 Today is December 23rd, 2021 and today's episode of Econ Talk is also being released as an episode of conversations with Tyler. I am speaking with Tyler Cowan of George Mason who blogs at Marginal Revolution, podcasts at Conversations with Tyler. It's his 14th appearance here on the program he was last here in April of 2021 talking about the pandemic. We're going to do something a little unusual today. We're going to talk about what it's like to be an immigrant using my move to Israel this year as a way to launch the conversation. As my listeners know and to let listeners at conversations with Tyler know, I came to Israel to be president of Shalem College, a small liberal arts college here in Jerusalem. And finally, I want to encourage Econ Talk listeners to go to our homepage to vote on your favorite episodes of 2021. Tyler, welcome back to Econ Talk. Thank you very much for having me. I'm so curious about your new ventures. Let me start with a general question. In the mature economies, why aren't there more new universities? Shalem is in its ninth year. And how is starting a new university in Israel different from in the United States? Well, we have a very strange business model. We lose money on every student and we make it up by volume. We give all our students a stipend that covers their tuition and a chunk of their living expenses. And as a result, in America, if that were the case, we take no money from the government. It's all private donations. And we're in competition, we like to thank for the best students here in Israel. So they often are on scholarships, so we have to match that. And that's the business model. In America, if you don't take money from the government, you usually get less regulation in turn. That is not the case here. The Council of Higher Education is extremely vigilant in making sure that we keep all of our promises. And they're very, very detail-oriented. The number of toilets, I think, is regulated here per student. So you can imagine starting a new major is we've got to get their approval. We have to provide the syllabi of all the classes that we be taught in the major. We have to show the faculty that would be teaching in the major. And we have to get a variety of committees to sign off on it. So to create a whole college is a major enterprise. The people who came before me did all that lifting, heavy and light. And in America, the challenge, of course, is both accreditation and reputation. You're in competition with existing, like any new entry, you have to compete with the existing competitors. And in case of college, the brand name is extremely important in America, obviously. People have emotional ties to colleges. I think, you know, there are very, very, very few new colleges that are at the highest level. As you know, of course, University of Austin is aspiring to be one of those startups in America. But it's not an easy task. So being a university president, it also has a managerial side. How are you feeling managerial culture as being different in Israel compared to the United States? Well, you know, I don't have a lot of managerial experience. It kind of took a leap of faith. You've managed your own career, your entire life. Yeah, a tremendous experience. And that meant managing a very difficult person, actually. So it's actually quite, quite encouraging. In all seriousness, the job I've grown in, you know, in the six months I've been on the job and on the ground here, it's been a wonderful experience adventure. You know, we'll talk about what it's like to live here, but to flex a bunch of muscles that I haven't used much or that I didn't know I had. It's a very multifaceted job. There's managing people. There's curriculum and faculty and student issues. There's fundraising. Can you be more direct when you're managing in Israel? There's a reputation that Israelis are super direct that don't mince words. Like, is that true? And how does that influence how you manage people? You just tell them what to do. Do they tell you what to do? Or how's it different? Well, I think there's a lot of my management team at the senior level are speaking English and Americans. So even though they're Israelis now and they're all citizens of Israel as I am, they bring a lot of their American baggage with them, even though they've unpacked for sure. In terms of the staff and the students, there is a directness. You know, with the students, it's quite interesting. They come here when they're typically 23, 24 years old to start their college career, very different than in America. And despite having served in the Army, they are remarkably young in a certain way. They have an energy and an openness that's very refreshing. The bluntness part, I don't sense so much on their end. In terms of the staff, it's not really an issue. At least I have an experience. What I think it causes, though, is a certain hesitation on my part for interaction. I've got the language barrier for the Native Israelis here. I try to speak Hebrew with them to amuse them. And they're very kind. And then we typically end up speaking in English if it's anything substantive outside of how was your weekend. And they're very blunt. Straightforward. I kind of like it. You're an Adam Smith scholar. And as you know, Smith and many of the other classical economists, they were worried about the decline of martial virtue in a commercial society with division of labor. And now that you've lived in Israel, how does this worry seem to you more justified, totally false? How do you view it? It's a deep question. I appreciate the flattery of calling me a Smith scholar. I wrote a book on Smith, which of course makes me an expert, but I'm not really an expert. The martial side, the military side here is utterly fascinating. There's a big conversation going around here about whether Israel should continue with the draft or go to a model close to the United States of a volunteer army. It's an enormous socializing experience here for the young people to go through that. It's challenging, difficult, often physically difficult. And it permeates a lot of life here. In the way that there are certain networks of college, for example, in America or a private school system, you have a certain natural connection to the graduates. Here in Israel, the unit you were in, the kind of unit you were in, the people that you were in that unit with, I think has a very powerful lifelong effect. It has some, it's jarring often to an American who comes here. There's a lot of people walking around with their Oozies, their automatic weapons. The first time you see that, it's a little bit scary. Second time kind of can be okay. You feel pretty, it's kind of comforting. But it's a part of life here, along with reserve duty and other, you know, I have students who missed the first three weeks. We have students here who missed the first three weeks of class because they had reserve duty. Or they were on some project. And that's intense. It's just very alien to most Americans. Even the rising importance of cyber warfare. It seems for Israel, most of all, should Israel still have a draft? Isn't the future of Israeli security, drones, cyber defense, cyber attacks, other advanced weapons? It's a tech story rather than a personnel story? Yes, no. Yeah, you'd think so. I think for the, and that may be partly what's driving the, having a conversation about a volunteer army. They don't have, Israel doesn't have the personnel needs that it had for an army that it would have had 20 years ago. There are a lot of units here where people in them can't tell you what they're in because they're, I think, highly classified, highly involved in those kind of cyber security issues. I think it's a big issue for the world. It's going to be an incredible thing to see how this changes warfare in general. It's, but it's a key part of Israel's arsenal, obviously. They've been very successful in using cyber attacks to slow down, you know, Iran's nuclear program, for example. That's the understood, that sort of thing. Israel, the Israeli military plus conscription, still over time produced that sense of social solidarity. If the military personnel themselves are not in the long run responsible for national security, won't it become a kind of Straussian facade? And at some point fade away or be viewed cynically or not serve its original socially unified function? I don't know. I