Modern Meditations: Tyler Cowen

What would you be doing if you didn’t work as an economist?

Well, in a way, I am already doing it. I work as what you might call a publisher, which is what my father did, actually. He published a business magazine, the Chamber of Commerce Business Magazine of New Jersey. It’s not something you should expect to know, but it made him good money, and he did a lot of it himself. My mother helped him. I grew up watching his work, so maybe it’s in my blood somehow.

I never considered following his footsteps while I was growing up. I thought, “Well, I’m an economist, an academic, a writer.” Those things are still true, but somehow, I’m also a publisher. Today, I publish a blog, release podcasts, and post videos for Marginal Revolution University. My second career has become a big part of my first career. If you want to predict your future thirty years from now, consider your father’s life.

By the way, this question reminds me of another one someone asked me recently: “What would you be doing if you were considerably stupider than you are but ultimately the same person?” My only response was, “I am!”

Which current or historical figure has most impacted your thinking?

I’d have to cite any number of very well-known economists, such as Adam Smith, Friedrich Hayek, and Milton Friedman. I read these people early in life, and they shaped what I’ve done. Between the three of them? It’s a toss-up. The clear pick is the collective impact of market-oriented economic thought, as expressed by a few leading economists.

I started reading Friedman when I was about 13 or 14. Then, Hayek and Smith. I was trying to read everything at the time – I would go to the public library and try to figure things out. What I liked about their writing was that it was a framework for making sense of the world. When you’re 13, so much of the world is new to you. I read a lot of Plato and Nietzsche then, too, and it had the same charm but was less practical from a career perspective.

I also read a lot of science fiction, which offers different frameworks for understanding the world. Economics and sci-fi are not entirely unrelated, by the way. Economics is not outright false, but a model is a kind of fiction. You hope it’s a useful one. It tells a story and creates an imaginary set of relationships.

Science fiction is just a very weird and wacky economic model that you know isn’t true now but has some small chance of being true in the future. But it’s a model nonetheless – like the “three laws” in Asimov’s “I, Robot!” That’s an economic model.

What is the most significant thing you’ve changed your mind about over the past decade?

It might be this: In 2007, I didn’t think there was much of a housing bubble. Maybe prices were a little too high, but I wasn’t panicking about it. Then 2008 and 2009 came, and everyone started saying, “Oh my goodness, there’s a housing bubble!” Our financial system almost fell apart, and I started signing on to the view that there had been a housing bubble.

The way prices have evolved over the past ten years indicates that the original 2007 prices were not a bubble. So, I’ve swung back to my earlier view. There was some kind of strange collective panic in 2008 and 2009, but most of the prices have been validated or even exceeded.

Back then, everyone said, “Oh, we built too many homes!” And today, everyone says, “Oh, we haven’t been building enough homes!” Not that many people have raised their hand and said, “Wait, both of these can’t be true.” Homes are pretty durable. Did we build too many homes outside of Orlando? Yes, we did. But for the most part, building more homes was the correct decision.

The shadow banking system was the more fundamental reason for the global financial crisis. Hardly anyone understood it. When people woke up and realized that that system didn’t necessarily have all the proper safeguards – and it didn’t – they panicked. They didn’t have to panic, but they did, and things came close to falling apart.

So, I changed my mind about that twice – maybe the third time is yet to come.

What risk are we radically underestimating as a species? What are we overestimating?

We’ve been underestimating the risk of nuclear war since 1989. I wouldn’t say it’s particularly high, but you keep playing the game again and again. It could happen at some point with enough years, which is scary. Nuclear weapons haven’t been used since 1945, so there’s no recency bias to support that fear.

Pandemic risk is still undervalued. I thought COVID would change that; I fear it hasn’t. Historically, pandemics are frequent. We had HIV/AIDS that killed 35 million people, but because of the distribution of those deaths, it did not knock enough sense into the mainstream. Then, with COVID, you have a polarized reaction. You have crazy people who jog outside with a mask on – that’s just absurd. Then you have the people who pretend it’s just like a flu – and that’s also absurd. We haven’t really processed it and gotten our act together.

