Bryan Caplan on Learning across Disciplines (Ep. 40 — Live at Mason Econ)

“No single paper is that good”, says Bryan Caplan. To really understand a topic, you need to read the entire literature in the field. And to do the kind of scholarship Bryan’s work requires, you need to cover multiple fields. Only that way can you assemble a wide variety of evidence into useful knowledge.

But few scholars ever even try to reach the enlightened interdisciplinary plane. So how does he do it?

Tyler explores Bryan’s approach, including how to avoid the autodidact’s curse, why his favorite philosopher happens to be a former classmate, what Tolstoy has that science fiction lacks, the idea trap, most useful wrong beliefs, effective altruism, Larry David, what most economics papers miss about the return to education, and more.

Listen to the full conversation

Read the full transcript

TYLER COWEN: I’m here today with Bryan Caplan, professor of economics at George Mason University, a very good friend of mine, a moral man. Each of his last three books has made a major impact, most recently, the best-selling The Case against Education. Welcome, Bryan.

BRYAN CAPLAN: Thanks so much for having me, buddy.

On writing papers and books

COWEN: Let me start with a sentence you uttered to me a week ago. You said to me, “No single paper is that good.”

CAPLAN: [laughs]

COWEN: What did you mean by that?

CAPLAN: What I meant by that is that if you look at any individual piece, in social science specifically, it’s very hard to see that a reasonable person would fundamentally change their mind based upon any one of them.

People often have an idea of, there’s the really good papers where you should have a mind quake, and you never see the world again in the same way after that. For me, all of them fail to measure up to that standard. I think the way that you really learn something is by reading a vast empirical literature.

The direct cause of this was . . . I think Noah Smith had a challenge: “Name the two or three papers on each topic that are really convincing.” I was thinking about that and said, “Honestly, I can’t think of any papers like that unless you’re going to cheat and count a literature view as being that kind of a paper.”

Just realizing that the way that you actually achieve social science knowledge isn’t by finding the one crucial — might be a natural experiment that shows exactly how the world works — but by assembling a wide variety of evidence and then muddling through.

COWEN: So, say you write an interdisciplinary chapter for one of your books. Tell us a little more of how you do this and how you calibrate what you’re reading against actual reality.

CAPLAN: My procedure, which I’ve been pursuing more and more as I go along, is first of all, I start with the big topic. I’m usually using Google Scholar to try and find what has anyone written on this big topic? I go through the first 20 or 30 pages of Google Scholar views, but then that to me just gives you a ballpark of what’s really going on.

Then I try to subdivide every topic into lots of separate subtopics, and then repeat that same process of going through Google Scholar just to see what is it that almost anyone has said about this topic. When I actually get the papers, then I actually will go and look at the references and see if there’s more stuff that I should be looking at here.

I get those papers and go back to Google Scholar, and eventually the process does converge. I do have some stopping rules. I generally don’t worry too much about empirical papers written before 1980.

COWEN: You also then email the people who’ve done this research, right?

CAPLAN: Mm-hmm.

COWEN: Tell us about that.

CAPLAN: When I’m going through and reading papers, oftentimes I’ll find that there’s something I don’t understand very well or something that seems questionable. Usually, as long as the authors are living, I do try to actually reach out to them and get clarifications.

The next thing is when I’ve got what I think is a good, solid draft of a book. That’s where I enlist my RA and say, “Get me all the emails of all the living people I’ve cited in the book so far,” and then email all of them with two offers.

One of them is an offer to show them the entire manuscript. The other one — so that I’m not over on the far right side of the Laffer curve — is to say, “Or, if you’re busy, then I could just tell you the exact pages where I discuss your works, so at least you can tell me whether I’m accurately summarizing your work or not.”

For me, what I do is so interdisciplinary so I’m always worried about this autodidact’s curse, where you’ve read a ton of stuff but you still haven’t actually talked to anyone who knows what’s going on. This is one of the things that I try to do to deal with especially the wisdom of a field. Oftentimes there’s wisdom in a field, where it’s known to people who have thought about it for a long time, but they don’t write it down.

What I do is so interdisciplinary so I’m always worried about this autodidact’s curse, where you’ve read a ton of stuff but you still haven’t actually talked to anyone who knows what’s going on. This is one of the things that I try to do to deal with especially the wisdom of a field. Oftentimes there’s wisdom in a field, where it’s known to people who have thought about it for a long time, but they don’t write it down.

Of course, that’s very hard for the autodidact to find out. “What is the wisdom in your field that you don’t write down?” This is where I try to reach out to people. Generally, I would say I get about a 15 percent response rate for the people saying they’ll at least read something, so I feel like it does give me some good quality control.

COWEN: One area you’ve read a lot in, but I think never quite focused on, is personality psychology. What’s the most interesting thing you’ve learned from personality psychology?

CAPLAN: I do have one paper on this, “Stigler-Becker versus Myers-Briggs.” Let’s see . . . the single most interesting thing about personality psychology . . . At least one thing that might be a good answer is that cheerfulness loads on extroversion.

There’s something actually very social about happiness. When you read this, it makes so much sense — how little of happiness seems to be about material possessions and how much of it is about having good relationships with other people.

You can think about animals. When I read you something about animals, the animals that laugh, they’re all social animals. Dogs laugh, chimpanzees laugh, humans laugh. You never hear about a tiger laughing, these very asocial animals. At least that’s one that I often do think about, is this connection between social interaction and being happy.

On how Bryan Caplan became Bryan Caplan

COWEN: Now let’s go back in time a bit and try to figure out, how did Bryan Caplan come to be Bryan Caplan? You grew up in the Valley north of Los Angeles in a town called Northridge. How did that specific location influence you and help shape what you’ve become?

CAPLAN: I know that you like to say that I’m a regional thinker, just like all people are regional thinkers. When I go back, it’s easier to see what was going on. Honestly, no offense to my friends out in Northridge, but when I get there, it’s like, “Wow, this is such an intellectual wasteland. No one wants to talk about ideas out here.”

There’s no curiosity. It’s so insular, where people just are not curious, even what’s going on outside of the state of California. It’s not like we only care about America. Californians talk about California all the time.

When you read the newspapers there, it’s like, “What’s happening in California?” To me, it’s a lot like when you’re in Canada, everybody’s always like, “What’s happening in Canada?” Well, why is that important?

This navel-gazing aspect of Californians — I see a lot of what I’m doing as reacting against that and being very intellectually curious and very interested in the world.

Although, not so much to me it’s a reaction. It does explain why I felt so dissatisfied growing up. Remember, this is before the internet, so to go to the library and be able to get a good stack of books was the best that you could do in those days for intellectual enrichment.

I really do envy my kids for what a cornucopia of wonder that they have if they want a feast for the mind.

Honestly, no offense to my friends out in Northridge, but when I get there, it’s like, “Wow, this is such an intellectual wasteland. No one wants to talk about ideas out here.” There’s no curiosity. It’s so insular, where people just are not curious, even what’s going on outside of the state of California. It’s not like we only care about America. Californians talk about California all the time.

COWEN: Michael Huemer. Who is he? And why is he important, especially for you, but not only?

CAPLAN: Michael Huemer is a professor of philosophy at the University of Colorado at Boulder. I actually met him my freshman year at Berkeley when we were both undergraduates in Paul Feyerabend’s Ancient Philosophy class, which, by the way, is the only class so bad I ever just stopped attending.

[laughter]

CAPLAN: Because he just didn’t talk about ancient philosophy. He only wanted to talk about action at a distance, and how that is possible.

Anyway, I met Michael Huemer there, and out of all philosophers, he came to have the biggest influence on me. There were many issues that I was grappling with, a lot of it under the influence of Ayn Rand, where the more I learned in philosophy, the more dissatisfied I became, and yet I couldn’t think of anything else that made any sense.

Mike Huemer, as a student, wrote a bunch of essays that said, “Wow, this seems like it really actually solves a fundamental problem of philosophy in a way that’s so much more satisfying than any of the others.”

He was a big influence to me there, and then over time, he really built on this. He now has this amazing corpus of work.

For politics, he has this book, The Problem of Political Authority, which out of all the books of libertarian philosophy — almost every single one, if there were some nonlibertarian who said, “What’s a good book to read?” I’d be kind of embarrassed to give them the book because “Here it is, but . . .” It’s not really very convincing to someone that doesn’t already agree.