think that there's a lot of cohesion here that we're not seeing. It's a very fractious political environment here, as you know. A lot of political parties, parliamentary system, no constitution, a lot of yelling in the Knesset, the Israeli parliament. But despite all that, because of, I think, the external threat, there's a lot of cohesion here whether there's an army or not. The other part of the army that I think is fascinating is the age of the people in leadership positions very early in their career. There are people in their mid 20s, early 20s who have the lives of 100 or more people in their hand in their units. And it creates a different kind of mentality here. I can't say I've sensed it personally, but that's my impression. I don't know what will happen. It's a fascinating question. What will happen is really just social life if the army becomes less central. But right now, that's not the case. As you know better than I do, the Israeli media landscape is very different from the American media landscape, though they overlap. How has that changed your mind about podcasting? How do you view podcasting differently from Israel? It's a lot of work podcasting from Israel. One of the challenges of moving here is that a huge chunk of my life gets crammed into 3pm to 7pm. Because 3pm is kind of the earliest. You can expect somebody for a meeting or an interview in the United States when it's going to be 8pm on the east coast. And certainly on the west coast, it's even a bigger difference. So from starting around 3 o'clock, my day tends to get a little more crowded and intense. So just on a logistics matter, it's challenging. I don't have a very good feel for the newspapers world here, but newspapers are much more important than they are in America. They haven't died out. They're not just online. It's fun to walk around on an afternoon or morning in Jerusalem and see four or five different newspapers out for sale. Even if I can't read all of them, or most of them, or sometimes any of them. Because my Hebrew is so embryonic and mediocre, but they come with a flavor. And I think that's part of what you're alluding to. They're more like TV in America, right? They have often an ideology and a certain perspective. American newspapers until recently, I would say, pretended they were objective. I think there's less of a pretense lately. But how podcasting fits into that? I don't know. I listened to some Hebrew language podcasts. And my Hebrew is not good enough to listen to the other ones. I should maybe be trying. You've remarked to me in the past that in Israel, baseball seems less important to you. Does podcasting seem more or less important there? That's interesting. Sports does seem less important, partly because the games are on at often at 3.10 in the morning here, which kind of reduces my, and I'm not a recorder kind of person. Don't have time to watch them. At least you're so much anyway anymore. Econ Talk doesn't seem less important, but I am surprised at how much I enjoy the challenge of improving the classroom here. We have an amazing set of teachers here. I want them to be better. We're trying to make the evaluation process a little more sophisticated and less a customer service on a scale of one to five. How'd you like your faculty, your professor? Trying to inculcate certain, inculcate our faculty to certain styles of teaching and expose them to certain ideas. And I'm enjoying that much more than I thought I would, and I'm much more passionate about it. I'm a little bit dangerous, Tyler. You know, I'm what's called in Hebrew a new Oleh, one who's come upward, who's come up to the land, the land of Israel. And I find my passion for things Israeli and my national identity way out of line with what I thought it would be as a person who's, I've been here many times. I've been here a dozen or so times to visit. I lived here as a teenager for eight months when I was in high school with my family. My dad's company sent him here. So I sort of thought I knew what it would be like to live here. I know it wouldn't be the same as being a tourist, but I've been surprised at how much national pride I have, how I'm not quite as interested in what's going on in America. I thought I'd stay connected either sports, politics, which is just a different form of sports sometimes. But it's very different. And I think, you know, you read stories of immigrants who come to America and who are very emotional when they pass their citizenship tests. I feel the same thing here. And it's been a pleasant surprise. What in the Torah now feels different when you read it living as an Israeli? In the Torah? In the Torah? Or the Hebrew Bible more broadly. In the Jewish Bible. Yeah. No, no, no. I just thought, I'm not sure I heard you correctly. It's interesting. Sitting in Jewish synagogue here on Saturday morning, which I used to do in America, the biggest difference is in the Torah reading. It's a blessing for the state of Israel, which gets recited every morning, every Saturday morning in a Jewish synagogue in America. There's also a prayer for the soldiers at the IDF, the Israel Defense Force. It's much more visceral here. People pay attention. You feel like you're actually saying something that matters and that means something. As for the Torah, I think the biggest thing that I felt actually wasn't in services or reading the Bible. It's exploring different parts of the country I hadn't ever been to before. When we first got here early on, we went up north to the Golan Heights, which Israel didn't have access to until the 1967 war. It's still controversial in some quarters, of course. It's really a stunningly beautiful part of the country. You can walk a town called Gamla. Gamla was a Jewish town in Roman times that the Romans destroyed, a little bit like Masada. They've uncovered the mosaic floor of a synagogue. There's some houses at the floors and rooms and walls and partial houses are still visible. It's a very wild part of the country. There's big ravines and outcrops and then in the distance you can see the Sea of Galilee, the Canary in Hebrew. It just felt different that there's a Jewish presence in that outpost in the middle of nowhere that's 2,000 years old. I feel part of something that, obviously intellectually I felt it before I moved here, but moving here and feeling that's very different and being there and standing on that. Having that town to ourselves, my wife and I, we hiked to the top. It's a little tiny space. I've heard of belief that a few thousands of people live there, but it's a crazy, crazy archeological experience to be part of that and other things like it. That's what's to me is more special. The holiest part of Israel, most people would say, would be the Temple Mount. A Jew would say, is the Temple Mount and the Cotel, the wall, the supporting wall of the Temple Mount that Jews pray out every day now. We have access to it since 1967. Jews have been praying there for thousands of years. It's very moving to be there. I'm about an 18 or 20 minute walk from there and I've been there once since I've been here. In the past I'd come here every trip. I had to make sure I got to the Cotel and the old city and I'm surprised how little I've been there. The sort of work a day, suburban, not suburban, urban streets of Jerusalem feel special in a way that doesn't require that past hovering over it. It's just nice to be here. There's a great books emphasis at Shalem, if I understand correctly. If you had a bit more time than you probably have and wanted to choose one or two great books, Hebrew Bible aside, of course, to make sense of your time and experience in Israel. What would you pick and why? Well, you know, our students, it's crazy. We're a great books curriculum, but sort of, but there's so many things we try to cover because we also have not just Western civilization, but Jewish thought and also other civilizations, our neighborhood, Middle East neighborhoods. So our students read the Jewish Bible. They read the Talmud. They read the Koran. They read the New Testament. And we have a course on Indian culture, civilization and religion as well. So it gets a little crowded. It gets a little crowded. You're asking me though what book I would want to read. To make sense of your own experience in Israel. Which great book. Well, I'm a sucker. I think I'd pick the Odyssey. You know, it's about travel