 So, this is the real monster when you come to America. It's not the mafia, you know. That's not what's putting you in danger. It's this grossly over-inflated healthcare system in a land where health is doing worse than almost any other rich country. This is Rob Johnson, President of the Institute for New Economic Thinking. I'm here today with Angus Steaton, Professor at Princeton University, Nobel Laureate in 2015, and the author of a piece that was in the New York Times this past week without a college degree, Life in America is Staggeringly Shorter with his colleague and wife, Ann Case. They've written a book together called Death of Despair and the Future of Capitalism, which I found very, very inspiring. It was haunting, but inspiring because of what you excavated. But I have seen and reading and listening to the audio track which is performed interestingly by the author of a new book that was just released at Princeton University Press, Economics in America. An immigrant economist explores the land of inequality. Angus, I'll foreshadow. My grandfather is from Aberdeen. My mother is Scottish. You talk about the foundation stones of your life there and at Cambridge and coming across. I got to grin just on that part of the agenda. And there are so many things in this book I really want to encourage our young scholars and all of our listeners to take a deep dive. I'll come back at the conclusion after you've persuaded them, but I'm very confident because this is an outstanding book at a time when the disorientation and the lack of trust and the tensions in politics lead someone like Martin Wolf to write a book about the crisis of democratic capitalism and you are digging into the dynamic between experts, policymakers and the general public and who they will reach toward to alleviate the kind of pain that you describe in various segments of the book. Thanks for being with me today and thanks for writing this book. You're making a big, how do I say, opening of our awareness to many dimensions and I look forward to exploring them with you. Angus, let's start with just one question. Why did you write this book? What triggered you when you said, I got to do this? What's the context in which that happened? Well, I'm not sure it started that way. I mean, you talked a little bit about my book with Ann Case, Dessert Despair in the Future of Capitalism, where we hit a clear message when we want to give this stuff out, whereas this book was rather different and I partly it's an attempt to tell my own story and also to tell the story of economics over the last 40 years. I mean, I've been active in economics for four and a half decades now and things have changed a lot. I've changed countries and continents, you know, so as you said, I grew up in Scotland. I was educated in Cambridge. I hang out with the Cambridge Keynesians and all those sort of folks, as well as, you know, a wide selection of people who were in Cambridge at that time. And then I came here and I wanted to tell the story of what happened to me here and how economics changed along with me over the last 40 years. And I thought this might be useful for young scholars starting out. It's sometimes critical of my profession, though one of my colleagues who's not an economist said he read it as a love letter to my profession, which I think is perhaps a little bit strong. But there's certainly a lot of affection there. And I think that, you know, economics has done a lot of good as well as perhaps gone a little astray in recent years. So that was, I wanted to communicate all of these things. I also wanted to give people an idea of what it was like to work as an economist, because most people don't have any idea what it's like to be a professional economist anymore than they know what it's like to be a lawyer. You know, we don't have emergency room economics on television series and so on. So and they probably think we're very tedious, boring people, you know, who have no idea what we're doing. And I wanted to get some of that across. So it had multiple purposes. And, you know, it had started out the Genesis was a six monthly newsletter I'd written to the Royal Economic Society. And lots of these pieces were incorporated into the book. But it was only when I began to see the thing as a whole and rewrite it in a coherent way that it took the form it has now. So I'm glad you thought it made a coherent whole, because that's been the sort of problem with it from the very beginning. But feels very, very real, very textured. For instance, when you arrive from Scotland and you talk, or Scotland and then England, and you arrive in New Jersey and you're talking about fast food restaurants and watching the Sopranos, and how that impacted you as you started your, which you might call it, investigation of American economics. Right. And certainly, I mean, we'd been brought up in Scotland to be both incredibly impressed by America and terrified of it. I mean, it was the country of Al Capow and it was the country of great military might and huge success. And, you know, that means of an immigrant when they first come here tends to have unusually experiences that way. So there are different elements that I see you exploring. But big and strong at the outset was the question of health care. Difference in cost, how it's paid for, all kinds of different dimensions that have what I will call huge social ramifications as well as financial and economic ramifications. Describe to us what caught fire in your mind and imagination about American health care and how it might say contrast with experiences that you've observed in other places. Yes, it's to an immigrant, certainly from Britain, where the state runs the health care system and you have very little choice and it sort of looks after you. And where the, it's often said that the National Health Service in Britain is the nearest thing we have to a national religion and that people are very fond of it. And, you know, when I grew up, I was born about the same time as the National Health Service. And, you know, its benefits were really very notable to me and to my parents when I was growing up in Edinburgh. And, you know, they got all sorts of subsidized goods. We really trusted our doctor who would come to visit us and who was a woman, incidentally. And we thought of this as a wonderful national system that was really helping look after us. And when you come here and it's all, there's money involved and, you know, I think I say in