Steven Levitt on Freakonomics and the State of Economics 11/9/20

today is october 21st 2020 i want to remind listeners you can get your econ talk merchandise at russ roberts dot info where i archive all my work so feel free to look around if you go there my guest today is steven levitt he is the william b ogden distinguished service professor in economics the winner of the john bates clark medal in 2004 prize for the best economist under the age of 40. and with stephen dubner he is the author of the free economic the book for economics and the creators of all things freakonomic steve welcome to econ talk good to be here russ thank you uh let's start with the free economics phenomenon why do you think your book caught fire mostly luck honestly i think we're in the right time uh every place at the right time and we um you know in some sense i think what made it different from many other economics books is that dubner's a real journalist and he he can write like almost nobody else can and i think the particular nature of the kind of studies that i've done academically tend to lend themselves to storytelling and we um you know and so i think we wrote an entertaining informational educational book but really you can't really attribute it to anything other than luck that certain things happen like i happen to go on the daily show with jon stewart and he made me seem like a hero and so a lot of young people started picking up books so you know it was a lot of um happenstance um you know it's good i mean no complaints on my side that's for sure well i have a complaint because for about five years uh when i tell somebody i was an economist they'd say have you read freakonomics what do you think of it uh unfortunately for you that that's been that's that question's become less frequent but it was frequent enough you did you did do extremely well and i think you really um i didn't realize this i don't know if it's true i like your reaction i i think you were very early on u.n dubner in the um the popularizing book that takes a bunch of social science studies and reveals them for the listener the reader uh i think you were malcolm gladwell before gladwell no glad all was before us because when um when we first thought about writing the book uh stephen dumbly said hey read this book by malcolm gladwell and and i read gladwell's book and it was um and it was surprising to me because i hadn't thought about that as a book i thought about writing books before but they'd always they'd never been so popularizing or so journalistic and so uh indeed gladwell was was there before then and indeed to thank gladwell for what he did to help us i mean his blurb on the front of our book um i'm sure had a huge impact on our success as well yeah that might be hard to test uh but yeah i've always wondered whether blurbs are fun i i don't know whether they work or not obviously publishers think they do um what was the reaction from your colleagues in the profession you know i have a similar route i'm not as successful as you are but i've popularized a lot of of economics and i in the early days and your book was in the early days somewhat of that uh it was considered somewhat untoward to quote waste your time speaking to a popular audience and chicago is a particularly having been a student there it's a particularly snobby place with a high regard for the academic life did you take flack for the book not as much as you might think actually i think my colleagues already helped me in such low regard that i couldn't really push myself any further i mean because i've always been i mean i'm kind of joking about that my colleagues i think they like me okay but i'm i'm different they treat me as different like i'm kind of held to a different standard and and they had come to expect just about anything from me so i think they weren't so surprised i mean it wasn't uh um you know and it ultimately it was interesting so the book got kind of popular and and uh and it made so much sense to teach a course like a free economics course to the undergrads it would have had a huge enrollment and the chair at the time came into my office and said hey just so you know you are not going to teach a freakonomics underground course and i said why not and he said well for starters i'm not going to have you profit from selling your book to the students uh and i said to him i mean just being honest i make a dollar a copy from the paperback and we've already sold six million copies so i think if you want me to donate the hundred dollars if the thing that's keeping us from giving our students what they want is the hundred dollars i'm going to earn in royalties i would be happy to donate to the department so but i think it was part of a broader view that um look this was kind of fun but a chicago view that like economics is serious and um and uh you know this wasn't serious enough but um look i think i think there are many reactions to the book um one very common reaction is look i'm a better economist and love it so if i write a book i'm going to sell like 10 million copies so i think a lot of people have written books that wouldn't have otherwise a lot of people got the pretty big advances on books as well i think that's probably true um and i think a lot of uh you know another set of people have said look i don't really like freakonomics but the fact is um a lot of people a lot of kids read the book and it led some of them to be economics majors and the supply of economics faculty is pretty limited in the short run and the the demand for our product went up so maybe love it's not so bad after all you know so uh you said your colleagues see you is different how are you different well the way in which i am different i don't know if it's how my colleagues see me is i'm i'm somehow not really an economist in the usual sense of the word um i'm i've i obviously i've studied economics i i know basic economics but i'm really always been more driven by data and by almost maybe i don't it's sociological it's wrong not not sociological in the sense of the discipline of sociology but sociological in the sense of very interested in in society and culture in a way that many economists haven't been really and you know i know gary becker was your advisor so very much in the spirit of becker although the the tools i've used have been very different and so i've i've just never been that interested in economic systems um as much as i have been in using economic tools to study questions that are are further afield than what you know i'm really at the edges that you know almost everything i've done you could look at it and question whether it's economics or not yeah um that's a fascinating way to think about it i want to go back to your your conversation with with the uh chair about the undergraduate class um two things come to mind one is robert frank has taught that class for a long time it doesn't teach the way you do but his idea of the economic naturalist the idea that economics is about going into the world and finding puzzles and thinking about how understanding incentives or markets might help us get a better grasp of what's really going on is a beautiful idea it's also the same the essence when i went to chicago in when i showed up in 1976 that was a huge part of the core exam was tricky puzzles like you know why are women's dry cleaning costs higher than men's and to see whether you could create craft a narrative around it what's different about what you've done is as you just confessed you're not so interested in crafting the economic narrative i would say outside of incentives matter which obviously is a crucial part of economics not the whole thing but that you wanted to bring data to bear on these questions in a way that that many economists hadn't before is that is that a fair summary yeah i i i think what um absolutely so i think i've i've always been driven by puzzles and and with the caveat that look i'm i'm in an economics department so i've always asked myself are these puzzles that relate to economics and so i've i've tried to really constrain myself to puzzles that relate to economics but but you're right incentives have obviously been a huge part of of what i've thought about and um you know externalities i think have have been present a lot of what i've been been thought about and um you know it's interesting because a lot of people call me a behavioral economist but behavioral economist but i'm not really i mean i've done very little that fits into um behavioral economics with a capital b going back to becker becker and i used to joke that he was a behavioral economist with a lowercase b like he was just interested in behavior and i think that's the same kind of thing with me i'm interested in behavior but rarely have i actually used many of the tools that behavioral economists have um have exploited well yeah we're all behavioral economists now but with the lower case b uh in fact in a recent conversation you had with governor on your podcast we'll talk about your podcast a little bit but uh you suggested that the impact of behavioral economics at least in the capital b sense meaning nudging and taking advantage of maybe what people see as irrationality uh is not been very effective that the magnitudes are small you want to talk about that yeah i just think empirically so a lot of the basis for behavioral economics has come out of laboratory experiments and in laboratory experiments you often can generate really big impacts on on behavior and what people do in the real world when we've gone out and tried to do nudges of various kinds with with the clear exception of defaults which are enormously powerful that if you just like sign people up for for uh retirement savings that's yeah exactly um all that's really big but but most of the stuff that people have tried to exploit you know others might disagree but my my empirical experience with loss aversion and with you know trying to you know use subtle framing effects i'm really um i haven't haven't yielded very much in terms of empirical results i mean i think there's a lot of evidence that you can use you know social um social shaming and stuff like that you know on in letters about paying your taxes or about energy usage by a couple percent but but it's no miracle um and and i think that the the interest i i think behavioral economics is really interesting and there's no getting around the fact that it is fascinating and it intrigues many people and it is enticing so when i talk to companies almost every company i talk to approaches me and they say we would love to use the tricks and insights of behavioral economics to revolutionize what we do and i usually say to them look i'm i'll try to help you with that but honestly i think oftentimes that the tricks and the miracles of regular economics are um are a better place to start because there's there's often a lot more power and just getting the incentives right and getting prices right uh is incredibly powerful um you know in many cases what i love about what i love about your uh your approach uh