adventures, a sense of home, a very reliable wife who's come with me for this adventure. And I've been writing about it recently for my next book, the Penelope's decision and dealing with the absence of her husband. But the idea of that book, which I think is just one of my favorite books, is The Odyssey, is the idea that home pulls you, right? And now I have two homes. It's a little bit weird, right? I was born in Memphis, Tennessee. I've never lived long anywhere in the United States. Maryland's the longest. My time in America, when I was teaching at George Mason and later working at the Hoover Institution, which I'm still affiliated with by the way, 18 years of my 67 were spent in suburban Washington DC. Which is roughly a quarter and certainly more than a quarter of my adult life. And so there's a certain home there. I have certain friends there. And now all of a sudden this feels like home. And I don't know what the odysseus was. He must have had a lot ups and downs when he was thinking about whether to come home or not. But he came home. So I think that helps me a little bit. The United States has, I think, about 330 million people. Yet there were more Israeli TV shows I want to watch than American TV shows. There's Shrewgim. There's Shetezel. There's Prisoners of War. There's Injudgment. There's Tehran. There's more. Why is Israeli TV so good? I'm glad you mentioned Prisoners of War. It doesn't get enough. Prisoners in my top five. If I had to list my top five, I'd pick Shetezel, Prisoners of War, the Americans, probably the Wire and the Crown. What would your, do you have a top five? Sopranos would be my number one. Shrewgim and Prisoners of War plausibly would be in my top five. So Prisoner of War by the way is pretty much about. That's in my top five too. Oh, you know, yeah. It's kind of a different thing. It's a, it's very different. I mean, what I love about those, those other ones when they're done well is they're a form of long form storytelling is simply not available to us until now. The closest thing I guess you could have had to it in the past would be a Dickens novel that came out every week and you couldn't binge, couldn't binge read it. You had to wait for the next installment. And I think, I'm sure there's been many PhD theses written about why, how the impact of that weekly thing affected Dickens' style and so on. But it's an interesting question. I'm going to, I have an answer and give it, I want to hear your answer first, which your answer. I think the audience is more demanding and has evolved into an equilibrium where they expect something more intellectually substantive from television and precisely because it's not economically so viable. The notion that at the margin you get a much bigger audience by pandering to more people just doesn't go that far in Israel. Now this may change as Israeli shows themselves become more popular. So I worry about this, but that would be my offhand answer, smarter, more demanding audience, plus limited incentives to sell out. That's really interesting. You know, there's some really bad Israeli TV shows that I've enjoyed that take weird and strange turns. I'll mention the Good Cop, Pashatero Atov, which is really often a really bad taste and quite amusing that, you know, all of a sudden gets really serious in season two or three. It starts off as this sort of silly comedy, similarly the Beauty and the Baker, which is this cheesy, you know, there's an American version of it too, but in the Israeli version it's this Baker. He somehow gets tangled up with this movie star, this model, and she's a model, I guess, on a movie star. But you think, ah, it's cheap, fun, and all of a sudden it gets really serious. Their families get involved and it takes these strange and inexplicable turns and I'm sure it's partly driven by the economics of the business. But I think there's another thing to think about, which is Jews created Hollywood. Jews have been making good movies for a long time. You know, we're called the people of the book. We're interested in storytelling. Just a standard thing Jews have been doing for a long time. Now, why Israelis per se are so good at it? It's an interesting question. It's obviously a function of wealth and the ability now to market those stories to a much wider audience. But I think your point about how, you know, subtitles and Netflix allowed that to reach a much wider audience than was available before. It's really kind of a puzzle. They're not particularly designed, I don't think, anymore for the Israeli market. And the real puzzle to me is why they're popular now, why they're so good. Why do people want to watch a schtiesel, which is not much happening in schtiesel? It's actual romantic tension. That's the thing with schtiesel and schtiesel. In American shows or even European shows, you can say, oh, why don't they just divorce or why don't they just go to bed together or why don't they just whatever. But in schtiesel, it's always a question what the boundaries are and that's hard to recreate. Yeah, one of my favorite scenes in schtiesel is when Akiva, and I think it's Batsheva, she pretends or is actually interested in buying and renting a heater from him, a portable radiator. And he just started this business. He's put up a sign around town. It's very entrepreneurial for him. He doesn't have much to do with himself other than art. And she shows up at the doorway and it lasts about 30 seconds. There's incredible tension in that scene, romantic and sexual tension. And it's because they can't. They're not going to do anything. And they're good actors. And so it's a very powerful scene. I've also argued, I think part of the appeal of that show, there's a sort of anthropological voyeurism. Here's a culture and a community that's very alien to most people, including modern Orthodox Jews. It's a very different form of religious Judaism. The ultra-Orthodox that they're portraying in that show. And part of the charm of the show is that, well, they have the same problems we do. They have trouble with their kids. They're not sure where they're going to make a living. And so that's part of the charm. But I think the other part of the charm is what you're talking about. There's a certain old-fashionedness there that people may not want to live that way themselves, but they like watching it the way they're like reading a Jane Austen novel where the mores of romance are long gone in the past. And there's a certain innocence, I think, to the character since Diesel, which makes it so deeply appealing. The only other observation I want to make, which I think is so fascinating to me, is it's a show about religious, ultra-religious, ultra-Orthodox Jews. So I'm still Judaism in the show. They murmur and mutter blessings under their breath, but there's no glorification of, say, the religious experience of the Shabbat, and they don't make fun of it either. There's no mocking of it or of the attitudes. They're just taken as they are. And I think that was a genius move by the creators to make that show the way it is. Which Israeli norm is hardest for you to deal with? Negotiation is challenging. I think it's particularly hard for my wife, who likes set prices. A lot of prices here are just kind of suggestions. They're an invitation to negotiate. And there are a few settings in America where that's normal. You buy a house or a car. You don't expect to pay a list price. But you do expect to pay a list price for, say, a haircut or, I don't know, a repair or something. But a lot of times the price they announce is just like a hint or a suggestion. And it's very hard for Americans to respond to that. If you come here and you get off the plane and you get in a cab, I don't think the price... This happens in America, right? Prices in America in a cab off the meter are often negotiated. The cab driver will say something and say, how about if we don't use the meter? How about a flat rate? But in America, you kind of know what it's going to be because you've been in cabs in America. It's a newcomer. You don't always know how far it's going to be, what the real fare should be. And so you're kind of vulnerable. And so a lot of Americans, I know, get angry when the cab driver says, let's take it off the meter and pay cash. They say, well, no, put it on the meter. And then a friend of mine was telling me, he got yelled at by the cab driver. I don't