Tyler Cowen on the Pandemic, Revisited
Apr 5 2021

covid-prediction-267x300.jpg Blogger, author, podcaster, economist Tyler Cowen of George Mason University discusses the lessons learned from the pandemic with EconTalk host Russ Roberts. Appearing roughly one year after his first conversation on the pandemic, Cowen revisits the predictions he made then and what he has learned for the next time.

Tyler Cowen on the COVID-19 Pandemic
Economist and infovore Tyler Cowen of George Mason University talks with EconTalk host Russ Roberts about the political, social, and economic aspects of the COVID-19 pandemic.
Scott Newstok on How to Think Like Shakespeare
Author Scott Newstok of Rhodes College talks about his book, How to Think Like Shakespeare, with EconTalk host Russ Roberts. Newstok draws on Shakespeare and other great writers and thinkers to explore the nature of education and the life well-lived.
Explore audio transcript, further reading that will help you delve deeper into this week’s episode, and vigorous conversations in the form of our comments section below.


Apr 5 2021 at 10:39am

The average person in the European union ( and not to mention Brazil) is poorer than the average American so it is not surprise that Americans can get a limited resource way easier than them. Passing judgment on this is quite distasteful to me. Biochemical products are very tricky to make and I am skeptical that the world could have been making way more vaccines than  the ones it’s already  producing. There are a lot of bottle necks. Specially when it comes to raw materials.

As for East Asia, I think they might have  had already some pockets of previous immunity to it. Maybe some other seasonal coronavirus in the region ( something like this happened with the Spanish flu, older people were immune due to contact with a  similar virus ) . Plenty of countries in that region did not handle it better than Brazil. The other explanation is the attitude of the population. They might be better at handling a pandemic.

Apr 5 2021 at 2:50pm

As an EU citizen, I have lots of opinions on the topic of EU and covid-19 and vaccine roll-out, so a few points to add:

Lockdowns have varied a lot here but I think we have overall put more effort into keeping schools open, which is one area where I think we have done better than the US
EU is based on open borders inside EU and tourism is a large share of GDP in many member states which has made the situation very difficult to handle. Imagine sharing an open border with Sweden during the pandemic so that people cross the border continuously in their daily lives! Some people hope for New Zealand style border controls here but I think they would have been very difficult to push through effectively for a long enough period.
EU countries are lagging a month to two months behind US in vaccinations  – which costs lives and lost GDP but should not be exaggerated
The rate of vaccinations will increase in April as there will be more vaccines available. Overall, the scale-up of vaccine production in EU does not seem to be much slower than in the US but the main difference is that the EU is not banning exports like the US. Vaccine rates here would higher if we did not / had not allowed exports to Israel, Canada etc. but I am personally fine with EU being a major hub for vaccine production and other people getting vaccines as well.
Operation Warp Speed surely sped up Moderna’s production but what would be the counterfactual without OWS? Perhaps they would have partnered with another company like Biontech did and would have produced just as many or even more doses?
Overall regarding the vaccines, I feel people are not thinking enough of counterfactuals. The most successful vaccine production seems to be by Biontech and Pfizer which seems to be the most free market of them all. I guess Germany / EU could have said to Biontech, that “don’t collaborate with that American company, we will pay you lots of money and help in every way if you produce vaccines exclusively in EU and for EU”. And EU / Germany could have marketed that as a huge success if they managed to produce, say a billion vaccines in 2021. But we would all be worse off compared to the current situation where in collaboration with Pfizer they are expected to produce 2.5 billion vaccines by the end of 2021.
Same is true of Oxford and AstraZeneca, perhaps we would be better off if UK government had allowed Oxford to partner with Merck, a company with actual experience from vaccine production
I can imagine also other ways by which the whole thing could have been a lot worse in the EU, and I imagine I am not the only EU citizen think that way: member states could have tried to outbid each other – which would have been itself bad for EU cohesion but there would have also been an increased risk of vaccine trade war inside EU which would have been disastrous for EU and the world
In the end blaming EU does not make that much sense, member states make the decisions and they are impacted e.g. by the fact that some of them are really quite poor. I think it is actually quite amazing that Romania was still recently ahead of Canada in covid vaccinations.
There are lessons to learn but I am mostly afraid that politicians will learn the wrong lessons

Regarding the issue with AstraZeneca vaccine and rare blood clots, I recommend this article from Science which explains it in a quite balanced way: https://www.sciencemag.org/news/2021/03/rare-clotting-disorder-may-cloud-worlds-hopes-astrazenecas-covid-19-vaccine I think in Norway, there have now been more deaths in young women due to the vaccine than due to covid-19 which may explain the hesitation to use it. In other places, other decisions may make more sense but please try not to underestimate and undermine European regulators.

Apr 7 2021 at 12:49pm

I think the main criticism of the EU is that hundreds of thousands of people are dying unnecessarily because the EU chose to negotiate for a lower price for vaccines, which are frankly badly underpriced to begin with. When someone is offering you $1,000 bill for $5, you don’t spend two months haggling them down to $1.

Alexander Otero
Apr 12 2021 at 2:06pm

Your response to Tyler doesn’t discount anything he says. The rate of harm is miniscule while the benefit is enormous. The problems are said to be manageable as long as you’re screening for this and doing follow ups. This restriction for an almost inconsequential number of bad outcomes is purely irrational.

krishnan chittur
Apr 5 2021 at 10:59am

There was both success and failure on the science front – the sequencing or the virus, determination of the piece that could be used to design a mRNA vaccine, making the vaccine and all that was amazing.  We did fail on ignoring several lessons from immunology – there were early studies indicating that while sarscov2 was novel – it shared properties with other corona viruses AND analysis of donated blood indicated some pre-immunity (T cells for sure).  There were many signs that while some people needed protection, there was simply no cause for alarm and gloom and doom.  Analysis of the infection and fatalities on the cruise ship did not justify the type of panic that followed.  Far more damage has been done in the name of protection (“precautionary principle”) than that caused by the virus itself.  Worse, state power has been allowed to expand and like 9/11, we will find that our lives are now constrained by often arbitrary and the unlimited power of government that will only get worse.

Alan Goldhammer
Apr 5 2021 at 1:27pm

This was a very good conversation.  Professor Cowan over-estimates the utility of human challenge trials for vaccines.  In this case the most susceptible population is over 60 and the vaccine dose required for this group will be much higher than that for younger people based on past vaccine experience.  This group will be excluded from challenge trials on ethical grounds.  Additionally, challenge trials on small numbers of healthy individuals will not meet regulatory requirements for safety studies.  One of the slowdowns for the current vaccines was the requirement for two full months of safety monitoring for all subjects in the trial.


Apr 6 2021 at 6:56pm

Furthermore, how would you be sure the viral doses in human challenge trials realistically represent those that one would obtain.

Ken P
Apr 7 2021 at 1:47pm

I agree that the utility of challenge trials is overstated.  Challenge trials require regulatory acceptance that the challenge method suitably models real world infections.  It also requires a dose finding study to determine a dose that will cause adequate disease/symptoms in the control group.  A very hot challenge would introduce a lot of risk and noone knows what a “hot challenge” is.  A weak challenge would be a big time delay.  I’m not opposed to them, I just don’t see much of a timeline improvement from using challenge studies.


Steve Raney
Apr 5 2021 at 2:00pm

It is a common occurrence, but podcasts that are not up to speed on the main mode of SARS-CoV-2 transmission (aerosol) miss insights on:

what lockdowns and restrictions on outdoor dining should have looked like
ventilation interventions that could have easily saved thousands of essential workers
how easily the Thanksgiving-Xmas 2020 U.S. surge could have been avoided
the “community of practice” failure by the 451,000 U.S. epidemiologists and public health workers – inability to process CDC case studies, the literature, etc.

Econtalk might benefit from bringing a top aerosol scientist onto the podcast: Colorado’s Shelly Miller, UCSD’s Kim Prather, or VA Tech’s Linsey Marr.

While humanity’s accomplishments with vaccines are amazing, our failure at productively responding to transmission science is equally as disappointing.


Medium 1/24/21: Six Deadly Covid Transmission Myths
Medium 3/20/21: A Weak Army Fighting an All-Out War


Todd Kreider
Apr 5 2021 at 4:35pm

Tyler Cowen’s criticism of the Great Barrington Declaration sure was vague: 1) ” Very passive attitudes or even hostile attitudes toward vaccines.” Not one is against vaccinations but that they should be given to the most vulnerable first.

2) “They’ve told us that a lot of the cases are phony.”  It was the NY Times that explained up to 90% of positive cases may be false with no active virus because states were using PCR magnification cut-offs higher than the <33 that the FDA has recommended. Virginia tests at 40, Oregon at 45, Wisconsin has two labs that test at 37 and 40. Dr. Fauci said on a zoom interview last summer that cut-offs above 35 were worthless because there are only RNA remnants left, no active virus.  /in comparison, Germany has been testing at 25 magnification cycles.

4) “A lot of the people connected with that institution have made very dubious predictions and not backed down from them.” No one has made predictions “connected with that institution” on how many deaths there would be. Does “connected with” mean one of 13,800 medical and public health scientists or 42,000 medical practioners who signed the GBD? Some of them may have made predictions.


Jeffrey Hall
Apr 6 2021 at 9:38am

I must take issue with a statement made by Cowen: “If you cover your face when sneeze, you believe that masks work.” This offhanded comment seems microcosmic of the problem with politicization of science. If you cover your face with your hand, then shake hands with people, you increase the transmission of respiratory infectious particles in the droplet (not aerosol) range, hence the actual recommendation that you sneeze into your inner elbow. Similarly, a previous interventional trial of masks in flu season in Southeast Asia, comparing cloth masks to surgical masks to standard of care (which was surgical masks, as they thought it unethical to coerce workers out of their standard mask use) found that cloth mask use was actually associated with a rate of infection higher than baseline no mask use (from previous studies), with the authors suggesting that the moist environment of the mask allowed for viral particles captured from ambient indoor air to remain infectious longer, thereby increasing the mask-wearer’s risk of infection. The study also did not find a difference in surgical mask use and base rate of infection. The distance between intended and actual use (and thus effectiveness) is often significant.
The only interventional (and thus effectiveness) study of mask use of which I am aware is the Danmask Study, which failed to detect a 50% reduction in viral transmission. It doesn’t “prove” that masks don’t work, but it does provide reasonable evidence that the effectiveness (and, conversely, the harm) is limited.
However, the appetite for study of mask effectiveness has been low, with authors even being criticized for publishing data demonstrating little change in CO2 from mask use, while the appetite for model-driven (and thus reductionist) mask efficacy studies seems yet to be satiated, leading to positive confirmatory feedback loop that may be significantly divorced from reality. Real-world mask use often involves multiple daily donnings and doffings, less-than-perfect use (the under-the-nose mask placement), and extended single mask re-use without effective sanitization, none of which is generally included in the models. As the other possible public health rationale for mask use is give the public a sense of security when returning to pseudonormal patterns of behavior, I worry that this could plausibly lead to a moral hazard situation with increased transmission (false sense of security causing decrease in isolation behaviors). And yet researchers are reluctant to investigate (or even suggest) anything counter to the established narrative (masks save lives) for fear of public scorn.
Tell me what I missed / where I’m wrong.

Ryan McPherson
Apr 6 2021 at 1:40pm

The statement is wrong on a number of fronts.  First, most people sneeze into their elbows out of politeness, and so as not to spray people with sneezes.  It has less to do with “getting people sick,” and is perhaps more analogous to not belching or passing gas in public.