is that you understand that incentives aren't just monetary incentives i think a lot of people use our mantra of incentives manner and a straw man version and say well you know this price change people didn't change or whatever forgetting the fact that of course prices and monetary incentives take place in a social setting with where norms guilt shame reputation matter and it's only bad economists who think it's all money you said that not me but um i agree uh that um it's almost reductio out of certain when you say incentives you know the way i use the word incentives i use it to cover everything um but it's i think it's not react to odd absurd because it's actually right it's actually true that there are social incentives and then there's also uh kind of moral incentives and so given that the kind of those three things financial moral and social incentives essentially cover more or less the universe of things that lead people who are you know paying attention to do the things they do and so yeah like i i think um you know what i what i loved about nudge in particular and i don't know maybe give enough attack but what i thought was interesting about nudge is that until i i talked to thaler about what he was doing even before i wrote the book i'd always thought of our toolkit as economists essentially you know it had you know they were they were you could try to you know do incentives or you know you could you know pass a law you know and use like prohibitions of various ways but but stellar's insight i thought was a really good one which is a lot of times it's just easier to trick people into doing what you want them to do than to actually you know either like educate them uh use information or or to change incentives and and that's actually a really important insight because i think one of the you know especially when the time that you and i were being educated in economics a lot of the stuff was like full information complete information we kind of we kind of assumed that people were paying attention and they were doing a good job at things you know not that they were necessarily perfect but that they were at least thinking about stuff and i think the others inside is like people people are busy and they're not even thinking about stuff so just just trick them you know just just like make do it when they're not looking and you can get relatively big impacts which you know i think you have to ethically you got to worry a little bit about that because yeah is it really the right thing to do but i think in terms of actually getting stuff done uh i know have that kind of at the top of my toolkit is if if i want to get something done i think how can i how can i trick people how can i how can i just get something done by changing it without anybody noticing and i think uh you know there aren't that many things where i think i'm smarter than you know where i think i know better than everybody else and and um where i actually want to impose my will on people but in those cases um like i think the nudge approaches is really really genius uh the only thing that i think i know better than other people is that i don't know much more than anybody else but um i don't um i don't agree with that that tricking part and i'll let you defend it in a second i think you know it's interesting i was trained the you can't trick anybody people are rational that's the full information uh um extreme version that you gave and i that's always been my starting point as an economic naturalist doesn't mean it's my ending point but i always start with i'd rather have a theory that people aren't stu that people i'd rather avoid the theory that people are stupid or they make this mistake systematically or they make it over and over again it's not in their self-interest and so i've changed i do know that people do get tricked now and then but i think it's hard to trick people and i think what markets do is make it harder to trick people it you know the incentives that emerge out of markets are are going to defend protect people from exploitation it's true they could still pay a stupid price if they ignore the market opportunities but um i'm much less uh uh i'm not as pure as i used to be but i've never i haven't gone nearly as far as as as you suggest and i and you just told me though that doesn't work very well so well so defend your your your uh idea we can trick people sure okay so first when i say maybe give us an example i want to i want i'm not actually saying taking advantage of people that is stupid okay so so i agree i i'm in basic agreement with you said that for sure markets are an enforcement mechanism that keeps keeps exploitation under uh within limits okay so in particular i'm not really thinking about market settings uh as i talk about this the second thing is that i'm not thinking about people making mistakes and being stupid i'm actually thinking more about inattention i think taylor's real insight is that inattention is really important because it doesn't actually make sense for people like you and me to to fumble around around the edges of exactly what's in our food or um is one you know shaving cream doing some particular thing different a little you know so i think there's a lot of things where we just kind of assume that so like i think you and i both assume that markets are going to take care of stuff and so we don't worry about a lot of but but i was more thinking about cases where we're not really in markets but instead we're relying somehow on you know going back to the classic case which is for retirement right so we we take a job we don't know anything in particular about um retirement savings but there's someone in hr and that person's a real expert right they've spent their life going to seminars and studying uh retirement and so when they tell me that i should do this i'm like ah okay and then honestly i never look at it again and so it's it's not really that i'm necessarily you know it's not that i'm thinking about it not that i'm stupid it's just that i've ceded control because life is complicated and i think we do it a lot with the medical profession too often to our detriment um yeah where if you just listen to doctors you end up doing crazy things and so um and so i comment you know i'll give you an example uh well i i was thinking i mean i've got so many examples of the medical patient i probably shouldn't even go there because they're the kind of things you'll have to censor out afterwards but um but i'm sorry that's what i really mean that just that the world is complicated and that when there's opportunity cost people aren't paying much attention and so around the edges but look on fundamental things um i i agree with you completely that markets are really the best um insurance we have uh you know protection against exploitation which is kind of the opposite of what many people yeah how many people think of markets yeah yeah yeah i just read an article by uh canadian journalist david kaley about the pandemic i'm just going to digress on this so we'll come back to the second to our main theme but it's time about the pandemic and um the way i would summarize what i hope you and i'll talk about that the pandemic in particular in a little bit but he talks about how i would phrase it uh we've been trusting scientists but not science that there's so much uncertainty around the pandemic and the voice of sciences scientists are very loud and people go well they're scientists so i guess they're talking science but of course in many cases there's a lot of uncertainty around what they're saying and in fact sometimes they're just simply wrong uh on and with you know the question with them which scientists are scientists on both sides saying some really bizarre opposite things and and i think it it taps into a a deeper cultural question that you're raising there which is for most of our lives that you and i have been alive you know we trusted experts we just said well that you know that person hr that's their field i don't need to look into this i'll just trust them and we're living in a time now where you know we've had ubal event on the program talking about this and martin guri expertise is dying uh it's been betrayed to some extent by the practitioners uh it's also been overwhelmed by the information tsunami that that we're surrounded by as guru calls it and so everything's kind of up for grabs now it's interesting to think about how policy and nudging and um incentives are going to work in a world where people are really skeptical about what people who you they used to trust what you know what they actually know yeah no i i agree and like let's go back to medicine for a second the um if you are diagnosed with some relatively rare thing um you will you can know more about that that melody than your general practice practitioner doctor in about a day you know you should like a day of really hard study about something and you know a lot about it and um which is the beauty i mean it's it's the wonder and the amazing value of the internet is the is how available information has become and how it can be used to help individuals who have who who are seeking information so uh i actually so i well i agree with you that the it is it is sad that in many cases expertise has been politicized or or distorted i'm not sure that wouldn't have been true in the past i mean i can go back i'll give you another example so after our second book super economics came out and we wrote about climate change and what was interesting going back to idea of scientists so there's something called i think it's called the union of concerned scientists or something like that which as far as i could tell there were no scientists involved in the critique of what we were saying about climate change it was purely a propaganda exercise to try to discredit us but but because they were called the union of concerned scientists um they were treated with the the dignity of science and and everyone seemed to ignore the fact that the the articles we were citing i mean we weren't doing our own research we were citing articles that had been in nature and science and these were by top stuffed scientists in the area but i will say that was a case where by use strategically in exactly the thing i think that you're speaking against like the strategic use of the reputation of science to um to destroy things that the people who are who are arguing want destroyed regardless of truth regardless of whether you know right and wrong um was used incredibly effectively i mean we i've never lost a debate the way i lost uh the debate to the to the um environmentalists i mean uh honestly partly i i regret the you know we wrote it really poorly the way we wrote about it um it's kind of triggered people to be very against it i think of all the things i've ever argued i've never been more right about anything than what we said about climate change which is that it was going to keep on going and all of the the the the cries that everyone should just like do the right thing we're not going to work i mean as a con