Russ Roberts

Michael Munger on EconTalk's 500th Episode

EconTalk Episode with Mike Munger
Hosted by Russ Roberts
Psyching Ourselves Out... What color is your unicorn?...

500b.jpg Michael Munger of Duke University makes his 29th appearance on the 500th episode of EconTalk alongside EconTalk host Russ Roberts. He talks about his personal intellectual journey, his interest in public choice, and Unicorn economics. Other topics include the origins of EconTalk, Roberts's intellectual roots, and the EconTalk theme music. The conversation closes with a brief reprise of a few highlights from past Munger appearances on EconTalk.

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Podcast Episode Highlights
0:33Intro. [Recording date: October 29, 2015.] Russ: This is a special episode of EconTalk. EconTalk is part of the Library of Economics and Liberty, which is sponsored by Liberty Fund, which is an educational foundation in Indianapolis, IN. If all goes as planned and if we've counted correctly, this is the 500th episode of EconTalk. And it's sort of the Indy 500. I want to thank the Board of Liberty Fund, its leadership, its staff, for all their support along the way. I want to thank Rich Goyette, my sound engineer, and Lauren Landsburg, who is the Editor of the Library of Economics and Liberty; and she's also is taking care, has taken care of all the technical parts of EconTalk--getting it on the web, the Highlights that many of you rely on, and she's been a great adviser as well as over the 9+ years that I've been doing this . And finally I want to thank Amy Willis at Liberty Fund, who is working to make EconTalk's next 500 episodes even better, with the extras that we've added. Please head over to and join the conversation there. Just enjoy the follow-up material that we've been adding. Now, one of the greatest things about Liberty Fund is their devotion to quality and excellence. All 500 episodes are still available on the web, without charge. I know there are some of you out there who have listened to all 500. Which blows me away. A lot of people will email me and say, 'You should have so-and-so on the program.' And often we already have. So, go to and you can find all 500 episodes.
2:08Russ: To commemorate this modest milestone, I thought I would get a very special guest. Unfortunately, I was unable to reach my first choice, as I could not get ahold of either Adam Smith or F. A. Hayek. So, I've been forced to settle for Mike Munger. Mike, welcome back to EconTalk. Guest: Here I had goose bumps, you talking about the 500th episode; and then it turns out I'm your 3rd choice. Russ: Life stinks. I'm disappointed--you didn't chuckle at my Adam Smith joke. And that could have given a little bit of foreshadowing to the listeners, of who it was. But anyway: This is Mike's 29th appearance on EconTalk. Which makes he the Barry Bonds of EconTalk guests. But I don't think he's much of a steroid user. So I'm going to call him the Wayne Gretzky of EconTalk guests. It's especially appropriate because Mike is so far ahead of the second place guest in career appearances. So, if you look at Gretzky in points, it's a big gap between him and number 2--which I think is Gordie Howe. Anyway: Our topic for today--well, there isn't one exactly. But I thought we'd talk about our intellectual journeys: how we got here. And look back on some of my favorite episodes with you and some of the ideas from those episodes. And encourage readers and listeners to go back and listen to those. And some of the things that are going on in the news that are relevant and related, some of those issues that came up. I want to start with you, Mike. And we've agreed in advance that you can occasionally can turn the tables on me and me personal questions. So, I'm going to start with you, though. I'm curious in your intellectual journey, who your influences were as an economist and thinker. And if that's changed over time, when you were, say, coming out of graduate school--an assistant professor. According to Wikipedia, you are about 4 years younger than I am: so we are pretty close, though--in [?]econ, 8 years. So, I'm curious who your influences were, and if they've changed. Guest: Well, I went to graduate school at Washington University to study macroeconomics with Hyman P. Minsky, the famous post-Keynesian macroeconomist. And that lasted about a week. I was taking his class, and I thought, this is really not just for me. And I was fortunate enough to have Barry Weingast, Ken Shepsle, and Murray Weidenbaum, all of whom were the most important influences in me in different ways in graduate school. I worked as Murray Weidenbaum's research assistant for two years after he came back from being the Chair of the Council of Economic Advisers for Reagan. And I guess if I had to pick one person, Murray Weidenbaum would be the one that I most admire for being able to balance having serious intellectual interests, careful work, and yet is able to talk both to the media and to the public in a way that conveys not just ideas but passion about the way that policy can work and how it can work better. But Barry Weingast and Ken Shepsle turned me more in the direction of Public Choice. And for that I owe them a great deal. The bottom line was that I basically ruined in graduate school. Whereas you were a great success. I never got a job in economics. Russ: Well, it's interesting. For the uninitiated, you should define what Public Choice is and how that led to your strange career as a political scientist--with a degree in economics. Guest: Remember, I had only, ever--I had gone as an undergraduate to Davidson College. I majored in economics, but it was pretty traditional. And so everything that I knew about the academic field of economics I learned at Wash. U. And there, Public Choice was kind of the core of what many people worked on. I think most people would define Public Choice as being the application of economic reasoning to non-market phenomena. Particularly politics. And it has three elements. So, it has the assumption of individual--we start with individualism. We then assume that individuals act purposively. And then we say that people act in groups, but they use non-market institutions to do that. And James Buchanan called that 'politics as exchange.' So, those three elements--methodological individualism, the assumption that people behave purposively, and non-market institutions that nonetheless can foster cooperation--is what public choice is about. I thought that's what all economists did. It turns out that it wasn't true. I ended up getting a job partly through the help of Murray Weidenbaum at the Federal Trade Commission. Which was great. Then I taught as a visitor for a year at Dartmouth College in New Hampshire. But then I went to the U. of Texas in Austin. And they had a group of people in the Political Science Department that we would recognize as a lot of the leading lights of kind of Public Choice economics of the 1970s and 1980s. And that's what saved me--was being able to have basically a second graduate career--working with Gary Cox, Mel Hinich, and the other people who were at the U. of Texas.
7:36Russ: So, I want to just take a digression on Public Choice. If you'd asked me, 'What is Public Choice?' I'd have had a simpler definition. I would have said: It's a way of studying the world by assuming that politicians are just like everybody else. And I mention that--it reminds me of a time--I was speaking with a journalist; we were talking about--it was in Washington, D.C.--we were talking about politics and I mentioned Public Choice. And his reaction was, 'Oh, yeah, yeah, yeah, yeah, yeah, yeah.' Like, 'Of course they are.' And, 'Of course they are like everybody else. Of course they are self-interested and they look for their own re-election.' And then he proceeded for the next 45 minutes to forget how he'd started the conversation. And one of the things I've learned from you--one of my favorite things--is one I think of as Unicorn Economics. And I'm really--I'm dragging you away from the U. of Texas here. But in the session that we did with Robert Skidelsky and Richard Epstein, a live version we did, I think it's called 'Capitalism, Government, and the Good Society,' you used the parable of the unicorn. And I wish--I want you to give that, over; and then I'll go back to my journalist-having coffee. Guest: Heh. Russ: If you remember-- Guest: I remember it well. Of course. I'm afraid, because I also reprised it in my book, The Thing Itself. Because I think it can't be said often enough. And you've just given an illustration of why. People will concede that the State is different than they imagine and yet they still go with the State that they can imagine. And that's what the Unicorn parable is about. So, I start with the idea that it would be really great if we could use unicorns to pull buses and use them for mass transit. And the nice thing about having unicorns for mass transit is they eat almost nothing except rainbows. They can carry a whole lot of cargo--so they are strong. And the nice thing is, the emissions--because their flatulence just smells like fresh strawberries. So, if a bus goes by, you'd say, 'Oh, that must be driven by a unicorn. It's quite pleasant.' Now, the difficulty with this is some people might object: 'Oh, but unicorns don't exist.' And of course, that's wrong. All you have to do is close your eyes. If you close your eyes and I close my eyes and the listener closes her eyes, what we see in our minds' eye is actually probably almost the same thing. Mine is pink--my unicorn is pink. It has a white horn and it's surrounded by rainbows. So, perhaps it's lunchtime. But what that means is, unicorns actually exist--they just exist in our imagination. The difficulty is, many of us think of a state or our politicians in terms of what we can imagine. And so, I try to get my students to impose what I modestly call the Munger Test, which is: If someone says, 'Well, I think the state should be in charge of that,'--and that's probably what the reporter that you were talking to did: The State should do this; the State should do that--stop them and say, 'All right. Let's see. Let's take the word 'state' out of there and put 'politicians I actually know, elected by voted and interest groups that actually exist,' and see if you still believe it.' So, large groups of people should be in charge of regulatory policy on entrepreneurs. Well, the State should be able to do that. But I'm not sure that interest-group dominated politicians should be able to do that. So, the problem is: We always imagine unicorns. And if you can get people to recognize when they are using a unicorn--and this is--and we said this when we were talking to Robert Skidelsky--our side does it, too. Russ: Oh, yes, we do. We [?]have our own[?] unicorns. Guest: We definitely have our own unicorns. So that, all we have to do is leave it up to the market. There's plenty of ways to screw things up. Adam Smith had a very sophisticated understanding of the good side and the bad side of markets. And in some ways I think we've come away from that, in our attempt to defend markets as being perfect. So, the bottom line of the unicorn story is: Stop defending markets as being perfect. Recognize that Public Choice shows us there's a lot of problems with the State. And that really is a summary of my intellectual journey--is to reach that conclusion: Stop talking about markets so much as being perfect. Although I enjoy that. As listeners know. We often talk about the way markets work. What's really interesting is to investigate the way that politics and the State screw things up. And so my most recent paper in Public Choice is called "The Anatomy of Government Failure,"--I'm trying to catalog the ways that different states, analogous to markets but in different ways, would require unicorns to work property.
