 Welcome to Free Thoughts. I'm Aaron Powell. And I'm Trevor Burris. Joining us today is Steve Horwitz. He's the Distinguished Professor of Free Enterprise in the Department of Economics in the Miller College of Business at Ball State University. And starting this month, he's the new economics editor at Libertarianism.org. Welcome to Free Thoughts, Steve. Hey guys, glad to be back. You've spent a lot of years teaching economics. In that time, have things gotten better or worse when it comes to the public's understanding of economic issues? Well, if we ignore for the moment the president, perhaps. Please, can we? I think it's gotten better. I think there are some basic, the basic kind of stuff that economists care about. I think the public sort of gets. At one level, we're not debating capitalism versus socialism anymore with a few outliers to be noted. The idea that markets generally are the way to go and understanding the basic ideas, why that is. Even the people we think of as being critics of market like a Krugman or someone like that, still at the end of the day, the sort of, you know, median spot where people and the public I think are with respect to these issues is better in many ways than it was a couple generations ago, for sure. There's still issues, right, that are problems. You know, thinking carefully about inequality, for example, and why, you know, what economics has to say about that, I think is important. In general, yeah, I do think things are better and I think part of the reason things are better, I actually think there's more people teaching and, you know, doing public intellectual work in economics who get it, who really understand economics or good at explaining it and get, I think, the kind of, you know, the idea that markets work and why they work and so on. Would you include, like, Freakonomics in that example of good teaching of economics or at least getting people to think about costs and benefits in a different way? Yeah, you know, I think Freakonomics is, I think of as kind of the, you know, the teaser for economics. It makes economics really sexy in some ways. And it is good if we think of economics as the economic way of thinking. I think that kind of stuff is really good. Same with Pete Leeson's new book, which is, you know, similar to Freakonomics in that way. You know, so that in that sense, yeah. I'm not sure that those things, you know, move the sort of economics that you need to understand the big policy questions all that far, but they certainly get people interested in economics. I think that's a good thing. And I think the general success of Freakonomics, for example, is an indicator of just sort of a more general interest in economics. In economics as a thing that I think was the case even when I started grad school in the 80s. So if the public's understanding is at least getting marginally better, does the same hold true among university students? I mean, we hear that, you know, that kind of if you listen to the media now, it sounds like the university has run so far left that they're all Maoists. And that's often driven by the students themselves. So what have the last decades looked like among, say, undergraduates? Yeah. So I think you have to be careful here because, you know, there's a selection bias problem for me since I'm teaching economics majors, right? I'm going to get a different view. But if I think about the students I've taught, say, in intro classes over the years, I don't think there's there's certainly by my measures, no significant move to the left. And if anything, a slight move towards sort of better, you know, better appreciating again markets, not a big one, but but slight. One of the things I really found, again, especially teaching intro, both at St. Lawrence and now at Ball State is how little students really know as the basis for their opinions before they walk into an economics class. And I think one of the great things about teaching economics, again, particularly intro, is the ability to sort of get students to see issues in ways they never thought about before. And at the very least, to get them to recognize it's a lot more complicated than their simple slogans would suggest. For example, the rich are getting rich, the poor are getting poorer, women make 80% of what men make. I mean, those kind of things we see knocked around, students come in with those, presumably from high school, which is a whole other question. But I think one economics class at the very least gets those students to understand that the issues are more complicated than that. When you teach your intro class, do you kind of focus it to look at the trendy misconceptions or at least conceptions that are missing the complexity of questions like the gender pay gap? Do you try and focus that on addressing some of those issues to keep the students interested? I certainly try to bring them up as examples. One of the changes I've made over the years, I really spend a full week on two issues that I think are those sorts of things. One is a week on environmental economics, right? And one of my favorite days in intro is when I argue that the optimal quantity of pollution is not zero. I say that all the time, yes. It's true. Yeah, that blows the minds of students. My students at St. Lawrence in particular were very sort of green and crunchy. And they didn't quite know what to do with that. But it stuck. I had evidence that it stuck with them. And I thought that was a victory for the economic way of thinking, at least if we understand, there's a cost to pollution reduction. So that's one week. And I spend another full week on the inequality stuff. And I have a whole sort of series of videos and sort of class discussions that go with that. Because I think that issue is really important. Gender wage gap comes up when we talk about labor