as we all know that just asking people to do the right thing when the benefits accrue to other people never really works and that you know that if we're going to have a solution it's probably going to be a technological solution um and i think actually what's interesting is that the entire the whole world has moved in that direction in the last 10 years i mean i think we've come to agree more and more that's true even environmentalists but um but uh you know it for a long time people have been using science as a weapon to fight culturally they don't like even when it is little to do with science yeah it's a cudgel i reminds me when i was once interviewed by a reporter on some issue related international trade and in the middle of the interview the reporter had a moment of unease and said wait a minute you are an expert aren't you i thought how do i answer that question i thought do i claim them and then i said well i've written a book on their national trade oh okay she was totally reassured because that made me an expert even though it was a popular mainly a popularizing book of the ideas of compared advantage and you know it was not it's not what i would call research but she was reassured because she could then put roberts the author of you know she's okay um you know thinking about you mentioned medicine and and our ability to have knowledge you know it's such a tragic example to me of where the incentives and feedback loops that would normally protect consumers from egregious uh over diagnosis and over testing other things you know the benefits typically accrue to the doctor sometimes to the patient but sometimes not so much with side effects and negative uh outcomes sometimes of those tests and um and yet i think emotionally we we have a trust of of that person as a quote scientist a doctor that it's being eroded through the internet and other bad behavior but but those incentives there really i think play into it a lot yeah i mean one of the things we've written about is about chemotherapy and how much chemotherapy is relatively ineffective has enormous side effects and and and incredibly and the crazy incentive system whereby doctors could get part of the revenue that's generated from the sale of those i mean it's really it's a crazy system i think if people knew more about it i don't think they'd be um very open to that system oh it's just it's a way i see it which is so depressing it's a way that often the doctors reaching into the taxpayer pocket the taxpayer's not in the room right the medicare payment unnegotiated price set by the pharmaceutical company um for an extra two months of life instead of using the existing treatment which is a fraction of the cost is um it's it's a it's a bad bad system it's going to be hard to fix but it's a bad system and on econ talk and on your podcast we're trying to spread a little education you're spreading a little more than i am because the size of your audience but we're all trying to do our part and it's um it's hard because the and plus the you know the invested interest there are extremely tough uh did you going back to our old thread did you teach that undergraduate class after that that incredibly generous offer to share the royalties from the hundred copies with the department no i've never taught a course on freakonomics uh with john list we did eventually teach a course of economics for non-economics majors it's the university of chicago and kind of i think the view is that everyone should have one economics course we've never been part of the the core economics it chose not to be part of the core first year classes and um and uh i'm probably not supposed to say this but i'll say it anyway you know so they changed the incentives at the university so that um that to the department there was a benefit from having more students take our courses we we started getting paid on the margin so when that happened john and i said well why don't we teach a course that would be really popular among non-economists and so we did that i think the first year we had something like 500 students signed up for it which turned out to be worth a lot to the department and a really fun course to teach because john's a good friend of mine and um and we just tried to we both believe in the ideas of economics as being really powerful um and i i think our own profession has a little bit gotten lost in in technicality and in um in in focusing things that are hard and liking things that are hard but the basic idea i mean you've i mean no one more than you has been kind of been focused on on the basic ideas of economics and how to bring whether it's comparative advantage or incentives or um you know how how effective prices can be at um you know solving problems so we it was really fun so we we have been teaching this course now for five four five years and um and in that course we do give i give away um pdf versions of economics for free and john gives away free versions of of his book um as well um but it's not really a free economics course in the sense that where it's like really and sometimes more economics and free economics because it's really trying to teach you know what we think are the 10 or 12 core ideas of economics but but without any math uh simply taught is like these are powerful ideas and and you should you should have them in your toolkit as you approach life yeah i'm i'm relieved that uh that it's more than a hundred when you said you're gonna give the hundred i i thought maybe there'd be a thousand students so 500 500 is um is not too bad i tell you i'll tell you about the 100 though so the reason i said 100 students is that um for the most part when we were doing in-person learning uh the limit on class size was determined by classrooms and in the tip the biggest classrooms that are easily available to the econ department in chicago are about 80 80 to 100 seats in them and so um so it's always been really frustrating to me that um that there are many students who want to take my course i teach a course on economics of crime which is quite popular and and i have to limit it every year so one year i pushed harder and there's actually one or two huge rooms and i got access to one of those huge rooms and i had you know 300 students in the class and um and the same chairman who didn't want me to teach for economics the next year came around and i saw that i had been reassigned to an 80 an 80 person classroom and i went to him and i said hey this doesn't really make sense we've got students who 300 students who want to take the class and he said well the problem is all the other faculty members got really upset because there were hardly any students in their classes and they complained so much that i'm going to lower you back down to 80 again and i said socialize this is the university of chicago department of economics and our solution is to not let people if they want not to have shouldn't the teachers try to teach something that students want to go to i mean like it was i've had about maybe three or four of those defining moments where everything i believe about chicago economics um is turned on its head in the actual practice of life by chicago economists who are great in their papers yeah at acting like chicago economists but awful in real life can i give you another example of something like this we were thinking about kenya right oh really i have tenure yeah and we have a really fantastic guy who was coming up who was young but was coming up getting outside tenure offers potentially and so we had a senior faculty meeting and um and so we decided to vote him unanimously with almost no discussion to give him an untenured uh associate position okay and um the problem was that it was clear that other places were going to make him tenured offers and it was also clear to me that um if other places made him tenured offers first and we only responded it would hurt our bargaining position and convinced him to stay relative to preempting those offers so i said um hey um let me just ask you like if he didn't do any other work in three years do you not think that this body of work he's already done would be good enough for tenure and like basically everyone agreed and i said so just trying to do backward induction in three years we're going to vote him tenure even if he does nothing in between does that not mean we shouldn't vote him tenure now and um and perhaps the world's greatest rational economics macroeconomist said she's not ready for tenure and that was the end of the discussion he's not ready for tenure even though backward induction told you that he would with one 100 probability he would be ready for tenure and three years i'm not even sure what that means but it's one of those moments i'll never forget where i think how is it it actually makes me understand why economists maybe hold so little sway in policy and in the way the world works when even in the university of chicago department of economics we make decisions that are completely at odds with anything i mean i'll give you another example i've sat in meetings where 10 faculty members who combined have a an outside wage option of you know i don't know fifteen thousand dollars an hour have sat for an hour arguing about how to allocate 250 dollars worth of stuff and and at the end i finally said look this is my answer to everything like i'll just write you i'll just write you a check for 250 and one side can have the other side never like this makes no sense why are we sitting here doing this so um but you know that's what's the old phrase that people who do do and people who you know can't do advise or whatever it is so anyway that's kind of what i feel like with some of the people in chicago they're really good they're incredible economists but but common sense has not always been at the um the top of the list of chicago economics yeah although market forces don't always impinge on those small decisions but that faculty member who didn't vote for you it wasn't a free lunch i'm sure that you paid a price for that um and it reminds me of the famous line which i've never fully understood but it seems relevant here why are uh academic fights uh so vicious because the stakes are so small um there's a lot there we'll we'll just leave that alone for listeners to it's kind of a zen thing we'll we'll leave that alone uh before we leave for economics i want to talk about your new ventures next but before we leave for economics i want to take an example from the book that that's always uh bothered me see if i have to confess uh and i'm going to give you a real-life um piece to it that i think will intrigue you at least i had never heard it before so this is the argument you make in the book that when a real estate agent is selling a house that she herself owns it it's her her name's on the title versus a house where she's representing a client and is going to get a commission when she's selling her own house if she charges an extra twenty five thousand dollars for the house she gets the whole 25 000. if she sells the client's house for an extra 25 