I think what’s great about this book, and really all of Mike’s work, is he always tries to start off with premises that make sense to people that don’t already agree, and then try to get somewhere. And the amazing thing is, he does get places, actually.

COWEN: A lot of people who grow up young with what you might call nerdy interests, they read a lot of science fiction, and you don’t seem to have been very interested in science fiction. You were intensely interested in learning about Joseph Stalin and the history of communism.

What’s the fundamental feature in Bryan Caplan–think that has made you, unlike most other nerds, so much more interested in Stalin than science fiction?

CAPLAN: [laughs] Let’s see. Well, I’ll say, I was very interested in dictatorship from a young age.

COWEN: And this comes from growing up in Northridge, right?

[laughter]

CAPLAN: I don’t think so. I had a lot of bad attitudes as a kid.

COWEN: You did?

CAPLAN: Yeah.

COWEN: Like what?

CAPLAN: Like I read a book about dictators, and honestly, I have to say, I was reading and saying, “Oh, this is so cool, getting to be a dictator.” There was a lot of pent-up hostility and resentment towards things as they were.

Reading it, it’s like, “If only I could be one of these bloodthirsty tyrants, then everyone . . .” Terrible, but that’s the honest truth of it.

Even when I got to fifth grade, I read this big book. It was like 10 biographies of different dictators. When I really got interested, though, I was very interested in European history, when I was in the 11th grade. I put a lot of time in reading that.

It was only later, actually, when I got into libertarianism that I became interested in first of all, not being a dictator, and going, “Oh my God, these people were actually terrible.”

Yeah, everybody knew that. I kind of knew it, but at the same time, it was sort of like someone who reads through a crime where on the one hand, you know that it’s terrible, but on the other hand, it’s like, “Oh, but he’s so clever. He almost got away with it.”

When I became interested in libertarianism, then became interested in the exact opposite and what that’s like. And that’s where Stalin is, of course, a focal figure as, at least up until his time, the most totalitarian leader in human history — someone who combined an ideology, rationalizing it with a personality that actually craved it, combined the technology that allowed it to really be done in practice.

That got me really excited. In terms of why that rather than science fiction, I guess for me, the main thing about most science fiction is it lacks — not all of it but most of it — it lacks what I call emotional truth, where there’s just not a lot of interest in the inner lives of the characters. To me, that’s the interesting thing about any story, is the inner lives of the characters.

COWEN: You love Tolstoy, right?

CAPLAN: Yeah. You love Tolstoy because here’s a guy who not only has this encyclopedic knowledge of human beings — you say he knows human nature. Tolstoy knows human natures. He realizes that there are hundreds of kinds of people, and like an entomologist, he has the patience to study each kind on its own terms.

Tolstoy, you read it: “There are 17 kinds of little old ladies. This was the 13th kind. This was the kind that’s very interested in what you’re eating but doesn’t wish to hear about your romance, which will be contrasted with the seventh kind which has exactly the opposite preferences.” That’s what’s to me so great about Tolstoy.

To me, pure genre fiction has no appeal. Especially anyone who ever tells me that science fiction is good because it’s scientifically accurate, this is where, “Oh god, that’s the best you can say for it is that there’s no sound in space?”

Wouldn’t you much rather watch a space opera where the characters have a rich inner life and where there’s drama and where the storytelling sucks you in and makes you care whether the character is disintegrated than whether the character disintegrates in a scientifically correct way?

COWEN: When did you build the Museum of Communism? Tell us what that is.

CAPLAN: I did this in graduate school when I didn’t want to do my real work. I spent a lot of time — not just in undergraduate but in graduate school — reading stuff that was totally, at least mostly, a waste of time careerwise. I was just really interested in it. I had a passion for it.

You have to remember these are the very early years of the internet, when all the suppressed urges that I had to go and pontificate suddenly had an outlet. If the internet existed when I was in high school, I might have actually failed out of high school because I would have put so much energy into creating web pages, like “This is my take on each of these different topics.”

The first time that the web was working well enough where you could actually do this — at least where I had enough knowledge to make it work — was 1993, 1994. Then to me, I put, I think, more time into my internet projects than into my actual studies, counting class time and everything else.

If the internet existed when I was in high school, I might have actually failed out of high school because I would have put so much energy into creating web pages, like “This is my take on each of these different topics.”

So the Museum of Communism — this is one where I wanted to go and put together all of my thoughts about the history of communism. I would say that’s it’s maybe 7 percent done. Almost all that 7 percent was done during my graduate school years, the parts that actually I really completed.

I had sections on the Marxist and czarist origins of communism, which is building on a rich historical literature. Obviously, there’s the Marxist roots but then people saying that there’s a lot of continuities with czarism. That made a lot of sense to me in sort of thinking of Lenin as being the Marxist czar of all the Russias.

Then I had a FAQ, frequently asked questions, where I went over what was known about the numbers at the time. Since then, I’ve learned quite a bit more about the numbers, especially numbers for deaths in the gulag seem in the literature at the time overstated by quite a bit.

But I’ve never gone back and updated. Obviously, that would be something that I would do, is bring it up to date with better data that we’ve got now.

On the bias towards action

COWEN: Now let’s turn to your new book, The Case against Education: Why the Education System Is a Waste of Time and Money. One theme you stress throughout are the costs of excess credentialism.

To be hired as a bartender, maybe it’s a real advantage to have a college degree. This encourages too many people to go to college. At the same time, there seems to be a waste of talent and a lot of bureaucracy and paper credentials, hard to get second chances, and so on.

What deeper disease about our society do you think excess credentialism reflects? That is, if you try to explain it almost as an anthropologist, like here’s why we’re really so screwed up to have done this, what’s your answer?

CAPLAN: At least a big part of it is what psychologists call action bias and the idea that we just ought to do something. People take a look at the world, and they see, look, there’s a bunch of people that don’t have very good jobs. There’s a bunch of kids from those families. It seems like they’re probably going to turn out like their parents. Let’s do something about it.

Let’s go and create a big education system and encourage everyone to spend as many years as possible in the system. Then in the end, of course, the hope is that this will lead to not just social mobility, but to a whole society where almost everyone has a really good job.

Yet again, if my book is right, the main result seems to be not that everyone gets good jobs, or at least every college graduate gets a good job, but rather employers ratchet up the educational expectations to be considered worthy to be a secretary or to be a bartender at a nice bar.

COWEN: You think, in our society in general, this action bias infests everything? Or is there some reason why it’s drawn like a magnet to education?

CAPLAN: Action bias primarily drives government. For individuals, I think even there there’s some action bias. But nevertheless, for the individual, there is the cost of just going and trying something that’s not very likely to succeed, and the connection with the failure and disappointment, and a lot of things don’t work out.

There’s a lot of people who would like to start their own business, but they don’t try because they have some sense that it’s really hard.

What I see in government is, there isn’t the same kind of filter, which is a big part of my work in general in politics. You don’t have the same kind of personal disincentives against doing things that sound good but actually don’t work out very well in practice.

Probably even bigger than action bias is actually what psychologists call social desirability bias: just doing things that sound good whether or not they actually work very well and not really asking hard questions about whether things that sound good will work out very well in practice.

Again, I think of this as primarily a disease of government because it’s so based upon what people say rather than trying to do a comparison between what we thought was going to happen and how things actually turned out.

COWEN: But your book on parenting — that also criticizes action bias. Parents think they need to do all kinds of things. They actually don’t. It’s not just government. It’s like we all as human beings . . .

The Straussian version of the Caplanian themes is the whole world is infested with action bias and that if you understand action bias at a deep level for decisive actions . . . For nondecisive actions, rational irrationality kicks in. You have two blades, the scissors. You put them together, and you can then explain a 2018. Yes, no?

CAPLAN: That sounds oversimplified. You are right that parents feeling like it’s really important for them to do things . . . When they don’t do things, this is going to mess their kids up.

I think that is a big part of what makes parenting so unpleasant in the modern US — the sense of “If I’m not acting all the time to go and help my kids, then I’m a failure, and my kids will be failures.”

