Buchholz on Competition, Stress, and the Rat Race
Jun 13 2011

Todd Buchholz, author of Rush: Why You Need and Love the Rat Race, talks with EconTalk host Russ Roberts about the ideas in the book. Buchholz argues that competition and striving for excellence is part of our evolutionary inheritance. He criticizes attempts to remake human beings into gentle creatures who long to return to an Eden-like serenity. He argues that it is action, creativity, and planning for the future that makes us happy. The discussion includes the implications of our interest in the future for theater and story-telling.

Explore audio highlights, further reading that will help you delve deeper into this week’s episode, and vigorous conversations in the form of our comments section below.


Jun 13 2011 at 1:48pm

good stuff econtalk. buchholz was a very entertaining guest, pretty sure ive heard him talk about this book elsewhere and he equally interesting speaker.

a few problems with the discussion:

1- straw man: who is really saying we should freeze the pharma industry (or anything like that)? if people r saying that, then they’re likely wearing tin foil hats as well.

this reductio ad absurdum was rampant.

2- i dont think there was any data presented, other than well known facts that life isnt as brutish or short as it used to b. he was just being an interesting conversationalist.

3- what would the real rats say? u know, not the angel investors and economists who r fulfilled in their toil.

none of my comments r endorsing the “pause” argument- which im not sure exists in relevant discussion.

anyway..it was a good reality check to remind us of what we all know: life is getting better.

Jun 14 2011 at 12:48am

Darn, just the other day I was trying to argue with someone whose line was “the problem with capitalism is that you’re always competing, all the time.” Wish I’d been armed with some of Buchholz’s quotes then…

Jun 14 2011 at 2:01am


I don’t know if it is partly because I’ve been such a dedicated long time listener, but I find it harder and harder to deal with the sarcastic pseudo-devil’s advocate straw man arguments you, and sometimes guests, present.

Whenever you attempt to present the “opposing” position, you change your voice to a somewhat mocking tone and present a simplistic one sentence summary of a view very few, if any, real people hold in the world. Or if they do hold it, it is usually much more complicated and nuanced an issue than it is presented.

Aside from some fringe groups, who are these people loudly advocating for the end of medical, technical, and scientific improvements? Ted Kazinsky isn’t exactly a main-stream hero. I think you don’t give much credit to the nuances opposing views often contain.

In regards to Buchholz’s claims, many of them I found true, but obvious, but many more were either demonstrably wrong, or misguided.

First his claim that stress is good for you. Now I would agree that the release of stress hormones in certain situations is helpful and can help one excel in a tough situation. But there is a trade-off if one wishes to actively pursue stressful situations.

The main trade off is that chronic stress shortens one’s life span!!! Now some might wish to live by the live fast die young mentality, more power to them, but to ignore that many (most?) people wish to live relatively long lives is a bit of an oversight. I also think Buchholz might be confused as to what stress is.

For example, simply being busy, active, and involved in many projects all at once does not automatically create stress hormones. It is more likely when people in these situations feel like they are not in control, overwhelmed, and unappreciated that people become stressed. This is not what you are recommending Buchholz, is it?

Then there is the issue of his characterizations of “zen,” and yoga as something akin to just sitting and doing nothing (I am guessing in reference to meditation). Now these are both complex topics, and indeed there are deeply religious monks who live in monasteries and spend many hours meditating. I am an atheist, but there are people who believe that this puts them in contact with a higher power, or in less religious language, with a sense of oneness with the world, etc. To say that this is just stupid and we wouldn’t have modern medicine if people practiced this is just ridiculous. Sure if EVERYONE was in a buddhist monastery we likely wouldn’t have many modern conveniences, but then again if EVERYONE was a cashier, or an automobile mechanic, then the market system would grind to a halt as well. This is just a ridiculous and fallacious argument in my opinion.

As far as how people utilize zen principles and yoga in their every day lives, well that is very complex and contains a great variety. What many zen teachers stress, however, is not dropping out of life and sitting around, it is fostering a sense of heightened awareness when performing one’s daily tasks and focusing on the task at hand and making you perform BETTER! Also stressed is letting go of the ego and attachments.

Again, this doesn’t mean get rid of all your possessions, don’t think about the future, etc. It means be more mindful of your attachments and don’t let yourself get too invested in one thing or another because of their possible fleeting existence. For instance, don’t define yourself by the car that you drive, because if something happens and you lose that car you will lose, and be pained by, what is perceived as a lose of part of yourself.

Also, as a musician it is often described the sense of “flow” that one gets into when one loses themselves in the music performance, although this can be true for many other activities as well (sports, factory work, what-have-you). Zen stresses those moments where the musician is both focused and present, but not caught up in unnecessary thoughts.

Again, this is complicated stuff, too much so to get into here, but Buchholz makes an absurd, simplistic, and cartoonish representation of the topic.

Similarly yoga is not just sitting around, it is about stretching and building strength and balance, as well as relaxation. For the many who suffer from back, shoulder, and other muscle pains, yoga is a way to help alleviate that physical pain. Also for athletes, and people in general, developing a good sense of balance, and strengthening and stretching muscle that may not always get stretched and exercised is a way to improve ones life and abilities, decrease life shortening stress, and help to improve one’s quality of life as they get older.

Jun 14 2011 at 11:04am

Well said AHBritton!

I happen to be a Zen practitioner myself. I winced a bit when all Yoga, Zen or any of that sort of stuff was lumped together and presented as being anti progress. Also the old sterotype that meditation is just sitting on your ass. I don’t see it as anti-progress or anti-capitalism at all. I’m very grateful for international trade, for at least in part, bringing these ideas all the way from the east to a guy living in New Mexico.

Zen, just as one example, required ideas spreading all the way from India to Japan over a very long time—commerce was part of that. Markets also create the surplus wealth to study Zen. Meditation retreats are expensive—definitely a capital intensive endeavor.

It’s difficult for me to understand how a Zen Buddhist or any Buddhist could be against capitalism but that might just be my libertarian bias. All that stuff requires commerce—some people don’t like to admit it.

That being said, I really liked the discussion. I think it was a bit over simplified. Progress is great. There are some costs to modernity as there are costs and benefits to everything—some things are lost. I think the key point is the more free we are to choose the better. I like to take a selective Amish approach personally—I hate tv, and the iPhone but I like econtalk. I say a little thank god I don’t have to be a farmer prayer everyday.

I think Russ is still pretty good about presenting the other side respectfully. I like that Russ doesn’t hide his bias—it’s more fair than the journalist who just pretends not to have any.

I also winced when the guest said you should avoid reading The General Theory of Money and Interest because he thought the stimulus was a mistake. If you are against Keynes that’s 100x more the reason to read him.

Thanks again for another great episode.

Jun 14 2011 at 11:24am

Also, I think one argument the other side is making is that people are having to work more hours just to enter into the white collar world. The twenty something entry level white collar workers I know, in the New York area especially, are only encountering jobs where they are expected to work over 40 hours a week.

I realize that is just my own personal anecdotes but there does seem to be an unhealthy workaholic culture that is not really getting as much focused work done—just more distracted.

If real wages have increased, wouldn’t we expect to see more people choosing shorter work weeks? As Keynes predicted in the quote that was mentioned. Instead it seems like work over 40 hours or no white collar job.

I can’t help but think lots’ of people would rather work less hours and have a living standard of 50 years ago. Many libertarian types (I am one) just claim that people evidently don’t want this—that they want to work more. I’m not so sure. I think more likely only more highly skilled people have that option.

I assume there is an empirical look into this sort of thing—why was such evidence never addressed?

Also, wanted to continue to vote for getting more lefties on the show. Since you Russ, are largely responsible for turning me into a libertarian, to the immense horror of friends and family, maybe one of them could switch me back. Which would be great–I wouldn’t get yelled at as often.

