In short
Podcast Summary Markdown
Podcast Episode Overview Podcast Title: Tetragrammaton with Rick Rubin Episode Title: Tyler Cowen Description: In this episode, Rick Rubin interviews Tyler Cowen, a prominent economist and professor at George Mason University, who discusses key economic principles, successful countries, cultural observations, the role of technology, and more.
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Key Concepts and Discussions
Core Lessons in Economics
- Incentives Matter: Understanding what motivates individuals in a given situation is crucial. This can include factors beyond money, such as fame or fear of working.
- No Free Lunch: Every decision has an opportunity cost. Analyzing choices requires understanding these costs to make informed decisions.
Theoretical vs. Practical Economics
- Simplicity in Theory: Good economic theories should be simple and easily explainable to non-economists. Complicated theories may lack practical relevance.
- Contextual Economics: Different countries can thrive under varied economic systems, highlighting the importance of understanding local contexts.
Successful Countries and Their Economic Strategies
- South Korea: Achieved remarkable economic success through large corporations (e.g., Samsung, Hyundai) and maintaining high savings rates.
- Ireland: Transitioned from a struggling nation to a prosperous economy by attracting foreign investment and reducing tax rates.
- Singapore: Noted for its efficient governance, high-quality civil service, and transformation from a British colony to a wealthy nation.
Downsides of Foreign Investment
- Economic Vulnerability: Countries that rely heavily on foreign investment may find themselves at the mercy of external economic forces.
- Regulatory Challenges: Small countries like Ireland face pressures from larger entities like the European Union.
Cultural Observations
- Diversity vs. Unity: The U.S. thrives on diversity and innovation; smaller, more homogeneous countries may benefit from unity in governance.
- Cultural Homogenization: Concerns about global culture becoming uniform, yet specific national identities remain strong.
Worldview and Change
- Evolving Perspectives: Cowen shares how his views on various issues, including marijuana legalization and economic predictions, have changed over time.
- Importance of Continuous Learning: Encourages a lifelong pursuit of learning and adapting one’s worldview based on new information.
The Role of Technology
- Interconnectedness of Hardware and Software: Future economic growth may rely on mastering both areas, particularly in emerging fields like autonomous vehicles.
Population Dynamics
- Declining Fertility Rates: Cowen aligns with views that many countries face future challenges due to low birth rates.
- Economic Implications: A shrinking population can lead to decreased economic growth and increases the urgency for creative solutions in policy.
Brexit and Global Relations
- Necessary Separation: While recognizing the economic drawbacks of Brexit, Cowen sees it as a necessary cultural and political divergence from the EU.
Education and Learning
- Critique of Formal Education: Cowen believes economics education often overlooks cultural factors and the importance of experiential learning.
- Informal Learning: Emphasizes learning from the internet and personal experiences over traditional academic routes.
Public Choice Theory
- Understanding Politics: Analyzes how self-interest among politicians can lead to misaligned incentives and ineffective governance.
Conclusion Cowen highlights the importance of adapting to new information and understanding diverse perspectives across cultures and economic systems, while also recognizing the limitations and challenges presented by current global dynamics.
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Key Takeaways
- Economic principles like incentives and opportunity cost are foundational in understanding human behavior.
- Real-world applications of economic theory often vary widely by context.
- Cultural identity remains vital, even amidst global homogenization.
- Continuous learning and adaptation are crucial for both personal growth and societal progress.
- Future economic success will hinge on innovation in both hardware and software.
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Recommendations
- Further exploration of Cowen's writings, particularly on economics and cultural analysis through his blog "Marginal Revolution."
- Engagement with Cowen's podcast "Conversations with Tyler" for deeper insights into a variety of topics and thinkers.
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Acknowledgments
Thank you to the sponsors that support this podcast
- House of Macadamias
- Squarespace
- Manna Vitality
- LMNT Electrolytes
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This summary captures the essence of Tyler Cowen's insights on economics, culture, and personal development as discussed in his interview with Rick Rubin.
Written by AI. May contain mistakes. Listen to the episode to check what was said.
Transcript
Automatic transcript. May contain errors.0:03Tetragramid.
0:21I think there are two core lessons to start with in economics. The first is incentives matter. So when you think about a social situation or an economy, just try to figure out what all the incentives are. It doesn't have to be money. It could be fame or recognition, or just actually not wanting to have to work. The second lesson of economics, as I see it, is there is no free lunch. So if you want to do something, there's a trade -off, there's an opportunity cost. Don't think that you can just get something for free. So again, if you're analyzing a choice and a business with respect to policy, if you don't understand what is the opportunity cost, you probably don't know what you're doing.
1:03So I would say those are the two key lessons of economics. Most good economics is fairly simple. If economics is super complicated, maybe I wouldn't entirely trust it. And just take those as some key concepts out there to explore life. How different is the theoretical versus the practical when it comes to economic matters? When the theoretical is simple, it usually makes sense. So if you can explain an economic idea to someone who is not an economist, that's a good sign. There's so much academic economics out there. And some of it is very accurate, but often it's not that relevant. It's just designed to address one specific context.
1:44One place at one point in time, and people do that for research, but hardly anyone else needs to know that. So I would just say be careful and always try to translate it back to your common sense. Is there one size fits all, or is it always case sensitive? It's usually case sensitive. So if you're trying to think about why have different countries or economies done well, I think there are some very basic principles. Incentives matter, property rights matter, you don't want the government to screw things up too much. But in fact, you see different countries like South Korea or say Ireland. They've taken very different paths, done different things.
2:24In both cases, it's turned out pretty well. So I don't think there's a simple recipe like formula for how to grow your economy. Tell me a little bit about those two particulars, what works in Ireland, what works in South Korea. In 1960, South Korea was actually a poorer nation than most of sub -Saharan Africa. Now it has a per capita income, actually richer than Italy, about equal to France. I think recently they've kind of come into a tie or surpassed Japan and England. They did it by building very large corporations, like Samsung or Hyundai, that all of us wouldn't know by having King Glamourits, by having high savings rates and not relying too much on foreign investment.
3:08At first their government was quite corrupt. It's still actually fairly corrupt. But basically they've done it. Now if you look at Ireland in the 1970s, Ireland was, in essence, considered a third -world country. There was conflict going on between Catholic Protestants, the situation with an Northern Ireland. They opened up to foreign investment. They cut their tax rates. A lot of them just decided enough of this nonsense. All of a sudden people started calling it the Celtic Tiger. In circa 2023 you would have to say they're doing better, say the England, which is a complete historic reversal, very high dependence on foreign multinationals and foreign direct investment.
3:48Good for them, but it's very different from the Korean homegrown Glamourit approach. Is there any downside to the foreign investment? There always is. So if you have a lot of foreign investment, to some extent you're at the mercy of, well other larger countries, in fact, continue to produce the big corporations who will invest in Ireland. Another problem Ireland continually has is the European Union wants to, from the outside, regulate Ireland more, and Ireland being a small country has to push back very hard. So their prosperity is never quite guaranteed, but they've stuck with it and made it.
4:24What are the other countries around the world that you see as winning stories? Well Singapore, you know, putting aside oil, rich monarchies and the like. Singapore is one of the very wealthiest nations. It's richer than the United States. They achieved their independence in the 1960s. They were kicked out of Malaysia. They were very upset about this. They weren't sure they could make it on their own, but they had some really fantastic leaders, like Lee Kuan Yew. They had a high savings rate. They decided they were going to develop the highest quality civil service in the world, and basically did it.
4:59So most countries, the smartest people work in the private sector. Very often in Singapore, the best and smartest people work in government, which is not a formula that I, as an American, am especially used to. But for them, it's work. You can think of Singapore in a way, as in some ways, more like a company than a country, but they have sovereign wealth funds that have invested successfully in China, India, many places, made the nation even much richer than its per capita income would indicate. And they turned being a British colony to their advantage, which not everyone has done. Being a British colony was not good for many countries, but it's been very good for Singapore.
5:35You say that the function more like a company than a country would every country benefit from running more like a company. I think there's only a small number of fairly small countries with some degree of ethnic homogeneity. Singapore being about 80 % Chinese. That can pull that off. Why is that? You need a sense of unity, a sense of a common mission. So the United States with 330 million people, our strength is in our diversity, our innovation, our discord in a sense. And it can be good often that we're polarized. You know, let's have a debate. Let's slug it out. You don't always like who wins.