the book, I didn't know the difference to, you know, pediatrician and a podiatrist. So even making an appointment when you had something wrong with you was a nightmare instead of, you know, calling up your local clinic where you always went and the doctor would tell you where to go. So it was very hard to negotiate. And I wrote about the experience of having a hip replaced, just how difficult it was to, you know, you were supposed to treat this like a grocery store or you go to Consumer Reports magazine and find out which was the best surgeon and then you couldn't really do that. And this was a very hard thing to do. And, you know, I came through that experience, but writing back to Britain about that experience, I shared, you know, how difficult and how different it was from Britain. But then that's transmogrified into the work that Ann and I have been doing, where we see the incredible costs and corruption in this system as being one of the worst things that's happening in America, especially at a time when, you know, we're spending more on health care than any other rich country in the world. It's a share of GDP and beyond that, even in total dollars. It's bankrupting us. I mean, almost all of the dysfunction of our government deficits in Washington is to do with health care. And, you know, people like Al Blinder or Vic Fuchs have said, you know, if we don't fix the cost of health care, we will never fix the budget problems in Washington. And if we, you know, and the other way around is true too. So it's just all about health care in some sense. And there's no reason to cost what it costs. And, you know, and then we wrote this book about all these people dying and this falling life expectancy. And this is happening when we're spending so much money. So this is the real monster when you come to America. It's not the mafia. That's not what's putting you in danger. It's this grossly over inflated health care system in a land where health is doing worse than almost any other rich country. Well, as I was reading in the notes I made, there was awareness when you're ill and afraid that you have inelastic demand. There was discussions about wealth extraction and the private equity business. I think, as you mentioned, the total costs of health care in the United States is something like 18% of GDP, which is about double what's happening in other countries. And so I since the and I'll add the WHO ranks American number 37 in the quality of performance. When people talk about free markets, and they talk about innovation, the idea is you're going to get more and better for lower price because of the dynamism that we go through with innovation. And here it feels like we're getting lower quality for twice the price. And the reason I'm underscoring this in such detail is we are on the cusp of the baby boom aging out, where the size of the retired population in relation to working population will be unprecedentedly high. And asking those people who are still in the workforce to pay twice as much for low quality does not feel like economic justice. It's worse than that. I mean, I don't think it's sustainable. And it's going to break down at some point. And that will be a horrible mess. And it's almost impossible to reform. Because you know, there are six healthcare lobbyists for every Congressperson in Washington. And so you know, they write the rules. And also the Congress people need so much money to support their election. Then this healthcare is a very good source of money for them. So it's very hard to see how you can possibly fix this, given the political system we have and given the amount of money that's in that healthcare system. So it's very easy to get quite despondent about this, or to see that it ending any way other than badly. I mean, other European countries have aging populations too. So looking after the elderly, which we're all members, is certainly going to be a problem everywhere. But it's we're spending twice as much on it as we want to be. And the numbers are pretty astonishing. One of my favorite ones is that if you were if we were to spend the same share of GDP as Switzerland, which is about the second most expensive system, the savings would pay for all of our military expenditure one and a half times over. Wow. So it's just an extraordinary we're talking about real dollars here. Yeah, order of magnitude is daunting. Yeah. And that money is being used to funnel the lobbying, which is keeping the thing in place. And it's a terrible system that's just extracting money from ordinary people in order to support these very, yes, much too large system. That's also paying people very large salaries and paying hedge private equities very large sums of money too. And then one of the things that Ann and I write about in the book is this idea that most for most working people, the health insurance is funded through contributions by employers. And because everybody has a body and your body costs about the same to maintain whether you're rich or poor, the companies have to pay about the same for their CEO as they pay for the doorman or the cleaning lady or the cafe worker and so on. And that's been a major force in just shedding workers, outsourcing, making, killing good jobs in America. So the jobs for less educated people in large companies in the US that used to be good jobs for less educated people just don't exist anymore. And healthcare is a big chunk to do with that too. It's also very inequality promoting because you'd much rather hire an educated person, because they cost you less proportionally than an educated person. It's just like an astrophy every way you look at it. So as a stimulant, it's exacerbating the compensation difference and the access to jobs between say the college educated and the and those with less education are not not up through a Bachelor of Arts or Bachelor of Science. Right. And basically, you know, other European countries in Canada all have different ways of financing healthcare, but none of them do it like this. You know, the burden falls more in proportion to income. We mentioned Canada, I grew up in Detroit. And when I was younger, people were telling me that were auto executives that were friends of my father, that they were considering moving plants to Ontario. Because the production of cars would go down in price now that they were competing with Korea and Japan because the state paid for the healthcare rather than the company. Right. So there was an impetus towards