Jun 14 2011 at 12:16pm


marx called it “the coercive law of competition”, think it’s part of his theory of alienated labor…

something to the effect of:

“the alienation of labour when work is external to the worker, not part of his nature, so that he does not fulfill himself in his work but denies himself and is physically exhausted and mentally debased. This alienated labour that casts some of the workers back into a barbarous kind of work and turns others into machines, thus depriving man of his species character, of free conscious activity and productive life.”

that’s n chomsky.

dont know if it’s all that bad or so either/or, but ive never been there, so not really qualified to answer on alienated labor.

but i do know, it’s lovely prose and seductive logic like that which is the reason we are not encouraged to read marx or chomsky in formative years.

for that, u get atlas shrugged or some other work of fiction….hA!

Jun 14 2011 at 12:35pm


ditto on the lefty request.

to econtalk’s credit, there have been a few standouts- especially immediately after the crisis, but certainly before then as well.

they were all very good discussions…less hall of mirrors where the same framework of thought gets reflected back and forth.

i vote chomsky on the topics of linguistic insights on human nature, classical liberalism, history of political revolutions.

but the finest thing about econtalk is the topics chosen, the long format and russ’s often (yet not always) probing questions.

Jun 14 2011 at 1:10pm

please forgive the numerous posts.

i hope to contribute positively and found this to b very apropo to the sense of “rat race” in the lower ranks of the american work force.

this is by d frum, via t cowen. frum posts a FRED graph showing income share of the american worker over 70 yrs or so.


it’s shocking.

Jun 14 2011 at 3:22pm


I’m currently earning a B.S. in economics, and I can’t find many sources of pure economic information. You often come very close- I learned a lot when you interviewed Eichengreen, Meltzer, and Kling, and I’m very grateful for the work that you’re doing. I especially appreciate that you cheerfully acknowledge your Chicago Sensibilities and bias towards Hayek. I’d like to see more interviews with that tone, and fewer that are so mired in political economy.

I also frequent Cafe Hayek, and while I respect Don (and often agree with his views), his constant warmongering against Keynesians has diminished my interest. He reminds me of Glen Beck.

My point is: there are many of us in second (third or worse) rate economics programs who feel passionately about the empirical aspects of economics and are starved of good instruction. We would appreciate episodes discussing mid-to-high-level economics. This last interview was mental bubble gum, much like Cafe Hayek.

You’re an eloquent speaker and a talented economist, proving the merits of capitalism is entirely unnecessary because it’s already proven itself.

John Berg
Jun 14 2011 at 4:13pm

I challenge at the very outset a concept of “better” and the idea that evolution is monotonically in the direction of “better.” Were one capable of comparing the number of people who achieved “heaven” in the 1800s to the number who were successful in 1900s or the 2000s, would we say “better.” Since the terms used are well understood in the US but essentially fuzzy when considered analytically, I compare this criterion to the use of “compassion for the poorer classes.” I note that using “poorer” makes this pertinent to an economics discussion.

Although the discussion soon changes to the criterion “happier,” which is equally fuzzy. Can one describe either the “pleasure” or “happiness” of reaching the summit of Everest at the cost of three toes. I could posit “happitrons” and “pleasuritrons,” and note no algorithm that quantifies or permits comparisons of quantities of these.

Presently society suggests that if April 15th of each year resulted in each individual getting a debit or credit that resulted in universal individual dollar equality, we would all be — what?

John Berg

[last paragraph fixed–Econlib Ed.]

Jun 14 2011 at 8:38pm

I generally agreed with the policy conclusions, but get the criticisms above. I do think labor is a fundamental part of being human, and actually believe the Bible implies there was work in Eden. Just not to the level of what is required of us due to original sin.

Jun 14 2011 at 10:12pm

Listening to Buchholz made me want to skip ‘Rush’ and go straight to a re-read of ‘Candide’.

John Berg
Jun 14 2011 at 10:54pm

I found a very serious typing error in the last paragraph of my message above. It should read:

Presently society suggests that if April 15th of each year resulted in each individual getting a debit OR credit that resulted in universal individual dollar equality, we would all be — what?

Jun 15 2011 at 6:37am

I thought this was really good, although only loosely tied to ‘formal’ economics. There are some quite inspirational quotes from the guest that I really liked, but equally I love the 1 liner relating to ‘Candide’ (everything is for the best) above!

I guess no one guest can get all of life perfectly balanced in a 1 hour slot about how we should live each of our 4000 weeks (7 days = 168 hours) we get alive (on average). There’s a lot of variety in life, many different people and phases we go through in life.

This was a pretty good summary of the benefits of high achievers in our world. We don’t (and can’t) all want to be Steve Jobs!

Keep it up Econtalk, great variety (but as asked above, please try to do a fuller effort at the devil’s advocate position, which is hard if you just don’t get what their argument is anyway).

Robert Wiblin
Jun 16 2011 at 1:24am

AHBritton has a good comment above. I like EconTalk a lot, but Russ is often weak when presenting views he disagrees with as a devil’s advocate. Which is understandable, but it’s something to work on improving as an interviewer.

Jun 16 2011 at 11:06am

Kudos to AHBritton – I wholeheartedly agree.

With regards to xian and Luke, Russ is free to choose who he likes, and if you’re feeling a “lefty” idea is left out (sorry) this comment section is a great spot for a fair challenge I think.

For example – I thought the example of a licensed ticket vendor was, as intended, a little far-fetched in imagining utility for the licensing process. On the other end of the spectrum, however, there are civil engineers who build bridges, and outside one bridge in Minneapolis, the record of bridges not collapsing is very good. I assume that most people agree that the business of public safety things like that type of project would make this profession different than that of a ticket salesman, and some formal designation of professional achievement would be beneficial. Working without “regulation” would mean that people would have to work on reputation, and there would end up being a lot more failed bridges by designers who had not previously made a bad reputation for themselves. Sure, the failure would ruin their career, but the cost to society of actual practice being the litmus test would be too great for that removal of “red tape.”

I think the discussion should be focused on what the purpose of regulation is, and in some cases, it likely should be less – like our ticket sales example. But let’s not throw the baby out with the bath water.

Jun 16 2011 at 12:38pm

econtalk is juss a better interview when russ makes his effort understand, probe and test the other person’s idea- not when it’s juss “call and response” among the like minded.

no doubt. he can improve this, and honestly, often when it is a like minded interview, it’s still a very good interview- among the best on the net.

but i think russ’s interview skills r far and away at their best when he’s talking to someone who didnt “drink the same milk” in grad school- as has been said…i learn tons, from both sides.

luv u!

Jun 16 2011 at 4:08pm

I’m responding to your tweet asking us to weigh-in on your interview style:

• In general, your interview style has got to be good, because your podcasts are almost always interesting.
• The first few times I listened to econtalk I thought you talked too much relative to your interviewee, but realized since then that the format isn’t classic journalistic but more of a conversation, and since you’re an economist yourself, you often have a lot to contribute.
• I love the fact that if you don’t understand something a guest says, or are unclear on it, you’ll say so. You have the confidence to admit it when you’re uncertain or confused and to ask for a clarification if a guest says something strange, ambiguous, cryptic, obscure, or jargonish. For that matter, you’ve also been very frank about economic questions you feel uncertain about.
• One of the most valuable things about econtalk for me has been to learn the extent to which economists can disagree or have different views even on relatively fundamental things like free trade and division of labor. I’ve come to appreciate the complexity and subtlety of “division of labor” much more as a result of econtalk.
• I really like the fact that you include non-economists in your show. These episodes are usually interesting and a nice change of pace.
• I think my only criticism is that there are times I’d like to see a guest challenged a little more pointedly. I’ve always heard that academics argue with considerable (intellectual) force. But that may not be your style and I’m not saying I’d want the discussion to be anything but cordial. It’s easy enough to find uncordial discussion on the internet. I also realize that guests with fundamentally different perspectives might not agree to come on the show.

