Paul Krugman: Economics of Innovation, Automation, Safety Nets & UBI

00:00:00.000 | The following is a conversation with Paul Krugman, Nobel Prize winner in economics,

00:00:04.960 | professor at CUNY, and columnist at the New York Times.

00:00:08.840 | His academic work centers around international economics, economic geography, liquidity traps,

00:00:14.720 | and currency crises.

00:00:16.000 | But he also is an outspoken writer and commentator on the intersection of modern day politics

00:00:22.440 | and economics, which places him in the middle of the tense, divisive modern day political

00:00:28.840 | discourse.

00:00:30.280 | If you have clicked dislike on this video and started writing a comment of derision

00:00:34.280 | before listening to the conversation, I humbly ask that you please unsubscribe from this

00:00:39.280 | channel and from this podcast, not because you're conservative, a libertarian, a liberal,

00:00:44.640 | a socialist, an anarchist, but because you're not open to new ideas, at least in this case,

00:00:50.320 | especially at its most difficult, from people with whom you largely disagree.

00:00:56.200 | I do my best to stay away from politics of the day, because political discourse is filled

00:01:01.320 | with a degree of emotion and self-assured certainty that to me is not conducive to exploring

00:01:07.680 | questions that nobody knows the definitive right answer to.

00:01:12.840 | The role of government, the impact of automation, the regulation of tech, the medical system,

00:01:18.360 | guns, war, trade, foreign policy, are not easy topics and have no clear answers, despite

00:01:25.420 | the certainty of the so-called experts, the pundits, the trolls, the media personalities

00:01:31.520 | and the conspiracy theorists.

00:01:34.200 | Please listen, empathize, and allow yourself to explore ideas with curiosity and without

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00:01:43.840 | I will speak with many more economists and political thinkers, trying to stay away from

00:01:48.000 | the political battles of the day and instead look at the long arc of history and the lessons

00:01:53.360 | it reveals.

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00:03:39.240 | And now, here's my conversation with Paul Krugman.

00:03:44.240 | What does a perfect world, a utopia from an economics perspective look like?

00:03:49.160 | Wow, I don't really, I don't believe in perfection.

00:03:53.960 | I mean, somebody once said that his ideal was slightly imaginary Sweden.

00:04:00.520 | I mean, I like an economy that has a really high safety net for people, good environmental

00:04:10.080 | regulation and, you know, something that's not, that's kind of like some of the better

00:04:16.800 | run countries in the world, but with fixing all of the smaller things that are wrong with

00:04:22.720 | them.

00:04:23.720 | What about wealth distribution?

00:04:24.720 | Well, obviously, you know, total equality is neither possible nor, I think, especially

00:04:31.000 | desirable.

00:04:32.000 | But I think you want one where, basically one where nobody is hurting and where everybody

00:04:38.520 | lives in the same material universe.

00:04:41.560 | Everybody is basically living in the same society.

00:04:45.320 | So I think it's a bad thing to have people who are so wealthy that they're really not

00:04:48.920 | in the same world as the rest of us.

00:04:51.280 | What about competition?

00:04:52.280 | Do you see the value of competition?

00:04:55.960 | What may be its limits?

00:04:57.360 | Oh, competition is great when it can work.

00:04:59.720 | I mean, there's, you know, I remember, I'm old enough to remember when there was only

00:05:04.720 | one phone company and there was really limited choice.

00:05:09.240 | And I think the arrival of multiple phone carriers and all that has actually, you know,

00:05:16.680 | it's been a really good thing.

00:05:18.200 | And that's true across many areas.

00:05:21.040 | But not every industry is, not every activity is suitable for competition.

00:05:26.760 | So there are some things like healthcare where competition actually doesn't work.

00:05:31.520 | And so it's not one size fits all.

00:05:36.040 | That's interesting.

00:05:37.040 | Why does competition not work in healthcare?

00:05:40.440 | Oh, there's a long list.

00:05:42.760 | I mean, there's a famous paper by Kenneth Arrow from 1963, which still holds up very

00:05:47.760 | well, where he kind of runs down the list of things you need for competition to work

00:05:51.280 | well.

00:05:52.520 | Basically both sides to every transaction being well-informed, having the ability to

00:05:58.320 | make intelligent decisions, understanding what's going on.

00:06:03.240 | And healthcare fails on every dimension.

00:06:05.440 | Healthcare, so not health insurance, healthcare.

00:06:08.720 | Well both healthcare and health insurance, health insurance being part of it.

00:06:12.120 | But no, health insurance is really, the idea that there's effective competition between

00:06:18.080 | health insurers is wrong.

00:06:19.680 | Healthcare, I mean, the idea that you can comparison shop for major surgery is just,

00:06:25.520 | you know, when people say things like that, you wonder, are you living in the same world

00:06:32.040 | I'm living in?

00:06:33.720 | You know, that piece of well-informed, that was always an interesting piece for me, just

00:06:38.440 | observing as an outsider.

00:06:40.840 | Because so much beautiful, such a beautiful world is possible when everybody's well-informed.

00:06:47.840 | My question for you is, how hard is it to be well-informed about anything, whether it's

00:06:51.760 | healthcare or any kind of purchasing decisions, or just life in general in this world?

00:06:57.600 | Oh, information, you know, it varies hugely.

00:07:00.360 | I mean, there's more information at your fingertips than ever before in history.

00:07:07.120 | The trouble is, first of all, that some of that information isn't true, so it's really

00:07:13.360 | hard.

00:07:14.920 | And then some of it is just too hard to understand.

00:07:18.240 | So if I'm buying a car, I can actually probably do a pretty good job of looking up, you know,

00:07:25.200 | going to consumer reports, reviews, you can get a pretty good idea of what you're getting

00:07:29.080 | when you get a car.

00:07:30.880 | If I'm going in for surgery, first of all, you know, fairly often it happens without

00:07:39.560 | your being able to plan it, but also, you know, medical school takes many, many years,

00:07:46.480 | and going on the internet for some advice is not usually a very good substitute.

00:07:52.640 | So speaking about news and not being able to trust certain sources of information, how

00:07:57.720 | much disagreement is there about, I mentioned utopia, perfection in the beginning, but how

00:08:02.720 | much disagreement is there about what utopia looks like, or is most of the disagreement

00:08:08.720 | simply about the path to get there?

00:08:11.360 | Oh, I think there's two levels of disagreement.

00:08:16.880 | One, maybe not utopia, but justice.

00:08:20.640 | What is a just society?

00:08:22.040 | And that's, there are different views.

00:08:24.280 | I mean, I teach my students that there are, you know, broadly speaking, two views of justice.

00:08:30.280 | One focuses on outcomes.

00:08:36.880 | A just society is the one you would choose if you were trying to, the one that you would

00:08:43.800 | choose to live in if you didn't know who you were going to be, that's kind of John Rawls.

00:08:48.560 | And the other focuses on process, that a just society is one in which there is no coercion

00:08:55.600 | except where absolutely necessary, and there's no objective way to choose between those.

