0:33 Intro. [Recording date: April 10, 2019.] Russ Roberts: My guest is Mary Hirschfeld.... Mary and I both have Ph.Ds. in economics, and both have become a little disenchanted with the underlying framework of modern economics. And, I like to frame my disenchantment through the ideas of Adam Smith; and Mary recently through the ideas of Thomas Aquinas--the 13th century philosopher, theologian, and scholastic. Today's conversation is going to be based on Mary's new book, Aquinas and the Market: Toward a Humane Economy.... In the standard economics paradigm, human beings try to maximize their wellbeing--often called 'Utility,' the 'capital U'--subject to the constraints of limited income. What's wrong with that approach? Mary Hirschfeld: Well, it depends on what you want to do with it. If you mean for it to be a description of how people behave, it's still probably not perfect, but it probably picks up some features of how a lot of people act. But, if you ask the question, 'Should we pursue our happiness by trying to maximize our utility subject to constraint?' there I think the answer has to be No. It's actually an actively bad idea. So, why do I think that? Part of the key problem of pursuing happiness or developing as a wise human being is figuring out which goods are worthy of pursuit. And, it shouldn't take too much reflection to realize that the goods that make up a meaningful human life are the sorts of human goods that aren't necessarily subject to constraint by income or time. So, the pursuit of justice, or of developing close relationships with your family, things like that, for Aquinas a lot of this gets picked up in the term 'virtue'--trying to become an excellent version of a human being. But that has a wide range of these higher goods associated with it. And the key point about these higher goods is that they are not constrained by income. So, yeah--so, when we think in terms of pursuing happiness as maximizing subject to constraint, what we inevitably end up doing is substituting into the, or thinking of the utility function as being primarily premised on these lower goods that do seem to be scarce or subject to constraint. So, material goods. And that seems to shape our whole idea of what happiness is about. And I think that's very misleading. Russ Roberts: Of course, you could make the opposite argument, that human beings are as they are. They care about stuff. Maybe they should; maybe they shouldn't; but they do care about it. And, I guess one way to frame this challenge to your challenge is to ask: Do people wish they had more stuff? A lot of people act as if they do. They seem to pursue stuff. In many ways, I would argue the utility-maximization framework produces almost nothing of scientific or predictive value other than that people have to make tradeoffs. Right? So, at a given level of income, the essential insight--it's so essential, it's so bland and uninteresting--but it's an insight that I think every human being is aware of: You can't have everything you want. As the Rolling Stones said so well. And so, you have to make tradeoffs. And so that's all that's really there. You could argue that. Do you agree? Mary Hirschfeld: Um, do I agree? Yes and no. Um, again, I think in terms of key features of human behavior that economics picks up, that would be one of them. And it's true: A lot of people think you can't always get what you want, because you always want a little bit more, and so you have to make these tradeoffs. But, what Aquinas helps you to see is that there's another way of thinking about human happiness that is ultimately more fulfilling and more sustainable. And, that's one where you think--where you just pause. You put the whole project on pause, and you think, 'What do I want my life to look like? What are the goods that I want to have in it?' And, if you do that, you are going to see that the amount of material goods, the amount of stuff you need, is actually finite. So, for me to live out a good life, pursuing the higher goods I try to pursue as a professor of trying to engage with my students, share knowledge, to share my ideas with the public through my writing, to participate in my various communities and all of that--requires a certain standard of living in order to carry that out well. And I actually happen to have that amount of money. So, for me, there really isn't scarcity. I don't need any more stuff. And, I think Aquinas, and Aristotle on whom he draws a lot, would say that, if you don't order your material desires to these higher goods in such a way that you know how much you need, roughly speaking, you will end up treating those lower, material goods as the thing that your life is really about. And, they have good arguments about why that's not a good, not likely to be ultimately fulfilling in the deepest sense possible for humans.

6:07 Russ Roberts: Well, Adam Smith would agree. Maybe we'll get into that later. But, I want to rephrase the critique that I started us with. And some of the--you know, my suggestion was that this vision of human activity as maximizing something, is sterile. In the sense that it only teaches us that there are tradeoffs. It leaves out a bunch of stuff. I think that a more serious critique would be that--and Robert Frank and others have made this suggestion--that if you teach people that this is the definition of rationality, they start to think that more stuff will lead you to happiness. Greater happiness. Which, I think, with you, I agree, is a, um, a bad way to look at the world. But I think the deeper point that you are suggesting is that the stuff that isn't in our utility function, as economists--belonging, friendship, love, justice--those things often conflict. They are not just left out. They conflict with the economists'--it's something of a straw man. I wish it were something of a strawman. I don't think it is. But, let's call it the textbook version of homo economicus--the economic human being--as maximizing utility depending on stuff. A lot of times, taking that new job with the higher salary that allows you to have the bigger house, the nicer car, and more stuff, means less time for your family, your community, your pursuit of French, playing the flute, whatever it is that is not commercially oriented. And I think economists, not intending it, but they become blind to those tradeoffs. Mary Hirschfeld: Very much so. I mean, in principle, they are going to tell you that they can put all those things into a utility function. The: a). there's real questions about whether this works of goods that could be modeled, as though, 'Oh, I want justice on the one hand and more pizza on the other.' But, b). in practice, they don't. And you're right. And the critique by Frank is a concerning one. This gets taught to lots and lots of students, who then think that it's rational to pursue life in terms of maximizing your utility function subject to constraint. Which in turn means that you really want more income to loosen up those constraints. And, people do end up making these decisions that subordinate the real goods that--if you ask them they would say that the real goods that they care about, but they end up subordinating them to the economic concerns. The whole idea that economic concerns are independent, should have independent weight, independent of these higher goods, is itself a symptom of this disorder. The last thing I want to say is--it just broke my heart. I was teaching some of this material in one of my classes, and I had a student who just said, 'You know, my heart's desire would be to be a First Grade Teacher. That's really what I would like to do. But I can't do that because it wouldn't be rational.' And, what she meant was, 'because I wouldn't make enough money.' And, yeah. So, it really is ubiquitous in the culture, and I do think the economic way of thinking just supports that. And, that's part of what I try to talk about in the book. Russ Roberts: And you are honest about it. I mean, I don't think--neither you nor I are suggesting that people are happy being poor-- Mary Hirschfeld: Oh, no-- Russ Roberts: We're not talking about poverty. We are not talking about a life as an aesthete, of just living as a--in poverty. But I think that example is, as you say, it's poignant in its--I've counseled a number of young people to take jobs that they are uneasy about. Maybe I shouldn't. But I've counseled them to do the thing they love. Often because--you don't need infinite amounts of stuff. And it's great to spend 8 hours a day doing something you love. And that's precious beyond--in so many ways, obviously. And, in particular, teaching. I've told people to go into high school and lower levels of teaching because it makes the heart sing. And that counts.