Jun 16 2011 at 4:22pm

Be more passionate and serious when playing devil’s advocate. This will make the good ideas presented more fully understood.

Speak more simply. My favorite episodes are the ones where I can bring the lessons learned from the podcast to my friends because my eyes didn’t constantly glaze over while the host or guest were saying things only economics graduate students would understand.

Some topics I’d like to see revisited: bitcoin*, religion, prohibition, history of the federal reserve, taxation alternatives. (Less on monetary policy, copyright, healthcare.)

More of these please: Don Boudreaux, Garett Jones, Mike Munger, Christopher Hitchens. I also like the ones where it’s just a Prof Roberts’ monologue / internal dialogue.

*: I tried getting started with bitcoin. It’s harder than I thought / hoped it’d be. There’s no easy “exchange n $ for x bitcoins” interface, and I’ve been running the generator since the episode with no luck yet. It all makes me a little less optimistic of its future. Have you dabbled in it?

Jun 16 2011 at 4:39pm

I’ve been listening for about two years now. No complaints. I admire your ability to remain civil when engaging with someone who advocates policies that I would describe as anti-human. Kenyesianism, statism, socialism and the like.

Jake Russ
Jun 16 2011 at 5:27pm

EconTalk ebbs and flows just like anything else. Even when I think an individual podcast was somehow “off” it’s still informative and entertaining.

Asking for more nuance sounds like a reasonable idea, but in a way it’s like asking for more government spending, in that you can always ask for more. At some point you have to just accept that it’s roughly an hour program and there’s only so much context Russ can fit in. He also does the heavy work of linking to almost every source brought up and past podcasts that are on related topics.

[broken link fixed–Econlib Ed.]

Jun 16 2011 at 7:10pm


if ur gonna have to play devil’s advocate, then brush up on the what the devils r saying amongst themselves.

not juss the “shoot from the hip” / “im smart enough to wing it” effort that doesnt really challenge ur guest or enrich listeners.

i h8 being such a critic bc i think ur podcast is awesome..luv it. juss want more tension in the discussions where the sides give their best cases.

dont think this suggestion is a radical change from the current product, but it addresses the soft spot.

when it’s a history, biography or specialized topic, then it’s not such a big deal cuz ur talking to an expert and a naturally curious mind suffices.

Robert Wiblin
Jun 16 2011 at 10:26pm

An idea might be to talk to some academics who actually disagree with the person you’re interviewing before you interview them. That way you can bring strong and real counterarguments rather than weak ones. It’s because you know the strong counters that your interviews with people you disagree with are by far the most interesting.

I feel Buchholz was guilty of the same logical fallacy he accused others of in this interview. He said people confuse the need for some individuals to slow down with the need for the system as a whole to slow down. But then he would switch interchangably between the question of whether people are biased towards working too hard with whether the system we have is the best for providing opportunities for fulfilling work or permitting choice between work and leisure. These are separate issues.

I was surprised that the positive externalities from working hard were discussed, but not those from leisure and non-market projects.

As I understand it work has a huge impact on mortality, though stress isn’t the biggest axis of variation to worry about: http://www.overcomingbias.com/2011/05/jobs-kill-big-time.html . A question like the effect of work on health calls for a lot of data not hand waving.

Robert Wiblin
Jun 16 2011 at 10:31pm

My other suggestion would be spending more time talking to people you disagree with, or talking to people from the same school of thought but on topics you disagree. There are plenty of options. Matthew Yglesias has never been on, nor has Brad De Long. Caplan apparently doesn’t think so much of the socialist calculation problem which you love. Why not bring that in!

Jun 16 2011 at 11:43pm

Just read the other comments, which shows that tastes vary. I say keep doing shows on monetary policy, because it has gotten (1) extremely important, and (2) more confusing and complicated than it used to be. And maybe it’s time to get back Bruce Bueno de Mesquita!

John Berg
Jun 18 2011 at 4:38pm

several times Dr. Roberts has earned my respect as an enthusiastic teacher. One who strives to teach and seeks to improve his teaching. Since this podcast provides him an opportunity to teach three audiences: Us, his guest, and himself, it may be useful to point to Hans Rosling and his presentation on several other criteria by which we can measure, “better,” some of which may suggest that “competition” is insufficient. For example, when measuring size of family/wealth of family/survival age of children, perhaps competition among families or children may not be appropriate. The lecture takes about 20 minutes.


John Berg

Jun 18 2011 at 6:49pm

I have heard you mention on several shows the scenario that people can go back to living as people lived in the past; if people want to live less hectic lives, with less technology, they have the option to remove those things from their life as the Amish do. Yet, the idea that someone would be happier living in an era when the results of one’s labor were more personally evident is not a ridiculous idea – even if it required more physical strain, more vulnerability to disease, and poorer hygiene.

It is my opinion that very few people could leave the modern setting because they have become dependent upon it, and to leave it would cause an unendurable withdrawal. I understand society would fall apart if we stop holding people responsible for their actions. I am also saying the deep part of the brain that likes bells and whistles is more powerful than the part of our brain that thinks living like the Amish might be a fun thing to try.

One of the confusing points of economics that I can’t wrap my head around is that of choice. If someone chooses to eat a huge ice cream sundae for lunch every day – one person will say this is irrational because of the poor health effects, another will say this is rational because the benefits of eating that sundae at that time outweighed the benefits of eating a salad. Is short term thinking irrational because it does not take into account the long term?

Jim Feehely
Jun 18 2011 at 9:06pm

This discussion proceeds, as almost all market economic discussion proceeds, on the error that ‘economy is life’ – a new secular religion. What market economists constantly claim is that the energy of life stems from rational self-interest. Life does not rely on economy. Only ‘wealth’ as defined by market economists flows from an economist’s view of life. And ‘wealth’ is not an analogue for happiness. For market economists to admit this flaw would be to negate the web of often meaningless statistics on which economists rely to falsely claim a status as a science. But this is, I suppose, only one consequence of the corrosive silo-ism of intellectual specialisation.

Meaningful and satisfying work clearly does not require a competitive environment. Cooperation produces just as much meaningful satisfaction and useful product as does the consequence of competition. In fact, cooperation produces less waste than does competition. Cooperation does not discard the work of the losers of a competition.

Jun 19 2011 at 1:23pm

A suggestion for an interview that might be interesting is Alex Prud’homme who recently released a book called “The Ripple Effect” discussing the history and current state of water pollution and regulation.

Although I have not read the book, I think this is one of the areas in which absolutist libertarians have some serious difficulty. It’s hard to see the argument that might defend river’s catching on fire and the preponderance of intersex fish and frogs.

Peter P.
Jun 19 2011 at 10:52pm

-Dr. Roberts is a great communicator and meets the Armen Alchian test of explaining things to someone who doesn’t know a darn thing about it
-Very articulate on a wide variety of topics
-So many podcasts and so many subjects really easy to find variety of interests
-Hour long format is the right amount of time
-In older podcasts enjoy how he talks about the current day to put things in historic perspective
-Doesn’t interrupt guests and actively listens to what they are saying
-Great give and take between Roberts and guests

Cons (Note this was very difficult for a fan of Econtalk)
-Wished the beginning of all podcasts had date
-Maybe at the end of the podcast talk about the guest for the next week so listeners could read or get familiar with work
-Would enjoy more podcasts on how businesses use economic way of thinking or economics to run a business
-Some subjects are too technical even for people with a great interest in economics
-Possibility of two guests (don’t know if this is good or bad)

P Durfee
Jun 20 2011 at 4:09pm

I almost always enjoy Econ Talk, regardless of the guest or topic. I find it ‘easier’ and perhaps more entertaining to listen to guests like Michael Munger. I also appreciate the many recent conversations on the causes and implications of the economic crisis, of which I have had the dubious pleasure of witnessing from the inside. It has been interesting to have my own experiences and opinions challenged, reflected or rebutted in the comments of Dr. Roberts’ guests.