00:09:01.520 | I'm pretty much a Rawlsian, and I think many people are.

00:09:04.920 | But anyway, so there's a legitimate dispute about what we mean by a just society anyway.

00:09:12.200 | But then there's also a lot of dispute about what actually works.

00:09:18.400 | There's a range of legitimate dispute.

00:09:20.960 | I mean, any card-carrying economist will say that incentives matter, but how much do they

00:09:27.560 | matter?

00:09:28.560 | How much does a higher tax rate actually deter people from working?

00:09:32.000 | How much does a stronger safety net actually lead people to get lazy?

00:09:40.040 | I have a pretty strong view that the evidence points to conclusions that are considerably

00:09:47.080 | to the left of where most of our politicians are, but that there is legitimate room for

00:09:53.720 | disagreement on those things.

00:09:56.840 | So you've mentioned outcomes.

00:10:00.480 | What are some metrics you think about that you keep in mind, like the Gini coefficient,

00:10:04.440 | but really anything that measures how good we're doing, whatever we're trying to do,

00:10:10.920 | what are the metrics you keep an eye on?

00:10:12.880 | Well, I'm actually not a fan of the Gini coefficient, not because it's anything-

00:10:17.400 | What is the Gini coefficient?

00:10:18.400 | Okay, yeah, the Gini coefficient is a measure of inequality, and it is commonly used because

00:10:23.880 | it's a single number.

00:10:25.800 | It usually tracks with other measures, but the trouble is there's no sort of natural

00:10:32.600 | interpretation of it.

00:10:34.280 | If you ask me what does a society with a Gini of .45 look like as opposed to a society with

00:10:42.440 | a Gini of .25, and I can kind of tell you, .25 is Denmark and .45 is Brazil, but there's

00:10:53.320 | no sort of easy way to do that mapping.

00:10:56.960 | I mean, I look at things like what is, first of all, things like what is the income of

00:11:04.880 | the median family, what is the income of the top 1%, how many people are in poverty by

00:11:12.080 | various measures of poverty?

00:11:15.320 | And then I think you want to look at questions like how healthy are people, how is life expectancy

00:11:28.200 | doing and how satisfied are people with their lives?

00:11:30.560 | Because there is, that sounds like a squishy number, not so much happiness.

00:11:35.280 | It turns out that life satisfaction is a better measure than happiness, but life satisfaction,

00:11:40.360 | that varies quite a lot.

00:11:43.480 | I think it's meaningful, if not too rigorous, to say, "Look, according to polling, people

00:11:53.080 | in Denmark are pretty satisfied with their lives and people in the United States, not

00:11:58.040 | so much so."

00:11:59.040 | >>Bellamy And of course, Sweden wins every time.

00:12:01.760 | >>Yeah, no, actually Denmark wins these days.

00:12:04.640 | Denmark and Norway tend to win these days.

00:12:06.320 | Sweden doesn't do badly, but none of these are perfect.

00:12:12.880 | But look, I think by and large, there's a bit of a pornography test.

00:12:20.080 | How do you know a decent society?

00:12:21.480 | Well, you kind of know it when you see it.

00:12:23.560 | >>Corey Where does America stand on that?

00:12:26.280 | >>Bellamy We are, our society, there are a lot of virtues to America, but there's a level

00:12:34.360 | of harshness, brutality, an ability for somebody who just has bad luck to fall off the edge

00:12:42.880 | that is really, shouldn't be happening in a country as rich as ours.

00:12:49.520 | So we have somehow managed to produce a crueler society than almost any other wealthy country

00:12:58.760 | for no good reason.

00:12:59.760 | >>Corey What do you think is lacking in the safety net that the United States provides?

00:13:03.880 | You said there's a harshness to it.

00:13:06.560 | And what are the benefits and maybe limits of a safety net in a country like ours?

00:13:13.520 | >>Bellamy Well, every other advanced country has some universal guarantee of adequate health

00:13:18.160 | care.

00:13:19.160 | The United States is the only place where citizens can actually fail to get basic health

00:13:25.960 | care because they can't afford it.

00:13:28.280 | It's not hard to do, everybody else does it, but we don't.

00:13:33.240 | We've gotten a little bit better at it than we were, but still, that's a big deal.

00:13:37.680 | We have remarkably weak support for children.

00:13:46.000 | Most countries have substantial safety, you know, parents of young children get much more

00:13:52.320 | support elsewhere.

00:13:53.360 | They get often nothing in the US.

00:13:57.620 | We have limited care for people, long-term care for the elderly is a very hit and miss

00:14:07.040 | thing.

00:14:08.040 | But I think that the really big issues are that we don't take care of children who make

00:14:15.800 | the mistake of having the wrong parents, and we don't take care of people who make the

00:14:20.080 | mistake of getting sick.

00:14:21.520 | And those are things that a rich country should be doing.

00:14:25.560 | Sorry for sort of a difficult question, but what you just said kind of feels like the

00:14:31.800 | right thing to do in terms of a just society, but is it also good for the economic health

00:14:38.920 | of a society to take care of the people who are the unfortunate members of society?

00:14:46.360 | By and large, it looks like doing the right thing in terms of justice is also the right

00:14:53.040 | thing in terms of economics.

00:14:55.320 | If we're talking about a society that has extremely high tax rates that deter, you know,

00:15:01.800 | remove all incentives to provide a safety net that is so generous that why bother working

00:15:09.120 | or striving?

00:15:10.960 | That could be a problem.

00:15:11.960 | But I don't actually know any society that looks like that.

00:15:15.480 | Even in European countries with very generous safety nets, people work and innovate and

00:15:22.120 | do all of these things.

00:15:23.720 | And there's a lot of evidence now that lacking those basics is actually destructive, that

00:15:30.880 | children who grow up without adequate health care, without adequate nutrition, are developmentally

00:15:37.200 | challenged.

00:15:38.200 | They don't live up to their potential as adults.

00:15:41.000 | So the United States actually probably pays a price.

00:15:45.640 | We're harsh, we're cruel, and we actually make ourselves poorer as a society, not just

00:15:50.920 | the individuals, by being so harsh and cruel.

00:15:53.800 | Okay, so invisible hand, Smith.

00:15:56.320 | Where does that fit in?

00:15:57.880 | The power of just people acting selfishly and somehow everything taking care of itself

00:16:05.080 | to where, you know, the economy grows, there's no cruelty, no injustice, that the markets

00:16:14.560 | regulate themselves.

00:16:17.080 | Is there power to that idea and what are its limits?

00:16:20.640 | There's a lot of power to that.

00:16:22.200 | I mean, there's a reason why I don't think sensible people want the government running

00:16:29.680 | steel mills or they want the government to own the farms, right?

00:16:36.000 | The markets are a pretty effective way of getting incentives aligned, of inducing people

00:16:44.920 | to do stuff that works.