foreign direct investment to Canada, which was maybe a plant eight miles away from downtown Detroit. It's really weird in some ways, Rob, because, you know, every CEO I've ever talked to about this would love to replace the healthcare system. So there are a few of them are well, maybe not CEOs of hospitals. But you know, if you talk to, you know, car manufacturers, you talk to CEOs all over the different sort of things. They just hate this. And it's a nightmare for them. And actually, one of the things that had inspired Anne and I to get on to this was we were talking to actually a retired executive of an oil company. And he told the story about they have an annual meeting with their HR people to decide, you know, what lies down the pike next year? And the HR people had come in and said, well, I'm afraid to tell you our insurers are saying the insurance premiums are going up 41% next year. And that's not every year, but it was one year, it was 41%. So you know, once they put the jaws back in place, they say, what are we going to do? We can't. You know, that's a big expense. We'd have no profits left that we'd have to close the company, all the rest of it. And they said, well, you bring in McKinsey and they'll sort it out for you. So they bring in McKinsey. And McKinsey tells them how to get rid of half of their staff. And it's all the low paid staff. Because that way, if you get rid of a lot of people who are not paid very much, their contribution to company is not all that large, but their contribution to the cost is the same as the CEO and the people who are making the decision. So they just shed all my workers. And that's been happening over and over in America. And there's very few. There are very few large firms anymore that hire their own support staff like that. And that one of the things that means to us, you know, it didn't happen very often, but there were people that are always these stories of janitors or people in the mailroom who finish up being CEO. And, you know, you belong to this company, and it gave you, you know, it meant something in your life, not just the weekly paycheck or the monthly paycheck. And that possibility has sort of gone. And no care is a large part to do with that. And you talk about the desire to reform. I often use musical parables when I'm talking to people, I come from a very musical family. And I remember Bob Dylan had a song called One Too Many Mornings. What I've often said is when you say capitalism is embedded in democracy and therefore morally justified, you may have to be concerned about things like does the media cover their advertisers? Do politicians need big war chests to get reelected? And do the places that fund experts, think tanks and universities depend upon pleasing the very concentrated wealthy and avoiding the issue space in the, what I might say is the thrust of public policy and governance does not deal with these things. And I worked for six years in the United States Senate, half on the Republican side, half on the Democratic side, all kinds of senators sitting on the floor at night or meeting in a restaurant, always talked about they knew better things to do and they couldn't get them done. Right, right. Well, there's a lot of money involved and it's hard to fight against money. And the idea that somehow that free markets are the foundation of freedom has all seemed to me a sort of odd one. I mean, I think Hayek believed that capitalism would favor the poor. But I'm not sure there's a lot of evidence of that. The last capitalist history. And this label of free markets, you know, use this as a free market healthcare system. I mean, that's just a label we use as propaganda because it's not free markets at all. I mean, it's a fixed oligopolistic monopolistic market that's dependent on politics. And where everything is fixed, but they say if you try to do price control, you're interfering with the free market. And that's a really bad thing. So if you if you deploy the Federal Trade Commission to have a look at it, you'll have all kinds of legislators trying to stop them. While there's that. And the legislators, of course, block the the investigations, the opioid firms until you know, or to see people in the health care, I think is so vivid right now. And I was very inspired that you started there. But I guess as a boy from Detroit, when you talk about poverty here and poverty abroad, and how they interact, I mean, people like Bronco Monovec, who I greatly admire, talk about the globalization in a global sense, alleviated a lot of poverty, say as China and other emerging countries climb. But my hometown got crushed pretty hard. And the old parable that free trade can make everybody off better off, and nobody worse off required some transfer and payments and adjustment assistance that we never we never saw. And there was never a chance of happening either. We should have known that. And that's one of my things that I think has been wrong with a lot of economics. And even now, I hear people arguing this, they say, you don't want to put any tariffs on, you don't want to free mess with the free market, you ought to compensate these people. And of course, it's never happened ever anywhere. And, you know, and it's deeply opposed by politics and by the gainers, because the gainers don't want to give up their gains. So I think the profession has been just much too blasé about that. And assuming that somehow everyone will be made better off. Or if they're not made better off, it's a short run thing, and it'll get sorted out over time. Some of my former colleagues on the Senate banking committee later served on the committee that would determine whether the Chinese exchange rate was being manipulated to the detriment of America. And what they told me and was echoed by a Chinese leader when Donald Trump was criticizing the Chinese, it's not Xi Jinping, but a couple of next step or two down. He said, Rob, you don't make the transfers. And when we get investigated to be manipulating our currency to support export led growth and undervalued remedy, you got you're not acknowledging that groups like Walmart and Nike are the leaders of what's stopping your committees from suggesting the remedy needs to appreciate. So they're even conscious of the game being played within the United States and the money politics stopping in my friends who I said, on that jury, say that was a very vivid part of what they were exposed to the pressures they were exposed to. Yeah, I