differently, and I were on the phone. And that's the mistake. You have to treat the face-to-face to ones differently. And I realized I had to up my game. I sort of said to myself before, I'm just not good at face-to-face or most guests aren't good at it. So, and so what I decided to do, so I don't know about you, but when, when there's a technical glitch that I need to edit, share with my producer to edit, or somebody makes a reference to something I want to make sure we link to, I used to take notes. I don't do that anymore. I don't take any notes while I'm talking.

I give the guests my full attention, even when it's not face-to-face. But when it is face-to-face, a fortiori, I'm going to give them my full attention. And that means sometimes I'm going to lose my train of thought. And that's okay. I do that anyway, even when I'm not trying. And in that case, you know, I have to take a pause and make note that we'll edit it out. And I just, I think the, so what I've been trying to work on is, and I think this is hard to do without video. I've been trying to work on being present for, for people. I talked about this a little bit in the, in the interview I did with Azra Raza.

I was talking, actually, she's an oncologist. We're talking about death. Woo! The last few listeners are giving up again. They're turning it off. But I was talking about the practice in Judaism of mourning,

with a U, M-O-U-R-N-I-N-G, mourning. And when you go to visit a mourner in Judaism of mourning, with a U, M-O-U-R-N-I-N-G, mourning. And when you go to visit a mourner in Judaism the first week after the death of a loved one, you're not supposed to talk to them until they talk to you. So it's literally a formulaic Jewish law that when you visit a mourner, you sit in silence until they say something. And part of the value of that is that you don't, they're blurred out something like, well, he was old. It's not that really a tragedy, you know, or something you think is going to comfort the person that actually doesn't comfort them. So that's one of the virtues of that.

But the deeper virtue is it's not about being silent. It's about being present. It's not about the fact that you're a better listener when you don't talk. It's about the fact that you can be there for the person when you don't talk. And I think the challenge of being a first-rate interviewer, which I have a long way to go, is that when I am face-to-face with someone, or ideally I hope now with Zoom, that I can give that person my full attention to allow them to bring out what they can about their ideas and to allow us to have a more meaningful conversation, not just we're taking turns. So that's how I would distinguish it. An interview is about taking turns. It's I ask the questions, you answer them or vice versa in this case. You ask the appreciated, to be listened to, to be absorbed, and to be present for that person. And I think that's the ultimate skill way beyond podcasting.

I think it's really the essence of friendship, marriage, life, is to be there for someone else and to fully experience their humanity and vice versa at the same time. It's not just I wrote a great essay and you got to understand something about the way I think. It's we're going to explore this together in a face-to-face conversation and find out something we didn't know about before. That's the greatest interview you can have. Yeah. And I did an interview recently face-to-face,

and the guest did not look at me the entire time. Not for a minute. And I think that was because of unease or social, I'm not going to, I don't know what the reason was, but they didn't look at me. That's okay. You know, I get that too. I'm looking away from you some of the time right now. And I realize, yeah, because I'm thinking about it. I'm, you know, pondering it. So I get that. But I think when you can actually be present for the other person in a full way. So that means, one, not talking while they're talking, two, listening while they're talking,

and three, conveying the empathy and full absorbing of their self to the extent that humans can do that through language. That's the goal. That's the gold standard. So, I don't know. Long, rambling answer there. Thank you.

I've learned a few new things in that answer, which I really appreciate. Let me react to a couple of things you said, Ross. Sure. I think presence is hugely important. What I do, so as guests who I interview in person will know i never take notes in um i'm purely present to them i have a lot of stuff committed to memory and i do a lot

of research and preparation but then at the door so to speak i kind of scrunch that list of questions up and throw it in the bin um and i figure like, in part, it forces me to actually do the work because if you need to take in a list of questions, then, you know, what are you doing? You haven't properly studied up on this person. And then it enables you to be more present to the interview because I think, I actually think the magic moment in podcasts and conversations more generally for that matter is in the follow-up question where you're able to go down a path that previous interviews haven't touched or you're able to dig into an emotional moment that's on offer and follow-up questions can't be prepared for

but you're more likely to miss that opportunity if you're sitting there staring at the next question. That's the first thing. I used to have a list of questions when I was doing interviews by Skype or Zoom just because I could, but I'm doing that less so these days. For example, I don't have any questions for this conversation, as you might be able to tell. It's been very discursive, which I actually enjoy a lot more. Talking about the really memorable conversations, I realized my... So, just remind me, how did you frame it where you know you've done an excellent job? Like, what's your ideal conversation?