markets. But I don't focus on that too much. Historically, I've taught a whole course on the economics of gender where essentially a huge hunk of the course is about thinking through the gender wage gap. And there are two. It's the same thing, I think, where students who've never thought about it before suddenly are sort of, wow, okay, it's more complex. And it's fascinating to watch college age women kind of work their way through that too. So I think the answer is, yeah. I do think the other thing though is that in teaching an intro class, you certainly want to get students engaged by showing them how economics is applicable. It doesn't always have to be to the sort of big political issues. And as I'm talking, I'm also realizing I'm in the last two years, unsurprisingly, I spend more time talking about using international trade examples, right? Than I would have before, thanks to the, you know, Orange Man. Taking a big step back. How did you get interested in economics to begin with? Oh, well, okay. So there's some family history here. My dad is a PhD in accounting and taught finance and accounting and was a business school dean for 11 years. His brother, my uncle, never finished his PhD in economics, but came close and it was actually a practicing econometrician. It sounds like a practicing, you know, voodoo artist or something. But anyway, but practicing econometrician for decades, right? So there's some of that. And their first cousin is a math professor, just retired at Penn. So there's all that in my blood. But the story for me is I became a libertarian at age about 16, and like seriously. And when I went to college, I was going to be a computer science major. And I needed a fifth course, second semester of my freshman year. And I thought to myself, if, if you're going to keep talking about this libertarianism stuff, you better learn some economics, young man. So I took intro econ as a fifth course, just for that reason. And had the experience, I think that that almost every economist has at some point where the sort of scales fall from your eyes. And you go, wow, okay, yes. Right. And for me, it was, yeah, I've always sort of understood the world this way. Now I have this systematic way of thinking and talking about it. And it was so easy and so natural for me that I was like, oh, this is what I want to do, right? I want to, you know, more, please. What is this, you say, thinking about the world this way. And a lot of people who aren't, who don't spend time hanging out around economists and aren't reading all this stuff, think of economics as just like you're just kind of studying money. Yeah. That it's almost, it's distinguish almost from like the accounting that your dad did. But what, so what is this way? And you talk about, and you've talked about in the past, the economic way of thinking. I think the easiest way to talk about it is, is understanding that human choices are made on the basis of our, of us determining the marginal benefits and marginal costs of each choice we make. So, and by marginal here, we mean, if I take this next step, if I make this next choice, what are the benefits that come from this choice? What are the costs of this choice? And all the stuff I've done in the past, right, you know, it doesn't, we talk about what we call sunk cost, that doesn't matter. It's thinking about the world in terms of, of that kind of cost benefit analysis, thinking about the term of the world in terms of people respond to incentives, how to, how to, you know, what are the, you know, we want to understand people's choices. What are the incentives they're facing? What knowledge do they have available to them? How does that inform their, their, their choices? I'm dedicated enough to the economic way of thinking and married a woman who, you know, is an adoptee, an adoptee of some of the economic way of thinking that our wedding rings are actually engraved with MB greater than MC, the economist way of saying it was worth it. I've just got to wrap my brain around that for a second. Even you guys may know Jacob Levy, but Jacob Levy called that the geekiest thing you'd ever heard about. That's a lot. Yeah, that's saying a lot. So is that your idea or hers? Actually, it was hers. So you, I'm sticking around. You mentioned the choice aspect. Would it be fair to say that economics is rooted in individual choice? Because sometimes I see economics that doesn't seem to be talking about choices that much. I'm thinking of big macro equations or monetary theory or things like this that don't really talk about individual choice. Yeah, I think that's correct. It is or at least should be rooted in individual choice. And again, ultimately, only individuals choose. Of course, individuals make choices within the context of organizations like households and firms and nonprofits and so on. But even when we say things, we say things like Walmart lowered its prices today. I mean, that's fine, but we also recognize it's a bit of a metaphor. It really means that some individuals within the organization we call Walmart decided to make that change. So, yeah, it is rooted in individual choice. And I think the other way of thinking about that is my friend Pete Betke would say, you know, all good economics is relative price economics, right? It's about individuals facing the prices of various goods and making their decision based on the relative price of one good compared to another. So when we think about things like macro, part of the problem with macro, the standard macro is that again, yeah, it's not rooted in individual choice. It's sort of looking at the way in which aggregates bump into each other and are correlated with each other. I think there's ways to do macro that get it back to individual choice. I wrote a whole book about it and done other things on it. But