12:34Russ: So, I was on Twitter yesterday and I got into a long and lengthy back and forth with a bunch of folks about a regulatory question: this is very irrelevant[?] for us--so, there's some issue, I don't remember what it was, whether it was about brokers in financial markets should be regulated and required to do certain things to please their customers. And I don't remember the exact details. I wasn't so interested in that. And I didn't know those details. But the willingness that people had to say: 'Oh, this would be better because it will help people who will be ripped off by dishonest brokers'--and so, financial people--so one of the people I was discussing this with was a professor. And I wrote back and I said, 'Do you think that the government should regulate the quality of education to protect your clients, your customers, your students?' And the professor wrote back and said something, 'Well, what would be the issues?' 'Oh,' I said, 'There's asymmetric information. There's a real big principle-agent problem. And there's a monitoring problem--so, you don't want to really want to spend as much time as you should, probably, creating papers and giving office hours and preparing your lectures; you'd rather spend more time on leisure or on your research. And I think there should be a government body whose job it is to correct those failures.' And there are big failures, by the way. We can debate where they come from--whether they are market based or government regulatory based or whatever. But college education--professors don't serve their students particularly well. Another way to say it is they could certainly do it a lot better. Whether they should or not, whether we want to live in a world where they do or not, those are different questions. But the idea--forget that. Let's just ask the question: Would a mandate of certain requirement--quality preparation, making sure that the syllabuses are well-designed--would that improve or hurt the problem? And I don't know the answer to that, of course. But it should be apparent to anybody who is thinking about it that there is a cost to that that has nothing to do with whether it is well-designed, perfectly designed--it can't be perfectly designed. But there's a cost in just complying; and how people then respond to however the law, legislation is actually drafted, they'll respond to that mandate. Not the one you might have in mind when you designed, came forward, and supported such an idea. Guest: Yeah. That's a much more sophisticated critique. And I think it's worth making. You are certainly right. It really astonishes me how many people don't even take the first step and say, 'I want to criticize markets as they are with a state that I can imagine.' Pointing that out is pretty easy, to get them to say, 'Yeah, I see what you mean. Yeah, that makes sense.' Russ: But the thing I want to push on, and this is just something I've learned as being the host here and forced to think about education and think about what people remember, and many of the books I've read and the people I've talked to--and that is this idea that there are concepts that are apparent and easy to define but hard to absorb and use. So, I learned this actually first from--I had William Byers on. He's a mathematician--I don't know, maybe 4 years ago. And he talked about the word 'randomness.' He said, 'It's easy to define randomness. But, you could spend a lifetime understanding it.' And I think that's true of so many things. And as I get older I find that the deepest things that I know are things that I knew 20, 30, 40 years ago. But I know them in a different way. I see them in a richer way. And I remember them in a richer way. So, when I talked about public choice with that reporter and he was dismissive--'Oh, of course we all know that'--in fact, he was insulted; his view was, 'That's my job. My job as a reporter is to be cynical about politicians. And you're telling me?' And yet, somehow it wasn't in his bones the way it was in my bones. He hadn't absorbed that lesson. He still had some Unicorn thinking. And I think the same is true for our side: people who are in favor of getting government out of certain areas often presume that everything is going to be great when that happens. And I'm happy to concede; and I think we should concede, as honest people, that many times it doesn't come out great. It just comes out okay. Or maybe sometimes not so great, but better than an alternative. Or maybe worse than an alternative. So maybe it's not the right solution. So I just think it's very easy to hand-wave away deep ideas that--they don't go in. And it takes a lot of thinking; and it takes a certain prep to be ready to absorb them. Guest: It is nice, though, to be able to summarize things simply; and it's sometimes deceptive. The definition of 'public choice' that you gave was the one that Alistair Cooke actually used to describe the Nobel Prize that was given to James Buchanan. So, in his Letter from America on the BBC (British Broadcasting Corporation), he said that 'Public choice embodies the homely but important truth that politicians are, after all, no less selfish than the rest of us.' Well, that--the reporter nods okay. But understanding the implications of that is very difficult. I have to say, from my own part--and this is kind of embarrassing--I first met James Buchanan in 1983, I think. And I would say that I fundamentally understood James Buchanan's work in about 2008, maybe 2009. It took me forever. Russ: And now you get it [?] pretty well. Is that 25 years? You say 1983-2009? Not so bad. 26 years. Yeah, I think that's a perfect example. 'Oh, I know what he says: He says politicians are self-interested, like everybody else.' Well, thinking about the implications of that is a lifetime project. And then some. And I view--there are a whole bunch of concepts in economics that are like that.
18:59Russ: I'm going to drag you back to the U. of Texas now. So, when you were younger, your influences--your living influences--were people like--that you mentioned, Murray. And I was a colleague of Murray's at Wash. U. (Washington University in St. Louis). I think there is a picture of Murray in the dictionary next to the word 'gentleman.' I mean, he was the most civil and courteous and pleasant intellectual maybe that I've known. He just was a very gracious human being. Which is unusual. Guest: I recognize what you're saying. I do fall short of him in many ways. But still, I would like to be something like that. Russ: Something to strive for. Just an unusually gracious and modest man, given his resumé, is the way I would describe him. So, you mentioned some of your living influences. Are there any larger-than-life or past folks who influenced your thinking when you were younger that you want to mention? Guest: Well, the person that most influenced my thinking, probably from reading--nothing but reading; I never met him--was Milton Friedman. So, Milton Friedman's ability--and again, this is something where my appreciation far exceeds my own grasp or ability--but Friedman's willingness to participate in debates and his desire, really, to try to mix it up and persuade people, sometimes by granting their premise--in a way that some people on our side would find really upsetting. So, famously Stigler and Friedman wrote a piece on price controls. And in it, they said something about inequality: if you want to solve problems of inequality, price controls are a terrible way to do it. And people went nuts. Because they said, 'How can you say that it's okay to want to solve those sorts of problems? That's socialism.' Well, no. The answer is: Even if you want to do that--I'll grant your premise--price controls are still stupid. Price controls won't even achieve their object within the logic of the approach that you are advocating for. So, that, for me, was the particular genius of Friedman. And I sometimes will go and read stuff that he's written or listen to the two podcasts that you did with him to try to get tips on ways to win debates--really, with philosophers. And the tactic of granting a premise and then showing that their conclusion still doesn't follow is enormously effective. And very upsetting to an opponent. Because if you deny their premise, well, we just disagree. But no: 'I'll grant your premise and here's where you're still wrong' is terrific. Russ: Yeah. What I like to do is go back and watch the old videos of him from the 1960s or 1970s when his interviewers would insult him, be condescending toward him, mock him, be disdainful. And through the whole thing he smiles-- Guest: Unshaken-- Russ: So confident. I'm not that confident. And I'm not that happy. It's a tremendous advantage. He's cheerful. Guest: Well, I'm not going to speak for you, but I'm not that smart. So that's a big part of the reason.
22:16Russ: So, I was just going to list my early influences-- Guest: Please. Russ: and how they've changed. Because I think it's interesting. Well, let's stick with you for a sec. If I asked you today who your influences are, have they changed much? Or do those teachers that you mentioned, are they still the people who influenced the way you think about look at the world? Guest: Well, particularly Friedman and Murray Weidenbaum and Barry Weingast were the ones that I thought, 'Boy, if I could ever come close to doing that kind of work'--and of course I haven't. I never will. That's okay. But I would say that the greatest intellectual influence that I have now is James Buchanan. And it's partly because it took me so long to understand the full implications of the combination of, politicians are self-interested, but we still need to try to do things together; and we need institutions that are not primarily markets. Prices don't work very well in some of these. But the state doesn't either. And so, what institutions can we design? What constitutions can we design? And as you know, because we did a podcast about my most recent book--that really is what interests me now: the work of James Buchanan. Russ: You're talking about [?] your time about Choosing in Groups. Guest: Yes. Russ: So, one other thing I want to ask you about in terms of the arc of your career. When you and I were--I think this is true--undergrads, roughly, or in grad school--and I mentioned this before--there really were only two economists, maybe two and a half or three, who had a voice that reached the public. So, Milton Friedman and Paul Samuelson alternated columns in Newsweek Magazine. And for our younger listeners, there used to be two magazines that people paid attention to. It's hard to believe. Guest: There used to be magazines. Russ: Yeah, that, too. I think Newsweek--Time still exists--well, anyway, Time and Newsweek dominated the news, the print news magazine world. The longer frame, as opposed to the daily paper. And the third that you could mention was U.S. News and World Report, which is a little stodgier and a little more highbrow. Which--it's kind of amusing also to think about--but Newsweek had, at the back, a column for an economist that was either Milton Friedman one week, and then it was Paul Samuelson the next. I say, 'two and a half or three'--you could throw in John Kenneth Galbraith. John Kenneth Galbraith--there are probably a few others--wrote books that people, for everyday people. But Friedman and Samuelson were really the only economists with a regular megaphone. Now we live in a world where there are hundreds of economists and non-economists with megaphones. How did you get interested in communicating to the public? And obviously--for those who don't know--Mike actually does things other than guest-appear on EconTalk. And even though he's self-deprecating about his resumé, he has a fabulous academic resumé of peer-reviewed papers and books and theoretical articles, empirical articles. So, you've had a very, very successful academic career--including Chair of the Political Science Department at Duke U. But you also have spent a decent amount of time caring about reaching a wider audience. So, talk about how that has evolved over your career? Guest: I was interested early on, partly because seeing Murray Weidenbaum navigate these two worlds so successfully; and so probably the first thing that I ever wrote that was popular was the one that was read by more people. I doubt that I reached as many combined, since. I had a Sunday New York Times Op Ed on trade policy, on protectionism, in 1983. And got hundreds of letters about it. And I found that experience intoxicating. I should say, though, that I went to graduate school largely because I had read John Kenneth Galbraith's book, The Affluent Society. Russ: There you go. Guest: And was--thought--this is right; we really messed this up. So, Jim Buchanan and I share a background of coming from very poor families, on having kind of a chip on our shoulder by feeling we weren't getting enough respect from what he was call--he was worse about it than I, you know, 'those rich boys.' But also having sort of--he explicitly called himself a libertarian socialist. I was a kind of libertarian socialist, in the sense that I thought somebody should help poor people. Now, it turns out that one really good way to help poor people is for them to have jobs. And one way for that to happen is to free up markets. But that's not an obvious thing. So that the evolution from reading Galbraith and saying we should care about the way society treats the poor, to moving to the view that I would take now, that poor people, given the means, will manage to find a way to treat themselves better, is the--I guess that's how I would summarize it. After I left the U. of Texas, I went to the U. of North Carolina in Chapel Hill. Which was your Alma Mater. And also that of my older son. Russ: Yep. Go Heels. Guest: Yeah. I'm still a Carolina fan. So, I've never converted to Duke, even though I've been there nearly 20 years. I was the Director, the dean, in effect, the master of public administration program. And we trained city and county managers. And that was fascinating to me, because city and county managers are pretty un-ideological people. They are mostly trying to make sure that fires get put out, that parks get mowed, and that the sewage gets cleaned up. That notion of the importance of public choice in a setting where you are just trying to have good government, I think changed the way that I think about a lot of things. And so my Norton book, Analyzing Policy, with W. W. Norton, which came out in 2000, is certainly my most successful book in terms of breadth of use. So, thank you for saying that I have a lot of academic publications. But I have a pretty confused academic record. When I say that I was interested in getting into debates and that I admired Milton Friedman, the most odd thing that I've probably done is that I ran for Governor of the State of North Carolina in 2008. I ran as a Libertarian. But we did manage to get on the ballot. And I was in 4 televised debates with the real candidates--the candidates who had been nominated by the state-sponsored parties. And that was really something. So, actually being in a debate--I think most of us secretly think that we can dance and that we can cook and that we can win debates. Russ: Yeah. Guest: And we're probably wrong all three times, if someone's looking. But actually I have televised evidence that I'm not very good at debates. It's just that the others are even worse. Russ: Well, I don't know. We're in the middle of debate season here--we're in 2015, in the run-up to the 2016 Presidential election. And people play this very cruel game of criticizing and applauding candidates. Of course it's important, to some extent. But one thing I always think of is how hard it is and how little people appreciate how hard it is. Guest: It's so hard. Russ: They think: 'Oh, you just go up there and talk. What's hard?' Guest: You have 90 seconds. Russ: Yeah. And you can make a fool of yourself in less than 90. Guest: I so felt for Rick Perry, when he couldn't think of the third thing. He should have just gone on. But he froze up. And this is a very experienced politician. Russ: And you are talking about the 2012 elections. But that was--that's a small kind of mistake. It turned out that was a gaffe. It did hurt him. But just how to respond to criticism when the camera is on you is I think much more challenging than [?] Guest: The key, I now know, is to talk and smile without answering the question. Russ: Yes. That's huge. Guest: And my mistake was I didn't smile and I answered the question. Russ: Those are both difficult things to do, though--the smiling and the not-answering. It doesn't come naturally. Guest: It takes a skill. Russ, I'm sure that I speak for the listeners when I say, 'Enough about Munger. Let's talk about Russ.' Russ: One more thing before--the lines are lighting up right now. You're right. But we don't have any lines.