I think we’re overestimating the risks to American democracy. The intellectual class is way too pessimistic. They’re not used to it being rough and tumble, but it’s been that way for most of the country’s history. It’s correct to think that’s unpleasant. But by being polarized and shouting at each other, we actually resolve things and eventually move forward. Not always the right way. I don’t always like the decisions it makes. But I think American democracy is going to be fine.

Polarization has its benefits. In most cases, you say what you think, and sooner or later, someone wins. Abortion is very polarized, for example. I’m not saying which side you should think is correct, but states are re-examining it. Kansas recently voted to allow abortion, and Arizona is in the midst of a debate. Over time, it will be settled—one way or another. Slugging things out is underrated.

Meanwhile, being reasonable with your constituents is overrated. Look at Germany, which has non-ideological, non-polarized politics. They’ve gotten every decision wrong. Their whole strategy of buying cheap energy from Russia to sell to China was a huge blunder. They bet most of their economy on it, and neither of those two things will work out. They also have no military whatsoever. It’s not like, “Ok, they don’t spend enough.” They literally had troops that didn’t have rifles to train with and were forced to use broomsticks.

Germany is truly screwed and won’t face up to it. But when you listen to their politicians speak – and I do understand German – they always sound intelligent and reasonable. They could use a dose of polarization, but they’re afraid because of their history, which I get. But the more you look at their politics, the more you end up liking ours, I would say.

What craft are you spending a lifetime honing?

Shooting a basketball. I’ve done that for the longest, outside of eating and breathing. I’m just not very good at it.

I started doing it when I was about eight. We moved close to a house with a hoop, and all the other kids would gather there and play. It was a social thing, and I started doing it. I kept it going in all the different places I’ve lived. The only country I couldn’t keep the habit going was Germany. But when I was living in New Zealand, I made a special point of it. It’s good exercise, it’s relaxing, you get to be outside. It’s a little cold today, but I did it yesterday, and I’ll do it tomorrow.

It’s important to repeatedly do something you’re not that good at. Most successful people are good at what they do, but if that’s all they do, they lose humility. They find it harder to understand a big chunk of the world that doesn’t have their talent or is simply mediocre. It helps you keep things in perspective.

I’m not terrible at it. I have gotten better, even recently. But no one would say I’m really good.

What do you consider your greatest achievement so far?

Survival. I’m sixty-two!

I’m serious. I’m here. Everything else pales in comparison. That means I never have a bad day. Every day I’m happy. The bad day, when it comes…I won’t be around to mourn it.

I haven’t adopted that perspective from studying certain philosophies – it’s just temperamental. I don’t think reading philosophy generally changes people at their core. It helps them find what they were to begin with. Which is useful! But people who are truly stressed and read, say, the Stoics, are still truly stressed. They might even stress more. It’s like, “Shit, I’m supposed to be relaxing! My goodness!”

What is your most contrarian, high-conviction opinion?

I don’t know what’s contrarian anymore. I would say my contrarianism consists of being quite normal.

For example, I wrote a blog post recently saying I thought the security procedures at American airports were more or less right, and I got a lot of blowback. On the one hand, that’s the most mainstream opinion you can have, but it’s also a view people will hate you for. Is that “contrarian?” Is that “normie?”

What piece of art can you not stop thinking about?

The room I’m sitting in now has about 15 pieces of art on the wall. One is by David Burliuk, the leader of the Ukrainian avant-garde movement in the 20th century. Another is by a Russian artist named Ivan Bilibin. Many of the others are from Mexico and Haiti. I don’t stop thinking about any of them.

I’ve spent a lot of time studying Mexican art and wrote a book about it. I’m pretty sure I have the best collection in the world from Guerrero in central Mexico. It’s been rewarding to have studied and enjoyed the region’s art over a long period.