But granting his premise; if you believe either that sneezing into your elbow or wearing a mask is a legitimate form of disease mitigation, you are simply wrong.  If you further believe that this is justification for state mandates and the elimination of individual liberty in favor of government force, you are dangerously wrong.

In that statement, Cowen justifies ignorance by suggesting that it is widespread.  That is a foolish argument.

Jeffrey Hall
Apr 8 2021 at 4:22pm

I disagree that sneezing into one’s elbow is without infectious risk mitigation, if the following are true:

1) the infectious agent (virus, bacteria, archaea, or prion) is spread primarily by respiratory droplets (still the party line on SARS-CoV-2 spread, though there are reasons to doubt this); and

2) the contact with another person’s (presumably contaminated) inner elbow (antecubital fossa) is rare; and

3) the chance of contaminating one’s own inner elbow is low.

If these are true, then the rate of transmission should be meaningfully diminished by recommending (or requiring, were one to believe such is within the scope of government, which I do not) that everyone sneeze into their inner elbow. Part of my point was that the situation with masks is considerably more complicated, and thus fraught with risk of unintended consequences. Consider that in real world mask use, people may lower their mask when they sneeze, as they don’t want to dirty their mask. They may put the mask on a countertop where infectious particles reside, converting the mask to fomite for spread. They may have significant rhinorrhea (runny nose) and be ok with contaminating the mask, allowing the cotton fibers to serve as the reservoir of infectious particles when they yell to be heard through the mask. They may use the same mask for weeks without laundering, all the while collecting additional infectious or allergenic particles, which they then inhale. Ad infinitum. And that’s considering only the effect on direct particle spread, not on chance for interference in interpersonal communication resulting in increase in violence, impairment in social cohesion, increase in environmental triggers for psychosis, etc.

I wholeheartedly agree that allowing governmental power creep, be that mask mandates or expansion of regulatory agencies, is a dangerous precedent.

In response to the comment about surgeons not wearing masks, and computer modeling of mask effectiveness (not efficacy – if you don’t know the difference, I fear our commentary exchange may not be either of our benefit): I would invite you to more carefully read my initial comment, as well as consider the following: Surgeons are trained in donning and doffing the mask. In my opinion experience, they wear each mask for a very finite time (ideally changing between cases, though not always in practice), are operating in an area where the culture encourages others to point out to them when it is not being used properly or is soiled. They are working in environments that are as close to sterile as practical, going into body cavities that are often (not in abscess, etc) sterile before the case start. And the masks are thought to help prevent bacterial contamination (I am aware of no viral surgical site infections – if one were immunocompromised enough to acquire such, I think one would have difficulty convincing a surgeon to cut). None of these conditions apply when we are discussing universal public masking. My major point, in brief, is that we don’t know, and the assumption could easily cause more harm than good, and further that the politicization of the topic is actively harming the scientific process


Todd Kreider
Apr 6 2021 at 3:02pm

The only interventional (and thus effectiveness) study of mask use of which I am aware is the Danmask Study, which failed to detect a 50% reduction in viral transmission.

A meta study of all ten randomly controlled mask studies conducted prior to the Danish study concluded last May:

“In pooled analysis, we found no significant reduction in influenza transmission with the use of face masks”



Jeffrey Hall
Apr 8 2021 at 4:25pm

I appreciate the link, but it is one I’d already seen (the Singapore study that I mentioned was pooled into that meta).  I wasn’t specific in my initial statement, which should have read “The only interventional study of SARS-CoV-2 transmission of which I am aware…”

Todd Kreider
Apr 8 2021 at 10:22pm

There is no difference in how a flu strain and a coronavirus transmits as these are respiratory viruses that are the same size so masks have the same non-effect.

Jeffrey Hall
Apr 11 2021 at 10:30pm

I don’t think we know whether it’s true that influenza and SARS-CoV-2 virus transmission are as similar as your comment implies. Were it true, why did the flu season abruptly curtail at the moment that COVID-19 was ramping up (we were certainly testing for both, any time there was clinical suspicion)? Why did COVID-19 ramp up during a time when flu is typically absent (April-July, in my area)?

Apr 7 2021 at 8:33am

So you would be ok with a surgeon not using a surgical mask while doing an operation?.


Direct measurement suggest that the droplets are reduced.

And virus and bacteria are different bests , a moist environment helps bacteria but it does not necessarily help viruses as they don’t reproduce by themselves.


Earl Rodd
Apr 9 2021 at 9:34am

The argument about surgeons and masks is a red herring. Surgeons wear masks to avoid mostly bacterial infections in open wounds. This is so different from the use case of COVID spread.

Apr 6 2021 at 1:59pm

Tyler seems to think that COVID is driven in large part by people’s behavior. I could be wrong, but that seems to be his thesis.  For example he says, “Japan it seems, I’m not quite sure I understand what they did that mattered, but they have done pretty well. Same with South Korea.”  He also said, “So, Vermont has done a good job in limiting cases. California, at least for a while did a good job in limiting cases and was fairly locked down.”

Arguably South Korea had strong contacting tracing and I could believe that’s one thing that worked for them, but did Japan?  And then how do we square the fact that California, after low case counts last summer saw a huge spike in the fall?

And what is driving the current increase in cases in places like New York, Michigan, Chicago, and Minneapolis, but not in Florida, Texas, and California? It would appear that there is a geographic component to infections that is a strong driver than behavior.

Behavior has to drive some infections, but there are other, unexplained factors, that appear to drive a very large component of infections.

Todd Kreider
Apr 6 2021 at 3:23pm

Arguably South Korea had strong contacting tracing and I could believe that’s one thing that worked for them, but did Japan?

Japan had some contact tracing but not at the level of South Korea. Japan used cluster testing but that only saves on costs and requires under 10% of the population has been infected according to what economist Tim Harford reported last year.

There is a notion that South Korea was mass testing, but it and Japan tested the least among OECD countries along with Mexico. The pandemic hit South Korea harder in early March last year than the U.S., which had a lag in case increase. According to Our World in Data – Covid-19, South Korea was testing .25 people out of 1,000 per day then compared to <0.0 out of 1,000 per day in the U.S. and Japan.

By late March, the U.S. had passed South Korea in testing, .18 per 1,000 people per day in South Korea and .25 out of 1,000 per day  in the U.S.  with Japan still under 0.0 in 1,000. By mid-May, South Korea was testing 0.15 out of 1,000 per day, the U.S. was testing three times as much at 0.5 out of 1,000 per day and Japan was testing at .3 out of 1,000 per day.

After over a year, South Korea has had 35 Covid-19 deaths per million, Japan has had 75 deaths per million and the U.S. ranks at around #11 in the world at 1,700 deaths per million. Based on a comparison with Japan, South Korea’s contact trace testing didn’t have much to do with far fewer Covid-19 deaths than in much of the West. Most of the difference is likely due to prior immunity, different ways of counting Covid-19 deaths and a healthier elderly population.

Apr 7 2021 at 8:39am

So I can’t claim to know what is behind South Korea’s numbers but I think comparing the number of tests per capita does not make much sense: South Korea has had consistently lower positivity rate, so they have done more tests compared to cases all the time which is likely to mean that they have missed fewer cases.

Keivan MK
Apr 6 2021 at 2:43pm

The slow pace of vaccination in Europe has been brought up both in this episode and the one with John Cochrane. I was rather surprised that the issue was so inadequately addressed by both guests and in the conversation with Professor Cochrane it was even implicitly misattributed to regulatory issues of the EU.

The main reason that EU countries are behind the US and the UK in their vaccination campaign is that the European Commission (the execratory branch of the EU) which was put in charge of procuring the vaccines acted very slowly, and (possibly due to wrong incentives within the EU and lack of experience in dealing with such tasks) unnecessarily focused on getting a better deal instead of getting a fast one. Almost everything else that happened after is the downstream of this inert action of the European Commission. One has to also keep in mind that the world capacity for producing vaccines is finite. In a different possible world in which the EU is doing better, other countries would have to be doing worse.

Apr 7 2021 at 12:59pm

“the world capacity for producing vaccines is finite”

Yes, but at a level many times that of the present day. I think your point is true to some extent but supply could have been increased with more resources. Finite is not fixed.

John Alcorn
Apr 6 2021 at 2:45pm

Re: Tyler Cowen’s reply to Russ Roberts’ questions about lockdowns:

“lockdowns I think is a more complicated question. There’s no doubt that if for a few weeks you lock down, your number of cases will fall dramatically. The question is, how do you sustain that lockdown and aren’t you simply shifting cases into the future?

So, my view is, we needed to do a major lockdown around the time last year when we recorded our podcast. Close most things so that the hospital system would not be overloaded. Allow the hospital system to adjust. Allow people to learn, with some degree of knowledge, what is safe and what is not. And, then we should have reopened.”

Compare Eran Bendavid, Christopher Oh, Jay Bhattacharya, & John P. A. Yoannidis, “Assessing mandatory stay-at-home and business closure effects on the spread of COVID-19,” European Journal of Clinical Investigation (24 December 2020, link here):

“In the framework of this analysis, there is no evidence that more restrictive non-pharmaceutical interventions [mrPNIs] (‘lockdowns’) contributed substantially to bending the curve of new cases in England, France, Germany, Iran, Italy, the Netherlands, Spain or the United States in early 2020. […] reductions in social activities that led to reduction in case growth were happening prior to implementation of mrNPIs [lockdowns] because populations in affected countries were internalizing the impact of the pandemic in China, Italy and New York, and noting a growing set of recommendations to reduce social contacts, all of which happened before mrNPIs [lockdowns]. […] the proportion of COVID-19 deaths that occurred in nursing homes was often higher under mrNPIs [lockdowns] rather than under less-restrictive measures.” (pp. 4, 5 & 9)

The authors note the difficulty of cross-national comparisons, and the need for better data and further research.

I would like to make a plea for comity in retrospective analysis. I recall vividly the sheer uncertainty surrounding the first wave of the pandemic. Although a number of public intellectuals (and I who am nobody) firmly disagreed with Prof. Cowen from the outset about lockdowns, I admire (a) his willingness to stick his neck out early and often, tirelessly doing his level best; (b) his incisive predictions about political economy in the pandemic (e.g., ‘the epidemic yoyo’); and (c) his willingness to revisit his predictions a year after.

Apr 6 2021 at 6:59pm

Tyler is a little to quick to blame the “bureaucrats”. The US decision to forbid the export of the Astra-Zeneca vaccine, is not a “bureaucratic” one, but a political one. The politicians fear that if they export the doses, and then a problem with the others means they are suddenly a good option, the public will be unforgiving. Unlikely, but there is little political upside to allowing their release now vs in three months.

Apr 6 2021 at 7:09pm

A fact on school closings. In some areas, there really was not solid public support for rapid reopenings. If there had been more, then perhaps it would have been easier to forces concessions from the unions.

In Montgomery County, MD’s December 2020 survey, the percentage of parents who opted for hybrid over virtual-only was only about 50%. The poorer communities were more likely to prefer virtual-only.

The way this counters the unions is the fact that those favoring in person instruction tend to be wealthier, more educated, and vocal.

Don Boudreaux
Apr 6 2021 at 8:07pm

While Tyler is a long-time colleague for whom I have great respect, I’m perplexed by much of what he says in this discussion with Russ. Some of what perplexes me has been mentioned by earlier commenters. But what is to me the single most perplexing of Tyler’s remarks has, I think, as yet gone unmentioned. Specifically, it’s his claim that what he calls governments’ “very vigorous response” to Covid – including the early lockdowns – were justified in order “to maintain your societal coherence.”

I disagree profoundly.

