Episode 177: Guest Russ Roberts on Adam Smith and Libertarian Economics (Part Two)

0:00 Mark: So I'm hoping that we can talk a little more about the moral aspects. You were just talking, Russ, about the specialization. And we made the point in our previous treatment of the wealth of nations that I think a lot of our complaints about economics are not so much about the mechanics of wealth generation. We don't deny the advantages in terms of raising standard of living. I mean, we got a little bit before into issues involving the poorer countries and inequality. There are a lot of things one can say, but the basic mechanism seems to have worked very well for us.

It's the question of what morally does it do to us as people participating in this, that if everybody becomes a cog in a machine, or labor becomes too specialized, then we become less interesting people, half people. Economic growth is what it's all about. And right at the beginning of the wealth of Nations, Adam Smith says, yeah, the wealth of a nation is going to be determined by the amount of specialization, success, the skill in which tasks are parsed so that they can be done efficiently and well, and also just what percentage of the populace, and by extension what percentage of the time of every individual is involved in this contributing to the economic machine.

And so it seems like, again, if you think that the ultimate utilitarian goal is just growth, growth, growth, then that should require us to kind of sacrifice ourselves to the machine, and so we become less than human. But certainly Adam Smith did not consider material wealth to be the only good. And he has this whole other book that we've discussed to some extent and that you've written a lot about, about the Theory of Moral Sentiments. So maybe talk a little bit about the relationship between those two books and him as a moral thinker, as we can see in the wealth of nations and what the ethic for an individual that's supposed to come out of being a Homo economicus.

1:46 Russ: You may be a cog in the machine. I'm a rose in a garden. So I say that as a humor, of course, but I think it's a very interesting way to think about it. Your opening set of remarks on the topic, which is that we serve the machine. So I'm going to give you two different ways to think about that. One is the wizard of Oz is at the top of the economy. And the wizard of Oz can look into a crystal ball and see what we're all doing. And the wizard of Oz can assign us to certain tasks and create the greatest economy of all time. Well, that's a meaningless exercise because there's no such thing as the greatest economy of all time.

The goal can never be to make it as big as possible. You can't even measure big. What does it mean to make the most pencils, to make the most peanuts, the most airplanes? How would you even measure? And we try to do that with gross domestic product. But if people didn't like what the economy made, but we can make more of it, it's going to be bigger. You'd say, well, that's not what it's all about. So what's ironic about emergent systems, which we talked about earlier, at any point in time, there's a certain number of sushi restaurants, a certain number of clothing outlets, a certain number of hardware stores, a certain number of.

Of orange groves, a certain number of bee colonies, a certain et cetera. At any point in time, you could freeze the economy and take a look and see all the incredible diverse assignments of tasks and outputs and other things that have resulted, not entirely, but mainly from our own personal choices of where we want to work and what we want to buy and what tasks we want to do. So a, you could write that all down if you had lots of time and lots of Information, you could freeze the economy and describe all the different things people are doing. And you could say, well, look at how diverse it is and look at the division of labor.

And now you could say, well, let's start from scratch, we could do better than this and let's have someone design it. Because this isn't serving anything, it's just the outcomes, it's just the result of personal choices. And while Smith may have been right that it's not horrible or it's pretty good, I think we could do better. And then you start to think about that. And this brings us to Hayek and the Use of Knowledge in Society in 1945 paper. I think Hayek's understanding and I think Smith would have agreed with it and maybe is in Smith literally is that that person can, you can't design that from the top down.

It's not in Smith, it's really just implicit in it. A person can't figure that out, doesn't have enough time, doesn't have the most important, doesn't have enough information, doesn't have the knowledge necessary to do that. And so when we think about the metaphor of yeah, we're all kind of cogs in a machine, we're all serving the machine, I just think that's totally the wrong metaphor because there isn't anyone running the machine as a whole for sure. And I don't think it's productive to think of it that way. And I think the right way to think about it is again, looking for ways for us to express our potential and to find our satisfactions and to get pleasure from the tasks we do and the places we live and the products that we choose to buy.

And having said all that, we all know that those are not the things that give us the deepest ultimate satisfaction. The products we buy, that's just part of life. So I think we want to think about Smith's view of human nature. The so called Adam Smith problem is that in the wealth of nations, the human beings in it are all self interested. You guys had a really interesting discussion back in episode 174 about greed is good. And isn't that what Adam Smith had in mind? And some of it's not some of it, almost all of it's semantic. It depends on how you define greed.

Depends how you define self interest. You can define self interest to include giving to charity because it gives you pleasure. You can define greed to mean trying to get ahead. And there's something evil or malevolent about that, trying to do better. But the way I would define it to make sure that we're talking about the same words. Greed is to be obsessed with money. Greed is to be willing to sacrifice almost anything to acquire more pieces of paper and gold. Greed is harming others to get money because that's what you care the most about. Greed is thinking in terms of your telos of what your goals are as the acquisition of money.

It's money for its own sake. And in that those definitions of greed, Smith thought it was a bad thing and thought most people weren't greedy, they were self interested. And self interested mainly means, in Smith's view, that you put yourself first. It doesn't mean I stomp on you. It just means I tend to think of my own well being before I think of yours. I think that's a very true thing for almost every human being. There are a few exceptions we might think of. People like to say Mother Teresa, I don't know if that's true, never met her. But there are people who sacrifice their own financial well being to help others.

And that's not a mystery, that's not irrational. It just means that that's part of what makes you tick. And it's I think, a very glorious part of what makes us t. The example I always use is that if I drive lumber down to Houston to help them rebuild and if there are no laws against price gouging, which I think there should not be, so that more people will be encouraged to drive down to Houston and bring lumber in their own trucks and incur all the costs and unpleasantness of making that trip. If I go and do that and make a very nice hefty profit on the lumber I bought and its compensation for the time I took and the energy and the things I couldn't do instead.

And maybe I just got lucky. Maybe I got it really cheap and I got to sell it the first day when it was in desperate demand and I made a killing that's all self interested. But I could also get pleasure from the fact that I'm bringing lumber to somebody to help them rebuild. Now you could say, well it'd be nicer even to give it away. And then I'd say, yeah, I would. That is nicer probably in some dimension. But it's hard to get people to go in their pickup truck and drive for 12 hours with lumber if you're not going to pay them. There are saints, there are people who do that.

Smith would say, you don't want to rely on that as your way to get lumber into Houston down The road or to use an example Walter Williams likes to use to get potatoes to New York City. You can get a potato anytime you want in New York City. They don't grow there, they grow in Idaho and wherever else. And the people who grow them in Idaho and work hard to make them come out decently, they're motivated by money, not by love. So to bring it full circle back to Smith, the Wealth of Nations is about self interest because in general people don't have enough love in them.

I think Smith would argue, and certainly forgetting the economist who also said this, but there's not enough love to go around and as a result you want to rely on things other than love to have people benefit from the skills and time of other people, the great extended order of cooperation that is a modern economy, the fact that I don't have to make my own potatoes, etc. Self interest has got to be important. And that's the hat I'm wearing when I'm surfing for a new pair of shoes on the Internet. I'm looking to see where they're the cheapest. I'm not worrying about whether the person I'm buying from is nice to her husband husband or whether he's nice to his spouse or whether he's a good father.