yeah, in the end, good economics is about tracing out the patterns of unintended consequences that emerge from the choices individuals make in the face of uncertainty and based on the information and incentives created by the price system. What does that then have to do with money? I mean, where do we get, like what you've described sounds so different from the, you know, if you say I'm an economist and what people think you do, that why, what's this big disconnect? The way that Mises would have put it is we study, economics is this sort of broad category of, you know, the study of human action, right? Is he called, he wanted to actually call it sociology and I think you wanted the term sociology for it. But within that sort of broad sort of study of human action, which is kind of what I've just described, right? Mises also talked about what he called catalactics, which is the study of economic exchange and monetary exchange in particular. So when economists historically certainly talked about economics, we were thinking in terms of, you know, the prices that emerge from people exchanging money for goods and we certainly talk about, you know, how to, you know, how to firm profit maximize and all those kind of questions that are money questions. But the principles that underlie that analysis can be extended to any situation that involves, again, sort of, you know, constrain many kinds of constrained optimization, but certainly any situation where we face scarcity, where we have to make choices, where we have to, where we can, you know, we have to act on the basis of determining benefits and costs and the work of people like certainly Gary Becker and others in the mid 20th century that extended economics sort of outward in its imperial march from money and finance into areas like the family and sort of other places that were, you know, occupied by other disciplines certainly is evidence of that, that kind of the fact that economics is really about human action and choice, right, just so happens that a lot of those are the ones that interest us most frequently are the ones that involve money and prices and so on. I'm interested if you could talk a little bit about the, a little sketch of economics in the 20th century in the sense of one person we always hear about is Samuelson, for example, and the influence of people like Paul Krugman and how that all kind of fits together within the professional economist discipline that you're in and the influences and the people who are kind of disagreeing with that. How does that, how does that work and how has that been in history? Well, let's see if we can condense this down. So I think the key, couple of key events here, you know, sort of economics really until about the 1920s was, was primarily, for lack of a better term, a kind of literary discipline in the sense that that most of economics, if you pick up an economics book from, you know, the late 19th, early 20th century, it's mostly words. And if there's math, it's in the footnotes. And I think what happened in the 20s and 30s was economists, changes in sort of philosophical understanding of science and economists wanting to, you know, getting a bad case of physics envy began to think that that the way you did science was, was through quantification and modeling and so on. And in the 20s and 30s, that approach, which which grew out of some economics of the late 19th century, in legitimate ways, began to become dominant. I think there's an interesting story to be told about World War Two, which sort of created incentives for economists to continue to develop those kind of mathematical models and certainly the Great Depression, where where economists were sort of, you know, relied upon to get us out of this mess even though arguably we were somewhat responsible for getting us in it. And, and also sort of the Keynesian models that developed in the 1930s, where were these sort of aggregate models that required measurements and required sort of quantification. And so by the by the end of World War Two, the discipline has become much more of both, you know, sort of theoretically quantified and empirically through econometrics quantified. You know, like, you know, what Samuelson does is sort of writes two books foundations his book foundations book, which was sort of the one for the economist but then his principles textbook, which both both of which sort of laid out economics as this sort of mathematical applied mathematical discipline. And those textbooks were used for the generations and undergraduate graduate school. My joke about my, my dad is that that he, you know, he's kind of a is he's still alive sort of a moderate liberal ACLU Democrat type right but but he has this incredible sort of understanding of private property and incentives and so on and he might well have been a libertarian if he hadn't had Samuelson's textbook when he was in college. That's my joke so but but even Samuelson's book really wasn't it wasn't about the ideology by the way put though the ideology was was awful at it in fact you know he has that famous graph that the Soviets would pass us right that they kept revising the addition after addition when it turned out not to be true. But the real thing that the people like Samuelson did was to sort of recast economics as this exercise and constrained optimization all the time right and that's and that is still fundamentally the way it's taught today. And there have been changes and advances and I think that the big the big change since the 60s or 70s in some ways the late 60s were about the worst period for economics it was both quantitative in those ways, but it was also completely bought into the sort of Keynesian demand management story and the market failure story and the belief that government could solve problems was was tremendous and then we