To lock people down, to mandate masks, to close schools, to restrict travel, and to stir up fear of Covid that is far out of proportion to the disease’s actual dangers is to shred the warp and woof of societal cohesion. Short of an actual, bazookas-blasting civil war, I can think of nothing that can have frayed and punctured societal cohesion more than the Covid responses – both the coercion and the fear-mongering – championed by most governments and pundits.

Many children are still kept from their classmates and often even from their neighborhood playmates. Families and friends were discouraged from joining together to celebrate holidays and special, even solemn, occasions. Fans were prevented from gathering together live at sporting events. (Fans were replaced by freakish cardboard cutouts.) Many sporting events themselves were canceled. Dining out ground to a halt, and remains today at far from full capacity in many places. Unlike Tyler, I very much enjoy sitting in crowded bars and talking with bartenders and patrons. Yet such activity, at least in Virginia and DC, remains impossible.

Sitting about a month ago at a table placed beside what was once a bar within a restaurant, I was reprimanded by the restaurant manager for turning around and leaning in for too long to chat without a mask with a couple seated more than six feet behind me. Some societal cohesion this.

Movie theaters, concert venues, gyms, coffee shops, bookstores, retail shops and shopping malls, churches, public parks, amusement parks, beaches – places where strangers congregate for enjoyment, relaxation, recreation, worship, and often for the mere pleasure of being among others – were shut down completely for a time, and might be shut down again. Many are still in at least partial shut-down. Some will never reopen.

The Canadian government literally recommended that people stop having sex with each other and instead to masturbate. And for those who simply cannot do without the actual intimacy of a partner in the flesh, the recommendation was at least to wear a mask during intimacy. What kind of deranged and anti-social freak recommends such things?

Very many people now regard strangers as poisonous monsters from whom unnatural distance must be kept. Passers-by steer clear of each other as people steer clear of mangy stray dogs. Masks hide smiles and muffle voices. We humans who communicate so much and so deftly with facial expressions are now denied this form of communication.

Shaking hands, back-slapping, and hugging are much-reduced.

My campus, George Mason University, remains largely deserted. Student unions and nearby restaurants that cater to young people are either quiet as mausoleums or shuttered.

Classes are conducted by Zoom. I teach – “teach” – by Zoom (or, rather, its equivalent called “Blackboard”).

People Zoom in to work – from home. In their pajamas.

Covid restrictions and Covid fear-mongering keep us dangerously apart. We’re not “all in this together” as much as we are altogether being driven apart from each other by unwarranted fear and by steely coercive state powers forged in the flames of this fear.

Elderly people are forcibly kept apart from their loved ones. One of my and Tyler’s mutual friends is unable to visit her dying mother in Europe.

The hand of economic nationalists to cut trade ties with foreign countries has been greatly strengthened by fears of Covid, thus threatening globalization and the peace and prosperity that it brings.


Tyler objects to the practice of emphasizing the fact that Covid overwhelmingly kills very old people and poses practically no risk to the young. He doesn’t deny this fact; he instead says instead it’s irrelevant.

Yet this fact is not at all irrelevant. It’s highly relevant.

First, more widespread recognition of this fact would help to better calibrate the public’s fear of Covid to this disease’s actual risks. (How is this outcome not desirable?) Second, such recognition would have prevented our indiscriminate widespread fear of each other. Efforts would have been focused on reducing risks to the elderly and vulnerable rather than on misleadingly frightening everyone to regard everyone as vermin to be avoided rather than as humans whose company and cooperation enrich our lives.

The “vigorous” Covid response that Tyler applauds did not create societal cohesion. It sparked and is still fueling societal disintegration. The results will not be happy.

Ajit Kirpekar
Apr 6 2021 at 9:53pm

Dear Don,

Long time reader of yours. I think its important to judge these things ex ante. If there’s tremendous uncertainty about the lethality and spreadability of the virus, perhaps the best approach is to promote a healthy fear in the populace. I am not an expert, but I can understand the knee jerk reaction of trying to abate the damage(and perceived down the road damage) in bluntness, quickest, and simplest way possible. Telling people to stay at home and getting them to believe it because it would overtax your police force to enforce lockdowns for everyone.

In that sense, Its quite understandable why the other costs fall by the wayside.

Again, ask yourself if the next pandemic comes and there is uncertainty about just how deadly it is. Will we not once more resort to the bluntest instrument of all?

Student of Liberty
Apr 7 2021 at 5:08am

Will we not once more resort to the bluntest instrument of all?

Is it not a problem indeed? Ex-ante, we know that this virus was far from as dangerous as some feared. And of course, we do not know how dangerous the next one will be.

If we get a novel virus every other 10 years, are we going to close down society for two years or more at that frequency in the future? This is not blunt, this is bleak!

Ajit Kirpekar
Apr 7 2021 at 11:03am

This is in response to John and Student and even Don who probably if he read my reply would be appalled.
I think I should clarify my position a bit. Full disclosure, I am also a libertarian and I also think lying to the public and encouraging politicians to lie is a serious threat to liberty, it retrogrades the faith in our institutions, and is on the whole a step in the direction of tyranny.

I do also worry that another virus will come along that will be uncertain both in terms of it’s lethality and spreadability.  I also think it’s naive to assume the whole population will react rationally/ responsibly and the problem is that it could only take a few bad actors to create a pandemic.

So I view this as a negative externality that requires some governmental response, but now we are left in a world where whatever that response is, it better be simple to implement, avoids partisan politics, and does not require much faith in politicians doing the right things. That’s why to me an immediate lockdown with the appropriate message of fear are the most effective approaches given the conditions I stated above.

John Alcorn
Apr 7 2021 at 8:29am

@ Ajit Kirpekar,

Experts and elites always will be tempted to employ noble lies in policy and rhetoric. They should resist the temptation, and we should flag the practice. Transparency and full, honest communication (and open fair-minded debate) about risks, costs, benefits, and uncertainty is the high road and the right road. Manipulation cast as paternalism is, well, manipulation.

Apr 7 2021 at 7:32pm

Thank you for your powerful response.  I thought I should write a response, but yours covers my concerns beautifully.

Ken P
Apr 7 2021 at 2:14pm

IMO, this was the softball of pandemics.  We knew early on that specific groups were extremely high risk and others were not.  With all the efforts we put in doing lockdowns, etc.  we put almost no effort into protecting those high risk groups.

The problem was that the whole strategy morphed into one of containment, bordering on eradication.  The approaches totally ignored Bastiat’s unseen.  Closing down schools results in parents dropping off kids at each others’ houses and picking them up, often accompanied by long conversations.  Shutting down restaurants resulted in young adults moving back in with their aging parents.

There’s a strong temptation to consider what countries/states “did well” or did not.  My thinking is that we should first do the same for other viruses.  Was the 2018 flu (or other viruses) homogenous around the globe in the absence of policy interventions?  I suspect it was quite varied and yet that is what we assume that when we assign polciies as cause for variation.

Doug Iliff
Apr 7 2021 at 8:43pm

I am a 71 year old family physician who has not missed a day of work since the start of the pandemic.  Was that courageous, foolhardy, or clueless?  I don’t know.

One of my colleagues, a physicians’ assistant twenty years my junior, resigned from my employment and bought a personal ventilator last March.  Was that wise or nuts?  I don’t think it was wise, given what we know now about ventilators, but at the time I didn’t know.

I wrote an op-ed for the local paper in April, the only physician in a large medical community to do so.  I think I was wrong in minimizing the threat, and in advocating the early arrival of herd immunity.  I think I was right in urging that schools not close.  But I don’t know.

I signed the Great Barrington Declaration the day after it appeared.  I don’t know if that was the right thing to do.

Is that fact that the average years of life lost in the pandemic was only 11, as compared to maybe 40 in the 1918-19 Spanish flu, relatively good news?  How can anyone do that calculus?

The reason this conversation was stimulating, distressing, maddening, or hopeful— choose one, or another among many  contradictory emotions— is that the uniqueness of the disease, the fecklessness of our politicians, and the public debates among experts have led to responses which are more emotional than rational.  Rationality will have to wait.  In the meantime, we don’t know.

Jeffrey Hall
Apr 8 2021 at 4:50pm

I’m a 38 year old hospitalist who also didn’t miss a day of work (actually signed up for extra and volunteered for our COVID unit), signed the Great Barrington Declaration, and don’t know. I don’t think I could have done anything differently and lived with myself, and I suspect the same is true for you. I searched out how to intubate with minimal exposure risk, which involved polycarbonate boxes, early complete neuromuscular blockade, in addition to the usual. I think the box added little physical (but more psychological, for some) protection against infection. I think the heavy use of NMB and drive to push intubation off as long as possible usually caused more alveolar derecruitment, and was thus harmful. I’ve been encouraging full anticoagulation for the bulk of hospitalized COVID patients, and I think that was helpful.
I hope the biggest lesson we can all take from this pandemic is the permission and courage to say “I don’t know.”

John P.
Apr 8 2021 at 1:56pm

Regarding the discussion beginning shortly before 48:10 about Tyler’s optimism based on a weakening in the forces of wokeness and a multiplicity of viewpoints:I worry that the addictiveness and programming of social media will (continue to) automatically find and amplify divisions that would otherwise sputter out quickly or not even be noticed in the first place.  In other words, many people seem to be addicted to social media (or in the case of organizations, are obsessed with social media because so many people seem to be addicted), and they accept as fact social media’s facade of being a representative sample of reality.  And social-media algorithms sniff out topics that get people excited and guide users to ever more extreme versions of whatever excites them.  Thus, a small difference of opinion on an obscure topic can become, under the influence of social media, a major dispute between tribes, with each tribe completely isolated from the inputs that are reaching the other tribe.  (You might call it the “Robot-Iago” effect.)  I don’t see this stopping anytime soon, and it makes me very pessimistic.

Earl Rodd
Apr 9 2021 at 9:52am

The part of the podcast thinking “outside the box”, especially on economics, was most interesting – Dr. Cowen always has some new ideas. This discussion why we did see a strong (negative) Keynsian multiplier was challenging and edifying.

However the parts of COVID itself were rather “main stream” failing, in my view, econtalk standards of dealing with research. Examples:

Constantly referring to vaccines as “approved”. They are not. From the FDA Fact Sheet for Recipients and Caregivers: “The Pfizer-BioNTech COVID-19 Vaccine is an unapproved vaccine that may prevent COVID-19. There is no FDA-approved vaccine to prevent COVID-19.”. Now, if the vaccine(s) turn out as well as it appears they might, there is an interesting question of whether the EUA process should be used in other cases – cases where promising drugs are languishing in FDA delays.
I enjoyed the discussion concerning things people (including the host and guest) were wrong about. A whopper not mentioned was the modeling group at IHME so often quoted in the early COVID days. I saved their model run from late March 2020 (they kept revising it). It was recommended to me by a doctor relative because it had error bars. So what happened: The graph stayed well within the error bars for about a month. But the model showed COVID pretty much disappearing by June 1. Later revisions always showed it going away in 3 months.
I find it very frustrating that one enormous factor is always neglected. Government response was on a number of fronts. One front NOT pursued was early, effective, out-patient treatment to keep people out of hospital. Not only was this not a focus of research (e.g. already approved drugs) and data collection from treating doctors, but the public health establishment actively tried to suppress even trying safe treatments in order to get data. At worst this problem cost 100s of thousands of lives. One does not need to prove that HCL, Ivermectin or others are silver bullets – the egregious  error was in not even researching and coordinating data. We really don’t know how effective these treatments are – a sad state of affairs.
Others have commented on Dr. Cowen’s falling for the simplistic idea that a mask must matter just be seeing the difference coughing into one’s hand makes. The problem is twofold. One is the macro data – the US went from almost no mask wearing to near universal mask wearing in a short time period (when the Chinese had filled the supply chain) and yet we did not see a sudden fall in infection spread.  The other is the couple studies showing masking ineffective – not conclusive – studies have their limits, but without any similar studies contradicting them. It’s not hard to come up with other hypotheses – one I have is that masks encourage spread because people can’t hear other through masks so get closer to each other.  Yet, with the only decent research shows masks ineffective, all we have is the mantra “masks work.” Not very scientific.