00:16:46.440 | And the invisible hand is saying that, you know, people, farmers aren't growing crops

00:16:50.400 | because they want to feed people, they're growing crops because they can make money

00:16:54.040 | by it, but it actually turns out to be a pretty good way of getting agricultural products

00:17:00.320 | grown.

00:17:01.560 | So the invisible hand is an important part, but it's not, there's nothing mystical about

00:17:07.440 | it.

00:17:08.440 | It's a mechanism, it's a way to organize economic activity, which works well given a bunch of

00:17:13.640 | preconditions, which means that it actually works well for agriculture, it works well

00:17:18.200 | for manufacturing, it works well for many services, it doesn't work well for healthcare,

00:17:24.840 | it doesn't work well for education.

00:17:26.960 | So there are, having a society which is kind of three quarters invisible hand and one quarter

00:17:36.240 | visible hand seems to be, something on that order seems to be the balance that works best.

00:17:41.680 | It's just, you don't want to romanticize or make something mystical out of it, it's just,

00:17:50.040 | this is one way to organize stuff that happens to have broad but not universal application.

00:17:55.560 | So then forgive me for romanticizing it, but it does seem pretty magical that, you know,

00:18:02.480 | I kind of have an intuitive understanding of what happens when you have like five, ten,

00:18:06.320 | maybe even a hundred people together, the dynamics of that.

00:18:09.000 | But the fact that these large society of people, for the most part, acting in a self-interested

00:18:14.440 | way and maybe electing representatives for themselves, that it all kind of seems to work,

00:18:20.240 | it's pretty magical.

00:18:22.080 | The fact that there's, you know, that right now there's a wide assortment of fresh fruit

00:18:29.920 | and vegetables in the local markets up and down the street, you know, who's planning

00:18:40.040 | that?

00:18:41.040 | And the answer is nobody, that's the invisible hand at work, and that's great.

00:18:45.840 | And that's a lesson that Adam Smith figured out more than 200 years ago, and it continues

00:18:55.040 | to apply.

00:18:56.480 | But you know, even Adam Smith has a section in his book about why it's important to regulate

00:19:01.560 | banks.

00:19:02.760 | So the invisible hand has its limits.

00:19:04.680 | - Yeah, and that example is actually a powerful one in terms of the supermarket of fruit.

00:19:09.160 | That was my experience coming from Russia, from the Soviet Union, is when I first entered

00:19:14.040 | a supermarket and just seeing the assortment of fruit, bananas.

00:19:19.080 | I don't think I've seen bananas before, first of all, but just the selection of fresh fruit

00:19:24.160 | was just mind-blowing, beyond words.

00:19:28.640 | And the fact that, like you said, I don't know what made that happen.

00:19:32.760 | - Well, there is some magic to the market, but as I'm showing my age, but you know the

00:19:39.760 | old movie quote, "Sometimes the magic works and sometimes it doesn't, and you have to

00:19:42.760 | have some idea of when it doesn't."

00:19:44.720 | So how do you get regulation right?

00:19:48.320 | - What can government at its best do?

00:19:51.280 | And strangely enough in this country today, it seems to get a bad rap.

00:19:57.120 | Everyone seems to, everybody's against the government.

00:20:00.880 | - Yeah, well a lot of money has been spent on making people hate the government.

00:20:04.880 | But the reality is government does some things pretty well.

00:20:11.760 | Government does health insurance pretty well, so much so, I mean given our anti-government

00:20:16.360 | bias, it really is true that there are people out there saying, "Don't let the government

00:20:20.080 | get its hands on Medicare."

00:20:23.520 | So people actually love the government health insurance program far more than they love

00:20:28.880 | private health insurance.

00:20:32.480 | Basic education, it turns out that your local public high school is the right place to have

00:20:41.520 | students trained.

00:20:42.720 | And certainly for-profit education is by and large a nightmare of rip-offs and grift and

00:20:53.600 | people not getting what they thought they were paying for.

00:20:59.320 | It's a judgment case, and it's funny, there are things, I mean everybody talks about the

00:21:06.360 | DMV as being, do you want the economy, actually my experience is that the DMV have always

00:21:12.200 | been positive.

00:21:13.200 | Maybe I'm just going to the right DMVs, but in fact a lot of government works pretty well.

00:21:19.200 | So you'd have to, to some extent you can do these things on a priori grounds.

00:21:24.880 | You can talk about the logic of why healthcare is not gonna be handled well by the market,

00:21:29.320 | but partly it's just experience.

00:21:31.000 | We tried, or at least some countries have tried nationalizing their steel industries,

00:21:35.000 | that didn't go well.

00:21:37.000 | But we've tried privatizing education, and that didn't go well.

00:21:39.920 | So you find out what works.

00:21:43.360 | What about this new world of tech?

00:21:46.320 | How do you see, what do you think works for tech?

00:21:49.320 | Is it more regulation or less regulation?

00:21:52.760 | There are some things that need more regulation.

00:21:56.480 | We're finding out that the world of social media is one in which competitive forces aren't

00:22:07.400 | working very well, and trusting the companies to regulate themselves isn't working very

00:22:12.080 | well.

00:22:13.080 | But I'm on the whole a tech skeptic, not in the sense that I think that tech doesn't work

00:22:18.280 | and it doesn't do stuff, but the idea that we're living through greater technological

00:22:22.640 | change than ever before is really an illusion.

00:22:28.080 | Ever since the beginning of the Industrial Revolution, we've had a series of ethical

00:22:32.360 | shifts in the nature of work and the kinds of jobs that are available.

00:22:39.440 | And it's not at all clear that what's happening now is any bigger or faster or harder to cope

00:22:46.760 | with than past shocks.

00:22:49.440 | It is a popular notion in today's sort of public discourse that automation is going

00:22:55.280 | to have a huge impact on the job market now.

00:22:59.680 | There is something transformational happening now.

00:23:02.800 | Can you talk about that, maybe elaborate a little bit more?

00:23:08.480 | Do you not see the software revolutions happening now with machine learning, availability of

00:23:16.160 | data, that kind of automation, being able to sort of process, clean, find patterns in

00:23:22.360 | data and do you not see that disrupting any one sector to a point where there's a huge

00:23:30.200 | loss of jobs?

00:23:31.560 | There may be some things.

00:23:32.960 | I mean, actually, translators, there's really reduced demand for translators because machine

00:23:39.040 | translation ain't perfect, but it ain't bad.

00:23:42.960 | There are some kinds of things that are changed, but overall productivity growth has actually

00:23:53.320 | been slow in recent years.

00:23:56.000 | It's been much slower than in some past periods.

00:23:59.820 | So the idea that automation is taking away all the jobs, the counterpart would be that

00:24:03.760 | we would be able to produce stuff with many fewer workers than before, and that's not

00:24:08.720 | happening.

00:24:09.720 | There are a few isolated sectors, there are some kinds of jobs that are going away, but

00:24:15.040 | that keeps on happening.

00:24:16.360 | I mean, New York City used to have thousands and thousands of longshoremen taking stuff

00:24:22.960 | off ships and putting them on ships.