My ideal conversation is where I learn something. this is really a high level though so this has happened you know i don't know how many times not many yeah my favorite is when i learned something about the author's i the guest's ideas i didn't know before and by putting it into words for myself, I teach the guest something about their own work. That's the really, that's hard to do. I mean, it's not like I need to try harder. It just doesn't always happen. That's mostly serendipity. But to get to that level, and that's why your follow-up question, to me it's not just a follow-up question.

It's a follow-up question or – to me, it's not just a follow-up question. It's a follow-up thought. When you can have a follow-up thought that enriches the concept, you've created something new. It's not just, oh, you don't have to read the book. Just listen to my interview with the author. That's, you know, that can be true, unfortunately, for some books. You know, that's more commentary often on the book than the interviewer. Not for some books, for far too many books, Russ. Yeah, yeah.

But I think the real point is that what I like to, I don't think about this enough in advance. I should probably think about it more in your, this is something I've gotten out of our conversation that I didn't have before, is that I've never thought much about how to make that more likely. I just sort of think, yeah, sometimes it happens.

There's probably something that can make it more likely. Face-to-face is an obvious way to do that, but I've had many that weren't face-to-face that had this character. So it's not only that um but is the question is is there is there a either style or um approach to the comments that you make that makes that more likely than less likely i think that's the that's something to really think about yeah i i way, the other thing I think is shocking about this, I'd like to hear what you think.

I'm always amazed at how hard it is for me to remember what our conversation was about after I finished the interview. Right? Because I have a lot going on in my head while I'm interviewing. Should I ask another question? Should interrupt should i pass on to a different should i change topics like how long should we talk about death for i think another half an hour maybe i don't know right should i so that's i'm that's why it's hard to be present yeah so if you're doing that you're not present and then so the the text of the interview is going to be better

because it's going to be more coherent, but you might miss this opportunity for a golden moment, a really special, cool moment. Yeah. Or like earlier when we're talking about podcasting, at the beginning of our conversation, and then you started talking about COVID-19, in my mind, the monologue is um okay I have I had some other questions I

wanted to ask Russ about podcasting and econ talk but it's a more natural opportunity now just to segue straight into COVID-19 so right should I do that or should I come back to oh no he's talking about COVID-19 for too long so I probably lost the opportunity to go back to the podcasting questions I'll come back to them later let's do cover 19 now like that's the kind of dialogue that's going on in my head um and yeah and i don't think you can escape that but i think i think to me it really comes down to that word serendipity but serendipity is predicated on a ton of research and preparation. And then having a natural chemistry with the person I think is really important. And then getting them on a good day, finding the right guests.

Yeah, all these factors align quite have a good answer to that question of how do you systematize the interview and the preparation for the interview to make those sort of ideal conversations more likely. and that was what my KPI is for a great podcast interview. And I realized last week, I aim to record the sort of conversation where I just never want to talk to that person again. So for me, a great podcast conversation is I don't want to talk to you ever again. And what I mean by that is not, I don't want to talk to you ever again, like personally, but I never want to

record another podcast conversation with you because that one was just so good that anything after that would just be an anti-climax um yeah so i've had go ahead i thought i thought you meant you'd ever want to record again because you've learned everything you could learn from me no well although i mean sometimes it is that to an extent if we do if it is a very comprehensive interview but no i more mean um you just can't beat that and and and it just it just wouldn't be the same to try and do another one so i've i've had a few in that category where you know i could easily get in touch with the person again you know six or twelve months later and record another conversation that would be great for the downloads.