Jerome Archambault
Apr 10 2021 at 10:07pm

No sure why American dismiss Australia so fast. They have 50 times less death by pop at that point it is not a correlation… Within a huge country Australian were free (most of the time beside when there was outbreaks and there was some but they acted). My sister is living in Adelaid (1M pop), she had 3 days of preventive lockdown and thats it. Otherwise it is live as usual, big sport event, meeting everywhere … She cannot understand what is happening here. I think 95%-99% of the pop would have prefer that in insight. Also what is the point of traveling other countries if everything is close. Semi-lockdown are about useless and will go on forever and that tactic even allow new variant to come forward…   Not saying the strategy had no cost but the gain in term of lives saved + the gain in economic activities clearly outweighs the loss of civil liberties when there were uptakes.  American had huge loss of lives, civil liberties and economic activities. Where is the upside?

By the way Tyler, no one asked you how to get in because by the time their strategy worked, their borders were closed to foreigners…

Kenneth MacClune
May 4 2021 at 3:44pm

Thank you for this episode – I was very glad I didn’t have coffee in my mouth when Cowen said, in talking about the odd political alliances these days, that “You’ll have more fun talking to a Marxist,”.  I have not laughed that hard in a long time.

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TimePodcast Episode Highlights

Intro. [Recording date: March 15, 2021.]

Russ Roberts: Today is March 15th [2021--Econlib Ed.] and my guest is economist, blogger, podcaster, and author Tyler Cowen of George Mason University.

This is Tyler's 13th appearance on EconTalk. He was last here in March of 2020 to talk about the pandemic. We recorded that conversation almost a year ago to the day. And, Tyler was my first guest to discuss the pandemic. I hope he's the last one but I suspect not. Tyler, welcome back to EconTalk.

Tyler Cowen: Thank you, Russ. Always an honor to be with you.


Russ Roberts: Given that this is roughly the one-year anniversary of the real start of the fear of the pandemic anyway, I thought it would be useful to look back on what we said a year ago and to talk about what we've learned since then and what we still have to learn. Why don't you start us off with talking about what you think are the most important lessons of the pandemic that we need to learn for the next time?

Tyler Cowen: Speed really matters. I've called it the speed premium. So, the countries that did best reacted immediately. Our biggest success of the pandemic was Operation Warp Speed. Obviously it was quick relative to the expectations of even experts. And, on most other decisions we dillied, we dallied. Many thousands of people died who didn't need to. And, when we acted decisively we did pretty well.

I would say that is by far the biggest lesson. When you act decisively you will not always do the right thing. But, waiting until you have perfect knowledge, say, about masks, you're going to get a lot of things wrong and cause needless suffering, GDP [Gross Domestic Product] losses, and loss of lives.

Russ Roberts: So, what do you think--what were we too slow on? We were fast on creating a vaccine; we were not so fast on distributing it. Although, I would argue we've done pretty well for a first-time kind of thing in a big country with a very complex healthcare system. Some states have done better than others. What do you think we took too long to do?

Tyler Cowen: Well, the FDA [Food and Drug Administration] approving tests and rapid tests took far, far too long. And, the FDA is still giving testing trouble which is inexcusable. As we speak, the Astra Zeneca vaccine still is not approved. And, if you don't want to approve it, well that's a decision but at least send it to other countries. Do something with it.

The Trump administration had in essence two months of prep time in which we essentially did nothing. You can go on and on. Getting research funding to people doing work on COVID took longer than it needed to. The early three or four first weeks of distributing the vaccine were a train wreck. Now it's actually pretty good: as you know, we're averaging almost three million vaccinations a day.

But, still in virtually every area except for the vaccine itself, and even that could have been much quicker had we considered the possibility of human challenge trials.

Russ Roberts: So, explain what those are.

Tyler Cowen: Possibly the whole thing. A human's challenge trial is where you test the vaccine by recruiting volunteers. You can pay them if you need to. So, rather than letting people receiving the placebo randomly get COVID, you design that some people will get COVID. It's no higher a number. And, then you can test more rapidly whether the vaccine is effective and in essence should be approved for having passed a Stage 3 Trial.

If we had done that, there's quite a good chance that the program of vaccination could have, say, started by very late summer and the whole winter wave possibly could have been avoided.

Russ Roberts: And, just to clarify what you said Astra Zeneca, you said it's not approved. It's not approved here in the United States, but we have--

Tyler Cowen: But, over 50 nations--

Russ Roberts: but, we have a supply of it--

Tyler Cowen: including the risk-loving Canada have approved it. And, we have millions of doses in a factory in Baltimore that are just sitting there. We won't approve them. And, at least as we are speaking we won't give them out to any other country. And, that is because of bureaucracy. And, that is a tragic crime which has no justification.


Russ Roberts: One of the lessons that I think we've learned from this that we have not talked about in this program--and I want to recommend the John Cochrane episode as well as all of them that we've done. They're still going to relevant for this conversation. We'll put a link up to that whole set. One of the things I've learned from this--I think I already knew it but it's gotten a little more intense: The challenge people have is thinking about probability.

As we are recording this there's I think some unease about the Astra Zeneca vaccine because of blood clots. I think the number was 37 blood clots were seen. Was it 17? A number under 50, in millions of doses delivered. And, that number is, I was told, I read, I don't know if it's accurate, is below the number in the general population of the prominence of blood clots. Which suggests that this vaccine remains quite safe.

But, I think some countries have already stopped delivering it and others I'm sure have more unease about it. So, the challenge of deciphering data generally and probability and risk and specifically is a human problem.

Tyler Cowen: And, again, you have to compare this to people, say, in Mexico who are not getting any vaccines at all. And, at this point I don't think the FDA is going to push the green-light button. But, again, let's distribute it overseas.

Russ Roberts: Do you think that the availability of rapid testing would have made a difference? Paul Romer early on in the pandemic pushed for that. Was not successful. Talked about it on EconTalk. A lot of people--in a recent episode I think with Megan McArdle which hasn't aired yet but will soon, she also refers to that. Why is that so important? Why do you think that would have made a difference?

Tyler Cowen: The social returns to mass rapid testing are much higher than the private returns. So, if you test a single individual, you're never quite sure how good the test was. But, if you test people en masse, in essence what you do is you lower R--the speed of transmission of the virus. People know when to stay home. If you could test asymptomatic people multiple times a week cheaply, which is indeed possible, that would be an imperfect metric, you can have a considerable degree of control over the spread of the virus.

And, of course many nations, especially in Asia, have done a much better job of rapid testing than the United States has. So, it has a track record. It's not perfect.

I think a problem we had in this country--we ultimately ended up doing a lot of testing but didn't do much useful with the information we got from testing. So, even there, our performance on testing was mediocre. Even once we got the numbers up.


Russ Roberts: Where do you think we stand in our knowledge of the effectiveness of masks and lockdowns? I've noticed that it's become of course a tribal issue, a partisan issue. Where do you stand on it?

Tyler Cowen: Masks in my view are modestly effective. If you put your hand over your mouth when you sneeze, you believe that masks matter.

Arguably masks are somewhat overrated by a number of public health experts. But, the cost of wearing masks is very low and we should have done more of it earlier on.

We're now in a situation where it's become a symbol. So, you have people walking outdoors alone wearing a mask and that doesn't in practical terms make any sense.

Now, lockdowns I think is a more complicated question. There's no doubt that if for a few weeks you lock down, your number of cases will fall dramatically. The question is, how do you sustain that lockdown and aren't you simply shifting cases into the future?

So, my view is, we needed to do a major lockdown around the time last year when we recorded our podcast. Close most things so that the hospital system would not be overloaded. Allow the hospital system to adjust. Allow people to learn, with some degree of knowledge, what is safe and what is not. And, then we should have reopened. Many places did. Many places did not. California is still too locked down in my opinion.

So, I think we needed a lockdown, but at some point people have to get on with their lives. And, a state such as Florida, where I'm speaking now, which has been fairly open most of the time, does not have a higher than average death rate. I'm not sure what we should infer from that. Right? That's n=1. But, if we're not sure what to infer from the data that to me suggests a presumption in favor of many things being open because there are other ways people experience misery or loss of life from a pandemic other than just the virus itself.

Russ Roberts: And that, despite the content drumbeat from a small group of economists on EconTalk and elsewhere has not really I don't think penetrated the national consciousness.

But, it doesn't really have to because most people just don't like it and they don't need to know the cost-benefit analysis. They know that their kids not being in school is not a good thing.

Now Florida I think has slightly higher excess deaths than California. Of course Florida has a older population than California. I would just remind listeners that these kind of naive, simplistic correlations are not so informative. That they could be somewhat suggestive at times.

But, the kind of conversations that people are having around these issues are rather depressing to me because they fail to--this is done of course by public health officials as well: comparing this country to that country without controlling for differences in the age, population density, obesity. There's so many factors in this beside lockdown; and lockdown is not a 0-1 variable--except maybe in China where it's 1. To say, 'They went into lockdown and it didn't matter,' or 'They didn't go into lockdown and it did matter.' There's self-quarantining that people have done.

So, I would just remind listeners that the data here are quite messy. The challenge of understanding what happened is quite messy.

You can comment on that if you'd like but also I thought we'd turn to the public health sector and how well they've handled this, CDC [Centers for Disease Control] and others in responding to the crisis and what your view on that is.

Tyler Cowen: Well, just one comment on lockdowns. I agree the data are very messy. As you're getting close to a vaccine, you actually might want to consider being tougher because by pushing infections into the future you're then more protected. So, they've become more feasible when a vaccine is on the way.

But, even then I think you should be highly selective. The data that really strike me, if you look at net migrations across American states.

So, Vermont has done a good job in limiting cases. California, at least for a while did a good job in limiting cases and was fairly locked down. And, those were not states seeing a massive inflow of human beings. People made trade-offs. A lot of people, it turned out, moved to Texas and Florida, which are more open states. Those were not typically people who had already been infected with COVID. Right? That would have made sense. But, the trade-offs people wanted was some reasonable degree of openness and possibly a higher degree of risk. I get there's extreme heterogeneity. That's not the right trade-off for everyone. But, it's not the case that there was big population movement into Vermont.

Russ Roberts: And, what do you feel about the importance of age? Obviously older people are more vulnerable to COVID. Younger people, especially children, appear not to be as vulnerable. When we recorded a year ago there was uncertainty about the long-term effects. There's still some uncertainty around that. But, I think a lot of the scariest stories have not turned out to be true. Should we have followed something akin to what the Great Barrington Declaration folks are suggesting: Extreme care with people over the age of 70 and 80 and letting other people mostly go about their business?

Tyler Cowen: That's not my read of what the Great Barrington Declaration [GBD] actually called for.

Russ Roberts: That may not be fair to them. That's my read. Yeah.

Tyler Cowen: A lot of the people connected with that institution have made very dubious predictions and not backed down from them. They've told us that a lot of the cases are phony. It will all be over by--fill in the month. But, it's typically some time that was a while ago. Very passive attitudes or even hostile attitudes toward vaccines. And, making lockdown the only issue.

I think when you look at the overall entire framing of Great Barrington, it's been extremely harmful. It has led libertarian and conservative movements in the wrong direction.