6:14But at the end of the day, we move forward with a lot of new ideas. Singapore is not that innovative. It's just incredibly well -run. Everything works. Everything is how you want it to be. It's wonderful if you visit as a foreigner. You know, Singapore is about the size of Fairfax County. I think population is about 5 to 6 million people. I don't think it could be so much bigger than it is and still do that. Beyond Singapore, other countries worthy of note? Well, I think Canada and Australia are two amazingly well -run countries. I would say they're both a bit more to the socialistic side than I would prefer.
6:49But they've made immigration work for themselves. Canada has been willing to slot itself economically speaking next to the United States and take advantage of that relationship. And life in Canada now is much better than life in Western Europe. That really wasn't true, say, 30 years ago. Western Europe has been stagnating. You have North America taking advantage of tech, now artificial intelligence, fracking, just general entrepreneurship. Whereas Western Europe is state as it is wonderful standard of life, especially if you come here with an outside income. But really quite stagnant. Could that change?
7:27Oh, could. I think one place it has changed is Poland, which obviously is Eastern Europe. So Poland now, since 1990, has been growing at an average rate of about 4%. It's on track, you know, in 10 to 12 years, to equal or surpass, say, the United Kingdom. And in 1990, they basically had nothing. They have a kind of unity stemming from their background with the Catholic Church, dislike of the USSR or Russia, viewing success as an existential issue. Like if we don't make this, we'll be swallowed up or attacked as Ukraine has been. So having incentives to succeed in racing capitalism, I think through some problems and how they run their government, but it's hard to call it anything other than a success.
8:10Is pressure always a good thing? I wouldn't say always, but I think on average, so you look at Israel, which again, the country started with virtually nothing. But everyone knew if we don't get richer quickly, you know, we're outnumbered by enemies who oppose us or wish us harm. So many more Egyptians say than Israelis, and that's not to even bring in all the other countries. And Israel developed some notion of capitalism, a startup scene, a tech center, in cyber security, their masters, water policy. There's so many things they've gotten right because they had to. And you would have to call that another example of existential crisis leading to success.
8:52In South Korea, the examples were hardware. Can hardware grow in a way that it's in peep with software in terms of growth? I think today, hardware and software are becoming much more the same thing. So most of your car now is software. So both the hardware and the software have to be good. So if you're thinking about future countries that will do well, look for ones that will master both hardware and software. You think about drones, which are now quite important, not only for the military. Again, you need both the hardware and software to be on track, self -driving vehicles, which I think will become a much bigger thing.
9:31So that's the new mode is to be good at both. And that's going to be very hard for a lot of countries. I think it will be very beneficial for North America, probably for Israel. But a lot of places, the European Union in particular, they're not so good at software. Germany has always been excellent at hardware. And that is carried them a long way. But they're about to enter this new era and it seems like they're deindustrializing. And that will be a grave problem for them. What do you believe now that you didn't believe when you were younger? Well, it depends on the year of younger. So when I was 10 years old, you know, I guess my favorite song was Jackson Five.
10:09I want you back, which was not so bad a pick. I thought Tommy Rowe was really good. Now I only like two of his songs. And I was tired of hearing Hey Jude on the radio. And now I just keep on wanting to hear it. So that would be a simple place to start. But if you're looking at 10 years ago, 10 years ago, I thought 2008, 2009 was the collapse of a housing bubble. Now I see home prices, they've come back. I don't think it was a bubble at all. I think we panicked when we didn't need to panic. But you can pick a year. And I'll tell you what I've changed my mind about. Anything culturally that you've changed your mind about.
10:45Five years ago, certainly 10 years ago, I thought marijuana legalization and decriminalization would work fine. I'm still in favor of them. I think it's ethically wrong to put a person in jail for something the person does as his or her own choice. But I don't feel it's working well. And I would prefer that at the social level, we rethink having a world where so many parents bring their kids to school, say in New York City, and smell marijuana smoke along the way. I'm worried this is not a stable political equilibrium. And I would just say it's gone less well than I would have wanted it to. And I hope we rethink it to make it work better because I don't want us to go back to how things were.
11:24Any ideas of what would work better? I think just having personal norms that are maybe a bit more like those of Singapore. I don't favor Singaporean drug policy, which is super strict and pretty well enforced because it's so hard to get in and out of the country. But just the notion that there's a sense of shame to certain ways of behaving in public. America had more of this in earlier decades. And I think we need to bring some of it back. How often does your worldview change? Every day, every moment, like the mere fact that nothing happens, you should update your worldview. So there's a big debate now.
12:02They're called UAPs. We used to call them UFOs. What are they? It's a big mystery. So one hypothesis is there actually some kind of craft from aliens. I don't know if that's true. But years have passed. I don't hear other good explanations. So if a moment passes and I don't hear anything, my probability that they might actually be say Ellie and Drone Probes. It just takes up by the tiniest amount. And all I'm doing is sitting in this chair hearing nothing. When you have a strong feeling about something and then you get new information that refutes that, are you easy to reset your software? Everyone will say yes to that, but the people who say yes, I don't trust.
12:42So maybe I'm better off thinking that I'm actually pretty stubborn and it takes a fair amount. We're all too vulnerable to the following mechanism. If someone you trust tells you you're wrong, you take it on more readily than if someone you don't trust tells you you're wrong. But that's a very asymmetric way to do intellectual business. And we all ought to try to reform ourselves. When does science get it wrong? It depends what you mean by science. I would say very often scientists get it wrong. So if you look at the pandemic, our unwillingness to reopen schools in a timely manner was a huge instance of scientists getting it wrong.
13:20And you could just blame the public school system as well. And the media did science and the abstract sense get it wrong? That's a more metaphysical question. We see paradigms change in science. Like science seems to always be changing. Whatever today's standard of science is, 10 years from now we'll look back and it's like there'll be a new discovery that changes, you know, a third of the things that we believe today. Sure, mostly it gets better, but sometimes it seems to me it gets worse. Because scientists take on their political beliefs and confuse them with the science. Now I think that's what happened during the pandemic.
13:55We, the United States, have just become in some ways too cautious, too bureaucratized. We were too slow to respond in a number of ways. And then we made the additional mistake of just dragging out all of the adjustments and lockdowns. So I think we should have had some lockdowns early on just to see what was going on. But then we should have gotten rid of them really pretty quickly. Some places did. Florida, I think that went quite well. But a lot of places didn't. A lot of countries didn't. What are healthy levels of bureaucracy? In every country I've ever visited there should be less bureaucracy.
14:31I'm not sure if there are any exceptions, but I would say the nice thing about Singapore is it's the highest quality bureaucrats I've ever met encountered or dealt with. And I've given talks to them numerous times met with them and they're just uniformly impressive. Tell me about intuition versus education. I think you need both. It's a bit like to have your economy succeed. You need hardware and software. So there are many people that are very highly educated, but they're intuitions or poor. I think all other things equal. I would prefer the people who are less educated and have better intuition.
15:09Most of all I want people to have both. And the great thing about education these days, it's not so closely tied to schooling. It may or may not be, but you can learn from the internet. It's just easier to meet the people you can learn from when you're learning from others face to face. We wouldn't have met if not for the internet, right? So formal schooling, mattering less to me is a big advance. If you're in high school today and you're really excited about either a career or starting a business, would you go to college before pursuing that dream? It's a difficult counterfactual. I think I would, but I don't think I would take the course I've taken.
15:47So I became an academic and a professor. That path is now to be rock -retized. Given that I'm 61, I went through the obstacles at a time when they were easier and better. So it's worked out great for me. But when people, you know, who are 20 years old, tell me like Tyler, should I try to do this? Some of them should, but far more often than before. I would say, no, you don't actually end up with the freedoms you think you're looking for. And to look at something like the world of tech or startups, or just doing your own thing, like someone like Mr. Beast, or yourself for that matter, it's very hard to just categorize your profession.
16:24There's ways you could describe Mr. Beast while YouTuber, of course, or you produce music. But it's something also bigger, different, and more diverse than that. And I would look for some kind of job in that manner that would be hard to describe in advance. In the past, there was talk of the population boom, and there being too many people on the planet. The planet can't sustain the people. And now the discussion is there not enough people, or there won't be enough people. Where are you on that? Well, I agree with Elon Musk. As of 2023, we face a future where there will not be enough people. The big flaw of South Korea, by the way, is they have a total fertility rate of 0 .8.