But I, it just feels icky to me because I don't want to ruin that, that very first conversation. So I've had several in that kind of category. One was in 2018 with Mark Cohodes, who is a legendary short seller who lives on a chicken farm in Sonoma County, California. I went to his farm in 2018. We got drunk in his man, or at least I did, in his man cave together and had this amazing three-hour conversation. Another one was Brett Weinstein in early 2019. Robert Schiller in 2019. John Hampton, the second one we did together. He's a brilliant Australian hedge fund manager. Kevin Rudd, a former Australian prime minister. The second

one I did with him. And then more recently, David Sloan Wilson, the evolutionary biologist. And Ian McFarlane, who was a governor of the Reserve Bank of Australia from 1996 to 2006. Those are the ones that stand out to me as... I don't really want to do another podcast with this person because it wouldn't live up to the expectations. Russ, I want to ask you some economics questions before I let you go and just get to know a little bit more about you generally, if that's okay with you. Sure.

So you were born in 1954. Correct. Where were you born? Memphis, Tennessee. And what was your dad's profession? He was in, he was in he was I think he had graduated from college I forget what he was doing to make some money

something that he didn't find very exciting because he decided to get a master's degree in psychology at Iowa State University after that so we left Memphis when I was a year old and never went back there although my parents both grew up there

and my brother and sister live there now but I mostly grew up outside of Boston in Lexington, Massachusetts 18 roughly when I was there right and what was your mom's profession she was a homemaker

as they say until at the age of 49 or 50, she went to college for the first time, got a nursing degree, and became a nurse for 30 years. She was an incredible nurse, wonderful. And she's 87, still going strong. Not as a nurse, but... Yeah yeah my mom's a nurse as well why did you study economics uh i was the unfortunate answer i was good at it i did well at it in school in college and but i fell in love with it because i liked the problem-solving aspect of it.

I liked the way the pieces fit together. I liked the elegance of it. And I actually thought in the early days of my love of economics that it would help me make the world a better place. I still think that's somewhat true, but I don't think of it the way most economists do, which is we have to figure out how to twist the levers and dials and buttons to make everybody as happy as possible. That part of economics gives me the willies, creeps me out. I think it's dangerous. Economist is social engineer, which is, I think, what most of the people in my profession are these days is not something I aspire to but I did think it was when I was younger I thought that was what it was good for

I could tell you how to make a perfect world and I think you know but just the right tax policy and monetary policy and incentives and subsidies to this and that I don't think the world works so well that way so you've lost your physics envy yeah exactly more of a biologist or historian now yeah okay so on that note adam smith kind of practice what you'd call narrative economics which is distinct from bob schiller's

narrative economics yeah but but in the adam smith tradition what does's narrative economics. Yeah. But in the Adam Smith tradition, what does good narrative economics look like? You mean for me or for him? Let's start with Smith. Well, Smith was trying to understand the world. There weren't that many people, you know, who were good at that point. It wasn't a large educated class.

There was a history of philosophy and history, a little bit of science in 1759 when he published his first book, but there wasn't anything that you or I would call social science. There actually was economics. There were people who were interested in the trade deficit or in employment or the price of corn. So he was not the first economist. He often gets called that. But I like to think of him as the first social scientist. He understood that there are these complex forces at play that explain the world around us, say why certain nations got wealthy

or why the countryside had different aspects to it than urban life, why rural and urban economic life were different or how landowners make their living. And he thought very broadly, he was not a narrow follower of a discipline. He observed the world and sifted through facts, and he was a storyteller. You know, when you say narrative economics, I view that as a compliment akin to the Ed Leamer, we are pattern-seeking storytelling animals.

He's a great storyteller, not in the sense of spinning a yarn, but in terms of pulling together disparate facts and observations to inform an understanding of a phenomenon like trade or education or specialization or governance or human behavior. And he was interested in it all. He was at a wide ranging curiosity about many, many aspects of human life, much way beyond, say, the stock market or what people normally define as, quote, economics, wage rates. He was interested in wage rates, but he saw them as being part of a much more complicated set of human interactions than just some market. The market to him meant something rich and subtle. So that's the sense in which I think he was a great narrative economist. And

to the extent that I'm a professional economist, I'm not much of one these days, but I'm also trying to tell stories. I'm also trying to help people understand how something works. Or right now I'm writing an essay on why there's a shortage of masks in the United States for protection against COVID-19. I wrote a book on the financial crisis, trying to illuminate an aspect of the crisis that was underappreciated, the moral hazard that previous bailouts had given to risk takers to invest imprudently. And I think that was grossly underappreciated as a cause of the crisis. But that's narrative economics, not proving anything. There's no formal theory. I'm taking

a set of observations about the world, and I will say proudly, I'm cherry picking. We all cherry pick, some worse than others. But you can't explain every fact. You can't incorporate every observation into your theory. If you did, your theory would be as big as the world. It's like a map of reality. A map, if you want it to be able to be folded and put in your pocket, it better abstract from a lot of the natural topography of the land and the detail of real life.