The emphasis should have been, all along, deregulating the process of getting good vaccines out there quickly. And, if you look at what the Great Barrington people did on that it was remarkably little until very late in the process. And, you even have Jeffrey Tucker, well into fall, saying, 'Vaccines, what vaccines? We need to let everyone get infected.'

Russ Roberts: I'm more interested--

Tyler Cowen: So, I've been very much opposed to their program as a whole. Though some parts of it, if you present in isolation, do in fact make good sense.

Russ Roberts: Yeah. I'm think of Jay Bhattacharya, who on this program I thought was quite sensible about the idea of locking down everyone seems remarkably inefficient and puts an enormous cost on people who are at relatively low risk.

Yeah, I have nothing to say about the more institutional implementation of that Declaration [GBD]. But, the original Declaration [GBD] and the epidemiologists and economists who were involved, the three people, made some sense to me. But, yeah, I'm not interested actually in those other side-agendas.

Tyler Cowen: It's not independent from the other agendas. And they also systematically overestimate how many lockdowns are in operation.

So, past a certain point most parts of the United States, schools aside, have been mostly open. My state of Virginia, virtually all stores have been open for really a long time. One may or may not agree with that. But, there has not been a major lockdown for a long time in most of the Southeast, and indeed many other parts of the county.

Russ Roberts: Yeah.


Russ Roberts: When we recorded a year ago, I was really scared. I think you were, too. There was talk of two million people dying. One million. We're at 500-and-something thousand right now, which is half as bad as one million in some dimension, but, in a way, not close.

When we recorded, I came very close to asking you whether you would bet on more than a million or under a million deaths. And, I sensed from you that you thought that was a dangerous question to ask, to put on the table, and so I didn't ask it. When I was just about to ask you, you started talking about the need for care in the public debate and not alarming people unnecessarily or comforting them unnecessarily.

But, you also were at the time, I think, quite worried about a large number. You were worried about exponential growth. Do you feel we've--how has the reality turned out relative to what you thought?

Tyler Cowen: The reality has turned out a bit better than what I thought. So, it's hard to remember exactly what you were thinking in which particular month. But, I suspect if you had asked me I would have predicted about a million deaths, I think. So, now we have a bit over 500,000. We have excess deaths. We have some number of deaths more on the way. Right? So, I don't think we'll be so far short of a million in this country. So, say it came in at 700,000, which is perhaps a plausible number--and a lot of people don't seem that keen on getting vaccinated, right? So, it's better than I thought but not massively better than I think what I would have predicted with a number.

Russ Roberts: I am surprised how the age distribution has stayed, I think, fairly constant. So, I expect there to be some--some of these excess deaths will be--I don't know what the opposite of 'excess' is. The death rate may fall in the future because people who are old and would have died anyway are not going to be around to die. Do you think that's a relevant fact?

Tyler Cowen: Well, somewhat. I mean the total number of deaths you have over the history of your civilization will not exceed the number of people. Right? Those things are--they're going to net out.

Russ Roberts: Funny how that works.

Tyler Cowen: Yes. Many great books teach us that.

But, overall the people who stress the role of age, I find myself disagreeing with more and more. I don't doubt the numbers. But, ultimately when bad things happen on a certain scale--you know, Pearl Harbor, 9/11--you don't worry too much how many young people died, how many old people died? It's simply something that, to maintain your societal coherence, you have to mount a very vigorous response to.

So, I think the average number of life-years lost from a COVID death is about 11. That's a lot I,n any case. And half the hospitalizations are people ,60 or younger. How terrifying it must be to be in the hospital for two weeks with COVID surrounded by COVID. No one can visit you. Especially early on.

It's significant no matter what the exact age distribution is. So, when someone--there are sort of two cues that set me off a bit now that we're looking back. One is when people obsess over the age distribution. And the other is when they obsess over lockdowns as the main public policy issue. And, then I feel predictively I'm about to hear something I'm not going to agree with; and I think that's mostly true.

Russ Roberts: So, knowing what we know now, what would you have advocated back in March? And, more importantly, what would you suggest our response should be to the next time this happens?

Tyler Cowen: Well, if you look at our earlier dialog on EconTalk I advocated a big set of prizes for quality vaccines. Operation Warp Speed was a version of that with prepayment built in. It worked wonderfully.

Obviously it will depend on what the next pandemic is. But, that I think is a great model. Rapid speed, portfolio diversification. Invest in excess capacity. Spend what in retrospect are really very small amounts of money compared to the other sums we've been shoveling out the door. And, just spend more on public heath and be quick. That's--I think, again, the lessons and what I did recommend then and what I think still made really good sense.


Russ Roberts: What's your reaction to the efficacy of the fiscal response, the checks sent out by the Trump, and Biden Administrations that are coming? Do you think those were good ideas?

Tyler Cowen: Well, there were multiple rounds of those checks. I strongly believe we have gone past the point of usefulness, and we're now spending far too much and that is a major fiscal error.

But, I think some of it has made perfect sense. It's an unusual kind of economic Depression. Especially if you think a vaccine is coming, as we did know at some point, things are going to bounce back. So, you're just trying to tide people over. You don't have to engage in traditional Keynesian fiscal stimulus--which I'm often skeptical of. You just want people to have some cash so they can make their rent payments, so the banking system doesn't go insolvent. And, the early rounds of that, for all their imperfections, I think they worked pretty well.

Now we're way over-spending in the face of a boom. Right? I think Goldman Sachs today predicted the economy is going to grow 8.1% this year. Maybe that's the number. And, we're shoveling $1.9 trillion dollars out the door. The whole picture doesn't add up.

Russ Roberts: What do you say to the people who say, 'Oh, so who cares? What's the big deal? We can handle the debt. It's just debt. No big deal.'

Tyler Cowen: You know: the old billion is the new million. Well, trillion is the billion.

If you're going to spend a trillion dollars, if only for cultural reasons, you want to get into the habit of spending that trillion dollars very well.

Right now we are in the habit of not spending a trillion dollars very well. The medium term consequences of that are grave.

And, the Democrats are all holding hands and just saying, 'Well, this is going to popular. This is popular.' Which is true by the way, as I think you know.

That, to me, makes it worse. We run the risk of getting into a political economy cycle where every time politicians want to be popular, they shovel money out the door. They don't try to address any actual structural problems in the American economy. There's a kind of myth we can get people money and no one has to pay anything. And, my fear is we're just going to keep on doing this with no natural end in sight.

Russ Roberts: Are you worried about the consequences of a large debt?

Tyler Cowen: Well, we already had a large debt. We now have a much larger debt. I think the size of the debt is still somewhat overrated. As a percentage of American wealth--there are different ways you can measure our national wealth--but, arguably we're still below 50% of national wealth with our debt, even if our debt-to-GDP ratio is high. So, do I think the United States can handle what it has? Absolutely. Do I see us on a good political economy trajectory? Absolutely not. It's a game of addiction and winning voter approval; and people grow to expect it. And, I don't really see how we back out of it now.

Russ Roberts: Game's been going for a while.

Tyler Cowen: It's getting worse. It's a bigger game. We bought a new board, new pieces, gave them brighter colors. More Monopoly money in the Monopoly game.

Russ Roberts: Yeah. My take on it is: That's not a problem until it is. And, we don't know when that moment comes. And, one should be prudent. And I don't see a lot of prudence. Different way to say what you're saying.

Tyler Cowen: Yeah.


Russ Roberts: So, one of the surprises to me--I'll pick on myself for a minute and then I'll try to pick on the other side. One of the surprises to me in the Trump years was the failure of the trade war of with China to have a large macroeconomic effect. I know there's ways to say, 'Well, they're not that big a part of our trade.' But, the effect that that would have had on expectations, on stability, I would have expected it to be a little more damaging. It probably was damaging in that our economy would have grown faster had we not had a trade war with China. But, I'm surprised it wasn't more devastating.

Similarly, on the other side, I wonder if Keynesian economists have a challenge explaining the lack of a Keynesian multiplier in the devastation to the U.S. economy from the original lockdown or self-quarantining. Both. So, here you have a very large nontrivial part of the U.S. economy basically collapsing. Restaurants, bars, concerts, sports. Just totally a lot of times getting zeroed out. You'd think that would have had a large ripple effect through the economy. Doesn't seem to have.

I mean, we had a bad time. Unemployment went to, I think, 14%. But, it didn't go to 30%. That lack of, that drop in Aggregate Demand doesn't seem to have had the kind of multiplier effect that Keynesians might have expected. Am I wrong about that? Do they have a story to tell?

Tyler Cowen: Here's one thing that I think happened that's been underrated. So, you've done episodes on YIMBY [Yes in My Backyard] versus NIMBY [Not in My Backyard], right? 'We need more freedom to build.' There's a lot of monopoly rents locked up going to landholders. That's a bad thing, correct?

Russ Roberts: Yeah.

Tyler Cowen: But, here's the funny thing. When a pandemic comes, in a funny way, it's useful. Because most of these restaurants, they either stop paying rent or they pay less rent. And, their expenses fall dramatically.

So, the land owner who is earning this monopoly return suffers a wealth transfer in the negative sense. It's not so painful to GDP, right?

That land owner is unlikely to kick out, say, the restaurant that's paying 30% rent because who else is going to go into that space? They get 30% rather than nothing?

So, you have this built-in adjustment mechanism of 3-year monopoly rents. And, if those are through land, just having everyone pay less rent will get you a lot more adjustment than it looks.

And, I think of the northern Virginia area--as you know I write a, I think, dining guide there--not one of my favorite places has gone out of business. And that shocked me. I thought the casualties in the restaurant sector would be much higher. So, there's takeout, yes, and partial dining and outside. All that. But, I think the key thing is, just don't pay so much rent.

Russ Roberts: Yeah. And, I think my counterpoint to that would be that during serious recessions and depressions that mechanism you're talking about doesn't seem to be there. It is still challenging to rent to a new person but you can't pay your loan back to the bank. The bank struggles to pay its loans back, keep its promises. That usually results in a death spiral for the economy that doesn't seem to have happened here.

Some of it, stimulus helped probably a little bit. Not in the stimulus sense, the multiplier sense. But, in the as you said, tiding people over, letting them pay their rents. But, I think it is a--it's a fantastic side-part of this experience that as you say, we didn't have the level of devastation of people losing their restaurants perhaps in the numbers we might expect. I think many did. Right? So, you got lucky in northern Virginia, maybe. A lot of places did go out of business. Those places I assume are still vacant and the people who had those dreams and that livelihood and the people they employed are struggling.

Tyler Cowen: But, again, it's still much less than I would have expected and I think in normal downturns a lot of tenants do get kicked out. And, you hope to get someone else in.

Whereas with the pandemic you think, 'Well, I rented to them to begin with, it will be a fundamentally healthy business within another year. Who am I going to get in anyway? It's just not going to work. How are they going to have the workmen in to refit the space?' And, you just hang on. But, again, I agree that's a surprise. If I had published a prediction there, I would have been wrong.

Russ Roberts: Yeah. You're assuming that the person who owns the building can get by with 30% of the rent. Because they also have promises to keep. That's usually part of that spiral that I don't see happening so much. It's a different point than I was making originally.

Tyler Cowen: It's as if we had the leverage distributed in the right way for a pandemic. And, that was a kind of a lucky accident. Because, those land owners, if you're earning monopoly rents for 10, 20 years, your net debt is probably not that high.

Russ Roberts: Yeah. And, you have a cushion usually you can fall back on.


Russ Roberts: Let's talk about some of the silver linings. You sort of alluded to one just there. What do you see as some of the more attractive parts of what has happened in this last year?

