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The Templeton Ideas Podcast is a show about the most awe-inspiring ideas in our world and the people who investigate them.

Transcripts of our episodes are made available as soon as possible. They are not fully edited for grammar or spelling.

Tyler Cowen is a professor of economics at George Mason University and serves as the director of the Mercatus Center. A dedicated writer and communicator of economic ideas, Tyler hosts the popular blog Marginal Revolution, and the podcast Conversations with Tyler. He is also the author of several bestselling books, including The Great Stagnation, Stubborn Attachments, and Talent. His latest project is a generative book entitled GOAT: Who is the Greatest Economist of all Time and Why Does it Matter? Tyler joins the podcast to share his ideas on education, economics, and progress as well as the potential of artificial intelligence and the importance of humility in politics.

Tom: Tyler, welcome to the show.

Tyler: Happy to be here. Thank you for having me on.

Tom: I’ve enjoyed many of your conversations from your podcasts, and one of the quotes I’ve always enjoyed and would love to say is, this is the conversation that I want to have with Tyler, not the conversation that others may want me to have.

It’s something I laughed, I think, every time I heard it, through many episodes of yours. So, I know that you’re a voracious reader, you’re immensely curious. Going back to your childhood, what were some of your favorite books during some of those formative years?

Tyler: Well, when I was very small, my favorite books were about animals and dinosaurs. A bit later, I liked books about codes and ciphers. I loved baseball books. I loved Jerry Kramer’s Instant Replay. Chess books, of course, when I was a chess player. Maybe when I was 11, I started reading science fiction. So, Isaac Asimov, Arthur C. Clarke, a little later, Robert Heinlein. Those were many of the first things I read.

Tom: I still remember at a book fair in middle school, I got a copy of Dune. I don’t even think I appreciated how long it was, but it wasn’t long before I think I read like all six volumes and the rest was history. I don’t know how much sci fi volumes I read since then, but yeah, it really is good for capturing the imagination. in your early life, who were some of the people in inspiring and encouraging you and stimulating your imagination?

Tyler: well, I had great parents. But past that, my grandmother for a while lived with us and she told me to read Shakespeare, Victor Hugo, Ayn Rand, and many other things. And she taught me how to read when I was very young. so that was a big advantage for me. She was a significant influence. anyone I knew through the world of chess, later, there was someone named Walter Grinder.

who for a while was president of the Institute for Humane Studies. from him I learned just that you can spend a life reading books. There was also a fellow named George Cather I met once, and it’s from him that I heard about Mont Pellerin Society, Milton Friedman, and other such things. So those would be some of the people.

Tom: Yeah. And as a teenager, growing in your intellectual development, did you start to see a clear path for your intellectual trajectory, or did that only come later in, college and, after?

Tyler: Well, when I was 13, most of all, I liked reading philosophy and economics. I probably was reading more Plato, say, than Hayek. At that age, but I realized becoming a philosopher was not very practical, even back then. so, I thought, well, then it will be economics. And by the time I was like 13 and a half, 14, I was pretty settled on economics, but didn’t stop reading philosophy. And the trajectory has been straight line since then, really.

Tom: Now, in terms of your interest in economics, were there certain questions that were really gripping you that economics is well equipped to explore? Was it liking the methodology, the, kind of formal ways of thinking? What, was, the big draw there for you?

Tyler: Well, it was both of those. A lot of my early economics was what is sometimes called Austrian economics. So, Mises Hayek. Some Rothbard, Carl Manger, and keep in mind, this is the 1970s, so everything seemed to be going wrong. In fact, everything was going wrong. Interest rates were extremely high. There was strong double-digit inflation in some countries of the world, such as Britain.

Trade unions were too strong. Marginal tax rate. You know, at the top was 70 percent plus other taxes above and beyond that. So how did things get to be so bad and how could they be fixed? those were major interests of mine, but just a lot of very arcane things about history of economic thought, interested me a great deal and still do.

Tom: One of the things I learned, prepping for this interview is that you were the youngest ever New Jersey state chess champion. And, uh, I wanted to ask, what is it about chess specifically that makes it distinct or special from what you might just call a board game?

Tyler: Well, it’s more complicated than most board games. You also can improve for a long time if you’re good, so you don’t asymptote too quickly. It has a long history in a way that some other board games do, but many do not. And it seems to be just the right Balance, so that a game of two roughly equal players can go either way.

Like some sports, the better player wins all the time, in other sports, it feels almost random, and chess just falls right in the middle, so there’s a lot of suspense.

Tom: Yep.