000. she only gets the commission of that which is quite small so your argument is that there's a uh tension uh a misalignment of incentives where the agent wants to set a lower price for the house than the owner when it's she's representing a client because it'll move more quickly uh and when she sells her own house she's going to be willing to wait a little bit longer because she gets the whole 25 000 is that a good summary of the argument and you find and you find that the data seems to suggest that although of course it's really hard to test it you do the best you can to make some assumptions and so on i've never liked it because in my view going back to what we talked about before people are relatively rational they're i think most people are aware that they don't have their agent may not share their incentives when they agents compete they're trying to get clients and therefore they tend to not be able to exploit customers in that way that that's my response that's neither here nor there we could go into the weeds of the of the actual study i'm not interested in that but i wouldn't tell you what my sister said who's who's a real estate agent because i i was so fascinated by first she said well if you set too high a price for the house it's just not going to sell it doesn't matter how long you wait and i said but isn't it i mean she says that's not going to it's not that you wait longer because you can get a high you get a higher price if you wait longer i said well but isn't there the chance that the perf perfect person will come along who falls in love with the house and and will pay that premium and you just wait for it she's yeah but that's so i mean that's a terrible idea i said what do you think of this finding and she gave me a twist on i've never heard before she said oh well when i sell my own house i'm a seller and i overestimate the value of my house because i think it's worth more than it really is but when i'm selling it for a client they too think it's worth more but i can tell them no you're crazy whereas when i'm selling my own house i don't have anybody to reel me in to calm me down i thought that was an amazing behavioral economics twist on the standard one have you ever heard that argument before i've never heard anyone say that it's so awesome it doesn't make sense of course in if you go back to the chicago version well then obviously your your um your sister or sister-in-law she should um pick the right agent right and she'd hire an agent then if an agent's worth it to um i mean obviously if she's if she has enough sense to know that she's falling prey to it again it's like it gets complicated but um yeah that's true too yeah but she can't help herself because her emotional you know reaction she knows it's and plus to admit to herself that she needs her own age i mean that would be that'd be jarring anyway let's just let's shift gears i i want to talk about before i do a number of people on twitter i asked him what i should ask you so i just i want to ask this before we leave for economics there are a lot of interesting and and dramatic and and provocative and hidden phenomena that you illuminate in uh in free economics a number of years have passed are there any of them that you want to say you've changed your mind on you don't think they're true anymore just for the so-called record or do you think they've they've they've stood the test of time or do you want to be agnostic about it you know i think that's the the um most of the things that were research based um all of the things that are research based that i have more evidence on i think i think you've stood the test of time whether it's campaign spending or legalized abortion or other things i think the the new evidence i'd love to talk about the new evidence and legalized abortion it's it's um um it's not but that's not the answer to this question i tell you that the two things that are just plain wrong in the book and it's really interesting is there are two things that are not based on data or analysis so um the one was what we did on the on the kkk and it turns out that um the the the gentleman who had supposedly done these amazing things to infiltrate the kkk uh and stetson kennedy and and we had based that on some historical record and talking with him one night but after we wrote the book somebody came to us a historian in florida who said hey a lot of these things stetson kennedy said aren't true and we actually took it really seriously and we went and investigated and um we we talked to him and uh he's threatened to sue us if we um you know we were going to write so we ended up writing a piece in new york times saying look uh we had relied on a bunch of sources they turned out that look it was true that somebody did infiltrate the clan but i think it was someone else and stetson kennedy kind of stole that person's identity x post and started telling it like his own story that and the other thing is that we talked we had a a leading sociologist who swore up and down to me that he personally had met arangelo and lamangelo um the the the two african-american children whose names were spelled orange jell-o and lemon gel look i would never have put a um an urban myth knowingly ended into this thing but like literally this guy has studied like the black power movement and he was completely totally credible i i have spent a lot of time and effort i've offered large prizes of financial rewards to anyone who can produce limangelo and orangelo and i am completely convinced that it's just an urban legend so what's what's funny is that the things that i regret now that are wrong are um are the things that were like well-researched journalism as opposed to actual academic research but but um i can't think of anything um of my own research that is in there that i would say no no actually that's just plain wrong well like my sisters steve you might you might have trouble evaluating your own objective sense of that there are people who criticize different parts of that of your research obviously they could be wrong too but more generally uh you know psychology has gone through uh is going through the so-called replication crisis we have brian nozick on the program a couple times talking about it um i followed it fairly closely because i'm fascinated by it and it fits my priors shame shamefully but that's being honest um i i am uncomfortable with the ease with which many economists uh tout the credibility of statistical analysis um for policy purposes ironic given that you said earlier economists haven't been very successful i think we i think we're the often the most power i think we're certainly the most powerful social scientists uh we may not influence policy the way we think we ought to be able to but um are you uneasy about any of that do you think that that some of the findings that not yours but in general any in in econometrics will stand up and you know part of my issue is how would you know you know unlike a you know a psychology uh experiment where you can theory can replicate it a lot of our analyses are of course natural experiments or not experiments at all just attempts to control for factors via uh kind of metric technique are you do you worry about that at all yeah just listen to the most narrow version of it like could you actually if you started from scratch take most academic economic papers and actually get to the numbers that they get and i think the answer is no i mean yeah that we we deal with replication in a much narrower sense so now when you publish in a journal they ask you to put your data set and and replication means is is there code that you've created that if somebody presses the button it will actually give the numbers okay and so it's really narrow that's very narrow okay so then you go back further there's a thousand choices that happen over the course of um you know and millions you know thousands of lives of code that can go wrong so i think uh my hunch is that most if not all papers have enormous numbers of mistakes in them okay so the question is to what extent are those mistakes mistakes that lead you to a very different answer versus just mistakes that maybe i mean i've made mistakes one of the big mistakes i made in the paper was actually a mistake in a paper nobody cared about but and somebody pointed out later but i had i had not fully understood that there had been a change in the way the accounting was done on on some time series which led my answers to only be about half as big as um as it should have been you know because usually most of the time when you make mistakes they end up you know pushing you towards zero rather than away from zero um so i uh you know but i think so look on the on every level i think replication is unlikely to happen on on most things okay so so that's always been my view is that a good basis for research is to allow a reader to see as much of the raw data as possible let's just assume you did a good job on the raw data okay yeah and just to start by saying here's what's in the raw data and let me show you every step i make along the way and that and by the time we're done my own personality will be heavily injected into whatever i've done and my beliefs and how i like to do things but i'm going to start by showing you the raw data and we'll show you how it changes at every step and i think that's one defense against um this kind of problem i mean i also wanted i thought you know i'm not very socially minded i'm not very public goods minded in general but i if i were i think i would have started a journal of just like a journal of replications in economics where um where you publish them when they work i mean the problem with replications and economics is if you replicate something and it works no one's interested nobody cares so um it's um yeah and i'll tell you the craziest thing about this is what disturbs me more about economics and replication than anything else so john liston and i i won't name the author i mean i probably should because he hasn't suffered nearly as much as he should for his mystiques but um in two separate occasions there were papers published in top journals that john liston i essentially thought must be fabricated because the results were so outrageous and they were both experimental papers so john and i went back with co-authors and we redid these experiments and not only did we find you know not replicate but in one particular case um this paper had found that if chess masters um were playing a what's called the caterpillar game which is you could imagine is a backward induction game that they played it perfectly like 20 out of 20 stopped on the first move whereas regular people never do that but look it didn't make any sense because among other things my my cousin is a world-class chess player and he says look cheating is rampant in chess we people cheat like crazy because the incentives are really screwed up and we've learned that there's a lot of gains from cheating and so um and so we went and we replicated this paper in a different world class you know with grand