Tyler Cowen: Well, much of work-from-home will stick. We don't know how much. But, many people will move to different cities altogether and keep their current jobs. Other people will move further away and just come into work one or two days a week. Congestion will go down.

In essence, real estate prices will be much cheaper. People will find it easier to live near good childcare, even if that's, say, only their parents.

So, those I think will prove to be very significant gains.

A lot of business travel simply will be abolished as wasteful. We did without it for a year. A lot of it, in my view, won't ever come back. I think I'll be giving talks over Zoom to South Korea for the rest of my life. No, I'll be going there, too. But, just many meetings, recording podcasts, having lunch with people over Zoom, Skype, whatever it's going to be--that's permanent. It's a big gain and it will be ongoing.

Russ Roberts: I'm also thinking of the cultural things that have changed. I've mentioned this before: I just love the people walking outside. A lot of people sick of being locked up, not literally, but sick of being at home, are strolling with their families, with their dogs. My neighborhood's transformed. It's really quite lovely. Got outside a lot more this year.

Tyler Cowen: Same here, yeah.

Russ Roberts: Because that was the way to socialize with my wife. Which is, in a way, better than socializing with other people, often.

So, it was great. We discovered parts of the Potomac River and the local area that we had never--despite living here for 17 years, 18 years--hadn't experienced. And, there's so many--well, I'll ask it a different way. You're one of the most peripatetic people I know. You travel a ton. Has that been hard on you? How much less have you traveled?

Tyler Cowen: I've had more trips than many people might think but it's been limited where I can go. And, I've traveled more by car. I'm now vaccinated. But, I expect it will alter my future travel history for the next 10 years. Just finding good connecting flights. How long does it take to clear an airport?

Even when this is, quote-unquote, "all over," I don't think international travel will be back to normal. Many countries will be very slow to vaccinate.

So, I think it's much more likely that rather than, say, try to see the next 40 countries I haven't been to yet, that I'll pick out three or four of those which are manageable in some way and get to know them really well.

So, I'll keep on traveling. So, I'm going to go to Mexico more. It's open. It's close [i.e., nearby, as opposed to not open--Econlib Ed.]. It's the same Time Zone. I can do all sorts of work meetings over Zoom from Mexico. So, the idea that I'm, you know, in Vietnam in a weird time zone and maybe they don't want me in, they don't want me out; there could be a risk of a lockdown; they'll be two and a half years getting vaccinated, with the Chinese vaccine. How good is that anyway? I'll be in Mexico. It's sad but it will have its own rewards, right?

Russ Roberts: Yeah.


Russ Roberts: Let's talk about Europe for a minute. They have not done very well in vaccinations so far. If I am vaccinated, which I am now--I've got a week or so to go before I'm, quote, "fully vaccinated."

Tyler Cowen: Congratulations.

Russ Roberts: Thank you. And, I'm moving to Israel soon, so it's fun to be close to Europe. I like a lot of European cities. It's not fun to go to Europe if you can't eat in the restaurants, you can't hear the music, and so on. What do you think they've learned about this issue? What does this say about their political economy?

Tyler Cowen: I haven't been to the European Union [EU] since this started. Just from what I read and hear, I don't see that they've yet learned the lessons.

I don't see the politicians apologizing. In many cases the approval ratings have not tanked. Merkel, being one instance of many.

There's still a sense of cheapness. I don't see grand disillusionment with the EU as a way of making emergency-style decisions.

So, I don't know that they've learned any of the things that they need to have learned. They just seem to be telling people, 'Well, lockdowns will be good enough.' And, I think that's poison. And, it's poison for your politics. And, you see these far-right anti-lockdown demonstrations gathering force in many countries. It's bad for multiple reasons.

So, I've become considerably more bearish on Europe given what has happened. I would like to go there, however, and see it and hear it for myself.

Russ Roberts: Why do you say lockdowns are poison?

Tyler Cowen: Look, if you do a lockdown for some number of weeks to get a virus under partial control, people will understand there's a known end to it. There's a clearly defined goal--getting your hospital system ready. And, the political incentive is really not to keep those restrictions on forever.

But, when you do them repeatedly or ongoing for six months, a year, the mental health problems are extreme. The issues with schooling become worse and worse. It encourages radicalism. It encourages restlessness.

Even in the United States, it's striking to me how many more people have received moving violations for traveling over 100 miles an hour in their cars. And, that is what happens when normal life is not present.

Now, lockdowns are not the only problem. Some of the problem is simply the virus itself. But, I worry about loss of trust in government and why can't they handle this and why do they keep on telling us what to do? And, it's all a bad precedent. I think the medium term consequences of that for the European Union will be quite horrible.

Russ Roberts: You said their politicians haven't apologized. I don't think that's a thing that--those two things don't go so well together. Politicians/apologizing. They don't apologize anywhere, do they?

Think about America: the bad performance of certain governors; the President certainly made mistakes. The head of the CDC, I think, made some terrible mistakes. Apology doesn't seem to be in the offing, in general.

Tyler Cowen: But, I think, say, if you look at America after Pearl Harbor, which was a terrible moment for us--I don't know if it was a formal apology, but it was clearly recognized that we had let something terrible happen and it was simply a flat-out mistake. And, that could not be denied. Right?

There are such moments in history and this should be one of them. In most countries it is not. Now, I'm not following every single country. I don't want to make this a universal statement. But, my sense is, in many parts of the European Union, there has not been a political awakening about the catastrophe that has gone on. In the United States you don't see people marching in the streets: 'Free the Astra Zeneca vaccine,' right? We have this problem, too. But, I think they have it worse, because at least right now their performance is worse and more easily avoidable.


Russ Roberts: But don't you think--and the existence of the pandemic is not really--assuming it's not bio-terrorism, that it's just a virus that escaped China in some fashion--given international global travel, economic activity, is it really realistic to expect that we will be immune from such things in the future? And, do you really think that any government is going to respond admirably in the future to these kind of challenges when they happen again?

Tyler Cowen: I think we've seen a lot of partial good responses this time around. I'm not sure any country got it completely right.

So, the USA [United States of America] did testing poorly but we did vaccines remarkably well. So, I don't think it's been a complete failure by any means.

I think the southeast of the United States will come away possibly as the world's most intact region. Just by culturally, psychologically, employment. They've done some things pretty well, though they came in for a lot of heat. So, next time around I actually think we will do better. Just like the nations that were hit by earlier forms of SARS [Severe Acute Respiratory Syndrome, general coronavirus infections] had quicker responses early on this time.

Japan it seems, I'm not quite sure I understand what they did that mattered, but they have done pretty well. Same with South Korea.

And, those are not nations where all flickers of liberty have been extinguished. You can go out and do a lot of things in those places. Not without restriction. But, I think you would call those pretty good responses.

So, I think a lot is up to us. And, you know, Brazil being a country that has done almost nothing well, and you see it in their numbers.

Russ Roberts: What would you say about Australia? Would you say their success is simply because they're an island? They, of course, have been--they closed their border. They locked down with a great zeal and they enforce it with great zeal. It's not just on paper. What are your thoughts?

Tyler Cowen: If you ask a public heath person, they will insist Australia is a great success. Because, in terms of cases and deaths and hospitalizations, they've done very well.

If you ask an economist, the economist will be more skeptical. Again, I haven't been to Australia. It would not have really been possible. But, I can just say that if at the beginning of the pandemic if I had had the option of flying to Australia or New Zealand and sitting out the pandemic there--and somehow I could adjust the time zones so my calls could still happen--I wouldn't have done it. I would have preferred to stay in the Southeast [southeastern United States--Econlib Ed.].

And, again, I'm not saying that's the right answer either. But, we need to think in terms of trade-offs, and let's not too hastily pre-judge what is a success. Because, it's not where I want it to be. A lot of the people I know, they were not, 'Oh, how can I get into Australia?' I didn't get any emails, 'Tyler, Tyler, you know a lot of things. How can I get into Australia?' Not one such email. And, that we also need to take seriously.

Now, how to balance that against the differential death numbers, I'm not sure. But, most people are not looking at both pieces of information there.

Russ Roberts: Well, I think life there right now is quite good. I have family there that are quite happy. Life is, quote, "normal." Totally normal. Not just like semi-normal, like I'd say it is here.


Russ Roberts: I think the real question is what happens down the road? What are the unseen costs of those lockdowns on children and mental health issues, economic activity, debt and so on. I suspect the costs--there are some costs we have not easily seen yet that will not be unimportant.

Tyler Cowen: Question for me is how quickly they vaccinate everyone. So, if Australia were on, say a U.K. or Israeli pace of vaccinations, I would look much more positively on what they did. Because they would then be over with it fairly quickly.

But, to literally lock up a whole country and lock other people out--again, it's a bad precedent. It is very bad for many people. It is bad for your future trade and migration opportunities. Bad for your universities.

And, as far as I can tell, the nations that all did a good job at the beginning seemed to be pretty slow at getting people vaccinated or even ordering vaccines. So, I'd like to see when enough of Australia gets vaccinated to open up again. Then I'll feel that we can start to begin to judge.

Russ Roberts: Well, they are open. They don't worry about the vaccine.

Tyler Cowen: Can I just get on a plane to Sidney and walk off the plane?

Russ Roberts: No. You've got to be there already. That's true.

Tyler Cowen: Well, okay. But, that's not open.

Most of the world is locked out of Australia.

Which I understand, and I respect that they did a good job. But, again, I didn't wish I was there. And, I'm not in the highest-risk group; but I'm 59 years old. I'm not 18. And, again, I think we need to face up to the trade-offs.


Russ Roberts: Let's talk about education. Some people have suggested that the way we have handled K-12 [Kindergarten through twelfth grade] in response to the pandemic suggests that we don't value education the way we talk about it. I would suggest it--I draw a different lesson. I would say that the feedback loops in the public sector are quite inadequate. So, the incredible interest that parents have in reopening has not been met by the government schools. And, private schools, a lot of private schools that I know of, kids have been meeting face-to-face, most of them, in most of the day. What do you learn about education and the political economy of education from the last year?

Tyler Cowen: I think it's a good argument for much stronger private sector participation in K-12 education.

But, just to be contrarian for a moment I think a number of people are too quick to think it would have been easy to reopen all the schools. I mean, teachers have to show up, right? And, if they don't show up, you haven't quite reopened. Students have to show up. And, you need there to be enough confidence in the system where those things happen and you keep people who are partly irrational about the pandemic involved in what is going on and believing in it. And, I do think that's much harder to do than just quote-unquote "open up the schools."

A regularity I do see is that school systems governed by mayors have reopened more quickly. When you have an independent school board, Fairfax county being one example, you get typically the worst performance. And, I'm not sure exactly why that is, but I think it's not just the public sector. There's some public sector structures that have worked much worse than others. And, we need to understand that.

And, if you look at universities, a lot of them closed but not because of the law. A lot of private schools closed. They didn't have to. And, the students don't necessarily want to come back.

So, again, I think the people who have pushed for school reopening, I mostly agree with them. But, it feels a little too simple when I read or hear what they say.

Russ Roberts: Tyler, that's often true. It's not just people writing about school. Yeah, my main response to most public pronouncements is it's more complicated than that; but okay.


Russ Roberts: Let's look at some of our predictions from a year ago. You said a lot of wise things. I remember when you said the NBA [National Basketball Association] would not be back, at least in front of live crowds. Remember this was back in March and you were looking to ahead and I thought, 'Oh well that's ridiculous,' but you were right. Of course, even some football wasn't back in front of any crowds for a while. Even dispersed crowds. It's just a fascinating, I think, thing of how we've emotionally responded to this fear.