10:30 Russ Roberts: So I think it's a fascinating question. I'll just add, on the last day of class I always tell my students, 'Don't take the job that pays the most money.' Unless--unless, of course, you are lucky and it happens to be the job that you love, also. But there is a tradeoff there. And the fact that people have trouble seeing that tradeoff, to me, is a serious piece of valuable information. So, I want to suggest that behavioral economics, its critique of economics is actually, has its own level of sterility. Which is, 'Oh, people aren't that rational. They don't make calculations. They have biases.' Yeah, but that's just such a small part of the problem. And I think the inability--let me make a speculation and you can respond to it. I think when you talk about stuff all the time--the demand for shirts and beer and whatever it is that you put on your blackboard as a college professor--you end up, you can't help but end up thinking less about these other things. And yes, you'd wave your hands and say, 'Oh, we can put them in the utility function.' 'Oh, of course they matter.' 'Yeah, yeah, yeah.' But I think when you do that all day long, year after year, you start to forget about them. It's like the drunk looking for the keys under the lamppost. And so, I think, the stuff that can't be measured--dignity, respect, agency--all those important human experiences just get forgotten. Mary Hirschfeld: Yeah. And, what I'm calling for really is just to completely reverse it. So, when we think about economic life, we should think, first, it of dignity, agency, those kinds of human goods. And then second, how does economic life support, enhance those things. But, yeah. It distorts our thinking, just massively. Like, once I started seeing the world this way, you just start to see it, really, everywhere. Things like, we say with a straight face, that we can't afford to have--every household needs to be a two-income household nowadays in order to make ends meet. We say that with a straight face. We're the richest people who have ever lived. We should have more leisure, not less of it. And we're unable to see these things happening as irrational, which in some sense they clearly are. Russ Roberts: Right--of course, if two people want to work, it's no problem. But if one of them doesn't want to work-- Mary Hirschfeld: Oh. Sure. Russ Roberts: for whatever reason--they have--to do childcare, or to volunteer, or to work on a hobby, and take a lower standard of material wellbeing, that's all to the good. And yet, we talk about it as if it's "impossible." Mary Hirschfeld: Yeah. The irony is, way back in the 1930s, John Maynard Keynes thought we were about to arrive at a place where we had solved the economic problem. And his concern was: What are we going to do with all this abundant leisure? So, whatever this thing is-- Russ Roberts: We showed him. Mary Hirschfeld: Yeah. Julia Schor has picked it up in The Overworked American and The Overspent American, two different books talking about this phenomenon. Because it does suggest that the culture is getting worse on this dimension, like over the decades; and it comes to seem more and more normal to us. And the real tragedy is we are so very rich, and yet we don't--because the flip side of this is if I keep pursuing more and always feel that I have scarcity in my life, somehow I'm not seeing how much I do have. I'm not actually fully present to or enjoying the material goods that are right here in my living room. And, so, that's also part of, to me, the tragedy. We're missing the higher goods; and I think we're also not fully enjoying the lower goods that we actually have. Because there's something in this maximizing mentality that means you are always looking for the next step. And, so you are missing happiness on multiple levels when you try to pursue your life this way.

14:26 Russ Roberts: So, if someone was listening in on this conversation and didn't know anything about you or me, they'd say, 'Oh, well these are obviously two Leftists who hate capitalism. Who think that we need a commercial sector based on people, not profit; and, obviously, greed is a sin and we need to put the commercial world in perspective. And most of that kind of talk comes from either the Left or the Far Left.' And yet, I am not on the Left or Far Left. And I don't think you are, either. How do we understand that? And, how do we reassure our listeners? Mary Hirschfeld: Yeah, well, I do try to spend time in my book, and I might end up writing a follow-up about it. I love markets. I think private property is an institution that's absolutely fitting to human nature. And I think if you take this lens of thinking about life in terms of these higher goods and then economic life in service of it, you come up with a really compelling case for, like, what does it--'For the good of business.' Like, it's really good for the baker to set up shop: they're exercising their human talents; they're providing bread and other items to the community; they're building relationships. All these things are really, really good. And they are making a living. And, markets coordinate all of this so they end up being interdependent. It opens up a beautiful view of how markets work, in a way that's compelling in its own right. The only switch is to say that the goods that we're pursuing are, you know, are finite--not this infinite desire for more. And I go on to talk about--and this just comes from Aristotle--that once we want an infinite amount of more, you're going to end up corrupting those real goods that markets actually can and should produce. So. Russ Roberts: Adam Smith says the same thing. Right? Mary Hirschfeld: Mmmhmmm. Russ Roberts: Adam Smith says 'Man naturally desires not only to be loved but to be lovely.' And, by, 'loved,' Smith means not just romantic love but paid attention to, respected, admired, praised, etc. Mattering--I say it's all about mattering. It's an ugly word; I need a better way to say it. But, people want to matter. They want to have some reason to be. They want people to understand and see them as a value. It doesn't have to be physically, and making stuff. It could just be socially and supportively as a friend. And, so that's what makes us happy--says Smith. And yet, Smith says, there's two ways to get there. One of them is to be rich, wealthy, and famous. And let's just stick with wealthy. So, wealthy people tend to get a lot of attention paid to them. Not just by advertising, but by the people around them. People look up to wealthy people. People want their opinion. People want to dress the way they dress. And so on. And Smith says: That's a fool's game. Pursuing that is not going to really make you happy. You are better off--echoing Aquinas--Smith says you are better off being virtuous. You are better off being wise. You are better off accumulating wisdom. And being respected and honored and praised for that rather than money, fame, or power. And, I think that's really good advice. I think there's a separate question of whether, how people actually behave. Right? That's--you and I are both, I think, blurring what economists call the 'positive' and 'normative' distinction--the distinction between 'positive,' which is how the world is, and 'normative,' versus how it ought to be or how we'd like it to head. And I think it's an open question whether people really do pursue more and more and more. So, I think, you know, that's, that's--one defense of the economists' world view is, 'Well, you know, sure, stuff doesn't make you happy. But people act like it does. So, that's what we should treat them.' Mary Hirschfeld: Yeah. Although, I will say: There actually are significant numbers of people who pursue lives where they do pursue the calling that matters to them regardless of status or wealth. So, they are more like Smith people pursuing, you know, the goods of virtue and character and community. And, um, they exist. And the economic framework just can't always handle that very well. And so maybe in the aggregate there's enough that are pursuing more wealth or whatever that their models work out well. But I think I remember a piece by Tyler Cowen where he suggested that there are a lot of people who are income-satisficers. You know--there are people teaching first grade, for example. There are people who go to work as a nurse. And they are not making a lot of money. But they chose that occupation because it was meaningful. So, but, the positive/normative distinction--it is blurry. So, just to repeat something we've already been talking about: When economists model people as pursuing more wealth, and calling that rational, they are also, I think, shaping or at least endorsing these cultural trends that support that path to happiness that probably is not the best one. Russ Roberts: So, if you said-- Mary Hirschfeld: So--Go ahead. Russ Roberts: Well, if you said that to me 25 years ago, I would have said, 'That's ridiculous. That's absurd. You are telling me that economists, through their little Econ 101 classes, are shaping our commercial culture?' Doesn't that strike you as a bit absurd? Mary Hirschfeld: People always do push back on me about this. And I don't mean that economists have single-handedly created this catastrophe. But I do think they amplify it. So, I think part of the reason why economics looks like a sensible approach is because it's picking up on things that are already there. So they are reflecting back what's going on in the culture. But then, they slap on labels like 'this is rational.' They teach their students how to teach this way. Uh, and that just reinforces it. So, if you tune into a podcast like Planet Money, or if you read a book like Freakonomics, they are just, again, amplifying the sort of message. And I do think that--well, it certainly makes it harder to try to persuade people that there's another approach to happiness that's better. But I do think it's shifting the culture. I think it's Michael Sandel who says, 'The word incentivize is metastasize, in the last 2 or 3 decades.' Just, as a measure of the spread of this economic way of thinking. And his book, What Money Can't Buy I think is a lamentation of, as we shift towards this way, this economic way of thinking, we are forgetting a lot of these other modes of thought that used to come more naturally to us.