My obsession began in 1996 when I visited an art dealer to buy some Haitian pieces. On his wall, he had some works from this village in Mexico. I fell in love with them. I liked how medieval they looked. They vertically stacked perspective and used color in unusual and surprising ways. They felt very emotional and authentic to me – they were about actual human lives, people being born and dying, worshiping gods, growing food. It was very different from most contemporary art in the United States.

I wanted him to sell them to me, but he refused. He wanted to keep them for himself. I kept asking and eventually said, “Well, how can I get other works like these?” He said, “No one sells them anymore. So I guess you’ll just have to go there.” Then he cackled as if no one would be crazy enough to do that.

The village was very remote. The last 20 miles of the trip took four hours at that time. There were no road markings, so it was very difficult to get there. For me, that was an exciting challenge. I wanted some of the work and an adventure. I started going there and eventually wrote my book about it.

As it turned out, it was also a good way to learn about economic development and see it up close. Food, immigration issues – I learned so many things there.

What trait do you value most highly in others?

Like, really value? That they’re interested and curious and that they like me. That’s the honest answer!

I don’t think I insist they have to be good people in all ways. People might tell you that, but it wouldn’t be my answer. They can’t be Hitler or close to Hitler. But that would be my answer.

What are you obsessed with that others rarely talk about?

Mexican art is an obvious one. A lot of what I’m obsessed with, people talk about: reading social science books, history. It’s not that the mass public is doing it, but it’s not obscure. I love to travel, I enjoy the NBA, and I follow chess online. That’s now become very popular, which has surprised me. My obsessions are not very obscure.

In terms of the NBA, I like most teams. At the moment, I’m rooting for Denver because I like Jokić. I think Luka [Dončić] is overrated, but I’m willing to change my mind if he shapes up and distributes the ball more and plays off the ball better. I think he will over time. Ultimately, there are few absolute villains in my basketball universe.

What contemporary practice will our descendants judge us for most?

Well, I think our descendants may be worse than we are. So perhaps they’ll be amazed by how moral we were: how much we gave to charity, how many grant projects to better the world we created, funded, and saw through, and how peaceful we were so much of the time.

It seems like we’re at a very good period in human history where lives are so good. I wouldn’t say I’m a pessimist, but it seems easier for some things to get worse rather than better. There could easily be more war. Except for a few countries like Mauritania, there’s really not much slavery in the world. Historically, that’s very rare. If you look at tolerance for gay people in most of the West – again, it depends on the country – it’s the highest it’s ever been in all of world history, as far as I can tell. There’s a lot of room for our moral condition to worsen.

People say things like, “Oh, they’ll be shocked we ate animals.” I don’t think that at all. I think we’re programmed – perhaps incorrectly – to believe that eating animals is ok. Most people just do it, and I doubt it will ever change.

What will the next generation use that is unimaginable to us today?

They’ll grow up with what I call the “AI teddy bear,” which they’ll probably speak with more than other humans. It will teach them all kinds of things. It will comfort them. It may not be good in every way – I understand that. And I find it hard to imagine what kind of childhood that will create, but we’re going to see it soon. I would think that product is less than two years from coming to market and it will continue to get better.

An AI teddy bear will multiply the quality of your parents both positively and negatively. Parents will have the pre-emptive ability to instruct the teddy bear, and most will do so for good ends. But not all will. Some will try to brainwash their kids religiously or politically. They’ll use the teddy bear to be overly strict or let their kids look at porn too early in life. If you have bad parents, you’ll be really screwed because they’ll program your AI teddy bear to screw you up even more. The virtue of bad parents today is that they often leave their kids alone. That’s not ideal, but in some ways, it does minimize harm.

It’s scary to imagine what something like an AI teddy bear might do, even if, on balance, I think it’s quite good.

If you had the power to assign a book for everyone on Earth to read and understand, which book would you choose?

I think it has to be the Bible. Both testaments.

To be clear, I’m not religious. I don’t believe in god. But I think if the world were more Christian, that would be a better world. If I look at the population growth in Africa, as people shed older tribal religions, I think they’re more likely to ally with the West if they’re Christian.