can imagine that. But what but your chapter on poverty at home and poverty abroad, I remember there are many dimensions to it, including your sense of how you say your places of origin and what did poverty look like there in relation to America. What were you trying to build in that chapter? Well, I, you know, I spent a lot of time, not a lot of time, but a fair amount of time over the last 40 years working at the World Bank off and on. So I've been very exposed to the way people think there. And those are very dedicated people, very smart people, most of them, nearly all of them. And, you know, they're very dedicated to making the world a better place. And so the philosophy that I talk about in that chapter, which I call cosmopolitan prioritarianism, which is not a phrase that economists use very much, but philosophers know what it is. It's just this idea somehow that any transfer from a richer person to a poorer person is making the world a much better place. And, you know, there's a lot to be said for that view. There's a lot of desperate poverty around the world. And so I think there was a genuine general belief, you know, on the left among cosmopolitan policymakers that making people in China better off at the expense of Americans could be morally justified because the Americans were so much richer than the Chinese or the Indians in the first place. And I guess I've been sort of chipping away at that in some ways. So if you talked about Detroit, well, if workers in Detroit give up their jobs and those jobs go to China, for example, they're giving foreign aid, but no one ever consulted them, right? So they're being asked to give up their jobs and in some case give up their community structures and lots of other things that are social life, things that are important to them in order that admittedly much poorer people in other parts of the world can get less poor. And that reduces global inequality, which lots of people think is an issue. But, you know, the people who are left not really consent to doing that, and many of them are going to get angry about it. And so, you know, the Chinese people who benefited don't get to vote in American elections, whereas the people in America who lost from it do get to vote in American elections. They're allowed able to make their displeasure felt in very uncomfortable terms for the rest of us, you know, thinking of Donald Trump and so on. So that's one aspect of it. The other aspect is we have some very good ethnographers here at Princeton, especially Cathy Eaton and Matt Desmond. Matt Desmond had won the Pulitzer Prize for these PhD thesis, looking at what was happening in labor in housing markets among poor people. A wonderful book called The Victid. And, you know, they see this terrible poverty here, and there's a part of it that we're not really cutting right. And, you know, I've always been interested in measurement my whole life. That's sort of what I do. And, you know, I think these dollar a day comparisons that became very famous. And then the World Bank pushing, you can't, you know, you might be able to live on a dollar a day here if all you had to buy was food. But if you have to buy housing and clothing and all the rest of it, there's no way anyone could live. So these Americans are undercounted in these numbers. And I think when you make adjustments, then you get into this very contested territory of, you know, are there people in America who are every bit as poor as the poorest people around the world? And my guess about that is yes. And we just like to pretend they don't exist. And at some level, poor isn't just a comparison between their gross incomes, because the difference in what it takes to live in America might be much more expensive. But it's even beyond that. I mean, one of the concepts that some of the philosophers talk about is impoverishment. You know, in many places, if the society is structured that way, you can live a very good life on very little. And it's more than just the cost of living. It's how the society is structured and what your expectations are. You know, Adam Smith wrote a long time ago about how, you know, you couldn't, no one really needs a linen shirt. But you couldn't be respectable in Scotland if you didn't buy linen, you didn't have a linen shirt. And then it's worth reading the rest of that package, because it's like, in France, you need shoes, but only if you're a man, women don't need shoes. And there's all these comparisons across countries as to what you actually need to be respectable. So that's another part of the poverty calculation. I mean, you could be seen to be desperately impoverished because you didn't have a linen shirt, even though no one, you know, in India has linen shirt, for example. So these are complicated matters. And I think there's a lot of really genuine and very serious poverty in the United States. Now what the numbers are, that has become so politicized that the measurement, I think, is buckled under political attacks from both sides. And I'm not sure we can do that anymore. And that's happening globally too. I mean, Modi has suppressed the poverty measurement system in India. There's pretty good evidence that they're cheating on the GDP statistics. So the growth they're proclaiming is not real or parts of it is not real. And so I think we're losing control of measurement. And that's one of the consequences of political decline around the world. In your recent piece in the New York Times with Ann Case, you talked about the acceleration of suicide. Yes. And how it relates to whether or not you get a college degree. Why do you think the college degree is that critical ingredient in alleviating the fear or stress that might lead someone to terminate their life? Well, let me tell you a side story. Ann and I presented that work at a place called Samshaw, which is the suicide branch of the National Institutes of Health in Bethesda, especially outside of Bethesda. But and we presented these numbers showing that people with less education were killing themselves more than people with more education. And the director said, I've never seen anything like that in my life. We've known forever that suicide is more common among more educated people. And that's not true anymore in the US. And Dark Eye, you know, who the founder, the father of sociology, who wrote the book on suicide in the 19th century, claimed that people who were more educated were more likely to commit suicide. And that makes perfect