21:21 Russ Roberts: Well, I--I want to--let me, though I mostly agree with you, maybe even more than mostly, entirely agree with you. I don't think--I don't find the Sandel critique as persuasive as perhaps you do. I don't think there's anything wrong with incentivizing people. I don't think there's anything wrong--maybe I just haven't come far enough along with the critique. But, I don't think there's anything wrong with realizing that people respond to incentives, and to structure public policy in certain ways to take advantage of that or to do that with that understanding of that reality: that people respond to incentives. I think--I've always thought that the--the deepest--there are really only 3 principles in economics: People respond to incentives; there are tradeoffs--that's Number 2, opportunity costs, same idea; and Number 3 is when people interact with each other in what we call markets, more generally in emergent orders and in complexity. It's complicated. The things that are going to happen are not as straightforward as you think. And that gives you the unintended consequences. And it gives you the appreciation that many things work better--not everything--many things work better when they are undesigned and unregulated and not created from the top down. And I think the critics of economics on the Left miss that last point. But, to take the Sandel point about incentivizing: I think the deeper point isn't that incentives have problems. I think it's when you use incentives only for the things that matter--that are measurable. Excuse me. And you ignore the things that don't matter. That's a legitimate critique. But, to argue that there are things that you can measure, that incentives matter, that seems pretty--like a good idea to know about that. Mary Hirschfeld: Yeah. No. And I certainly don't mean to suggest, by any stretch, that policy-makers should ignore incentives and the fact that they shape human behavior. What I'm more worried about--so I think there's an important role for economics to play, precisely because they do understand this. The point I want to make, though, is it's not the whole picture. And you need to remember that it's not the whole picture. And I think Samuel Bowles, and I'm not going to remember the name of his book but it's mostly just one, talks about his. So, incentives shape behavior. But insofar as incentives also suggest that more is better, they also might undermine some of these other norms or other higher goods. And so, a policy-maker needs to be careful about balancing them. And I actually, we said I think[?] we are saying the saying the same thing. It's not that we should ignore incentives or not use them. It's that when we come to think about public policy exclusively in terms of incentives, we risk forming people in a way that thinks more is better and undermining the commitment to higher goods that often generate good behavior on its own. Um, so, from my point of view, a really good economist has to do this careful balancing act between how do we structure policy so that, yes, we use incentives, but we don't thereby also undermine the deeper goods that we are trying to aim at.

24:38 Russ Roberts: I want to push back a little further. Against [?] policy. If I can get you to agree. So, more isn't better. But, I would argue more kidneys are better than fewer kidneys for people who have kidney failure. And we don't have very many kidneys donated in the United States, through just the incentive of altruism. And so, there's an argument to be made that we should let people donate their kidneys for money. Now. I think you'd get more kidneys. I could be wrong about that, obviously. But I think you would get more kidneys. You'd get kidneys from different people, once you said it was up for monetary donation rather than just a pure altruism. And, I think, you could argue that that would be a better world than the world we live in, where people are dying or stuck on kidney dialysis machines that are credibly life-diminishing and incredibly expensive; paid for by usually other people. So, I think that's where the rubber hits the road in this kind of argument. Now, would you argue that it's immoral to monetize the donation of a body part? Mary Hirschfeld: I'm worried about it. So, I'm not prepared to endorse or condemn. But I am worried about it. So, for me, that's an open question. But let's say for the sake of argument that I don't have a problem with monetizing it. There's still a real question about whether paying people--I mean, giving up a kidney seems like a major sacrifice, like, a hard thing to do. And maybe you get more of it if you pay people. But, maybe you get even more of it if you somehow socially acknowledge it as a heroic, noble, lovable sacrifice. And that, to the degree that you monetize it, then it becomes, 'Oh, she just did it for money.' And you may actually have an adverse effect where you get fewer kidneys and not more. And, [?] points to a few studies on smaller issues like the Israeli day care center where, when you bring in incentives you actually get the perverse effect that you get less of what you were trying to get, because you also inadvertently undermine the norms. I don't know if you need me to spell out that particular example. But, there was a day care center; parents were coming late. They were getting irritated so they just decided to start charging the parents for coming late. And it turned out that parents came even later. And what seems to have happened is, once you convert coming late into something you can buy, people just buy more of it. And, you have thereby undermined the norm that says, 'Out of respect for the daycare workers, I should come pick up my kid on time.' So-- Russ Roberts: I'm glad you mention that example. Because it is the single most frequently-mentioned example that I despise. And really dislike. So, let me give you my reaction to that. When I say it's the most common: It gets quoted--so, Sandel quotes it. I think you quote it in your book, right? Did you mention it in the book? I think you did. Mary Hirschfeld: Yeah, I did. And Bowles does. Russ Roberts: Bowles does. And Dan Pink does: we talked about it--I think it was Dan--one of the times I've interviewed him. And I just want to say a couple of things about it, and then I'm going to--I'll give you a little bit of agreement, for what it's worth. So, I think, if they had picked a large enough fine, they wouldn't have seen an increase in people being late. They would have seen a reduction. So, I don't think you want to say, one should say as a general principle that substituting money for norms is counterproductive. I think it depends on whether you pick it correctly. I think the fundamental claim of the paper, which is just a hypothesis that when you convert something to money you reduce the impact of the norm, could