I'm just looking where they're cheapest. I'm purely self interested. But when I think about who I'm going to have dinner with tomorrow night, I don't just think about, well, who could give me the best business opportunities. I think about something else. I think about who's going to make me laugh, who's going to teach me something, who's going to make me feel good, who can I comfort? Those are the things we care about in our face to face interactions. And Smith wrote about those in the Theory of Moral Sentiments. And of course it's not just about self interest, because if all you care about is yourself, you're not going to be a very good friend, you're not going to be a good husband, you're not going to be a good father.

That's what that book's about. That book is about face to face interactions and what gives us pleasure in those interactions and what restrains our natural self interest. Those are our moral sentiments. In the wealth of Nations, Smith's trying to figure out how do I deal with somebody who lives across town I've never met before for who's trying to sell me something that I might not think is high quality, but I can't be sure, or he's Thinking about an employment situation where I get a paycheck. I don't know my real boss. I might not know. I work for Stanford.

I've never met the new president. I don't know what kind of a person he is. I don't worry about as long as the check cash is so far so good. That's one of the key differences between those two books, not the only one. In a minute I'll talk about what they have in common. But to me the main difference is the wealth of nations is about interactions between relative strangers or total strangers, in which case you care about yourself and reasonably so. The Theory of Moral Sentiments is about your interaction with people around you face to face and wrote a book about it, How Adam Smith Can Change Your Life.

Let me plug it to try to understand how those insights that Smith had in the past still apply today. And they do. And I think his vision of human nature is spot on. And it's spot on in both books. We're self interested in our transactions at distance. And we don't always put ourselves first when we interact with with people around us because if we did, we wouldn't have anybody around us and we'd be very lonely and we wouldn't be happy. We learned to recognize that we're not the center of the universe. That's what Smith is writing about in the Theory of Moral Sentiments.

10:09 Seth: Thank you for that because that helps me put context around how to think about both books. And the concept of flourishing then would also be the telos. Ultimately, if you think of it as flourishing, it would be the same in both books as well. And they're both somewhat somewhat normative and somewhat descriptive, talking about how things happen, but also how things should happen in both sets of circumstances.

10:33 Russ: Smith's very comfortable saying that we like it when people pay attention to us and the ways that the people who get paid attention to are the rich, the powerful and the famous. So he said you have a natural inclination to be rich, powerful and famous. That's the positive side. That's the descriptive side. And I think he's right. His normative side is he says, don't go that way. That's the wrong way to go. Because you can also get respect from being wise and virtuous. It's not as dramatic, it's not as exciting, It's a lot more work. That's the way to go. And he's happy to say that he could have just said most people don't do that, but he doesn't. He talks all the Time in that theory of moral sentiments about how the pursuit of money or the pursuit of power corrupts you. And he's perfectly happy to tell you that it's a bad idea.

11:15 Wes: This tension between self interest and moral obligations that's come up repeatedly, and I think this is somewhat counterintuitive. But self interest actually places limits on our ethical obligations in a weird way. So this came up in our podcast with Peter Singer, where he thinks you have these very extensive obligations that could require you to give up, for instance, large parts of your income. And if you push his thought experiment further, one of the things I think I brought up was what if I could alleviate poverty in India simply by spending every minute of my day pressing a donate button online or something like that?

What if it required absolute misery on my part, but certainly nothing comparable to the sort of misery that I'm alleviating. And there are lots of examples like that where we, at a certain point, our self interest actually wins out and it's actually not unethical to take it into account. And if we do a bunch of thought experiments, we'll realize that intuitively we'll reject the notion that we have to completely sacrifice self interest for the greater good.

12:20 Russ: Well, it just explains why I'm not a utilitarian. Singer is right. I think it's actually we go farther. I would say this is going to sound harsh. I guess it is harsh that the potential for tyranny and authoritarianism there is just. It's almost a frightening notion to me to argue that let's make a little more realistic. Forget pushing the donate button. Let's just say tax me, not a marginal rate of 90%. At an average rate of 90%, that is, after, at the end of the year, take 90% of my income and give it away to alleviate poverty. Now, I'm sure there are some people in the world who do that voluntarily, but not too many.

And then economists and all of us would say, well, I'm not sure people are going to work as hard as they would otherwise if they had to give up 90% of their income. Which case used to say, but that's immoral. You should work as hard. In fact, you should work hard because the gains to those you're helping are so large. You should even not just take your normal amount of work that earns you a salary of whatever it is you need to work harder and take less leisure. In fact, browsing through Twitter, watching a YouTube video, or even worse, last night's World Series game, which was quite extraordinary from the 8th inning on you're evil, people are dying because you're not doing that.

That's a very. To me, a very. I'm now going into the episode I shouldn't be in, which is talking about philosophy on a philosophy podcast. But I just think that's a very. I just think that's an extremely not a good thing. The other thing I would argue mention is that if you believe in God, you get a very different calculus there about what your goal in life and role in life should be. If you are a pure utilitarian in a world without God and what you, you believe in is maximizing the total well being of the human beings in the world, then enslaving people is justified.

14:09 Wes: So ultimately we're talking about the age old tension between rights and what philosophers would call deontology and then the greater good or utilitarianism.

14:19 Russ: Yeah, that's right.

14:20 Seth: We're a sympathetic audience to that point of view, I would say.

14:23 Russ: Which point of view?

14:24 Seth: That we're not utilitarians either. A few. Okay, not singering, utilitarian, not Singerian utilitarians for sure.

14:31 Mark: Well, in fact, we're doing Nietzsche next Twilight of the Idols. So I kind of have that on the brain, which is an objection from the other side. It's not that I think you as a capitalist are too selfish and you should be more selfless. And so you respond by no, no, no, the capitalist has to save, has to invest, has to be industrious and is really all about serving other people. I think the Nietzsche critique would be more kind of like I was saying at the beginning of this, that it's possible maybe select, lucky, talented within the existing economy be fully actualizing flourishing human beings, that they can have enough leisure time to balance their extreme energy and they can find something that they're really pumped up to do.

I think the educated class, more often than not more than the rest of the population falls in that. So the people who are sort of talking about this maybe don't have the same pessimistic view that I would have for most workers in the economy that perhaps while it's very exciting to be an entrepreneur, should we really be espousing a culture that imposes that as sort of. That's the ethic of getting yourself excited, that will be maximally rewarding. Whereas being an artist or something like this, well, you're probably condemned to a life of poverty.

So there's so many ways that it's kind of up to each of us to Find our calling in what would most excite us and that the current social system focused on the economy as you better get out on the dance floor and serve your fellow humans and get paid for your dancing.

16:03 Russ: How dare you sit on the edges. How dare you sit this one out. How dare you sit any of them out. I think all those are dangerous and really anti human. That whole range of views from you need to contribute, get to work or oh come on, it's all about the art. Just to make fun of my own own romance about entrepreneurship. An Uber driver is an entrepreneur in some sense, self employed in some sense. But I don't want to romanticize. Although many of them have wonderful times and they do it, I think, with joy and delight. And a lot of them are retired and they do it for the fun of it, which is shocking.

But for a lot of people it's not for the fun of it, it's for the money. And they have to work 15 hours to make enough money to keep doing it. And it's really hard. And I don't think we should romanticize. I don't think we should romanticize anything right, like those kinds of things too much. And the same with art. I love art. I like photography. There are times I think I should just retire and just do photography full time. I change my mind, but it crosses my mind because I find it so satisfying and it's so rewarding to me and maybe it's amazing to me I can do it at all that I have the time to do it at all.