31:00Russ: Seriously, one thing I want to mention in talking about your outreach to the public: The governor thing is very interesting. When you look back on that--I'm going to say one more thing. I'm going to ask you about the governor and then I'm going to ask you one more thing and then we can talk about me a little bit. Was that--how fun was it? Was it scary? Was it fun? Are you glad you did it? Do you have mixed feelings? Was it a mistake? What are your thoughts now, 7 years later? Guest: Maybe the [?] why I did it, the simple answer is: North Carolina has really restrictive ballot access, and that parts of the law are designed to ensure that you arrive breathless at the starting line and have no chance of actually running. So, it takes $300,000 to get on the ballot, and then you have to get 2% of the race once you're on, of the election, once you are on. The problem with that is, once you've spent $300,000 raising signatures, you have no money left over to use for ads. And so 8 times, the Libertarian Party in North Carolina had gotten on the ballot but then failed to get 2%. I, because I'm an arrogant man, thought I could get 2%. But in a way, that's a pretty modest goal. And if you set your goals low enough, you can be a success, Russ. Your goals have been pretty high, and you've met them. I had the 2% goal. And if you define 2% as victory, I won that race: 128,000 misguided souls voted for me. Russ: So cool. Guest: And it was--I mean--when you say, 2.8%, okay, that's some. But 128,000 people voted for me. And that part of it was very satisfying because I got the Libertarian Party on the ballot in one of the states where the Democrats and Republicans had conspired through an obvious conflict of interest to prevent basic democracy from working. So that may be the thing that I'm proudest of, the individual separate things that I have done, was overcome that obstacle. Now Libertarians are on the ballot: we did it again in 2012, so we can run a full slate of candidates. It's not that we're really be able to win many of these races. But we can participate in the process and offer an alternative that embarrasses both the Republicans and the Democrats about the key parts of their platform that they've just forgotten--that they've conveniently forgotten. So, if someone like me is at the debate, I can raise questions and say, 'You know, you say this. That isn't really how it works.' So, I say the debate was difficult in that I answered the questions. The fact is, in a way, I'm their worst nightmare. Because I'm superficially glib; I have a Ph.D. in economics and I have no hope of winning. So I can say what I actually thought. Their job was to bicker. So it was fun--that part of it: the final debates and then getting the 2% that I wanted really was very satisfying. The previous year was terrible, because I and one other person would drive for 4 hours to western North Carolina and talk to a gathering of 5 people. Russ: Yeah. It's tough. Educating one person at a time. Or five. Guest: Or, in your case, thousands. Because you, in your intellectual development had the idea of saying, 'I'm going to do something on the radio.' Russ: We're going to come back to me in a second. I've got two more things--well, one of them is about me, but it relates to you. So, I've probably told you this story and I may have even told it on the program before, but I'll repeat it because it's so relevant. In 1976, I was--probably '75 actually, no probably '76, winter of '76--I went down to North Carolina with Roger MacBride's Presidential Campaign. A very modest campaign, but did have a plane. It was a DC-3 (Douglas DC-3), which most listeners will have never been on. I've been on a couple. That's a plane, by the way, that when it sits on the runway, it's at about a 45° angle--it's got three wheels, basically; it's a classical plane. And it was used for commercial airlines for a long time. But anyway, this was not commercial. It was a private plane. And its call number on its tail was N1776--or 1776N, I can't remember--but it was a very auspiciously-yeared number relating to an auspicious year. And we flew to North Carolina for a day to try to get MacBride on the ballot. So, I stood in front of a grocery store in Raleigh. And accosted strangers, saying, 'Would you like to help a Party get on the ballot that supports the ideals of Thomas Jefferson?' That was my marketing line. Guest: So, you've actually done that. You've been a solicitor for signatures. Russ: Yeah. And they--it was remarkably difficult. They had no interest. And at one point, my favorite encounter of the afternoon, was somebody said, 'Not interested.' I said, 'Why not?' I was sort of desperate and depressed and down. And he said, 'We have too many Parties already.' I said, 'Two? Two is too many?' Guest: Well, he may have had a point. There's plenty of anarchists who think that way. Russ: Yeah, it's true. Guest: I know that, Russ; that's trivia. Russ: Yeah, I know; it was a great experience. But before we get to me, I want to just mention that you've written many, many fantastic essays; and people who have not read them should read them. Your book, The Thing Itself, is great, written for a non-technical audience. There are parts of Choosing in Groups that are great, that you can read if you are not a technical economist. But my favorite piece of yours--I just want to get this in because it's so important--is the piece you wrote called "Everybody Likes Mikey". And if you haven't read it, we'll put a link up to it. It was on the Library of Economics and Liberty. If you haven't read that piece, you've missed out, because it really is an extraordinary well done piece on how markets work. Guest: I have to agree with you, Russ. It is probably the best single thing that I've written. Probably because it's short. But it also, it's laugh-out-loud funny. But it's mostly true. Yeah. Russ: And even though that sounds immodest, it's modest. You'll have to read it to figure out the joke there.
37:29Russ: Well, I'll talk about me for a sec. What's interesting for me--and I've had a very erratic career for an academic. I started off as a "normal academic." My first job was at the U. of Rochester. And coming out of graduate school, if you'd said, 'Who are your influences?' I would have said: Gary Becker, Milton Friedman, Coase, McCloskey, and Nosek. Those were the people who I respected, who had shaped my thinking, either as an academic economist to me, or as a philosopher--as somebody who was interested in ideology and interested in public policy. In particular--and I would say, of those influences, although Milton still is with me in certain ways, Deirdre McCloskey, who taught me price theory in 1976, Fall of 1976, had a huge impact on the way I think about economics as a set of tools for looking at the world, rather than a set of, say, equations. But when I think, now, because my career is headed in so many other directions--and getting ready for this interview I was thinking about what was sort of the turning point in my career. The turning point in my career for me, that changed my path, was, I was watching a documentary on Frontline--on PBS (Public Broadcasting Service)--about how Japan exploits America and gives us all the lousy jobs and is stealing all our jobs. And it was an utterly despicable and I thought awful bit of public policy analysis. And I think history has not treated it very well. Their vision. But at the time, I was stunned by the fact that at the end of that documentary--and this was in the early 1990s--at the end of that documentary, it showed a set of troops returning home from Iraq. And they said, 'We won that war. Why can't we win the trade war?' Guest: Wow. Russ: And, I got goose bumps. Even though I thought it was an awful argument, because I don't think trade is a war. I think trade is about mutually beneficial exchange. And I was so stunned that I was emotionally affected by an argument that I thought was wrong. And I thought: I'm going to do something like that: I'm going to make a documentary that makes the case for trade as a non-zero sum game--as a mutually enhancing human experience. And so, I wrote Milton Friedman, who I'd had in a non-credit class when I was at Chicago, right before he left Chicago. And he told me to get in touch with Bob Chitester, who he had made the Free to Choose documentary with. And I got in touch with Bob, and I met with him, and thought about making a documentary about trade. And then I realized: I'm not good at making documentaries. I don't know anything about it. I'm going to write a book. So, I wrote a book called The Choice, which was my attempt to explain the economics of trade for people who didn't know any economics. And that really has gotten me started on, impassioned about the idea, of reaching non-economists and helping them understand things. And EconTalk is the natural transition. What's interesting for me is that, along the way, I ended up getting a job at George Mason U.--which I didn't expect to. I was doing a bunch of experiential learning things at Washington U. in St. Louis's business school, the Olin School of Business. And I thought I had left academic economics behind. But George Mason, to my gratitude, hired me. And I fell under the influence of their department. And I would say, their influence, and people like them, have shaped who I am now in such a dramatic way, and so many dramatic ways--more dramatically than graduate school. So, people like Don Boudreaux, who I spent hours talking with. Arnold Kling, who is not at George Mason but who I think has a very novel way of thinking about things, a guest on EconTalk many times. You. I realize I've spent 28 hours, at least--and of course we've spent time talking outside of EconTalk. Dan Klein, who got me interested in Adam Smith. And all of them, including Pete Boettke, got me interested in Hayek. And I had, as I've mentioned before on the program--I'd read "The Use of Knowledge in Society" in graduate school. Nobody reads it any more, but at the time, that was sort of still considered required reading. And, I liked it. Nice article. And that was my James Buchanan. We've talked about this before. I've talked about it with Vernon Smith--that you can read that article three times and still have plenty to learn from it. And so, I'm surprised at how much of my modern, current way of looking at the world comes from people I've either interviewed at EconTalk or hung out with at George Mason. Guest: I think--one thing that many of us would like to know--and I speak now as a fanboy--is: How did you have the idea, specifically? You said it led naturally to EconTalk. In one case, you wrote a book: it was very successful. It was very successful. That book has sold more than everything I've ever written, combined. The one book, The Choice. So, why would you think, 'All right. Now that I've written a book, I should basically do a radio show, using technology that no one understands?' And let me say, for the listeners, if you look at the first few EconTalk recordings, the name of the file is the name of the person; and the first one was Cox--it's 'Cox-underscore-Radio.' So, it makes sense: you think of this as being a radio. The idea of podcasting had just started in 2004. The first ones that you did, you were feeling your way. This was a new medium. And you were one of the pioneers of it. Russ: Yeah. I was--it was really incredibly fun. I got interested in it because somebody invited me to be on their program. And I thought, 'Okay, sure, why not?' I said, 'Well, how many people listen to it?' And they said, 'Oh, about 3000.' And I thought: 3000? Wow! I mean, there's like a huge auditorium of people who are going to come hear me talk? That sounds fun. That sounds like a good thing. So, I thought, I'm going to try this. I'll do one. I'm going to try it. I'll do one. And it [?] not hard--it would be--in fact the two things we worried about in the early days are kind of funny, now that we've been doing it for 9 years. The