Tyler: I want to, Turn our attention to formal study of economics. it sounds like as a teenager, you had a pretty good idea of, where you wanted to head. When you entered college, we’re taking formal classes with professors, syllabi, were you learning what you wanted to learn or did you do a lot essentially on your own with your own, interests and, focus?

Mostly, I learned on my own. So, classes such as math, I did really learn in the class. But economics, I wouldn’t say self-taught is the right word. Just talking with other people, going to events, reading books. What I learned in classes was, I don’t know. One percent of what I know, or maybe less.

There’s something about self-taught people. somehow, they’re different. And often you can recognize that I find. Gordon Tulloch would be another example. I’m not sure exactly what the common denominator is. That would be interesting to investigate.

Tom: Yeah, absolutely.

I have not taken a formal economics class before, but I had roommates in graduate school in which we’d have very long, long conversations. And I wonder the ways in which the field of economics, does it have certain kind of unique insights in the world that you feel like that it gives?

Tyler: I’m never sure how useful economics is. I feel it’s most useful when I hear people speaking who don’t know any of it.

Tom: Ha

Tyler: actually, had to give someone small pieces of advice, well, this is true. That’s true. That’s much tougher to do. So, it’s a way of organizing your thoughts in terms of incentives and tradeoffs and opportunity costs, and that’s extremely valuable. but it’s as much an art as a science, and I don’t think one can take it all too literally or too seriously either.

Tom: Don’t confuse the models with reality.

Tyler: Yes.

Tom: Yeah, what are some of the dimensions, aspects, subject matters where you think, yeah, the tools of economics are, well equipped to study this?

Tyler: Oh, I don’t know. I think the quality of empirical papers is much higher today than it was even, say, 15 years ago. So, people are much more careful about data, extremely careful about identification and showing causality. They often become so careful that the interestingness of questions dries up because they just want to be careful. You know, say states pass a particular law, but at different paces, or they implement it at different paces. And you can then compare changes across the different states depending on when one state put in a certain law compared to other states. I mean, that’s a pretty good identifying method. It’s not perfect, but if I read a paper of that kind, usually I’ll feel I learned something. There’s a lot of papers like that in law and economics, for instance.

Tom: Yeah, like identifying where the natural experiments taking place and then, seeing how they unfold independently of you. What kinds of questions have you gravitated to where you think, yeah, these are outside the bounds of where my economic friends would be comfortable. but just nevertheless, you just feel so pulled to them that you’re going to trammel in territory that doesn’t, often see perhaps somebody wearing the economist hat. Mm

Tyler: I’ve written the most, probably, is economics of the arts.

Tom: hmm.

Tyler: Now, whether that is, in fact, trampling into area economists don’t belong in, or you just want to treat it as part of the economy, and we can write about the arts as we might write about supply and demand for thumbtacks, it’s a bit of both. But that would be a case where I’ve spent a pretty big chunk of my life working on something unusual.

Tom: Yeah.

Okay, here’s a question that I’ve been seeing people bandy about in public recently. What do you think the purpose of a college education should be?

Tyler: Well, that’s such a big question, and it depends on who it is we’re talking about. I would just keep in mind, in the United States, about 80 percent of our students go to large state schools. And not to you know, Harvard or Stanford are the places we all argue about. So, it’s some odd mix of dating service, social acculturation, you learn some things, you signal that you’re determined, you have some fun, you get away from your parents, you avoid bad peer groups. So, it’s nine or ten different things bundled into one. And it’s hard to supply those things separately. Certification also.

Tom: right. Do you see a need for major pivots, reforms, things that colleges are, doing especially well, other things that where they’ve really dropped the ball?

Tyler: Oh, I think it’s quite dysfunctional now. Again, it depends on where you’re talking about. But there’s not nearly enough free speech. Faculty is far too conformist. although I’m not myself religious, I think the academy has become far too secular in quite a dangerous way. There’s not enough religious opinion represented there.

There’s something wrong with the ratio of male to female students. To be clear, I blame the males for this, not anyone else. But if admissions were on merit alone, a whole bunch of top schools would be two thirds female and only one third male. Now they don’t do that because they realize the whole business model would fall apart.

But something’s wrong somewhere, administrators are often craven or corrupt. You see with Harvard, so many bad things happening there. That’s just more typical than people realize, or I guess they realize it now, but I think we’re in a bad state, even though there’s a lot of talent still in universities.

Tom: Right. As a professor, you’ve seen many students come and go. how has the classroom experience changed over time, both perhaps student interests and perhaps the way that you teach as well? Yeah.