So models and stories are inherently filters. They have to leave out a lot of stuff to help you see. One way to think about this, I never thought about this before, but when you walk into a room that you've been in many times, I'm recording this in our bedroom, and everything in here is familiar to me. If there was something unfamiliar, if my wife had tacked a drawing up on the closet door over there, I'd go, I wonder what that is, and I'd notice it.

But there's 3,000 things in this room I don't notice anymore because I've seen them. My brain doesn't, I mean, it literally doesn't see them. You know, it fills in the visual field with memory and all kinds of, I don't know how to describe it. I don't know what the neuroscience words are for it, but I'll give you another example. There was, you know, this meme one of my kids described as the looking back meme it's the it's the boyfriend looking at the strange woman while his girlfriend says what are you looking at with her eyes and people use that meme to create all kinds of different examples of humor on social media well somebody created one of those today as a using excel out of it's the equivalent of making it out of Legos.

And your brain immediately sees what it is. It looks nothing like the meme, but your brain immediately goes, oh, it's that meme. I get it. And it's clever as hell. It's incredibly clever. I'll send it to you when we're off the air. But why did I bring that up?

See, I've lost my train of thought again. Help me out here. So we're talking about narrative economics and how we all cherry-pick things. Yeah, so you cherry-pick things, and your brain fills in all the holes. It can't look at everything. Your brain can't absorb everything.

If it did, you'd be paralyzed. So your brain knows to look at only some things. And people think, oh, well, that's unrealistic, or that's biased. Of course it is. It has to be be your brain doesn't work any other way and i think that's a you know the challenge is to make sure that the things you leave out aren't the important things that you don't want to see as opposed to things that you can't see or because you can't look at everything you just can't yeah we all do that to one degree or another. But the crucial thing is to actually be honest about the fact that we do it.

Yeah, I like to think that. I hope so. Yeah, yeah. So if for the sake of argument, we say that Adam Smith is the most important economist for people to know, and Friedrich Hayek is the second most important economist for people to know, who's the third most important economist for people to know? Boy, that's a tough one. It could be a few people if you can't pick one.

Yeah. Well, the names that come, let's start with people who aren't alive. Uh-huh. Of the people who aren't, and I'm going to talk about for me, because I would not say that Adam Smith's the most important economist for you to know, or whoever's listening. If you pick up The Wealth of Nations or The Theory of Moral Sentiments, you might put it right back down, because it's not written for you. It's written for somebody in the 18th century, and some of the terms are going to be hard for you to know what they mean.

And other pages, if you pick the right page, you'll go, wow's really that's a great sentence or well i never thought of that so there are things to learn from it but i'm not sure they'd be the first thing you should look at but but i'll put them on my list for sure and then i put a hayek for sure in the top five um milton friedman had a big impact on me less so as i get older which is really interesting for me. But I think more Friedman is a philosopher than as an economist. If you pick up Capitalism and Freedom, it's still very thought-provoking. It's not dated at all. Most of the vision of that book is still, unfortunately, timely and modern because the world hasn't exactly implemented all of his any very many of his ideas um and then for me i you know for my personal let's say who else would i put in this list of um uh great dead economists um well gary becker was my teacher had a big impact on me just because

he was so intensely passionate about the power of economics maybe a little too much so uh for me today but when i was younger had a huge it was very inspiring to me but i wouldn't recommend necessarily that listeners go out and read his books as many of them are not so accessible but he wrote some But he wrote some books for the general public. But who am I missing, Joseph? You tell me. Who should I be thinking about? Schumpeter, Keynes. You're not a fan of Keynes?