What other book is really going to matter? The Bible has stuck around for a long time. How many other books have that staying power?

There are ancient Indian texts, which are wonderful. Those seem very culturally specific to India, which is not a complaint. But as marketing tools, I don’t think they’re going to sway Africa as much.

The Quran is a wonderful, beautiful book, but ultimately, at the margin, you would prefer more Africans to be Christian rather than Muslim. It’s not a question of one religion being better than the other. It’s just that Christians are more likely to ally with the more capitalistic, more democratic West. That’s what is important to me.

By the way, the Quran is quite underrated by non-Muslims, in my opinion. Most of them have never read any of it. I suppose you can’t even say they underestimate it; they’re not even estimating it. If you are going to read it, I think it’s very important to hear oral Quranic recitals. That gives you a better feeling than reading it in English. I’ve read it three times, but when I spent time listening to recitals, a lot clicked for me. It’s music, it’s poetry, it’s beautiful. In English, it’s not beautiful.

How will future historians describe our current era?

Do you mean the past ten years or the next ten years?

I think the past ten years will be seen as a transition. We had this period in American history from the 80s through, say, Obama, where there was a lot of stasis. I wouldn’t say that not much happened, but lives broadly stayed the same. What America was and did broadly stayed the same. It was extremely peaceful for the most part.

That ended in the last ten years. The time we all felt it was when Trump was elected, but I think that was misleading. We all thought, “Oh my goodness, everything’s different now.” And ok, it was. But really what I think is changing is that technology is accelerating again with AI and biomedicine. That’s the more fundamental change that would be happening with or without Trump or if Hillary had won or if Biden had been nominated instead of Hillary in 2016. We still would’ve ended up in some very volatile set of circumstances.

We haven’t yet seen what we’ll get in its place. Looking forward, I think we’ll have more volatility, less like Reagan through Obama. An awful lot of history is just volatile. I think we’re back in “normal history,” and that’s terrifying.

It reminds me of England in the 17th century. The printing press became important, calculus was discovered, the scientific revolution took place, millenarian thought became popular, and there were all these different sects and polarization. It was a period of immense breakthroughs, but there was also a lot of war and turmoil. It was a critical time period for humanity bettering itself, but my goodness, you wouldn’t want to live in it.

War is rising in frequency. For a while, it was falling, falling, falling, and then Steven Pinker published his wonderful book [The Better Angels of Our Nature], which I loved, but even at the time, I feared it was wrong. Since the book came out, it has just been going up. The big flash point is China-Taiwan, but there are plenty of other hotspots: Russia-Ukraine, Azerbaijan-Armenia. We’ll see how it goes with Congo. Six hundred thousand people died in the Ethiopian civil war – that was quite unnecessary. It’s scary, and on average, it’s getting worse.

What was the last piece of media you found exceptional?

It’s a CD called “I Disagree” by an artist named Poppy. I don’t know if it’s a he, she, or they. Whoever they are, they have a cult following but aren’t well-known. I thought the CD was fantastic. The melodies are extremely good. In terms of genre, it’s very odd – some of it feels metal, some of it is influenced by Queen, some of it is influenced by electronica, and it’s changing a lot. It doesn’t make sense when you listen to it; you can’t place it. The first time I heard it, I was just disoriented, but in a way that made me want to return for more. To do things across, between, melding genres – and pulling it off – was very impressive, I thought. I liked it so much that I ordered two other Poppy CDs.

The last movie that made an impression on me I watched two nights ago. It was Steven Spielberg’s Duel. It was his first movie, made for TV. I saw it as a kid when it first came out. I was maybe 10, I don’t know, and I loved it. No one knew who Spielberg was at the time – he wasn’t Spielberg yet.

I thought, “I should rewatch it.” I watched the whole thing, and it’s just amazing. It holds up. It’s a very Hitchcockian movie in the way the suspense builds, how little explicit action is required, how passersby or random individuals interact with the main storyline and shed light on the narrative. It’s also a very American movie. The notion that America is going to become extremely neurotic is in that film.