I think there is a lot more going on than just those things. In general, my work is . . . Unlike, say, Robin, I do have a resistance to monocausal things and explanations that seem like they’re overbroad. I do try to narrow it down and think about one thing at a time.

My general view is, you get a better general theory of things if you work on a lot of particular issues first and then step back, like we’re doing now, and say, “Are there some commonalities?”

On signaling and the return to education

COWEN: Am I correct in thinking that a lot of existing papers on the social return to education or the private return, they neglect the fact that a high percentage of students drop out?

CAPLAN: Yeah, actually, this is, in fact, there’s maybe about seven papers in economics that specifically interact completion probability with the rate of return.

COWEN: Out of how many would be the total pool roughly?

CAPLAN: Thousands.

COWEN: Only seven.

CAPLAN: Yeah.

COWEN: What causes that bias to come about?

CAPLAN: Here’s the key thing. There’s a lot of papers on completion probability, but they are generally segregated from the rate of return. A lot of people try to figure out, how can we get completion probability up?

Of course, the reason, if you’re saying, “Well, why do you want to get completion probability up?” For an economist, “Well, so we can get the expected rate of return up.” Meanwhile, over in the realm where they’re doing the rate of return, they usually do it the wrong way, which is by looking at the payoffs for people who successfully complete.

The most superficial story is just that people do it because the data is constructed that way. Because normally, the measure of education that economists use asks, “What is the highest number of years of school that you have successfully completed?” Then they just run the regression and kind of forget exactly what the measure even is.

I think this does reflect a general pro-education bias, especially among people or economists who work in education — labor economists, education economists — where they just aren’t looking that hard for reasons that education might be overrated.

COWEN: How much does noncompletion risk lower the return to education? How much does this bias matter?

CAPLAN: Wow, so, let’s see. Of course, it varies a lot by the level. For high school, then, it’s modest, so maybe reducing it by something like 30 percent. But on the other hand, for college, where the completion probability is a lot lower than it is for high school, then I think reducing it by 40, maybe even 50 percent.

Again, it’s one where there’s nonlinearity, and so it’s hard just to do the simple back of the envelope. But the thing to remember is not only — the on-time completion rate for full-time students doing four-year degrees, something like 40 percent.

COWEN: And overall . . .

CAPLAN: The key to remember is, since there’s also this big literature on the sheepskin effect, saying that a lot of payoff for college — most of the payoff — comes from graduation year. This means that if you only get three years, you don’t get three-fourths of the payoff, you get maybe 15 percent of the payoff.

COWEN: Overall, if we look at higher education — just the first four years, or one hopes that it is four years — what percentage of that time do you think is best explained by the signaling hypothesis?

CAPLAN: My general best guess overall is about 80 percent. In the book, I actually use a constant number, at least for high school on. It’s one where, on the one hand, it seems like there’s more obviously useless things in college, but on the other hand, you’re also more likely to find a major that will tie into your actual job.

So, at least it’s not obvious to me that the right number is different from 80 percent, so that’s what I’ll go with.

COWEN: What do you think is your single best piece of evidence for your view that it’s 80 percent?

CAPLAN: Let’s see . . .

COWEN: Or just for your view that it’s high, not exactly 80.

CAPLAN: The single best piece of evidence there is just to look at the curriculum. There’s data on how people actually spend their time in high school, broken down by course material. For college, there isn’t the same kind of data, but there is data on just the distribution of majors.

Again, just to see the small amount of K-12 time spent on any kind of studying that seems plausibly to be future job related. Then similarly, in college, you see just these — the rareness of majors that are plausibly vocational.

There’s a lot of people saying, “Well, I mean, hardly anyone is doing your traditional humanities anymore. There are not many people doing history or English anymore.”

Again, that doesn’t mean they’re switching to STEM. They’re switching to things more like communications where, at first glance, you might think it’s vocational until you realize how few jobs there are in that field compared to the number of people that are graduating with that major every year.

COWEN: Now let me put on the table a number of reasons why some people, including, often, myself, haven’t agreed with you as to why signaling is so important. I’ll give you the last word in each case.

CAPLAN: [laughs]

COWEN: I’m just going to go through a bunch of these. If we look at, say, Singapore and South Korea, they have maintained world-leading positions for their economies, often in fairly advanced areas. Could they have done anything like this with, say, the levels of education they had in 1980?

CAPLAN: Yeah, I think that I don’t see what the problem would have been at all. Most of the education they’re getting is stuff that they’re not going to be using in their jobs. They may have a higher percentage in STEM, so it may not be as wasteful as what we’re doing.

The material that they actually are studying in school is not very related to the job, and the way that people get good at their jobs in those countries, just like almost any country, is learning by doing. The main thing going on is that they are spending years jumping through hoops in order to finally be allowed.

Normally, I hate it when people go and find one new story as proof of something. But there was a recent one from South Korea so vivid, where even if you say that it is cherry picked, still, that such a cherry exists says something.

This was a story about, the government in South Korea wanted to hire four janitors, and most of the applicants had college degrees. In the end, they hired three BAs and one AA to be janitors there. This disease of credential inflation seems to be serious in countries where people think of education as something that’s central to their success. I don’t think so.

COWEN: We would all agree, most workers don’t go back to school. Some do, of course, but most of them don’t. But wages change a lot over the course of a worker’s lifetime. If the signal from education is fixed and then wages are changing for many decades, doesn’t most of the wage story have to be human capital theory rather than signaling theory?

CAPLAN: Of course, the obvious story for change is just that people are acquiring more experience.

You could have a strong version of the signaling model where you have an idea about, first of all, average productivity, and then you have an idea about average productivity gain, and then there’s not much connection at all. I don’t think that’s right.

What I would say is, it is reasonable to think the signaling share goes down over time, and there is evidence this is so. However, how quickly does it go down and by how much? That’s where — there is a whole literature called the employer learning statistical discrimination literature where they do try to measure this.

The usual view there is that, at minimum, you’re talking about a 10-year wait before you start getting reasonable credit even for your IQ, which is one of the easiest and most observable, most testable traits that employers value. So it makes perfect sense to me, there’s a lot of other traits where it may take a very long time.

Furthermore, as I say in the book, if the model of actual employment in the real world were, “Hire someone, see if they’re good, and then if they’re not as good as you thought, fire them,” then I think your story’d make a lot more sense.

There’s even a special word for this in what I call the termination community, the group of people who specialize in firing. They call this de-hiring. We’re not firing you, we’re de-hiring you. We’re encouraging you to find an opportunity elsewhere where you can become somebody else’s problem.

The way that actual jobs usually work is, when you get someone who’s disappointing, they have to be really bad to get fired unless there’s a recession. If you do want to get rid of them, it’s much more common for there to be a little conspiracy between the bad employee and the employer to help the bad employee get another job someplace else.

As I found doing the research of the book, there’s even a special word for this in what I call the termination community, the group of people who specialize in firing. They call this de-hiring. We’re not firing you, we’re de-hiring you. We’re encouraging you to find an opportunity elsewhere where you can become somebody else’s problem.

Once you realize this is actually a big part of the modern labor market, the idea that someone could basically go from one job where they’re a burden to another job where they’re a burden to another one.

COWEN: Let me pursue this speed-of-learning question because it’s important. Let’s say you’ve hired someone, or you have a new colleague, or you have a new coauthor. How long does it take you to figure out how good they are?

CAPLAN: Yes. Hmm. For my own purposes, that’s easy because for me, the main value of a colleague is lunch.

[laughter]

COWEN: So it takes one lunch.

CAPLAN: Because I’m judging, one lunch is . . .

COWEN: Steve Pearlstein started coming to our lunches, and you were telling me within a week how great he was, right?

CAPLAN: Yes.

COWEN: And you have not wavered since.

For me, the main value of a colleague is lunch.

CAPLAN: Yes, because there’s not a lot of inference in what I care about. On the other hand, if you’re an employer running a business, it’s not primarily about whether you like the person, although that’s important, too. It’s what they actually contribute to productivity. There’s issues with figuring out how much someone is part of a team.

Again, the key thing out of this whole literature on actual firing and de-hiring is that, even after the employer has full information, this does not mean it’s going to be reflected in wages anytime soon. That can take a lot longer.