Kids have learned anything from Keynes. That's awkward to admit. Yeah. So the general theory to me is unreadable. What about Chapter 12, The State of Long-Term Expectations? Okay, well, I've forgotten Chapter 12. I found his essay on, I forget what it's called, Essay on Our Grandchildren? Okay.

Something like that. It's a very provocative essay, but i wouldn't say i've learned a lot from it uh schumpeter's um capitalism socialism and democracy is is a is a great book that's a very valuable book um kindleberger minsky no didn't affect me. Not much. My loss. Has Schiller affected you? Nope. Nope. Vernon Smith? Yep.

Vernon Smith for sure. Not so much for his technical work on auctions and pricing, which experiments, which is what he won his Nobel Prize for, but his insights into emergent order and Smith. And Smith have been very effective for me. Yeah. But he's still alive. He's 92 years old and still an active scholar.

Oh, I forgot. Coase. Ronald Coase would be on that list for sure. Okay. He wrote a handful of papers, and every one of them changed the field that he wrote about in powerful ways. Very provocative thinker.

Great. Also, you know, I'll throw in Stigler. I'll throw in Buchanan and Tulloch, even though I don't know their work as well as I should. But they were pioneers in what's called public choice, which is the idea of the economic theory of political science and so-called public choice, how we act in groups. And that's very influential in my thinking. I think we really misperceive group decision-making and how it works. So that's helpful to me.

I've learned a lot from them. And are you throwing in Stigler for regulatory capture theory or something else? No, Stigler because he understood that it's funny, even though I'm skeptical about data and empirical work, he really thought it was important to try to measure stuff. And he really changed industrial organization, the theory of the firm, and regulation, studies of regulation, because he

actually said you know instead of just saying that that's true maybe see if it's go find out if it is so i think he's he's been forgotten he's also probably the best the cleverest and best stylist uh prose stylist of the profession of the last i don't know 40 years or so he's a brilliant brilliantly clever and funny writer. Awesome. I'll have to read some more of his stuff. Russ, you're not a traditional professor anymore. How do you think about what you do?

So I taught in the classroom for 30 years, and I loved it. I love teaching. I don't like grading. But I did like lecturing and leading conversations in the classroom. I was a very Socratic style, very interactive. And when I stopped doing that, people would say, do you miss teaching? And I'd say, oh, well, I still teach. I just don't teach in the classroom.

So I see my job as an educator, which sounds pretentious. Not pretentious. It sounds, I don't know what the word, condescending. I don't mean it to be condescending. I really think my job as host of EconTalk is to help people understand things. And I try to do that by asking the question.

One thing we didn't talk about is that in podcasting is I really try hard to ask the questions i think listeners would ask if they were so i think there's two aspects to my style of podcasting one is i want listeners to feel like they're overhearing a conversation in a coffee shop between at least one interesting person ideally two if i'm doing my job well but the other is is that I want to ask the question that if they were given a chance to intervene, a clarifying question or a question that disturbs them, they have a chance to get their voice in.

So I'm always thinking those two things conflict a little bit. So I see myself, educator is not quite the right word, but guide is kind of pretentious. Steward is even more pretentious. Steward of the guest's ideas, trying to help them. I'm trying to shepherd the conversation toward a set of conditions that will allow knowledge to emerge that's really ugly but can't put on a business card either but um that's what i see my job as that's my job and i you know i i make videos and i occasionally write a book i feel like that's what i'm trying

to do all the time is to put ideas into a framework that people can access access and remember um you know there there's as you know loud cells angry cells and i think i'm always fighting the urge to be loud and angry a long time ago i got a little bit better at fighting that and i you know through the podcast i was talking about growing up and being a long time ago i got a little bit better at fighting that and i you know through the podcast i was talking about growing up and being a more better listener and all that and less interjection and so part of that is just an eagerness to not um swim with the tide on that which is where our era cultural era has headed toward louder and angrier um i always like this line only a dead salmon swims with the swims with the

with the tide you know we want i want i want to swim upstream baby i don't want to i don't want to i don't want to be carried downstream i want to i want to i want to get home and if you want to get home you better swim against the tide against the current yeah okay so based on your answer i take it that most of your working hours are given over to econ talk is that fair yeah i don't know it's hard and sometimes i say it's 50 you know there are times when it's more like 80 when i'm doing three interviews in a week and got two books to finish and or sometimes read and other times you, if I get the right level of passion about an essay or a book or a video project,