want to put it on the meter. I was thinking, but that's the job. That's the rule. Come on, put it on the meter. And I think that the anchor of the cab driver was really just, hey, we're negotiating here. We're having fun. Here's the game. It's not theater, but it is a game. And there was some theater involved because you don't know how the drama is going to end. But I think here it's a little bit of the fabric of daily life, right? And that's a little strange. It takes some getting used to. I think when I rented my apartment here, I think it was an eight or 10 page lease. Had to hire a lawyer. Never had a lawyer for a lease. I've rented a dozen places and 20 places in America. That was strange. What I do to sign the lease, things I had to do to get the lease done, insurance I bought, weird stuff that just doesn't happen in America. And it's all in Hebrew. But that part's kind of challenging. Anything else? The Israeli friend of mine suggested I asked you the following question. Quote, are you tired of being a friar? Yeah, friar is the slang phrase. I say it's Yiddish. There's a few Yiddish words that get peppered into Israeli daily speech. Not much, not like you'd think. Because of course the early days of Israel was very much a revolt against the Eastern European mentality. And the Hebrew was going to be spoken here, not Yiddish, and Jews here were going to be strong and proud, not hunched over a book. And they were going to fight in the army. And there's a certain huge pride actually in that here. But as a result, the best slang is Arabic. There's an enormous number of Arabic words that are used daily. I like to tease my Israeli friends that there's no Hebrew word for fun. And when you tell them that, they say, well, yes, there is kef. It's an Arabic word. It's kind of a cheap shot at the seriousness of life here. And it's not true. There's a lot of vibrancy. And people here have a lot of fun. But there's no native Hebrew word for fun. I blame it on Ben Yehuda. But the word friar is a very, very interesting word. And it's an interesting aspect of human nature because it means a sucker. And some Americans here will talk about the friar tax, the amount of money extra big. You just don't know what you're doing here. You're just lost. You don't know the norms. And I try not to worry about being a friar. I view it as a form of charity. I have a comfortable life. I can pay a little bit extra. It's not a problem. I'm happy to do it. But people worry about it, I think, emotionally. And I think it's an important part of human nature that economics doesn't have much to say about. The fear that you're being taken advantage of drives a lot of bad behavior on both sides, various transactions, if you don't have a good level of trust. As you well know, a significant portion of the population of Israel is Arabic and the same. What do you think you're learning about those Arabic cultures living in Israel? Not as much as I'd like to yet. I mean, I've only been here six months. There's a lot of... It partly depends on where you live, of course. But in the parts of Jerusalem that I live in and walk in near our campus here, there's a lot of Arab Israelis. Most people don't know this. I don't know it well, so I may embarrass myself. But people who are born within the borders of the Jewish state right now and the borders of Israel who are not Jewish, Arab Israelis, are full citizens. They get full health care. They get to go subsidize the universities. They vote. They don't serve in the army, which is fascinating. They don't want to serve in the army, incidentally, which I also understand is complicated for them. And those are distinct from the West Bank and Gaza, who are Palestinians. Then there's some special categories of folks who live in East Jerusalem, which is a disputed, more challenging, and I don't know all the ins and outs of that. But my wife is going to Opaan. Opaan is Hebrew lessons. She goes to Opaan three hours a day, four days a week. 22 of her 23, I think, or 21 of her 23 classmates are Arab, Arab Israelis who think they're Hebrew is not good. They all speak Hebrew. They speak very good English, but the Hebrew is not good enough, so they're improving their Hebrew because they want to go to a good university. They want to get a good education. They want to be in business. And they're all young, by the way. They're all in their 20s. But I don't have much exposure to the Arab-Israeli population yet. So that's something to find out about. You're both non-Muslims. What is it you think we can or should learn from the Quran? I don't know the Quran. I love the Muslim, the religious Muslims I've met face-to-face as opposed to the ones that are called the cultural zeitgeist of Islam that's in the air in the West. But the actual Muslims that I have met face-to-face, I have a lot in common with them. We believe in God. I think they have a very deep, deep faith, which some Jews have, but not all, even religious Jews, I think struggle with faith in a way that many Muslims and Muslims, for that matter, don't struggle with. So I think there's something to learn there. I think it's possible. I'm naive. I like to think there's a way that the great religions of the world would get along a little bit better, the followers of those religions. And on the ground, face-to-face, I think we get along pretty well. But it's not going so well overall in the outside world. So work to do. And as an economist, I like to think that commercial interaction helps. Do you think that helps? Do you think trade? What do you think of this view that trade leads to peace? I think it's been overrated by many of us. At many margins, clearly it's true. But trade also helps you build up weaponry. Trade can solidify groups within a nation. An overrated proposition. Though on average, true. That's how I would classify it. Yeah, I like that. Let me use that. So late 19th century Europe had plenty of trade, right? The world was remarkably globalized. And you get World War I, you get World War II. I'm not saying the trade caused that, but you can see. It's what you might call a complicated regression. Yeah. Here's another religious question. The Knesset recently, as you know, voted to loosen up kosher certification regulations and take away power from a group of rabbis. That's a kind of deregulation. You're a market oriented economist. Are you happy? Or should you be worried as a religious observant Jew that this could mean a higher probability of some Israelis eating non kosher food? Yeah, it's a fascinating example. Listener should know that their, Shteesal is not the modal family in Israel. The ultra orthodox are a percentage of the country and they're a politically powerful percentage because they tend to vote as a block. But they're really all kinds of variations now, both religiously and non religiously in Israel that are extremely fascinating. The many Jews here are secular. Their Judaism is that they live in a Jewish state. Now there are other Jews who are religious. And then in between that, there's all kinds of stuff happening here that's really fascinating. I recommend the book, The Wondering Jew by Mika Goodman. Mika Goodman that came out in the last few years about what's going on on the ground here in Israel and the amount of religious innovation that's happening and how people who are quote, not religious or connecting to Jewish texts, people who are religious are leading more open lives. I think it's the tension between the religious and the non religious here is somewhat overrated. Having said that, some of the source of that tension is governmental mandates. The treat gives a preferences for subsidies to child bearing, which the ultra orthodox tend to have much, much larger families. Families are much larger here in Israel than in America generally, secular and religious, but the ultra orthodox tend to have the larger families. And they've used their political power to get both subsidies for children, exemptions from army service, and other forms of special treatment that non-religious Jews not surprisingly find offensive. So I don't think the alliance of the state and the Jewish religion has necessarily been a good thing. Many people before me have pointed out that the United States is generally a more religious country than Europe. There's no state religion in America. Most of Europe has state religion. The state doesn't do