first was that we would run out of guests. Somebody at Liberty Fund said, 'You're going to run out of people to talk to. How many interesting economists are there?' Guest: Yeah. Actually, that's a fair point. Russ: It is a fair point. Because--we solved it in an unusual way. We interview a lot of non-economists, of course. And we interview some economists more than once. Guest: Yes. Yeah. Russ: But it is interesting. And I think, in the aftermath of the financial crisis, the interest in economics has grown so dramatically that there are many, many more people writing books for the public who are suitable for interviews. There are people interested in spreading their ideas. And willing to appear on the program, who otherwise wouldn't. So, anyway, I started the program, and I thought, 'Well, I'll do this every once in a while.' I learned pretty quickly--and I think it took about--it's in the first maybe 6 months of the program, I realized it had to come out every week if we were going to get an audience. And that--in the early days, we did 50 episodes a year. We took a week or two off at holiday season, and then we decided--I just decided--I'm going to put one out every Monday no matter how or what. I guess--I don't know how long we've been doing that for. Maybe 6 or 7 years, since then. And when we started, we had a few thousand--people asked me how many listeners we had. We get about 40,000 downloads in the first week of an episode right now. You say I've reached my goal: I think I've mentioned before I'd like to be at 100,000 or 200,000 for that first week. But we're at about 40,000, which is not bad. So, we've gone from a large auditorium to a small football stadium. I'd like to get to a large football stadium. I'd like to have 100,000 people listening. I'd like to be sitting at the 50-yard line in my comfortable armchair with you while there's 100,000 people listening. But 40,000 is really nice, listening out there. I so appreciate it. And I so appreciate hearing from you. It's by far the most rewarding thing I've ever done as an economist in terms of education impact. It's--my book--you say my book's outsold all your combined. Unfortunately, my first book outsold all my other books combined, too. Guest: Well, it's not unimportant. It's still a good thing. Russ: Kind of. Yeah, kind of. But in terms of--one of the reasons I left George Mason and am now full time at the Hoover Institution at Stanford is to have more time to expand EconTalk's reach, and to expand what it can accomplish. And I think we've got a long way to go, still, on--I think it's wonderful that people are listening while they walk their dog or brush their teeth or do the dishes or commute. And that's great. But a number of you out there want to really understand the ideas really deeply and not just be multi-tasking and listening at work; and you want to listen to it two or three times. I think you want to think--some of you would like to have some ways to check your knowledge. And I'd like to push EconTalk in that direction as we go forward.
47:33Guest: Well, I have some little questions that I'm sure people have wondered. I have debated this, and I'm hoping you can solve it for us. The music: How did you choose the music? Russ: That music was--and by the way, I've asked whether we should change the music. A lot of people would like to change the music. But those people have a solution. And I've met people who, they tell me they just, when they start EconTalk, they just skip 27 seconds or whatever it is they had. So they just skip the music; it doesn't matter. So, other people say, 'How can you change the music?' Guest: That's the Music. Russ: That would be an outrage. Guest: If you were to change the music for "Green Acres" it wouldn't be Green Acres any more. Russ: Exactly. Or Gilligan's Island. I mean, come on. We're dating ourselves. Badly, too. And choosing really awful examples. Guest: It was an infelicitous example. Russ: Yes, it was. Very infelicitous. A word we don't get to use that often. That music--it came from a video that I saw, that I loved. There was this beautiful video done that showed the pattern of takeoffs and landings in, I think the United States, over the course of a day--the takeoff and landing of airplanes. And each--it showed a map of the United States, and each takeoff and landing was a white line. And it unfolded in real time. So, what you saw is that the flights started in, of course, the East Coast, in the takeoffs in the morning; and then the takeoffs got more common as they moved to the West. And each flight being a line of white light, the lines got very bright around cities, where there was more traffic. And I viewed this as a beautiful example of emergent order. Guest: Yeah. Russ: That, the--it's not just that there's more flights in cities. It's that the market, to the extent it's a market--it's obviously highly regulated--but it responds to people's desires to travel more frequently between certain places. And you could see that with your eyes. And it was kind of cool. And there was a sound track--the sound track for that video, if I'm remembering this correctly, was called 'Cleared Up Sunset'. And the creator was Yasuhiro Tsuchiya. And somehow I got ahold of him and asked for his permission and he said yes. Now, my first choice, actually--we didn't have music, I don't think at the beginning. I'll have to check that. But my first choice was actually the acoustic guitar opening of "If I Had a Million Dollars," by Barenaked Ladies. Which--my kids all know I'm a sucker for a good acoustic guitar, particularly folkie, finger-picking, but just even good strumming, which is what is the opening of "If I Had a Million Dollars." I just--I love that opening; and I love what that song is about as an example of economics. Which is, basically: Even when you have more money, you still have things to spend it on. That's just--you just get--you get gourmet ketchup. Design [?] ketchup. You don't just--you still have ketchup. You get Dijon ketchup, I think, is a line in the song. So, the insatiability of human desires is captured really beautifully in that song in a charming way. So I thought, there aren't that many songs like that. After that, you'd have to go with, "You Can't Always Get What You Want," by the Rolling Stones. But I thought it was a beautiful sound, but I couldn't get Barenaked Ladies' attention. Guest: Yeah. Russ: I tried. I tried for a long time. Guest: You could have gotten their attention by using the song without their permission. Russ: Yeah. In my dreams. Guest: That wouldn't have been the right kind of permission. Russ: Yeah. Guest: That would have been a cease-and-desist order. Russ: Yeah. I don't think Liberty Fund would have let me do that. I think I might have thought of that, but I didn't do it. But I couldn't get--I finally got their attention. I got their legal team's attention. And they were--it was one of these things where, 'Yeah, for $100,000 you can use it for 6 months.' And I said, 'Look, this is an educational podcast. I'm not Warner Brothers. Give me a break.' But they didn't. So: Thank you, to Yasuhiro Tsuchiya for the sound track of EconTalk. For whatever it's worth. Guest: I actually don't recognize it because I always listen on--I have a little MP3 player and I listen on double speed. And I wonder how many listeners do that. So, I listen to everything on double speed. I have to admit, Russ: Your voice sounds weird to me, because I'm so used to hearing your voice much higher and faster, listening double-speed. If you practice, you can actually get everything. And then it only lasts for half an hour or 35 minutes. And you can listen to two if you go for a long walk. But I don't recognize the music now because I'm used to hearing it so fast. Russ: That's funny. Guest: Well, at first, you didn't get many comments. So, I went back and looked at the first one. You didn't really have transcripts. It wasn't clear how comments were going to work. The first one that actually was commented on in any useful way was in July of 2006. And that was Robert Barro. And that one had 28 comments. So, was that a revelation? You may not remember. But it's interesting that there were enough comments there that there was a conversation. They weren't asking you questions. They were talking to each other. Did you then try to cultivate that? Because that's a sort of Web2.0 thing, where there's another conversation that's going on that you are fostering, but you are not really influencing. It's just you are providing a forum for the commenters. Russ: Yeah. I don't remember that. And I don't think we've done a very good job of creating that forum. I'm trying to find some new ways to allow those who are out there to interact with each other. That's why we've done some live events. I think it's nice to meet, face-to-face. And I want to find more ways to do that.
53:41Russ: It's funny you mention, though--I don't remember that episode--2006, looking here at the Archives. I want to mention--I don't know if I mentioned here at the beginning, but all 500 episodes are available. I did mention that. So, do check them out. They are somewhat embarrassing, because I think the early ones, I think I talk way too much. I still talk too much, probably. But I talk less than I used to. People would complain about it. And I took that complaining to heart. And I do try to talk less. But they are all up there. So, all my flaws are on display. I will say--and I see I've got Barro on Growth here. What happened was: People were very kind to me. The first EconTalk was Don Cox, an old, very good friend. My second, some guy, Mike Munger. Yeah, I don't know what he was thinking. And then we had Skip Sauer, Alex Tabarrok, Richard Epstein, Mike Munger again; I did a solo one, which I tried, which is an awful one. And then my first Nobel Prize Winner was Gary Becker. Gary was my Adviser, and he agreed to be a guest. Which was incredibly kind of him. And then of course Milton agreed later that summer. And, when I can tell people that so-and-so has been a guest--Milton Friedman has been a guest--they thought, 'Well, that's a club I don't mind being in.' Not that they wouldn't mind being in your club, Mike. But, Milton I think helped me a little bit more in the early days. And I think that was a big deal. Guest: Well, it's--you say, sometimes you talked too much. I'm not sure that's true. You got so much better at asking questions that now it just seems seamless, whereas before sometimes you could tell you were trying to think just what question to ask. So, the quality of your commentary now is really terrific. Often you still do have quite a bit to say. I wonder how often it had happened--and you may not remember this, and I don't know which one it was--but you and I were doing one--one day we got so mad at each other that we just quit and started again the next day. Does that happen very often? Russ: Oh, all the time. No, it doesn't. Guest: We weren't cursing at each other, but it was clear that it was just tense. And so, 'All right. We'll do this later.' Russ: I don't remember that, mercifully. When we get to number 1000--God willing there will be at least a thousand episodes of EconTalk--I'll tell some of the stories maybe, the backstory of what actually happened when I recorded certain episodes in person, which have happened that are amusing, embarrassing, frightening. Guest: There are bound to be out-takes. And of course the nature of outtakes is they are taken out. Russ: Yeah. But very few, actually. People ask me, 'Are they edited?' They are not edited other than--I lose my train of thought every once in a while; the guest almost never does. But every once in a while I'm trying to look ahead and see how much time's left on the clock, and trying to think about whether to ask a clarifying question; and I go blank and I tell the guest we'll edit this out. But most of it is what you hear. You and I had a disastrous one where I made some empirical claim--we're not going to go into it in detail, but I made some empirical claim that turned out to be false. Guest: The only drawback was false. It was very clever. It just happened to be false. Russ: Yeah. And I said, listeners out there, I said to Mike: 'This is a little bit awkward. I know it's kind of gauche, but I think my whole premise' [?] when we taped that--other than the fact that it was wrong, it was fantastic. But it was wrong. Guest: Yeah. It was a very interesting talk. Russ: Could we talk about something else? You kindly agreed to re-do it. But I don't remember the fighting one. Guest: It wasn't a fight. It was just tense. It was a little hinky. Russ: Is there anything else you want to ask about? Guest: You said 40,000; you'd like to have 100,000, 200,000. Have you thought of doing more live? Because the way that--a lot of these are live to tape, and some of them are live in person. But that's the sort of tradition with podcasts. The other way to do things is to webcast them, and to allow questions at the beginning. And it may have been--and it really was interesting to me to see that the titles of these were like 'Cox Radio,' 'Munger Radio' because the way that clearly you guys thought about it was this was kind of a radio broadcast that just happens to be recorded. Actually, the advantage of podcasts is they are available to people to download and listen to 2 or 3 times or whenever they want. Have you thought about trying to webcast, the advantage of which would be allowing people to ask questions real time? Russ: Yeahhh--I have a little bit. I've also thought about other ways we might have