econ talk kind of becomes less important. So, you know, it depends how high the level of the water is in the well. You know, when I'm in a creative mood, econ talk's less important, but it's always there. Yeah. Russ, you took up meditation at the urging of your daughter yeah and you did a five-day retreat i did a 10-day vipassana retreat in 2016 the first and last time i've done one um it was that year i did two marathons and an ultra marathon and the 10-day Vipassana retreat was by far the hardest

challenge. Absolutely excruciating. What did you learn about yourself on the five-day retreat and do you still maintain a regular meditation practice? I want to know what you learned on a 10-day retreat. You should have learned twice as much as I, although I've done three five days so in a way i'm 50 better than you but uh and i've run one marathon so but but it was a long time ago um i am serious i would like to know what you got out of your 10-day but but in my five day you tell me first i'll go first so uh it's such a long list um there were so many insights uh about myself that i got from that many of which um a few of which i'll share but many of which i will um you know, I think about, I still think about a lot.

It was a powerful lesson in self-awareness. It was also a powerful lesson. It's funny, you know, it wasn't totally silent. You know, we interacted with the teachers in small groups once a day. We had some, it was a Jewish retreat, we had some Jewish learning that was face-to-face for about an hour a day. So it was not a full 10 days, like yours may have been fully silent. But one of the things I learned the most about was talking.

By being silent, it forced me to be aware of how many times I talk out of habit rather than for any particular reason. And on my retreat, we were encouraged not to gaze into the eyes of anyone or the other participants, not to look at them. And when at meals, if we wanted the salt, rather than gesture, certainly couldn't say pass the salt, but you also couldn't use your hands to say that you wanted the salt. You had to just get up and go get it and then put it back or put it somewhere else. Mm-hmm. And that at first seems, at first, when I was told that, I thought, that's silly. It's just silly. It was so liberating not to gaze at other people because you realize they're not gazing at you, which means that you're not worried about how your face looks when people are looking at you, which is about an enormous energy consumer of human life, is that you have to put on your mask, not your protective COVID mask, but your outside expression of the world mask. And the idea, you realize that you hold your face a certain way

because you need to make sure you're being looked at the right way. And that's bizarre, but that's, you realize you do, that one does that. And then you get to, when you do look over at someone else and you see that they're not worried about catching your eye or avoiding your eye they're just in their own space you get a glimpse of uh it's an intimate one reason you shouldn't do that is there's an intimate an intimacy in that glance because their mask is off they are not covering up and there's a lot of emotion and when i was doing this i there. And there's a lot of emotion. And when I was doing this, there were a lot of people who had times of tears and incredible vulnerability. It was a very powerful emotional experience for me.

Yeah. And I'm glad I had the opportunity to do it. I meditate now, right now, about the last few weeks since my father passed away, I probably should be meditating more, but I haven't been. But lately, it's been, you know, once a week, which is not appropriate. You know, in theory, I'm supposed to be meditating every day. But I find it's very hard it's hard to do it's um you know i've talked about this on the air sometimes you know it's a the when i'm on retreat life is so vivid um and rich eating is so rich you know we had meditative eating where you you know you would examine the food before you ate it you would examine the food before you ate it. You would smell the food before you ate it.

You would look at the food before you ate it. You would chew slowly. You would examine the texture of the food. It was exhilarating. Almost never done that other than on retreat. And I asked myself, if it's so exhilarating, why don't I do it? There's a natural, just like we talked about the fear of death, there's a natural, I think, human desire to get on with it, whether it's eating or emotion or,

you know, the idea of being in the moment, of being present and of savoring small parts of life is so fabulous when you have it, and yet I find myself with a natural disinclination for it most of the time. So that's a paradox. I don't know what else to say about that. So you're meditating about once awake at the moment. How long do you meditate per session? Well, that's a session I, you know, I used to, when my synagogue was in session, I would run a meditation session there on Saturday mornings before prayer to put myself and ideally help others to get into the space for that. I'm not doing that now. Our synagogue's closed because of the virus.