But I find the conversations that tackle core economic topics such as monetary policy, inflation, balance of trade, etc., to be the most rewarding. These are the discussion that I often have to stop and rewind, because I realize I have stopped paying attention after having taken some brief question or suggestion and argued it out in my mind for twenty minutes. These are also the discussions that fill in the forgotten spaces of my economic knowledge and remind me why I feel the way I do about so many issues, both political and social.

With respect to the conversation with Buchholz, I must take strong issue with his comments on the Shakers, which I find consistent with earlier criticisms posted here on the use of strawmen. I have not read Rush, so I admittedly cannot speak to the full context in which he places the Shakers in his argument. But from his brief comment in the interview, I question how thorough his knowledge and understanding of the Shakers actually are.

Despite their prescriptive act of celibacy, the Shakers thrived for well over a century. I would argue that they did so by providing something to converts that they could find elsewhere – specifically, a social safety net, and gender and race equality. Consider the options of a poor widow or orphan in a New England mill town during the early Industrial Revolution or of a bright, ambitious young woman or African American male in the 1840s. A vow of celibacy might seem like a small price to pay in exchange for the knowledge that you were cared for, and would be treated as an equal.

Shaker life certainly made time for worship and reflection, but they were hardly slothful, anti-progress, or anti capitalist. A common Shaker mantra was “Hands to Work, Hearts to God,” and they toiled rigorously throughout the day. The Shakers adopted modern conveniences such as electricity, telephones, and engines as they became available. They traded actively with the outside world, held patents on tools and machinery, used mass marketing (catalogues) and are rumored to have invented their own accounting methodologies.

While the Shakers certainly had a formal leadership hierarchy, I am unaware of any central planning with respect to economic output that resulted in a misallocation of resources or shortages. Although Shaker communities and families did tend to focus on specific areas of production, they seemed to be driven more by the skills of the workers and the demand for products on the larger market.

Lastly, if you ever have the good fortune of sitting in an original Shaker Rocker, I encourage you to do so. I think you will find it one of the most comfortable (and beautiful) pieces of furniture you will encounter. I’m partial to the ones from New Lebanon, but being a bit of contrarian, I prefer the leather seats to the taped ones.

In closing, here’s a proposal: how about a discussion on how perceptions of utility and the shapes of indifference curves have changed over the last hundred years in response to changes in the external environment?

[Munger’s first name changed to Michael from Robert.–Econlib Ed.]

Jun 23 2011 at 7:41am

Just like a few people here, I found this episode to be entertaining but frustrating. Tod’s view of his argument seems very arrogant and not thought through. Giving examples about competition in medicine and how chemist compete for patents, he does not look at major health concerns were solved by sense of duty and maybe because it was the right thing to do. Was there polio walks, or Cholera marathons to sponser the cures or vaccines? No! Because in the “simple times” people had more care and understanding for their fellow human being.

Competition is great when it comes to the creation of consumer goods. However, the necessities of life should not be competed over for profit (Water comes to mind here).

He also conveniently skipped over the fact that millions of Americans are so depressed they are on a cocktail of medications or are so over stimulated by life they take downers like Marijuana and Oxycontin.

Tod lives in a very small bubble and seemingly has not experienced much outside of his culture.

Jun 28 2011 at 3:50pm

data relevant to the discussion in chart/graph/table format on workload, wages, productivity etc in the US with some world comparisons.

little to no conclusions or interpretations, just data.


Jul 5 2011 at 1:05pm

I’d like to echo AHBritton’s first comment above. While I found parts of the discussion entertaining, the hand-waving and strawmen were not up the usual quality of the podcast. Contrast this episode against the interview with Daniel Pink on his book “Drive”. Roberts provided good skeptical push-back and Pink was actually able to quote research to back up his points.

On an entirely different note, I’d like to suggest Lawrence Lessig as a guest – both for his work on copyright and also his recent work on congressional reform. I see the article from 2003, but an EconTalk interview would be very interesting.

Thanks for an (overall) excellent podcast!