Because — and people don’t like firing, and they often conspire to help a worker that they don’t like to get another job where, once again, they’re overpaid. Then the way that actual pay is handed out, again, it’s very unusual to do an absolute pay cut, so really very unusual to even give a person zero raise if other people are getting raises.

These are all things that really slow things down. So even after you’ve handled the purely intellectual problem of how good is the person, there’s this other problem of, right, how quickly does the system actually react to it? And how well does that information disperse throughout the system?

COWEN: Talk me out of this dilemma. If the speed of learning is very quick — let’s say you know in three months how good a worker is — it seems implausible that you would need 12-plus years of schooling to learn the same thing.

If the speed of learning is very slow — let’s say you need 10 years to figure out who’s good and who isn’t — then it seems educational signaling is actually highly productive because it helps you slot the better workers into the better jobs. So you can kind of pick your poison, but you’ve got to choose somewhere on the spectrum.

Either way, it seems the cost of signaling won’t quite be that high. Or am I wrong?

CAPLAN: Yeah, you’re wrong. Let’s just take for granted that at the end of three months, any employer can know the truth about any worker.

There’s still a big problem, which is, what has to happen before you can work for someone for three months? You have to be hired. What has to happen before you’re hired? You have to actually stand out in an interview.

What has to happen to stand out in the interview? You have to get interviewed. What has to happen to get interviewed? You have to have your résumé not thrown in the trash.

I think of a lot of what people are signaling is just, they’re signaling to get opportunities. They’re signaling to get a time to actually talk to the employer and convince them that they are worthy.

I really much like the analogy of getting your big break in Hollywood. There are a lot of actors right now, I think, who are really good. But until they actually get a chance to star in a movie, it’s very hard for them to convince anyone that they have this talent.

They can go and show up to try to get an audition, but again, just to get enough of people’s attention to show them and to get them to put the energy into you.

Remember, hiring people is really expensive. You’re taking the time of some of the most valuable employees at a firm, who are the people who need to be there to judge whether a person’s good enough, and you are distracting them.

Think about this: Say you’ve hired somebody who’s a disappointment. At what percentile does someone have to be before it even is profitable just to fire them and then go back to the drawing broad?

Obviously, somebody’s in the 45th percentile of expectation, you don’t want to fire them and go back to the drawing board. Maybe you want to go back, like maybe the 30th, the 25th percentile is there.

Obviously, this is about the big cost of hiring someone and just sorting them out at that stage. The fact that employers are not in the business of giving chances, they’re in the business of making money. Chances are expensive to hand out.

COWEN: The other Straussian reading of Caplan: Is it just labor markets work very, very poorly? Yes, no?

CAPLAN: They work a lot more poorly than a lot of economists think. And they work poorly in different ways than economists think. There’s sort of a standard list that economists have of ways that labor markets are messed up.

The more times people talk efficiency wages, that’s the real problem. How about the problem of employers don’t want to fire people who are incompetent? How about that problem? It’s not one that sounds very good, but it’s one that I think is very serious.

Or again, for all the talk that people have about discouraged workers and how unemployment rates understate the severity of the unemployment problems, they’re ignoring discouraged workers.

I always remember, “Sure, but what about the megalomaniacal workers?” The workers that think they’re too good for any job for which they’re actually qualified for, and they keep searching around and staying in the numbers, even though it would be like me claiming to be an unemployed brain surgeon. I’m not an unemployed brain surgeon; I’m not a brain surgeon at all.

In general, the world’s more complicated. Especially, the problem here is that the behavioral economics revolution, or like psychology in economics, does not really enter labor economics nearly as much as it should.

Especially like economists, when they do psychology, they only read a few parts of psychology, and there’s a bunch of other areas they just don’t pay much attention to that I think also are leading to some tough results.

Again, of course, this doesn’t mean that you don’t have government policies that are amplifying a problem. Sure, any time you have human beings dealing with each other face to face, there’s going to be things that are badly screwed up.

COWEN: Let me ask a very general question, trying to put together your thought as a whole. You’re saying, across a lot of margins in terms of learning, formal education doesn’t matter that much, right? It matters for signaling.

Also, in your book, Selfish Reasons to Have More Kids, you’re saying, at least within certain margins of acceptable behavior, parenting doesn’t matter that much. You believe in both of these two views. Schooling doesn’t matter that much. Parenting doesn’t matter that much.

CAPLAN: Sure.

COWEN: So the way social customs are carried forward today compared to 1910 or 1950, something has changed that. It’s not parenting, and it’s not schools. So again, the deep Straussian reading of Bryan Caplan — what is it?

CAPLAN: In terms of the economy, a big part of how people get good at their jobs is just by practice, like I said. A major difference between practicing today and practicing 100 years ago is there’s better kinds of practice to emulate.

In terms of the economy, a big part of how people get good at their jobs is just by practice. A major difference between practicing today and practicing 100 years ago is there’s better kinds of practice to emulate.

COWEN: But not “good at their jobs,” just social mores, customs. Parenting and schooling in your take don’t matter so much. Something is changing these that is mostly not parenting and not schooling. And they are changing quite a bit, right?

CAPLAN: Yes.

COWEN: Is it like all technology? Is the secret reading of Bryan Caplan that you’re a technological determinist?

CAPLAN: I don’t think so. In general, not a determinist of any kind.

COWEN: I was teasing about that.

CAPLAN: Yeah. Much prefer multicausal theory or polycausal theories to what’s going on.

I would say in terms of why modern culture has changed these ways, the story of just people are richer, and that makes a big difference. I think there’s a lot to that. Just the way that people are much more freaked out about taking chances with their lives — that seems to me to be a big part of being in a rich society where you just have a lot to lose.

Also, you can live comfortably without risking your life. Just being a richer society, I think that matters a lot.

In terms of other things that seem changed, just the much greater availability of entertainment — this is something that I think has replaced a lot of things that people were doing in earlier periods. I think the wide availability of entertainment probably explains a lot of religious decline.

COWEN: And it beats the influence of parents in some ways.

CAPLAN: Yeah. Another thing — this is something you can get out of Judith Harris — is that it can be that individual parents don’t matter. But if there’s an entire generation of parents that are a certain way, that can matter a lot. And that wouldn’t be picked up by standard empirical methods.

If you had a couple of weird parents today, then you might still turn out to be a normal member of adult society. But on the other hand, if you were raised in a society where all the parents were very different, probably a very different outcome.

I remember Judith Harris had an example in her book where there were some Orthodox Jewish parents who decided to move to Israel to live on a kibbutz because they said, “Look, as long as we’re in America, we can’t control our kids. We got to go to a place where all the kids are controlled by parents like this. So we have basically blocked out the outside world.”

COWEN: Culture writ large really matters a lot; individual cultural decisions hardly matter at all. You’re flipping the Ayn Rand story. It’s really like the big macro aggregate that persuades people as expressed through entertainment, business practices, and wealth. But individualistic efforts, they’re puny. They don’t matter so much.

CAPLAN: I think Rand’s view is actually very similar to mine. Remember, she was angry about the world because she thought that most people were heavily influenced by their cultures. That outraged her, that just because you grow up in the culture of Russia, that you’re a Russian.

She’s there saying, “No, I don’t care where you are. You should be an Aristotelian. Doesn’t matter you were born in Moscow or you had this background. We should all be reading the great works and the great minds, especially me,” for her of course. Your background shouldn’t matter very much.

In the end, the reason she wrote about this is, she looked around and saw that people are generally very conformist — Fountainhead, the “second-handers,” the people who form their views of what is meaningful based upon looking around at others. She didn’t write about this because she thought it was rare. She wrote about this because she thought it was normal but terrible.

I think very much at least in the same ballpark for me, I am very individualistic. Of course, if this were the normal thing, everyone else would be doing it. Then there wouldn’t be anything special about me doing it. In a way, if you don’t think the culture’s really important, it’s hard to be an individualist because then you aren’t different from other people.

On fixing schooling

COWEN: Now let’s talk about education policy. Let’s say we agree with your basic take on education: There’s educational failures. There are connected labor market failures. And the question is what should we do about this?

What if someone came to you and said, “Well, take South Korea. Government there spends relatively little subsidizing higher ed. But signaling costs are high. In Germany, the whole system is more or less free. People go on strike if they’re asked to pay 10 marks or 10 euros a semester. And in Germany, a lot of the universities are mediocre. But the German economy does fine. So isn’t the solution to too much signaling, in a sense, nationalize the sector and lower quality and get people less interested in it?”