17:02Can you imagine so low? Like a family is not even averaging one kid. Italy had been at 1 .3. I think it's now a bit even lower than that. So these societies are not reproducing themselves. And to just have someone, you know, to have people raise their hands and say, there's something about this that is totally dysfunctional. And it will at some point be an emergency. Very few people are willing to do that. And any given day, it's a problem you could ignore. Because in terms of the stock of people, there's enough people around in most places. But the future flows. A lot of countries are in big trouble.
17:37And you have places like Iran, which will depopulate before they become wealthy. And they're not so attractive for immigrants to go there. Is the need for population only based on the economy? Well, the economy is so intertwined with other factors. I'm not sure you can separate them, but just to pay for everyone's retirement, you need an incoming flow of young people. But I think also for individuals to feel connected, to have families, to have ties, to feel whole in their lives, to have some sense of attaining a spiritual understanding of all that is around them. More people are an enormous help.
18:16Maybe the number one help. They don't have to be your biological family. But that's one pretty easy way to get there, which typically does have pretty strong bonds. So it's not only economic. Describe to me the world tomorrow if there were half as many people on it. Well, again, there's an issue between the stock and the flow. If you had half as many people, but each family had three kids, it wouldn't be a problem over time. You would repopulate the earth. If you have half as many people, and the total fertility rate is 0 .8. You're headed, if not quite toward extinction, to not having enough people to keep things up and running, you'd have less division of labor.
18:55All economies would have negative economic growth. Future generations would be poorer. You'd probably have a lot of political conflict. So you would solve some environmental problems, which is nice, but it's not close to being worth the price. I heard a quote from a current politician talking about the need for depopulation, and I was surprised. If you think, are there overpopulated countries, there's maybe a handful that are overpopulated in the sense that they're not wealthy enough. So does Bangladesh have too many people? Maybe. But most of the world, including Africa, is quite underpopulated.
19:30They don't have the economies of scale to build infrastructure and transportation networks that will get people, food, medicines, other benefits of urban life. So very few parts of the world are overpopulated in my view. Tell me the effects of Brexit. Brexit is a complex issue. So when Brexit happened, I was opposed to Brexit, because I thought the economic future of the United Kingdom was with the European Union, and I thought they would lose about 3 % of their GDP by leaving. They left. It has hurt the economy. I think that was a correct forecast, but increasingly I've come to see Brexit as necessary, just as the reformation was necessary.
20:11So the British way of life, European Union way of life, they're just very different. I don't think they're ever going to converge enough for the UK and the European Union to be stable. So I think they had to go their own way, and I'm hoping they can turn it into a good Brexit. If the United Kingdom would deregulate, toss out all of the European Union laws and regulations they inherited, which they have not done, by the way, that's odd. It's very odd, but they've lost their courage. And in some ways, their regulations are worse than the EU. So what's the point of leaving if you're not going to make a good go of it?
20:45So they're at this kind of turning or switch point where they need to decide, are we going to use Brexit for the better? Or are we just going to take this loss and not actually do anything to compensate? Then we'll see. If Brexit could have been good for the UK, why would that not be the case for other countries? If you're looking at a country like Estonia, which has a military issue with Russia, they're very small. They need trade with the European Union. They can't go it on their own. So they should be in the European Union, even though... This trade not happen without the European Union? The European Union is kind of nasty.
21:22They say if you don't belong to us and you're nearby, we're going to put significant tariffs on your goods. Now I object to that, but it's a fact, and given that fact, a small country such as Estonia has to be in the EU, plus they need the protection against Russia. So a bunch of countries should be in the EU, but United Kingdom, it has nuclear weapons. It's on the other side of Europe. It has the English language. It has very strong ties to the US. So I would like to see them over time, enter NAFTA in some form, and truly build out the transatlantic partnership. That would be one way that could turn this thing to their advantage.
21:59And they might do that, right? They might, we'll see. Yeah. How do the different countries maintain the specialness of why we like to visit them as the world becomes more of a global system? There was a big prediction in the 1990s that the whole world would culturally become the same. And I think in some ways that has happened, but mostly it hasn't. So if you go to China, go to India, they still feel quite special, not always in good ways, but they're still strongly Chinese Indian or regionally different. If you're in Italy, Italian, social ways, or still here and quite intact, that said, there's something about cities that I find a little depressing.
22:44They all have the same kind of we work spaces, the same kind of cafes. There's Starbucks everywhere. I love sushi, but the fact that you get the same kind of sushi in all the world's great cities. I don't know. There's some dimensions along which cities have the super common kind of yapified upper middle class appeal to the educated, but it doesn't at all appeal to me, and I find it quite boring. And that to me is depressing. And it depends on the city. I think if you go to Tokyo, it's remarkably vital, still quite Japanese. Los Angeles, plenty of places that are fine up and running. London to me culturally feels much more boring than it was the first time I went in 1970.
23:26There's way more culturally to do. Oh, here's an exhibit. Here's a concert. But what about that is London feels fairly emptied out. So... Do you set a homogenization? Yes. But again, many, many countries in the world still feel like what you want them to be. So I'm not pessimistic. What is your experience of the situations around the world versus what we are told about the situations around the world? I don't trust global news at all about most places. There's a tendency for media to report the negative about what happens in the world. Reporters, they might have formal education in the sense they were undergraduates at Harvard.
24:10They're typically very poorly educated if you ask, do they know a diverse set of people in terms of class? If they know a diverse set of people ethnically, it's the same kind of wealthier people whose kids went to Harvard sort of thing. Often they haven't traveled in a serious way much or ever tried to actually live in a very poor place or learn other languages. So they think their way undereducated. Sometimes they even might have basemotives, but I don't think that's the main problem. I think in life most people mean well, I just think they're not up to the job of reporting on other countries.
24:46What do you think of remote viewing? When you say remote viewing, what do you mean? Remote viewing is when you close your eyes, travel to another place, and visualize the place, draw it, and be accurate. It's fantastic if you can do it. I have a zero skill at that, like I have to go to the other place. But it's a great human ability and just ability to imagine other places. But I'm very poor at that. I feel I need to see things literally, smell them, taste them, and then I start to have like some partial understanding of a place by being there.
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26:45When you ask a question, are you looking for the answer to your question, are you interested in seeing where it goes? I'm looking for a better question. I'm not sure how many questions have answers. I mean a bunch do, once two plus two, that's four, but we know those answers, right? So I think we ought to be looking for better questions, and always trying to revise, and not get too caught up in, quote unquote, the answer. With people who are leaving countries, fleeing countries, are they fleeing to escape or to look for a better life? My wife was a refugee from the Soviet Union. She left right before the Soviet Union collapsed.
27:26For her it was both of those. So a lot of human decisions that are over -determined. You have a bunch of reasons for leaving. Ultimately what pushed her to leave is that her mother, who was very wise, and she trusted greatly, insisted to her that she had to leave and had to leave now, that they didn't know if they'd be able to leave in the future. So it was just like a let's go. Are they all expected the family great things from the United States? They did not in every way have those expectations met. My wife's father, who's the one who expected the least and didn't really want to go. He's the one who ended up the happiest with the country.
27:59He just thinks it's great. Or is my wife's mother, who visualized it all as like a country of jazz and poetry and Henry James and Herman Melville, she ended up remarkably disillusioned. That a lot of it really was not a cyber -ad was what she was wanting. Did they all leave the whole family? The two parents, my wife and her daughter, who then was between ages one and two, and later I adopted her, they all left. And did she have other relatives who did not leave? Many of the others left and went to Israel and are still there. That was a very different choice. They didn't have the option of the United States.
28:36My wife did, that was unusual, and she grabbed it. Did they stay in contact with any people who stayed? Oh, of course, and my wife is still in contact with many people in Moscow. Absolutely, all the time. How did their life change with the fall? Well, at first it was extremely traumatic. So life expectancy for men dropped a great deal. Things were chaos. No one knew what the future held. There was then a period of time. I would date it is roughly something like 2000 and 2006, give or take, where the Russian economy grew and just boomed. And it was a phenomenal period. Things were happening. They built out a whole economy and away from scratch.