00:24:28.240 | They're almost all gone now.

00:24:29.760 | Now you have the giant cranes taking containers on and off ships in Elizabeth, New Jersey.

00:24:36.960 | That's not robots, it doesn't sound high tech, but it actually pretty much destroyed an occupation.

00:24:45.600 | Well, it wasn't fun for the longshoremen, to say the least, but we coped, we moved on,

00:24:55.040 | and that sort of thing happens all the time.

00:24:57.920 | You mean farmers.

00:24:59.440 | We used to be a nation which was mostly farmers.

00:25:03.240 | There are now very few farmers left.

00:25:07.480 | And the reason is not that we've stopped eating, it's that farming has become so efficient

00:25:13.440 | that we don't need a lot of farmers, and we coped with that too.

00:25:16.760 | So the idea that there's something qualitatively different about what's happening now, so far

00:25:22.320 | isn't true.

00:25:23.320 | So yeah, your intuition is there is going to be a loss of jobs, but it's just a thing

00:25:28.560 | that just continues.

00:25:30.720 | There's nothing qualitatively different about this moment.

00:25:33.280 | Some jobs will be lost, others will be created, as has always been the case so far.

00:25:37.840 | Maybe there's a singularity, maybe there's a moment when the machines get smarter than

00:25:43.040 | we are and SkyTech kills us all or something, right?

00:25:46.800 | But that's not visible in anything we're seeing now.

00:25:51.520 | You mentioned the metric of productivity.

00:25:52.840 | Could you explain that a little bit?

00:25:54.160 | Because it's a really interesting one.

00:25:55.440 | I've heard you mention that before in connection with automation.

00:26:00.320 | So what is that metric, and if there is something qualitatively different, what should we see

00:26:05.320 | in that metric?

00:26:06.320 | Well, okay, productivity.

00:26:08.600 | First of all, production.

00:26:09.720 | We do have a measure of the economy's total production, real GDP, which is itself, it's

00:26:17.000 | a little bit of a construct because it's quite literally, it's adding apples and oranges.

00:26:22.460 | So we have to add together various things, which we basically do by using market prices,

00:26:27.880 | but we try to adjust for inflation.

00:26:30.480 | But it's a reasonable measure of how much the economy is producing.

00:26:34.040 | Is it goods and, sorry to interrupt, is it goods and services?

00:26:36.520 | Goods and services, it's everything.

00:26:39.240 | Productivity is, you divide that total output by the number of hours worked.

00:26:45.480 | So we're basically asking how much stuff does the average worker produce in an hour of work?

00:26:52.640 | And if you're seeing really rapid technological progress, then you'd expect to see productivity

00:26:57.920 | rising at a rapid clip, which we did.

00:27:02.680 | For the generation after World War II, productivity rose 2% a year on a sustained basis.

00:27:10.240 | Then it dropped down for a while, then there was a decade of fairly rapid growth from the

00:27:15.400 | mid '90s to the mid 2000s, and then it dropped off again.

00:27:20.160 | And it's not impressive right now.

00:27:24.480 | You're just not seeing an epical shift in the economy.

00:27:29.000 | Let me then ask you about the psychology of blaming automation.

00:27:32.120 | A few months ago you wrote in the New York Times, quote, "The other day I found myself,

00:27:36.800 | as I often do at a conference, discussing lagging wages and soaring inequality.

00:27:41.760 | There was a lot of interesting discussion, but one thing that struck me was how many

00:27:45.660 | of the participants just assumed that robots are a big part of the problem, that machines

00:27:50.760 | are taking away the good jobs, or even jobs in general.

00:27:54.480 | For the most part, this wasn't even presented as a hypothesis, just as part of what everyone

00:27:59.120 | knows."

00:28:00.120 | - Yeah.

00:28:01.120 | - So why is, maybe can you psychoanalyze the public intellectuals or economists, or us

00:28:09.820 | actually in the general public, why this is happening?

00:28:14.360 | Why this assumption has just infiltrated public discourse?

00:28:17.840 | - There's a couple of things.

00:28:19.720 | One is that the particular technologies that are advancing now are ones that are a lot

00:28:25.540 | more visible to the chattering class.

00:28:31.720 | When containerization did away with the jobs of longshoremen, well, not a whole lot of

00:28:37.920 | college professors are close friends with longshoremen, right?

00:28:40.800 | And so we see this one.

00:28:44.280 | Then there's a second thing, which is, we just went through a severe financial crisis

00:28:49.960 | and a period of very high unemployment has finally come down.

00:28:55.760 | There's really no question that that high unemployment was about macroeconomics, it

00:29:00.280 | was about a failure of demand.

00:29:02.440 | But macroeconomics is really non-intuitive.

00:29:05.840 | People just have a hard time wrapping their minds around it, and among other things, people

00:29:09.920 | have a hard time believing that something as trivial as, well, people just aren't spending

00:29:14.080 | enough can lead to the kind of mass misery that we saw in the 1930s, or the not quite

00:29:19.600 | so severe, but still serious misery that we saw after 2008.

00:29:24.200 | And there's always a tendency to say, it must be something big, it must be technological

00:29:28.520 | change that means we don't need workers anymore.

00:29:31.240 | There was a lot of that in the '30s, and that same thing happened after 2008, the assumption

00:29:36.120 | that it has to be some deep cause, not something as trivial as a failure of investor confidence

00:29:43.760 | and inadequate monetary and fiscal response.

00:29:48.200 | And the last thing, wages.

00:29:53.720 | A lot of what's happened on wages is at some level political.

00:29:57.640 | It's the collapse of the union movement, it's policies that have squeezed workers' bargaining

00:30:02.320 | power, and for kind of obvious reasons, there are a lot of influential people who don't

00:30:08.440 | want to hear that story.

00:30:10.160 | They want it to be an inevitable force of nature, technology has made it impossible

00:30:14.840 | to have people earn middle class wages, and they don't like the story that says actually,

00:30:23.960 | no, it's kind of the political decisions that we made that have caused this income stagnation,

00:30:29.380 | and so they're a receptive audience for technological determinism.

00:30:34.160 | So what comes first in your view, the economy or politics in terms of what has impact on

00:30:40.600 | the other?

00:30:41.600 | Oh, well, look, everything interacts.

00:30:44.920 | That's one of the rules that I was taught in economics, everything affects everything

00:30:49.800 | else in at least two ways.

00:30:51.160 | But I mean, clearly the economy drives a lot of political stuff, but also clearly politics

00:31:01.900 | has a huge impact on the economy.

00:31:08.000 | We look at the decline of unions in America and say, well, the world has changed and unions

00:31:13.520 | don't have a role, but two-thirds of workers in Denmark are unionized, and Denmark has

00:31:20.440 | the same technology and faces the same global economy that we do, it's just a difference

00:31:25.120 | in political choices that leads to that difference.

00:31:27.760 | So I actually teach a course here at CUNY called Economics of the Welfare State, which

00:31:34.240 | is about things like healthcare and retirement, and to some extent wage policy and so on.