anything particularly well and it doesn't tend to lead to good feelings about religion and has not over time. So when you ask the question, if you take away some monopoly power from the rabbinic authorities here, are you going to get less kosher food? The answer is you might get more kosher food. There's a lot of resentment of the way that the kosher certification has worked here. A lot of people feel that a lot of times a fee is collected and not much supervision takes place. These are non-religious people who resent that they're paying for something that gives them the certificate they need to serve their religious customers but don't like the hypocrisy of that system. It's a fantastic example, by the way, of the natural assumption most people have that when there's a law it gets enforced or when there's a law the government does it well or I had people say to me, what if we move to a more decentralized system, people won't be able to trust the kosher certification. Are you sure you trust it now when the government has a monopoly driven by rabbinic oversight? A lot of people say it doesn't work so well. I'm excited about the role competition might play in the process and I think it'll lead to cheaper kosher food, more kosher food, more restaurants offering certified kosher food that I think will actually be kosher and we'll be fine. Let me give you a perspective I sometimes hear from Israelis, but I'm going to put this maybe more public choice terminology than they would use. I've heard it argued that secular Israeli to some extent free ride upon the more stricter, more religious Israelis who do more to shore up the unity of Judaism or the cultural foundation of the country and thus that as part of the bargain the more extreme religious individuals have to be given some kinds of political preferences to keep them on board. As you know decades ago many of the ultra orthodox were anti-Zionist rather than Zionist as they now tend to be. So there is actual pressure where everyone has to be in the right caress winning coalition and things like monopoly power over kosher certification whatever it's going to be but you have to give them something. Is that an accurate way of thinking about the Israeli political dilemma? Well it's not accurate. Is it useful? It might be useful. That's a good... I've never heard that quite that way. I think... By the way I think many of the... there's a wide range of views about what the role of the state should be in the country and whether there should be more... the government should be more sympathetic or less sympathetic to the religious currents here. Jerusalem tends to be a more quote religious city than Tel Aviv but there are plenty of orthodox people and religious people in Tel Aviv and there's plenty of non-observant people here in Jerusalem. They tend to have different rules about how the Sabbath is capped in terms of public services and cultural norms also of course play a role. But I don't... I don't like that idea. As a Jew I don't like that idea as a religious person. I don't like the idea that this implicit bargain that somehow the... the ultra-orthodox are... but carrying the water of the ballast or I don't know what you would call it anchoring the Jewishness of the country. It's not even... I don't think it's an issue for most Israelis to think about it that way. I don't think it would come naturally. I think that's definitely a reference to William Riker who I got to be a colleague for about five years at the University of Rochester. He was a wonderful, wonderful man. Very insightful and an incredible twinkle in his eye. And his work... I think you've probably read it, Tyler. He's... He was applying a lot of economics tools in his day long before other folks. He's kind of, I think, forgotten among our colleagues. But I like him a lot. Living in Israel and being a citizen there make you more or less utilitarian in your moral philosophy. Why would it? Well, for instance, the Israeli policies toward hostages as I understand them which is imperfectly I admire these views. The notion that if someone takes hostages you simply have to look at the longer term calculation and you can't cave to every demand. You need to play it quite tough. That seems to me... Is that utilitarian or non-utilitarian? From my point of view it's utilitarian but I'm asking you. I'm not insisting you take my point of view. Living in Israel, has it made you more or less utilitarian? I'm not much of a utilitarian. I think all of us have some utilitarian impulses by certain cases where it's overwhelmingly clear that the too many people who benefit from something are the size of it so large. But I think in mostly interesting cases I think it's just I think our profession has been so damaged overall by our professionally many economics by the Benthamite calculus. I went back and I hadn't read it before. I went and read Bentham in the last year. I'm a big Bentham fan though I'm not at all a pure utilitarian but even on issues such as gay rights or animal welfare or a monetary theory or usury laws or tariffs he's a fantastic thinker and economist, penal reform. How about the designated hitter? I mean you're showing his incredible breath. I don't think Bentham wrote about the designated hitter. I disliked it in baseball but that's maybe a topic for another podcast. It is but I have to ask, do you still dislike it? I've become neutral only in the sense that I stopped caring about baseball so I would be anti-DH. Why have you stopped caring about baseball? You haven't moved Israel? I've moved other places and it's too time consuming. It's hard to watch in chunks. I think it's a less efficient game than it used to be. They've tried to speed it up they've tried some ways to speed it up but it's really not the it's not just the total time it's everything it's not a game made for the TikTok generation or even the YouTube generation exactly but going back to Bentham I've never read a lot of Bentham but I'm surprised at how little he has to say he gives you this overarching theory that we can take all of our pains and pleasures it's very important to emphasize this and it's the pleasures aren't just physical pleasures it's not just about gluttony and our animal drives he understands pride he understands satisfactions and more ethereal and other kinds but he gets into a problem which is that after a while when you start adding them all up you can't add them up anymore they can't really be quantified and as far as I understand and I'll be curious to your take on this he never could solve that problem we try to solve it as economists through money not literally money but by putting a monetary value so I'm going to in the next five minutes of Tyler I'm going to say something embarrassing about your past that I've discovered and I could ask you anything about it I can't imagine there's anything embarrassing but suppose I knew something about you and I said you know Tyler before the show I said if you don't I'm thinking of saying this how much would you pay me not to say it and I'm not going to collect the bribe so I'm blackmailing you in that story and in the way economists use the utilitarian framework is everything's a form of that so the green canyon the view of the green canyon is that a monetary transaction of course not but we can ask the question how much would you pay to be able to continue to see the green canyon for the rest of your life how much would you pay for your children to be able to see it and that way I can trade that off in theory against other things and create a scale and the problem with that scale of course as every good economist knows and many bad ones don't is that the scale depends on how much money you have it's not a real scale of pleasure and pain it's a scale for me so my ability then to compare my cost and benefits to yours is I think zero but as economists we don't like that we want to aggregate we want to be able to say this is a good policy because the net gains are positive or this is a bad policy the net gains are negative does that do you agree with that I think it's horrible I would put it this way in so far as we can aggregate and to make a choice we can aggregate in some manner but I think we aggregate by making moral judgments about different kinds of well-being and in this sense utilitarianism is parasitic on non-utilitarian moral theories about which