And, one of the great costs of this to me, by the way, is that we see other people as dangerous. I hope that goes away with vaccines. I'm looking forward to hugging friends and family in a way that I haven't been able to, when my vaccine gets fully effective. But, you were right about that. You weren't right about everything, of course; neither was I.

You were very pessimistic at that point, and I said you were

painting a much more dire picture than I expected. I would say that if you are right, Donald Trump will not be reelected. You're suggesting he's going to be in the middle of a major recession, accusations that he bungled the opening of this, and unemployment in the 20% range. He's cooked. [Time mark ~34:25--Econlib Ed.]

Of course, unemployment didn't hit 20%. He bungled probably more than the opening or was at least perceived to be bungling more of the opening. And, he was cooked. I think in the absence of the pandemic he would have been easily reelected.

You were not so sure. You thought that FDR [Franklin Delano Roosevelt] had survived Pearl Harbor. What do you think about it now in terms of the politics of what happened? You also, by the way, predicted--and I'm going to cut slack on this--that the Progressive Left would become less noisy and effective. Of course, that changed partly because of things beside COVID--the death of George Floyd and others changed, I think, the dynamic on the Left and Right rather dramatically.

But, what are your thoughts on how politics have changed over the last year? Defend some of your comments if you want. Repent of them, my friend. Whatever you feel like.

Tyler Cowen: I think if Trump had sent out the checks early and if he had been a little more skillful in pushing the FDA to approve the vaccines rather than making it into a big public fight, he would have been reelected. Voters held COVID against him less than I would have thought. And, Trump had other weaknesses which are fairly obvious. But, they didn't seem to surface in the parts of the country with the biggest COVID problems. So, that was a reason why some people voted against him, but not that major a factor.

So, the notion that some people would rally around the flag--as I had predicted--I don't think was a crazy thing to have said. And, I think, as we saw Trump came very close to winning. With other decisions being just a bit different, definitely think he would have won.

I do think the Progressive Left really has, as an intellectual force, faded from the scene much more than people now admit. So, people give me grief about that prediction all the time. I think it's looking very good. If you read the full prediction I made, including in our dialog but also in a Bloomberg column, I said: We're going to get a lot more statism. Right? We're going to get a lot less libertarian thought--

Russ Roberts: Bigger government--

Tyler Cowen: but, it's not going to be packaged in a culturally left-wing woke manner. And, that the forces of woke had peaked. And, what we were due for was simply a lot of statism.

And, if you look at the Biden administration, how well Warren and Sanders did in the primaries, to me that prediction is looking very good. And, I haven't seen many cities defund their police.

Looking forward, I think we're going to be a highly weird country where the Progressive Left is one force but never in charge. So, that, I'll double down on.


Russ Roberts: Okay. What about the cultural scene? Our bailiwick of universities? Cultural left seems to be quite powerful in lots of places. What are your thoughts on where that's headed in terms of so-called cancel culture and so on? We're outside of COVID right now, obviously.

Tyler Cowen: Sure. Well, you have more outlets than ever before. I mean, Substack is one example of many. So, I'm not sure how many things actually get canceled. So, those four Dr. Seuss books--which by the way are just--

Russ Roberts: Six.

Tyler Cowen: Six of them, sorry. Not continuing the--

Russ Roberts: It's 50% worse than you thought.

Tyler Cowen: Exactly. I had never heard of all but one of those books. And, it was the owner of the intellectual property rights who decided to stop them. If I owned those property rights, I might have done the same thing, just to avoid the headache. And, then the notion that you take revenge on the cancelers by buying more copies of their books, seems to me just a weird episode.

We have diverse discourse. There's a lot of ideas out there. There's podcasting. There's Clubhouse. There's many more things you can do and reach people. So, I'm not as pessimistic as are a lot of people I know.

One thing that surprised me a lot is how robust large public state universities have been relative to a lot of the private schools. Private schools had higher debt than we thought. And, I don't just mean the little dinky places in Iowa somewhere. I mean a lot of the well-known private schools are not in great fiscal shape. A lot of the big public schools, they're kind of doing fine. Have some troubles but clearly are going to make it through this. And, the idea that the cheap really matters and people want to be more local--big moment for state education at the college and university level.

Russ Roberts: I agree. That is surprising.

One of your predictions was that--I really like this one: it's a good one. I think you said:

... biomedicine will be far swifter and better funded and less regulated in the good sense of that word and our response capabilities when all this is over for the next event will be far, far greater. We may overreact in some 9/11 kind of ways like we've done arguably with airport procedures.

But, if there's one part of the economy that'll get a huge beneficial boost, I think it is our biomedical capabilities and our public heath infrastructure. [Time mark ~38:28--Econlib Ed.]

You then went on to say you were optimistic about the FDA getting a little bit better. Okay. So, that one, we'll march that one back, maybe, I think.

But, your understanding and expectation about this being a bio-pharma moment I think was right on, combined with your idea of encouraging prizes. Talk about what you think the significance of what's happened for biomedicine.

Tyler Cowen: People are going to live much longer. There's a possibility that mRNA [messenger Ribonucleic acid] technologies are a general platform that will help us address cancer, malaria, other problems. There are new developments using CRSPR [Clustered Regularly Interspaced Short Palindromic Repeats] to fight sickle cell anemia. I think we're at a biomedical moment in the same manner that the late 1960s were a space/put-a-man-on-the-moon moment.

And, it's incredibly exciting. It's the first set of big breakthroughs other than mobile devices and smartphones in a long, long time. And, many of us will benefit, and I think it's going to keep on going. And, young talent is now attracted to those fields.

And, I think one of the key factors is just greater access to tools of computation if you're doing biomedicine. That, in essence you use cloud computing. You have all the world's computing power at your disposal. Even if you're, like, an 18-year old, you can get a lot computing done at a reasonable price.

And, I think that's driven a lot of these different developments--is the democratization of computing power in biomedicine. So, I'm still super-bullish.

I also said in our podcast--this was in last March--we'll have a vaccine 12 to 18 months. And, experts then were still saying four years.

Russ Roberts: 18 months would be a miracle.

Tyler Cowen: Right. And, Trump was right. So, that pushed a lot of people away from the true view. But, I think I did pretty well on that one. I was a tiny bit late by saying 12- to 18-months. But, in terms of actual distribution, it's really pretty right on.


Russ Roberts: Well, you also said--I love this. You said,

But, again, there are still liability issues. There's scaling issues. There's distribution issues. Possibility of secondary harms, given that most people are not killed or even harmed by coronavirus. It's very complicated. [Time mark ~42:12--Econlib Ed.]

So, I agree. I take my hat off to you there, too. That was pretty good.

Tyler Cowen: Let me tell you three things I got totally wrong. And, some of them I said, some of them I'm not sure I said but I know I was thinking.

First, I thought liability issues from the pandemic would be huge, and a huge barrier. I don't see it. I was totally wrong about that. And, I said it in our podcast at length. Again, I don't understand why I was wrong but I'm quite sure I was wrong.

The other is: I thought people defaulting on mortgages and rental contracts would be higher than it was. Now, that I know why I'm wrong. I just didn't expect such a vigorous fiscal response. But, I was wrong. And, this I didn't say, but I know I was thinking it: I thought the unemployment rate would be higher and last longer than it did.

Russ Roberts: Yeah. Me, too.

Tyler Cowen: And, the extent to which people prove to be willing to fearlessly go out there and do things was again, just higher than I had been thinking. And that's why I was wrong about unemployment.

So, I know why I got that one wrong. But, I definitely got it wrong. Though I don't think I put the prediction, like, in print in any way.

Russ Roberts: Tyler is one of the rare guests who actually goes back reads his previous EconTalk episode transcript--which I appreciate, Tyler. I read it less carefully than you did.


Russ Roberts: Let's talk about the pharmaceutical sector for a minute in connection to the remarks you made about biomedicine.

Many times on this program I've argued that we have over-subsidized pharmaceuticals. Obviously, there's a good side to that: You get more pharmaceuticals. Bad side is you don't get what you paid for.

We have, I think, encouraged the adoption of drugs that have a very marginal impact yet cost a great deal of money to both the fisc--meaning to the government--and also to people who can't afford them; and which causes social problems. Who are not covered by insurance. Are not covered by Medicare. And, I think that's been a disaster. Really destructive.

And, yet I've conceded that in this past year, having an army of pharma people available to work on a vaccine is glorious and been a very great, been a very good thing. Megan McArdle, in an episode that hasn't aired yet, is happy that we have too many pharmaceutical people. I'm curious where you stand on this issue.

Tyler Cowen: I think most of those subsidies have worked out pretty well, even prior to the pandemic.

And, here's the second best way I think about it: I mean, let's take the vaccines. I really can readily imagine that if we had just sold them at market-clearing prices, at the proverbial 7-Eleven with refrigeration--right?--that that would have gone better. Been a better incentive. More rapid distribution. There's a very good chance that is true.

So, in that sense there's some other regime you would prefer--let's call it the market. Right? But, you and I also know, people don't like that. They're not going to let it happen. They're going to put on price controls. They're going to confiscate the IP[?]. There's going to be social norms and customs that look askance on----just buying your way into line. Given that we're, in essence, not allowed to use the price mechanism, think of subsidies and Operation Warp Speed and other background interventions that predate the pandemic as a second best approach, because we're not willing to commodify the sector maybe as much as we ought to. And, that's where I think one ends up.

Russ Roberts: But, you don't have to commodify it in a way. I mean, it doesn't have to be--the approval and adoption process of new drugs that maintain an intellectual property, that keep out generics, that encourage the use of pharmaceuticals that extend life by an average of two months for $100,000 alternative instead of a generic that's a fraction of the price. Those seem to just be policy errors to me that stem from political power of that sector. Do you disagree?

Tyler Cowen: I don't know. I'm very struck by the work with Frank Lichtenberg at Columbia. And, he argues that spending on pharmaceuticals, on average you can spend around $10-, $12,000 and save a year of life. So, you have a huge number of misses, a small number of very important hits. So, you can always look at the misses and see a lot of policy failure; but if you don't know in advance where the misses and hits will come--like in the music sector and movies, book publishing--pharmaceuticals are somewhat akin to that. MRNA vaccines were mocked for decades, right? She couldn't get that paper published--Kariko.

So, I don't know. Maybe we're not so far from the optimum and a lot of these bad-looking built-in subsidies--again, I'm not saying we have it right. But, I would be cautious in just condemning it.

Russ Roberts: Yeah. That's a good point. All good points. I think the entrenched nature of the cashflow that comes from the marginal improvement is really not so healthy. I think if we're going to keep the current system intact we need some funding for those prizes you're talking about--the home runs--that use an alternative mechanism.

Tyler Cowen: Oh, of course. It would be much better.

Russ Roberts: Yeah.

Tyler Cowen: But, look at medicine as a whole. It's verging on 20% of GDP, right? What's the one part of medicine, or two parts, that work best? There's like setting broken bones--which is kind of like physics. It's what a vet would do. And, then there's pharmaceuticals. And, a lot of the rest really works very poorly. So, it seems to me, if anything, we should be shoveling more resources into pharmaceuticals because that's what's been paying off.

Russ Roberts: Well, I would just suggest if we do that, we do it in a different way than we're doing it now. So, I don't disagree.

Tyler Cowen: But, we're not willing to use real prices, right?

Russ Roberts: I'm not sure that's the only barrier. I think we need more competition. We need to make it easier for smaller companies to exist in the regulatory environment rather than just the handful.

Tyler Cowen: Absolutely. Absolutely. 200% for that.


Russ Roberts: Let's close and talk about economics. Now, 10 years or so ago we were colleagues. I was at George Mason.

Tyler Cowen: We still miss you.