00:31:39.160 | And the message I keep on trying to drive home is that, look, all advanced countries

00:31:45.880 | have got roughly equal competence, we all have the same technology, but we make very

00:31:50.560 | different choices.

00:31:52.060 | Not that America always makes the wrong choices, we do some things pretty well, our retirement

00:31:56.020 | system is one of the better ones, but the point is that there's a huge amount of political

00:32:02.760 | choice involved in the shape of the economy.

00:32:05.440 | So what is a welfare state?

00:32:09.160 | Welfare state is the old term, but it basically refers to all the programs that are there

00:32:16.080 | to mitigate, if you like, the risks and injustices of the market economy.

00:32:23.120 | So in the US, the welfare state is Social Security, Medicare, Medicaid, minimum wages,

00:32:28.400 | food stamps.

00:32:29.740 | When you say welfare state, my first sort of feeling is a negative one.

00:32:34.240 | Even though I like all, I probably generally, at least theoretically, like all the welfare

00:32:40.920 | programs.

00:32:41.920 | Well, it's been demonized, and to some extent I'm doing a little bit of thumbing my nose

00:32:48.120 | at all of that by just using the term welfare state.

00:32:52.920 | No, it's not.

00:32:53.920 | I see, yeah, I got you.

00:32:55.240 | But everybody, every advanced country actually has a lot of welfare state, even the US.

00:33:03.480 | That's a fundamental part of the fabric of our society.

00:33:06.560 | Social Security, Medicare, Medicaid are just things we take for granted as part of the

00:33:12.840 | scene.

00:33:15.360 | So there's a lot of people on the right wing who are saying, "Oh, it's all socialism."

00:33:23.880 | And well, I guess, mean what you want them to mean.

00:33:28.200 | And just today, I told my class about the record that Ronald Reagan made in 1961, warning

00:33:39.580 | that Medicare would destroy American freedom.

00:33:43.320 | But it sort of didn't happen.

00:33:47.120 | On the topic of welfare state, what are your thoughts on universal basic income?

00:33:52.160 | And that's sort of a, not a generic, but a universal safety net of this kind.

00:33:59.140 | There's always a trade-off.

00:34:00.140 | When we talk about social safety net programs, there's always a trade-off between universality,

00:34:09.440 | which is clean, but means that you're giving a lot of money to people who don't necessarily

00:34:13.840 | need it, and some kind of targeting, which makes it easier to deal with the crucial problems

00:34:23.400 | with limited resources.

00:34:25.760 | But both has incentive problems and kind of political, and I would say even psychological

00:34:33.360 | issues.

00:34:34.360 | But the great thing about Social Security and Medicare is no questions asked.

00:34:41.560 | You don't have to prove that you need them.

00:34:45.520 | It just comes.

00:34:46.520 | I mean, I didn't...

00:34:48.440 | I'm on Medicare, allegedly.

00:34:49.760 | I mean, it's run through my New York Times health insurance, but I didn't have to file

00:34:59.180 | an application with the Medicare office to prove that I needed it.

00:35:02.360 | It just happened when I turned 65.

00:35:05.600 | That's good for dignity, and it's also good for the political support, because everybody

00:35:10.720 | gets Medicare.

00:35:13.800 | On the other hand, if you...

00:35:17.040 | And we can do that with healthcare.

00:35:21.260 | To give everybody a guarantee of an income that's enough to live on comfortably, that's

00:35:27.280 | a lot of money.

00:35:29.000 | What about enough income to carry you over through difficult periods, like if you lose

00:35:36.080 | a job, that kind of thing?

00:35:37.080 | Well, we have unemployment insurance, and I think our unemployment insurance is too

00:35:41.600 | short-lived and too stingy.

00:35:43.440 | It would be better to have a more comprehensive unemployment insurance benefit.

00:35:50.540 | But the trouble with something like universal basic income is that either the bar is set

00:35:56.440 | too low, so it's really not something you can live on, or it's an enormously expensive

00:36:02.000 | program.

00:36:03.000 | And so at this point, I think that we can do far better by building on the kinds of

00:36:09.080 | safety net programs we have.

00:36:10.680 | I mean, food stamps, earned income tax credit, we should have a lot more family support policies.

00:36:17.560 | Those things can deal with...

00:36:19.720 | Can do a lot more to really diminish the amount of misery in this country.

00:36:24.000 | UBI is something that is being...

00:36:28.400 | I mean, it goes kind of hand-in-hand with this belief that the robots are going to take

00:36:34.240 | all of our jobs.

00:36:35.600 | And if that was really happening, then I might reconsider my views on UPI, but I don't see

00:36:39.760 | that happening.

00:36:41.160 | So are you happy with discourse that's going on now in terms of politics?

00:36:47.760 | You mentioned a few political candidates, is the kind of thing going on both on Twitter

00:36:55.000 | and debates and the media, through the written word, through the spoken word, how do you

00:37:00.760 | assess the public discourse now in terms of politics?

00:37:04.000 | We're in a fragmented world.

00:37:06.080 | So the public discourse...

00:37:07.080 | More so than before.

00:37:08.080 | More so than ever before.

00:37:09.680 | So at this point, the public discourse that you see if Fox News is your principal news

00:37:21.280 | source is very different from the one you get if you read the New York Times.

00:37:26.440 | On the whole, my sense is that mainstream political reporting, policy reporting is A,

00:37:34.160 | not too great, but B, better than it's ever been.

00:37:37.840 | Because when I first got into the pundit business, it was just awful.

00:37:43.520 | Lots of things just never got covered.

00:37:45.560 | And if things did get covered, it was always both sides.

00:37:50.200 | It's the line that comes back from me writing during the 2000 campaign was that if one of

00:37:55.840 | the candidates said that the Earth was flat, the headline would be "Views Differ on Shape

00:38:01.600 | of Planet."

00:38:02.600 | I mean, that's less true.

00:38:05.880 | There's still a fair bit of that out there, but it's less true than there used to be.

00:38:08.880 | And there are more people reporting, writing on policy issues who actually understand them

00:38:15.160 | than ever before.

00:38:18.080 | So that's good.

00:38:20.200 | But still, how much the typical voter is actually informed is unclear.

00:38:31.440 | I mean, the Democratic debates, I'm hoping that we finally get down to not having 27

00:38:43.640 | people on the stage or whatever it is they have.

00:38:46.560 | But they're reasonably substantive, certainly better than before.

00:38:52.000 | And while there's a lot of still theater criticism instead of actual analysis in the reporting,

00:38:59.560 | it's not as totally dominant as in the past.

00:39:02.400 | Can I ask maybe a dumb question?

00:39:05.640 | But from an open-minded perspective, when people on the left and people on the right,

00:39:15.920 | I think view the others as sometimes complete idiots.

00:39:22.840 | Yeah.

00:39:23.840 | What do we do with that?

00:39:27.480 | Is it possible that the people on the right are correct about what they currently believe?