real live questions. I think that's a good idea. But the technological aspects of all that just don't thrill me. Guest: I think it's a different thing. And this works. Russ: People say, sometimes, 'Can't you get better audio quality?' I think we have really good audio quality. By the way, this episode, we are doing this on Skype, and we're getting a little bit of reverb and warbly sound with you, Mike; and unless you've got some kind of physical issue I'm unaware of--I think you are okay, right? You are okay? Guest: I'm sorry you had to find out this way. Russ: But if you hear that, that's just a bad artifact that comes from using Skype. We do these--there's no studio. We're using--when you listen to an NPR (National Public Radio) podcast, they force you--not always, but most of the time they force you into their studios. Because they care a lot about the audio quality. I do, too. And we're doing the best we can. I think we're going to go to Skype in the future more often; I think we're going to have better quality. But I think that's a key, and a really important thing. I just want to say one thing about the audience size, when we get to 100,000. I'd like to get to a million. But the reason I pick 100,000 is that I know there are at least 100,000 people who listen to economics podcasts, of whom many of them just don't know about us. I mention there are two things that we worried about in the beginning: One was not enough guests. The other thing we worried about was that people wouldn't want to listen for an hour. And there are people who don't want to listen for an hour, obviously. Some people said to me, 'Radio is really short. Three minutes is a long time on radio.' And it is. It's true. Ten minutes is an eternity on a radio program. But what I wanted to do, and, if you are listening, what you want to hear is something a little more in depth--well, maybe not this week. Cheap shot at both of us. But you want a more in-depth discussion. And I often found an hour limiting. Guest: I've seen that in comments--I've seen commenters say, 'I wish you'd had more time to talk,' and it was an hour and 5 minutes. Russ: Correct. And we did an early one with Bruce Bueno de Mesquita that went 80 minutes--an hour and 20 minutes--and people complained because they couldn't write it onto a CD. They had an 80-minute CD and it was too long for that. So, I sort of made a mental note that a little over an hour is okay; 80 minutes is too long. But the sweet spot we've been shooting for is about an hour. And I'm really happy with that choice. I love the opportunity to talk to interesting people every week, smarter than I am, and ask questions and learn new stuff. It's been a really extraordinary intellectual experience for me. Guest: Well, I've said, and you've scoffed at this but it's true: The quality in the last 2 years has been so great that I'm intimidated. I really think I need something better to say. Russ: Oh, yeah; you better study up, Mike. Do some research. Guest: This has really been great. I look forward to Mondays and I know that a lot of people look forward to Mondays because that's the day that a new EconTalk podcast comes out. When did you start saying, we'll talk on Monday? Russ: I don't know. Guest: Because I love that. That's great. Russ: And Lauren Landsburg, who I mentioned on the technical side--she puts it up every Monday morning, 6:30 a.m. Eastern Standard Time. So my joke is: You want to live on the West Coast, because you get it earlier. You get it at 3:30. It's a fantastic deal. Or Hawaii. So, if there are any Hawaii listeners out there, I'd love to know if you're listening at 12:30 or 1:30 a.m., whatever time in Hawaii they come out. But it's 6:30 a.m. on the East Coast, in America.
1:02:17Russ: I don't know if it's gotten better. I've gotten--many people are not happy, and some are very happy, that the show is, the guest list is a little different, I'd say, today than it was 4 or 5 years ago. Four or five years ago we did a lot of shows in the financial crisis, on monetary policy. And I'm just less interested in those things. I'll still do some. There's still some books being written I wouldn't mind talking to the authors about that relate to the financial crisis or monetary policy. And we'll continue to talk about those. But they do not dominate the guest list the way they did in the past. And some people are disappointed about that. But, you know, I can't keep--it's not interesting enough to me. I won't do a good job. So, we've widened it a little bit since then. Guest: Well, part of what's nice about EconTalk that I really admire is the way that you sort of take us along on reading a book or talking to someone that you're learning something from. And you're pretty honest: I didn't know that much about this; I really learned; here's the thing that I thought was most interesting. And so we get to free-ride on that kind of journey of discovery. That, to me, is the thing that, maybe 6 years ago wasn't as present, and now it's there almost every week. So, way to go! Russ: That's kind of you; and I hope that's true. I want to--do you have anything else you want to ask about EconTalk before I-- Guest: No, I don't. Russ: Good. I want to just close--we're over an hour, but I want to close with just some classic episodes that you and I have done, things I've noticed in the news in the last month. We've done a lot of episodes on price gouging and price controls. And the story that's been much talked about is the generic drug company that's selling drug doses for $750 and the venture capitalist who is behind that--got a lot of criticism. And I couldn't help but think about our past episodes, but in particular the fact that: Why wasn't there competition for generic drugs? And now I think it turns out somebody is going to produce it for, I think, a dollar a dose--a slightly lower price. What's not clear to me, and I don't know if you are up on this, the FDA (Food and Drug Administration) evidently makes it a little challenging for generics to just enter and compete. But this pre-existing company is going to do this through this some--I don't know exactly. Have you been following the story? Guest: Well, they bought a license to produce it. And it is generic in the sense someone else could. The market for it isn't that big. But the people who buy it really, really need it. And so the economies of scale are such that nobody else might enter. The interesting question is: Would we expect people to just not to act this way? Because it seems pretty egregious. The guy who was the CEO (Chief Executive Officer), who is the CEO of this company, just flaunted the fact that, you know, 'Nobody can tell me different; I'm going to charge the highest price that I can get.' It meant that a lot of people had trouble affording any. But he got a whole lot more as a result. The difficulty does seem to me the restrictions that the FDA puts on what should be a generic drug. The difficulty was that the market just wasn't very big. So, this guy scored by making a correct guess. I found it pretty troubling. And this is something that you observed, that I now have pointed out to my students and actually used in one of the LearnLiberty videos: The solution to a lot of these problems is manners. It's wrong to act that way. Russ: It's the Smithian response. Guest: Yeah. But I recognize, said it, but you brought it home to me once, and now I see that happening all the time. You just don't act that way. And that person, if you really don't care--if you are a sociopath and you don't care about the views of other people, then we have other problems. Russ: Yeah, well I assume he didn't get invited to a lot of good cocktail parties. Guest: You can buy friends. Russ: Of course the other point is that a lot of the people paying the $750/dose aren't paying with their own money. They are paying with third-party insurance money or government money. So, it's a whole aspect of our medical system that we've talked about recently, as well. Now, about a year and a bit ago, we did a conversation on the Sharing Economy. It was one of my favorite episodes ever, and especially one of my favorites with you, because it really helped me crystallize my thinking on the role of Uber and Airbnb and others and how they compete with existing players. That market remains troubled. Those companies remain somewhat besieged by the regulatory world. There's been some progress in allowing them to have access to customers; and there's been some steps backward. Guest: That talk that you and I had was the reason that I'm now working on a book called Tomorrow, 3.0, because I learned so much in preparing for it. And I think the way to think about this, and a lot of people know this but not everybody does: In Northern France and Belgium there were people who used hand looms to make cloth, and they wore wooden shoes called 'sabot'--s-a-b-o-t. Well, when power looms came in, they would throw those wooden shoes and break the gears in the power looms. And that was sabotage: they were sabot-eurs. Russ: That is the coolest thing. It's not the coolest thing. But it's the coolest thing to explain that. Guest: The economic interest led them to sabotage what we as economists would say, 'Oh, everyone is better off.' That is so not true. It is not true that these innovations make everyone better off. There is a lot of benefits. But there is a lot of harms. And so we're going to continue to see sabot-age of exactly this kind. People are going to turn, lift cars over; they are going to make it more difficult to have Airbnb. The economic logic of it is irresistible in a way. But it can be delayed a long time because of the concentrated economic interests that depend on rents that are created by the current system. So, this is a fascinating subject that will play out over the next 10 years. And it's interesting to see history repeat itself. The difference here is that it's not a new production process. It's a new way of selling reductions in transactions costs on software platforms. As Gavin Andresen has talked about in the times you've had him on-- Russ: Marc. Marc Andreessen. Guest: Yeah. There are two Andresens and it's pmarca that I managed. So, Marc Andreessen, with two 'e's'--he was the one who says 'software eats the world. Well, yeah, but people throw their wooden shoes into the gears, too. Russ: Absolutely.
1:09:14Russ: A last thing I wanted to mention is that we are recording this in the middle of the World Series. Neither of us has a horse in this race. Your beloved Cardinals and my beloved Red Sox didn't make it. But in the run-up to the World Series something happened that made me thinking of you, Mike, which was Chase Utley was on first base. It was a ground ball. He ran out of the base path and bowled over the Mets' shortstop, Ruben Tejada, and broke his leg. Broke his leg. Guest: Injured him. Russ: Yeah. Badly. And there was an enormous firestorm of criticism of him, and a view that he had done a horrible thing. And I'm just struck by how--obviously the reason there was some criticism was that he broke his leg. If he'd just broken up the double play, it would have been nothing; and plays like that every week in baseball. And there's an unwritten rule that you are allowed to slide out of the base path and try to break up a double play. And he was keeping that unwritten rule. In the keeping of it, he broke the guy's leg, so there was a firestorm. But there's a big outcry that they need to change the rule; they need to stay in the base path. And of course at home plate they've changed the rule. So that to try to reduce the number of injuries that happen at home plate when people try to score. And so, you did an episode on, I think it was on a book called The Code, about fighting in the NHL (National Hockey League) and various norms. And we broadened that to a discussion of norms in sports generally--but beyond sports. It's a fascinating thing how norms can change as we get richer; as sometimes a result happens as a result of that norm we just don't like. And it will be interesting to see how baseball deals with this. There was a big debate after that: whether the Mets were going to hit somebody in the head on the Dodgers' team as a punishment--and that they had to, because that was an unwritten, another unwritten rule. And this generated another discussion of unwritten rules. So if you are interested in unwritten rules, you should go back and listen to that. Mike just mentioned rent-seeking in terms of the sharing economy. He's got a fabulous episode on rent-seeking. And if you are wondering about Chilean buses, we've got that, too, for you. So, the Munger-oevre--or to give the more high-brow pronunciation, 'ooervreh'--the Munger-oevre of episodes is rich. This is number 29, and I encourage listeners to all 29. Guest: Well, and I want to thank you for all of those. And as I said, I had goose bumps even thinking about there being a 500th episode. This thing that you have done, that you have created out of nothing, that is now a social institution for so many of us, gives us value basically just for the cost of downloading the file every week. The fact that it's available for free and yet produces so much value is really a credit to your vision and what you have accomplished as a teacher and as an entertainer. Russ: I want to thank Liberty Fund and the vision of Pierre Goodrich, the founder, to allow it to be possible: that all you have to do is download that file. Because their commitment to economic education, the books they publish, the conferences they run, all, I think, help increase our understanding.