29:15They overcame deindustrialization. Putin, who was leader then, was relatively popular. That was his better period, even though he was still doing bad things. And people then had a sensible rushes really on the march forward. This is going to be wonderful. But then a lot started going wrong. The country didn't turn out as competitive or prosperous. As people liked, there were these foreign adventures, which got the country in trouble, eventually culminating in the Ukraine war. And now people are really not knowing what the future is. And there's been a mass exodus to Armenia, Turkey, Kazakhstan, Cyprus, many other places.
29:51We'll see. Only since the war. No, it was ongoing before the war. But it greatly accelerated because of the war. Some of it simply being young man who don't want to be drafted, right? But just people who didn't want to face a future where, in essence, they wouldn't be allowed into the European Union, say without having as it's confiscated. And I've been looking for places to go. And the Russian economy seldom up pretty well. Better than people thought. I would say the sanctions did not work out as planned. But still there's other reasons to want to leave. You're not really part of the global community anymore.
30:26And you had this, whether you call it a coup or a minikoo or a fake coup or a stage coup, whatever happened with pregursion. And I don't understand it. You just feel a bit, well, here's a guy with 25 soldiers maybe marching on my capital. Like, who needs that, right? Tell me about the house you grew up in. It was in Northern New Jersey. So I was born in Cardi, New Jersey, to a family that at the time was quite poor. When my father was 30, his pet shop had just gone bankrupt and he had zero net wealth. I was a tiny tot then. Cardi was very much a working class city, very Irish American. That was our background.
31:05My father worked in Chambers of Commerce. He had a few other chances to move. He, in fact, was extremely talented that we never went to college. Back then it was still possible to work your way up. We ended up in Bergen County, which became quite well to do. And by the time I was 18, we were very upper middle class. My parents divorced. They started splitting like in my age range, age range 10 to 12. I had a sister. Later, brother was born from my father's second marriage. I went into New York City all the time. I was a chess prodigy early on, like ages 10 to 15. chess was totally my thing. Always took the bus into New York, learn New York early on.
31:48That was my childhood. I was like a nerdy kid playing chess, reading books. Was there... And loving music. Was there a piano in the house? There was a piano in the house. It was a terrible piano. And there was a kind of plastic organ and guitars. And I played around with those just all the time. It's totally fascinated. I ended up with sheet music from the Beatles, Classic Rock, just would try to learn the notes and chords to everything. Was music playing your house often? Well played by me. My parents had been in barbershop choirs and sang harmony. But they didn't play records much. Some music was self -generated.
32:26My sister, who was two years older, from her I learned a lot about music, like grateful dad, Bruce Springsteen. She would get to know it before I would. And I figured out pretty quickly. Well, she had good taste in music. Let's just see what she's listening to. And that worked fantastic. Did you ever get into looking for records yourself? Oh, of course. I mean, as soon as I had money, records would be what I would buy. And buying the next Beatles record, things that were already out, was just the thing. So first I got like the blue and the red records, which kind of everyone started with then.
32:58And then, well, which do I buy next? So it was such an agony. I think it was something new I bought, which is the American version. A lot of it's like Hard Day's Night. I heard, I'll cry instead, you know, by John. Just blew my mind first time I heard it. I'm like, what is this? This was better than what I was hearing on transistor radio, which was like Zager and Evans Year 25, which is fun. I like it. But it's like John singing Hard Day's Night stuff. And then I just worked hard to get more money and bought all this stuff. And then tried to go to concerts. I saw Paul McCartney and Wings at Madison Square Garden.
33:32That was probably 1976. Crosby Nash. I saw on 75 in New Jersey, my mother drove my sister and myself. What was the venue in New Jersey? It was called a home dell. It's an unknown town. But a very nice concert stage. The first real concert I ever saw, they were still close to their vocal peaks. They were also out to show like they were better, you know, stills and young didn't need those other guys. Very competitive relationship it seemed. And played all the great songs they would have had in 75. And I just realized, here's this whole world, I have to learn everything about music for the rest of my life.
34:07Yeah, I love the enthusiasm. Same, my same. You hear like our house, which I knew from record. But to actually have Graham Nash in front of you playing our house and singing it, it's totally different experience. Our Wings back then was much better as a live band. Like that Holvenus and Mars album, which to me feels like I overproduced too many horns. But when you heard those songs live like Letting Go, they were A double plus, and they all made sense all of a sudden, or called me back again. On the album it's okay live, it was just fantastic. The live version of Maybe I'm Amazed was better than the studio.
34:45Maybe I'm Amazed on the McCartney album, though I love that one too. Did you watch much television growing up? Oh, absolutely. So I had clear favorites. I didn't watch that many shows, most shows I hated. First I loved Gilligan's Island, like the Professor, and then of course it was Classic Star Trek with Spock. And I watched those again and again and again. And then like horror movies, like Frankenstein, Wolfman, Dracula, from the 30s. Comedy's? Comedy's back then were not funny. I mean they might be in the movies. I've been castelos. My father watched Abbot in Castello. I saw it multiple times.
35:19I have to say I never thought they were funny. But when I now see Larry David Seinfeld, you see how much Abbot and Castello is in them. And you realize there was something funny about it after all. Even though it was an 11 year old, you're not going, ha ha ha. So they've gotten up in my view. Yeah. And I suppose Gilligan's Island essentially is a comedy. Absolutely. And it's a statement about society. What the America then valued, like how we stereotype the millionaire, the professor, the skipper, the movie starlet. It's actually very interesting, substantively. Do you have any rituals? Do I have anything that's not a ritual?
35:56I would reword the question. I go to bed every night in a timely manner, like by 1130. I wake up every morning in a timely manner. I work every day. I listen to music every day. Every day I'm totally focused on learning. I can be talking. It can be on WhatsApp. I can be reading Twitter. It can be my own writing. It's like, what I do. And I'd say my whole life is a ritual. Is Twitter the only social media you spend time with? I don't spend time on Facebook or Instagram. I've written a blog every day for 20 years. I don't know if you'd call that social media, but it's how I meet a lot of people.
36:35And then I'm super active on WhatsApp and texting. Really a lot of time each day. Tell me about the process of writing a blog every day. It forces you to learn things like you're making something. It's like teaching. You only learn economics when you have to teach it. It doesn't matter what school you went to. So you write to figure out what you think and to come up with better questions. And directly it's a source of income for me, but most of all I do it. To keep going. And I want to stay fresh. And I always have questions to ask. What's the amount of time that it takes to do a post? Well, I'm 61 years old.
37:12So I would say 61 years. But in the moment, really not very long. But it's the fixed cost that matters. Do you do any research for the post? It's always about what I've been reading lately or talking to people about. If you would call that research, yes. All the time. But you'd be doing the same research regardless of whether you were writing the post or you don't know it. Exactly. It's more or less the same. So the marginal cost of the writing is actually much lower than people think. And I've written enough I write pretty quickly just like some people write songs pretty quickly. How do you see you manage your time?
37:46I guess I have to say well. So I direct an on profit, which is now reasonably large. I run what is arguably the number one YouTube channel for economics. I write two columns a week for Bloomberg. I teach at my university. I write blog every day. And I'm in touch with, I don't know, 100 to 150 people on a pretty regular basis. Have a wife, have a daughter, have two grandkids. We now take care of a dog. So like, wow, it's a normative thing. But people look at me and think I got a lot done. That's how I would put it immodestly. All of those things the same. They feel a bit the same to me. So I sometimes say like my program or project is to become an information trillionaire.
38:33So I know people who are billionaires. So I try now to be an information billionaire. It's never enough, right? Like you only keep your current knowledge fresh by always wanting more. So that's the general quest. And obviously one never gets there. But for me, it makes life very exciting. I've always been in good health. I feel in very high energy and just keep on going. How much of what you lend you retain? I'm never sure what retain means. So I'm very well known for reading a lot of books and for reading at a very rapid speed. And a lot of people like used to doubt how much I retain. But then I started doing a podcast called Conversations with Tyler in the 200 episodes or so.
39:17And you're one of them. And people when they listen to the podcast, they tend to realize I retain a lot of what I read in a way where they didn't believe me before. So I think I retain a fair amount. But like, is it for me to say? The questioning on your podcast is different than any I've ever experienced. How would you describe that difference? I would say it's like speed dating. I've never done speed dating. Yeah. But what I believe speed dating works. It's not at all conversational. That's right. That it's called Conversations with Tyler's kind of an inside joke pun. Yeah. It's not a conversation.