Tyler: think I’m a more entertaining lecturer than I used to be. And I used to be reasonably entertaining. I just have more and more experience with different kinds of groups. technology has changed things a bit, but less than you might think. I think on the student side, in the last five to ten years, there’s been a higher rate of mental health issues, or people not feeling right with themselves going to school. To be clear, I don’t think that’s the fault of our colleges. stems from broader society, but I have noticed that there’s more grade inflation also. So, some changes, not all good.

Tom: I queried a few of my grad school economist friends that I’ve lived with for many years and mentioned that I was going to talk to you. So, I did a little crowdsourcing of questions. And one of my developmental economist friends was very curious how you might answer this. If you’re given a billion dollars to help alleviate, some of the world’s poverty, some part of the world you could choose, what would you do with a billion dollars?

Tyler: I would speak to the people at Open Philanthropy about their projects for malaria bed nets. And to ask if I could usefully contribute to that, I know Alexander Berger at Open Philanthropy reasonably well. I disagree with them on a whole bunch of things, but I think when it comes to optimizing dollars spent in poor countries, they’ve studied this the most closely. And I would sit down with Alexander and, given to a project of that nature.

Tom: I think with a billion dollars, I would consider taking some of it and spending it to try to influence policy in a very small country, but a country that was not totally dysfunctional. but it’s very hard as an outsider to succeed on that basis. that’s where the big gains are for sure, they may not be the easiest gains to buy. Whereas malaria bed nets, we do know you can spend money and then you end up with more malaria bed nets. So that’s why that’s appealing to me. But I think the other is more important.

Yep. Another one of my crowdsource questions. So, artificial intelligence is having its moment in the media. A lot of hype towards it. looking at that, area, what’s your level of enthusiasm or do you have like a critical eye? how are you gauging that right now and the kind of influence may have?

Tyler: Well, it’s more than its moment. I would say it’s for the rest of human history, right? Uh, it’s Probably one of the half dozen most important inventions, if you would call it that, ever. We’ve just started using it, but we’re on the verge of creating intelligences that are, for 95 percent of nonphysical tasks, smarter than humans, and I think we’ll reach that in less than five years. That’s quite astonishing. I wasn’t sure I would see it in my lifetime, and already, GPT 4 is better or smarter than humans, I don’t know, for 80 percent of nonphysical tasks. That’s already quite good. Now, it can be difficult to integrate it into a workflow. Maybe that’s where a lot of the future gains will come. But human beings have created a new intelligence. We should just be awestruck by this.

Tom: I was reflecting on that in, relation to, your notable book, The Great Stagnation, where you pointed out that some of the great innovation that we’ve had in, Earth history, particularly the 19th century, the development of, trains, of electricity, sanitation, sewage, and huge positive impact on society. And maybe it’s felt like the last four or five decades there just hasn’t been the kinds of innovations that have gotten the tremendous benefits that we’ve seen before. Does artificial intelligence feel like there’s some potential there where you can see the kind of innovation that you were, perhaps looking for, in that book.

Tyler: Oh, sure. It’s more than potential. So, it’s already solving problems in biology, for instance. And if you look at progress in biology, if you put aside the term AI, which is a bit contentious, and just think about computation. Computational biology, I think in the next 30 to 40 years, will get rid of most of the things that kill us. So, people will die either in accidents or of old age. you won’t anymore, if you’re a person of some means die of cancer at age 79.,

malaria vaccines are working and so on. we already see with mRNA vaccines beating back COVID, we’re probably going to beat back sickle cell anemia in the next few years, HIV AIDS. Many, many other maladies. There are dengue remedies in the works. We’re know suddenly in a remarkable time, and I think applying computation to biology is what has driven this.

Tom: Sure. Sure. Well, the way that you describe that to me sounds like we, perhaps in our lifetimes, we’ll start living in a world that’s been more envisioned by sci fi writers, than anyone else. Are there any science fiction books where you feel like, this person, really captured some essence or some spirit that might indeed, become tomorrow’s reality.

Tyler: Well, early Stanislav Lem, his writings on artificial intelligence, and Neil Stevenson, that’s what most people would say. I’m not sure science fiction is that useful predictively. Obviously, if enough people write enough things, a bunch of predictions will come true. It’s more about just expanding your imagination,

Tom: Right.

Tyler: and helping you be a better person or see what’s possible in life. And for that, I’ve always felt it’s wonderful.

Tom: Coming up…

I recently read your book Stubborn Attachments, and want to, raise a few questions, that really caught my attention and surprised me as I read it. And one of the things was the question whether, do future people, do we put the sort of the same value and hold them in the same consideration that we have with people living now?