sense because, you know, especially for those of us who were sort of first generation to be educated, you know, we could lose our social moorings when you went to college, for instance, because no one in your family had ever been to college before. You know, it was a very different place. And that was the sort of argument that their time used. But it's not true anymore in the US if it ever was true. We don't really have very good data going back. And so that seemed to us a very shocking thing. And to us, the suicide is the sort of canary in the coal mine, because it's the ultimate in self-destructive behavior. I mean, you literally destroy yourself. And so the suicide was a clue to the opioids, to the alcoholism that's killing people in huge numbers, too. And as someone once said about accidental overdoses, maybe they didn't mean to die, but it wasn't an accident that the needle was in their arm, you know, so you're indulging in behavior. Now, of course, this is not to excuse the pharma companies and all the rest of it that, you know, preyed on people in this way. But we think of both of not both, but suicide, alcoholism, and, you know, opioid overdoses as being symptoms of parts of society that are in real distress. But I remember when I first read some of your work about diseases and despair and so forth, and I was looking for the geography of where the economy has taken a downturn, in other words, the stress emanating from the economy and the reaction, whether mental illness, physical illness, or even suicide. But it was, it was almost like, how would I say, it illuminated my childhood in Detroit? Because while my father was a physician and a jazz musician, my mom worked with the Detroit Symphony. Many other friends were manufacturers, auto executives and so forth. And as it was crumbling, I was watching people in my neighborhood or parents from my friends at high school, getting sick, be going to the alcoholic, it's anonymous, all kinds of things, that the economy affected the human being. I think that's right. It's harder to pin that down than you might think. Because, for instance, there's no, if you look at what we call deaths of despair, and you track them through the great recession, for instance, they were going out before they went up during they went up afterwards. And you just don't see any effect. I think we think of it as a longer term effect. That there's a sort of crumbling away of the supports of the social structure, which has happened, you know, alongside the law. We think that loss of unions is being very serious for working class people here too, because unions were a source of power over your workplace. They were a source of community. You know, Bob Putnam's solitary bowler was bowling in a union hall. I'm sure that wall is not there anymore. And they were power in Washington and power in the States. And that's pretty much all gone. You know, Google spends more on lobbying than all the unions put together. So there's been a real loss of, you know, effective political voice. So at some level, you could say that if you thought the system was healthy, and there's a transient downturn, it'd be painful, but you're going to ride it out. I think when you think the system is the equivalent of bankrupt, that's when the despair can deepen. That's right. And economists have tended to say, OK, you know, if you furniture mills in Carolina are closed down, they can go get a job in some successful city. And, you know, you can turn mechanics into airplane manufacturers or something. But that's become almost impossible because the costs in those successful cities have become so high. And so it's very hard for sort of modest working class people to go live in New York City or San Francisco or Seattle and so on. And, you know, that seems long to be true in other countries around the world. It was really nice peace in New York Times a couple of weeks ago by Benjamin Appelbaum, who's one of their editorial writers showing how in Tokyo, in almost half the province, the precincts in Tokyo, people running a small restaurant could afford to rent or buy an apartment. And that in New York City, there was no one or no place in the city where that was possible. So, you know, we deprive people of their jobs. And, you know, in the famous phrase of Sir Keith Joseph in Britain told them to get on their bikes. But, you know, there's nowhere for them to go on their bikes. And that's, I think, become a real problem. Well, turning a little bit in the direction of what I think might have been something that deepened the despair, looking at the financial sector and its governance and regulation. I'm very familiar with another audible series called Meltdown. Two of my friends, David Sorota and Alex Kidney, who I've partnered with on some films in the past, made something where the meltdown was not the meltdown of the financial markets. It was the meltdown of trust and faith in expertise and governance. And they talk very vividly about the Tea Party, Occupy Wall Street, Republican House, Republican Senate, and then Donald Trump as the byproduct of what Joe Stiglitz used to say, the polluter's got paid. And so there was a lot of anxiety about that since. And we've talked about money politics, it's over. But a deregulated financial system might have been a mistake in a change given digital technology that we learned about and had to put it back together. But now with FEB and some of the new Bank for International settlements, it still looks like there are a whole lot of what people call shadow banks that have the characteristics like Enron of a special purpose vehicle where their positions are hidden and in a shock or a crisis of some sort, like a U.S. Treasury default because of healthcare in the coming years. We even our authorities is brilliant as Janet Yellen or the others would be. They won't be able to see what's coming on to their doorstep because we haven't repaired the transparency and scrutiny and regulation of the financial system. I think that's been a problem all along. And actually, I think that, you know, the that financial meltdown in 2007, 2008 was really a key turning point in people losing their trust, not just in the financial sector, but in, you know, many institutions altogether, including government. But, yeah, I'm not quite, I mean, I'm not really a great expert on that. But one thing I would say is that I think economists under pressure from, you know, Chicago economics and free markets can look after