pleasures and pains we count and for how much and even how we understand what pleasure is there's not a simple physiological definition as a you know a unidimensional measurable variable so it's all to me parasitic on pluralistic moral value theory not a benthamite and I think Mill understood this bentham's utilitarianism is the weakest part of his philosophy but I think he's a wonderful thinker and if you read more of him you'd be very impressed okay I'm gonna let you create a reading list for me not a very long one Tyler though but you give me 25 pages to start with that I may have missed I want to just go back to that for a second if I could and since it's my program and well it's not really it's ours today so I'm semi-host today but I want to ask you this when I think about marriage my advisor is Gary Beckinger there is a marriage he has mathematical models of marriage do you think it's a reasonable thought to compare two people as potential mates for yourself one self in other words if you marry a person is considering two different spouses and you choose one and they're willing to marry you and as economists who say well there's reveal preference you pick the one you thought was better for you how would you begin to conceptualize what better means in that context and I think the risk and I think the easy way to think about it is more fun fun broadly defined meaning day to day life will be better with this person than the other person that's my expectation and I think that's a bizarro the more of where I've thought about this I'm happily married but this book I'm writing next called Wild Problems is about these kind of challenges is it really a meaningful statement in the sense that there are so many different aspects of marriage and life in all kinds of choices like this that aren't about just what it's like to be around them it includes things like pride it includes things like sense of purpose it includes sense like meaning so when I take a job obviously I don't take the job that pays the most necessarily take the job that I think will be the best meaning a mix of non-monetary and monetary benefit it's really a meaningful statement that's one side and the other I'm kind of embarrassed about and how do I really think I can trade those off and put a number on those ultimately a lot of the that's bent to my calculus to me is about this idea that we could put a scalar a single number after we've aggregated everything up and I think that's a full scale with so many choices including having kids you're choosing what kind of person do you want to be which is fine identity different possible persons you could be two or more which of those gets to do the ordinal choosing that's indeterminate and that's another reason why I think pure utilitarianism whether of the cardinal or ordinal variety the self undercutting it needs to pull in values from outside of the utility itself yeah and that's the you know we talked about this on the program with L.A. Paul talking about the vampire problem right before your vampire it looks pretty grotesque after your vampire it's fantastic and what I've suggested what I'm suggesting my new book is that well it might be fantastic and so her conclusion is rationality ill defined mine is yeah but I don't want to be a vampire it's kind of gross I don't care how fantastic I think it's going to be it might be and you get to live forever I think if you play your cards right I just think we bring in other as you say other value systems into that calculus which makes it I like that for example I have a very easy question for you now if there's a conflict between the ethnic religious identity of Israel and the democratic nature of Israel what philosophic standard do you apply to resolve that conflict easiest question of the hour right oh yeah you just flip a coin I think I talk about that in the book also by the way there's a beautiful poem by Piet Hein and I've heard other people say you flip the coin so that you'll know what to root for and that tells you what you really want Piet Hein was a great scientist thinker or mathematician so here's this guy saying oh yeah flip the coin so you can find out what your gut is really hoping for and use that to make the decision and I write about that's part of what I'm interested in this book about but when I think about I think there's a really interesting tension that you're identifying especially for a religious person I don't want to live in a theocracy Jewish or otherwise I'm a big believer in competition to make the world a better place under some constraints of course you know Israel has I don't know was it 30 years ago 30 years ago was everybody knew that Israel was going to struggle to stay a Jewish state because birth rates were low among the Jewish population they were high among the Arab-Israeli population and soon Israel would be in this weird predicament of being a Jewish state where the Jews were a minority people did not foresee the fall of the Soviet Union and the influx of millions of Russian Jews into Israel so Israel's really kind of avoided the existential threats that would require a very very non-democratic response but it's not a democratic place like America any Jew can come live here if they can prove that they're Jewish but much harder if you're not and it's not an open you know I'm a big fan of open borders but I do want there to be a Jewish state so there's an inconsistency there for me that's somewhat troubling but I'm happy to maintain that the ethnic religious character that you're referred to as a Jewish state and I have to say that you know it used to be when I was growing up oh that's pleasant you know it's nice to have a Jewish state the last 10 years, the last 5 years I've actually thought there really has to be a Jewish state we're actually living in a world where anti-Semitism was unimaginable 20 years ago it was now increasingly common or surprising and I think it's scary the so called Jewish question you know what's the Jewish role in the world what's when they're not when they're a citizen of another country it's back and hard to imagine I'm shocked by it, are you surprised by that I know it doesn't touch you the way it touches me or my children but are you surprised that anti-Semitism is actually failed for being Jews in the United States weird didn't expect, didn't think it could happen doesn't happen very often, I'm not paranoid about it but it's surprising I would just say I have worked very hard over the last 20 years to try to root out recency bias in my expectations so fewer bad things surprise me than used to is how I would put it because if you look at broader history it's a pretty common event as are many other bad things we suffer from recency bias we think, oh what we've seen over the 20 or 30 years where the centrality of our own growing up happened is somehow special but it's not tomorrow we'll be like yesterday until it isn't I'm curious I got way over excited about there in us and way over excited about driverless cars is that the same phenomenon meaning all the hype and excitement that this was different that they'd solved this problem that there was going to be this new world I'd call it more of an optimism bias I wanted to believe that we solved, improved transformed did you fall prey to that? I think you were right to be excited about driverless vehicles they're not going to revolutionize the world tomorrow but I think that will happen within our lifetimes in a significant way there in us I just wasn't paying that much attention to I have become successively less skeptical about longevity research I would say that but I think it's a long slow haul and a tough slog so I don't have a utopian vision there but I think there's so much talent now working on those problems will make some progress on them those would be my two responses I was just surprised there were so many smart people and I just got swept up in the excitement so many smart people who said within three years we're going to have driverless cars, 35,000 lives saved because there won't be any deaths on the highway true there might be a few more pedestrians killed but it's going to be a huge advantage for improvement in human life I think the technical problems there turned out to be quite a bit more daunting and I think a different kind of bias we just sort of assume that technology and focus will solve anything and