I think there's so many workers today who have so much time to do so many things that they do enjoy. There's still a lot though that don't and we shouldn't be unrealistic about. But the main point I want to make is I don't think we should ever have the goal of saying our goal should be that everybody does. There is no such thing as everybody. I had a roommate in graduate school who was a Marxist. He was not in the economics department at Chicago, he was in a different department, strangely enough, he was a Marxist, a real Marxist. And at one point he yelled at me.

He lost his temper. He said, you can't imagine what it's like to work on an assembly line. I did it once for a few weeks and it drove me crazy. And I remember thinking, you know, that's why you're not fit for working on an assembly line. I don't want to ever romanticize working on an assembly line. But you're probably one of the least fit people to do it. It's really boring for someone like you, and less so for others. And of course there are some jobs that are boring for nearly everybody and those we hope disappear. And many of them have. And more work is rewarding now than it was in the past, but it's still not everybody.

Don't romanticize it too much. Anyway, end of speech.

18:04 Seth: I'm finding your relentless optimism is infecting

18:09 Wes: me, he said pessimistically.

18:14 Russ: Well, I'm not so optimistic actually. I think on my Wikipedia page, which I did not write, I think it describes me as an optimist, which is interesting. I think through the early years of econTalk I was much more optimistic and I think I've become less optimistic and less confident about about our self interested choices to lead to good outcomes, which is sort of at the root of the emergent order optimism. Before we go any further, by the way, I do have to mention we've talked about all these great things from the Invisible Hand, but as you remember from the Econ Talk episode I did with Don Boudreaux and Mike Munger, I always like to point out there are a lot of emergent orders that are awful.

Racism persisted in the United States for a long time, partly through government policy of restricting freedom of human beings, through the enforcement of slavery. But a lot of it is just social. It's cultural. It emerges. Churches it's our natural inclination to be tribal and to be afraid and fearful and distrustful of the other. So racism is an emergent phenomenon. No one sends out a memo telling people how to be racist or that we should have a racist system for centuries. We still have a somewhat racist system. I think it's less than it was, but there's a lot of racial animosity and all kinds of hatred in the world.

They don't just disappear and no one's in charge of them. They emerge in a dictatorial system. One of the things that emerges the dictator doesn't have to send out a memo. One of the things that emerges is that people abuse their neighbors. People distrust their neighbors because they're afraid they're going to get turned in. So they're eager to turn in other people. They're eager to spy on other people. A lot of totalitarian systems persisted because of those incentives and reward systems that nobody designed. They're just part of human nature and they're evil.

They're horrible. They propped up Saddam Hussein and Adolf Hitler and Joseph Stalin, but there wasn't an organized way. There were organizations yes, there was the kgb, there was Gestapo, but it's not like they had to do everything. They didn't. They let a lot of it just happen because it was a natural response to the incentives that were put in place. That's horrible. So I just. I don't want to glamorize Emergent Order. And anybody who's tried to get across town in Washington D.C. or any place other large American city or anytime between 4 and 6 o' clock will understand that not all emergent orders are good.

Traffic is an emergent order. No one wants to go slow, everyone wants to go fast. It works here. We're all going 15 miles an hour, bumper to bumper, and you say, well, who's driving the car? You are, so it's obviously your fault. No, there's an order that emerges that's no individual's intention. Now, you can debate whether that's because the government has the roads owned publicly and prices them at zero, as if it would be magically easily fixed. It's not. It's a whole other topic. But my point is that it's really important to make it clear that there are a lot of invisible hands in the world and many of them are not good.

The noisy restaurant is an example I mentioned earlier in the previous episode. It gets noisy in a restaurant sometimes. It'd be better. Everybody would like it to be a little bit quieter. It can't get there from here. It's emergent. No one decreed it, no one designed it. It wasn't planned. It just happens and you can't fix it so easily.

21:03 Dylan: I think this topic is really interesting in thinking about what the rules of the game are and the relation between explicit and implicit rules of the game. Some of those explicit rules of the game, I guess the most clearly manifest ones would be laws. One thing that I guess that makes me uncomfortable when I was listening to the Emergent Order podcast, maybe it's because of certain kind of romanticization, maybe that I heard stronger from the other guests on it, regarding free market economies, is that it seems very difficult to not argue that government itself isn't also a part in emergent order.

And what we end up needing to talk about is the relative effect of different kinds of rulemaking and different kinds of perturbation of a given order that we have. So it's one of these complicated things about sophisticated systems is you have elements of the system, using the garden analogy, things like the dirt and the plants in them and the sunlight and the nutrients and the water flow and stuff like that. And Then you, you have the border effects where you have things coming in and going out. And all of these things both are context. So you have elements of them that are within a context, but then they also form their own layers of context that affect each other.

Whenever you have one set of rules, you have this problem of perturbing it. And it then becomes this conversation about, well, you're messing up the natural order of this or the natural order of that. And I guess I myself am left with this question of how do we want to talk about what we're going to be optimizing Again, just go back to Russ point about things like slavery came about as an emergent order. I guess one question would be, did getting rid of slavery more or less also arise emergently? And if it did, how is that different than the effect of people making laws and, and the role of organizations, of individuals to do that?

23:12 Russ: So that's a fantastic set of questions and I've spent a lot of time confused by it. It's really hard to think about it carefully. I'm going to give you where I'm at now. Maybe it'll help it. Help me to talk about it for sure. I think there's a bunch of issues that get tangled up when we start thinking about this that make it hard to think about carefully, which is the following. The economy is mostly a emergent for sure. So is the government. There's nobody. President's not in charge, right? Not even remotely.

23:41 Dylan: We can hope so.

23:44 Russ: The policies that result from the complex organization called the US Government, which is a mix of market forces of voters, donations by citizens and corporations, the crazy weird structure of the three branches of government, the weirdest, craziest structure within any one branch. All that leads to outcomes in public policy that are emergent. Once you concede that, as I do, you cannot romanticize emergence anymore. Right. And it's a painful but wonderful realization. And as a free marketer, there's a temptation to romanticize emergent order by comparing it to, as I did, I already did this to a rose garden or to a garden.

A rainforest is a better one than a rose garden. I was my made that clarification. It's better to be a rainforest, a better example. It's alive, it's organic, and we have a lot of primitive love for a rainforest. So when I say the economy's like a rainforest, the capitalists, the free marketers, the Randians, the classical liberals go, yeah,

24:48 Mark: it's like a rainforest.

24:50 Russ: And the other people are going, wait a minute, I like rainforest. Capitalism's brutal, ugly and exploitive. They're not like anything at all. Like. So to be honest, I try to be honest, right. So capitalism is something like a rainforest, so is the government. And once you concede that not all rainforests are good, you're making some progress and you're allowed as an anti capitalist to say, but I don't like the outcomes where people can spend all their days on social media, or I don't like the fact that Netflix has these shows that people like to watch that are violent or I don't like whatever you can complain about everything.

25:22 Dylan: I don't like dying of terrible tropical diseases.

25:26 Mark: I don't like the stick bugs and the snakes.