CAPLAN: I think this is a classic case where there’s multiple omitted variables. When someone says, “Look, the government funds it all, but they don’t spend very much. So the way to get spending down is for government to increase spending” — I think that is one of the strangest inferences I’ve heard in social science.

Government spending is generally going to be piled on top of whatever other spending is there. We see that there’s countries where the total spending is low, but government’s spending it all. I wouldn’t say that shows that government spending reduces spending. I’d say that government is spending in countries where otherwise the private demand would have been lower on its own.

Fun fact: it seems like the US spends as much as a share of GDP on Medicare plus Medicaid taking care of a small part of the population as a lot of other countries do taking care of the whole population.

So you might look and say, “Wouldn’t it be great if we just did what other countries did?” I say, “Well, is what other countries do to spend in an American style for everybody? Or is it to go and spend in the style of other countries on everybody?”

I think what would happen in the US, or really almost any country that were to follow your advice, is that they would just have even more spending. Especially the US. If the US took socialized medicine, we wouldn’t even have Medicaid for all. We would have Medicare for all. Americans would be horrified at the idea of anyone getting anything less than the very best treatment, and the cry of death panels has enormous resonance here.

Your general point: government subsidies increase spending. If it seems like they don’t, it’s probably because you haven’t looked closely enough.

COWEN: Have K–12 vouchers underperformed? In general, how do you interpret that data?

CAPLAN: I would say yes. This actually barely appeared in my book because it was not really central to any of the topics I was talking about. But my understanding of research on K–12 vouchers is a lot of people thought that they would substantially raise standardized test scores. And it’s hard to see a big gain there.

This is puzzling because it sure seems like there’s way better ways to improve test scores, starting obviously with just teaching the test. Many people say people are teaching the test all the time. Whenever I actually look at my kid’s schools, like, what are you talking about? There’s three practice tests. If I wanted to teach the test, there would be a hundred practice tests. That’s how I would handle it if you told me, “Get test scores up.”

I think the main thing that we learn from this is that most parents don’t care about test scores. When you give them a choice, they aren’t looking around for the school that will raise kids’ test scores the most.

They’re looking around for other things. Part of it is just convenience or location. Probably another big part of it is whether the kids are happy. I think we agree this is actually one of the most undervalued benefits of school choice, just giving kids some options so that kids that are crying and miserable at one school can go and take that money and go to another school.

COWEN: If there’s overinvestment in education, you talk about changing or getting rid of some subsidies. Could you imagine there being a role for government in making the signal more continuous or more convexified?

For instance, you could allow federal funds for certificates rather than just degree programs. You could imagine governmental nudges to give people a three-year option, a two-year option. There are a lot of one-year alternatives to colleges popping up the way two-year community college could be treated.

There seems to be a lot we could do but maybe aren’t doing to create or produce signaling options that waste fewer resources. What should we do there?

CAPLAN: What I would say is definitely worth some experiments. When you’re spending an enormous amount of money, you can take off 2 percent of it, and then use standard social science random assignment to really learn something.

It’s not as bad as there being a big literature saying that highlighting is totally ineffective for improving student learning. Yet almost every kid in America still has a highlighter. It’s actually on the list of mandatory school supplies for Fairfax County: “You must have a highlighter.” This is an item that science says you don’t need. Yet everyone must have one to be at school.

It’s been pointed out that a high percentage of government spending on healthcare is for medical research, but only a very small amount of education spending is for education research.

The main disappointment there is, despite all the education research, it seems like it’s not very often actually used for any education policy. Medical research, you might have a similar pessimism, but I don’t think it’s as bad as that at least.

It’s not as bad as there being a big literature saying that highlighting is totally ineffective for improving student learning. Yet almost every kid in America still has a highlighter. It’s actually on the list of mandatory school supplies for Fairfax County: “You must have a highlighter.” This is an item that science says you don’t need. Yet everyone must have one to be at school.

On things under- and overrated

COWEN: Are you up for a round of overrated versus underrated?

CAPLAN: Absolutely.

COWEN: OK, let’s start with effective altruism.

CAPLAN: Underrated.

COWEN: Why?

CAPLAN: In general, when people are thinking about charity, it’s mostly about feelings. I hate to use the word, but it’s a very artistic experience where people . . . It’s the warm glow. “What is it? Does this make me feel good?”

I think effective altruism is all about, let’s try to get some actual measures of how much good is being done and to raise the status of that. Rather than thinking of someone who asks, “How many lives is this going to save?” as being a Vulcan who doesn’t really care about people, to reframe that. No, he’s someone who cares a lot. That’s what you would do if you actually cared about people.

I know that we talked about this. We blogged about it. I would just say, remember, most people have never heard of effective altruism, So it’s totally underrated relative to almost anyone else. If you were to go and look at the main philanthropic societies in the United States, how many of them have ever heard of effective altruism? It’s just some nerdy thing out in the Bay Area.

The general idea of trying to go and spend money in a way that does the most good and using science in order to accomplish that seems great. The idea that this isn’t a generally good approach seems very odd to me. Of course, I do think that once you start thinking in this way, it also has all kinds of other good effects.

It makes you realize there’s a bunch of things that people in politics are super concerned with that we should just never worry about again in a triage sense, that they’re just so small that we’ve already spent more mental energy than we ever should. There’s a bunch of other things hardly anyone worries about that we should think about a lot.

COWEN: Socrates, overrated or underrated?

CAPLAN: Underrated. Yes.

COWEN: Why?

CAPLAN: Because of the dialogues. This to me is a much better kind of philosophy. Most philosophy is really just a monologue. It’s just a person going and rambling on, and most of them do ramble on without really trying to listen to the audience or think about what people in the audience would already know or find a starting point.

What Socrates does is, he’s at least trying to go and talk to his philosophical opponents like they’re human beings and find some common ground. “Let’s find some premises that we both agree are, at least tentatively, a good starting point.” The Socratic dialogues, out of all the stuff in ancient philosophy, I think that is close to the top of what I would enjoy reading to get something out of.

COWEN: Robin Hanson.

CAPLAN: Underrated, of course.

COWEN: But highly rated.

CAPLAN: Highly rated but still underrated. Just the sheer intellect of Robin is, for me, still hard to fathom. Just the way that I have told Robin stories that I’ve told a hundred other people, and only he notices a logical error in the story. That to me is super impressive. Just the sheer intellectual enthusiasm.

Even the topics — when he gets on what I think of as sci-fi topic, those are the parts where I am least happy. But again, if you just read the blog, the range of things that Robin has thought about is actually vast, just in terms of breadth and depth and just sheer curiosity.

I’ve said this quite a few times. When people get really mad at me, that doesn’t bother me. When someone gets angry at Robin, this is what actually outrages me. I just want to say, “Look, to get angry at Robin is like getting angry at baby Jesus.” He’s just a symbol and embodiment of innocence and decency. For someone to get angry at someone who just wants to learn . . .

COWEN: And when they get mad at me?

CAPLAN: Eh, I understand that.

COWEN: Camping, overrated or underrated?

CAPLAN: Overrated.

COWEN: Why?

CAPLAN: Social desirability bias. It’s getting back to nature and enjoying the great outdoors. But there’s a lot of really unpleasant, uncomfortable things going on. I say you can get the good stuff out of the great outdoors while staying in a hotel. It is the kind of thing people think will work out a lot better than it actually does in practice.

That was actually almost the only vacation I had when I was a kid, was camping. I have some good memories but also a lot of bad things. Again, so much of the good stuff, we could have kept 90 percent of it while getting rid of the bad stuff by staying in a hotel.

COWEN: You’re sent back in time to the year 527 AD. Let’s assume you’re good enough at learning languages. Where would you pick? And why?

CAPLAN: Wow, 527. Let’s see. Probably Byzantium.

COWEN: Why?

CAPLAN: First of all, of course assuming you’re good at languages, Greek as a Western language would be easier. I think that is actually the biggest city in the Western world at the time. It’s the one where you’d still have at least a modest amount of Greek and Roman thought which has been preserved. Really center of civilization by that point.