often it does, amazing getting a vaccine in a weekend that was a great moment of human achievement let me ask you another super easy question let's say we think that under current circumstances a two state solution would not lead to security either for Israel or for the resulting Palestinian state many people believe that let's say also as I think you believe that a one state solution where just everyone votes would not lead to security for current vision of Israel or even a modified version of it and let's say also that the current reliance of the Palestinian territories on the state of Israel for protection, security, intelligence, water many important features of life prevent those governing bodies from ever attaining sufficient autonomy to be a credible peace partner guarantee of its own security and so on from that point of view what do we do so we're not utilitarians right so we're thinking about what's right and wrong what's the right thing to do there's an expression from the Talmud to answer something on one foot because you can't stand on one foot for very long so it just means maybe what means you got 30 seconds there's some base mob pictures you could probably stand on one foot for an hour or two but it usually means so you want me to answer this on one foot and of course there's no answer and I think I mentioned Michael Goodman a minute ago for his book The Wondering Jew his other fascinating book called Catch 67 which explores the contradictions and inconsistencies with different world views toward the conflict between Israeli and the Palestinians in an incredibly thoughtful way I recommend that book it's the best book you can read about what's going on here politically and intellectually and emotionally it's a phenomenal book so even though part of his insight is it's wrong to look for a solution if I remember the book correctly I read it quickly but think about ways to live with it think about ways to make life better think about ways to move toward an improvement rather than fixing it and I think the American foreign policy establishment has spent the last decades just trying to quote fix it and it may not be fixable it's hard to admit that as a rational person it's hard to admit it as a person who lives here by the way I should just mention people have written me in the last month saying is it scary here would you be afraid to raise your children there if you had young children it's an incredible place to raise children children here run free without fear they play in a way that American children used to be allowed to play I played that way growing up it's still true here there's very little crime on the streets very little street crime very little theft very little terrorism so you're much more likely to get stabbed in Jerusalem than you are in New York City but of course it's not common thank god at least so right now but it's serious and then you got a ran and it's as I alluded to earlier it's a tough neighborhood so I think it behooves if I may use a word that's out of fashion it behooves us all to think about ways to both reduce the security threat to Israel and to improve the lives of the people of course in the West Bank and Gaza and elsewhere who they're not very good democracies even though sometimes they're elections I don't necessarily believe that the person on the street there is being I don't know what their attitudes are they can't give an honest answer out of fear so I wouldn't rely on survey data I think there's certainly a lot of people in those parts of the world our neighbors here are cousins they want to lead a normal life and have a better life for their children like most people aspire to so how do you improve that I would love to have more commercial interaction although I agree with you the trade is not a panacea or does that mean it is a panacea I can't remember I've trouble with that word but I think there used to be more commercial interaction between the Palestinian population and Israel because it was more peaceful and now that it's the threat of terrorism is there Israel's walled off its borders to those neighborhoods and those parts of the of the world to Gaza because it's scary and that's a tragedy and they live horribly there it's a very tough place to live Gaza, Egypt's not very nice to them either by the way they have closed border with Egypt so I think the challenge is to find ways I don't think the real problem right now is that Israel does have a negotiating partner who thinks that Israel has a right to exist so Hamas doesn't recognize Israel's right to exist it's hard to imagine a two state solution with that so how do you improve things along the way I think you look for ways to do some commercial interaction I think the other thing reminds me a little bit of I'll say it this way this is the Middle East there are cultural norms here that are not the same as in America I think a lot of Americans have no understanding of that certainly American Jews don't I don't think American negotiators understand it so well probably the role that pride, face, dignity plays as opposed to say narrow quote narrow self-interest narrowly defined I think it's much greater for those other tangible things and personally I'd like to see Israel try a different kind of move toward normalcy but I also understand that I'm naive and have only lived here six months and have very little thoughtful to say about that that I would want anyone to pay attention to because it's a different neighborhood than where I came from in Maryland and it's not easily understood and what might be seen as a generous gesture in Maryland might be seen differently here and vice versa something that's harsh in Maryland might be seen very differently here and so Israel has its own cultural Israelis have their own cultural baggage not just that they're part of this Middle Eastern culture that they share to some extent with their neighbors Israelis are very proud of their self-reliance I'll tell you a story I once again I've only been here six months but this is an old story it tells you something I'm flying out of JFK I have to get to Israel to visit one of my kids who's studying here for the year there's a special program for the parents and it's a small window for me to get here in time to enjoy the program with my son and JFK is every flight's canceled it's snowing just this relentless hour after hour blanking the city and I leave midtown Manhattan to go to JFK and the flight still my flight on LL the Israeli airline is still not canceled somehow but I can't the cab can't go faster than 20 miles an hour so it takes about there's no one on the road it's like me the car cab's the only car on the road takes us about 45 minutes or an hour to get to JFK and 20 miles an hour and and I get to the gate the desk to check my bags and they ask me the security questions which I'll all does differently than anybody else and they take my bag and I get to the front desk and I say you know to get my boarding pass and they say can I help you I said yeah I'm on flight such and such and I said we're not leaving tonight are we we're not really going to fly this I mean it's flights going to be canceled isn't it I'm two hours early right and still going to keep snowing the whole time and she looks at me and she says you know our pilots are they're all from the Israeli Air Force and the rule here is it's the pilots call they can decide they're uncomfortable flying and cancel flight anytime she said as long as the airport's open we're going to fly because those pilots they're going to fly they're confident that they can fly through that storm and you know there's something beautiful about that something scary it was a little bit it was really exciting because I wanted to get to see my son but they can that's always my mentality that's the Israeli mentality we'll get it done we'll take care of it it'll work out and it's a pretty you know we're joking a lot not joking but we're talking around these issues of bluntness and and this culture here but there's also some there's a vitality and national pride here that's so missing in America these days you know I'm very worried about the future of America and it's a different set of worries here but they're not bad worries or what America is dealing with it feels like are you optimistic about the future of America as a I would put it this way I'm increasingly optimistic