00:39:37.080 | Is that kind of open-mindedness helpful?

00:39:40.720 | Or is this division long-term productive for us to sort of have this food fight?

00:39:48.240 | Well, the trouble you have to confront is that there's a lot of stuff that just is false

00:39:55.480 | out there, but commands extensive political allegiance.

00:39:59.520 | So the idea, well, both sides need to listen to each other respectfully.

00:40:04.200 | I'm happy to do that when there's a view that is worthy of respect, but a lot of stuff is

00:40:10.800 | not.

00:40:11.800 | And so economics is something where I think I know something, and I'm not sure that I'm

00:40:19.760 | always right.

00:40:20.760 | In fact, I know I've been wrong plenty of times.

00:40:24.840 | But I think there is a difference between economic views that are within the realm of

00:40:32.160 | we can actually have an interesting discussion, and those that are just crank doctrines or

00:40:39.680 | things that are purely being disseminated because people are being paid to disseminate

00:40:45.840 | them.

00:40:46.840 | So there are plenty of good, serious center-right economists that I'm happy to talk to.

00:40:54.560 | None of those center-right economists has any role in the Trump administration.

00:40:57.720 | The Trump administration and by and large Republicans in Congress only want to listen

00:41:02.720 | to people who are cranks.

00:41:05.520 | And so I think it's being dishonest with my readers to pretend otherwise.

00:41:11.520 | There's no way I can reach out to people who think that reading Ayn Rand novels is how

00:41:18.880 | you learn about monetary economics.

00:41:20.360 | Let me linger on that point.

00:41:22.320 | So if you look at Ayn Rand, okay, so you said center-right.

00:41:25.800 | What about extreme, people who have radical views?

00:41:29.040 | You think they're not grounded in any kind of data, in any kind of reality?

00:41:36.640 | I'm just sort of curious about how open we should be to ideas that seem radical.

00:41:44.440 | Oh, radical ideas is fine, but then you have to ask, is there some basis for the radicalism?

00:41:51.680 | And if it's something that is not grounded in anything, then, and particularly, by the

00:42:02.000 | way, if it's something that's been refuted by evidence again and again, and people just

00:42:06.360 | keep saying it, if it's a zombie idea, and there's a lot of those out there, then there

00:42:11.920 | comes a point when it's not worth trying to fake respect for it.

00:42:16.000 | I see.

00:42:17.000 | So through the scientific process, you've shown that this idea does not hold water,

00:42:22.520 | but I like the idea of zombie ideas, but they live on through, it's like the idea that the

00:42:28.080 | earth is flat, for example, has been, for the most part, disproven.

00:42:34.120 | But it lives on, actually, and growing in popularity currently.

00:42:39.000 | And there's a lot of that out there, and you can't wish it away, and you're not being fair

00:42:45.320 | to either yourself, or if you're somebody who writes for the public, you're not being

00:42:49.880 | fair to your readers to pretend otherwise.

00:42:53.000 | So quantum mechanics is a strange theory, but it's testable, and so while being strange

00:42:59.280 | is widely accepted amongst physicists, how robust and testable are economics theories,

00:43:06.880 | if we compare them to quantum mechanics and physics and so on?

00:43:11.200 | Okay, economics, look, it's a complex system, and it's also one in which, by and large,

00:43:17.640 | you don't get to do experiments.

00:43:19.800 | And so economics is never going to be like quantum mechanics.

00:43:24.560 | That said, you get natural experiments, you get tests of rival doctrines.

00:43:31.360 | In the immediate aftermath of the financial crisis, there was one style, one basic theory

00:43:40.000 | of macroeconomics, which ultimately goes back to John Maynard Keynes, that made a few predictions.

00:43:45.160 | It said, "Under these circumstances, printing money will not be inflationary, running big

00:43:52.040 | budget deficits will not cause a rise in interest rates, slashing government spending, austerity

00:43:58.680 | policies will lead to depressions if tried."

00:44:04.660 | Other people had exactly the opposite predictions, and we got a fairly robust test, and one theory

00:44:12.920 | won.

00:44:13.920 | Interest rates stayed low, inflation stayed low, austerity countries that implemented

00:44:18.360 | harsh austerity policies suffered severe economic downturns.

00:44:23.500 | You don't get much, that's pretty clear, and that's not going to be true on everything.

00:44:29.740 | But there's a lot of empirical, I mean, the younger economists these days are very heavily

00:44:36.500 | data-based, and that's great, and I think that's the way to go.

00:44:43.640 | What theories of economics is there currently a lot of disagreement about, would you say?

00:44:48.800 | Oh, first of all, there's just a lot less disagreement, really, among serious researchers

00:44:55.180 | in economics than people imagine.

00:44:57.820 | We can track that, the Chicago Booth School has a panel, an ideologically diverse panel,

00:45:04.460 | and they regularly pose questions, and on most things there's a huge, there's remarkable

00:45:13.180 | consensus.

00:45:14.180 | There are a lot of things where people imagine that there's dispute, but the illusion of

00:45:21.340 | dispute is something that's basically being fed by political forces, and there isn't really.

00:45:27.260 | There are, I think, questions about what are effective ways to regulate technology industries.

00:45:37.020 | We really don't know the answers there.

00:45:43.740 | There's a, or look, I don't follow every part.

00:45:48.860 | Minimum wages, I think there's pretty overwhelming evidence that a modest increase in the minimum

00:45:55.980 | wage from current levels would not have any noticeable adverse effect on jobs, but if

00:46:05.540 | you ask how high could it go, $12 seems pretty safe, given what we know.

00:46:13.540 | Is 15 okay?

00:46:14.980 | There's some legitimate disagreement there, I think probably, but people have a point.

00:46:22.220 | 20, where is the line at which it starts to become a problem, and the answer is truly

00:46:27.300 | we don't know.

00:46:28.300 | It's fascinating to try to, such a cool, economics is cool in that sense, because you're trying

00:46:33.460 | to predict something that hasn't been done before, the impact, the effects of something

00:46:38.380 | that hasn't been done before.

00:46:39.780 | Yeah, you're trying, you're going out of sample, and we have good reason to believe that there

00:46:44.980 | are, that it's non-linear, that there comes a point at which it doesn't work the way it

00:46:49.660 | has in the past.

00:46:51.940 | So as an economist, how do you see science and technological innovation?

00:46:56.020 | When I took various economics courses in college, technological innovation seemed like a no-brainer

00:47:03.220 | way of growing an economy, and we should invest in it aggressively.

00:47:08.340 | I may be biased, but it seemed like the various ways to grow an economy, it seems like the

00:47:13.940 | easiest way, especially long-term.

00:47:16.460 | Is that correct?

00:47:17.460 | Yeah.

00:47:18.460 | And if so, why aren't we doing it more?

00:47:20.820 | Well, that's, okay.

00:47:22.540 | The first question is, yeah, I mean, all, it's pretty much overwhelming.