39:53How did you develop the style? It's just, here's what I want to know from the person. I'm not paid to do it. We don't sell ads. There's zero revenue. So there's no reason for me to do anything other than what I want. And I'm just informationally greedy and want to keep on pulling grabbing. It puts some people off like, oh, what is this? It's not hostile at all. Like, there's no, oh, you dummy. Why did you do that kind of question? Yeah. But it's like, tell me, tell me, tell me. Yeah. Like this impatient little kid pulling on someone's sleeve. It's a very strange experience. I think that we're conversational beings.
40:26So what? Yes. So it's not so much. Yeah, I see. Yeah. What do you view as success? Learning more, staying in good health, being around people I care about, and I take care of them. They take care of me. You know, all of those things. I think one needs all of them. Tell me about the extremes of the different cultural norms you've seen in your travels. Well, I've been to over a hundred countries. So there's incredible variation. I think overall, I've ended up seeing different humans as more alike than when I started. But for instance, recently I was in rural Kenya with my wife. We were in a massage village.
41:11And their typical man would have like three wives and 12 kids. There's female circumcision quite often. People cannot read her right. They do have smartphones. They have to walk two kilometers to get their water. It is a very different outlook. But when you stand across from them, like the first thing you want is to talk about music. And they will perform music for you. And that's phenomenal. And then they want to ask, they asked my wife and myself, oh, were you too married? How long have you been married? When did you meet? It's much more honest than a lot of Western conversation. They're like, here's what we really want to know.
41:48We're just going to ask you. We're not shy. So I think the universals are more important.
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43:25Do you see any positive attributes for some of the things that we may view as negative in the West? Well, I would do it country by country or even region by region, but I think the United States is an overall a bad nation for limiting mental illness and the costs of mental illness. We don't have social networks well designed for that. Italy is one of many countries that does a much better job of limiting the costs of mental illness. American families may be are underrated. American politics may be is underrated. We've grown a lot more rapidly than Europe has. But I think keeping people in the bottom is at like bottom third, bottom quarter.
44:09However you want to slice the distribution, keeping them out of trouble we're not good at. And I think a lot of it comes down to social networks. We're super good at innovation. So you can just be on your own as a weirdo and innovate. But you can also be on your own as a weirdo and just get into trouble and not get out of it. What's the recipe for places that have revolutionary changes, the Renaissance, Silicon Valley, Paris to the 20s? What are the seeds? A certain degree of competition, cluster of talented people who are rivals but who also help each other, effective social networks. Typically there are new technologies coming along.
44:52So if you take the Florentine Renaissance, well at first it's gold smithing, but then it's the ability to have temper -repaint. And then you have enough wealth through finance and the well guilds and other producers that there are business people who want to commission paintings one way or another. And then you have oil painting coming from the north. So there's a whole new medium that people like Leonardo can experiment with. Just like the electric guitar, a lot of the earliest people did the most with it. Because over time these things become repetitive. So having this magic collection of different facts about the world come together.
45:26The small groups, the networking, the growth in wealth, the new technologies. And most importantly, the sense of believing you're doing something really important, which you see say in 1960s music. It might be in summer app today, but for the most part I don't see it in very contemporary music. But it's so strong earlier on in popular music. This stuff really mattered. The Beatles sing all you need is love. And the world is shaken. Is it always related to a new technology? Are there any examples where it's not tech -based? I would hesitate to use the word always. But if you think about say French impressionism, well actually there the railroad was important.
46:09You needed to take a train to get out into the countryside to see what you know painting the landscape. And just like brushes and oil paints became much cheaper. So it opened it up to a large number of people. So I think in an overwhelming majority of cases there's technology, electronic, obviously required technology. Sculptural materials do you have access to the quarry? Can you get what you need? It's not enough. There's plenty of technological breakthroughs that lead to nothing. But in so many cases you see it as part of the mix. What is public choice theory? Public choice theory is a branch of economics that analyzes politics and starts with the largely correct assumption that most politicians are self -interested.
46:52They're not angels. And if you're going to understand politics you have to realize they have their own purposes and will pursue their own ends. It doesn't have to work out badly. But if incentives are not aligned the government can just screw you. Or maybe the government does what voters tell them. If the government voters want bad or misinformed things that's another way things can go wrong. And I view public choice economics as essential to understanding why the modern world is partly screwed up. Can the incentives align? What would a world where incentives align look like? Well one thing we did very well in the United States I think was Operation Warp Speed where the government created incentives for vaccine manufacturers to get something out there quickly.
47:35It didn't go perfectly but government actually moved rapidly rather than slowly outside of Philadelphia the I -95 bridge collapsed. And there was the prospect of it wouldn't be easy to drive to Philadelphia for months or even years. It can take the government decades to build a road in fact even to rename a road it can take them 10 or 20 years. What actually happened is that people in the local and state government worked together and they refitted the road and it was up and running again in a few weeks. Now that's the exception but it definitely can be done and that's a case where it was done this just happened.
48:14So America hasn't lost its greatness it's lost it selectively I worry that the fraying may increase and increase. But there's still plenty of cases where we get things right as we're speaking the latest inflation report came in at 3 % it had been at 8 .9%. We're still awaiting further data but to get it like from 8 .9 to 3 in a pretty painless way we did something right the European Union most of it has not managed the same United Kingdom has not managed the same. So it's very wrong to think American greatness is vanished. It's just like how selectively are we going to decide to make it appear in the bridging sample you just gave what were the conditions that allowed that to come together.
48:56Why is that the exception versus the rule? I think in some ways believe it or not American media is better than it was say three years ago that you actually have media outlets you know including like from the left that look at this episode and just ask why can't we actually get this done. And then there's there was some political entrepreneurship and number of people seeing they would be popular if they did get it done and the governor was willing to wave a whole bunch of regulations and just say we're going to build this thing. And you compare that to say New York City subway where the second avenue line was first planned in the 1970s costs billions of dollars and opens only 50 years later.
49:36I just think there's more attention being brought to bear on that contrast or people you know they want more green energy in the United States. Well that's great but if it's so over regulated you can't build anything environmental impact reviews take 20 years we're never going to get there. So you need to have in some key ways government getting out of the way and saying we're going to let builders make these things happen. What's your view on nuclear energy? I think we should have much more of it. I think it's also possible nuclear fusion may work a number of very smart people I know strongly believe nuclear fusion is the future.
50:13It also allows you to have more solar and wind energy because those are intermittent the sun and wind can go away. You need something to fall back on so it's a compliment to other green energy sources and the countries that have done more nuclear Sweden and France are two main examples. It's worked fine for them you know the countries haven't blown up people are not dying from radiation so we can do the same we can do better. How do you decide a subject is worthy of writing a book? It's not rational if you feel something is bugging you until you get the book written I write the book I don't even know if that's wise.
50:51I just don't know any other way to do things. So my next book which is not out yet is about all the greatest economists of all time. Friedman and Hayek and Keynes and Adam Smith and Malthus and I just have had ideas about them my whole life. This was during lockdown time I was sort of cooped up couldn't write a book about any place I might go really. That was a book I could write at home and I just felt I had to do it so I wrote it. I remember hearing that you decided to become an economist very young in life. I was like ages 13 to 14. It's a funny choice for a 13 or 14 year old tell me about what turned you on to that idea.
51:32Well I'm a funny person right so as I mentioned like my first thing was chess but you realize when you're playing chess unless you're the very best person in the world it's a terrible life income no health insurance whatever meeting women what it's just awful. It's actually better now but then it was unbearably bad so it's like well what else can I do and I realized like I wanted to learn as much as I could. So I thought I would either be a philosopher or an economist and I looked a little into being a philosopher harder to get a job less outside income. In a way it's more limiting you can still philosophize from other perspectives and I just thought well let's do economics and kept on going but I've always had these very broad interests you know in the arts and travel and food and music whatever I can learn history different places.