I'm going to do one via Zoom tomorrow. We'll see how it goes. I don't know if I'm just, you know, my heart's not in it. I think it's a it's a it's a natural response to the death of my father i'm just in a more um i don't know if i'll see how it goes tomorrow but i'm not in a i'm not in a space to perform like that it's just to help i just i just kind of i don't know if i'll be able to do it we'll see i mean i'll do it i don't know if i'll do it well but so i don't right now i'm just

my practice is uh resting how about you um so firstly the 10-day retreat um i found it physically very challenging i'm not a particularly flexible person and you have to sit on the floor cross-legged for like 10 hours a day on concrete yeah i mean you could have pillows like propping up your knees which i did i dislocated my right patella twice playing rugby at school so it starts to ache when it's bent for extended periods of time like on, you know, flights or long car trips or on 10-day Vipassana meditation retreats. And I found the physical pain reinforced the mental challenge because it was much harder to concentrate my mind when I had that physical pain. I found found i discovered how deficient my attention is like constantly i was trying to entertain myself with daydreams fantasies like i was thinking about

sex constantly thinking about my then girlfriend thinking about you know all the things i'd be doing when i got out thinking about you're the only one what do you mean you all the things I'd be doing when I got out, thinking about food. You were the only one. What do you mean? You were the only one. Everyone else was just totally focused on their breath. What happened? I know. It was pathetic.

Yeah, yeah, yeah. I really beat myself up about it. Yeah, shame on you. Yeah, yeah. God. I guess I'm not cut out for meditation. But, no, look, I found it. I felt an incredible sense of satisfaction at the end.

And it was a lovely moment when everyone was allowed to speak on the final day, talking to people. Like, one of the funny things was everybody seemed to have a nickname for everybody else. So, we're all sharing our nicknames at the lunch table on the last day. So, yeah, you know, you were this person and you were that person. It's funny. To be honest, it didn't really change me as a person apart from feeling like I had an achievement under the belt. But it did give me a lot more motivation and confidence when I went back to, I generally use the Headspace app doing Headspace daily

sessions, whether it's 10, 15 or 20 minutes. I felt like, you know, an Olympic athlete going back and playing in the little league. And during lockdown with one of my mates, we've been doing like a 10 week challenge. We've got a number of things we have to do every day, but one of them is meditating. So I've been doing 10 minutes a day on Headspace. So, I'm kind of trying to re-establish the habit. And it is one of those things that's very much, well, you only see the benefits like cumulatively after doing a lot of it for an extended period of time.

It's just like going to the gym or anything else in that kind of category. So, I'd encourage you to do little bits every day. Yeah, I'm trying my uh it won't surprise you my daughter is doing the same okay she's encouraging she's encouraging me to do a little bit every day um yeah i think that's a good idea um i have a question for you at lunch at that lunch when you're sharing the nicknames um did you feel close to the other participants yeah yeah definitely so we knew nothing about each other

personally or not much but there was that sense of you've gone through a difficult initiation together so the the sense of group closeness was quite strong. And the camaraderie was palpable. Yeah, I found that fascinating, given that we haven't talked, right? The people in that retreat haven't shared a single thing except the experience, and we're all inside our own heads, which is this very insular place. But, yeah, I was amazed at how powerful that part of it was yeah i mean

and the women and the men were separated on my retreat so i don't know whether uh it was different for the women whether on average they tend to bond more through um verbal communication whereas men tend to go through activities on average um so maybe it was a more powerful sense of bonding for us than for them totally speculating but but yeah it was um it was palpable and it was kind of nice um russ say we we have someone who's a generalist by nature like a tyler cowan style infivore who has quantitative aptitude and they're thinking about which undergraduate degree to study would you recommend economics or would you recommend they do something else like mathematics or science statistics that's a tough one um i don't recommend anything. You have to know the right person.

Of course, yeah, yeah. But let me say what I think is, but let me say what's undervalued. So I wouldn't have them study economics the way it's often taught, and it's taught differently at different places. When it's taught as a form of applied mathematics, I don't think it's very interesting. That's my taste.