25:28 Russ: Yeah, exactly. And the poisonous frogs. Exactly. So it's like a rainforest, but it's not all good. But then you're stuck though, if you're not careful, you then say, well, I guess everything's emergent, everything's complicated, I can't say anything. But that's not where it ends. So the next part of this framework is to realize so no one's in charge of the guy government. So a lot of things that happen there are no one's intention. And there's a thousand things I can tell you like that, right? I can tell you the details of where some really fun good idea like let's not allow people to put poison into the air, which is almost unanimously agreed on, we should stop people putting poison in the air.

But the bill, the legislation that results from that impulse privileges West Virginia coal, which it shouldn't exist. But Mr. Byrd's really powerful. He didn't design the whole thing, but he could tweaked the rainforest, tweaked the bill and the citizens of West Virginia influenced that and da da da and his donors and we get an outcome that's nobody really intended it. I thought I was getting clean air. I got West Virginia coal privileged. That's weird. So that's true though. Political outcomes are not under anyone's control, not even Senator Byrd's.

Certainly not the President, certainly not Mitch McConnell, Paul Ryan, Nancy Pelosi, Justice Roberts. None of them are in charge. They're all interacting in incredibly complex ways. But that doesn't change the fact that that system produces top down restrictions on this other emergent order called the economy. And that could be good or bad, right? Again, I don't think you should be doctrinaire about emergent order per se or top down. Always bad, always good. Top down is top down. You just recognize it for what it is. So when we put a law in that says if your employees work more than 40 hours a week, you have to pay them double.

Well, then we should realize two things. That's a restriction on the emergent properties of the labor market. It might be a good one. I don't think it is, but it might be a good one. Or you have to have daycare. That's a restriction. The fact that it passed was emergent, but once it's there, it's a top down restriction on the emergent properties of the economy. And that's going to have certain consequences. Sometimes they're good, sometimes they're bad. Like I said, I think it's good that we constrain the natural emergent order of the economy to not let people put poison in the air or dump garbage in their neighbor's lawn, or put effluence into their river system that other people are going to try to use and enjoy the river.

Those are all good restrictions on the emergent order. Those restrictions come out of a system that is also emergent, called the political process, that has its own complexity. And again, people who say, oh, we can fix this, we'll just have term limits. Oh, wait a minute, what's that going to do? You start thinking about it, you realize it's a lot like an economic restriction. It leads to some consequences that are good, some are bad, bad. You'd want to think about it. And it's not straightforward because it's emergent. So both systems are emergent, political and economic.

But the results that come out of the political system often impose top down restrictions, just like the Constitution does. Constitution is the top down part of the emergent order. In theory, of course, we ignore it a lot of times, but in theory the rules of the political game are the top down part of that. But once those rules are in place, then everything scrambles around and reshapes itself. The gas of the balloon moves over to this part when you squeeze it here. And I think that's the right way to think about both parts of the economy and the political system.

28:49 Mark: So I'm trying to relate this to Adam Smith's general principle of the philosophy of law that I've heard you discuss at various points that pretty much rulers have to take into account the telos, the natural tendencies of the citizens. And if they make any law that would just go straight contrary to that, then it's like again analyzing a physical system. If you dam the water some one place, the water's going to go a different way. There's limits to how Law can control people. So that seems to follow from that. The wise legislator should try to make the emergence system of government reflect as closely as possible the emergent system of custom. Of course, custom, people disagree within society,

29:31 Russ: not just custom, the desires, and I would just add the desires and resources of the people who are going to have to deal with that legislation.

29:41 Mark: Okay. And of course people disagree that custom is not a unitary thing. So it might be the custom that I heard this when we were getting around to legalizing gay marriage, of conservatives saying it's not that we think it's a sin or something, but you have to wait for the mores of society to catch up. Because if you try to just stamp this and say this is okay, then there's going to be pretty much the problem that we had with abortion for decades and decades after the we got a top down court thing. So that's the kind of response to the social innovation.

I mean, you might say that the fact that this is being proposed as legislation in the first place or as being something that a set of judges would decide that they do actually have to assert this right, that this is something that through the evolving understanding of the Constitution or of past law, this really should be a right. What you're really doing is because custom has internal disagreements, you're just pushing one side, an emerging side. Whether it's I think slaves should all be free or gays should be allowed to marry, et cetera, et cetera, pushing that out, making that sort of the top down thing, which then in turn, I think this is Marx's great insight that people react, often contrary maybe to what Smith was saying, when they're given a set of rules, we're generally malleable and we'll kind of adjust to that so that if we have a top down sanction, that actually racism is bad.

This is not something the custom up to now might have supported racism, but now that we're putting that out there, then at least over time that actually does have the effect of changing custom.

31:15 Russ: Well, I think the civil rights movement, which was a demand for top down change, right, that was a bottom up phenomenon that wanted a top down change. I think that played a role in changing people's mores and norms and culture and conduct. And it wasn't just that, it was stamping and saying, putting a stamp on, saying this is the way we now feel. I think it's, it did more than that. But of course there's a flip side which is you tell people you shouldn't take drugs and they want to take drugs because they want to rebel or supposedly, who knows what the magnitudes of these effects are.

But those are really interesting points and I think I agree with all of them. But I think Smith was saying something slightly different. So to bring it back to Smith for a minute, Smith is talking about this is in the Theory of Moral Sentiments, ironically, because it sounds like it's in the wealth of nations, but it's in the Theory of Moral Sentiments. He talks about what he calls the man of system. It's really only a paragraph or two, but it's such a profound and interesting metaphor. He basically says that the man of system, that is somebody who has a vision.

And Smith is not the friend of visionaries. He thinks they're dangerous. He says the man of system wants to impose a certain order on the chessboard of life. And if you impose that order without taking into account the natural movements of the pieces, you're going to get chaos and disorder and society will not work very well. Well, and I think that's really the. It's the best in our lifetime. I think in our way of. To use an example that we know something about, that would be the Soviet Union trying to remake human nature to try to direct where people live and people's access to all kinds of things.

And it doesn't work very well. It leads to people. The best example within that system would be the farm problem, where they had a strangely enough, bad weather for 70 straight years because they just couldn't. There's enough wheat for their people. And the reason they couldn't is that the incentives weren't there and that the private gardens that they allowed people and that the black market activities around that were much more productive. So I think that's what Smith's talking about. What Smith is talking about is the fact that if you pass legislation that generally restricts people from doing what they want to do, you're going to have a hard time.

And the drug war is the best example of that. But let's flip it around the other way, which talk about the fact that it's illegal to murder someone. That is not the main reason that restricts the number of murders. It's an imperfectly enforced piece of legislation. People are tragically murdered all the time. The legislation itself does some deterring, presumably, but most of the deterrence comes from ourselves and our habits and conduct and culture. And that's a good thing because if we were murderous us, the law would not be very effective.

33:52 Mark: Well, just honor killings say. Yeah, if you have a society which honor Killings are, it probably would still be good to make them illegal, even though you recognize that that's not going to be enough to actually stop the problem.

34:02 Russ: Yeah, yeah. I'm not saying you don't need laws against murder. I'm just saying Smith would understand that that's not the main reason people don't murder people. And oftentimes legislation's literally ineffective because of black market activity.