Comments and Sharing

TWITTER: Follow Russ Roberts @EconTalker

COMMENTS (55 to date)
David Scylla writes:

Congratulations on your 500th episode.
You're much appreciated by all of us listeners.
Mike Munger is the perfect choice for 500.
Thank You! to you and Econtalk and all of your guests.
Dave (Australia)

Jason writes:

Hi Russ,

Congrats on episode number 500! I started listening while at 'grad-school' in 2010. Don't think I've missed an ep yet.

Much appreciated and keep up the good work.


JRo writes:

Kudos to Russ for excellence and longevity.

Thank you, gentlemen, for another entertaining and informative episode.

Based on your comments on the origins of the word 'sabotage' it may interest you to know that the word has been borrowed by the Japanese to describe a slowdown or a go-slow strike. More strikingly, an abbreviated form ('saboru') is a verb which means to skip school or cut classes.

Felipe C. writes:

Thank you so much for doing the podcast all these years. I think the podcast has contributed to my intellectual development as much as anything else I can think of, and for that I'm certainly eternally grateful.

I do have a question that I hope you had addressed during this episode: In making 500 ep., you have had to read a great deal, to study on the work of your guests, to come up with questions, etc. The fact that you average just shy of one a week over this long stretch of time is remarkable. To do this, you obviously need to be incredibly efficient about how you use your time to read and study in preparation. Any tips you could share with us? Or perhaps, any insights into how your study and reading habits have changed over these 500 episodes?

David McGrogan writes:

I have been listening to Econtalk since, I think, 2008, and I may have missed at most 5 episodes during that time. Russ, you are a legend - thanks.

BZ writes:

Econtalk 500, woohoo! Thanks for making my Mondays bearable since 2008!

Doug Tree writes:


I also wanted to say thanks and congratulations on 500. I've listened practically every week since 2009 and have listened to pretty much all of the episodes in the archive, many twice. I'm always excited to see what Monday morning will bring!

Econtalk has truly shaped my understanding of the world! I'm a non-economist academic in the physical sciences, and I love the long-form discussion. There are so many science podcasts, but nothing I've ever found comes close to Econtalk in depth and what I can learn. (Maybe the "In our time" series from BBC, but I prefer the Econtalk format. Perhaps, if I get enough courage and an opportunity, I could try and steal your format for my field.) Also, as an academic, I love the perspective on education.