Tyler: Well, first, I think it’s very important that we have this great faith in the significance of the future of human beings. When you ask what we can do for them, I would say maximize the rate of economic growth and, we want to leave them good institutions. That’s the very best bequest. Far more valuable than money. So, I don’t think it very much pits our interest against theirs. It’s mostly a positive some relationship. But it means we should work harder, innovate more, invest more, and take greater care not to leave them a mess.

Tom: Yep. you wrote to some of the prerequisites for having a durable, thriving human civilization. You mentioned one, like the importance of consistent economic growth. And you mentioned two in your book, the importance of social stability and environmental stability. I’m just wondering, can we have all three at once, held in, tension stability where we’re not sacrificing one for the other?

Tyler: Well, we never quite know, But I would say some parts of the Western world have been on a pretty incredible run since about 1620. We don’t know how long it can last. But if we’ve managed it for 400 years, it would be weird to think it’s over right now. So, I just want to say let’s keep on going. Let’s study it, learn lessons, try to do it better, of course, and full steam ahead. Let’s give it our best.

Tom: Yeah. In terms of measuring economic growth, you’ve stated, and I think Many agree that GDP leaves a lot to be desired in terms of a measurement or indicator of the kind of economic growth that you would want. You described something you’d call wealth plus, as a more robust concept Can you explain kind of what wealth plus consists of?

Tyler: Well, as I defined WealthPlus, it’s like GDP, but it accounts more explicitly for leisure time. Work done at home, which does not get measured by GDP, and forms of environmental degradation that will affect human beings. In practice, it moves together with GDP quite closely. So, there’s more leisure time in richer societies, for instance. Household production is more efficient and easier on average in richer societies. The environment is a trickier issue. but I think the areas of the environment we’re messing up, such as carbon emissions, we do need to spend more resources to fix that. But in terms of green energy, we’ve made a great deal of progress in the last 10 years. And we’ve made that progress through innovation and economic growth. So, I’m cautiously optimistic there.

Tom: This is where I’ve had a long-time debate with somebody. Economics grad school friends, are there any things of value that you feel like can’t be quantified? They can’t be plugged into the equation and measured?

Tyler: Well, you can always measure it by just asserting a value for it. The question is how accurately are you measuring it? I look at it this way, whether you can measure it well. We must make choices across it anyway, and in that sense, there are implied measurements. So, we might as well treat the important things as if they can be measured, because we must act on that basis, no matter what. So, there are difficult questions, like if a species goes extinct. Above and beyond its value to humans, how much should we care? I don’t feel I can answer that question very well.

Tom: Yep. One more aspect from the book I wanted to ask.

about. You stated that in terms of our political commitments, our preferences for certain public policies, and our disagreements we might have with our adversaries you suggest that we be much more cautious and much humbler. if I’m very Well, informed about something? Why shouldn’t I go marching to Capitol Hill and shout from the top of my lungs that things must be this way to have a better future?

Tyler: Well, I’m not sure how much being well informed predicts you being right. That’s an interesting question, Now, clearly, society relies on the fact that many people will go out and march for things, even when they’re not well informed. So, I don’t want to talk everyone out of that. But it still seems to me the wisest people, or people who are trying to be the wisest people, should be much more careful, and do more to listen, and set an example toward humility. While recognizing you need a lot of dogmatists fighting for a bunch of things to keep society sustainable.

Tom: You compared of these public policy preferences and legislation a little bit to like sports gambling where, your odds of winning are maybe much, much lower than you expect. And so therefore, the degree of confidence should be adjusted. I think I read that in certain cases, you might be twice as likely to be right about what we should do about the future, but you might be 4 percent likely to get it, whereas your opponents might be 2%, right.

Tyler: Yeah, so you’re twice as good as they are, but you’re still not very good. And I think people should just have that attitude more often. And yes, you should act on the 4 percent if there’s no other thing you can be more certain of. But at the same time, recognize you’re acting out of a 4 percent chance that you have the correct model of the world.

Tom: Yeah, different mindset, whether you’re right 96 percent of the time or right 4 percent of the time, and I think if we, reflect on that more deeply, it could very much change the posture that we hold. Let’s turn to your, you’ve had your own podcast for quite a while, and you’ve interviewed a wide range of people. what are some of the most surprising, insightful things that you’ve learned from some of your guests over the years? Do any things stand out?

Tyler: I’ve done more than 200 interviews. People as diverse as Margaret Atwood, Mark Zuckerberg, Kareem Abdul Jabbar, many top economists that I agree with, don’t agree with. I don’t know what I’ve learned. I mean, they’re all different. That sounds a little silly and trivial, but to learn it, it’s not that easy.