be true. You know. But, you just need to pick a bigger one. The more fundamental point, which is made by Ariel Rubinstein, the Israeli game theorist--and I think we talked about it in his EconTalk conversation, because I just found his critique so entertaining, is that, he says: The people who did that study, he says two things about it. One, the actual researchers weren't on the ground. They had graduate students or research assistants collect the data. Which is a little bit weird, because you don't know exactly whether it was collected correctly. That's number one. Number two, he said, 'If you think you can make an Israeli pay a fine at 5:07 when they were supposed to show up at 5, and they are charged so many pounds--Israeli currency--for being late--one ninth of an hour,' he said, 'You're crazy. No Israeli would pay that fine. It just ain't happening.' To the daycare center. So, he expressed some cultural skepticism of this fact. Now, having said that--it's just my pet peeve about that study--having said that, I could imagine--I like your first point. I agree with that 100%. Rather than quote, 'Oh, it's easy. We just have to raise the return, in a financial sense,' you do have an alternative, of creating a social reward: honor, dignity, pride. There are other ways to motivate people. And I don't--I think economists do tend to ignore that. So, I'm with you on that. Mary Hirschfeld: Yeah. And, I will say, neither Bowles nor Sandel lean exclusively on that one example. They pick out other ones. But, I think all you need to see, to see their point, is: Certain goods which clearly would be mutated if you think about them in monetary terms. I mean, there's a reason why we think prostitution is different from marriage. Right? Russ Roberts: Yep. Mary Hirschfeld: So--but then the trick would be to go into each particular case and ask, 'How does this balance out?' And sometimes you are absolutely right: Incentives are going to be the easiest, most obvious, intuitive way to handle it. The warning is just not to think exclusively in terms of incentives. Russ Roberts: No, I think the incentives are crucial. I just think that monetary incentives are not much different from non-monetary incentives. If you have a norm that says the right thing to do is to give up your kidney for a friend--of course, I salute Virginia Postrel, who donated a kidney to Sally Satel. And we've had conversations with both of them, as well as conversations about the market for kidneys. So, we'll put up links to all of those. But I think norms and--well, norms are sort of a kind of incentive. I think it may be important to make a distinction between a monetary incentive that makes you better off, versus, 'doing the right thing,' that makes you better off--what Adam Smith called 'propriety.' And the certain expectation that there's civilized ways of behaving and interacting with others. Maybe there is an important distinction there that I shouldn't inflate[?]. Mary Hirschfeld: Yeah. And I would really like to see Social Science move more in the direction of thinking through how to balance out these things, or what's involved in these norms. Because I do think there's something--like, we all want to be able to look ourselves in the mirror at the end of the day. Those kinds of--if there's a social calling for me to be a certain way, it's going to be easier for me to step in to do that. And, there is in a sense a higher calling to make, to getting more. And that's what worries me about the heavy weight on incentives that currently characterizes our culture.

32:44 Russ Roberts: Yeah; I was just thinking about tipping. Tipping--I think people tip in restaurants because it's the right thing to do. It's a norm that has evolved. And some people don't like that norm--recently have criticized it. But I do think it's different than the economists' way of looking at tipping in the standard model. Which is: 'Well, there's a chance you might be back there again, with that same waiter.' That's clearly technically true; but it's not why people tip! Mary Hirschfeld: Right. Right. It's a way of saying 'Thank you.' And 'thank you' is not just to try to get you to be nice to be later on. It's to express actual gratitude. So, although, it begs the question why that service seems to call forth a desire to express gratitude. And, there's interesting reflections on why, that it is a norm; and so I have to say, 'Thank you' that way. And I usually mean it. I mean, I usually genuinely feel gratitude. Russ Roberts: No; I agree. And I've told the story in here before about leaving a large tip at a lodge in a national park, and my housekeeper returning my wife's diamond earring. It wasn't my plan. It wasn't an insurance policy. I just got--it was a lagniappe; it was a bonus; it was gravy. But I like tipping. As you say--I get pleasure from the expression of gratitude. But it is a little bit complicated. I do think it's an interesting question, whether norms and propriety have become less important in American society. Mary Hirschfeld: I mean, that is a concern Sandel expresses, and I clearly share. Whenever you substitute money, you are saying that the norms aren't what matters. Because, nobody--like I've already said--nobody thinks you rise in character, improving character, by doing whatever it takes to get more money. So, I do think there's a systematic substitution. And I would hope that people would start thinking about that more thoroughly. Because, Sandel, you know, shoots from the hip. And it seemed to me to be more a gateway to a question that should be explored more deeply. Russ Roberts: At the same time, though, I think, other institutions--and as you concede, it's not just economics and economists--other institutions that used to teach what I would call virtue, such as our public schools, definitely do not do that any more. They teach a different kind of virtue: they teach tolerance and self-esteem, which are the wrong--I think those are not necessarily the right--they both have positive aspects to them. But honesty, courage, duty, honor, etc. have fallen into disfavor, I think, in American society, to some extent. Mary Hirschfeld: Yeah. No; absolutely. A little self-discipline would go a long way. The [?] what bothers me about the whole self-esteem push--again, it's good to feel good about yourself; and as you already said, that's, we're built to want to feel good about ourselves. But if it's without content, you end up not feeling good about yourself at all. That's--I think that's one way to identify when you've taken a lesser good and put it up too high, is that when you pursue it as an ultimate good you actually lose all the good or all the value that was there in the first place. It corrupts it. And self-esteem is a perfect example of that. I think it's a disaster that we've pushed that so hard in the schools.