Finally, I wanted to second the question by Felipe C. How do you read all of those books?

Best Regards,

KS writes:

I have yet to listen to this one, but congratulations and a heartfelt thank you for all of your hard work. Also, Munger was the perfect choice for this episode.

Kevin Erdmann writes:

Thank you. This archive of conversations is a treasure.

l0b0t writes:

Thank you so much to everyone who works so hard to bring us this wonderful resource. I started listening in 2008 and I learn so much every week (Your lessons on emergent order have enabled me to put into words things I see all around me but had been unable to conceptualize for others.) while being simultaneously entertained, even on topics about which I thought I had little interest. Also, thank you to the commenters; there is at least one comment per episode that challenges my preconceptions and forces me to confront my own blinders and bias. Additionally, I too would enjoy hearing about your interview preparation regime (particularly in light of Munger's revelation about his double-speed podcast listening).

Günter Weinberg writes:

I also want to join in on the congratulations from Cali, Colombia. I've been an assiduous listener for a year now and have gone back as far as May 2013 to listen to past episodes. It is truly a podcast I enjoy listening to. Thanks a lot.

BZ writes:

At one point in this episode, Dr. Roberts was struggling to explain the phenomenon of someone stating some principle they believed, and then not applying it in their very next thought. Well, "undisciplined" is the word he was looking for. Economic Thinking requires a kind of focused disciplined thinking. Why that is would make an interesting podcast in the future!

Greg Linster writes:

Russ and the EconTalk crew,

Thank you for making this program so wonderful and interesting!

As an aside, I lived in Hawai'i for much of 2014 and 2015 and have to inform you that I still waited until a decent hour on Monday morning to listen. EconTalk is fantastic, but it's not worth losing sleep over, at least yet.


Jim writes:

Congratulations n the 500th episode !

I have listened for several years and enjoy the podcast.

As to any new features, let me vote against any way for questions to come in during the podcast or at least put them to the end. It is very annoying in interview were questions from the audience are answer in the middle of the flow, mucking up the flow and logic of what is being discussed. Russ's questions are good and generally logically follow the path of the conversation well.

Keep up the good work.


David Brisco writes:

Like others, I want to thank you for the past 500 episodes. I think I have listened to most, as I was an "early adopter". Economics was not my field, but I now feel that I know as much practical economics as anyone (without all the boring statistics). I especially enjoy your programs on the problems associated with data interpretation in experimental work in the social and hard science.

I look forward to the next 500 episodes

Andrew writes:

Thank you to Russ and the whole EconTalk team! I listen to EconTalk on a daily basis and it has enriched my commute tremendously. After listening to over 1000 hours of EconTalk, can I get some kind of honorary degree?

I was hoping for a bit more talk of turkey carcasses in this episode or maybe Mike lamenting Cardinals' injuries, but enjoyed the conversation none-the-less!

Michael Byrnes writes:

Just wanted to say congratulations! I stumbled onto Econtalk in 2012 while looking for Scott Sumner interviews and have since gone through the full archive.

A few comments:

1. I like the length and Russ' interviewing style. These episodes don't really come off as interviews, but more like interesting conversations.

2. I like the selection of guests - all of the financial crisis related guests from a few years ago and all of the eclectic mix of guests now. (Though I do hope there is an upcoming interview with Sumner on his new Great Depression book). Over the years, there have been a lot of topics where my initial reaction was "That doesn't sound very interesting." but i always give those a shot and far more often than not I am glad that I did.

3. The past year, in particular, the selection of guests has been fantastic.

Edward Dentzel writes:

I'll be the geek and point out that the origin of the word, sabotage, is told in Star Trek VI: The Undiscovered Country. I wonder if that's where Mr. Munger learned it.

Michael Munger writes:

Edward Dentzel:

I have always thought the story of the "sabot" is a little too pat. It is certainly NOT obviously true:

It is possible that Star Trek VI is the source of the FALSE origin:

But then that's not geeky. That's just wrong! When I tell the story I usually mention that the story is contested. But now that I know that the "source" is Star Trek VI (there was a Star Trek VI? What is WRONG with you people?), I will certainly never tell that story again.

Jim Ellison writes:

Econ songs: "Tax Man" by the Beatles
Libertarian: "Won't Get Fooled Again" by the Who

lloydfour writes:

To Mike Munger, here is a blog post on the darker side of the sharing economy.

Jonathan Heywood writes:

Russ, congrats on your 500th episode!

I started listening in 2010 or 2011 and look forward to each new episode and enjoy crawling through the archives.

My favorite programs are on the topic of macro economics - and my next favorites are on growth theory and the sharing economy.

I've particularly enjoyed your podcasts with Milton Friedman. Milton Friedmam!! The episodes with Scott Sumner and Mike Munger have been especially stimulating.

I also hope you make it to 100,000 listeners!

Michael Byrnes writes:

Michael Munger wrote:

But now that I know that the "source" is Star Trek VI, I will certainly never tell that story again.

I agree with the reasoning. But, FWIW, I think Star Trek II or even IV would have been fine as a source.

Shayne Cook writes:

Russ and the entire EconTalk Team:

Congratulations on 500 - and Thank You!

I have been a listener for years and am now finally compelled to comment.

First, as an eye doctor/business owner with no training in economics, I am also one of those who look forward to Monday mornings specifically so I can listen to EconTalk while running, driving, etc so I can try and learn a few things. I can say that EconTalk has dramatically changed the way I think and process the news of the day.

Second, your audience is certainly large, diverse and intelligent. I regularly lurk on the comment sections, but am surprised at the low level of discussion. I certainly think at that a "forum" type discussion board would foster more discussion by providing a more cozy "home" for listeners.

Third, I have produced podcasts on various subjects since 2010. While I understand it might feel "gimmicky" and not fit the tone of EconTalk, there are simple things that can be done to increase engagement and listenership.

Best of luck for the next 500 episodes!

Joe writes:

Thanks so much for EconTalk, which I discovered last year. Having listened to all the current podcasts, during my long commute I've been making my way through the earlier ones and have gotten to 2008. Russ, your reasoned, good-natured approach and your generosity of spirit is really wonderful and I always look forward to hearing your voice.

Out of intellectual curiosity, I wondered whether you would consider doing an episode with Michael Pettis. I know he is a self-declared Keynesian (but I suspect not of the vulgar sort) and a devotee of Hyman Minsky. But perhaps because I trained as an engineer, I love that his predictions and analyses result from a model and I really like his presentation of accounting identities as they pertain to trade between nations. It would be very interesting to me and I suspect others to understand where your views might overlap and differ.

Karin Aaen writes:

Keep the podcasts coming - I love learning from them, and often get a good laugh too. I tried listening to this podcast at twice the speed (MM's suggestion) - but prefer the "normal" speed.

E Burris writes:

What, no mention of rap videos based on the ideas of John Maynard Keynes and F. A. Hayek? With 5 million plus views on YouTube. There's your stadium of listeners.

Trent Whitney writes:


Congratulations on your 500th episode, and for making so many people actually look forward to Monday mornings! Yes, I've listened to them all and am looking forward to 500+ more (am still looking forward to a discussion between you and Bill James, if it can ever be arranged)!!

Luke J writes:

My respect and to Russ and the Econtalk team for reaching this achievement!

500 episodes! Speaking of infelicitious...At this rate, you will soon have more episodes than The Simpsons, and in much shorter time.

Michael Munger writes:

Karin Aaen: It take practice. And I'm trying to fit one podcast into two dog walks, which takes almost exactly 40 minutes. If I had an hour I suspect I'd go at normal speed also. But now I've been listening at the fast speed so long it has improved my ability to hear conversation from people from New York. Being a southerner, I could never speak "Yankee" before.

Russell (not Russ Roberts) writes:

Congrats on 500. I'm a die-hard listener/fan. I've learned a huge amount listening to your conversations over the years.

Is there a reason why you never announce in advance who you'll be talking to the following week?

[We do make announcements on both the EconTalk home page and the Econlib Facebook pages, usually on Friday mornings. We like to make sure we have all our ducks in a row before announcing an episode. --Econlib Ed.]

Russ Roberts writes:

Thanks for all the kind words.

I try to choose books I'll be happy reading. For most books, I read every word. For some books, when I know a chapter or section is unlikely to be relevant for the conversation, I read every page but not every word on every page. I skim. But most books, I read the whole thing.

I'm a fast reader. It helps.

The biggest change in my preparation is that I've gotten much better at preparing the questions. That part doesn't take nearly as long as it did in the early days.

The Keynes-Hayek rap videos are not part of EconTalk. They do have over 8.5 million views on YouTube but they took a huge amount of time. By the way, we did have over 4 million downloads from the EconTalk archive in 2014. So while an episode will get 40,000 or so downloads its first week, it will continue to accumulate downloads as time passes. So in a year, a good episode will have over 60,000 downloads and I suspect a very popular one will surpass 100,000. Last year, about half of the downloads each week were the current episode and half were from the archive.

Why don't I announce who the next guest is? Usually I'm not 100% sure. Sometimes people fall through and an interview doesn't happen. Right now I have three episodes already recorded. So barring a big surprise, the next episodes will be with David Mundell, Canice Prendergast, and George Selgin. When I record the next one, I might not have someone already scheduled for the one after, or that one might fall through.