masters and not only did not a single one of them stop on the first note and without explaining the whole game it won't make sense but people know the game the crazy thing was they actually went all the way to the last note which is absurd and like no one in their right mind except a really good colluders can ever go to the last note it was so bad this is a game where if you stop on the first note it only cost the researcher a dollar and if you go to the last note each time you play it costs like 512 dollars we literally were bankrupted within about two hours of this study we had only brought i think like three thousand dollars with us in cash we had to send ras all over philadelphia to atm machines to try to gather up enough money to pay off the people who were doing our subjects okay so but the point of this is look we wrote a rejoinder to that paper and we in very clear terms said we believe not just that this was a fluke that we had gotten different results but we suspected that there was malfeasance on the part of fraud and and in in the two cases we did that's the same author within a year uh we ended up getting our replies published but the editors made us stick out anything about fraud or malfeasance uh the the the unlike in psychology where there have been huge prices paid by people who have been um who have been who it's been suggested have been fraudulent and then this this guy goes along just fine tenure did it top university no one holds it against them there's never been a discussion i mean like i i would say in the 10 years since we did this not a single person has written to me saying hey i just read this article and the only way to make sense about your comment is to think that this author did something fraudulent but like no one's even talked about not even a discussion and i think um and i think it's i i think it really in many ways for us in economics the problem is that the the the the space of problems that we deal with like the set of things that fall under the rubric of economics is enormous and expansive relative the number of economists so there's relatively few economists working on any particular problem and so if it were if it were more like physics where there were seven big problems and every economist worked on one of those seven problems then if somebody was fraudulent one-seventh of the profession would be watching and would be focused on it but so somebody finds out that somebody made a terrible data error on a paper the 14 economists who care a little bit about that maybe lower that person in their opinion maybe they you know you know they they talk about it but the discipline itself it just it just goes right by yeah well that's comes back to earlier discussion of course about incentives and we don't like to admit it uh but not everyone in the academic world cares about truth we care about we might care about it along with other things we care about our reputation which is part of this but not the whole thing we care about our status we care about our salary we care about our publication our cv and uh you know a friend of before a colleague of mine just called slicing the salami was was the mode of of a many academics um as opposed to say tackling one of the big seven questions you know that reminds me i want to ask you this uh brenko milanovich is coming onto the program soon to discuss this tweeted last week or this past week that uh the economic nobel prize the the nobel prize it's not exactly a nobel prize given by the bank of sweden but we call it the nobel prize nobel prize should go to people looking at big questions why did china succeed so much in the last decades what's the source of poverty reduction there in india and elsewhere these are not easy questions to answer but they are the deepest most important questions and fundamentally he was critiquing not the research of the people who had gotten the prize this year say for improving auctions that the fcc might might do it's not unimportant but these are not the seven big things we would make in a list of the questions we should be dealing with uh what are your what are your thoughts on that i i i think i think that the challenges that academics does not reward answering big questions halfway academic rewards answering little questions 100 of the way i mean that's just that is the role of of of um of of academics and so especially i think in economics there has been um an underinvestment in broad thinking like why has china succeeded because there's no real academic return to doing that i mean yeah you know that's a that's something that you know old men and women can sit around doing because they they're not trying to get published but um but i don't think i don't think you can build a career on saying i'm going to tackle these hard problems and so um so i think it's to me it's an unfair criticism of the nobel committee to to have them charged with rewarding economists i mean it's sensible like a nobel prize has a lot of sway so it wouldn't be a crazy thing for the nobel prize committee say look we think academics gets it wrong and we have a different instead of um you know where we're about the big economic picture and we're going to reward people who maybe have had zero academics yes i mean the the the best thinking about why china has succeeded probably hasn't been done by academics it's probably been done by all sorts of pundits outside of academics and and the nobel prize committee if they wanted could go and and um and you know give a nobel prize to somebody like thomas friedman or someone like that who's you know people who don't have economics degrees and who don't work in but who write about big important um you know questions uh but to me i think um the you know what the nobel prize is i i hardly can think you can fault the committee for the set of prizes they've given in the last few years i think you know given given what they have to choose from i think they're they've picked really uh path-breaking important research you know in both in what what you know milgram wilson have done and what esther and abajid and michael kramer did last year i think to me those were good prizes yeah well i think his point and i don't think it was so much a critique of the the um the committee itself but an urging of the committee to to do something different than it's doing now what it does now is rewards the best academic performance to some extent not totally you know it's it's a there's some wiggle room there but i think his point is is well taken i i just want to add i would not give it to thomas friedman but uh even if we broadened it and and i think um but your basic point which is i'm gonna phrase it a way you might not like i i think our profession tries to be like physics i think it ought to be more like history history doesn't pretend to answer the question of what really caused the civil war but we learned something from studying the history of the civil war it's just not an answer so maybe instead of the journal of replication that you start maybe you should instead start the journal of half-finished ideas or half-finished hypotheses or incomp imperfect you know journal of your reproducible results the journal of maybe true results yeah yeah i mean it's the history analogy is an interesting one because uh history tackles big problems and but history and economics could not be more different because history the nature of a great piece of history is that it focuses very much on idiosyncrasies on on narrow institutions on the particular identities of the people involved and nothing could be more antithetical to economics especially chicago economics then the idea that you you know that that your tools should be used to describe exactly one moment in time right so i mean going back to you know our our joint mentor backer gary becker look gary basically believed that a good economic theory applied everywhere and um and in in that kind of a world um it's it's um it's harder to to necessarily go and say you know why did china succeed because why china succeeded probably has a lot of idiosyncrasy a lot of history a lot of particular laws that change at the right time or a particular entrepreneur and look i think that it doesn't fit well into how we describe economics right now but but look i agree i worry i worry that economics is going the way of sociology and anthropology in the sense that we are losing focus on important questions and on fundamental truths of um being able to provide guidance that we're we're getting caught up in a lot of self-referential pursuits of complicated models certainly that was complaint that was very fairly lodged against macroeconomics after the financial crisis but i think it's increasingly becoming true in in microeconomics as well and i think that i think in my own view it's less and less of what academics are doing has a policy relevant relevance that is should and is going to influence um how real decisions get made um in part i think it's because it's too easy because when you know when i'm a little bit younger than you not much but when i came into the profession 30 years ago it was at the cusp of new data sets new techniques like natural experiments um and the you know and and it was a little bit hard to go and get data and a pile of data and try to make some reasonable causal inferences from it and so there were academic rewards doing it because it was a scarce talent it was hard now that talent is not scarce now there's a cookie cutter recipe for taking a data looking at a law change or some other national experiment and getting a result so there's no academic reward to it so people move on to do things where there is an academic reward like building a complicated structural model that has dynamic optimization in it and and so so there's not a lot of effort that's devoted to doing simple things that are useful parameter estimation because it won't get you a good job and and again it's incentives i don't fault anyone for not doing it um when i write those papers myself like myself i can't get them published and so um so i write them sometimes just for the pure joy of of knowing but for people who need to be published all the incentives are pushing in a direction that i think is making economics less and less relevant so that's a good segue i mean i think i don't want to be too harsh a psych uh a psychiatrist or therapist for you but you know to some extent you're there's a self-reflection there about the nature of your own work you know in terms of the scope of it you did some unbelievably clever and provocative takes on small issues um you know sumo wrestlers cheaters it's fascinating it's fun to think about it's not at the heart of the good society or the good life and yet uh in recent years you've had some kind of change of heart we're going to talk about your podcast in a minute called people i mostly admire but as part of that uh what i sense is a transition for you you started uh a center at the university of chicago uh radical innovation for social change risc risk and you're trying to look at big