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0:36Intro. [Recording date: June 6, 2011.] Book is a slap in the face to most self-help books, fascinating read, very contrarian. Could only have been written by an economist. You start by attacking the idea that many people hold as a utopian ideal, which is that we need to get back to the garden of Eden, or something like it. What's wrong with Eden? Eden was a great place, from what I've read. Thousands of years ago. Of course, it was lush; and Adam and Eve didn't have to work; and the fruit was there for the pickings if you were willing to take a chance. But we can't go back there any more. Humans have evolved since then. Our expectations have evolved; our brains, our psychological makeup has evolved. While Eden as a paradise still has this captivating aspect to it that attracts people throughout the world, throughout cultures--they may not call it Eden, but the same idea of some paradise, it's just not something we are going to find in our lives. The idea of changing public policy in order to create Eden--in order to stomp out competition--strikes me as a pretty reckless way to run one's life or run an economy. But it's a pretty commonly held view, particularly among many economists, that competition is destructive; inequality is harmful; and the ideal--we may not get there, we may not literally be able to go back there, but that's what we ought to be striving for. And you don't even agree with that. There were simpler days, not all that long ago. We could go back, just turn back the clock, not thousands of years. But just go back 100 years, 120 years ago. Life was simpler. There was no Internet. No telemarketer was calling you to interrupt your dinner conversation with your family. You didn't have to worry about traffic on the freeway. But life expectancy was about 48 years of age. People didn't complain about traffic jams, but they complained that their children were dying of cholera. So, we could scroll back the clock, I suppose, and think about a simpler day. But the fact is, given life expectancy differences, if we went back to simpler days, half of the population wouldn't be here--they'd be dead. And we'd have all sorts of other problems. So, the idea that simple is better, I think is a fantasy. And it's a fantasy that's sold to us by yoga experts, zen masters, as well as economists and psychologists. Well, couldn't we say--I'm sympathetic to your view, but let me present the other side. Let's go back to 1900 without the cholera. For example, I know people who don't have televisions. I don't know too many people who don't have computers, but there are such people around the world. The claim would be that these complexities of our life, whether it's a fancy car, big plasma, big screen TV--these are illusions. They don't really create happiness. They are things we are conditioned to purchase and desire. And when we lived in, 1900 America, say, if we could get rid of the cholera and the smallpox and the flu, which we have the technological ability of embracing that, we could say: That's good. And let's lead a simpler, slower life. But at any time in history, we could have decided to flip the switch and say: Life is good enough at this point. We've had enough progress. And I'm sure there are others, people who at various points in history would have said that. But thank God, Theodore Roosevelt in 1905 didn't decide to put the economy in a lockbox and say: Okay, enough progress; we now have some electricity and we've figured out that germs cause disease. We could have decided that that's enough progress. But, frankly, as I look back on history, I can't find any particular point where I would have been happy for people to say and agree that it was enough progress. How about right before the Civil Rights Act in 1964--would that have been a good time? How about 1860--would that have been a good time? So, looking back, we can't really identify any moment where we would agree things were much better and let's freeze-frame. I don't think other than the intellectual exercise of saying: Could we create 1905 but without cholera? That's an intellectual game, a what-if game we could play; but it's all bound up together. Actually is one of the themes of Rush. You can't have the curing of cholera, medicines to alleviate heart disease, without having the competition of pharmaceutical companies and the laboratory rats, and laboratory scientists competing to get their patents. That's all bound up together. You can't simply wish for the good stuff without also getting rid of the process, the competitive process that ultimately leads to these things--that we appreciate, and some of which we don't appreciate.
6:36Obviously there are some downsides to progress we wish we didn't have to deal with. I guess the other thing to think about is that if you want, you can live in 1875 America--if you choose to--and you can enjoy many of the benefits of the technological advances we've made. You could be selective about it. The Amish obviously have made a set of choices about which technologies they'll embrace and at what pace. Most people don't want that, though. I think that's one of the themes of your book, that that simpler life doesn't seem to make most of us very happy. No, and I think you make a very good point about the Amish. The Shakers embraced their own simple life, which included a lack of procreation, which I think I point out in the book, left them just with a lot of uncomfortable furniture and no progeny afterwards. You could attempt those things. During the 1960s and 1970s there were plenty of experiments, socialistic, communitarian experiments; I'm not talking about the Soviet Union, but small-scale Woodstock-like areas. Communal living. Most of them ultimately broke up. You could look at the kibbutzim in Israel, which were successful in some ways and many still around, but almost all of them have morphed into something more commercially minded, because they realize that after you've got more than a couple hundred people it's awfully difficult to maintain a standard of living simply on the basis of everyone being charitable and communitarian to each other. It just doesn't work that way. That's something Aristotle pointed out thousands of years ago; his idea, the city should only be as large as to encompass all the people that could hear the sound of the trumpet or ram's horn. If you were beyond that distance, you couldn't be in the community. So, in his mind you couldn't have a working community once you got past a certain number of people. The same is true of these sorts of communal communitarian efforts. How're you going to keep 'em down on the farm after they've seen Tel Aviv? Exactly. The kibbutz is an interesting example because they were fairly successful initially. They struggled to keep the next generations eager to play by the same rules. As modern metropolitan life became what it is in Israel today with a much higher standard of living, even with a slightly higher standard of living, the ability to get young people to play by the rules of the kibbutz, the egalitarian rules, was much harder to do. Also, the rules were rather authoritarian. The rules and the concept that the children would be raised in communal homes and so on--this was different from a communist authoritarian regime where it was forced on people; these were folks that voluntarily wanted to do it. In my book, that's fine. But, to try to keep those sorts of rules in place became exceedingly difficult. Once the pleasures, temptations, conveniences outside of the kibbutz was made apparent, it was tougher to keep them down on the farm picking Jaffa oranges. Instead, they are now designing CDMA devices for our phones. I once spent two or three weeks on a kibbutz in the Negev, the southern part of Israel, where it's extremely hot. We worked from 4 a.m. to about 11--a 7 hour day of sorts. We did two things: we picked peaches and one of the tasks I did was to clean an irrigation tube that would get clogged from the dust, the dryness of the air. The dust would block the little irrigation holes in the tubes that would run for hundreds of yards; every 18 inches there would be a little hole and I'd take a pin and clean it out of its dust or dirt. Those two tasks were two of the most boring things I've ever done. We were making the desert bloom--that was the inspirational part--but taking a pin and cleaning a hole every 18 or 30 inches, whatever it was, was not very exciting. Not a whole lot of creativity. If you wanted to do it every 12, were you given the latitude there? The creativity, which I didn't particularly like, was when to leave a tree behind. When you picked the peaches, you didn't pick every peach; some were too high, some not ripe, better to let someone come along later. As an amateur, I found it challenging to know when to move on. I don't think the people who lived in the kibbutz year round were very appreciative of the volunteers; we were pretty inept, I think. There was some room for improvement and mastery, but it was small, and I found it, as did many of my friends, a little bit challenging because it wasn't the most exciting work in the world.
12:33You talk a lot in the book about the power of creativity and innovation, and I'm very sympathetic to that. But not everybody has creative jobs. What about those folks? Well, first of all, not everybody wants a creative job, either. I've met plenty of people in my life who really do want to come in at 9, be given a list of tasks they must accomplish; and they want to be able to go home when the clock strikes 5. They are not really interested in creativity. That's fine. Or at least on the job. From your point of view, what about those who do seek to demonstrate their creativity and do not have an outlet in their workplace? As I say in the book, there are certainly plenty of people who have miserable jobs, miserable bosses. They may also have miserable home lives, as well. But when you look at the data, and if you take the United States in particular and ask, are you satisfied or pretty satisfied in your job, the numbers are pretty high. About 2/3 or more than 2/3 of the working population are satisfied or very satisfied with their jobs. Is it for me to judge whether you should be satisfied? The UPS man is trotting up to my door as we speak. He looks happy; pay is decent wages. Would I be happy? My back might ache after a couple of days on the job. The question is, in what kind of society, with what kind of political and economic system, are people given a greater choice among occupations? If you look back through history, we've been on this march towards more freedom; using Milton Friedman's words, freedom to choose what sort of jobs. Back in olden times, if your father was a blacksmith, you would be a blacksmith; and your forefather was a blacksmith. Same is true of various vocations. We all know the reason families might have the surname Smith was because their entire family going back a thousand years in Europe were smiths and blacksmiths. We now no longer have those constraints, and I think that gives us greater opportunity for creativity, even if it turns out that there are discontented people, legitimately, who can't quite figure out how to do it. I live in southern California, and they say every cab driver here has a screenplay in his trunk. He doesn't want to be driving a cab. He wants Steven Spielberg to call him up for a meeting. Probably not going to happen. But is there another society, another form of economic matter that can make that more likely? I don't really think so. I guess the question would be: What constraints, if any, do we want to put on those choices. My impulse is to say none. And I'm sure you would have with other guests; and I'm flattered to be on the program because you've interviewed so many brilliant people; but I'm sure you've gotten into the discussion of excessive licensing and that if somebody wants to set up a business selling tickets to a professional wrestling event--I think I point out in New York they need a license to sell tickets to a pro-wrestling match. This is something that is entirely fake--it's not real wrestling, it's pro-wrestling. And they have to get an authentic government license to do it? That's to keep quality high. The quality of the person professionally trained to sell those tickets. Make sure that Andre the Giant really was a giant. Because I don't want to have some midget coming in there and wrestling; make sure he was measured and a full 7 feet tall. Obviously we still have quite a number of restraints, and they tend to be put there by government; entrenched interests liked to tamp down competition.