36:09 Russ Roberts: Let's talk about economic growth. You mentioned Tyler Cowen. Tyler was on here in the past talking about economic growth as a virtue. Do you see it as a virtue, as something public policy should aim for? Mary Hirschfeld: Definitely not something public policy should aim for. Caveat: When we are talking about already-developed Western economies. So, economic growth is clearly very good for impoverished countries coming out of poverty. The question is whether we should pursue further economic growth in the United States and Europe and Japan and places that have already in some sense arrived. And, I do not, because I think that just feeds into the solution[?] that more is better; and it keeps people scrambling off into this elusive, whatever is the next thing, and not--failing to see the goods that are around them and failing to cultivate these higher goods. So, I worry about that a lot. That said, the ideal economy, in my picture[?]--if I got to my Utopian vision of what the economy should be like where we are pursuing our economic lives in service of these economic goods, I think it would create a healthy, flourishing society. And, healthy, flourishing organisms tend to grow. So I would expect growth as a byproduct of pursuing these goods. And I would welcome that kind of growth. But I think when you pursue it as an end in itself, you end up--devaluing, not valuing enough these higher goods. And you end up with a lot more stuff and lot less genuine human flourishing, genuine human meaning, genuine human purpose. Russ Roberts: So, let me ask you a tougher question. Some people believe that economic growth has not been shared widely over the last 40 years. I disagree. As long-time listeners know, I think a lot of people have gotten more materially improved than the data suggest for a variety of reasons. However, there is a reasonable amount--excuse me--there is a substantial amount of inequality at any point in time. Which, you could debate whether that's good or bad. But, do you think we should devote our policy space to bringing up people at the bottom rather than improving the economy as a whole? Mary Hirschfeld: Uh--neither. I want to go off the menu on that one. Russ Roberts: Fair enough. Mary Hirschfeld: So, if you just look at material goods, and the point that you make, that, you know, a growing economy has clearly raised the material standard of living for the poor, and people who worry about income inequality are missing that fact; and you are exactly right about that. But what I think you might be missing is that the real problem with income inequality is the social meaning it has. And--and that's a different question. Although, once we start worrying about these inequalities that I think are rising in our culture, when we start thinking about them in economic terms it invites the response that you'd want to give, which is if you care about the material wellbeing--if you care about how much money people have, then you have to take into account the fact that the people at the bottom tend to have a little more than they did 50 or a hundred years ago. It seems to be[?] that what both people on both sides of the debate are missing is that what matters is the social meaning of the inequality. And I do think that's been shifting in character over time. So, you can imagine a world where, say, you are at a university and you have a professors and you have secretaries and you have gardeners. And it would be natural for a lot of reasons for the professors to be higher paid because they spent more time doing education--educating themselves. And because maybe the community wants to celebrate the good of the university which is represented by what professors do. So there's lots of good reasons to pay a professor more than a gardener at a university. That said, you can imagine one good kind of university, where the professors go to work, and they admire the gardening that's been done; and they are friendly with them. They have full respect for and value the contributions of everybody, even though they are being paid differently. And so there's a sense of community. Right? So that would be one vision. And then another vision is: Well, my economic wellbeing is a marker. My status if I make more than you, I'm better than you. And I use these invidious distinctions. And I think there's a real argument to be made that we are increasingly using our economic wealth to make these invidious distinctions. Indeed, I at least entertain the hypothesis or possibility that part of the reason why we're so frantically searching after more wealth is because these invidious distinctions have gotten more and more pronounced over the decades. Um, so anyway, I just--I think economic inequality is a topic that really could benefit from rethinking in a way that thought it through in terms of not just the economic characteristics, but of what the whole human picture of economic inequality means. Russ Roberts: So that's lovely; and I'm sympathetic to it. But how would that change the actual wages? Would you suggest that--well, you conceded that professors should earn more than gardeners, they shouldn't probably earn as much more as they actually do now. Right? In terms of that status and change and comparative respect. But, so, if you shrink that gap, you are going to either have an excess supply of gardeners, or a shortage of professors? Right? The market forces are going to punish you. Do you want to change that? Mary Hirschfeld: No. Not really. The market forces are going to set things the way they do. Certainly not at the level of professors and gardeners. I'm not--I'm not such a libertarian that I'm unilaterally opposed to, you know, taxing the rich more or whatever, that just might be a social signal that, you know, while we think distinctions are relevant and matter, that there should just be a cap to them. But I am far more interested in this book and in my whole project--is to let other people sort out: How much should we have of the State due to correct these things. So, I really want to shape the culture, such that the people at the top end who are pursuing their wealth, they are not going to be trying to maximize it. Right? So, they will, ideally, they would voluntarily identify a standard of living that marks out whatever they've accomplished. And then the rest would be available--either through higher taxes or through charitable donations, or whatever, to make community needs; to meet the needs of people who have fallen behind. And, we have examples of this. So, Warren Buffett, for example, still lives in Omaha, Nebraska-- Russ Roberts: Yep-- Mary Hirschfeld: in his old neighborhood. It's a nice house. I'm sure his life marks out that he has been successful. But he doesn't need a 65,000 square foot mansion, right, with 20 acres, and fencing-- Russ Roberts: In Seattle, say, hypothetically. Mary Hirschfeld: Hypothetically. Yeah. And so, so yeah: to me, there's healthy economic inequality and then there's unhealthy economic inequality. But the primary thing driving it to me is--well, the market is there doing it, but it's the social--the way we socially navigate that. And that does strike me that something has changed. So, I'm 58. I guess I'm a few years younger than you. But it does seem to me in the 1960s and 1970s it wasn't quite as pronounced as it is now: this idea that successful people really should have these splendiferous mansions and leave everybody else behind. There are always people like that; don't get me wrong. It also seems there are a lot more people who have Warren Buffett's sensibilities of, 'Sure, I'm a successful physician and I'm going to live in a nice house, but I'm still neighbors with these other guys and I'm still part of the community, and I'm not going to make myself so different from them that there's a break in the community.

