Great Throughts Treasury

"Markets are not just about the steam engine, iron foundries, or today?s silicon-chip factories. Markets also supported Shakespeare, Haydn, and the modern book superstore. The rise of oil painting, classical music, and print culture were all part of the same broad social and economic developments, namely the rise of capitalism, modern technology, rule of law, and consumer society."

"Most of us are not pure self-starters; most people need role models, they need coaches, they need exemplars, they maybe need some discipline or some rewards. We need to be motivated."

"Most Web activities do not generate jobs and revenue at the rate of past technological breakthroughs. When Ford and General Motors were growing in the early part of the twentieth century, they created millions of jobs and helped build Detroit into a top-tier U.S. city. Today, Facebook creates a lot of voyeuristic pleasure, but the company doesn?t employ many people and hasn?t done much for Palo Alto; a lot of the work is performed more or less automatically by the software and the servers. You could say that the real work is done by its users, in their spare time and as a form of leisure. Web 2.0 is not filling government coffers or supporting many families, even though it?s been great for users, programmers, and some information technology specialists. Everyone on the Web has heard of Twitter, but as of Fall 2010, only about three hundred people work there."

"My view of the internet is that it is way overrated in what it?s done to date but considerably underrated in what it will do."

"Newton expected no money from establishing his originality but rather desired recognition for his excellence."

"Most restaurants in most cities, including Washington, are at a sort of mid-level. They're somewhat trendy, or they have some sort of gimmick, or they're somewhat expensive. And they make a lot of money off drinks. I tell people don't go to most of them, unless your goal is just to socialize."

"One interesting thing about cognitive biases - they're the subject of so many books these days. There's the Nudge book, the Sway book, the Blink book, like the one-title book, all about the ways in which we screw up. And there are so many ways, but what I find interesting is that none of these books identify what, to me, is the single, central, most important way we screw up, and that is, we tell ourselves too many stories, or we are too easily seduced by stories. And why don't these books tell us that? It's because the books themselves are all about stories. The more of these books you read, you're learning about some of your biases, but you're making some of your other biases essentially worse. So the books themselves are part of your cognitive bias. Often, people buy them as a kind of talisman, like "I bought this book. I won't be Predictably Irrational." It's like people want to hear the worst, so psychologically, they can prepare for it or defend against it. It's why there's such a market for pessimism. But to think that buying the book gets you somewhere, that's maybe the bigger fallacy. It's just like the evidence that shows the most dangerous people are those that have been taught some financial literacy. They're the ones who go out and make the worst mistakes. It's the people that realize, "I don't know anything at all," that end up doing pretty well."

"Often, economists spend their energies squabbling with one another, but arguably the more important contrast is between our broadly liberal economic worldview and the various alternatives - common around the globe - that postulate natural hierarchies of religion, ethnicity, caste and gender, often enforced by law and strict custom."

"Once you're using sides and sauces you're on the right track and you're also following the general principles about how to eat well in the United States."

"One of the major Lockhart restaurants, Kreuz Market, ships to anywhere in the continental United States."

"Presidents always want to do nice, noble, long-run things, and Congress is less keen to do so. We've seen that throughout the history of this country."

"Our love of art is often quite temporary, dependent upon our moods, and our love of art is subservient to our demand for a positive self-image. How we look at art should account for those imperfections and work around them."

"Our time and attention is scarce. Art is not that important to us, no matter what we might like to believe? Our love of art is often quite temporary, dependent upon our moods, and our love of art is subservient to our demand for a positive self-image. How we look at art should account for those imperfections and work around them. Keep in mind that books, like art museums, are not always geared to the desires of the reader. Maybe we think we are supposed to like tough books, but are we? Who says? Many writers (and art museums) produce for quite a small subsample of the? public."

"So as an alternative, at the margin (again, no burning of Tolstoy), just be a little more messy. If I actually had to live those journeys and quests and battles, that would be so oppressive to me! It's like, my goodness, can't I just have my life in its messy, ordinary - I hesitate to use the word - glory? It's fun for me - do I really have to follow some kind of narrative? Can't I just live? So be more with comfortable with messy. Be more comfortable with agnostic, and I mean this about the things that make you feel good. It's so easy to pick a few areas you're agnostic in, and then feel good about like, "I'm agnostic about religion, or politics." It's a kind of portfolio move you make to be more dogmatic elsewhere, right? Sometimes, the most intellectually trustworthy people are the ones who pick one area, and they're totally dogmatic in that. So pig-headedly unreasonable you think, "How can they possibly believe that!?" But it soaks up their stubbornness, and then on other things, they can be pretty open-minded. So don't fall into the trap of thinking because you're agnostic on somethings, that you're being fundamentally reasonable about your self-deception and your stories and your open-mindedness."

"Social systems proceed by (usually) covering up the brutalities upon which they are based. The doctor doesn't let you get to his door and then turn you away, rather his home address is hard to find. The government handcuffs you so they don't have to shoot you trying to escape. And so on."