16:58Let's talk about the people who love their work--which would include me, and probably you--you like your work a lot of the time. I look at that as a great blessing. I look at the history of humanity; and as you point out in the book, there was a lot of romance about primitive man; it was false. Margaret Mead and others who fantasized primitive life as idyllic were wrong. Primitive man struggled to get enough to eat and doesn't spend a lot of time sitting around campfires singing folk songs on an improvised guitar--which they wouldn't have, either. So, I'm very grateful that I live in a time that I enjoy going to work. It's a wonderful thing. There is a tendency--I want to come to your subtitle. I think the fascinating thing is that rat race. Early in the book you say: Stress is good for you; retiring makes you stupid; and the hardest-working people are not the downtrodden but those who cannot afford more vacations. So, let's talk about the people who work through the weekend, compulsively check their email, never want to come down; who enjoy the fact that they are always connected to the office. We know people who go on vacation and brag about the fact that they choose somewhere that they couldn't get email. But I know a lot of people who don't like that. They want to be connected all the time. You think that's good for you, really? I don't think that's good for everyone. I don't think people should feel plugged in or feel an obligation to feel plugged in 24/7. I've had houseguests, friends were here for a weekend; Saturday morning I come downstairs and there they are at my kitchen table, both of them, in tandem, with their laptops open. These were houseguests. We thought we would be having fun! What are you doing? They looked at me with surly looks and said: We're working. Expressing ourselves, being creative; it's good. In fact, they were in a creative industry. I don't think everyone should be a "Type A" raging personality. On the other hand, I don't think people should be made to feel guilty for the fact that they are trying to get ahead, trying to make a better life for their kids and themselves. But we also have to recognize that sometimes those Type As do a lot of good for the world. In Rush I tell the story--my father had had a heart attack while on vacation in Phoenix. Maybe if he'd stayed at his desk he would have been fine, but he went on vacation, had a heart attack. Vacation can be very stressful. You feel like you've got to get all the sights in, golf, museum, the right kind of dinner. Some people do get kind of stressed out. I spent my morning trying to get hotel reservations for Florence, Italy; it took a lot of effort. My heart goes out to you, Todd. So, anyway, my father is going to have to have heart surgery; my mother is there; my brother and I flew to Phoenix; and there were two doctors to choose between, two surgeons. One was a really nice guy; I'd love to go to dinner with him--conversational, laid back; and the other one looked and acted like he was Tom Cruise in Top Gun. Might have been wearing a bomber jacket. But it turns out, this is the guy who does more bypasses and more effectively. He wasn't the guy I wanted to go out and have a beer with, but this was a real professional, a top gun. And when it's your father who is tethered to the IV tubes, who do you want? The one you want to go on vacation with or the guy who really is intensely focused on his work? We chose the top gun; happily, my father survived the procedure. I think we got people who are probably too intense by your judgment and my judgment, but often they are intense in a way that ultimately creates benefits and positive externalities. I think Steve Jobs is probably a pretty intense guy. He wears his black turtleneck and black shirts and so on, but he seems pretty intense to me. I'm pretty delighted with all the iPads and iPhones I've bought in the last few years. He's a good example; he seems to be a pretty demanding fellow and he has strong tastes. He's not an easy-come, easy-go kind of guy to work with. Most of us are the beneficiaries of that process. And even if you don't like Apple, you are a beneficiary because it's encouraged competition and forced others to meet those competitive standards. It's funny--I've got three daughters. I said something to one of them the other day: If you are a guest at somebody's house or with friends going out to dinner, and they ask you what sort of food are you in the mood for, I say whatever you are in the mood for. I think I'm being helpful, not an obstacle to whatever they want. People actually like to hear some opinion in some direction. There's nothing worse than a few couples wandering down a lane because they can't decide what they want or no one seems to have any preferences. Sometimes, preferences are a good thing. And we need them. Steve Jobs is a guy that had a preference for no buttons on computers; and screens; and that's revolutionized how people are doing business and leading their electronic lives these days.
23:02You spend a reasonable amount of time in the book--fairly long amount of time--talking about the evolutionary past that we've inherited and how that imposes constraints on what makes us happy and what we get pleasure from. Talk about the implications for competition and stress, and happiness. Well, we are not sloths, at least most of us are not. We wouldn't be happy just clinging to a branch. As Mary Poppins said to one of her wards: We are not codfish; close your mouth. We are human beings and we've evolved in certain ways. Two of the important ways from a biological point of view and a neuroscience point of view: number one, we have this large frontal cortex that literally sits in the front of our brains. It is our window to the future. It is the part of the brain that allows us to imagine the future, to think forward. It's like our windshield as we go forward. It rewards us for planning. Which is very different from the planning a beaver does to build a dam. That's more instinctual and so on. But we can imagine: should it be a dam made out of sticks or woods or metals. Number two, we've got these neurotransmitters. Most people have heard of dopamine, for instance; dopamine is that neurotransmitter that gives us a rush, a surge of good feelings when we take a risk, when we try something new. So, my argument in Rush is that our brains have evolved in such a way that we are more likely to get good feelings when we move forward as opposed to just staying in place--that's the frontal cortex. And it's the dopamine. Dopamine is not the good feeling you get from winning the race. It is the good feeling you get from being involved in something, from being engaged. Once you win the race, it's over. But the real challenge in life, I find, and my research shows me, is when people feel engaged and feel as if the future is in front of them and they are moving forward. And that's when they are most likely to get those slivers of happiness. In Rush, I don't promise in reading 300 pages that you are suddenly going to feel ecstatic about yourself; but I don't think there's any book that can make you feel that way. I think we should feel lucky. We are privileged that we can grab slivers of happiness now and then. But I don't believe in any yoga master who tells you that if you meditate you are going to feel good every day or most of the day. The good feelings we get are when we are acting, not when we are just sitting on our fannies. I think there's no doubt about that. I think there's a certain paradox there, of course, that we all live through when we do creative work. There is no doubt that the exhilaration of the process is just spectacular. When you are writing the book, imagining how it will come out, it is often more exciting than the actual book. Not because the book is mediocre, but because it's done. As a teacher, I always find the end of the year a very bittersweet time. There's an incredible sadness when college ends, whether it's the end of the year or the degree or the time a student is here. Same phenomenon: the promise, the expectation--there's an incredible, poignant and exhilarating feeling that comes from the uncertainty and that risk-taking you are talking about. So, we have a certain schizophrenia. We know the payoff is often, not disappointing but when it's over it's going to be kind of a little bit of a downer. Yet, we keep striving. In Rush I quote, of all people, Frankie Valli because I was lucky enough to be an angel investor and one of the co-producers of Jersey Boys, the Broadway, Tony Award winning smash hit. Anyway, in that show, at the end, Frankie Valli has been inducted into the Rock and Roll Hall of Fame, and has sold millions of records, household name and all of that. And after conquering the music world, he reminisces about success. He says, "They ask you what was the high point? The Hall of Fame? Selling all those records? Pulling the song 'Sherry' out of a hat? But four guys under a street lamp, that was the sweetest moment." To imagine the future is an evolutionary gift, and we are the beneficiaries of that gift. And yes, I agree: the actual finishing of the task, the accomplishment--you take the bow, you walk off stage; but that's not as thrilling as when you are walking on stage. Or when it's just a glimmer. That Frankie Valli story is a beautiful story. He may have been--who knows if he was telling the truth. But whenever you have done anything, whether it's remodeling your house, changing your wardrobe--the imagining of it is a huge part of the pleasure you get. One of the best sports books I've ever read was Andre Agassi's book, Open in which he confesses--at one point: I hate tennis. One reason he hates it is it's a lonely game and his father beat him into it. As I read that book--and I think I read it