I do periodically tweet about who is coming up so you can read the book if you'd like. Or just get excited looking forward to the upcoming guests. My twitter handle is EconTalker.

Bill D writes:

Thanks to Russ and the crew for 500 episodes. I can't say that I listen to all of the shows . . . but certainly one a month. What I appreciate more than anything else is the thoughtful way Russ listens and engages with people he clearly disagrees with on many issues he and they care about deeply. He gives his guests a chance to say their piece and then responds politely but firmly. His civility helps him get a wider group of people onto the show. It doesn't devolve into an echo chamber for him or for the listeners.

For this episode, hearing the personal stories for once was a nice change of pace. It made me reflect on some of my life changing intellectual experiences like reading the Problem of Social Cost in college for the first time. It also made me hope for more such experiences in the future whether from the show or otherwise.

Ajit writes:

I sort of wish I remember when and how I stumbled on Econ talk. I am an economist and somehow I feel like I discovered econ talk too late(became a regular listener by 2010).

Russ - this is a marvelous, enriching program and one that has helped me in so many ways. I do really appreciate the work you put into it.

Jonas writes:

Regarding your audience, of the 40 thousand people who download your podcasts how many come from outside USA? Do you have a list by country?

Immigration is a huge subject with all the refugees coming to Europe at this time. Do you have any plans to make a podcast about that? I would recommend a discussion with Paul Collier on his book "Exodus - How Migration is Changing Our World".
It changed my view on the subject however pro free immigration I am.

Michael Muldowney writes:


Thanks so much for all 500 episodes. I'll guess I've listened to 400 of them. EconTalk has added much to my view of the world - thanks for sharing!

Both you and Mike Munger in particular have an uncanny ability to present economic principles and observations in plain language that most people can grasp. Well done!

Onward and upward - I'm ready for episode 501 now!

Mort Dubois writes:

Late to the party, nothing to add, but I can't let an opportunity to thank you and your team again go by. Russ, you're my intellectual hero. You've shown me the value of questioning my own assumptions often and rigorously.

My questions:

1) What's the budget for a typical Econtalk episode?

2) What percentage of your working hours are devoted to Econtalk?

3) Do you tape at George Mason or Stamford?

4) Who would you like to interview but suspect will never accept the invitation?

Thanks again to you, Rich, and Lauren.

Michael Munger writes:

Mort Dubois: I can answer some of those questions. And Russ is also MY hero, because he has done something so remarkable, by creating some thing of value that he gives away. It is quite true that he is "paid," but most of the value of what he does is just given to people.

1. The budget is just whatever it costs to edit and then host the podcast. The guests are not paid anything. In my case, zero is ABOVE my market wage, since I'd pay to be on the program. But some people are surprised that guests are not paid.

2. Russ reads all the books, and thinks about the questions. But he does a LOT of other things. Have you heard about this?

3. He tapes from either place. Does more "live" or semi-live bits from Stanford. But most are from home base, by phone/skype.

4. I'm going to guess: The invite has been given to Paul Krugman, but nothing so far. But the two people Russ would really like to interview are Adam Smith and David Hume....

[Broken link HTML fixed--Econlib Ed.]

Doug Coate writes:

Congratulations to both of you for making our lives better. Russ, of course, gets most of the credit. I think you guys did disagree in the sharing podcast on whether innovation could trump rent seeking. Russ thought yes, Mike not so sure. I guess we don't know yet. Much like the debate between the federalists and the anti-federalists.

Russ Roberts writes:

Mort Dubois,

Mike did pretty well. Some elaboration follows.

While there is no charge to listeners (so there is no revenue for EconTalk), the team that produces EconTalk (including me) is paid to produce it. But as Mike point out, guests do not get paid (which is the typical market wage for guests on radio and podcasts). The time cost to create an episode varies on whether a book is involved and the technical problems that can occur in creating audio files over long distances.

I don't know what proportion of my week is spent on EconTalk. It does vary a lot by episode depending on whether I'm interviewing an author. I do try to read every word of every book unless I'm pretty sure that a particular chaper or section isn't likely to come up in an episode. Even then, I try to read every page by skimming.

I no longer work at George Mason--I'm full-time at Stanford's Hoover Institution. In the summer (when I'm out at Stanford), I record either from my office or face-to-face if it's a local person. Otherwise, almost all of the rest are done from my house.

There are a few people I've invited who have either turned me down or ignored me. But most people say yes.

Peter Gordon writes:

I agree. Mondays are great. Thank you.

Levon writes:

Mr. Roberts,
Congratulations on your 500th episode. I've listened to every single one. I started listening around 2009 when I was pursuing my BA in Economics. Yours is my favorite podcast and it is always an amazing demonstration of superb quality work (from the interviews to the background material to the availability of all of the episodes over 9 years out). Thank you so much for this wonderful piece of entertainment and education.


Robert Swan writes:

Found EconTalk in 2008 via a link (at Steve McIntyre's "Climate Audit") to your first interview with Taleb. Have listened to every interview (often twice) since then.

While the technical economists are interesting, and controversial topics can be very entertaining, I think I best like the interviews with people active in a market -- your chats with car salesmen, auto-parts manufacturers and farmers have brought them to life in my mind.

A recurring theme (touched on in this interview) is the futility of central planning. One need only consider that the central planner is matching wits with multitudes of people just as shrewd (and sometimes as ruthless) as your car salesman. Like the boy playing chess, eagerly moving his queen into the field, the central planners are surprised to find their "opponents" have minds of their own.

Anyhow, before I get to metaphor overload, thanks to all of you for these interviews. I'm glad Russ Roberts has his megaphone. Mike Munger's voice is so resonant I'm not sure he needs one. And it's nice that people like me get our own little kazoo in the comments area.

I look forward to your next five hundred interviews.

Charles Peterson writes:

You mentioned in this episode that you would like to get to 100,000 listeners.
I also heard you on a Ricochet podcast. I kept thinking that that sounds a lot like Russ Roberts on Econtalk until I checked the podcast synopsis to find that it was you. In the intro and outro you/they mentioned your book, but I don't seem to recall any mention of Econtalk. Your segment was very interesting. I suspect that mentioning your podcast more than once when you appear on these other podcasts might help in reaching that 100,000 goal.

Jonas writes:

I forgot to write thanks and congratulations.

Chris Wilcox writes:


Congratulations on this very impressive milestone! More impressive is that Econtalk’s quality far exceeds its quantity. Many thanks for all your hard work.

Jeff Garland writes:

Enjoyed listening to two old colleagues and friends have a conversation. Since you brought up the intro music (Cleared Up Sunset) I wanted to point out that the link to the ringtone has been broken for some time. I've always wanted to have it my phone with the expectation that someday it would ring and some stranger would say, "You listen to EconTalk too?" Any chance of getting that fixed?

The question for Russ I was wanting to hear was how do you prepare for podcast?

Chris G writes:

Great stuff. Next target: 500 Mike Munger episodes.

jw writes:

Thanks again for Econtalk!

It's good to know that there are tens of thousands of other Econtalk-geeks out there, the comments per week seem low for such a large audience.

Both of you made a comment that capitalism causes pain for some. Of course it does. But it seems that you are falling into a common trap.

The argument is not that capitalism is pain-free, but that it has proven to be by far the best way to maximize the collective living standards. The total pain caused is relative to the alternative (ironically enough - collectivism), which generates considerably more collective pain.

I know that you both understand this, I just hope that you point it out in the future.

Lastly, I am amazed at how EconTalk (and a few other podcasts) can have such intelligent and civil discussions and the vast wasteland of TV cannot come close.

Keep it up!

Jack W writes:

So many words to choose, which ones will I use?

I have learned so much from your podcast! Thank you. And you may never know or be able to measure the impact, but I have no doubt that something I learned from this show informed a choice I made along the way that changed the world in some small way.

@ Mike Munger--- Wonder Bread by Adam Smith: Priceless!

Congrats on 500! A salute to at least 500 more!

Richard Fenton writes:

How to improve posts here?

I think a number of them are good and interesting. Could we introduce a thumbs up / down for posts or a competition for bloggers here? Amazon do this for their product reviews. It might help to focus the mind and it would be interesting to see how people view our contributions to the site. It's quite a standard piece of software and could make the posting section more interactive>

Is this a good idea?

Robert Swan writes:

Like jw, I find it surprising how few comments there are. Perhaps it's partly because people listen to the podcast well after it comes out. I run one or two weeks behind. Any later than that and the comments have completely petered out in any but the most controversial topics.

But I like the comments as they are. Whether I contribute or not, I always read all comments and they are of a high standard.

Richard Fenton, I think a thumbs score is too easy, and encourages tribalism. Besides, how would you score something that you only partly agree with? I find the effort of putting my argument in words is helpful in itself. Whether it convinces others is another matter.

Miles writes:

The most I've agreed with Munger is on listening to the podcast at double speed :) The exceptions are when guests have a thicker accent, especially Spanish and Italian accents (for me personally).

Congrats on 500 episodes! I've been really enjoying it, for many years now (since 2008, I think).

Rob writes:

I just wanted to echo the other commentators and say congratulations and thanks for all your work putting out this amazing show every week. I have learned more about economics from listening to Econtalk than I did from studying for a master's degree in economics (this is not hyperbole).

I'd be curious to know what proportion of your listeners are outside the US. Sometimes (as at the very end this podcast), the conversation goes into sports analogies that are lost on me and I guess on other non-American listeners. But don't worry, that's all part of the charm...

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