34:14 Seth: When you're talking about emergent order not necessarily being good, it's essentially as a mechanism, its value, and I don't mean worth, but I mean whether we judge it as being good or bad has to do with what it's rooted in. So, as you mentioned, if we just take the two examples that the idea of emergent order in the form, very strictly speaking, of commerce and exchange between individuals that's regulated by pricing, for example, that comes from a couple of different, what we would consider to be positive human traits, the desire for exchange, which is a relationship with others, both a willingness and a recognition that others have something of value.

And as Smith so eloquently says in the book, you know that the simplest thing that we interact with on a daily basis involves hundreds or thousands of people around the world, right? Just the glass you're drinking out of or the headphones that you listen to, just to get it from where raw materials to your ears requires an entire world. And so there's a sense in which there's a really nice moral recognition of the value that we all play. In a related fashion, the flip side of that is, as you mentioned, let's just call it bigotry, slavery, you know, as being an outcropping of that, but which emerges from a part of our human nature that we don't necessarily think is good, or at least those of us, I would think, on this call, don't think is good.

And so there's very much a moral foundation to whatever we look at and we try to describe as the emergent results of those particular foundations, or at least you can look at it that way. And so it helps me in thinking about, for example, you don't take this tone, but you hear this on your podcast frequently, is this idea that somehow markets are inherently good and government intervention is inherently bad, or it interferes with the natural movement of markets, which is inherently good. And I mentioned at the beginning of the podcast Michael Sandel and this notion about where we should actually have markets and where we shouldn't have markets.

But it makes it problematic to think about it in those simplistic terms. If you look at emergent order and interference as being active on both sides of the coin coin and then try to parse out what that actually means.

36:34 Russ: That's really well said. I don't want to overstate my ambivalence. Let me try to restate some of what I said. I agree with you. Markets, good, government bad is not smart, not thinking. I also agree with you that not every outcome of the market process is good. That's a little too strong by itself. So I want to add a little something to it which comes from Dan Klein, George Mason, who I interviewed a number. We had a six part interview on Theory of Moral Sentiments. Working through it. Dan's very eclectic and interesting thinker and I learned a lot from him.

37:10 Mark: Excellent series.

37:11 Russ: Thank you. And Dan would thank you too. The way Dan describes, which I think is a nice way to think about, he says, and this comes back to our earlier point about what Smith said versus what people say Smith said and why it's always more interesting to look at what the person said. There's nuance and there's thoughtfulness and it's much more better if you have the time. But the way Dan Klein describes it is Smith believed in the presumption of liberty. So Smith was not an anarchist. He's not an anarcho capitalist. He's not even a hardcore. He's not a Randian.

He likes freedom. He presumes that's his starting place. And I would agree with that from my own views. And I would say I have to be a little more strong to be honest, which is markets generally give people what they want. Now sometimes we might sit back and say, I don't like what people want. I don't like that they watch violent shows on television or I don't like that they smoke cigarettes or I don't like that they take heroin, or I don't like that they want to sell their kidneys. To come to the Michael Sandel example. So then you have to say, okay, well, if we stop people from doing what they want, which is what we were just talking about, the man of system challenge, how's that going to go?

Is that going to be a better world? Now, I think what Sandel and others believe is that there's something inherently culturally changing when you say anything's for sale. And that might be true, but I'm going to start with the idea that it's okay to sell stuff to other people if they choose voluntarily to buy it, even though I don't like what people spend their money on. A Lot of times it's not because I think everything turns out really well. And it's not that I think that, well, what people want is. That's the good. It's that the attempts to change those choices tend not to be very good because we're not going to be in charge.

The people on this phone call, it's going to be somebody else. And so I have an enormous suspicion of concentrated power, particularly when it's backed by legal violence. So the state makes me nervous. I have a presumption against state power and a presumption in favor of decentralized personal choice. My honesty comes in recognizing it's not all hunky dory. At the end of the day, in that worldview, there's suffering and there's bad choices. And I'm more interested in trying to be a preacher for good culture than I am for trying to be a preacher for good government.

The data doesn't work for me on the good government thing. There's too much damage there. But on the other hand, let me make one more concession. In 2017, as much as I don't like much of what government spends its money on, and much of government regulation, that's not expenditure, but simply restriction, I have a really good life and my children are going to have pretty good lives mostly unless they make some bad choices. It's certainly up to them. They have an enormous amount of an opportunity to fulfill their potential, even when government is large.

And I think libertarians, classical liberals like myself, have to concede that we might be on the road to serfdom, but we're not in serfdom. At the same time time, there are people living in inner cities whose kids don't get good educations in the public school system. And I think that's a horrible, terrible tragedy and we ought to do something about it. So it's complicated. I just think the main thing is not to be too doctrinaire about it. Yeah.

40:22 Mark: So I see somebody like Sandel as more concerned with, as you say, cultural evangelism than actually changing laws. And this is something that is. So we'd like to change the culture, and we don't have a good model of how to change the culture. And in fact, people react if you try to argue something at them in very similar to the way that they would react if there was a law against something. Free speech should be just a legal matter, a matter of organizations setting their policies. But we see in online forums, say, I want my voice to be heard, we talk about free speech as if It's a matter of anytime that you're trying to culturally evangelize someone that you're attacking them personally, that you're trying to shut them down.

So I think the big thing Sandel was trying to advocate was to have more of this sort of national conversation. I mean, I remember thinking, when I don't remember which Bush was in office at the time, talking about, like, yeah, I don't want to have the heavy hand of government doing that much, but I do want to use my place as the president as a pulpit and to preach good standards. And the fact that that is playing on a religious trope really struck me the wrong way. And that is the model that we have for cultural evangelism. Just the fact that I'm using the word evangelism should say it's got a very negative stigma to it.

So that, in other words, it's very common for someone who's in favor of more or less free market capitalism to more or less throw up their hands that there's nothing we can do as a group. The thing that has to happen is individuals have to become more spiritual and they have to become more in control and more moral. And that is the only way that we will solve problems. You know, there has to be a third way. That's not just everybody should, you know, go to the church of their choice and become a more. And then that will have the rising tide of a more moral citizenry or, you know, top down, certainly laws that indicate some moral stance that because we have decided from the top down, this is the way we feel as a group, as we've said, that doesn't work.

There needs to be at least a third way, if not a fourth or fifth way, to incite change.

42:25 Russ: Well, you might wish there was, but there may not be. Sorry, bad news.

42:30 Unknown speaker: Yeah.

42:30 Wes: I mean, the best model we have is right as persuasion. So if you look at the civil rights movement, for instance, that sort of was a model of persuasion. It was an appeal to conscience. Those protests where.

42:43 Russ: Same with gay rights.

42:44 Wes: Yeah. Well, I think gay rights was a little bit different in the sense that, again, it was a campaign of persuasion. In the case of civil rights, you sort of forced people to look at themselves doing horrible things for society to confront that. People beating up African Americans for trying to sit at a lunch counter or something like that. In the case of gay marriage, I think that was like, that's a model in the sense that it's a variation. A lot of it was just cultural. It was the kinds of TV shows that were on like Will and Grace. That made it just culturally more acceptable to be openly gay.

And then people discovered that their friends or family members were gay. It became something that was less other, less alien, less unfamiliar. And then there was a critical point where most people were in favor of gay marriage. And then legally things changed very quickly. So I mean, I think at a certain point Obama and Hillary were both anti gay marriage, they were for civil unions. But as soon as it was clearly culturally acceptable, then politicians, including Obama and Hillary came out of the woodwork and said, yeah, oh yeah, we support this.