52:22So am I even an economist I don't know I don't worry about it describe your love of chess. I don't play anymore I really have not played since I was 615 16 I don't know that I've played 20 games because it's one of these addictive things you do it a lot or you've got to stop but I watch online I love Magnus Carlson it's a way you can learn about talent it's a great way to learn about how artificial intelligence works I found because it was prominent early in that area. You learn about competition you learn about globalization. It's just a very good entry point into many different parts of the modern world it's no surprise to me it's actually booming rather than dying out and it's fun to watch especially when they play the faster games.
53:07Would you say you had fun playing it or was it something else it's something else. So it's a zero some game in the sense for any winner there's a loser. Now when I was a little tight I was winning a lot more than losing but that does not for anyone go on forever you reach higher levels and it asymptotes into something like if you're lucky you know 55 45. But there's a compulsion to it and it's a way of ordering the world but again I definitely found it unsatisfying it was too mono and 64 squares a bunch of pieces all the same people it's like yeah not for me. As you are progressing as things are going good as you are rising in whatever ranks there were do you remember a big loss.
53:53Well what I remember most is I learned pretty early on this was very important for me like first I learned I could win beat like grown adults but more importantly I learned that I could lose that there were people out there who were just better than I was. And even if sometimes I'd hold even because I could work habits or I didn't take drugs or drink like they were just better and a lot of smart young people don't learn that till much later and that they're not sort of built to adjust for it and I feel I was built to adjust for that very early on. So I always knew there'd be smarter people than me out there and to do well I would have to kind of have rituals routines where I would have a lot of compound learning and just keep on doing those for many decades.
54:37And that I figured out when I was like 12 13 because of chess and that was just invaluable for me. I don't know if you can answer this question but do you think the people who are the best have any question about it. There's one clear best in chess we could talk about other areas Magnus Carlson knows he's the best he's justifiably arrogant keeps him going and that's great. No one else thinks they're the best in chess because they're not by the area like music. You know it's not a clear competition with a winner loser so who's the best. I think people feel deeply insecure about it but you would know better than I do.
55:15Tell me about hiring. Most organizations are bad at hiring they're too bureaucratic. They want people who are just like they are. They want conformity. Probably from any jobs that's fine. A lot of organizations conformity is what you need. But when you're looking for creative dynamic people and I think in a globalizing high tech economy they are more valuable than ever before. You have to be better at looking for weirdos. So I co -authored a book with venture capitalist Daniel Gross called Just Palant. And that's a book in part about how to find and hire weirdos and maybe he and I are weirdos and that's why we should have written the book.
55:54He and I had years of conversations and getting back to your earlier question like when do you have to write a book. We just had to get it out of our system like we're not going to move on until we write this book. So we did. From the beginning was there always a thought for it to be a book? No. It was just conversation. It was the first thing Daniel and I ever talked about. I didn't even know him or really who he was. He was just this guy and he didn't ever go to college. It was from Israel. He had his first start up. I think he was 18. He sold it to Apple. He was head of machine learning at Apple.
56:29I think he was 23. He was the youngest ever partner at Y Combinator, the leading venture capital firm at the time. And at incredibly young ages he was becoming this master of talent. And he still is. So he was a practitioner. I hire people also. But I was the one who typed out the words of the book. Though I would say more than half the good ideas in it are his. And that was our collaboration. Good experience. Wonderful experience. And he and I became great friends. I were in touch all the time. He's investing now in artificial intelligence. And lives in California, Bay Area. Through the process of writing the book, did you learn about how entered you?
57:13Just put together what you already know. Both of those. So so much of what Daniel knew I didn't know. And the hiring I've done has been very different than the hiring he's done. I fired public intellectuals, academics, ideas people, you know, podcasters. And he hires people doing companies for the most part or who want to do companies. So so much I learned from him and other people he put me in touch with. But I also figured out what I really think. And how much I like people who get to the point. I like people who are curious. And again, it may not be appropriate for every kind of job. But there's plenty of manuals on how to hire for conformity.
57:53And not enough approaches on how to hire weirdos. Are we are the key to everything? No, but I think they're the key to a lot in music. I think they're a key to a lot in the world of ideas. They're a key to a lot in the worlds of religion, great religious leaders. Whether they're actually weird, but they certainly come across as weirdos in a big way. And increasingly, top businesses in the United States are led by weirdos rather than conformists. And that was not the case decades ago. And in many countries, you know, saying Denmark, like their four biggest companies, date from the 1920s or earlier, they're fine companies.
58:31But are they truly all going to be led by weirdos? Probably not.
58:39You think the weirdo factor currently in the US is based on creators, people who are starting companies? They start as hackers or programmers, but then they realize the idea they have is so good. It can be a company. And then at some point, they realize it can be a world shattering company, like Facebook or Stripe or the other tech companies that, who whose names we all know, and it just takes off. But they were tinkerers in the sense that a lot of the early great musicians were tinkerers, people in the Industrial Revolution were tinkerers. Religious leaders may have been a kind of tinkerers with ideas.
59:15And then they realize they're on to some larger enlightenment. But they start by playing with ideas. I think that might have been the case in the past as it related to tech, because usually it would be an engineer who was interested in making something that would run those businesses at least at first. And I think it's some of its changing. You have now these long established tech companies, which are not so weird. They still might be successful. So how much the future is a future for weirdos? I would say we don't know yet. But I still think it will be certainly in the creative arts. What are your thoughts on UBI?
59:51It's an idea. I used to favor. You asked about changing my mind. I now don't think it will work anymore. So people want to work. We do need to make jobs more rewarding. In different ways, we paid people to stay at home during the pandemic. It was bad for most of them. Mental illness or frustration. So I don't favor UBI anymore. I think we do need to work harder at creating more good jobs, though. Did your experience change with the lockdown? Yes. I saw other people not doing well during the lockdown, though financially they were fine. For the most part. And they were much less happy. And it just made me update views on a whole bunch of things.
1:00:33Also, our mental fragility. I now see as much higher than I used to see. Because again, like if you don't have to go to work, you might think it's this extreme form of comfort. Everyone will just have a great time. It wasn't that way. Like what was your purpose, people would ask, or what am I doing, or how can I return to my project? Or my kids with school, all sorts of issues, just kept on growing in their minds and praying on their happiness? It's interesting, though. And when I think about you, I don't think that the things that you do, you do because of the financial outcome. No, generally not.
1:01:09A lot of what I do, I give away for free. My podcast, I'm not paid, it's free. My YouTube channel, no ads, no nothing, it's free. My blog, no ads, no nothing, it's free. So in some ways, UBI allows everybody to be you. I don't think everyone ends up being me. I'm this weird outlier. If the whole world were me, UBI would probably work fine. Yeah. And maybe earlier on, I too much assumed other people were like me. So, oh, UBI, we can do that. Yeah. Is that a common confusion that other people are like us? I think everyone makes that confusion. And even once you're like 47 years old and you feel, oh, I don't make this confusion anymore, you still do.
1:01:48It's remarkable how hard it is to root that confusion out of your worldview. What do you think's on remote work? That's another thing I've changed by mind on. So there was a new piece of research, it just came out. But the number of people playing golf on Wednesday afternoon, now compared to 2019, has gone up dramatically. And it's remote work. It's not that people love golf more. So in the very short run, it works great. It's great for senior people. They already have their networks. But I see people working less and less. And the young people who are starting are not getting mentored the way they need to be.
1:02:24Apprenticeships don't work that well. Finding and selecting for talent is breaking down. So it's hard to get out of remote work once you have it. But I've changed my mind on it in a big way. And again, it's seeing the data. How much do you lie on data? It influences me. But I want intuition and data to work together. If it's only a number, I'll question what I think. But I also want a new story. And the new story with work from home is actually a pretty simple one. Like, hey, a lot of people stopped working. They're out there playing golf or walking the dog too much. Walking the dog's great. But you can't do it all day.
1:03:01When the data and your intuition don't align, do you dig deeper? Talk to more people. Look for more data. Question your intuition. Just keep on going. Yeah. Can the same data be used to argue both sides of an issue? Very often. I mean, maybe some things are quite unambiguous. But the data do not always speak. You interpret them through some kind of framework or lens. So, data don't settle a lot of issues. A lot of people will look at the same economy. Some say it's going great. Some say it's going terribly. Maybe they each have a point. There's not a simple, right or wrong always. Are there characteristics that you see in many of the...