Russ Roberts: Thank you. That's kind of you Tyler. I miss you too. And, by the way, we didn't talk about this but one thing I talked about were the advantages of Zoom coffee and Skype coffee a year ago, and I discovered how pleasant it is. And, I've made contact with lots of old friends and that's another plus to this pandemic. I think--you know, it's an amazing thing. Zoom, there were some issues in the beginning about security and servers in other places--maybe that weren't so comforting. But, it works really well. When you have technology that works well, it's so pleasant. That's a positive.

And so, you know, I'm thrilled. I miss you as a colleague; but isn't it nice that we get to still talk now and then?

Tyler Cowen: It is. And, I think the miracle of taking Zoom, which was not a tiny company to begin with, but just putting so much of our economy and education on it within the span of two weeks. And, it really just held up.

Russ Roberts: Yeah. Where's that book? There's got to be a book about Zoom's response. That's quite an extraordinary--I didn't think about it enough. It's a great point.

Tyler Cowen: Yes.

Russ Roberts: What an extraordinary response.

Anyway, what I was thinking is the following: You know, 10 years ago if you had asked either of us what are the big issues, we would have given a very traditional response. It would have been the same set of issues that I think we would have given 20 years ago: size of government, the role of prices, deregulation versus more regulation, and so on.

I feel we're at a moment in world history now where those concerns seem dwarfed by cultural issues. I've become personally much less interested in, say, whether Modern Monetary Theory is really true. I think it's not. But, I'm less interested in that issue than I would have been 10 years ago. And, I'm much more interested in the cultural consequences of public policy. The impact on human dignity. I'm much less interested in efficiency and growth--the things that I know you've championed. Have you had any of that kind of reconsideration? or do you feel you're pretty much the same intellectual--I mean, you're an incredibly diverse, intellectually interesting person, Tyler. You're way out in the tail of economists. But, you've been a champion of economic freedom, as I have been, of the importance of growth as I have been. I'm less excited about those issues. I'm more interested in some of the more cultural issues. Has that happened to you at all? And, if not, tell me why I'm making a mistake.

Tyler Cowen: Keep in mind, I spent the middle 20 years of my career writing about the economics of culture--arts, music, and the like. It's not exactly the same kind of culture you mean, but it's closely related. So, in that sense, I feel I've shifted less.

I don't view economic growth as any less important. In fact, the higher our debt is, as we were saying before, the more imperative it is to grow to pay it off. I'm not sure how much more I will write about that, as I feel I've already said a lot of what I have to say about growth.

To me, a key question now is the cultural effects of the internet. It allows people to be much weirder, which is a significant positive, but also pretty often a significant negative. And, in my view it's not polarization: It is weirdness. It's a very different concept. And, we're misunderstanding it.

So, to think through how that's going to work is maybe the question I think about the most right now and that's very much along the lines of what you brought up. And, it was not something I thought about nearly as much 10, 15 years ago.

Russ Roberts: What do you mean by weirdness? And, what do you mean, it's 'not polarization that worries you: it's weirdness'?

Tyler Cowen: In my view, polarization, ideologically, in the United States probably peaked around 2011. You have the Obama people who want to push to the Left, you have the Tea Party people who want to push to the Right. There's one against the other. They butt heads. Someone wins, someone loses. You're on one side or the other.

It seems to be now, it's more a bit like people at a mental asylum yelling at each other. I mean, the dialog is harsh or negative or maybe people get canceled, but it's not really polarized. Everyone has his or her own version of strangeness out there. It's a very different dynamic.

There are artificial alliances which are not that tight anymore. The old, like, libertarian-conservative alliance largely has dissipated or it's even hostility. Even within libertarianism, get people talking about the pandemic. You'll have more fun talking to a Marxist, I think. Often.

So, extreme individualism in opinion and heterogeneity and weirdness being a mix of allowed and encouraged and just what that looks like politically, I genuinely don't know. But, that to me is Number One question on my mind these days.

Russ Roberts: And, you mentioned music and culture. I can't help but ask you: Is the current landscape of music sustainable? I think this is one of the most glorious parts of being alive in 2021 is Spotify and similar services. I happen to use Spotify. That I can hear any song almost--I've probably mentioned this before but I don't know if I mentioned it to you: there was an old Robert Klein comedy routine where he would talk about a late-night ad where a truck would come to your house and deliver 'every record ever recorded.' And, it was a joke. The idea is it would be an 18-wheeler and you'd have no room for it. It was a parody of sort of the Time/Life music record series of its day.

We live in that world, and you don't have to store it. You don't have to take the records into your house. The quality is better. They don't degrade. It's paradise for me.

Now, I don't think I like music a lot more than the--I may like it a little more than the average person. But, that impact of that on human wellbeing and the range of music that's available to almost every--to anybody with a smartphone--which is an enormous percentage of the human population. Such a lovely thing. Do you agree with me, and is that going to stay?

Tyler Cowen: Let me just be contrarian, because this is a podcast. I two-thirds agree with you. I worry we are not replenishing our music ecosystem and that you have to tour to make a living from music. You can't go into the studio. You can't put out an album that will sell 400,000 copies in the first few weeks--unless you're Taylor Swift.

The notion of innovation in music has changed. It's hard to surprise people with sounds anymore. Harder to have a movement. I think--pandemic aside, I think are more great songs put out each year than ever before. But, lasting works, I'm not sure we're at a peak even we're throwing more talent at the problem.

I do think there's something about the ecosystem for current popular music that is somewhat broken and we may regret, though we do have access to all the great master-works of the past.

And, just as a perfectionist of sorts, it bothers me that people are so content with mediocre sound quality. I know Spotify has a new plan to remedy this. I'm all for that. But, actual listening is much worse than it was 20 years ago. So, that counts, too.

Russ Roberts: Well, you need to get older, Tyler. When your hearing deteriorates like mine, it's really fine. It's just totally fine.


Russ Roberts: But, I was going to ask you--so, you're a voracious reader, as am I. I read roughly 50-plus books a year. Not quite that high anymore with EconTalk. But I read a lot. And, I read a lot of harder books and I read a lot of articles, like you do. And, as I've suggested a number of times on the program, if you get 50 good years of reading at 50 books a year, you've got 2500 books to read.

And, I think it was on the Scott Newstok podcast--I'm think getting his name right. But, in a recent podcast: Thoreau evidently said, 'Can't read everything so read carefully.' And, I quoted my son who said, 'Oh, so don't read Thoreau.' But, the point is that you've got 2500 books to read--maybe. Haven't most of them already been written? I mean, there's so much already written that's of immense value. Surely there are enough great songs and pieces of music already recorded. Would it really be a problem if the rate of improvement and innovation slowed? Doesn't seem to me to be a big issue. Why should I be worried about that?

Tyler Cowen: I think whether it's music or books or the visual arts, one wants one's time embodied in artifacts to pass on to future eras to show what we were, to be able to understand and figure out what we were.

So, let's say Bach and Mozart and Beethoven were the greatest composers. Eminently defensible view in my opinion. But, if that's what you're doing, you are missing something fundamental. You're not being a person of your time.

And, for our times to continue being replenished, we need that.

And, also with books. I'm not sure we're in a time of great view [?] books. Number of wonderful history books, biography books, popular science books--probably never been higher. They come out all the time. There's an onslaught of them. That's wonderful.

And, maybe it's partly my age or our ages, but a book where you pick it up, even at the level of, you know, Jared Diamond's well known book, Guns, Germs, and Steel, those aren't happening right now. People are aiming for something different.

So, I don't know. I think we need to be very careful. There was something about the modernist era, immediate time after modernism, where the idea of these important, canonical, viewquake[?], shattering, building producing works was at a kind of peak through an intelligentsia that met together in person. Maybe it was centered in New York City, parts of Europe.

That's gone. It's the Internet.

I prefer this new world. But, we need to be acutely aware of what we're missing, and it's significant.

Russ Roberts: I disagree with you on the viewquake thing or at least the kind of books that get written. I think I'm the last person--I've never read Guns, Germs, and Steel. Okay. Sorry.

Tyler Cowen: It's too late. You don't need to read it now. You've absorbed it.

Russ Roberts: Yeah. Well, I really don't like books that explain the history of everything. I think there's quite a few of them still coming out. I won't name them, because there's no reason to. But, they remain a very popular genre. The, 'Oh, just read this book and you'll understand history totally differently because you'll realize that'--fill in the blank,--'and that that drives everything.' And, I've become jaded. I don't learn anything from those books. They're all 'Just So' stories for me, typically.

Tyler Cowen: But, don't take them at face value. Just take away--you know, factor X is 3% more important than I had thought. And, that's what the viewquake book does for you. And, a lot of biographies, you don't even get that from them.

Russ Roberts: What do you mean?

Tyler Cowen: Like the recent Frederick Douglass biography. It's maybe, I don't know, 800 pages. It's a wonderful book. I loved reading it. It's great. But, it didn't make me think, 'Wow. This one factor is 3% more important in world history than I had thought before.' And, I miss that. I'm not sure we're getting that now. You get these little squibs of insight on the Internet about what happened today. So, nonfungible tokens. There's some phenomenal, funny commentary about nonfungible tokens every day right now.

Russ Roberts: NFTs [Nonfungible Tokens]. Yeah.

Tyler Cowen: Yeah.

Russ Roberts: Yeah, I could do without that.

But, I guess the problem for me is that when you read that book, you say, 'This is 3% more important than I thought.' When I read it, I think, 'There's a bunch of people think this is everything. It's 100% the problem and it's all explained here.' And, that just--it offends me. It's the lack--

Tyler Cowen: Well, like the Diamond book. Even when I read it, I thought, 'Well, the livestock thing probably matters. Distance across versus distance up and down, that might matter. I'm not sure how much, but now I'll think about those things more and look for more on them.' And, that worked great for me.

Russ Roberts: You're talking about the importance, say, of warm weather versus temperate weather, or hot weather, tropic--

Tyler Cowen: Or distance from the equator.

Russ Roberts: Yeah.

Tyler Cowen: And, I'm still agnostic on these questions but I know to look for them. And, I know a lot of what he said hasn't held up. Some of those variables seem to be much more important than the others. And, he just throws them all at you on a big plate like, 'Here it all is. I'm so excited about this.'

Russ Roberts: Tyler, are you working on something that's not a little squib on NFTs [Nonfungible Tokens] that you can talk about?

Tyler Cowen: Well, most things are NFTs, right? I mean, how many tokens are fungible other than cash or maybe paperclips? But, I'm writing a book with venture capitalist Daniel Gross on what do the social sciences know about finding talent. And, possibly the publication date is October of this coming year. Not sure that will be met but it's in the works. And, the title of that book quite simply is Talent.

Russ Roberts: Well, I look forward to that. God willing, I'll be in Israel in October and you'll be--who knows?--you might be in Vietnam.

Tyler Cowen: Daniel is from Israel, by the way.

Russ Roberts: I hope we'll find a time to talk about it.

Tyler Cowen: Daniel's parents were American Jews who moved to Israel and he grew up in Israel but now lives back in the Bay Area.

Russ Roberts: I look forward to talking more. I look forward to reading it, Tyler.

Tyler Cowen: Thank you very much Russ, and please send me your next as it is coming out. Are you allowed to tell us? Can I ask you that?

Russ Roberts: Yeah, sure. It's coming out in Fall of 2022. It's on decision making and it's about half done. But, that's a question of opinion I guess between me and my--

Tyler Cowen: You need to make some decisions about how done it is.

Russ Roberts: Exactly. My guest today has been Tyler Cowen. As always, Tyler, thanks for being part of EconTalk.

Tyler Cowen: Thank you very much, Russ. My pleasure.