right before Tiger Woods had his marital escapades--I thought: Wow, Tiger Woods probably hates golf. He's always winning. Kind of a lonely sport. But at this point what's in it for him--to fly all around the world and have to play golf once again, before all these people? I can't imagine that's nearly as fun or interesting or stimulating for him as it was 5 or 10 years ago when all that greatness was still in front of him. Watch his face when he's en route to winning his first Master's and watch it later on in his career. I think what sustained him actually as long as he was successful was the unrealized expectation that he would pass Jack Nicholas in Majors or some other measure. And that kept him going, I think. As you say, he was getting--you could imagine it wasn't quite as interesting. It does raise the interesting question whether he is happier now. I doubt it. He's got other things going on at the same time. He's got a more interesting golf life, for sure. Now that his wife has taken up the game by slapping him across his window. As someone who sees a lot of theater, and I've actually written a play, hasn't been produced yet--one of the most common complaints about a theatrical piece is "It fell apart. It didn't have a second act." People, when they are disappointed in a play, it's usually not because the first act wasn't good, because the first act is the build-up. It's how things are resolved. I think that reflects the fact that we like--nothing gets people to lean forward in their seats more than if someone says: Hey, let me tell you a story. Just that phrase, that's the promise of something in front of you. How the story ends--maybe it will end with a big belly laugh. But what gets us going is "Let me tell you." Come with me. That's more exciting than: Here it is. Great example. Digressing for a moment onto Broadway: Most second acts aren't as good as the first act. It's obviously a challenge. I never thought about the challenge being the realizing of the expectations or the uncertainty about how the future would unfold. One of my favorite shows is Wicked, and the first act ends with, I think, the best song in the show, "Defying Gravity", and I think the best moment in the show. When the first act ended, the first time I saw it, I said to my wife: Let's go home. That was great. The second act is actually pretty good; but it's not as good as the first act. It's a great show; I didn't leave disappointed or anything. But you are right that the expectation of what comes next is really much easier than resolving in a way that is satisfying. I never thought about it as having an evolutionary component that our brains--we like the future.
32:56Daniel Gilbert, the Harvard psychologist, with whom I disagree from time to time in my book, does point out an interesting observation. I suppose it is true that people tend not to watch DVR or videotaped sporting events even if they don't know the outcome. Big Bears fan; the Bears are playing the Lions; I'm not going to read the paper. They tend not to watch them because somehow they have this feeling that it's already taken place. They are rooting for their team. It isn't going to have any impact through God or brainwaves. So they end up not doing that. I don't know whether that is empirically true, but it's an interesting observation. I think it does reflect the fact that we like to march forward, not play with nostalgia. I'm going to disagree with that. He's not here to defend himself. But I've watched a lot of sporting events taped because I couldn't watch them live. It's probably dying out now because it's almost impossible to keep yourself in what we used to call radio silence, where people wouldn't tell you who won. Or you don't get a tweet or instant message about it. But I do think what's interesting, that I think contradicts that point and reinforces your earlier point, is that I'll watch Wicked--I've seen it I think three times. I've seen it two or three times. My wife's seen it three times. I've got to get you to see Jersey Boys. I've not seen it. I'm open to it. I take no gifts. But I'd like to see it. But Wicked is a great show, and I enjoyed it as much the second time even though I knew what was going to happen. That's the ultimate taped sporting event. I saw Cyrano de Bergerac last night, actually, and I know how it ends. I still love it; it's still powerful. I do agree with you. But the whole concept of ESPN's sports channel--I'll watch a boxing match, an old Mohammed Ali boxing match, again. Just attending the Stratford Festival a couple of weeks ago with my kids in Canada, and we saw Richard III, and you know what--he doesn't make it. You don't spoil it. Spoiler warning--bad outcome for Richard III; he doesn't get a horse. Maybe if he had an iPad he wouldn't have needed a horse. Fascinating, never thought of: When we watch a show the second time, rewatch a classic sporting event, we suspend our disbelief. Even though we know how it's going to come out, we put ourselves back in that moment. I think we savor when things are possible. We love that. Very much part of what makes us human. In the book I also talk about performing artists performing live. I talk about Frank Sinatra confessing he still got butterflies on stage, even later in his career. It's the excitement; he thought it made him sing better. Bill Russell. When I was a kid, old ads with Ella Fitzgerald: Is it Live or is it Memorex? Ads for Memorex tape. Something thrilling about that, because there's the stress. And that gets back to the issue of stress in society and my argument that we need stress. Otherwise, we become too complacent, bored, and discontent. Bill Russell, who has I think 11 championship rings as a Boston Celtic--he threw up before every game out of anxiety. Clearly a top 10 player, maybe top 5 player of all time. Wasn't easy for him. And, as you say, I think he used that deliberately to make himself a better player. I don't think he ever wanted to be complacent or content about it. Better to throw up before the game than get beaten by Bill Russell--be sick for the next couple of weeks. Or during. Now, let's talk about the rat race. You do, at the end of the book, have some--not sure I'd call them caveats, but obviously some people consumed by competition, Type A, whatever you want to call it, lose connections to their friends and family. I think the critics of our modern lifestyle--I love how people say "our modern lifestyle." As if there were one. But let's talk about the people who do work very hard. Obviously it comes at a price sometimes, that they regret. You are not suggesting that you should neglect friends and family and merely pursue the future, right? No, no. I think a balanced life makes sense, but I also find that the great bonding experiences in our personal lives tend to be those involved with action. We just spoke about theater, and it's fun to take your kids and go to the theater. But it's more fun for them if you are doing something other than passively sitting there. And those are the sorts of things that make relationships, that create experiences that make us happy. I'm not a whitewater rafter by any means. But we were on vacation and I took my daughters rafting. I wouldn't say it was the experience of a lifetime, but it was a much better experience than if we watched a movie about whitewater rafting. So, my argument is that no, we shouldn't be working 24/7 and ignoring your family but the time you spend with your family shouldn't be simply defined as downtime. It should be defined in a way that you are creating experiences. And, it's tough to create experiences if you are just sitting on a chair reading the newspaper while your kids are on the other side of the room lounging in their own sphere. That's always an interesting challenge. On vacation everybody has different philosophies of what they do. Some people just want to sit on the beach. They are happy reading next to their spouse and their kids. Other people want to be out doing that stuff, whitewater rafting and parasailing. I've got hyperactive friends who can't stop jumping around in the water, and sometimes I look at them and say: I kind of wish I had the energy to play with the kids as vigorously as Eric does, because the guy won't sleep. I'm not prescribing this as someone saying: Do what I do. I'm not perfect in that respect. But again, it's about building experiences, because those are the sorts of things we remember and that bring us good feelings.
40:30Let's talk about the people on the other side of the political spectrum, or people who would want to restrain some of these choices that we make. As we both agree, some people choose to be more active than others, some choose to be more competitive than others, some choose to be more materialistic. I love that. Everybody has the freedom in our country to choose those options. Why do you think, though, that there are so many people selling intellectually a different flavor, who want to restrain our choices, who argue that these--whether natural or not, you argue in the book that these are natural impulses we have to take into account if we want to be happy and lead satisfied lives, and I agree with you. Why is it then that it's so easy for them to sell that return to Eden philosophy, the Walden Pond, as if Thoreau sat around all day at Walden. I think you point out he was pretty active. He didn't sit around and look off in the distance for most of his life. Why is that viewpoint so nostalgic; why is that nostalgic view so attractive to so many people? By the way, the sellers of that idea, they work awfully hard at it. Deeprak Chopra and all the others. They've got their institutes, their expensive spas, their PBS specials; they are working, they are marketing it all the time. I think that there is this natural, primitive yearning, a yearning for paradise that calls upon people. I said at the beginning: most people are satisfied or very satisfied with their jobs. At the same time many people feel under-appreciated. That's especially true of the intelligentsia. The English professor in his office is sitting around saying: My dumb C+ student just became CEO of Lehman Brothers or President of the United States. So, why should we have this system that neither rewards people based on moral merit; nor does it seem to reward them based on intelligence--because if it did, I as a tenured English professor would be paid far more than any of my students. This has been the attraction of a socialist apparatus for at least 100 years, and that's why its support tends to come from the underappreciated intelligentsia rather than from the middle classes or the rabble. It's a strange thing, though, because many economists hold this Edenistic view, have a nostalgia for the past; and they are making a lot more than that English professor. A Ph.D. in economics is a pretty lucrative gig. It's interesting to me that they still are selling a return to simplicity. I suppose that's right. I'm not sure. Here's what I think the disconnect is, where there is a logical fallacy and leap, like Evel Knievel trying to go over whatever that canyon was. It's one thing to look at your friend Bob and say he's under a lot of stress; he didn't get the promotion he was looking for; he's