pictures and find relatively simple solutions and i want to talk about a coup a couple of those because they're they're so interesting uh let's start with uh monitoring criminals sure so um no sir i think you're right like my um my approach to academics was purely self-interested i did stuff i thought it was fun and um and i really was incredibly lucky that the the discipline accepted me and published my papers and top journals and and i got accolades um but it's also true so what happened over time is academics stopped being fun it stopped being fun for me um in part because i think the discipline kind of passed me by it's it's a different discipline now and it values different things and what it values i don't value but the other thing that was disturbing a little bit to me was that of all the success that we had you know with free economics and popularization and all this i had within regular academic channels i honestly think it's fair to say that i have not directly affected in a in a positive way any public policy anywhere i mean the the um the closest we came is dublin and i did something on drunk walking uh and um we just showed that drunk walking was like per mile something like 10 times more dangerous than drunk driving and um and that led a town in in alaska to um to debate whether they should pass a law making it a misdemeanor to walk drunk in that town which failed okay so it didn't even get passed but that was the closest i think i can ever say to coming to actually having a law um put into place so i just reflected on that and look i'm not against just having fun and the consumption value of economics and obviously i've taught a lot of students and maybe had some benefit there but um but as i've gotten older um for me now again it's just more fun to think about how to affect the real world and and could we not have some impact so i started to set a risk and i got it's kind of the bottom line of risk is um i i looked at the incentives being faced by by a lot of different folks around social issues whether it's the government whether it's academics whether it's uh nonprofits and i think all of those three groups all had a little bit of had the wrong incentives and also corporations have the wrong incentive to like private for-profit places i don't want to go into exact details of why i think they have the wrong incentives but just say non-profits what's clear to me having talked to many people in charge of and working at nonprofits is that not only do they want to make the world a better place they want to be liked along the way um so you know the big philanthropists are are deeply concerned about their their image and their perception they they are more often than not philanthropists because they want to be popular and they want to be justified so look i thought i don't care if people like me so how about we try to carve out a different space which is we're going to try to find problems so the problems that haven't been solved the big social problems haven't been solved either because they're too hard or because they're not that hard but the answers are really unpopular so nobody with any common sense would actually go out and try to do it so i think that the electronic monitoring one is a really good one so i've studied crime academically for for 30 years and i know a lot about crime of thought about crime and i am convinced that there's a very simple technological approach which could have the biggest impact of any crime policy of the last 50 or 100 years which is simply to to to use gps technology and other technologies going forward but the easy ones gps um on people who are under the jurisdiction of the criminal justice system super simple idea the the idea is that if you um if someone is being monitored in this way so you know where they are at all times we can cross reference their locations with existing databases on say where shots are fired or where crimes have been committed and it creates a tremendous deterrent effect to committing crimes okay and what we've seen empirically is that if you put people on these um these bracelets that have gps they do virtually no crime okay now so far i'm sure everyone listening is like oh my god big brother you're this awful person okay so okay so but here's the thing all right steve steve who's going to wear these make that clearer who's who's going to wear this um so me and you so uh i mean i'm personally not totally against that but but that's not the plan the the plan would be for instance that people who are in prison right now would be offered a deal if you want to be let out of prison two years early in return for wearing a bracelet say for four years we'll let you out of prison two years early if you commit crime we're gonna put those two years of your um of your sentence that are deferred we'll put it back on okay so this would be completely voluntary in that sense um that anyone would have the option of either doing um doing their full their full sentence or being released early um another a place where we're using it right now is actually on people on pre-trial release so these are people in cook county who would likely be in the cook county jail awaiting trial uh but um but they're remanded on you know to house arrest and then given these bracelets um so in some sense that group is a little different because it's not really i mean they have a choice everyone who's wearing this bracelet has a choice of being a cook county jail if they would want to be many of them might be out on bracelets without gps technology absent the technology and so for them like they may there might be a third option that will no longer be available to them because this technology exists okay but but going back to the basic idea it's really important is that the reason we lock people up by and large is because we fear the crimes they will do if they're not locked up okay so that we that there's an enormous um if you really knew that people weren't going to commit crimes you might hold some of them in prison you know as some kind of retribution for the mistakes they've made or whatnot but but by and large we would have a much smaller prison population if we didn't fear that the people who are in prison are residing you know you know recidivists and and uh habitual offenders okay so the whole thing becomes a virtual um sorry a virtuous circle in which if you put technology on folks that make them not do crimes then you don't have to lock so many people up and and just simple back the envelope calculations we've done suggests that done really well this could both reduce the amount of violent crime in society by 25 at the same time that we reduce the prison population by 25 and save a lot of money this is an idea save money it's good for everybody right the only the you know it's really is good for everybody right it's good for government saving money it's good for society because crime has gone down uh it's good for the people who are not locked up uh i think it's like it's a for most of the people who are committing a lot of crimes uh crime does not pay it's it's a bad set of choices and the commitment device of knowing that if i commit a crime i'm actually going to get locked up again it's it's actually works for the benefit even of the people who otherwise would be committing crimes but look i'm sure in this in this one two minute version of it i've done a terrible job explaining it which is actually useful for our purposes because almost everyone listening right now is probably saying this is an awful idea okay yo you say whatever like for a hundred different reasons it's an awful idea but the simple fact is that if if we can pull this off okay right now we're doing in cook county and we're having awesome results in cook county that people are gonna eventually realize that as poorly as i've explained it this is a really powerful idea and this is a good thing for society and it's not big brother in a bad way it's it's it's using technology in a really effective way that's good for everybody okay but no nonprofit would ever have touched this idea and um you know it's the only reason we're kind of making any headway is that the cook county sheriff a guy named tom dart is brilliant and thoughtful and willing to take chances that other people won't and so we've been able to you know get get these bracelets on 1500 people uh more than anywhere else in the country and the results are really good and and and how how lucky did we happen to be that the timing was such that covid the number one hot spot for covid in america was the cook county jail but we had these bracelets available so that um the sheriff's office did an amazing job of doing so many things but one of them was having the option to use these bracelets to get people out of jail uh and it turned out already to to pay enormous social dividends so that's kind of the gist of what we're doing we're trying to to take hard problems and to take a kind of chicagoy hard-nosed look whatever it takes thoughtful approach to solving them and not worry about um you know not worry about short-term repercussions and criticisms and and really be thinking about in the long run is this going to give us an important answer we need well you know when you describe it i find it kind of creepy too however it it's a classic example i think of many policy suggestions where people go i don't like that and i always say well compared to what i mean because you got to remember that the alternative isn't not having it the alternative is the u.s prison system which is pretty horrific on many different dimensions um which we don't need to go into but i think the general point about policy improvements it's so hard for people to you know you know one of my favorite examples of this would be the drug war um you know i think drugs should be legal of all kinds not just recreational drugs but pharmaceutical drugs i think i don't like the fda i think it should be up to personal people's choices and i think we should treat people like grown-ups we shouldn't subsidize them either by the way it's another little side note uh but but and we could allow third party nonprofits to pay for them when we think people can't afford them for pharmaceuticals we have a lot of things to add to the story but just just take the basic claim when i say we should end the drug war but but people say to me but drug use drug use is terrible well yeah it's not great for some people they make mistakes but how about the last 40 years of people being killed in the street and the corruption of the police department and oh my gosh does that count for something in the calculus it should i so you know i think people often use nirvana you know harold dempsey has talked about this uh the nirvana fallacy it's like oh oh i have in mind a world where where the people running the program are angels not not human beings that's my policy solution and that solution is not available folks so you know you could be pregnant you can stand on principle and say you know as a as a first amendment person i don't like this some