I don't think it doesn't broaden your horizons. It's practical for getting a job, but it's not, I think, the right way to think about things. I think philosophy is undervalued. Philosophy is a fantastic thing to major in. It teaches you how to write, how to think. But one of my sons is majoring in philosophy. People say, well, what's he going to do with that when he gets out? I'm tempted to say, well, he's going to be a philosopher.

Wouldn't that be fun? You think Socrates had a, Plato had a good run? Aristotle? Nietzsche? You wish, you know, Nietzsche made a splash, but obviously he's not going to be a philosopher.

He's just a student of philosophy. But studying philosophy puts you in touch with great minds, helps you to learn how to think, how to write. So when they say that, what's he going to do with it? I say, not much. He's going to learn how to think how to write so when they say that what's he going to do with it i say not much you're going to think and write but other than that it's not very valuable so i think that's undervalued um uh the humanities are

undervalued generally they are hard to get employed by but you know it's not clear whether humanities is is doesn't help you with a your career i think it could depends on who you are and what your other skills are but yeah i read a lot of fiction when i was in college i took a lot of english classes i liked them i took a lot of philosophy too by the way yeah i think they're good help make me who i am are there any particular works of philosophy or fiction that jut out in the history of your life as being especially influential? Well, Adam Smith's Theory of Moral Sentiments, for sure. But in terms of fiction, there's just so many. I just think fiction is underrated generally.

It helps you understand the world, helps you think, helps you think about how people behave. I think it's a substitute for psychology, especially psychology the way it's taught today, which is, again, it's got some physics envy, so there's a lot of data and experiments. I think you're probably better off reading Jane Austen. Yeah, I think that's so true.

How much of behavioral economics as it stands today do you think will actually stand the test of time? Oh, that's a tough one. You know, behavioral economics is going through some of what's going through the psychology literature now, which is a replication crisis. A lot of the most vaunted and cleverest findings there are not standing up to replication, just troubling.

And some people say Adam Smith was the first behavioral economist. There's some truth to that. He understood that we self-deceive. And in that sense, I think behavioral economics is immortal. Obviously, understanding the foibles and flaws of human reason are incredibly important. And treating people as calculating machines is the wrong way to think about human behavior often. Not always. Sometimes it's helpful, but it's often helpful to remember that they're not. So I think it's early in the behavioral economics story it's got it's a bit of a fad and i think it's we'll see how it goes russ in this conversation we've spoken about

one aspect of your intellectual life which i think you summarize with the phrase, it's complicated. But we've kind of danced around the other aspect, which is to be lovely, which comes from Adam Smith, obviously, that in the theory of moral sentiments, he wrote that man naturally desires not only to be loved, but to be lovely. I know you've spoken about this so much. I mean, you've got a book about this. But for the benefit of people who aren't familiar with the idea, we may as well introduce them to it because it's so important. Talk a little bit about the distinction between being loved and being lovely. So, I like this line from the theory of moral sentiments.

Man naturally desires not only to be loved, but to be lovely. And Smith meant that to mean not just loved romantically, but admired, respected, being important, mattering. And by lovely, Smith meant praiseworthy, worthy of respect, worthy of honor, worthy of mattering. And it's just a useful way to organize your thinking about how people behave and what matters in life. You know, Smith thought that that was the road to happiness, was to be loved and lovely. And I think he was definitely onto something there. It certainly wasn't money that makes us happy. It's the respect and honor that we earn and affection from the people around us. And he understood that we also want it to be earned honestly, and not by fooling people into

who we are, but by actually being worthy of love and worthy of respect and honor and admiration. And I think those are deep truths, just, you know, worth living by. Well, Russ, I better let you,

you know, eat and get back to your family, but thank you so much for being so generous with your time. I've really enjoyed chatting with you and take care. It's the same. It's a wonderful conversation. Thanks for having me. Thanks so much for listening.

I hope you enjoyed that conversation as much as I did. For show notes and links to everything we discussed, you will find those on my website, www.josephnoelwalker.com. That's my full name. We also have a Facebook group where we expand and continue the conversation about particular episodes and topics discussed in episodes. The name of the Facebook group is Swagman and Swagettes. But the and is an ampersand because we like to do things differently. And just finally, you can also find me on Twitter.

My handle is at Joseph N Walker. As always, thank you so much for your time. Until next time, ciao.