got a big mortgage, he may have trouble making the payments; so on and so forth. He really needs some time out to turn down the dial on stress. Now, we know people like that. And for Bob, that probably really would be a good prescription. We've got to figure out how to get Bob out of this terribly stressful situation. But the illogical leap that's been made is that people say: Therefore, our society needs to take an Ambien or a Xanax and unplug capitalism or free enterprise because that's what is creating Bob's situation. What might be a good prescription for Bob as an individual I think would be a hazardous prescription on a macro basis; and that's what I find so many of these practitioners doing. If we could just unplug competition, we'd all be better off. What they fail to realize is: Every society had competition. You don't think the Soviet Union had competition? China, in Maoist times had competition. But it wasn't competition to see who could patent the next prostate cancer drug. It was competition to see who could get the next party boss to give them a cold shower once a week. So, they were vying for what scraps were on the table as opposed to building a new world. The competition and stress are there; the question is whether you want to channel it in a way that leads to longer life spans and a better standard of living, or you want to channel it so that everyone is engaged in a zero-sum game of grabbing everyone's scraps on the table. Great point. I do think some of those differences come down to Thomas Sowell's great thesis, the conflict of visions. Sowell says there are people who take what we would call a Smithian view, or a more utopian view of human nature. What you are saying is this is the way we are. So, to suggest we should try to stop that is simply unrealistic. Yes. I'm sure you've found the same. As you've traveled in your career--and I've been lucky enough at various times to be associated with the White House and Harvard and all sorts of august institutions, and I always thought: I'm going to find Mozart at one of these places. It turns out, in my career, I've never found a Mozart. The Mozart of economics or of politics or of writing theatrical works. What I find is we've got a lot of Salieris out there trying to pluck out a reasonable tune. And that's probably good enough. The concept that there's Eden, or there's Mozart, or there's this saintly person if we could just follow in his footsteps--he's not competitive at all. The more honest biographies you read of great men, most recently a biography of Mohatma Gandhi--you find out that, what did you know, humans are humans. So, we've got to take people as they are, not as we would like to recreate them.
47:21Talk about trust. You talk about trust in competition interact. What role does that play in our economy? Trust plays a huge role. My argument is a few things. Number one, as societies become more private-enterprise focused, more commercial--the more trade, the more trust there is. There are some studies that show that, noted in Rush. If you go down to South America, more primitive tribes in southeast Asia, if you can still find aboriginal tribes--people assume, the Margaret Mead types tell us they are more honest. It turns out their murder rates are higher, their theft rates are higher. The more advanced civilizations or countries tend to have lower crime rates. Crime rates have fallen dramatically in Europe over the last 500-1000 years. First of all, the trust and the honesty seems to be developed and enhanced by commercial transactions. Second, it is not the first transaction; it's the repeat transaction. You can be ripped off easily by some fly-by-night salesman. Obviously a pejorative term--it means he's only going to be there for one transaction and he's gone. Well, he's got no reason to engender trust with you if he's there for only that one transaction. But if he's got a storefront, as 90% of businesses to have repeat customers, not stealing or ripping off one customer and moving on to the next, he's got to be honest in his transactions. So, what you need is a society where people trade and a society where people trust that the strangers they trade with will be a more permanent part of their environment. I guess, 15 years ago you might have objected and said: What about all these Internet transactions? That's not my storefront; that's not down the street from me. But now we have the advent of TripAdvisor and the Amazon star system and the e-bay star system--ingenious systems so that people who are strangers somewhere out in cyberspace actually become much closer than strangers, and in some cases you may feel closer to them than the guy who has got the storefront a couple of blocks from your house. Or even a family member, if it's the wrong kind of family member. We all have some family member we'd rather not trust much money with. I use the example of if I have to get to the airport at a certain time, do I want to call my brother or do I want to call a stranger I have to pay? In my case, my brother is remarkably reliable. I'm flying in to Dulles next week; give me your brother's number. There you go. But that's part of the point. I only have one brother, who I can count on; and my sister's pretty reliable too. But I'm sure there are many people out there who have siblings with whom they are better off calling a cab or the shuttle. That's right. Another argument or part of the book: Charity obviously is a good thing. I encourage my kids; and my wife and I try to be charitable as we know how. But can you build a society on charity? I don't think so. This really reflects Hayek's great essay on information. If we are out together and you say: Todd, I like your tie. I say: Here, take my tie, you can have it. You say: Well, can I pay? No, it's charity. And maybe you'll give me your tie instead and we swap. Then we've got some questions to ask. What materials went into that tie? How much silk? How much polyester? How many resources to make it? If we don't somehow have an ability to put a price on something, we end up wasting precious natural resources instead of handling them in a way to preserve them or put some value on them. So, ultimately even a society based on everybody sharing ends up being a very wasteful society with some very big open questions to be answered. You have to know what to produce. That article, of course, is "The Use of Knowledge in Society," which we probably mention every two or three months. Great article. It's where Hayek calls the price system a marvel. I think he was onto something there. For someone to write so brilliantly and so clearly in what even was not his first language is staggering. I think that was the exception rather than the rule. He's not always the most light and intrepid stylist. But in that article, he's pretty clear. It's an amazing thing--his essays are really well-written. I think they are much easier to read than his books. I don't know why. Maybe some Hayekian out there can tell us. I had a conversation with a friend the other day who said a similar thing about Keynes. I always thought Keynes a very clear writer. May obviously disagree about many of his arguments, but I always thought he was a skillful writer. But my friend insisted it was only his essays. It's true; his essays are very well written. His books--The General Theory is very painful to read. Especially today. I don't know if it was easier then. Given the bogus stimulus plan we had out of Washington, I wouldn't recommend reading The General Theory again at this moment. Unfortunately, it's always timely. It's always going to be something people want to use to justify spending.
54:01Let's come to an essay of Keynes's that's relevant for your thesis. Some of your discussion reminded me of it. He has a famous essay where he talks about the economic future. His theme in that essay--written I think in the late 1920s or mid-1930s [1930] and he says: There's going to be a time in the future when we are going to have an extraordinary standard of living. Our biggest challenge is going to be leisure. What are we going to do with all the extra time? He was half right. He was right that an extraordinary standard of living was coming. He was wrong that out problem was going to be leisure, because we still manage to work hard and don't say: Oh, I've got plenty. But Keynes very much pushed in that essay, and I think it probably affected his theorizing elsewhere--he was very anti-saving. He did not like looking to the future. He viewed it in many ways--and if you read the essay--as a moral failing to look to the future. Your book reminds us that we are future-oriented whether we like it or not. Keynes didn't like it perhaps, but it's perhaps the way we are. It's interesting because his teacher, Alfred Marshall, at Cambridge, was someone who embraced savings, and deemed interest rates as the reward for patience. Not medical patients. Schumpeter in his essay, his book on capitalism and socialism, also suggested that ultimately socialism wins. Why? Because the sons and daughters of affluent people will have too much time on their hands and will decide in all of their luxury to plot the end of competition. And I think that's it. I think Schumpeter kind of points to those moralists and economists today. Two hundred years ago when people were struggling just to get enough food not to starve to death, they didn't have time to sit around wondering: Gosh, are we under too much stress? The stress we feel is a luxury. The idea of talking about stress today is a luxury, a result of the fact that we've created this high standard of living. Is now the time to say: Game over, let's just put everything in a lockbox? For all we know, one year from now, there will be a cure for lung cancer, and maybe if we unplug the pharmaceutical industry that won't come about. And thousands will die. I'd rather take the chance and keep going than pronounce that this is the final moment that we should embrace and just keep us in the status quo. I think the people on the other side, who want a more controlled life from top down or who want a less dynamic, more egalitarian world--their argument, I think, is that we've picked all the low-hanging fruit; the improvements that are coming are relatively small. And I'd say: The jury is not out on that one yet. Who knows? I don't believe the jury is out. It's really amazing--in the last 20 years the changes in life expectancy as a result of cardiac medicine and cardiac procedures. It's not a couple of weeks. It's years of gains. And then you get your artificial knees and keep playing tennis. Not just sitting around in an armchair drooling. The quality of life is better too. So much more than just life expectancy. I'm impressed at the number of senior citizens so engaged in the Internet. My mother. Of course, half of her engagement is sending urban myths to me. With alarm no doubt. Don't put that mug of water in the microwave or the entire world will explode! Some of the technological and other benefits we are seeing are not merely redounding to Silicon Valley nerds and 20-somethings. They are redounding to the benefit and the lives of people across many spectra, all age groups.

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