aspect of this or i do think there's a surveillance worry here that it could spread and be lead to technology that might be dangerous for tyranny those are legitimate questions but if you're just going to talk about whether it works don't just tell me everything that's bad about it and ignore the other things that are bad about the status quo and of iran absolutely i mean yeah i mean so the criticism so a lot of the kind of more left-leaning uh ngos that i've approached about this they become apoplectic and they say this is such an invasion of privacy and to your point i say look prison compared to prison this is like like you know joy it's like freedom i mean it's literally a walk in the park yeah it is yeah and um but it's but it's um but it doesn't hold it's it's exactly your point about this nirvana and um but you know one thing that i i believe without a lot of evidence there are two pieces of it one thing i know for sure is that ideas are not enough to win the day so you know so if if as an academic i go to a group and say hey this would be a great idea to do i have been doing that for 30 years and many of the ideas may have been terrible but i think some of them have been okay and none of them get adopted and so really what i hope that my risk center can do is to to take this intermediate stage that entrepreneurs do all the time which is to go from an idea to a proof of concept so we can go we'll do this in cook county and we'll put this on 3 000 people eventually and we'll show that actually they don't commit very much crime at all and it helps them show up you know we have ways to contact them so we can see if they're not going their uh their their um their um trial appointment their their trial dates and we can remind them and and tell them to do and we can do lots of things and we'll just show that it actually saved a bunch of money and that they were happy i mean that's the kind of thing that we're hoping we can do because i you know not my goal to build a company or non-profit that is you know producing you know a million angle bracelets to try to deal with the prism but but my hope is that by doing this uh it'll become easy key that that the next uh you know that the new york city you know the the new york city you know or new york state would say hey this worked in cook county is easy to adopt uh we've got open source software we've developed now that we can give to anyone who wants to use you know use these technology so that's what we're trying to do and um and uh and what's interesting is this is a great case where it is totally obvious there's no big idea here it's like completely clear like if you really think about it how is it you know how is it that our criminal justice system which has jurisdiction over the lives of you know a million people out on the streets doesn't know where they are when cell phone technology is out there um and you know so it's obvious to do but it's one of those things where it's just you know it it just hasn't happened there's been you know been 20 years for it to happen and there's not there's just no thrust even pushing there so that's what that's kind of that's the best of what we hope to do at my center called risk i love the startup mindset uh i love the recognition that packaging matters marketing matters it's not irrelevant i you know i i think of so many academics who've told me about their great idea and i'm thinking you can't even explain it to me and i'm an economist and you think you're going to get some bureaucrat or or senator to get behind it you gotta it's gotta be simple it's got i mean that's one of the reasons i think milton friedman was such an incredible policy entrepreneur he was a great explainer first of all he's a great teacher but more than that he figured out policy interventions the volunteer army would be an example uh a voucher for schools that you know they were flawed they were imperfect we might prefer something else to them but the reason they got any traction at all was that he could explain it and then you could explain it to your neighbor and say what do you think and i think so many of of our colleagues who want to change the world um neglect that little tiny piece i can't maybe you have an understanding you've talked to a lot more economists in a in an interviewing kind of way than i have but what has shocked me is all the economists i've talked to now are very articulate in talking about many things the one exception is their own research when they talk about their own research it makes no sense and i know their research so i try to then rephrase it in a much more straightforward way and um then they usually argue no no that's not quite right because it leaves out this one tiny element but it's it's interesting to me have you found that as you've interviewed that's fascinating what economists are worse than talking about is their own actual research wouldn't say that that way but because i don't delve deeply into the research the nuts and bolts so it's maybe not not the right question for me but it reminds me of something that's i think that there's a deep insight there which is the following if if you read something in the paper about something you know about um you have a hobby not not economics not research where you have a hobby and you read an article in the paper about you realize oh my gosh since i got so many things wrong about how we believe how we act in this hobby or how how we actually actually do the thing we're talking about oh it's awful you know it's the way i think of bill belichick when he reads articles about the patriots and the even in a sophisticated publication he must he doesn't read them obviously you know and that's why he finds questions the coach of the new england patriots those at home don't know him uh he's not very tolerant of ignorant questions and i think probably all questions are pretty ignorant to him you know he he kind of has uh such a deeper understanding so the idea of him reading an article about what the patriots ought to do this week is just is ludicrous so when you and i read an article in the newspaper about something we always go like well boy they really got this not just it's it's superficial there there are mistakes in it and then somebody has the occasionally has the realization that wait a minute that might be true of everything they're right now what and so what i'm thinking of though is when when an academic talks about their own work they're writing uh it's like the way they would critique a newspaper summary of their nobel prize it's like oh no you're missing all the subtlety the depth oh you've got to add this caveat it's why in general academics are not good communicators because they believe in caveats that's the essence of the of our often what we do in in so-called science we have to say but and remember this and so if you leave that out in your summary of their work they're going no no that's not what i meant because because it's so much richer and deeper than that and i think that's that phenomenon they know too much about their own work it's not that they're bad communicators necessarily because they as you say they could be good communicators about someone else's work but about their own work you know it's kind of like saying uh how would you rank your uh your oldest child on a scale of one to ten oh wait a minute i can't do that there's too much let me write a a 60-page essay about what's special about my child because because there's there's a lot of nuance there and i think that's i think that's what's going on there yeah that's a good point let's let's close about and talk about your podcast um it's called people i mostly admire the word mostly uh could be interpreted in two different ways there uh so how do you mean it do you mean it both ways uh i mean both of those actually um i because um i am interviewing people i'm i do mostly mostly i'm interviewing people i admire and they're people that i mostly admire that i'm that i'm interviewing um it's it's kind of different than what so you've done an amazing public service by bringing so many economists into the you know the forefront leading people giving people an audience i think i'm locked am i locked no you're good okay okay sorry okay somebody says i'm just so stunned i'm just so stunned by your observation it looked like i was frozen now keep going i'm trying to keep a straight face here appreciate the kind yeah so you so you've done a real public service by giving so many economists a chance to talk and i'm actually trying to do something slightly different which is um i'm sort of this is not really an economics podcast in the usual sense that i'm trying to to um talk to a very broad group of people people who are um who are innovative who are rule breakers who are trying to do the right thing who maybe have um you know quirks about them and to um and in my own you know weird way you know reflecting my own weirdness of how i think about the world to to try to have fun smart conversations and um so but i've i honestly put the word mostly in because um because i wanted to be able to interview everyone and i didn't want and including some people who i think might be horrendous so i haven't interviewed anyone so far who's horrendous i mean um uh but but partly uh i called it you know we call it that because look it's a little the whole thing's a little bit tongue-in-cheek i mean my whole my whole thoughts is about having fun and whatnot and um and the idea you know someone suggested like what do we call people you i admire and i'm like well that's like really earnest and that's not really the spirit of what freakonomics is trying to do um but but it's been you know it's fun i mean you have a lot of experience interviewing i was surprised at how hard interviewing is compared to being interviewed um yeah that being interviewed whatever blah blah blah whatever i say oh it's stupid whatever no one really but there's something i find i i feel a real um obligation as an interview i feel really weight isn't an interviewer so um you know it's kind of good to do new things as you get older and and uh for me the the um the deep research um they're very you know people this this psychological concept of flow where you really like work really hard at something and you become completely immersed in it i don't have that very much uh in what i do interestingly the preparation for my interviews is very much a flow state for me i become extremely focused in a way that i haven't and i and i study what people have done in the past in a way that i don't usually and uh and it's it's somehow the intensity to it i found to be a really surprise i hadn't expected it but it's been you know flow's both good and bad i mean flow is kind of enjoyable the other sense like flow is like very intense and um you know and and tiring but so that's what we're doing it's been it's uh an experiment well i appreciate the kind words i you know i i have given a platform to a lot of economists but like you i feel like i find our profession a lot less interesting than i did five