43:58 Russ: They came out of the pantry, they weren't in the closet, they were in the pantry.

44:02 Wes: So that's a model of a sort of bottom up change. I mean it's difficult because there really is this continuum and this is something, something I think Plato makes something of, but this continuum between individual habit, which is the groundwork for virtue ethics, but individual habit and custom and then law. And there's feedback loops between each of those things and they support each other to some extent. So for Socrates, for instance, it was in the Crito. The Crito sort of sounds like an argument against civil disobedience. And he's not going to defy the authorities that be he's not going to run away, he's going to take his punishment even though he knows it's unjust.

And he sort of makes the argument that instead of defying the unjust state and unjust laws, you persuade them to change. You stay there and you persuade them to change. And if you can't and you end up dead because of it, then so be it. That sort of argument actually you could turn that into something that's actually pro civil disobedience. If you think think of civil disobedience as properly persuasive. I guess the thought experiment that you might want to do is you say, well, what if a 19th century president of the United States had become an enlightened dictator and could have just by mandate said gay marriage is legal?

What would have been the effect of that? Would that top down action have created the right cultural change ultimately? I mean we have something of an analog in Lincoln being able to issue the Emancipation Proclamation, but that's a much more complicated situation. Obviously.

45:37 Russ: I think that's a great example because even then it didn't turn out so well. A better way to say it was, it was really messy. There's no magical thing here. When I think about these issues, I think about cigarettes versus drugs. There's a huge stigma associated with Smoking cigarettes in the circles that I swim in. It's a pretty big circle. Not the one that I swim in, but the one where cigarettes are not attractive. 50 years ago, 70 years ago, whatever it was, smoking wasn't just. It was hip, it was cool. Right? And you see so many movies even today where and now we have to issue a warning.

There's smoking in this movie. As if that's going to make me want to smoke. Which it doesn't. But I guess it could, I suppose. I don't know where they're putting the. I don't think the warning does anything but I guess I can keep my kids away from it if I think that's the case. But we haven't been able to do that with lots of things that people want to stigmatize. Fatty foods, people want to stigmatize it. It's not working so well. Meat maybe meat's getting there. Some people are starting to be embarrassed that they eat meat. Watching football, getting stigmatized.

Don't you realize that it's giving people concussions and it's perpetuating racism because they don't like people kneeling for the anthem. People try to use the cultural levers to create these bottom up solution to these problems. They're very hard. I don't know who said a minute ago but we don't understand how to do it. My view is I like what the Talmud says. It says I'm going to get it wrong. But the basic I just of it is that just because you're not going to fix it by yourself doesn't mean you shouldn't try to improve it. You take the things that you're passionate about.

You make your small steps in the right direction and slight encouragement, slight education, whatever you're passionate about. And I want it to be. I don't want that wise benevolent dictator in 1860 or 1820 to allow gay marriage. Not because I think the cultural impacts are going to be complicated. I don't want it because that's not what they're going to do. Is back to my earlier point. They're not going to do the things that we think are enlightened now and they're going to do bad things. That's what they typically do. When people have dictatorial power.

I'm not sure there's a counterexample.

47:39 Wes: I tend to think that there's a cultural analog to the dictatorial power which is the method of shaming and calling out which is common in our discourse today. I think I brought up persuasion before because I Think we actually tend to underestimate the power of persuasion and the power of principled discourse. I think people tend to think it happens so rarely or in the ivory tower or something like that, and that it's too soft to produce any real change. And that the way to produce change is to shame and to make sure that people are afraid of public disapproval for doing certain types of things. I'm actually of two minds about the role of shame and producing because obviously shame works and you can. I mean, I don't think smoking is an example of shaming exactly. It's just more of an example of status, actually, the attachment of smoking to status.

48:31 Russ: If it didn't give you cancer, it'd be a better example, but it does. So it kind of gets a complicated

48:36 Wes: example, but it's sort of a. There are lots of things people do that aren't really good for them. But when you attach, I think in that sense it sort of attaches a rank disregard for one's own well being, to low status, to lower class behavior. And so the circles we run in, yeah, there's a huge stigma in the same way that there would be any stigma associated with types of behaviors that are signifiers that clash with our status. But I'm unsure of the role for shame in all of this. But I think it tends to be counterproductive, at least in the way it's deployed so often today, because it makes opponents dig in and it just creates a sort of battle of finger pointing. One thing I will say again is I do think people underestimate the long term power of principled discourse to produce change.

49:25 Russ: That's a beautiful idea.

49:26 Mark: Can I bring this back to Smith for a second? Because Smith does seem.

49:29 Russ: Oh, come on, Mark, we're having fun here.

49:32 Mark: The idea of the impartial spectator does seem to actually rely very much on shame. It doesn't seem very amenable to producing revolutionary enlightenment. So let's say you're in a really crummy job, or maybe you're an actual slave and you are unsatisfied with your lot. And then the impartial spectator comes in and thinks about, well, what would somebody else contemplating my situation think about this? Well, it would think that, look, life is hard if you're a slave. This is pretty much the way things are going to be. Suck it up and advise some sort of stoicism. There's room in Smith's system for a second order spectator to question whether the first spectator is being truly impartial. But I still don't See a very obvious way to get beyond community norms in enforcing morality or figuring out what the right attitude that you should have.

50:20 Russ: Well, Smith's impartial spectator is a product of the community that the person lives in. Because what you're doing when you're using that imaginary motif, when you're imagining the impartial spectator looking down on you, you can only use the people that you know who could be that person but are impartial. They're not your friends who are sympathetic to you, and they're not your enemies who would like to see you be enslaved. But they are, perhaps. But they are your peers who are disinterested, but not so disinterested as to not be paying attention, having an opinion.

They just aren't partial. It's interesting, the example used. I don't think that's the way I would think about that. That's a question about suffering. A person in a position of suffering, how should they cope with it? Should they whine, complaints, plane fight, try to run away or suck it up? Those are all choices we make throughout life for things that cause suffering to us, some of which are in our own minds and some of which are from the places we find ourselves. I think where the impartial spectator comes in, though, is on morality. I guess the distinction I would make is that that's a strategic question.

How do we alleviate the suffering of this person? Might it be a legitimate strategy to just live with it, cope with it? Especially if it's not going to change? Are you better off just accepting it? Those are religious. Those are psychological questions. They're really interesting. They're very important.

51:37 Mark: What is the community standard in terms of maybe not a physical suffering, being actually whipped or diseased or something like that, but just feeling like, again, going back to the. I feel like being a rose in the garden of the economy, to put it in the nice way, does not serve most people very well in terms of flourishing. But if I try to convince people of that, well, that's kind of what the standard is today. And. And you're going to whine and say that you don't want to have a real job, you don't want to get with the program. That's you being selfish.

That's you being. But I want to figure out sort of what the. I think we could all do better and that we will do better in the future. I am with the increasing standard of living and as technology advances. So just like somebody advocating for gay marriage decades before its time, I feel like I've glimpsed this future of no longer being defined in a bad way by the job system. So the impartial spectator doesn't seem a very useful tool in hitting on any kind of ideal like that. Whether or not you like my particular

52:38 Russ: ideal, that's not what it's about, though. What the impartial spectator is about is Smith's attempt to understand how you make moral decisions. So if you want to understand the slave owner, how does a slave owner sleep at night? That's because the impartial spectator he's listening to is from his community. Community and thinks he's. Of course he's got a slave. Some people are inferior, says the impartial spectator. And that was the world that that slave owner lived in. And it was a dark, evil world. And that comes back to my same point before about not all emergent orders are good.