44:28 Russ Roberts: Yeah; I think that's--I don't know if that's true or not. People say that; I think it's partly just that we got a lot wealthier in the 1980s and 1990s and onward. But, I have to tell a story. I'm a skeptic about the story, but I think it's an interesting example of what we are talking about. Supposedly. I'd love to know if it's really true. I think it was a business class--some MBA [Master of Business Administration] class--where this student was going into the final exam with an A, easy A. This is a student with a 4.0, maybe an undergrad, even. And, they get to the final exam, and the final exam is a blank piece of paper; and there's only one question. And the teacher says, 'You have a piece of paper in front of you. Enter onto the piece of paper the name of the cleaning lady for this building.' And the student telling the story, years later, said, 'I didn't know the name of that cleaning lady. I had to leave it blank, or I made up something.' And I got a B for the class.' Now, I'm a little bit skeptical that this actually happened. But it's a nice story even if it didn't happen. I think it's a good lesson about the kind of minimal human interaction you are talking about, and the place where there is disparity between people's prospects and material wellbeing. But I also want to push back in a different way. Because, it seems to me that, by focusing on the material inequality we've become obsessed with ways to change that with money. And I think, although there are many people who garden who think it's a glorious thing--and I salute them--there are probably some people who garden because they don't have other skills that they didn't get because their school wasn't so good. And I'd rather see us improve our schools in drastic ways rather than change the tax system. Mary Hirschfeld: I'm all for improving education, so everybody has access to realizing their talents. But I'm also very worried about the people whose vocation really is to be a gardener. And those people are going to exist, anyway. And, by the way, we're always going to need the gardening to be done. And, so, I would really like us to start moving back towards a world where we recognize the value of an honest day's work, and gave people, you know, social admiration for doing that, even if they are not always materially compensated, you know, as much as other people are. Um-- Russ Roberts: And how would you do that, Mary? I mean, I agree with you. Right? What's the practical implication of that? Mary Hirschfeld: Well, this is a whole thing about trying to work through a culture. Because, unlike state and unlike the individual, there's no button I can push to just change things. But, I--the cultures do change. And they change through conversations like this one. And so I just keep having these conversations. It's kind of me tossing my little coin into the pot. And, um--and, you know, things can change. And, you know, again, we've seen this happen in our lifetimes: When we were growing up, everybody smoked. It was super-common. And, sure we had a few laws. We threw on some taxes. But we also just had people talking and talking. And now it's a disreputable practice. And far fewer people smoke. So, cultures really can change. And, so, I'm just doing my little bit, trying to change it in this other direction. And, and, and also I think it helps to start trying to put into practice. So I can have the conversation, but I can also make sure that I do know the name of, you know, the person who cleans my office. Which, by the way, is also Mary. So-- Russ Roberts: Easy one-- Mary Hirschfeld: Yeah. Russ Roberts: Heh, heh, heh-- Mary Hirschfeld: So, you know. And just get back in the habit of synch. I think Adam Smith is really onto something: The pain of poverty is the people socially do not see. And one thing that you can start to do is just learn to see the people that you normally don't see. And it's actually--so, I try to practice this. And, anyway. Russ Roberts: Yeah. No. I'm a big fan of that kind of "policy"--that it's not some edict out of Washington, but individuals choosing to be more respectful and giving honor to people in their lives who don't maybe make as much money as they do, but who provide extraordinarily wonderful services. And to raise the non-monetary rewards. You know, the smoking example is really interesting. I never thought about it before. But, you left out something in your summary, which was that it came to be believed that it killed you, earlier than you otherwise would die. But you write[?] the right point, which is that incentive--which is an incentive--was also, went along with a cultural view of smoking that it simply wasn't cool. And not because it killed you. It was something more than that. It wasn't just, 'Oh, it's really cool but be careful: It kills you.' It was, as, it's an ugly habit. And I think they both happened together. Which is interesting. Mary Hirschfeld: I can actually speak to this. This is personal. I was a smoker. And I certainly knew all the terrible things it was going to do to my health. But I liked smoking. And that was by itself never, ever going to change my behavior. But change my behavior as a social stigma became unbearable. Russ Roberts: Yeah. Fascinating. So interesting.

49:54 Russ Roberts: Now, you--you have a remarkably unusual academic career. In the middle of your career as an economist you decided to get a Ph.D. in theology at Notre Dame. Having a Ph.D. from Harvard under your belt, already. And in the course of that you studied some Aquinas--quite a bit, evidently. Has it changed your behavior as a consumer? Do you notice it? I'm not suggesting that if you don't notice it that it didn't make a difference. It could make a difference without your noticing it. But I'm curious if you notice it. Mary Hirschfeld: Um, I love that you ask that question. Yes. It made a difference. It took--so, I've been working on this way of seeing the world for 15 years, now. Um. And it took a while. So, it really is a conversion. But no: I no longer need a raise. Like, I really am happy with what I have. And it changes how I--you know, I walk into my house, and I just, I'm just more able to look at it and go, 'You know, this is nice.' Like, you know, 'Yah.' So the kinds of decisions I make have certainly changed. My orientation, what's important in life has really changed. Um, and I mean, part of the reason why I have a certain passion about it is because it really has made me a more happier, more flourishing person. But you have to walk it. You can read about it. And you can say, you can say, 'Oh that sounds really nice.' You have to start putting it into practice for it to come real. And, so it's been an amazing journey. I've really enjoyed it.

51:36 Russ Roberts: I thinking about the amount of time I've spent leafing through catalogs. Typically of gadgets, but not always thinking, always, and thinking, like: 'How, if I could get this one?' And now, I make enough money that, if I want, that if I have a fairly expensive camera--every few years--which is probably stupid, probably a mistake, probably better off keeping my current camera. And just getting better at taking pictures with it, as I like to say--it's the wizard, not the wand! But, when people compliment me on my photographs. But, sometimes I get obsessed with the wand! I can't help it. But I do think it's an interesting question about how one should socialize one's self. How one should be self-aware about how one's own consumerism and need or passion or addiction to the material world. One of the things I like about the ride-sharing and, potential for autonomous vehicles is that--I'm not obsessed with cars, but I would prefer not have one at all.' I don't have a fancy car. I have a Honda Accord. It's a nice car, but I don't have a fancy car. So, it's an interesting question about how to think about how to wean oneself from these material addiction, if you think it is an unhealthy thing in the long run. Mary Hirschfeld: Yeah. And it's often a matter of discerning. Because, for some people, having a nice car might actually make sense. It might fit certain, you know, certain of the goods they are trying to instantiate in their lives, and more power to them. But, your camera example is a good one. Because I was in the same boat. I would always look at all these gadgets. I would--what if I won the lottery? I would think of all these things that I would buy? But then part of the trick is to look around at the litter in your house-- Russ Roberts: Yeah-- Mary Hirschfeld: Especially in the basement. And those kind of used to all represent those same kind of desires. And at least for me, 90% of them were a complete waste. So, it's just learning that there's an illusion about what this might do for you, versus just pausing to say, 'No, really. Really what would it do for me?' And if the answer is it really would do something, then sure. But I think a lot of the time you find out that, 'No: I want the better camera to substitute for the fact that I'm not taking the time to figure out how to, you know, become a better photographer. At least in my life, that turned out to be true, a lot. So, now I come back and say, 'Okay. Why don't you just become a better cook rather than getting better pots and pans?' And so, you know. Russ Roberts: 'Oh but that new coating is so fantastic!' Mary Hirschfeld: 'I know. And it will change everything.' Russ Roberts: Everything. Yeah, yah.