years ago so i'm interviewing many fewer economies you are my exception uh in many ways you're as about traditionally an economist as you one could get but you've also gone in a non-traditional direction and for a while so um i'm um i appreciate the compliment but i also and i also appreciate the recognition that this sorry it could be a hard job and the prep is um is fascinating because what i try to do i know if you try to do this but i try to think about a narrative arc for the conversation oh you know there's a tension between letting the conversation go where it might go and be spontaneous which people like enjoy it's like fun but i also have this sort of it not sort of i have this educational agenda i want your ideas to get out in the world and and i want to react to them and let listeners hear that conversation and learn from it and so i have an arc before i get started of where it's going to go it doesn't always go there but at any moment i'm constantly trying to decide whether i should pull it back and you listen to this conversation could hear me say that or we'll get to that later because i've been back in my mind i've got the whole thing mapped out but not literally i'm not literally going to just ask question after question because i need to stay a certain there's a certain flow in this back and forth if it goes well which is really special right uh and there are moments when you feel it and well let's let's um i want to close with um with the question that that you have asked a number of your guests which uh is a question i increasingly think about which is what advice do you have for the good life how to live well and that's a question that used to be at the center of university education it used to be at the center of what we once called without shame western civilization now you're not supposed to say that without shame but i i say it without shame i think it's the central question of of huma human existence i think it's the central question of that any person needs to confront as they at least as they grow up and it may not happen until they're in their older years but uh and it's hard to think of when you're younger but i think that's the central question and i'm curious what you may have learned in asking that question and what you yourself think is where you what you've learned in heading toward an answer to that question yeah let me back off that but one one level which is i think there's something society two things society could do in education that would make it easier for people to live good lives and so um i think one of those is i i think we i think we make a real mistake in in the educational system by not giving um mental health topics a place in our curriculum so things like everything from you know how to deal with trauma to kind of what you might call mindfulness or something to to thinking about how conflict resolution i mean there's just a bunch of stuff that for whatever reason we don't think of it as things that schools could do maybe because they can't do them well but um but if i think about the practical things that students the kids could be taught that would make their lives better um it seems to me that's right at the forefront and i think it's only historical accident that we we don't teach those things in school so i think society owes its we society owes it to our next generation to start doing that now completely on the flip side i think it's the same with data so it's like completely like it seems uh opposed but like i think i think society owes it to our next generation of students to teach them how to think about data and use data because data are so important i think so i think our schools are failing on these two completely different dimensions which is that by the archaic curriculum we're teaching uh is not teaching kids how to function in the real world and function in the real world number one these like mental health tools i think could be really powerful and number two i think data is just so important and and it's like crazy that what we teach in math class and uh when we could be teaching kids sort of the rudiments of data i think it's a real disaster can i comment on that before you go to the next point which is uh i went to my first mindfulness meditation retreat when i was i think 60. waited a little late uh it was transformative in many ways and and um it is a challenge to teach that well i think it's taught badly in many settings so i think that is part of the problem but teaching people to be self-aware about their own psychological quirks uh i wasn't prepared for the psychotherapeutic part of the retreat which was embedded in the silence of that retreat and i think it's incredibly powerful and it's part of going back to western civilization uh the unexamined life is not worth living is um said socrates and he he was onto something um on the on the air on the question of data uh my wife's uh a high school math teacher and um when she has come home and told me how much statistics they've put into the curriculum and how much is being put into curricula elsewhere around the country it's kind of frightening so i'm very sympathetic i think i think it's incredibly uh important that we teach young people about uncertainty and risk and how to think about data in that context the work of of sim nicholas taleb comes to mind as someone who i think has certainly helped me think about risk in a way that i was not able to do despite a phd in economics and i think those basic some of those fundamental ideas are very powerful but unfortunately what actually happens when we say i need to teach people about data it's like oh great well let's teach you what the mean is and we'll show them how to run a regression using a statistics package and you know it's like saying uh people should learn about how to deal with money oh that's a good idea well let's have a stock market contest he's like don't do that that's the last thing you want to do anyway so i just i just want to react to that you can react to that back or you can move on to the good life if you like no look i think both i agree it might not be easy to do data or um or kind of mindfulness but but to punt on it uh or to do what we're doing now it just seems like a mistake okay let's go back to the individual so um i mean life is an arc and i have a so i have a few like simple things that i believe to be true um and one of them is i i really believe based partly on data that people get stuck in the status quo a bias too much that that people don't make changes they should and um and that simple advice i give to everyone is that um if you really are stuck if for like a month you've been like you wake up in the morning and you ask yourself god i i really feel like i should end this relationship i should quit my job and and months at a time and you you just can't pull the trigger almost for sure the right answer is you should pull the trigger and um i've done actually an impair like a randomized experiment where i had people flip coins over it and um and i think it's just it it just in both the data and the intuitive story makes sense which is that a lot of the costs of change are up front and many of us are hyperbolic discounters or our our fear change but so i i think one good rule for living a good life is that if you're really stuck that um to to have faith that making the big change is likely to be the right path uh right course um the the other thing that as i've gotten older i've come to understand is that life is long not short i i was always in a hurry i think and i always feared that if i took a step off the path that that it would be it would be disastrous but i've looked at so many people who are wildly successful and it's often the steps off the path i think that have been the key to their eventual success and and the way they go and um and so i kind of you know i i'm much more tolerant with myself and with others of not being in a hurry of you know like you know i got my phd in three years which wasn't a good thing or a bad thing you know i just did it but like that was like the goal was like i wanted to get stuff done and i think there's um that there's uh that is a youthful mistake that i think um but i think you were gonna react to something about that no go ahead no okay keep going um and what else you know and i i still think so i've always believed that it's really important to have fun and to do what you like along the way but um but i also think that um people need to be realistic about that that um you know most of the time you know doing the thing you love doesn't lead to anywhere particularly good and mostly where it leads to is not loving that thing anymore by the time you've you know done it for a couple years and that's the part about going slow which i think is okay right so i think it's okay to say look i'd like nothing more to be a rock star and then to go and to try and be a rock star of course you're not going to be successful because no one's successful you know with a few exceptions okay that's where if you have if you listen to my other advice which is look when you're not sure if should be a rock star anymore you've got to stop being a rock star where you really hurt yourself it's where you start being a rock star and then you never stop trying to be a rock star even though the writing was on the wall a long time before that and then the last thing i would say which is something that i've always tried to do but much more so now than before it's just like human i think there's a lot of value in human decency in being able just like trying to be nice to people and doing the right thing and not not necessarily even because it's good for other people but just because it's just easier to live your life if you um kind of have a rule where you try and be nice to people and you give people the benefit of the doubt and stuff now i've just found it easier like being a jerk's hard work uh it takes a lot of time and effort and but just trying to be thoughtful and you know still you say no i mean i say no to people a hundred times a day but um but i err on the side of um you know offering a compliment when i can or or or telling people when i think they've done something well and and to me that's uh you know or trying to help out somebody young when i don't have to um i don't know i get i personally get a lot of satisfaction from that my guest today has been stephen levitt steve thanks for being part of econtalk ah my pleasure thank you this is econtalk part of the library of economics and liberty for more econ talk go to econtalk.org where you can also comment on today's podcast and find links and readings related to today's conversation the sound engineer for econ talk is rich coyette i'm your host russ roberts thanks for listening talk to you on [Music] monday you

Channel: EconTalk

Views: 5,024

Keywords: Steven Levitt, Russ Roberts, EconTalk, University of Chicago, People I (mostly) Admire, podcast, Freakonomics and the State of Economics

Id: VBazh3R5Wa8

Length: 93min 14sec (5594 seconds)

Published: Mon Nov 09 2020