1:03:45I'll use talent the way you use talent in the book. Are there similar characteristics between talented people? It depends on the area. An area is change. So, it seems to me America is an in -error. Where a politician being weird is not so unpopular as it used to be. In the 1950s, it just was a non -starter. It's like, I like Ike, whatever. Now weird is more acceptable, though. It may not always succeed. So, there's different types of talent across sectors. And it changes. Maybe musical talent now in some ways is less weird than it had been and more about execution. Because you have to manage more parts of the business that is you.
1:04:29And you need like teams to do different things and agents. And maybe it's just different sort of management problem than stepping out there with the guitar. But you look at like YouTube channels. It's not solo production. The top people do have teams, but they're small teams. It seems to me a lot of them are weird. So, this concept of weird talent overall is applying in more areas, but not all. And there is something similar across a bunch of different sectors of the economy. Yeah. Is there usually some sort of a, I'll start with the word obsession, but then we might even go to say unhealthy obsession with people who succeed.
1:05:07It's definitely an obsession. I don't know if it's unhealthy. If you think happiness is the standard for everything, it's probably unhealthy. But I don't think happiness is the standard. I think simply having done something worthwhile or great is a standard of its own. It's not the only standard either. But then these unhealthy obsessives look a lot better, because many of them do manage that. And to ask how happy these people all are, to me, that's a little degenerate, if that's all you're focused on. I think it's fine if they're not entirely happy. It's Magnus Carlson happy, like, I don't know, I've never met him.
1:05:44But if I learned he wasn't, I'd still think he was great and it was worthwhile what he's doing. Did you have any mentors? Many mentors and I still have mentors. And it's important to always have mentors, have mentors who are younger than you are. But when I was in my early teens, I met a bunch of older people who just read a lot of books. And what I learned from them, this will sound stupid. Just that it's possible to have a life where you've read a lot of books. And that was sort of somehow physically possible. You don't know that when you're 10. Like you read books, but you don't really know how the bigger piece is fit together.
1:06:20And that was a huge impact on me, maybe bigger impact than any other people have had. How did you meet those people? One of them I met through my father, his name was Walter Grinder. Walter was not all that successful in life. He was super smart. His goal was to read everything, which you cannot literally do. But it was remarkable how many fields there were, humanities, social sciences. Or he would have read like any book I could have named. So he really knew a lot. And I think he understood it quite well. In retrospect, I now think Walter was highly successful. But he wasn't known or didn't have a high income or, you know, he struggled a bit throughout his life.
1:06:58But he inspired many people, not just myself. Any others? Different in different areas? I think in terms of getting things done, managing, there was an early professor I had named Richard Fink, who was full of energy. He had so much energy, he left academia, and became highly successful, which was the right thing for him. But the notion that you just always want to keep on pushing, like should never be satisfied, self -satisfied, it's never good enough. You're always not being aggressive enough along some dimension. I learned that from him pretty early on. I learned some of that from chess, too.
1:07:32Like you have a good position. You can't let up. You've got to keep on going. But then to see it instantiated and actual people was great for me. How different of a person would you be today had you not played chess when you played it? It depends on the counterfactual, but I think it made a big, big difference. And really was the key to so much of what happened later on. Both that I did well and that at some point realized I was not going to do that well, like I'd never be in the world top 10. Are there any other pursuits over your life that informed you in the way that chess did? When I say in the way, as much as chess did, let's say.
1:08:10Well, music in sports. So music, I tried to play a bunch of instruments when I was young. I was terrible at everything musically. But I learned chords and theory and jazz improvisation, not that I could ever do it well. But I had a very solid foundation for going out there and exploring music. And I just still remember a lot of it. Like if I hear the song something, I think of like, I was that C to C major to C7. And maybe I learned that when I was 11, but I still know it and had helped me a lot. But having something like that I was terrible at was useful, but really cared about. And then sports, maybe I was at best average in sports, like never could have done anything.
1:08:53But you learn a lot of quantitative realities from sports. Like I was very young. I figured out percentages, expected value from baseball cards, learned how to think mathematically. You start thinking about talent, like which players are underrated, overrated. You can become very analytical. I was a baseball fan, basketball fan. Also had a big impact on me. My later interest in talent, I think, came through sports and also music. Matters intellectual. So you see all these people who really were mostly not educated at all, become so successful in music and just so smart. And you start asking like, well, where did that come from?
1:09:31And there's no simple answer, but it gets you thinking in ways that are very non -academic. That I feel I've always tried to embrace. That like one of the things you care about most, pretty much all the successful people are not educated, is a very healthy, early impression to have. What's taught in economics class that's different from your real world experience or life? I think economics classes don't teach you anything about culture. And culture is a vague term. But maybe I would define culture as what people think is important, and how they receive their validations, and how they interact with each other.
1:10:09I'm not sure economics classes can take on every task of the world. Maybe they can't teach culture, but you need to learn it. People need to live in different places, visit different places. Like if all you know is economics, you don't know anything, I would say. It may even be positively harmful. And just to have like your analysis tempered against some experience of the diversity of humankind is kind of a starting point for doing anything with economics. It's too small of a lens to look through. It's like chess, right? It's bigger than chess, but it's not as much bigger as it likes to pretend.
1:10:45It's how I view it. The theoretical versus the practical. Talk to me about those. I do a lot of things in life that are quite practical, like partly running my YouTube channel, managing a nonprofit. I have an economic textbook, which is an essence of commercial project with a textbook publisher. So I'm always dealing with the real economy in some way. And that's greatly deepened by understanding of economics. Like I have to solve some problem every day with some other person, typically, or motivate someone to do something or choose the right person to do something. So when I do that, all the time I'm like confronted with, if something goes well, how much won't we out because I understood economics, or how much won't we out because I understood culture?
1:11:33And the economics contribution, like it's pretty good. It's maybe 20 to 30%. That's not nothing. But it's only 20 to 30%. And the rest is like culture, psychology, human experience. And again, it's very sobering when you actually have to try to stop something from failing. And you must face this all the time. You're working on a record. A lot of it is just the music, right? But there's motivating the people you're working with. There's choosing with whom to work, dealing with the corporate angle of things. There's dozens of dimensions that you have to deal with. And simply knowing music doesn't really get the job done in any of those, though it might help you.
1:12:12How did the podcast start? It was, I think, seven years ago. And I thought I would invite my friend Peter Teal to George Mason, where I teach, just to come talk to everyone. Like, oh, this would be great for everyone to hear Peter. And Peter at the time was not as well -known as he is now. He also wasn't vilified the way he is now. It was not a controversial thing to invite Peter Teal. But I thought like, oh, Peter, he's not going to come. He's like so busy, whatever. So I asked Peter, Peter's like, oh, that'd be great. I'll come. And it's like, oh, Peter, can we tape this? And we taped it. It was a live event.
1:12:46And we put it online. It was like massively popular. And then I just thought, well, let's try someone else. And let's try someone else. And all of a sudden, it was a podcast. And now there's a few hundred episodes we've had on, like Mark Zuckerberg, Eric Schmidt, Margaret Atwood, Karim Abdul -Jabar, yourself, the classical composer John Adams. Wow, John Adams. That's a great guest. That's a great one. Vishi Anand, the chess player. I'm going to interview him in Chennai after being here. And I learned so much from doing them. And I learned so much from the prep. It makes my reading much better.
1:13:19That's a big reason why I do it. Like, if I read about you, and I'm not going to interview or meet you, I lose much more of it. If I read about you, and we're going to have one of these non -conversations, you could call them, I retain so much more of it. And I have to actually try to understand it, it's like solving the real world problem again. And if your knowledge is not connected to solving a real world problem, it sort of goes poof, or it was not even knowledge to begin with. The first one was live in front of an audience? Yes. And then when did that change right away, or after several? It changed pretty quickly.
1:13:52The second one was with an audience. And then a lot of people just couldn't come, but we still wanted to do them. Like I would fly to them, which was fun also. Obviously, COVID came, totally stunned everything. So they were all on Zoom. And at first I thought, like, oh, these are on Zoom, they're going to be terrible. It's another thing I learned. But they were on Zoom, and I don't think they were terrible. Or like the viewers didn't think they were terrible. Yeah, they're just different. They're different. I personally preferred to meet the person for other reasons. But some are on Zoom, a lot of them I meet the person, whatever it takes.