54:25 Russ Roberts: Now you mentioned status before. I do think economists--unlike sociologists--underrate the importance of status. And they tend to think that people pursue mature wellbeing for its direct impact rather than its status effect. We do have to accept the fact, though--or maybe you don't--but I am very aware of the fact that people are going to compete on status in certain ways, even if you take away they currently compete. Do you worry about that? Mary Hirschfeld: Yes and no. I think it is built in--I mean, this goes back to the Smith point. Right? So, we all want to have social approbation: We want to be approved of and we want to be loved. And that's never going to go away. So then the real question is: What are good ways to get that social approval, versus what are not such good ways? And, so we are always going to have status. We should always esteem the person who is wise and prudent over the person who is foolish and intemperate and all the rest. So that's a status thing. But it's a status based on real accomplishments rather than these external markers. And also, it's a status--there's a status where I want to lord it over the other people, versus a status where I'm happy that I inhabit[?] with the goods that I inhabit, but it's still oriented back to the community so it's not at your expense. It's more like, 'I contribute to the community and I'm glad you appreciate the contributions, but I in turn want to appreciate what you contribute,' so there's more of a back and forth, a give and take, that leads to a healthier version of status pursuit. So--this goes to a theological point: from a Catholic point of view, there is a hierarchy in human nature; I mean, we can't help it. There's going to be a certain hierarchy. Everything turns on what that hierarchy means. Right? So, you know, Jesus's command to the disciples is that: Yes; the people who would lead should think of themselves as servants. Right? So, they're going to have the status of leader but they're still oriented toward serving the community. That's a healthy form of hierarchy. Whereas, we just kind of want to go out on our individual own and climb as high as we can, and get to the top and go, 'Hurrah. Yay, me.' And that's more unfortunate. And also much more common. Russ Roberts: Yeah: it would be interesting if politicians were more interested--we call them 'public servants.' I hate that phrase. Mary Hirschfeld: Maybe once upon a time it was true. Russ Roberts: Yeah, it could have been true. It may be true of some people at some time. And the implication then is that Jeff Bezos is not a public servant, because he is working for money and not for serving. And, yeah--ehh. Mary Hirschfeld: Hhmm, hhmm, hhmm.

57:20 Russ Roberts: Say something about Aquinas's view of human decision-making relative to an animal. Because, I think our--the seductive nature of material goods, when I buy that extra gadget and then it's left abandoned 6 months later in the basement--I think Aquinas has something to say about that, comparing us, say, to animals that act on instinct. And we do have the potential for something more than that. So, what does Aquinas say? Mary Hirschfeld: So, there's one way--I just want to repeat what I said in the book and then I kind of want to go past it, because it occurs to me that I left out an important point. But, the point in the book is: If we think about ourselves solely in terms of acting in terms of incentives--if you pay me more, I'll do this; if you tax me more I'll do less of that--which is all clearly true. Aquinas actually identifies that kind of rationality as being the sort of rationality that we share with animals, because it's one that mostly goes off our pleasures and our pains, and makes these calculations along that. And then, if that's what it is, the only thing that distinguishes a human from an animal is that we are a little bit cleverer about how to do these calculations. Um, so, that goes back to Hobbes, who wanted to say that's the only real difference between an animal and a human. Um, but, for Aquinas, for Aristotle, or really any of the ancients, there's a higher human rationality or intelligence that allows us to step back from our momentary impulses or desires or fears or whatever, and ask, 'What is good?' and 'What is true?' and 'What is beautiful?' And to think through the meaning of things. And to choose out which of the finite goods are worthy of pursuit in our lives, and to order our life coherently around them. It's the exercise of human rationality that allows us to be creative. It's the exercise of rationality that allows us to be distinct--individually distinct. So, you know, a dolphin might be really, really smart; but my guess is most dolphins act more or less the same way in the same set of circumstances, whereas we humans have a wide variety of things that we could do. And it comes out of this ability to contemplate what is good for us to want rather than just wanting what we want. So, the thing that I would add is: When we pursue those gadgets, that's somebody--animals don't really do that. Right? I mean, they don't pile up--[?] pile up--well, maybe they do-- Russ Roberts: Well, they try. Mary Hirschfeld: They might try. I don't think they have the problem having all that junk of failed things that they wanted. Like, they mostly go out--so, I think there's a further distortion when you introduce money in this maximizing idea that's kind of a human--it's a distortion of human rationality that plays off or with our instincts in a way that makes us even worse than the animals. Which, by the way, is another common, ancient theme: that, you know, a good human is wonderful but a bad human is worse than a beast. Because we somehow max--yeah. So. I don't know if I made that clear or not. Russ Roberts: Well, do you want to say more about--repeat what you said about the extension of the idea in the book. Because what you said in the book you said very well. But then you said you wanted to add something? And, did you finish that thought? Mary Hirschfeld: Well, I kind of waved at it. So, the book basically wants to identify our maximizing behavior with the animals. And the addendum is: Actually, we are probably worse. When we are in the mode of maximizing, we are probably worse. Because what happens is: Once we get this idea that we can pursue our infinite desires through more, we humans actually have deeper ideas about the infinite, from believers, infinite good of God, that even if you are not a believer that the deeper or richer goods of human relationship and all the other things that we've been talking about. If I misdirect that desire for the infinite onto stuff--right?--I'm going to be really hungry for it. I'm going to want a whole lot more of it. And I don't think animals quite have that frenzied desire for more that we have. I think it's a human distortion that comes through of our reason being fallen, or disordered.

1:01:35 Russ Roberts: Well, David Foster Wallace says in his commencement address: 'Everyone worships.' And he suggests you worship something that has stood the test of time and that involves the transcendent, rather than, say, beauty--your own beauty. Or money. And he claims--and this is a religious--I don't think he's a religious person particularly, but it's a religious claim, that the pursuit of stuff, or your own physical appearance, or fame--and certainly Smith agrees with this--is a fool's game. You are not going to be satisfied. You are never going to have enough. There will always be people who have more than you do. And then, you'll lose your beauty as you age. You'll desperately try to stave it off with plastic surgery and other, exercise maybe in other things. But ultimately, your beauty will fade. And therefore it's not going to ultimately be a satisfying thing to cherish, and to salute and put at the top of a pedestal. So, these are--these views have become--they are not almost--they are clichés. They are a part of what you call the wisdom literature that nobody on their deathbed wishes they had more toys. Nobody on their deathbed wishes they'd spent more time at the office. And yet, I think for young people listening, when they hear these kind of comments between oldsters like you and me, Mary, they go, 'Oh, that's just religion stuff. That's masquerading as advice. We don't need that. We go out and have fun. We do what we want.' And, 'Stay out of my life.' Mary Hirschfeld: Well, they may say that. And unfortunately then they will inherit the older version of themselves that they are going to be creating. And I had to struggle with the weaknesses that I accumulated by behaving exactly that way when I was younger. But I want to finish the David Foster Wallace quote. He says it will eat you alive-- Russ Roberts: Yes he does. Mary Hirschfeld: It's not just--and maybe they can't hear our wisdom. But they are going to find out. Like, if I decide that what really matters is becoming the most famous economist in the world, the problem is there's always somebody more famous. And so--and then the tragedy of it is, my achievements just stayed away. Right? Like, I can't even enjoy what I've achieved if I'm always looking to that next rung. And, I figured that out around the age of 30: that this just, you know--it's completely counter-productive. I'm positioning myself in an attitude toward the world that is going to make me perpetually miserable. And, it's been a long walk back from it. But all we can do is talk about it. And then when they hit the place where they realize the last promotion is still leaving them really upset because there is another promotion they need, maybe they'll remember what we said; and they'll go, 'Oh, wait a minute. There was something to that.' Russ Roberts: Well, it's interesting: You're a Catholic; I'm a Jew. But it's kind of a Buddhist set of wisdom, part of wisdom here. Which is: If you are always grasping, if you are always trying to get more, if you are always dissatisfied with what you have, that will be your life. My way of thinking about this is: Free beer tomorrow. Like, the sign in the bar: Free Beer Tomorrow. 