get the public choice revolution, we get other kinds of changes, plus the empirical failure of both socialism and Keynesian And since the 70s sort of while the discipline remains highly quantitative in all those ways, the kind of work that are done by public choice economists by Austrian school economists by what so called new institutional comments that really give much more scope to much more treat markets as having be much more robust than we thought before and recognizing how brittle government is has sort of changed the kind of way textbooks treat things. I think if you looked at a textbook today versus, you know, 4050 years ago, it would be more sympathetic to markets than it was back. You mentioned this term constrained optimization. It sounded like you're kind of negative about what that what that means and what does that mean. Well, it simply means that that what what the fundamental insight of economics is that that we're always we have preferences there are things we'd like to do and think goals we'd like to accomplish, but we're always facing constraints. Our knowledge is scarce resources are scarce. Everything scares. Right. And so what we try to do is optimize, given our preferences and given those constraints what's the best we can do. And I think that, you know, as I've just stated it, I think that's perfectly fine. What it often becomes, you know, in the economics textbooks and economics courses, you can draw this up using calculus and you have to make all kinds of assumptions about the stability of people's preferences, and then everybody knows all the prices they face and someone right it just ignores the sort of rich uncertainty and complexities of actual human life when we try to model it in that strict way. But the basic insight that we're always, even though we're often uncertain about what our preferences might be and exactly what the constraints are. We still go through life, you know, facing that engaging in acts of constrained optimization. We probably don't actually optimize. We sort of muddle through somehow, but still thinking about how do I, you know, how do I get the most out of the situation that I'm in? What's what's the best course of action for me, given what I'd like to accomplish and given the constraints I face that's that's the basic economic attitude right there. We started this conversation with you saying that public's understanding of economics was, if not good, at least getting better. That said, the public gets a lot wrong. And so I wondered if you could tell us what you think like what are some of the kind of most pervasive or harmful or as an economics professor mistrating myths that the public believes about economics. Yeah. So a couple of things that would say here, I think that the two biggest global ones are not the belief that economic activity is a zero sum game. That that someone's bet when someone wins someone benefits that means someone else is losing and and so the flip side of that, not understanding that exchange is mutually beneficial and interactions and markets are mutually beneficial. I think that's the that at the fundamental level. That's that's a big one. I also think I can give you three. I think the second one is the belief that economies require some level of design and construction in order to be successful. Again, flipping it the other way and inability to see the possibility of what high called spontaneous order or undesigned or order or unintended order. And for me with students, I often work on that with, you know, sort of if you think biological evolution Darwinian evolution is correct, which I'm not convinced all of them do but let's assume that they do. Right. Right. You already understand what undesigned order is and you don't have a, you know, you are fine with it in the natural world. Right. This is just the social world story. Same, same kind of story. So you're advocating social Darwinism. I haven't got that one yet. And actually, the joke, of course, is anyone ever raised that right. The joke is that that historically it was the reverse right Darwin took that idea from the Scots. Right. So we should call biology, right, you know, natural Smithianism or something like that. Because he took it from them. I think the third one is a little more subtle one. And it's more of a macro one, but the idea that consumption drives the economy. Right. That if we just buy more stuff, things are better. Right. And that's just, that's just wrong. And it's wrong in the sense that what really ultimately matters is production, investment are what create well consumption, as the name suggests consumes it. But the other part of that is when we think about the business cycle, people say, oh, we have to get out of the recession by, you know, by beefing up consumption. Well, in fact, consumption is the least cyclical of all the components of GDP. Consumption stays fairly constant across the business cycle. All it goes up and down is investment. You know, you're in a recession when business people aren't investing. So the real secret to getting to avoiding business cycles is to not, you know, not have those changes in and problematic changes in investment. And if you're in a recession, you want policies that encourage firms to invest. So that's another one that I find. And that one is all over the popular media and sort of in people's heads that that when they buy stuff, they're doing a good thing for the economy. Now, you mentioned these three, which are sort of theoretical problems with how people are looking at different policy issues. But previously, you also mentioned inequality a couple of times, which I've noticed has become an accepted truth over the last 10 or so years that everyone has to acknowledge that inequality is increasing. But you said you've challenged that idea or at least it's not