00:47:28.180 | We think we can more or less measure this, although there are some assumptions involved,

00:47:31.780 | but it's something like 70 to 80% of the growth in per capita income is basically the advance

00:47:38.580 | of knowledge.

00:47:40.420 | It's not just the crude accumulation of capital, it is the fact that we get smarter.

00:47:46.260 | A lot of that, by the way, is more prosaic kinds of technology.

00:47:50.140 | So I like to talk about things like containerization or, in an earlier period, the invention of

00:48:02.300 | the flat-packed cardboard box.

00:48:05.460 | That had to be invented, and now all of your deliveries from Amazon are made possible by

00:48:12.100 | the existence of that technology.

00:48:14.060 | The web stuff is important too, but what would we do without cardboard boxes?

00:48:20.700 | But all of that stuff is really important in driving economic progress.

00:48:25.860 | Why don't we invest more in, again, more prosaic stuff?

00:48:35.340 | Why haven't we built another goddamn rail tunnel under the Hudson River, for which the

00:48:41.460 | need is so totally overwhelmingly obvious?

00:48:45.060 | How do you think about, first of all, I don't even know what the word prosaic means, but

00:48:48.260 | I inferred it, but how do you think about prosaic?

00:48:50.660 | Is it the really most basic, dumb technology innovation, or is it just the lowest hanging

00:48:59.420 | fruit of where benefit can be gained?

00:49:04.100 | When I say prosaic, I mean stuff that is not sexy and fancy and high-tech.

00:49:10.100 | It's building bridges and tunnels, inventing the cardboard box.

00:49:23.980 | Where do we put EasyPass in there?

00:49:29.780 | It is actually using some modern technology and all that, but I don't think they're going

00:49:36.300 | to make a movie about the guy, whoever it was that invented EasyPass, but it's actually

00:49:43.340 | a pretty significant productivity booster.

00:49:46.340 | To me, it always seemed like it's something that everybody should be able to agree on

00:49:51.700 | and just invest.

00:49:54.820 | In the same way, the investment in the military and the DOD is huge.

00:50:02.860 | Not everyone, but there's an agreement amongst people that somehow a large defense is important.

00:50:14.460 | It always seemed to me like that should be shifted towards, if you want to grow prosperity

00:50:21.960 | of the nation, you should be investing in knowledge.

00:50:25.300 | Yes, prosaic stuff, investing in infrastructure and so on.

00:50:28.700 | I mean, sorry to linger on it, but do you have any intuition?

00:50:32.580 | Do you have hope that that changes?

00:50:35.260 | Do you have intuition why it's not changing?

00:50:37.780 | It's unclear which intuition-

00:50:38.780 | I have more than an intuition.

00:50:39.780 | I have a theory.

00:50:40.780 | I'm reasonably certain that I understand why we don't do it.

00:50:46.740 | It's because we have a real values dispute about the welfare state, about how much the

00:50:56.940 | government should do to help the unfortunate.

00:51:00.780 | And politicians believe, probably rightly, that there's a kind of halo effect that surrounds

00:51:08.060 | any kind of government intervention.

00:51:10.660 | That even though providing people with enhanced social security benefits is really very different

00:51:18.300 | from building a tunnel under the Hudson River, politicians of both parties seem to believe

00:51:24.060 | that if the government is seen to be successful at doing one kind of thing, it will make people

00:51:29.200 | think more favorably on doing other kinds of things.

00:51:32.440 | And so we have conservatives tend to be opposed to any kind of increase in government spending,

00:51:37.620 | except military, no matter how obviously a good idea it is, because they fear that it's

00:51:45.980 | the thin end of the wedge for bigger government in general.

00:51:50.340 | And to some extent, liberals tend to favor spending on these things, partly because they

00:51:57.020 | see it as a way of proving that government can do things well, and therefore it can turn

00:52:02.660 | to broader social goals.

00:52:05.780 | It's clearly, if you like, what you might have thought would be a technocratic discussion

00:52:13.060 | about government investment, both in research and in infrastructure, is contaminated by

00:52:18.660 | the fact that government is government, and people link it to other government actions.

00:52:25.580 | Perhaps a silly question, but as a species, we're currently working on venturing out into

00:52:30.380 | space, one day colonizing Mars.

00:52:32.740 | So when we start a society on Mars from scratch, what political and economic system should

00:52:40.140 | it operate under?

00:52:41.540 | Oh, I'm a big believer in...

00:52:44.500 | First of all, I don't think we're actually gonna do that, but let's...

00:52:47.500 | Let's imagine.

00:52:48.500 | Hypothesize that we colonize Mars or something.

00:52:51.940 | Look, representative democracy is...

00:52:59.820 | Versus pure democracy.

00:53:01.060 | Well, yeah, pure democracy, where people vote directly on everything, is really problematic,

00:53:08.140 | because people don't have time to try and master every issue.

00:53:15.540 | We can see what government by referendum looks like.

00:53:18.140 | There's a lot of that in California, and it doesn't work so good, because it's hard to

00:53:23.140 | explain to people that the various things they vote for may conflict.

00:53:27.000 | So representative democracy is...

00:53:33.020 | It's got lots of problems.

00:53:35.380 | And I...

00:53:36.380 | You kind of know the Winston Churchill thing, right?

00:53:37.860 | It's the worst system we know, except for all the others.

00:53:42.740 | But so yeah, sticking with the representative...

00:53:45.940 | And basically, the American system of regulation and markets and the economy we have going

00:53:52.580 | on is a pretty good one for Mars.

00:53:54.860 | If you start from scratch.

00:53:57.260 | If you're gonna start from scratch, you wouldn't want a Senate where 16% of the population

00:54:03.420 | has half the seats.

00:54:06.380 | You probably would want one which is actually more representative than what we have.

00:54:12.940 | And the details, it's unclear.

00:54:19.420 | When times are good, all of the various representative democracy systems, whether it's parliamentary

00:54:26.500 | democracies or a US style system, whether you have a prime minister or the head of state

00:54:32.860 | as an elected president, they all kind of work well when times are good, and they all

00:54:37.340 | have different modes of breakdown.

00:54:39.260 | So I'm not sure I know what the answer is.

00:54:42.060 | But something like that is, given what we've seen through history, it's the least bad system

00:54:50.500 | out there.

00:54:51.500 | I mean, I don't know if you...

00:54:57.180 | I'm a big fan of the TV series, The Expanse, and it's kind of gratifying that out there

00:55:03.420 | the...

00:55:05.300 | It's the Martian Congressional Republic.

00:55:07.860 | Okay.

00:55:10.180 | In a brief sense, so amongst many things, you're also an expert at international trade.

00:55:18.940 | What do you make of the complexity?

00:55:23.460 | So I can understand trade between two people, say two neighboring farmers.

00:55:29.020 | It seems pretty straightforward to me.

00:55:31.820 | But internationally, when you start talking about nations and nations trading, it seems

00:55:35.340 | to be very complicated.

00:55:37.540 | So from a high level, why is it so complicated?