themselves really became too complacent about the harm that the financial sector could do. And there was a belief that modern, you know, all these regulations that we'd had since the 1930s, you didn't need them anymore because modern banking could look after itself. And in fact, what modern banking had learned to do was to protect itself against scrutiny and do even more harm than before. So I think that's been a really crucial event. I think up till then, people, a lot of ordinary people believe that trickle-diamond might sort of work. And you know, if these bankers got paid to you sums of money, somehow it was benefiting the rest of us. I think after that, people didn't believe that anymore. They should leave it to the first place, I think. But, you know, I think the rhetoric out of Chicago, the libertarians actually did a lot of harm. A lot of people bought into it much more than they ever should have done. One of the papers that caught my attention, and by the way, I just want to say to our listeners and viewers, the tour that you took us on in the history and evolution of ideas in this book is outstanding. Thank you. And I know a lot of schools now don't teach history of the economic thought or economic history as a core part, particularly of the graduate curriculum. But the way in which you brought people into this, it ignited in my thinking, which ones really got to me. And I remember George Stigler's article on the theory of economic regulation, which everyone in Chicago was touting because it essentially said government's going to make it a bigger mess, get them out of the way. And you and I talked about the plutocracy or the corruption of money in politics. But it doesn't mean unfettered, let it rip is going to be a rising tide that raises all boats. Well, I think George really believed that and probably believed that till his dying day. And there's two stories about him. Well, one story is in the book and another one I've learned since, you know, when I was a young research officer in Cambridge, you know, around 1970, I read this paper of his, which said that, you know, if you become an economist, you automatically become conservative. And I thought it was a typo. I mean, I never met a conservative. In Cambridge, the most conservative people were Fabian socialists. I mean, people on the other side were Trotskyists and Maoists and Pol Pot people and so on. So, you know, I thought the guy's crazy this can't be right. So that was something that I learned when I came here. Another story, George was always very kind to me. He involved me in some very interesting things when I first came here. He was interested in consumer behavior and consumer demand analysis and had read my stuff and picked up on me very early on. But there's a story that I heard Orly Aschenfelter is running this wonderful podcast about labor economists and industrial relations specialists. It's really excellent. You're listeners. I remember him. I was a graduate student at Princeton. He was dynamo. He's just done this recently and many of these are really wonderful. They're fantastic pieces. But he did one with Jim Hackman and he asked Jim Hackman as he tends on these podcasts, what was the best paper he'd ever written or what was his own personal favorite, right? And he says his own personal favorite was one where he'd gone down to the Carolinas and was looking at what civil rights legislation had done to the relative wages of blacks and whites. And he spent time talking to union people. He spent time talking to the workers, the legislatures, he'd done econometrics, done the whole shebang, right? And he'd find a very strong positive effect on black wages of the change in the civil rights legislation. So he goes back to Chicago and tells, you know, presents it in the seminar. And George said, you're not serious, Jim, are you? And Jim said, well, of course I'm serious. And George said, but we know that's ridiculous. You've got to be wrong. I mean, I don't know what you did wrong, but I know this result is wrong. And Jim said, why? And he said, because we know the government can't possibly do any good. And if you get results showing that it did some good, you must have, there must have been something else going on that you didn't pick up. And the other colleagues in Chicago take exactly the same view. I mean, they knew in advance that government could not help. Now, I mean, Chicago School's great contribution was to teach those of us who'd grown up in a different tradition that government could do harm as well as do good, you know, that government was always the solution. And that's a very important thing to know. But the idea that government can never be the solution was, you know, one step too far. And I think that we went, the profession as a whole, the center of the profession, Democrats as well as Republicans, moved too far along that direction. Yeah, I think, I think that's what you say is very wise. The sense that I get is lots of people on the left, jump into the debate, presuming democracy works right, and that there is no role of money or anything. And if you just get out of the way, I would remember when I worked on the Senate Budget Committee, I was talking with Bob Dole one night, he said, I'm really worried about these deficits. And I met with your my mentor, Paul Volcker, to help me get the job with the Senate Budget Committee. And he said, we were talking about it. And what essentially was you've got to stop politicians from selling policy. So the budget deficit in election years or in the year before election year starts going to explode. And you've got to be able to maintain taxes. And Bob Dole said, I think those are really good ideas. And I said, well, the other thing you can do is you could make every media institution put public service windows of time so people aren't having to buy advertising to reach the public. He said, Oh, those are that's a good idea, too. But he said, the problem is, if I put a bill like that together, I wouldn't get 15 votes out of 100 senators, because they all know as incumbents, they have an advantage. And they would be putting their neck in the noose with challengers. So but but I remember both both parties in those days, before the Newt Gingrich era, a lot of Republicans, John Dan Ford, Nancy Kassbaum Landon, Howard Baker, Pete Domenici, they were like a law firm that was running a country, not how do they say, rabble routers for extremes, performance and performance artists. That's