as simple as people think. Yeah. So what I like to say is, it's, it might be true that measured income inequality compared at two points in time is increasing. So given how we measure it, right, usually sort of some measure of household income. And if we compare, say 20 years ago with today and say, you know, what are the top 20% get today versus 20 years ago with the bottom 20% get by those kinds of measures. Yeah, I mean, I think there is inequality and measured that way, it's probably increasing. But that ignores a whole bunch of issues that we might want to think about here. One, it ignores income mobility. It's not the same people who are rich in year one as in year 20, and it's especially not the same people who are poor in year one as in year 20. So people frequently start out poor. And most people work their way out of poverty over the course of some number of years. So when we say, you know, inequalities increasing, it's not like the people who started rich are all of a sudden richer and the people who started poor are right. So, so that's the mobility questions part of it. The other question is what about absolute living standards as your, your Kato colleagues at human progress.org have so aptly demonstrated right, you know, poor and middle class Americans that I've contributed to this literature to live, you know, live way better than we did in the 1970s I'm old enough to remember the 1970s I know things are better and in fact poor Americans today by a number of measures live better in material terms than than American than average Americans did 40 years ago. So, even if it's the case that inequality is growing should that bother us if the real real ability of the poor to consume and to sort of have material goods and other sorts of things right is better than it used to be sort of why are we worried about inequality is another question and I think the last issue is to the degree it's true that inequality is increasing to what degree has that been the result of what we might call, you know, regressive regulations, things like zoning laws and occupational licensure and minimum wage and so on that that make it more difficult for for folks who start out poor to get richer and that, you know, sort of readjust and other kinds of policies that redistribute from the from the poor to the rich corporate bailouts and all those kinds of things. So I think, you know, when you start asking those kinds of questions, the inequality debate looks a lot more complicated than than the rich getting rich, poor getting poor. This question is fairly abstract. So let me see if I can try to make it make sense, but you earlier on you talked about how when we're kind of looking at the this economic way of thinking we're looking at people's preferences and they're trying to satisfy their preferences within a system of all sorts of constraints and scarcity. And so how are they going to behave? What decisions are they going to make? And so there's on that side of economics, there's a descriptive side. So you can as an economist, you can say, look, this is, you know, this is how I think the world works. And I can use that to describe phenomenon that are happening. But economists and that all the people in this building at Cato who do economics work are making normative assertions as well. They're saying like, not just this is how things work, but here's how they ought to work or here's how you, whether you're a policymaker or a person out another kind of person out in the world ought to behave. That those are all about if preferences vary, right? Like people, I have different preferences than you do and we can kind of talk about our preferences without valuing them differently. But in order to make these normative claims that economists make or when we say like we ought to free up markets, you know, and it's wrong to over-regulate or it's wrong to restrict people's economic choices or whatever, there's a value system at work there. And so how are we, what are those values? Is it simply just maximizing people's preference satisfaction is always good? And does that value then play into these kind of concerns that we have where we say, you know, like this is wrong for an economics standpoint, but maybe the public simply has a different, a set of different values. And so it's not wrong from the perspective of those values. Well, okay, so I think sort of trying to satisfy as many people's preferences as possible is part of the story, right? But I think we have to even maybe step back one more abstract from that, right? That the way I often put it is if we want a world of sort of peace, prosperity and social cooperation, that is, if we want a world of progress basically, if we want a world where, you know, human beings live longer and better and more fulfilled lives, if we want a world especially where we reduce the number of absolutely poor people, if we want all of those things, then what economics can tell us is what sets of institutions are most likely to produce those kinds of outcomes in general, right? So the normative part becomes, look, you know, to people who might sort of think that you need government intervention to do X, Y or Z, often the response is to say, well, okay, I understand the goal you want to achieve here, but the intervention is not going to achieve that goal. And in fact, letting markets work and under the right institutional framework is much more likely to achieve it. So, you know, take simple examples like rent control. If the idea is how do we make sure there's plenty of affordable housing for people? Well, rent control is not going to do that. It's going to create shortages. It's going to reduce the quality of housing. It's going to allow, give all the power to landlords, right? Because at any time you have a shortage of economy, the seller has