The impartial spectator is not a mechanism for changing the world. It's a mechanism for understanding how people make their moral choices. So if you live in a world where my favorite example is you go into a restaurant and you're never going to eat that. You're on the road, you're on a trip, you're never going to eat that again, and you decide not to leave a tip because what's the point? I'm never coming back. So you don't leave a tip. Do you feel good or bad about that? Well, I guess there are some people who say, well, that was smart. And some people's friends would say, great job, you've saved some money.

And other people would say, what? You didn't leave a tip? I think that's what Smith's saying is that you use those mechanisms, the people you associate with, to decide what's good and bad behavior. And then Smith would say, if you want to be a good person, hang out with good people because they're going to be your impartial. They're literal spectators. But Smith's impartial spectator is a figment of the imagination. It's a mental exercise that I do to try to figure out what the right thing is. And you're right. If I'm in the company of thieves, then the thievery is considered smart, justified.

A person who goes around steals from his employer because he thinks he's exploited. And if his friends all agree with him and he lives with people who think that's a good thing, he's going to feel sleep well at night. He's not going to have any impulse to do anything different if he's in a different group of People, he's going to feel guilty about it. That's what Smith was interested in. But your other point, which I think is a legitimate point, deep point, very important point, is we want to make the world a better place. How much of it should be legislated, how much should be preaching, how much should be literally bottomed up from my bottom, My personal attempts to make myself a better person.

I'm sympathetic to that last way because I like that it's decentralized. And I've seen a lot of. And you have too. We've all seen attempts through history to change people, people that are not so successful. But doesn't mean that it's never going to be successful. Doesn't mean that all legislation is going to fail and it doesn't mean we should legalize kidney sales. But I think we should think about it, by the way, because there are people dying every day. But that's not a legitimate argument in and of itself. People will say things like, if we mandate this, we ought to save so many lives.

Yeah, I'm not going to disagree with that part. The question is, are there other things that we care about just other than how long we live? And of course, we all do. We do lots of things that shorten our lifespan because they give us pleasure or they make us feel good or whatever it is.

55:13 Wes: The same question incidentally arises with respect to changing oneself. You can take a sort of top down approach in which you try to mandate things like a diet, for instance, and we all know how well that works. And then there are more therapeutic approaches. So the therapeutic approach really tries to change you from the bottom up in terms of your emotions and your say, let's say, desire to eat. And then there are, there's approaches which rely on changing context. So you hang out with a different group of people. For instance, if you want to eat differently or you don't keep the big bag of Doritos in your apartment, Things like that. The sort of strategic.

55:50 Russ: Yeah, you tie yourself to the mast.

55:52 Wes: Contextual things. Yeah. So often I associate at the political level, the political discourse. I think of that as the therapeutic method that we would see at an individual level. And ultimately we have to persuade ourselves, ourselves to be different. If we try and dictate it, it can be counterproductive.

56:11 Russ: That reminds me a little bit about the Constitution. I'm a rules versus discretion kind of person. I prefer rules over discretion. I think discretion leads to leakage, just like in dieting. So I think, well, I just won't eat too much. That doesn't work so well for me. No Doritos. That works. I have to have strict rules and I can't have any discretion. So I understand that. But they kind of start to work together because then I have trouble keeping the rules sometimes. And similarly at the national level, I have the constitution. I'm a big fan of the constitution because I think it limits the power of the state.

But if nobody believes in it, it doesn't really work anymore. So it really does come off from the bottom up in a certain way. And persuasion and political culture is incredibly important. You can't just say, oh, I don't need all that. I'll just have a good constitution. But if it's a good constitution that people don't agree with or believe in anymore, you're back to discretion. Discretion all the way down is the sad part. This has been really fun for me. I want to thank you guys for having me on. It was a fantastic discussion and very thought provoking.

57:12 Dylan: Thanks Russ, for joining us on the podcast. It was really a pleasure having you on and I just think the topic of the complexity of our economy is really, really interesting and it was just fun to talk to somebody who's thought about it a lot.

57:28 Russ: I have to tell you, the reason I have to get off the air right now is I have to go to a soccer game. And even though it's in my my narrow financial self interest to expand my time on this podcast in selling books and getting listeners for my podcast, I'm putting my child's well being ahead of that. So I just want you guys to know that.

57:45 Mark: Nice.

57:46 Seth: Thank you. Yes.

57:48 Wes: I hope your child knows that.

57:49 Dylan: Just kidding.

57:50 Russ: Oh, don't worry, don't worry. I'm self interested enough to tell him.

57:54 Mark: I might have to call this episode Russ Roberts Economic Existentialism because we just find this very our time is our most valuable resource and that being economically rational is having that staring you in the face like Kierkegaard's God at all times, making the best use of your time before it all flits away.

58:13 Wes: Yeah, thanks so much for coming on. This was great.

58:15 Russ: That's a horrible thought. I'm not going to let you close on that. I got to say one other thing about dieting, which is I really think the key to losing weight is serenity. And the key to enjoying life to a large extent is also some serenity. If you're always looking at that watch, you're going to have a tough life. Thanks guys. Thank you.

58:32 Seth: Thank you.

58:33 Mark: I want serenity now. Serenity now. That was a comparison I wanted to make here between a point that was made in our American Indian philosophy episode that I don't know that we really spelled out so much, but that a lot of the criticism in those works of Western ways of thinking is really this impatience and disregarding the teleology of the system that exists already. And so I would say say that's kind of a Robertsian or I don't want to just call him a libertarian, but that's the term that we have approach to social problems is you might say there's these things that have emerged that are bad.

There's racism, you know, there's traffic. So let's go ahead and legislate something because that's the, you know, the equivalent taking the sledgehammer out and trying to whack the problem because come on, you got to do something. And rather than a total libertarian would just say, well, too bad, once the government gets involved, government is inevitably corrupt and there's nothing we can do, so we just kind of have to let the problems exist. But a approach that Russ might better agree with is closer to the American Indian approach is no, we have to kind of be patient and pay attention to the pre existing telos of the various elements of the system and not disrupt what is good that is going on there.

Don't get rid of the good for the sake of a person. Perfect. That is not really attainable anyway.

59:50 Seth: There were so many threads that I felt like we could continue to pursue. And maybe that's what happens when you, you know, Mark, like you, I've been listening to Econ Talk for years and I think in many respects it's a sister podcast. I think of it that way. It's discussion, it's dialogue. Although it's academic. There's certainly some episodes which are more engaging than others. But you know, I think Russ spelled it out pretty well that he's war wary of government. There's this kind of naive view of free market versus big government or what have you, something like that.

And he said that that's naive. He's wary of the concentration of power. And in the paradigm of decentralized market forces versus government intervention, as far as policy goes, it's easy to paint a broad brush picture that makes it look like the government has the power and the market fights against that centralized power. But if we are all wary of the concentration of power, we have to understand that in the environment we're in right now, the government is one place where power is concentrated. Financial institutions which control government is another area where it's concentrated or the corporation that owns all the data that you, you know, all your search data and this sort of thing, these are all concentrations of power.