good. That's a good way to put it. But I but I do think on the left, we've seen a little bit too much of what I'll call romantic sense of what the government can do. And some of what I'll call the neoliberal mask has played behind that notion as well, that that government, if given more power, will do good as opposed to turbo charging the concentrated power once. Right. I don't know why we can't draw a middle way in these things. And we have to lurch from one extreme to the other all the time. Yeah. You go through a number of different themes. Talk a little bit about your thought about retirement pensions and the equity market. I'm going to see a gentleman who's an MD and a PhD and worked at Goldman Sachs. Give a talk on Sunday night. His name is you freak. And he's part of the Stansbury Research Group. And his whole focus is on sharing what I'll call the inside Wall Street game with a broad array of people to plan their retirement. What do you see as the dynamic of what's happening with retirement pensions, stock market? What are the dilemmas that your exploration and your chapter explore? Well, I mean, I'm not sure that these are very big questions. And I'm not sure I have an answer to that. But what I've observed over the years is this oscillation between sort of belief in the stock market as a sort of fairy godmother, which is the way I refer to it. And people say, well, you know, how are we going to afford these pensions? Well, you know, we're going to go down to the casino and we're going to put everything on zero. And, you know, if we win, we won't have a pension problem anymore. And if we don't win and we lose, we're no worse off than where you are now, which a lot of state governments do. I mean, you know, there's the state governments put money in Bitcoin for goodness sake. So I think this gambling and there's a lot of misunderstanding about the stock market. And, you know, it's been a huge issue in economics for a very long time. I remember maybe 20 years ago, or 15 years ago, when Marty Feldstein and Peter Diamond were sort of alternating as presidents of the American Economics Association. And one was saying, you know, old pensions should go in the stock market. The other one was saying old pensions shouldn't go in the stock market. And I'm more on the latter side, I must say. I mean, I think you shouldn't be running this thing through the stock market. But there's a big thing that's happened, which I think is very important. And Jacob Hacker at Yale wrote a book about it called The Great Risk Shift. And so, you know, it used to be that for most people, they had pensions through their employers. And those were defined benefit pensions. And they usually weren't. Meaning you got money from the company and the company in investing took the risk. Yes, the company took the risk. And now there aren't basically no new defined benefit pensions. A lot of people have them from the past. And some universities like California System still has defined benefit pensions. But very few employers offer those anymore. So the employer will make some contribution along with you and it gets invested in the market or somewhere else. You often sometimes at least have some control how it's invested. And then you take the risk. And that's really a big difference. And it's made for a different society. I mean, I think it's one of the things that's educated elite, most of whom have defined contribution pension funds, which are invested in the market, done very well out of the market. And so to the extent that workers have lost out relative to capital, people like us have been bought into that because our pensions are doing so well in this market. And that's a mechanism that has been talked about very much. But also we're all at risk. So, you know, if the stock market crashes, you know, we'll pay for that in a way. And this is an ultimate issue because the amounts of money are enormous. And how society organizes this tells you a lot about the extent to which it's a purely individualistic society or risk is shared in a social way. I have a little story about fishing boats in the book, which I was rather pleased with to illustrate how that works and how risk can be shared quite profitably. And it may hurt some people. But to me, that's the way it ought to be done. Well, my sense is that there's a what I'll call an amplifying feedback embedded in this system, which is, let's say we had a Ukraine or a Taiwan nuclear episode and the stock market crashed. Defense budgets are going up. Healthcare is still expensive. And we get into a crisis and the value of all the pension funds goes down with the stock market crash. That that turbocharges the anxiety and despair of society precisely at the time when it doesn't have the resources to counteract Well, it's we're in a pretty bad place right now with no one set off in nuclear bomb yet, but that scenario could certainly come to pass. And a lot of people would be hurt. But it can also be a little bit less acute, but it can be something like a profound episode on climate or something that shakes us all up to wonder if life on earth is going to go on. No, that will come back to that. I know that's towards the last chapter of the book, but but but it needn't be something quite so vivid like the Jason Robarts movie the day after it can be something else structural that we can't get out from. The risk is still there. So if we all still had pensions to find benefit pensions, then some of those scenarios you're talking about, we'd lose those to, you know, bankruptcy of companies or whatever. Yeah. Yeah. Yeah. That's right. The issues, though, related to retirement and pensions, do you have a vision of what you would like to see be the structure in the United States? I haven't really put my money where my mouth is on that. I'm pretty sure that it should not be a privatized system. And, you know, I think the structure of Social Security, as we have it right now, is perfectly salvageable. And then people pop that up with their own. So that basic structure, I don't have a problem. OK. Let's see, other things. Towards the end of the book, you describe in two chapters the work of economists and the Nobel laureates. And I'm curious, I guess, what I would say to hear your wisdom, having been immersed in this for, as you said, at the outset, 45 years. When and how does it take things systematically off course? I mean, I would say there's a romantic parable about a really brilliant person working