power. Instead, right, if we want to think through how, you might say, I agree with your goal here, creating more affordable housing for people. But let's look at the ways in which, for example, the supply of housing is being restricted by zoning laws, by historical preservation laws, by all kinds of things, right? That NIMBY stuff that make it hard to create more housing and in so doing bring the price down. So just as an example, I think, you know, we can share those general goals and then the normative judgment comes in because one has that set of goals, that set of, you know, call moral values, whatever one wants to call them, right? And you can't escape that at some level. That that's always part of the story. And I think, you know, you pardon the argument for economists is if we want to achieve those things, here are the institutions and here are the practices we think are best to do that. Is that the kind of thing you were thinking about there? Yeah, I guess, I mean, so to give a kind of an example of where this we might, so we argue, you know, that we should, that increasing immigration brings with it often enormous positive economic growth and all sorts of other benefits. That, you know, a country that has much more liberalized immigration is going to be wealthier, see more economic growth, better labor markets and so on. And we say, you know, so therefore, if you want to restrict immigration, you're just hurting yourself, you're hurting the country. But those kind of economic arguments for immigration seem to depend on, you know, what people care about is increasing wealth. When it might be that they care about other things that they place, they place value in something other than economic growth and instead want, you know, solidarity or more of a static culture or certain values. Or, you know, we rail against, we rail against tariffs because tariffs look like, you know, just mind numbingly dumb economic policy. But maybe it's because we don't, we free marketers don't value, you know, American industry and the very fact that Americans are employed doing things, even if as a result we, you know, T-shirts are more expensive or whatever. Or, you know, staplers, it's good to have staplers made in Pennsylvania, even if those staplers are bad, simply because they're American staplers. And so that's where I guess I get to this question of value is that it feels like a lot of the time economists are simply saying to people either, you know, so on the one hand there's the argument you gave, which is, you know, you can take their values as they are and say, but you're mistaken about how to maximize those, how to fulfill those. You're getting the details wrong. But a lot of the time it also feels like economists are basically saying, well, those aren't things that you should value as much as you should value maximizing wealth. So two things about that. I think at some level, right, if someone makes the argument you just made, right, I want them to make that argument eyes wide open. I want them to look at me and say, yes, I think we should make staplers in America because having American industry is good. And I understand that it will impoverish many of my fellow citizens, and it will put them at each other's throats because they're fighting over a shrinking pie. But I think it's so important that I'm willing to pay that price. If someone says that to me, I can't argue with them, right, because they're not wrong, you know, that is a value judgment, right, their value saying they prefer those other things to, you know, to the peace prosperity and social cooperation. So, you know, at that level, I can't, you can't. And again, you know, Mises made this point too, right, where he said if someone doesn't, isn't interested in those other good things, you're never going to, you can't persuade them of, you know, that your means are the right means to that end. I do think another point, though, that's worth mentioning here is, you know, you can't eat GDP, right, but you got to have many of the other things that people often say they value are possible because we have a materially progressing economy. Right. We talk, we, you know, we talk about how much we value people's health, right, but, but unless you got in the broad sense of the term economic growth, you can't get the resources, you won't get the innovation to provide the medicines and so on that that can cure diseases and keep people healthy. So in that sense, right? And I do think many economists make the mistake of sounding like material stuff is the end point. That's the goal. But for me, it's, it's, it's those that that even that is a means to these other kinds of things and I love the word progress here. I think the word progress, even though we can't often define it very precisely, maybe like pornography, we know it when we see it, but, but that's the thing, right? We, you know, progress means, to me means, means getting better at all those things that human beings care about. Another thing that economists often discuss is how the price system lets goods go to their highest and best uses in many ways that if someone really wants to purchase some piece of land to put a factory on it, that demonstrates that it's the highest and best use of that land over a different use of the land. But does money really actually correlate to those kind of values? This goes with Aaron's question. If, if Rush were to announce a concert and come to your hometown to play and you're a huge Rush fan and you would want to get in line to buy Rush tickets, but also you make mistakenly bet on Michigan to get in this college football playoff. So you lost all of your money. I'm just, yeah, I'm doubling down on this. So you lost all of your money. You literally have no money. And so you can't buy a Rush ticket, but you are actually the biggest