"Real cultural diversity results from the interchange of ideas, products, and influences, not from the insular development of a single national style."

"So if I'm thinking about this talk, I'm wondering, of course, what is it you take away from this talk? What story do you take away from Tyler Cowen? One story you might take away is the story of the quest. "Tyler came here, and he told us not to think so much in terms of stories." That would be a story you could tell about this talk. It would fit a pretty well-known pattern. You might remember it. You could tell it to other people. "This weird guy came, and he said not to think in terms of stories. Let me tell you what happened today!" and you tell your story. Another possibility is you might tell a story of rebirth. You might say, "I used to think too much in terms of stories, but then I heard Tyler Cowen, and now I think less in terms of stories!" That too, is a narrative you will remember, you can tell to other people, and it may stick. You also could tell a story of deep tragedy. "This guy Tyler Cowen came and he told us not to think in terms of stories, but all he could do was tell us stories about how other people think too much in terms of stories." So, today, which one is it? Quest, rebirth, tragedy? or maybe some combination of the three? I'm really not sure, and I'm not here to tell you to burn your DVD player and throw out your Tolstoy. To think in terms of stories is fundamentally human. There's a Gabriel Garc¡a M rquez memoir, Living to Tell the Tale, that we use stories to make sense of what we've done, to give meaning to our lives, to establish connections with other people. None of this will go away, should go away, or can go away. But as an economist, I'm thinking about life on the margin. The extra decision: should we think more in terms of stories, or less in terms of stories? When we hear stories, should we be more suspicious? and what kind of stories should we be suspicious of? Again, I'm telling you it's the stories that you like the most, that you find the most rewarding, the most inspiring. The stories that don't focus on opportunity cost, or the complex, unintended consequences of human action, because that very often does not make for a good story. So often a story is of triumph, of struggle; there are opposing forces, which are either evil or ignorant; there is a person on a quest, someone making a voyage, and a stranger coming to town. And those are your categories, but don't let them make you too happy."

"So what are the problems of relying too heavily on stories? You view your life like "this" instead of the mess that it is or it ought to be. But more specifically, I think of a few major problems when we think too much in terms of narrative. First, narratives tend to be too simple. The point of a narrative is to strip it way, not just into 18 minutes, but most narratives you could present in a sentence or two. So when you strip away detail, you tend to tell stories in terms of good vs. evil, whether it's a story about your own life or a story about politics. Now, some things actually are good vs. evil. We all know this, right? But I think, as a general rule, we're too inclined to tell the good vs. evil story. As a simple rule of thumb, just imagine every time you're telling a good vs. evil story, you're basically lowering your IQ by ten points or more. If you just adopt that as a kind of inner mental habit, it's, in my view, one way to get a lot smarter pretty quickly. You don't have to read any books. Just imagine yourself pressing a button every time you tell the good vs. evil story, and by pressing that button you're lowering your IQ by ten points or more."

"Some Google employees have their self-driving vehicles take them to work. These car robots don't look like something from 'The Jetsons'; the driverless features on these cars are a bunch of sensors, wires, and software. This technology 'works.'"

"Sports is remarkably cognitive. I think it's underrated just how smart it is. Actually, if I had more time, I would spend more time with sports. Watching it, reading about it, I think it's oddly underrated."

"The Christian right, which trumpets the theme of family values, damns contemporary culture for undermining older traditions. Yet many individuals from this camp are not concerned first and foremost about family values per se. Family is a code word for constraint; families and family values place constraints on individuals more effectively than any other institution, including government. The Christian right seeks a society in which all are constrained; they reject big government for failing at constraint, and for undermining those institutions, like the family, that have a chance at succeeding."

"That?s understandable, but it also shows we are a bit intolerant of alien intelligences."

"The iPhone is made on a global scale, and it blends computers, the Internet, communications, and artificial intelligence in one blockbuster, game-changing innovation. It reflects so many of the things that our contemporary world is good at - indeed, great at."

"The fourth and final step is that the human isn?t needed much at all because the program on its own is so strong."

"The key questions will be: Are you good at working with intelligent machines or not? Are your skills a complement to the skills of the computer, or is the computer doing better without you? Worst of all, are you competing against the computer?"

"The lesson about food is that the most predictable and the most orderly outcomes are always not the best. They are just easier to describe. Fads are orderly. Food carts and fires aren't. Feeding the world could be a delicious mess, full of diverse flavors and sometimes good old-fashioned smoke."

"The more extreme conservatives will embrace religion and nationalism to a higher degree."

"The right wing will be identified with the monied class, even when the left often has more money. And the left wing will be identified as the whiners, even though the right at times whines as much or more. You might say that both sides are monied, high human capital whiners, on the whole."

"The 'low' quality of many American films, and of much American popular culture, induces many art lovers to support cultural protectionism. Few people wish to see the cultural diversity of the world disappear under a wave of American market dominance."