00:55:41.460 | What are all the different factors that weigh the objectives that need to be considered

00:55:46.460 | in international trade?

00:55:48.260 | And maybe feeding that into a question of, do you have concerns about the two giants

00:55:54.780 | right now of the US and China, and the tension that's going on with the international trade

00:56:00.860 | there with the trade war?

00:56:02.140 | Well, first of all, international trade is not really that different from trade among

00:56:05.860 | individuals.

00:56:06.860 | It's vastly more complex, and there are many more players.

00:56:13.340 | But in the end, the reasons why countries trade are pretty much the same as the reasons

00:56:17.420 | why individuals trade.

00:56:18.980 | Countries trade because they're different, and they can derive mutual advantage from

00:56:24.180 | concentrating on the things they do relatively well.

00:56:26.620 | And also, there are economies of scale.

00:56:35.580 | Individuals have to decide whether to be a surgeon or an accountant.

00:56:38.660 | It's probably not a good idea to try and be both.

00:56:42.380 | And countries benefit from specializing just because of the inherent advantages of specialization.

00:56:49.460 | So now, the fact that it's a big world, and we're talking about millions of products being

00:56:56.060 | traded, and in today's world, often trade involves many stages.

00:57:02.260 | So that made in China iPhone is actually assembled from components that are made all over the

00:57:08.140 | world.

00:57:10.220 | But it doesn't really change the fundamentals all that much.

00:57:15.060 | There's a recurrent...

00:57:16.060 | I mean, the big...

00:57:19.420 | The very little secret of international trade conflict is that actually it's not...

00:57:26.060 | Conflicts among countries are really not that important.

00:57:29.540 | U.S. trade is beneficial to both sides, to both countries, but it has big impacts on

00:57:37.540 | the distribution of income within countries.

00:57:40.180 | So the growth of U.S. trade with China has made both U.S. and China richer, but it's

00:57:47.620 | been pretty bad for people who were employed in the North Carolina furniture industry,

00:57:54.380 | who did find that their jobs were displaced by a wave of imports from China.

00:57:58.740 | And so that's where the complexity comes in.

00:58:03.620 | Not at all clear to me...

00:58:07.140 | We have some real problems with China, although they don't really involve trade so much as

00:58:11.540 | things like respect for intellectual property.

00:58:17.380 | Not clear that those real problems that we do have with China have anything to do with

00:58:22.100 | the current trade war.

00:58:23.100 | The current trade war seems to be driven instead by a fundamentally wrong notion that when

00:58:30.100 | we sell goods to China, that's good, and when we buy goods from China, that's bad.

00:58:33.780 | And that's misunderstanding the whole point.

00:58:36.860 | Is trade with China in both directions a good thing?

00:58:40.460 | Yeah, we would be poorer if it wasn't for it.

00:58:43.740 | But there are downsides, as there are for any economic change.

00:58:47.340 | It's like any new technology makes us richer, but often hurts some people.

00:58:53.460 | Trade with China makes us richer, but hurts some people.

00:58:56.780 | And I wouldn't undo what has happened, but I wish we had had a better policy for supporting

00:59:05.620 | and compensating the losers from that growth.

00:59:09.460 | So we live in a time of radicalization of political ideas, Twitter mobs, and so on.

00:59:15.820 | And yet here you are in the midst of it, both tweeting and writing in the New York Times

00:59:21.460 | articles with strong opinions, riding this chaotic wave of public discourse.

00:59:26.660 | Do you ever hesitate or feel a tinge of fear for exploring your ideas publicly and unapologetically?

00:59:34.380 | Oh, I feel fear all the time.

00:59:37.820 | It's not too hard to imagine scenarios in which this is going to, I might personally

00:59:42.260 | find myself kind of in the crosshairs.

00:59:47.180 | And I mean, I am the king of hate mail, I get amazing correspondence.

00:59:54.540 | Does it affect you?

00:59:56.380 | It did when it started.

00:59:57.940 | These days I've developed a very thick skin.

01:00:01.780 | So I know I don't usually get, in fact, if I don't get a wave of hate mail after a column,

01:00:08.260 | then I probably wasted that day.

01:00:11.220 | So what do you make of that as a person who's putting ideas out there?

01:00:16.340 | If you look at the history of ideas, the way it works is you write about ideas, you put

01:00:21.460 | them out there.

01:00:22.460 | But now when there is so much hate mail, so much division, what advice do you have for

01:00:28.860 | yourself and for others trying to have a discussion about ideas, difficult ideas?

01:00:34.140 | Well, I don't know about advice for others.

01:00:36.300 | I mean, for most economists, just do your research.

01:00:44.260 | We can't all be public intellectuals and we shouldn't try to be.

01:00:47.140 | And in fact, I'm glad that I didn't get into this business until I was in my late 40s.

01:00:55.180 | I mean, it's probably best to spend your decades of greatest intellectual flexibility addressing

01:01:03.820 | deep questions, not confronting Twitter mobs.

01:01:10.940 | And as for the rest, I think when you're writing about stuff, sort of dance like no one's watching,

01:01:20.340 | write like nobody's reading.

01:01:21.940 | Write what you think is right.

01:01:24.420 | Trying to make it, obviously, trying to make it comprehensible and persuasive, but don't

01:01:30.220 | let yourself get intimidated by the fact that some people are going to say nasty things.

01:01:40.580 | You can't do your job if you are worried about criticism.

01:01:47.660 | Well, I think I speak for a lot of people in saying that I hope that you keep dancing

01:01:52.220 | like nobody's watching on Twitter and New York Times and books.

01:01:56.820 | So Paul, it's been an honor.

01:01:58.980 | Thank you so much for talking to me.

01:02:00.660 | Okay, great.

01:02:01.660 | Thanks for listening to this conversation with Paul Krugman and thank you to our presenting

01:02:05.540 | sponsor Cash App.

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01:02:10.100 | You'll get $10 and $10 will go to FIRST, an organization that inspires and educates young

01:02:15.220 | minds to become science and technology innovators of tomorrow.

01:02:19.820 | If you enjoy this podcast, subscribe on YouTube, get five stars on Apple Podcast, follow us

01:02:24.780 | on Spotify, support on Patreon, or simply connect with me on Twitter @LexFriedman.

01:02:31.380 | And now let me leave you some words from Adam Smith in The Wealth of Nations, one of the

01:02:36.820 | most influential philosophers and economists in our history.

01:02:40.980 | "It is not from the benevolence of the butcher, the brewer, or the baker that we expect our

01:02:45.860 | dinner, but from their regard to their own interest.

01:02:49.820 | We address ourselves not to their humanity, but to their self-love, and never talk to

01:02:54.900 | them of our necessities, but of their advantages."

01:03:00.540 | Thank you for listening and hope to see you next time.

01:03:03.180 | [END]

01:03:03.680 | 1

Paul Krugman: Economics of Innovation, Automation, Safety Nets & UBI | Lex Fridman Podcast #67

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