Rush fan. Rush tickets are not going to the biggest Rush fans and they're going to people who have a lot of money who may not be the biggest Rush fans. So is that, is that a just way of distributing something like Rush tickets or something else like food where we're not, we're distributing it by how much money you have and not by how much you actually need it or want it? Right. So, all right, when I teach this sort of idea and intro, it's great to loop us back to where we're talking more concretely about teaching. What I teach this, what I teach about the role that prices play as sort of, you know, allocators in the way that we're talking about. One of the things I do is I say to the class, look, let's think about all the ways that we could allocate resources. Right. Prices are one, right. Paying money for something is one. I said, imagine we have a big pile of stuff in the middle of the floor here. Right. How can we divide it up? How can we determine who gets it? And, you know, they'll quickly come up with some ways, right. We can, we can distribute it randomly. We could, you know, is, as your driver's license and an even or an odd number, we could have you line up. Right. That's another one we could, we could ask you to write an essay about why, you know, why you're the world's biggest Rush fan, right. Why you deserve this. Right. We could talk about some notion of need. Or, you know, we could also play Fight Club. Right. I just say, you know, come get it. Right. And, and, and you guys could come down here and, and, you know, get into a big old rumble over it too. And one of the things I say is all of those are at least potential ways of allocating resources. In that sense, none of them are wrong. Okay. They have costs and they have tradeoffs. Right. I mean, you know, people who can afford to wait in line will benefit from the line waiting system. People who have much more brute strength than I do will benefit from Fight Club. Right. Although I do point out to them, you know, if you go with Fight Club, the first thing people are going to do is spend lots of resources on baseball bats and right, whatever, you know, and suddenly we're, we're, we're getting very costly, a very costly allocation system. Whatever the costs and benefits of all of those, using prices to allocate resources, whatever flaws it has, and you've identified one, right, you might have a deep desire for something, but if you don't have the money, you can't express that in the way in the, in the lingua franca, right, in the way that matters. But the huge advantage of the price system is, unlike all the rest of them, the price system also encourages people to supply more of it. Right. When, when prices change and when people are willing to pay a high, you know, a lot for something that sends a signal that encourages greater supply, even in my example, right. You know, I assume that there was this pile of stuff on the floor that we're going to allocate, which leaves open the question, where's the next pile of stuff going to come from. And the price system solves both of those problems. It helps us allocate the existing pile of stuff and helps us, gives us an incentive to create more. One of its flaws is what you've identified. But, but a system that did what, you know, even as much as I might think that I would have the most, you know, powerful claim for front row tickets to this imagined rush concert, even if I couldn't afford it because I'm such a long time devoted fan, right. You know, that certainly, that's a, you know, I might imagine again myself having that, right. But that's not going to make, that doesn't make rush tickets appear, right, in the way that being willing to pay for them does willing and able to pay for them does. So yeah, I mean, it's a problem with allocating by price and by monetary exchange. But that's a, I think that's a smaller problem than the problem that problems that all those other systems face. Continuing this topic of economic education, we've, we've talked throughout this episode about you teaching students. But, but there's also, I mean, you're now economic senator for Libertarianism.org, you know, we at the Cato Institute are trying to communicate these ideas to, to the broader public, not just university students. And we're trying to do it from this obvious perspective of economic liberalism, of pro free markets, of Libertarianism. So there are there, I guess, what do we as Libertarians are the things that we do wrong when we're communicating these ideas? Are there ways that we could be better at communicating economic ideas? Yeah, I think, you know, we're still, I want to put this carefully, we're still overly plagued by the rant and virus. That was the careful way of putting it. Libertarians tend to talk about free markets and economic ideas, sort of in terms of both the heroic individual or the markets enable me to get the stuff I want, right, that kind of way of talking, or, and not, again, moving away from, from, from, ran, or, or, as we were talking about before, or in terms of this sort of very materialistic kind of measure of things. And I think, I think we would do ourselves a better favor. If we were to do a couple of things, we'd be better off talking about, again, economics as this realm of human choice, where we all have different preferences, different knowledge, we're all facing constraints, and we're all trying to talk to each other and figure out how to make the best use possible of the, of the stuff, the limited stuff that we have, right? That's, that's the challenge, right? It's, it's figuring that out. And also framing that in terms of the reason we think that markets work well and that one needs to understand economics so that one can appreciate that is precisely because it's about these questions of progress and particularly these