And what I'm kind of wondering here, like it's not talked about, but it's no accident that every social revolutionary is also a political revolutionary in the sense of Martin Luther King, communist. Right. Helen Keller, communist, like Che Guevara. Right. And Fidel Castro. Right. There's no such thing as a capitalist revolution revolutionary. And that's because we equivocate capitalism in the free market. But really capitalism is the political instantiation of a free market system. And so there's the question of your third way, Mark, is is there some way you could rebel and exempt yourself while being open to decentralized power?

You want decentralized power, but you want it in a way that's not capitalist. So it's just very hard to think about what that might look like. So that's the first thing is just this notion that the concentration of power is not just in a government entity and the question of whether just capital by its nature needs to concentrate. Which brings up the second thing that I think would have been interesting, but having just recently done this stuff on Debord, the idea that one of the unintended consequences of emergent order might be that the emergent order wants to, to self perpetuate.

Maybe not consciously, but if emergent order has its own internal momentum and inertia to perpetuate itself, then good or bad, it's just going to continue, continue, continue to do that. And then we kind of start thinking about going back to Hegel and Marx and thinking about a teleological notion of capital. And maybe we're seeing the logical conclusion, blah, blah, blah, the dialectical end. But my point is, is that there are unintended consequences and then the mechanism itself has its own power. And so the idea of how you would rebel against that is questionable in itself because it's not a thing that you can break.

Could we persuade our way out of it? Could we influence our way out of it? Could we legislate our way out of it? Or is that just somehow, is it like trying to hold water in your fist?

1:03:22 Mark: Some of this is reminding me. Have you heard of this game called Paperclips? It's an online game, you can just search it, but it's kind of based on the thing that we talked about in the Nick Bostrom episode, episode of if you're an AI who has been tasked with just manufacturing as many paperclips as possible, then eventually you'll make the entire universe into paperclips. And so that's supposed to be a warning about be careful what telos you put in the AI before it gets super intelligent. Because once it gets super intelligent it's not going to necessarily correct for its. So just comparing that to sort of this economic growth that we've got this I ideology of growth, growth, growth and well, you've read the Lorax.

1:04:01 Seth: Yeah.

1:04:02 Mark: So you end up with all the Truffula trees are gone.

1:04:05 Dylan: And

1:04:08 Mark: I'm glad we got in this discussion of mores because that's sort of the necessary. I think anybody who is concerned with limiting the power of government should also be concerned with propagating good mores in society and hopefully not just using by appeals to old-time religion.

1:04:26 Wes: I am going to start listening to econ talk. I think Russ is great as far as my views on top down versus bottom up or I guess a more libertarian approach versus a socialist approach. I'm just confused. Basically I was calling myself a libertarian socialist for a while because I think of Orwell that way. But I think as we've discussed in our Marx and related episodes, socialism is predicated on a certain amount of technological advancement. So I think even Marx understood the benefits of capitalism up to a certain point. It has tremendous drawbacks as well.

I found myself highly sympathetic to Russ's point of view. And then I think there are ways to just in the same way that there are ways to sort of hybridize utilitarianism and deontology, there are ways to hybridize capitalism and a strong welfare state which like a state like Sweden has done. So I'm not sure what the answer is, but maybe it's some combination of acknowledging the strength of people's desires and their self interest and the way that's going to create an emergent order and then putting checks on that as necessary that don't and I think this is something Russ would say that don't fundamentally break the engine of the emergent order, but maybe guide it in more productive ways.

1:05:50 Mark: Well, I'm glad at least through this process that I've come to the conclusion that economics actually is philosophy. This is getting to a broader question about social science and we didn't get in the discussion with Russ about is to what extent is economics of science. He has whole episodes where he discusses and debates that with various folks. My objection to libertarians on the podcast is less an objection to their point of view than our on the simplicity of the position and just having a blanket. The fact that Russ has been studying this for so many years, is professionally trained in this, has more than any other economist, probably interacted with so many other economists and people talking in this area about different points of view on this, and is very sympathetic in his own thought to sort of libertarian principles and prima facie against government and interaction.

But as he just made very clear whenever we tried to kind of pin him down on that, that it's not a simple matter. And I think most economists probably end up being more pragmatists than anything else. They have their kind of prima facie principles. But then what's actually going to happen in a particular circumstance? Well, you weigh the cost and benefits and you try to have as much foresight as you can. That's really all you can do. Well, thanks guys. This was fun. It required very little, little comparatively little prep on our part and still was one of our more exciting episodes, I feel like.

1:07:15 Wes: Yeah, I thought it was a really

1:07:17 Seth: vigorous conversation and I like doing it in the middle of the day when I'm not exhausted.

1:07:22 Wes: Yeah.

1:07:22 Mark: Everybody should weigh in on our Facebook page, On our blog partiallyexaminedlife.com, all that stuff to tell us what else in this area you want us to read. Give us your impressions, give us a. Were we interpreting Russ correctly? Do you have thoughts with.

1:07:35 Seth: Was.

1:07:35 Mark: Was. Were we just bamboozled by. He was. You know, the fact that he was such a right wing comparatively economist. And we really need to have a counterbalancing view at some point. We're open to all sorts of comments.

1:07:45 Seth: We just did an episode on leftists. Yes, of course. So we, I think we're, we're fairly well balanced.

1:07:52 Mark: Those are not economists. They're not.

1:07:54 Seth: Oh, sorry I left.

1:07:55 Mark: We haven't read Das Kapital Keynesian, you mean?

1:07:58 Russ: Or.

1:07:58 Mark: Yes, no, Keynesians. Yeah. All right, a couple quick announcements. First, the Apple podcast app has been enhanced to accept password protected feeds. So folks can use the Pel Citizen feed on that if you want. Now if you come up Partially Examined Life Citizen and go to how do I under the members menu, it will walk you through setting that up. Also, the partially examined life 2018 calendar will be available shortly for pre order. We'll let you know when that happens. Finally, this week's song goes back to Nakedly Examined Music, Episode two, My Interview with Fritz Beer. You're going to hear a very nice economic song of his by one of his bands, punchy, called Needle Exchange. You can check out that interview and many others@nakedlyexaminedmusic.com Good night, everybody.

1:08:42 Wes: Good night.

1:08:42 Dylan: Good night,

1:08:56 Unknown speaker: Dear. You should button up. The weather's getting rough and people aren't that kind. The fear that you might fall apart. Come on, glue before you start. It happens all the time. The place where love lies down asleep never lays down next to me. I'm missing you so much. The fear no one really cares. It's if you disappear. You don't count it now. Yeah. There's a fortune to be made on them misfortune There's a fortune to be made on someone else's name. It's tomorrow's application that important There's a fortune to be made at be all exchange. Exchange.

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1:11:52 Mark: Yeah.

1:11:53 Unknown speaker: There's a fortune to be made on their misfortune There's a fortune to be made on someone else's name. Is tomorrow's obligation that important? There's a fortune to be made at the meat of exchange. There's a fortune to be made on that misfortune. There's a fortune to be made on someone else's name. Is tomorrow's obligation that important? There's a fortune to be made and need all exchange

1:12:40 Mark: things just j.