about economic issues, technological issues and even American democracy contrary to most people but I am increasingly worried about the possible collapse of geopolitical stability in places such as Taiwan, Ukraine parts of Africa so I'm not sure if I'm optimistic or pessimistic as a whole I'm relatively optimistic about North America compared to the rest of the world for sure because it's geopolitically secure right not readily and it has enough of its own resources if we were cut off we would in different ways manage of course we could destroy ourselves from within I'm now wearing putting my American passport on American citizen also with the way we could destroy ourselves from within I always ask people are you sure about that and they never say yes there's a lot of hamming and hawing but I think it's become a kind of protective talisman to over worry about American democracy because people feel angst about the content of what it's producing which a lot of that I would agree with but I think it will continue and American democracy has looked and sounded ugly for most of its history getting back to recency bias it sounded better in the 80s and 90s but for American democracy to be lunacy is in fact part of our history but let me close with two final questions one is super easy the other is very hard easy question alright sure can I have the easy one first it seems to me Israel faces a pending or even current shortage of unskilled labor and is also committed to the idea of being a Jewish state and countries like Switzerland that I never thought would take in a lot of outsiders have done so because it makes economic sense so how will Israel address this question that's the easy one it's easy one all great is everything going to be robots and driverless cars but you don't believe in those anymore so who does all the work I think robots are pretty powerful but we're not going to have driverless cars for a while we're going to still have drivers you know I think again I'm a newcomer there's a lot of debate here that I've not been paid close attention to before I arrived about immigrants from other countries there's a lot of people here from Asia who do some of the jobs that Israelis don't want to do at market wages here and there's people from Eritrea and other places and it's really a national identity issue right that the Israeli people will work out through their really complicated and not so perhaps robust democracy pretty robust you know it's 70 years now it's pretty amazing heading toward 75 but I think it's it's a bit of a fallacy I know you don't subscribe to it but a lot of people do that well if we don't import workers to do those jobs no one will do them and that's not true what will happen is you have something about market economy the wages rise and they become more attractive to the native population you know it's immigrants aren't needed and some of the things with the prices rise so much they won't be done anymore people won't want them at those higher prices it would take to pay for those services so I don't think it's a there's a temptation always to look for the efficient solution the one that's financially wise but there are other aspects and I think you know Brexit and other decisions that populations are making in the modern world are a view that there are things more important than money and I don't think that's ever going to change I think as I've said before a good economist understands that a bad economist focuses on it an episode I don't know when it's coming out I come out before this I think it's now coming out I can't remember I think it's before this with Megan McCartle on Roger Scruton's book where we are which is about the role that plays plays in our emotional well-being and our heart and our decision-making and I think those things are really important and people care a lot about them especially here in Israel you know their connection to the land their connection to their country their sense of identity that we alluded to earlier that I think is extremely important here so I think you know Israel make the decision they might be willing to pay a price Israelis might be willing to pay a higher price for a bunch of stuff to have it done by you know Israeli sources or not get done at all you know America's got that same issue right it's the same challenge a lot of people like the idea of inexpensive food you know fruit and vegetables picked by inexpensive labor more repairs done by inexpensive labor all immigrant often illegal perhaps and a lot of people like that a lot of people like what comes with that which is more interesting life more interesting types of people but some people don't like it and the fact that they're going to pay a higher price for some things that doesn't surprise me that they're willing to make that right and use the hard question and it's hard because you actually have to solve it in your new job what is your next task yeah you have to do it that's much harder than the others but I have to do it by myself and I don't have to pretend I understand something I don't understand like you know preventing warfare among people who've been fighting for a long time tragically the thing I really have to do is that in about one hour we have our first gala dinner here of alumni which we haven't had because of COVID is amazing thing right now in Israel right this is December 2021 we've closed our borders to the United States which means that my youngest son can't come visit us for winter break like he planned to a lot of people can't come to their kids their grandchildren's life cycle events and until I'd say about a month ago when Omicron was just a glint in somebody's eye or throat people here are living a totally normal life I mean it's just totally normal we have this we have these mask mandates like on the buses you're supposed to wear a mask even the driver's not wearing his mask excuse me they're all wearing it nobody's wearing it over their nose and mouth very few the older people are generally but the younger people either wearing it under their chin maybe a little over their mouth but not their nose and I think with Omicron the level of anxiety has risen here some I assume it's risen there where you are as well but we've got a gala dinner tonight and there's going to be 125 alums of this place we've only had five years of graduates so that's the first thing I'm doing but that's not really your question what am I doing that I can share that's not too secretive or important I'll tell you another thing we're doing which is glorious Leon Cass is our new dean of faculty and he's convened a he's 82 he taught the great books at the University of Chicago and St. John's for over three decades often with his wife Amy who's passed on but who was an incredible teacher also and Leon's just an incredible visionary educationally so one of the thrills of this job is sitting in on the faculty colloquium which he started and listening to my colleagues my faculty members like saying my our faculty members talk about a text that they love and we have a faculty member of Saf and Barry he's a great Israeli novelist at least I hope so I can't read his books they're in Hebrew they haven't been translated yet but they're popular I think among the right people and anyway he taught a class last week and a half ago and he was in the United States and the poem was after long silence and I I'm a Yates fan I love Yates and I picked up this poem and I looked at it and I thought I have no idea what this poem is about it's trouble and then I read it again before the colloquium get anything out of it again and for 90 minutes we studied it with other faculty members from all different departments and I got some light a lot of light actually it doesn't it doesn't have much rhythm to it the rhythm is disjointed there's some lines that are ambic pentameters some aren't and Asaf said this is Yates don't you think he did that on purpose you know you don't like the rhythm of the poem maybe you ought to think about whether this is part of the poem so it was an amazing glorious experience that's my favorite thing about working here that and going to choir practice with the students here and pretending I can sing I'm looking forward to seeing them tonight so it's kind of a cheap ducking of your question but it's the best I can do I think Russ Roberts thank you very much thank you Tyler