questions of progress for the least well off. I mean, we have one of the most amazing accomplishments of the last couple of decades is the dramatic drop in global poverty. And I have no doubt that that is due to the general sort of freeing of economies across the globe, in particular freeing of trade across the globe, right? Has, has, has, has just, if you brought someone back from 30 years ago, it's incredible what's happened, right? And sort of reminding, as libertarians, reminding people that the reason we care about freedom in general, but certainly the reason we care about economic freedom and economic liberalism, is because it improves people's lives and both, and disproportionately improves the lives of, of, of the least well off among us. And so I think there's a, there's a rhetorical, there's some rhetorical challenges there that, that we're not always really, really good about. And one other thing I should mention too, I think there is a tendency among libertarians when they talk about economics to separate the world into, you know, kind of Austrians and some Chicago school economists over here and everyone else is a Keynesian socialist over there, right? And, and it's just so, it's so frustrating the way in which, you know, libertarians are quick to demonize and sort of overly simplify. What are, what are more complicated things than that? I mean the, you know, just, there's plenty of non-Austrian, non-Chicago economists out there who are appreciative of markets and who are not in fact Keynesians, those are sort of orthogonal to each other. I even saw on Facebook today, you know, apparently Krugman's doing this online course of some sort, right? And someone I think was joking, but I never know, but between libertarians and my Facebook, I never know. But sort of said, oh, wouldn't it be kind of cool to get some libertarian friends together and take this class and, you know, and sort of suggesting that they would, you know, be critical of Krugman. We probably get thrown out, right? And I'm like, guys, you would be the first ones yelling if a group of students walked into my classroom and did that to me. Why, why, you know. The guy's got a Nobel Prize for a reason. His New York Times columns are terrible. Yeah, he's become a partisan ideologue. Yes. But he actually seriously contributed to our economic understanding and poppin' a nationalism is a great book. So, you know, that kind of stuff, as you can see my blood pressure starting to rise. That kind of stuff drives me crazy when, in fact, there's another meme out there. I think it's a Homer Simpson one, right? And it seems sort of lying in bed with a smoke and a cigar and a caption, something like, what libertarians are like after they read one economics book, right? Suddenly they know everything. No, you don't. You don't. And I know your heart's in the right place. And I'm glad that you think economic freedom is important. But in fact, you just, you know, you probably don't know as much as you think you do. And you need a little bit of humility just to sort of be willing to sort of understand that it's probably more complicated than you think it is. With all of that in mind, let's turn to this new role that you have taken on as economics editor at libertarianism.org, which as I said at the beginning is kicking off this month. Can you tell our listeners what your goals are as economics editor and maybe what they can expect to see? Yeah, I think what I would like, what I'm asking people to contribute, let's put it that way. And so that I think reflects the vision, is I want that site to be able to do one thing mostly in a second thing a little bit. And basically to explain and explore key economic concepts in a way that's accessible and useful to precisely the kind of people we were just talking about, right, sort of, you know, libertarians who are not especially knowledgeable about economics but genuinely want to learn more. And so this is, you know, primarily an exercise in understanding a concept from economics, understanding something about the history of economics, that's the story we were talking about a little bit earlier. You know, and I think there's space in there too for application type pieces. But for me, the focus of even of those would be on making sure we understand the principle or we understand the concept or we understand how economists talk about these things. And all with an eye towards why does this matter for people who care about economic liberty. I hope, you know, and I'm encouraging my contributors to sort of write in a way that while the liberty content is clear, it's not so heavy handed and overwhelming that these things couldn't be useful in the classroom, right? Because I think, you know, good economists who can write well and write something like this, that becomes a piece on the web that can be shared in ways that I think would be really useful and that students might really get a lot out of. I expect these to be in that sense somewhat didactic, but I'm hoping to get writers who are also outstanding teachers and who can explain these concepts in clear and accessible and clever ways with excellent illustrative examples. And we'll do, you know, I think some of them will be sort of short blog postie op-ed length type things, you know, 800 words. But I have some ideas for longer form pieces that I hope I can see appear in the next, over the next bit. So yeah, I think it'll be a wide range of stuff. But I think of it as a resource for libertarians who want to expand their knowledge of economics and want it in a form that again is clear and accessible. Thanks for listening. Free Thoughts is produced by Tess Terrible. If you enjoyed today's show, please rate and review us on iTunes. And if you'd like to learn more about libertarianism, find us on the web at www.libertarianism.org.