I think I’ve also learned, the well-known people, and I’m not saying I agree with them or even necessarily like them. Very close to all of them deserve to be well known in some way. The world is, more meritocratic than I might have thought when I started doing this. When you really look under the hood, read through someone’s entire body of work, listen to them in their other YouTube interviews, whatever it is you must do, you realize there just aren’t that many phonies out there. And positions of renown. You know, that’s also humbling, right? So anytime anyone says something, you ought to at least consider it.

Tom: Yeah. If you could only read books or only talk to people from now on, which would you choose?

Tyler: Do I get to ask my wife, which I choose?

Tom: That is a very, very good point. Let me rephrase. How might you be inclined to do not considering some of those consequences?

Tyler: Well, if you put aside personal relationships, I would choose speaking to people in any case. At my current margin being 62 years old and having spent a lot of time in my life reading. I don’t feel we’re in an era of incredible, wonderful books. I feel we’re in an era with a very large number of very good books, typically histories and biographies. But at the end of the day, if I’ve somehow ruled out reading books, I don’t feel I’m missing the next Leviathan by Hobbes. Or Republic by Plato, or Pascal, or Tocqueville. I feel I’m missing out on a lot of good detail. And for grasping the world, I’d rather be talking to people.

Somehow the current era doesn’t suit books well. Academics are too conformist. There are too many quality checks, which, to be clear, result in a much higher number of quite good books, but probably a fewer number of great books. Imagine writing, say, Adam Smith’s Wealth of Nations and handing it in as a doctoral dissertation.

They wouldn’t even read it, much less approve it. So that is our current world. I think what is right now interesting is to learn how to use the internet as a kind of truth computing device where it’s not about any one person, but sort of playing the internet as one might, say, play an organ, and tinker with it and try to figure out what’s going on. That’s the thing the world has created that is truly novel and super powerful, and I find very rewarding. Much more rewarding than reading books.

Tom: Hmm. And you think the internet too has that capacity to lead you to, types of people you’d want to be here to talk to and making those social connections.

Tyler: That’s right. It’s like a Hayekian decentralized computing device, but it doesn’t have prices in the traditional sense. So, you must learn how to use it. Again, a bit like a musical instrument. And that I value at the current margin much more than reading more books. Maybe even more than speaking to people.

Tom: I sided with book reading when I was young. I was very bookish. But then the very first time I went abroad and lived with a host family in Spain, I, started to realize I had deeply underestimated the value of relationships and talking to people and what you can learn in a two-hour conversation versus 200 hours of book reading. So, I had to, I really readjusted my, calculus of what I spent my time doing. So, yeah.

Tyler: I

Tom: We’ve got a couple more personal questions for you. and then I’ll let you go. If economics, when you’re a teenager turned out for just, for some reason, you just couldn’t go down that path. Do you have a sense of this counterfactual history of where might you have pursued, and taken your life outside of the profession that you did?

Tyler: Well, philosophy was the other alternative I considered, but I would say just look at the life I have, given what happened. It’s true I’m an economist, but you could also say I’m a publisher of blog posts, of podcasts, of YouTube videos. My father was a publisher.

Like certainly, much of what I publish is economics, but I feel I’m attracted to publishing above and beyond being attracted to the economics I publish. There’s something about the mentality of the deadline is always now that suits me.

Tom: And the way we like to wrap up is a bit of a hopping into a time machine. If you could, go back and bump into yourself as a 15-year-old that, just won a big chess tournament and have a conversation, are there certain topics or questions that you would love to have on that short meeting that you’d have with each other?

Tyler: Well, I think I would just say, keep it up. You’re on the right track. I know you’re going to quit chess. don’t listen too much to other people but listen to them just enough.

Tom: Yeah, yeah, very good. If you could have dinner with any historical figure, living or dead, who would they be and why?

Tyler: I don’t know if one is allowed to count Jesus, that’s maybe a special case, but that would be my first choice. But putting that aside, it depends where we have dinner.

Tom: Mmm.

Tyler: have dinner within the Aztec Empire, I would pick a highly educated, Nahua right before Cortes and the Spanish come. And we would have the meal in Tenochtitlan, and I would have those blue corn tortillas and maybe some iguana meat and, pepitas. And that’s the conversation and meal I’d like to have.

Tom: Fascinating. Very good. thanks for taking the time to talk to us today. It was fun. You challenged me to think about certain things in different ways, and, yeah, I look forward to the next time we cross paths.

Tyler: My pleasure and catch you next time.