That would be the place where you’re most likely to have smart people around — there’s things that you can do with your mind — and least likely to get ripped apart by barbarians.

COWEN: What would your job be? Once you’ve learned the languages.

CAPLAN: The temptation to become a government adviser under those circumstances would be painfully high. As to whether I could actually find some role there where I would not be morally horrified is a tough call.

If I could get away with just being a teacher, if I have what I know, then to actually go and found a school and teach economics 1,300 years before the rise of modern economics and try to jump-start the Industrial Revolution and economic growth and social science and everything else. Emotionally, that would have by far the strongest pull on me.

If that weren’t available, then there’s room in business, banking, moneylending, shipping. I think I could learn those. Wouldn’t be thrilled. But it beats rowing an oar.

On Capalanian aesthetics

COWEN: Here’s a general question I have for you about what you might call a Caplanian approach to things. It starts with aesthetics, but maybe it doesn’t end there.

If I think about some of the things you like or love, I think of, say, 18th century classical music, Wagnerian opera, certain traditions within graphic novels, a number of TV shows — one would be Ali G — Chinese opera, Gilbert and Sullivan, Larry David. You could add much more to the list.

It’s always seemed to me there’s a broadly consistent pattern behind all those tastes. But I’ve never been able to put my finger on what it is. Now that we’re all here today, I would like for you to tell me what that pattern is. What’s the common theme?

CAPLAN: For me, I feel like I have to start between splitting the comedy off from everything else. The comedy seems to be very different.

But for everything else, for anything that presents itself as serious art, for me what I would say is, I like what some people love. If there is something where there’s a group of fanatical, devoted people who say, “This is the best thing in the world,” those are the kinds of things where at least I’ll say, “I want to try that. I want to see what that’s like.”

A lot of times when I do this, I’ll say, “Wow, the people who fanatically love it are right. This is wonderful. There’s so much going on. You could spend a lifetime on this.”

I remember once you described some Bach oratorio as chaff. I said, “Bach doesn’t have any chaff.” There’s no piece of Bach, no oratorio I couldn’t properly spend a month on.

For me, anything, especially anything where it’s produced by someone who is a megalomaniac, who feels like what they’re doing is fantastic . . . I think about Wagner’s term for his work, the Gesamtkunstwerk, the complete artwork.

“I, Richard Wagner, have composed the music. I’ve done the libretto. I’ve done the stagings. I’ve done the casting, everything. This is all a reflection of me, Richard Wagner.” Those are the kinds of things that pull me in.

I remember once I was just wandering past opening day for The Hunger Games, which I was not particularly a fan of. But just to see a bunch of people who are in love with something, I was happy just looking at them loving this thing in a way that when I see someone half watching a sitcom while doing something else, that’s the kind of thing that depresses me.

I just want to go and shut it off. If it’s worth watching, it’s worth watching with 100 percent attention. If it doesn’t motivate you that way, you need to find something else. Or else you might be wasting your whole aesthetic life!

I remember once I was just wandering past opening day for The Hunger Games and just to see a bunch of people who are in love with something, I was happy just looking at them loving this thing in a way that when I see someone half watching a sitcom while doing something else, that’s the kind of thing that depresses me. I just want to go and shut it off. If it’s worth watching, it’s worth watching with 100 percent attention. If it doesn’t motivate you that way, you need to find something else. Or else you might be wasting your whole aesthetic life!

COWEN: What should we infer from the fact that your sense of the comic is so segregated from the rest of your aesthetic, if it is?

CAPLAN: Yeah, that one is harder. If I were to go and try to list things that I like in comedy, a lot of them are very lowbrow. Like The Three Stooges is hilarious to me. If someone were to say, “But why is The Three Stooges better than a sitcom that you would turn your nose up at today?” I would have trouble having a really good answer.

The Three Stooges is sublimely stupid. They’re taking the stupidity to a level that you or me or sitcom writers aren’t capable of. Maybe you might say that it is just the extremism. Or the fact that just they take a joke and they run with the idea of a guy in a gorilla suit meeting an actual gorilla.

For me, comedy — it is much more idiosyncratic. I’ve said Shakespeare I love except the comedy, which just isn’t very funny to me. I get the joke, but why especially is that funny?

You said comedy’s more culturally specific. That does make sense to me. There is sort of a class of things that I almost certainly won’t like, like whenever my dad emails me a thing of lawyer jokes. I do say, “Look, if you find it funny, good odds I won’t think it’s funny because anyone can understand it.” But if you say, “What about The Three Stooges?” All right, that isn’t really a full theory.

COWEN: But that’s almost becoming hermetic these days, The Three Stooges.

CAPLAN: Hopefully.

COWEN: I was sent this question earlier this morning. I quote: “What are the most socially valuable delusions or shared erroneous beliefs?”

CAPLAN: That is a good one. Hmm. I am tempted to say something along the lines of God will punish you for bad behavior. But the problem is that’s mixed in with — so many things of the bad behavior is actually good behavior and the good behavior is actually bad behavior that I’m not convinced that is all that socially useful.

Probably a better answer is the delusion that money will buy happiness. There is an enormous amount of progress that is caused by people desperately going and trying to get rich. I think the actual psychological evidence is the money won’t actually lead to all that much happiness, but the things they produce are quite a bit more likely.

Probably, in terms of the most happiness-producing stuff, I would think may be actually in the arts, where so much of the stuff was produced by people where, if they just did a reasonable ex ante calculation, would have said, “This isn’t worth it.” But the reason why we have it is because they ignored the odds or overestimated themselves, so maybe that.

COWEN: A follow-up question from the same source, “Which mistaken shared beliefs would he like to see adopted?”

CAPLAN: [laughs] Hmm. Let’s see. Probably the idea that there would be some kind of eternal, horrible punishment for holding power and not having a very high degree of epistemic rationality, especially if there were a view that God hates a politician who takes any action without calmly and studiously studying the facts, and that God will punish you in a way that voters never could.

God would punish you in a way that’s far worse than the simple loss of power. If that were widely believed by people of power, I think there would be a lot more effort to actually double-check that what they’re doing really makes sense. The Spiderman Principle — with great power comes great responsibility.

If there were false beliefs in some enormous concrete sanctions for people that violated the Superman Principle, I think that would be a big gain.

COWEN: Our mutual colleague, Daniel Klein, writes to me a question: “Do direct and overall liberty ever disagree? What are the most likely or important areas of disagreement?”

CAPLAN: I was amazed that Dan would ask that. Of course direct and overall liberty disagree. If you could just go and kill baby Hitler, right? Kill baby Hitler — that’s great for the freedom of the world, but he’s just a baby. He hasn’t done anything yet.

Or, more obviously, say in 1928, if the German government had just rounded up all the Nazis, or at least all the leading Nazis, and just executed them without trial, that would have been a big gain.

There was an incident around 1940, when the Romanian government just took all the leading brass in the Iron Guard, which was the main Romanian Fascist Movement. They had a lot of them in jail already, and without any warning at all, they just sent them out to a forest and they murdered them all.

I read that and I said, “Wow.” Probably a bunch of these guys hadn’t done anything yet, and yet . . . If you know how bad things were in Romania, if you know anything about the Iron Guard, I think it very likely would’ve been quite a bit worse.

There’s a small number of power-hungry people where there’s at least a moderate risk that they’re eventually going to get to do what they want. Just to go and kill them preemptively, that’s a tough one.

Of course, once you’ve got that, if we were to go and do censorship for people like that, that’s another one of the more obvious ones.

On the idea trap

COWEN: You have a famous piece called “The Idea Trap.” Could you outline how it might illuminate at least some parts of 2018?

CAPLAN: The motivation of the idea trap is twofold.

First of all, I had these empirical results out of public opinion that said pretty strongly and surprisingly that people who have higher income do not think more like economists, but people who either have experienced or expect higher income growth do think more like economists. So the level doesn’t matter, but the change does.

Essentially, the more optimistic view seems to actually push people in this economist direction. So there is that fact in my mind.

And then there was also this big literature on non-convergence where, at least for a very long time, economists were expecting that poor countries would tend to catch up to rich countries. Then they looked at the data and weren’t seeing it happening. Further, there’s this literature saying at least a lot of the reason why this is happening is that countries that are poor just very persistently have bad policies.