"There was a study done, we asked some people to describe their lives. And when asked to describe their lives, what's interesting is how few people said, "mess". It's probably the best answer; I don't mean that in a bad way. "Mess" can be liberating, "mess" can be empowering, "mess" can be a way of drawing upon multiple strengths. But what people wanted to say was, "My life is a journey." 51% wanted to turn his or her life into a story. 11% said, "My life is a battle." Again, that's a kind of story. 8% said, "My life is a novel," 5% "My life is a play." I don't think anyone said, "My life is a reality TV show." Again, we're imposing order on the mess we observe, and it's taking the same patterns, and when something is in the form of a story, often we remember it when we shouldn't. So how many of you know the story about George Washington and the cherry tree. It's not obvious that's exactly what happened. The story of Paul Revere, it's not obvious that that's exactly the way it happened. So again, we should be suspicious of stories. We're biologically programmed to respond to them. They contain a lot of information. They have social power. They connect us to other people. So they're like a kind of candy that we're fed when we consume political information, when we read novels. When we read nonfiction books, we're really being fed stories. Nonfiction is, in a sense, the new fiction. The book may happen to say true things, but everything's taking the same form of these stories."

"This book is far from all good news. Being young and having no job remains stubbornly common. Wages for young people fortunate enough to get a job have gone down. Inflation-adjusted wages for young high school graduates were 11 percent higher in 2000 than they were more than a decade later, and inflation-adjusted wages of young college graduates (four years only) have fallen by more than 5 percent. Unemployment rates for young college graduates have been running for years now in the neighborhood of 10 percent and underemployment rates near 20 percent. The sorry truth is that a lot of young people are facing diminished job opportunities, even several years after the formal end of the recession in 2009, when the economy began to once again expand after a historic contraction. Many people are seeing the erosion of their economic futures. The labor market troubles of the young?which you can observe in many countries?are a harbinger of the new world of work to come. Lacking the right training means being shut out of opportunities like never before. At the same time, the very top earners, who often have advanced postsecondary degrees, are earning much more."

"The way to make the world a better place, through your eating, is simply to eat a bit less meat. Local is sometimes good, sometimes bad. But even when it's good, its environmental impact is relatively small compared to other possible improvements."

"This idea of hovering, of epistemological hovering, and messiness, and incompleteness, and not everything ties up into a neat bow, and you're really not on a journey here. You're here for some messy reason or reasons, and maybe you don't know what it is, and maybe I don't know what it is, but anyway I'm happy to be invited, and thank you all for listening."

"There's so much free material on the Internet you can learn from, and some people are pure self-starters: they pick up computers and teach themselves everything. Certainly there are millions of people like that. But at the same time, I think it's a pretty small percentage of the population."

"Three-quarters of today?s youth between the ages of seventeen and twenty-four are unfit to serve for one reason or another."

"To get anything done, Obama has to be seen as having winning economy - which isn't easy."

"Understanding economics can help you make better decisions and lead a happier life."

"Throwing more science at things isn't always the answer."

"Vietnamese food has probably been saved from the mass market because most people never master the sauces and condiments that must be added to the food, at the table, for its glories to become apparent. It's too much trouble, and a lot of people don't like asking for help, especially if the interaction involves some linguistic awkwardness."

"Unintended Consequences is full of substance, it is one of the must-read books of the year, and once I finish it I will be giving it a second read through right away."

"We will be returning to historical levels of inequality. We'll view post-war America as a kind of strange interlude not to be repeated. It won't be the dreams that we all had that virtually all incomes go up in lockstep at three percent a year. It hurts to give that up."

"We need to accept the principle that sometimes poor people will die just because they are poor."

"We?ll end up with a society where the people with decent self-control win back a lot of the lost health gains by better behavior."

"We're seeing an enormous amount of global upward mobility that's quite rapid and quite sudden, and undiscovered individuals have a chance - using the Internet, using computers - to prove themselves very quickly. So I think the mobility story will be a quite complicated one."

"What I would like to vote for is a candidate that is socially liberal, a fiscal conservative, broadly libertarian with a small 'l' but sensible and pragmatic and with a chance of winning. That's more or less the empty set."

"What the banking system needs is creditors who monitor risk and cut their exposure when that risk is too high. Unlike regulators, creditors and counterparties know the details of a deal and have their own money on the line."

"When you look at the actual data on technological innovation, one thing you see is that what I call the 'low-hanging fruit' has been exhausted. So radio, flush toilets, electricity, and automobiles - a lot of very basic inventions - have spread to almost all households."

"When humans team up with computers to play chess, the humans who do best are not necessarily the strongest players. They're the ones who are modest and who know when to listen to the computer. Often, what the human adds is knowledge of when the computer needs to look more deeply."

"When I hear people express extreme optimism about the Internet, I say, we've had it in mature form for about ten years. Macroeconomically speaking, those are about the worst 10 years we've had since about the 1930s. I don't blame the Internet for that - that would be ridiculous."

"You might like either the Republicans or the Democrats more than I do, but still something is wrong in today?s politics, even if we don?t always agree."