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1:16:03Do you work better under pressure or in a more relaxed situation? I feel I don't recognize that distinction. So I'm very obsessed with the process so I don't feel pressure, but I'm not sure I would describe it as relaxed. I would say I'm just wrapped up and that's the only mode I have of working. I don't get very nervous if there's some big talk or event or whatever. I really don't notice that. I'm oblivious in a very particular way, but not relaxed. I'm not tense, just like very focused. Where does your drive come from? I think I was born with it. According to my mother, I've always been the same.
1:16:43You know, moms will tell you different tales about yourself, but I trust her on that one. And you're not. Now that I have two grandkids, you'd see how early the personality is evident. So that's my basic theory of human beings that 60 to 70 % of stuff people are born with. When did your musical taste broaden from the current rock music to what you like now? My biggest interest at the Margin would be what's misleadingly called world music and then classical music. And really a lot of that came from the Beatles. So I would go to the public library, bring home records, and of course I saw George's concert for Bangladesh.
1:17:23And I heard Indian classical music. And it made no sense to me. But I didn't give up on it. I thought, well, the Beatles like this, like they knew what the heck they were doing. So it really took me, I think, 25 years to really figure out Indian classical music. And I just kept on trying, never gave up. Finally it all clicked. I now think it's one of the highest achievements of humanity of all time, Indian classical music. And I don't even like Robbie Shanker anymore. I think it's like not actually very high quality of the form. And then classical music, you know, the flip side of the yellow submarine LP, which George Martin, it's not that good.
1:18:00But I heard it just swell. I ought to get to know this better. And then in the house we had two records that I think my mother brought home from the supermarket. It was Jekowski, Pathetic, Beethoven, Pastoral Symphony. And then I heard Bach Brandenburg can share it on number two. I used to watch William Buckley's firing line. And I liked all that. So it's like, I guess I was 15 then. Well, I ought to just keep on going. And those are great introductions. The Buckley had a real impact on me. And partly I enjoyed it, but I also saw how much he appreciated it. Like he'd have on Rosalind Touarek, they'd talk about Bach.
1:18:36Most of it I didn't understand, but I understood enough to know they were smart people appreciating something. So it's like, oh, you've got to keep on going. But whereas Indian classical music took me 25 years. That took me, I don't know, a month. Is that the case with everything in your life if someone that you're interested in, references something, will you always go back to the source? Yeah, I'll try and try again. I don't like it when people dismiss things. It's fine to disagree. Or there's things in music that maybe I don't listen to as much. Or I don't understand. Like there's still a lot in country in Western.
1:19:11I feel I don't understand. Maybe I don't have the cultural codes. Or don't know enough, but I don't dismiss it. Even though if I listen more, maybe I never would love it like I love some other things. Did jazz ever take a hold for you? Oh, absolutely. And you know, my grandfather, whom I never knew. But he was a professional jazz drummer. And there was a jazz radio station from New York. I listened to it. I tried to learn jazz guitar. I studied like theory of jazz improvisation more than any other kind of music. Loved all the jazz guitarists like Joe Pass, Barney Kessel, Herbalis, early on, went to see them play in New York, went to great lengths to see them play.
1:19:49Had a huge impact on me. And I still enjoy it a great deal. And especially jazz guitar, piano. I've just tried to see everyone I possibly can. I'll go to Village Vanguard. It's the one concert venue in the world. I'll show up. And I don't even have to look at who is listed. I'll just buy a ticket and I've never been disappointed. Typically, how much time per day do you spend on Twitter? It's probably too much. I don't know. Two hours, an hour and a half. But if I see something on Twitter and then I read the article, which is not on Twitter, is that time on Twitter? Like on Twitter, it's not that long.
1:20:25But the stuff it leads me to an hour and a half to two hours. What are the different schools of economics? Economists pretend that schools of thought have vanished. I think they're fooling themselves. So typically there would be like Keynesian approach, which is often advocating a lot of government spending, monitorist approach, Milton Friedman, which is often advocating government predictability within certain rules, Austrian approach, which typically stresses the dynamic unpredictability and creativity of the market. I think you have to know all of them. You shouldn't dismiss any of them. You asked me about public choice approach of studies, government.
1:21:02But Austrian approach has been the biggest influence on me. How has the field changed throughout history? Early economics was a lot like philosophy. Adam Smith, he was a professor who taught literature. He gave lectures on literature, lectures on astronomy. He wrote a book, some blend of psychology and philosophy. No one thought that was weird. It was called Theory of Moral Sentiments. Economists have become more and more specialized, more and more technical, doing a smaller number of things, doing them with greater technical expertise, but arguably losing sight of these larger pictures. In general, is that an issue across the board?
1:21:41In every science or humanities effort I know, I've seen the same trends, way more specialization, people do become adept at dealing with real world in some ways, but it's even then specialized ways like manipulating grant procedures to get money, not always like healthy ways, and just so tied up in their work, the hour requirements, forgetting like that 90 -page intensive study done, or so extreme, people get cut off from other things. But like the quality of that 90 -page paper, which was once a 20 -page paper, say 30 years ago, like the quality is higher, but we're making the person worse. That doesn't seem right to me.
1:22:22How much corruption do you see in the system? In academia, it's more than most people think, but a lot more of it has been coming out lately. So there's one researcher, Dan Ariely. He's been accused of just fabricating research results. People have asked him where that data come from. He can't say where it's from. I haven't followed this closely, but if someone's accused, they can't say where it's from. Their co -authors can't say where it's from. I'll just say people have crone increasingly suspicious, and I think there's a lot more of that than people realize. Or just people, they're not outright frauds, but they just push on the research methods enough to be right up to the point of not being dishonest, but right up to that point.
1:23:07And in a way, maybe that's worse. There's a lot of that. What are the ramifications of that? I mean, the sad thing is it may not matter that much, because a lot of the outputs aren't consumed. The ramifications for me personally, as I started this blog 20 years ago, called Marginal Revolution, where I try to showcase research that I think is good and explain why or criticize why something is bad. And that's the most widely read, like social media or blog source on economics. It has a big readership, and it's one of the things keeps me going. And I try to shunt credit toward the people doing good things.
1:23:44That's been my response. But I try to mostly be positive. Help out the people who are good and not spend too much time damning the people who are bad. Understood. Which modern convenience is do you use and which do you avoid? Car is very important to me. More so than for most people. I love satellite radio, the Beatles station, Internet of course. I'm starting to use chat GPT, an enormous amount. And Claude too, I find this both extremely useful for learning about everything. Music included. But a lot of stuff I don't use, like I have a microwave, I don't use it. Most devices I don't know how to operate them.
1:24:23You may have noticed time we spent together. I'll get confused by different things pretty easily. So again, it's like this focus in certain ways. Would have no idea if I had fixed my own car or something. I'd have changed a flat tire. But I find the Internet extremely useful in WhatsApp. What are labels that have been put on you that you don't see as accurate? Well, I think any label you ought to realize it might be partly accurate. And if you rebel against it, like you still ought not to dismiss the person labeling you. So people will call me libertarian. I think it's pretty accurate. Even though like no libertarian will call me a libertarian.
1:25:01Like they would call me a sellout. People will call me like eccentric or like selfish. I mean, I think you have to accept that all of it's partly accurate. Anything else you want to talk about? Well, there's everything. I mean, Paul McCartney's solo career. I want more people to know that his second recording of Seamoon, done on a CD single, which starts with all my trials, one of his best by gospel inspired cuts. And then he redid Seamoon with much more rigor. And no one ever talks about this redone song. And more people ought to know. And your audience is probably the audience I want to tell about this.
1:25:39So that's what I'll say. Great. So then maybe tomorrow we'll do a music focused where you'll DJ and we'll talk about a different music that you'll turn us on to stuff. That would be my pleasure.
1:26:21Music
From the publisher
Tyler Cowen is one of the top thinkers in the world: the thinkers’ thinker.
A professor of economics at George Mason University, he has one of the most popular economics sites on the internet, Marginal Revolution, where he’s blogged every day for over 20 years. It also runs the online educational platform Marginal Revolution University. However, he may be best known for his popular podcast, Conversations with Tyler.
Tyler is a New York Times bestselling author, having written 19 books, including Average is Over, The Great Stagnation, Discover Your Inner Economist, and Talent: How to Identify Energizers, Creatives, and Winners Around the World.
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