So I took these three facts and said, “Let’s come up with a little model. The model will have three variables, which we’ll call growth, policy, and ideas.”

The model will have the following laws of motion: Good ideas cause good policy, which is almost a tautology. Good policy causes good growth, and that’s almost a tautology. And then the last thing is, how does growth affect ideas?

What I said is, there’s a usual view that if you have bad growth, then people realize they’re making mistakes, and then ideas get better. On the other hand, maybe if you’re having good growth, people said, “We can afford to live a bit. We don’t need to worry about this so much,” so ideas get worse.

What I said is, there’s a usual view that if you have bad growth, then people realize they’re making mistakes, and then ideas get better. On the other hand, maybe if you’re having good growth, people said, “We can afford to live a bit. We don’t need to worry about this so much,” so ideas get worse.

In that model, that actually gives you growth convergence, and basically, all countries tend to be mediocre. But I said if we tweak the models in light of that public opinion finding, where supposed good growth actually gives you good ideas, bad growth gives you bad ideas, this actually gives you a model of multiple equilibria, where you can have one equilibrium where everything is good.

You have good policy, good ideas, good growth all mutually supporting each other. Or you could have bad ideas, bad growth, bad policy all mutually supporting each other.

In terms of 2018, at least the story you might tell in a lot of countries is, there are countries that are in the bad equilibrium where, say, they’ve had some bad growth, which then led to bad ideas, which I generally in the paper equate with populism, leading then to populist policies.

2018 is not that great, just because the actual growth for most countries is good right now. It made more sense during the Great Recession when there was bad growth, and then there were a lot of kooky ideas coming around.

In a way, I would think of the last few years as cutting against my model because it seems like people are getting very angry and very populist when it’s hard to even find what the supposed cause of it is.

COWEN: Maybe it’s just your model with a 10-year lag, though. Is that possible?

CAPLAN: My general view is once you can put a 10-year lag into a model, then you really don’t have much of a model. Then you really have an unfalsifiable mess.

The role that lags play in the model was to say, “Why is it the countries that have had good policy tend to keep it over longer runs, despite this?” And I said, “Well, if you have a good national intellectual organization, you probably have a higher chance of bouncing back to good ideas.”

So a country like the US — if you had bad ideas in the ’70s, just the fact that it has a better tradition makes it more likely that they will get back out of the bad equilibrium

Or like during the Great Depression, there’s a revival of better ideas afterwards in a way that you wouldn’t expect from a country that had never been any better.

COWEN: What is it that you understand about Stalin, at least possibly, that maybe most other economists would not?

CAPLAN: Wow. I think that probably the single best thing is that Stalin was, in his own way, a sincere Marxist-Leninist. The ideology is not just a rationalization for totalitarianism. It’s not just a rationalization for him to loot the country or anything like that.

All the historians who know the details of Stalin’s life will say he lived very modestly. He slept on a cot. He wasn’t like a tin-pot despot, going and building palaces for himself. I think a lot of economists would just assume that the guy is living high.

Instead, it seems very much like it’s the power, and not any kind of conventional luxury, that he cares about, and that not just the general goal but even very small policy details seem to be heavily influenced by Marxist-Leninist ideology.

Really, what you have to look for in Stalin’s career are the counterexamples to this. So in The Myth of the Rational Voter, I did actually find one counterexample where it seemed like Stalin did dump the ideology, and this was on the nuclear program.

Stalin sent Beria to go and talk to one of the leading Soviet nuclear physicists. I think it was Kurchatov. He said, “So, is it true that relativity theory and quantum mechanics are idealist?” Which is something where you have to know a bunch of Marxist-Leninist philosophy to even understand the question.

The Soviet scientist says, “Well, if they’re idealist, if that’s bourgeois science, then nuclear weapons are bourgeois science, too.” “All right, fine. Then forget philosophical objections to relativity theory and quantum mechanics. If this, the science, lets us build a nuclear bomb, I don’t care what the philosophy says. We’re just going to believe the science.”

Occasions like that are fairly rare, and really, the more you study Stalin’s career, you do see, even bizarre doctrinal things like the farmers are kind of revolutionary. It’s like, “What are you talking about?”

It was like, “We have to go and set up a system based upon this, and that’s very important to Stalin in a way that it’s almost hard for anybody who isn’t a Marxist-Leninist to really realize it.”

Usually Westerners don’t have such a shallow understanding of the philosophy. They don’t realize how much of it is all part of this bizarre package. They think it’s just about high levels of redistribution, and that’s not the story.

On the Bryan Caplan production function

COWEN: We started this conversation with the Bryan Caplan production function, so we’re going to close with it. We have a little bit of time left, three questions about you. First, how do you make yourself a good teacher?

CAPLAN: Let’s see. For me, any class begins with writing the notes, so I write extremely detailed class notes, where I try to distill everything that’s worth knowing about the subjects at the level of the students. Once I come up with a set of notes, I don’t tend to change them very much, the written parts.

When I actually teach, then I do a lot of improvisation. Often, it’s whatever I was thinking about yesterday works its way into the notes in terms of examples. Another big part is actually just trying to talk to the students like human beings and find anything in their experience that relates to what I’m actually talking about.

The older I’ve gotten, the less popular culture I have in common with the students, so it does get harder. But The Simpsons fortunately, thank God, is still watched by students, so there’s that. Often, I’ll start by asking them questions.

For me, a big part, one of the main things I learned from my students for The Case against Education was just saying, “All right. How many students here have a job?” At George Mason, I’d say 80, 90 percent raised their hand.

“How many of you hold a job where there is a person there that everyone agrees is incompetent?” And almost every hand stays up. I’m like, “That’s pretty interesting that almost everyone is at a job where they will say there’s someone who’s known to be incompetent.”

That actually did get me searching to what researchers actually found about this, and quite a bit.

COWEN: What is the Ideological Turing Test? And how do you use it to improve your own knowledge and understanding of things?

CAPLAN: The Ideological Turing Test — this is an idea that I came up with something like five years ago. There’s the original Turing Test, which is a test. It’s used in artificial intelligence, and basically, it says that if you can no longer tell the output from a computer from the output from a human being, that AI has passed the regular Turing Test.

I was saying you could actually do a similar thing for a human being. You could say, “Is it possible for you to successfully mimic the holder of a view that you disagree with?” Sort of jumping off of [John Stuart] Mill’s famous line of, “He who knows only his own side of the case, knows but little of that.”

The key thing about the idea is that it’s a real test. It’s one you can actually administer. The idea is you do it blind, and then you actually show it to people that hold a view that you don’t and see whether they can tell the difference between that and the real view.

I say, “Once you can pass that test, then you have at least indicated that you understand the view that you disagree with.” Now of course, in practice, it is hard to do this because of the cost.

When I am actually trying to explain a view, I do try, in my mind at least, to pass this. I will say, when I am going and checking on my references with the original authors, the one thing where I basically never contradict the author is if they say, “You misunderstood me.”

That’s where I say, “If the guy says I misunderstood him, then I almost certainly misunderstood him, and I need to do better.”

COWEN: Last question. What are your plans for the future?

CAPLAN: I’ve got a queue of books. The one that is coming out next year — the plan is for September — is a nonfiction graphic novel on the ethics and science of immigration. It’s going to be called All Roads Lead to Open Borders.

This is a genre many people aren’t familiar with. There’s the general genre of the graphic novel, which is basically a highfalutin comic book. The nonfiction graphic novel — this is one where you use the vocabulary and grammar of comic books to talk about a nonfiction subject.

This is not a story about immigration. It is actually an extended journey through what social scientists know about immigration and what philosophers said about immigration.

This is actually in collaboration with Zach Weinersmith, who was, out of all cartoonists, was my first choice in the world to be my collaborator. I didn’t know him when I started the project, and I amazingly talked him into it.

Now, he’s drawn 90 percent of the first draft of the pages. I’m super excited about this because this is my chance to be on the production side of a product that I have long been in love with. There’s that.

Then my big word book after that, to distinguish from a graphic novel. There’s going to be a book called Poverty — Who to Blame. This is going to combine social science with economic philosophy.