for the public good. But when you're navigating through the peer-reviewed journals that you talk about, and I know Jim Heckman's done a lot of eye-net research on, and I remember you were on a panel at the AEA with him and Lars Hansen and George Akerlof on these themes. What's the real world in which an expert lives? And what do they do? And are there reforms of the profession of economics that you would try to inspire us to embrace? Well, I'm not that pessimistic about the profession. I mean, I do think that there's lots of parts of it, like all of us that I think are pretty worthless. I mean, you know, they're doing things that I don't think have much social value. And I'm not going to tell you what those are because if you talk to some of my colleagues they'll give you a very different list. And that's probably the way it ought to be, you know, and that or not. But there's one very hopeful thing. Well, let me give you the negative thing. The negative thing I've been pushing is I think we went a little too far in believing in the virtues of markets and we didn't pay too much attention to. And also we tended to think of human welfare in terms of real material living standards and not paying much attention to community and relationships between people and health, for instance. And I'm not the first person to say these things. You know, Amartya Sen has been saying those things forever. And, you know, but nevertheless, I don't think we paid a huge amount of attention to that. And we pursued this sort of relentless pursuit of efficiency without thinking very much or enough about who was benefiting from that efficiency. And what effects pursuit of efficiency had on other things that mattered to people. I don't think we talked enough to historians or to philosophers, sociologists too, who are much stronger on these community things than economists are. And, you know, I don't think we paid enough attention to politics. We were very good at thinking up technocratic solutions to things that, you know, had no chance to have her being implemented. And, you know, the fact that they weren't, our brilliant ideas were not implemented was because politicians are stupid or evil or something. And we didn't think as hard about that as we should have done. So those are all things that we might have done better. The good side is, you know, compared with many professions, we're a really open profession. You know, there's no bars to young people coming into the profession and doing whatever they want to do. And, you know, young people with good ideas can be tenured at Harvard when they're 25 years old. We're much better about women than we used to be. And so there's plenty of room for new ideas to come along. There are no barriers, there are no motes which preserve the gerontocracy like me in the profession. And that's a really good thing. And it's one of the reasons I wrote this book because I hope young people will be inspired to read it and think, okay, look at how much change there's been in the 45 years that Deaton was in this profession. You know, we can make even more change over the next 45 years. And that would be a wonderful thing. But that, which you might call dynamic flexibility and curiosity might allow us to build maps that are more helpful to society than if we, we say, stayed in time, the contours. You talked about it as a religion in some ways, of a religion that markets do the job. I had a very good friend who did a PhD after working on Wall Street, did a PhD at Union Theological Seminary. And what he said to me was at the time of the Protestant Reformation and then afterwards in the UK and in Scotland, the notion that the church worked for the people through God began to deteriorate. And the notion that you could speak in moral and ethical language and be trusted when the feudal lords were running the church in England and Scotland led to people even like David Hulme and Adam Smith talking to each other. I read some of his work, my friend's work about this, about needing to talk like value free technocrats. But my friend went on to say the next chapter was everybody romanticized technocratic planning until Hayek stood up against the Soviets, Stalin and the like and said, you don't have anywhere near the kind of perfect information you would need. He kind of borrowed Frank Knight and John or Major Keynes. So then in the aftermath of Hayek and various working groups, we started to deify the market. The market went from being a tool to being the center of a religion, an article of faith. And I think that what you're saying, I guess to follow that now is that there's enough discord and distrust of expertise that we have to put a North Star together again. But the flexibility has returned and the ability for people to debate and be differing about something but not attacking each other might be a goal that we need to pursue. I think that's exactly right. No. But you know, I'm not sure there's a... You're always searching for common good. Yeah, that's right. We should get back to the common good. I'm all in favor of that. Anyway, thank you. What is your thought at this juncture? If you had a brilliant dynamic young student walk in the door, what path would you send them on? I think economics is a good path. And I think, you know, I've never regretted the fact that I started out as a mathematician. Being able to count is sort of important. And, but I would tell them to read, to read history, read philosophy and bring those humanities to bear and to the quantitative work that they're doing. The numbers are really important but they need to be interpreted in terms of the humanities more broadly. Well, I know people like Ann Swidler teaching the relationship between economics and sociology at Berkeley. And others are, which you might call stretching into this space. And she even brought up the sociology of suicide in a lecture that George Akerlof shared with me. And I know a lot of young people in my young scholars initiative that are very interested in people like Keith Hart and others reaching across the boundaries of the discipline to anthropology, sociology and psychology. And I think that- But we should preserve the things we're good at. We're good at counting. That's a really good thing. Yep. But what I like is you're good at those things but you're trying to be better by augmenting it by synthesizing all these other dimensions without forfeiting that which is at the center that you, that economists are good at.