'Oh, yeah, yeah, yeah. Tomorrow will be great, because it's the free beer.' And you get in the bar, and it's--the sign says, 'Free beer tomorrow.' 'Okay, I'll come back tomorrow.' And you never get there. So, I don't want to be--I don't want to be a curmudgeon. I don't want to suggest I have insights that younger people don't have. But, it's worth considering. And certainly the libertarian in me, and I'm probably more of a libertarian than you although less than I was when I was 25, says to people, 'Choose a way. It's up to you. That's what freedom is all about.' Mary Hirschfeld: No, and I absolutely do not have paternalistic legislation to keep them from choosing what they are going to be choosing. I strongly resist any moves in that direction. But, I'm going to feel free to tell them that I think it's a bad idea, and have conversations with them about it. And, as you pointed out: This is ancient wisdom. It's across all sorts of cultures and all sorts of religious traditions. The Greek pagans had this idea; Aristotle; Plato. Everybody knows this. What's missing in our culture, I think, is we've forgotten that that was good wisdom. And, that this other behavior, while it comes up--and certainly young people are going to be particularly open to the idea that just one more thing will be better--we have forgotten to call that a vice. We have forgotten to call that out as a lesser--you know, ultimately unsatisfactory path. And-- Russ Roberts: Other than smoking and intolerance, there are no vices in American society. Vice has gone out of fashion. We've changed what the fashions are, for sure. Mary Hirschfeld: Yeah. Although I think what we're going to find is that people do like to call out vices. And so, they are going to be very judgmental about the ones that they keep on their list. And, again, speaking as an ex-smoker, I can testify. Russ Roberts: Well, Scott Alexander has a beautiful essay on that I'll put up from his website, Slate Star Codex.

1:06:59 Russ Roberts: I don't want to stop before we talk about sunk cost. This is a bit of minutiae, to some extent. But it's such a perennial issue in economics classes, and in economics haranguing people, I don't want to miss it. You make the point, I think it's in your book--correct me if I'm wrong--but it's a little bit weird that economists are proud of taking people as they are. And yet, most people struggle with the idea that sunk costs are sunk. They take sunk costs into account. And economists say, 'Oh, no, no, no, no. That's not rational.' But evidently, then, most people are not rational. Because, most people are very uncomfortable with it. So, you made that point. But you have a deeper point about why, I think, we should take account of sunk costs. So, share that, please. Mary Hirschfeld: Okay. But first, I just--I love the observation that in Chapter 1 of an economics textbook, they'll say, 'We're just describing people as they are. People are rational, and this is how it goes.' And then, in Chapter 2, they'll say, 'And most people fail to'--you know, 'respect the sunk costs.' And they never even notice that there's a small tension there. But, anyway: Now, there's some places where you actually do want to ignore your sunk costs. If I'm playing you at poker and I spent a lot of money bidding up the pot, and then on the last card it turns out that I really am not going to win, I should not follow up my losses with more betting, if I think I can con you out of it. But, there's a good--there's plenty of places where you really should ignore your sunk costs. But, if you think about it as a practice in general, if I'm always saying to myself, 'Oh, well, whatever it was that happened yesterday is a sunk cost. I have to decide today,' that means I'm always going to be emphasizing what are my feelings in the moment. They are just going to have an elevated sense of importance in my decision-making. And, the problem is, my feelings in the moment might often be impulsive or not wise. And, part of self-discipline--part of growing in self-discipline and virtue, is learning that 'Well, sure, I might like the donut today; but in the long run, I might like to cultivate the habit of not wanting donuts, because it would be better for my health.' And, so--I mean, there's classic places where this happens. If I want to start exercising more, I might go down to the gym and pay for a membership fee. And then if I have the idea that I should honor my sunk costs, I'm more likely to act on that higher impulse and get to the gym. But, if I do what the economists says, on the day when I'm thinking I don't want to go to the gym because I'm tired, and then my little quote-unquote "irrational" voice says 'You paid that money for the membership; you should go,' well, the economist would say, 'No. Ignore that voice. That's a sunk cost. If you don't feel like going, don't go.' And then I never get this chance to discipline myself. Now, economists certainly have models that allow you to try to do this self-committing kind of behavior. They have complicated models that try to handle these kinds of situations. I just think it's a lot more common than they think. And I think the main reason I think that is actually personal. I really was formed as an economist. I started grad school at the age of 20, 21, whatever I was--it was young. And I always found myself thinking on the margin, ignoring my sunk costs, and not developing anything remotely like self-discipline. So, I'm really--and I'm still struggling with this. The legacy of this is still in my being. Russ Roberts: I think that's a remarkably deep insight. I've never heard it before. That example would be--I think you used it in the book, actually--of, you buy tickets--and we've talked about ticket scalping and the alleged, all the challenges to rationality that come up when you lose a ticket for an event, should you re-buy it at a scalped price? And, you know, or when you over-pay, let's say, or you pay a lot for a ticket: Sunk costs are sunk. That money is irrelevant. And yet--so, an example would be--I think it's the one you use in the book, though I love the exercise one, too. But, you buy a ticket for an event; and now it's the day of the event. And, obviously, when you bought the ticket, you thought the value of the event was greater than the value of the ticket. But now--ach, you're so tired, or you've got this other stuff to do. And you should ignore the fact that you own the ticket: that, whatever you paid for it, because that money is gone no matter what, and you should just make the decision right now. And I think the idea that you bind yourself to the mast--the Ulysses allusion--that you bind yourself to the mast and say, 'I'm going to honor sunk costs because I'm going to go to more concerts that way,' or, 'I'm going to exercise more,' or 'I'm going to socialize with friends more,'--and I'm going to use that as a way to, as you say, remind myself of what I ultimately care about: I think that's really very cool. Mary Hirschfeld: Oh, thank you. Again, it comes right out of personal experience. I didn't go to the opera that day. I stayed home, and I've regretted it ever since. Because again, it becomes habit-forming. It becomes habit-forming; you say, 'Oh, I just don't feel like going today, so I won't. And then you miss out on all these higher goods. I mean, a lot of the things worth having in life require some effort, and that means sacrificing your higher concerns for these higher goods that are going to come to fruition later on.