I want to begin with what I think of as one of the great neglected moral concepts in academic philosophy, which is the concept of blameworthiness and desert. These are concepts that almost everyone who thinks about right and wrong thinks about. Yet they are so dismissed, certainly by consequentialist philosophers, but a lot of other philosophers implicitly dismiss them by neglect.

I want to say, actually, these concepts are very important. They’re morally at least as plausible as the other stuff that people are talking about, probably more so. I want to go and think about the actual social science of poverty through this lens of blameworthy, nonblameworthy, and semi-blameworthy poverty.

A lot of what I want to do in the book is to revive this old notion of the deserving versus the undeserving poor, and then take everything that social science knows about the causes of poverty to understand what are the main sources of blameworthy poverty? What are the main things that we’re overrating? What are the main things we’re underrating?

Really to change people’s minds of, “What are the kinds of poverty that really are deeply, morally problematic and we should be thinking about all the time?” Which in my mind, things like poverty of people in the Third World who could easily come and get a job in the First World if it were legal.

People that are totally capable of solving their own problem if government would just get out of the way versus problems of, say, someone who is a chronic alcoholic, and if they would just stop drinking, they’d be doing fine. I think those are very different cases. Yet there’s, of course, a lot more concern about the second problem than the first in terms of ink that’s spilled over it. And I want to go and get people to rethink that.

COWEN: Bryan Caplan, thank you very much.

[applause]

Q&A

Note: this episode was recorded live for economics students at Mason.

AUDIENCE MEMBER: In your education book, you don’t devote a lot of attention to the networks, the social networks that form in schools. Yet my interactions with Bryan Caplan suggest that he finds them important.

Your advice is for students to go talk to speakers, to faculty, to other students, and so on. So I was wondering if you could elaborate on how you see these networks interact with your story of signaling. Do they impact career outcomes? If they do, is it just a form of signaling, or do they actually create value by spreading beliefs and habits, connecting individuals with different characteristics, and so on?

CAPLAN: Great question. I do have one section on who you know. This is a subject where I spent a lot of time reading sociology to find out . . . they actually empirically study this quite a bit more than economists, at least, for labor markets. So definitely true that social networks are hugely important for the labor market. A pretty commonly cited factoid is that about half the people got their job because they knew somebody.

But this does not mean that the social networks that people are getting in school are very helpful because there’s a couple of other key qualifiers, namely the kinds of social networks, the kinds of social ties that are very helpful. Either it’s people who totally love you, like close relatives, or it’s people who are in your exact field.

For a graduate student, then, I would say that social network is hugely important because, especially if you want to be a professor, then your professors have the job you want, and they know other people who have that job. Those are the kinds of social networks that are great.

Similarly, like CS at Stanford — great social network because there you are studying with a bunch of people that you are very likely to be working with or for or be the vendor for, or they’re going to know such people. Those are the really valuable social networks.

However, the problem is that most college majors are so loosely tied to any occupation, that it is phenomenally unlikely you will ever work again with someone that is a fellow student or the professor.

If you’re an English major, the odds that you will ever get a job from a fellow student — very low; that you will do a startup with a fellow student — low; that you will hire someone else; that your professor can get you a job. Unless, of course, you want to be an English professor, in which case, that’s great.

I would say is that social networks in general are very important. Academic ones are grossly overrated. The people who usually ask this question are Silicon Valley people, and they are seeing a narrow subset of labor market where they’re right. But if you step back and just realize how nonvocational most majors are and how vast the economy is, it’s too unlikely.

Then there’s other exceptions. There are certain fraternities that are good at getting their brothers jobs in finance. That’s where they funnel them. But these are very close ties. Remember a fraternity — it’s a brotherhood. This is what really counts.

Like the Granovetter strength of weak ties stuff — this was one of the most cited papers in all of social science. When I started reading, I was like, “Wow. Essentially, no one believes the paper, but it’s got 39 citations.” That’s the main story you might tell from why educational social networks are good, and this is wrong.

COWEN: Next question. Robin?

ROBIN HANSON: You do scholarship, and you know many other scholars, and you have opinions about the quality of their work. What are the biggest mistakes other scholars are making, from the point of view of making the kind of scholarship you wish they would make?

CAPLAN: Type III error, getting the right answer to the wrong question — that is my main view. Most work that I read that I don’t like, I don’t so much think it’s wrong. It’s that it’s boring, and who cares?

That’s honestly my reaction when I flip through a journal is, suppose you’re completely right. Who cares? Suppose you’re completely right. Who cares? That’s what I say for 80, 90 percent of pieces that I read.

This does not mean that I think that you can’t write a good piece on a narrow topic. But it’s got to be because you convincingly argue that it really reflects something bigger than just the topic itself.

I can really enjoy reading a book about the French Wars of Religion because it’s not just about the French Wars of Religion. It’s about the nature of human religiosity, and about the way that dogmatics try to tear society apart, and about, is religion primarily social, or doctrinal, or what’s the interrelation between them? That kind of thing.

To me, that’s the main thing, is just that it’s boring and who cares?

The second biggest thing is the focus on disciplinary boundaries, where people usually, if they’re going to read, they only read within their field. Economists read economics. Even that is optimistic. You usually read within your subfield of economics or your sub-subfield.

What I always say is, “Look, if you really want to understand something, don’t read what other people in your niche are doing or have read. Read what anyone who has thought about the issue has read, and it’s quite likely you’ll learn something.”

Now, ultimately, I will say this: I think it does come down to academic incentives because those people in the fields that people aren’t reading don’t help you. They don’t do stuff for you. Honestly, I think most scholars are primarily about career advancement. I don’t think there is that much curiosity.

I remember, this is actually one of the things that disturbed me most when I became an assistant professor. When Tyler started telling me all about these backstories about professors. Finally I get to get behind the curtain — not anybody in our department, but other departments, others.

Finding out . . . the thought of someone who started off really curious and, in the end, they’re just consumed with this pettiness over someone not citing them. Why do they care? Every citation translates into a statistical $100 a year.

This kind of mentality, it did horrify me at the time. I’ve gotten over it, but still this is the kind of thing when I step back . . . I think you become a scholar to go and advance human knowledge on important questions. I just don’t see many people doing it or even using the methods that you would want to use, which is, step one, go and read what anyone who has really thought hard about the question already knows.

COWEN: One more question, yes?

AUDIENCE MEMBER: I know you’ve stated that there is not a lot of crossover between psychology and economics, and you’d like to see more. For somebody who may be interested in looking at that bridge there, what is some literature that you’d be recommending for them?

CAPLAN: Just the outset, sometimes when I say that economists don’t know enough about a subject, people get mad at me. They say, “You’ve ignored everything we’ve done.” I haven’t ignored everything you’ve done. I’m just saying it’s not enough and there’s got to be more. However much there is, I’m aware of that stuff.

Economists mostly just read one sub-area of psychology called cognitive psychology. Some other areas that are all worth reading, at least for depending upon what area you’re working on, like personality psychology.

Human personality is really important. It explains a lot of things about the world. Human beings are quite different from one another.

Becker and Stigler tried to go and come up with a model of the world where you never mention differences in taste. Personality psychologists have documented very strong differences in taste between human beings.

Human beings — of everyone from someone who would kill themselves if they couldn’t be a rock star with thousands of fans in front of them every night, to a librarian or a hermit — these are all human beings. This whole range of level of decider interaction is seen in the world. Realize there’s everyone from me to someone who watches football all day, that whole range — just realizing that.

Even areas more narrowly . . . of course there’s educational psychology. It’s a big area in psychology where they answer questions that education economists should be interested in, like how do people learn, and how much can learning really explain?

One thing I noted in the book is that when I started telling economists, “How can the human capital model be right, given that most of what people learn in school, they never use on the job?” And this is what economists who would never deign to actually read educational psychology would say: “Well, it’s like learning how to learn.”

Yeah. And you realize that educational psychologists have been studying this for a hundred years, and they think something different. They don’t care.

Then, the last, there’s industrial psychology, the whole field of psychology where they do things like measure job performance. How do we measure this? What predicts it? How are firms organized? How are promotions done?

It is a mass of information and data that economists really could easily get if they would just go and take a look. Wow, they have their own journals. There’s journals of industrial psychology, shockingly. How many labor economists have ever even bothered to crack open such a journal? I don’t think it’s very many, but shame on us.

COWEN: Thank you again, Bryan.

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