0:00

Marshall here. Welcome back to The Realignment.

0:08

My guest today is the New Yorker's

0:10

Nick Romeo. He has a new book

0:12

out. It's called The Alternative. The central

0:14

idea behind the book is that despite

0:16

all of the deep dissatisfaction, almost everyone

0:19

feels the political status quo in the

0:21

United States around the world. There are

0:23

a few examples in our public discourse

0:25

of folks actually providing a clear articulation

0:27

of what the alternatives to that status

0:29

quo actually are. So in his book

0:32

and in this conversation, Nick focuses on

0:34

actual on the ground examples of how

0:36

across the globe we are seeing alternate

0:38

social structures and arrangements that can get at

0:40

how people feel the economy is so unjust.

0:42

Hope you all enjoy this conversation. I think

0:44

it's a great starting point on a bunch

0:47

of different places folks can go. And of

0:49

course, a huge thank you to the Foundation

0:51

for American Innovation. Nick

0:55

Romeo, welcome to The Realignment. Great

0:58

to be here. So

1:00

I want to start here because you just have

1:02

a great title for the book that gets at

1:04

a deeper idea that folks, especially those in

1:06

the Gen Z audience are going to kind

1:09

of not really get the reference. But what

1:11

is the reference to there

1:13

is no alternative, this alternative

1:16

Margaret Thatcher phrase referring to?

1:19

Yeah, that's a great question. So I agree

1:23

it may be a bit of a deep cut. I think

1:26

it kind of depends on your

1:28

context. So Margaret Thatcher in

1:30

1980, you know, she made a speech in

1:32

which she used

1:35

the phrase, it was almost verbatim.

1:38

What she actually said in this 1980 speech is, there's

1:41

no real alternative. And

1:43

she was referring to a kind

1:45

of suite of economic

1:47

policies that came

1:49

to be known as neoliberalism,

1:52

and which tended to involve

1:54

deregulation, the increase

1:56

of free market, thinking

1:58

into as many domains. of

2:00

life as possible. So labor

2:03

markets, health care, schools, trade,

2:05

etc. All of this kind

2:08

of got swept up in

2:10

the phrase, there's no alternative. And

2:13

it's 1980,

2:15

so memes were not as viral or

2:17

as rapid, but it became a meme. The

2:20

phrase there is no alternative came to

2:22

stand for a

2:24

certain worldview in which economic

2:27

status quo was presented as

2:30

inevitable. Anyone who thinks

2:32

we could have a different, better

2:34

world is sort of implicitly

2:36

dismissed as utopian. So that's

2:39

the Margaret Thatcher quote

2:41

that the title of the book alludes to. It

2:44

actually though, it really draws

2:46

on a much older tradition

2:49

of evoking physical

2:51

laws, really quite akin to laws of

2:54

physics to kind of justify the status

2:56

quo in the economics sphere. And I

2:58

can give you some examples of that

3:00

if that's interesting. Yeah, and we'll pause because

3:03

I kind of want to get into this because the I'm

3:05

coming at more of this issue from

3:07

a political economy perspective and just straight

3:09

up like economics. So what's interesting to

3:11

me is that on the one

3:14

hand, you could say that neoliberalism, especially in

3:16

the 2020s, is

3:18

the status quo. But what's interesting is in 1980,

3:20

late 1970s, when the politicians

3:24

like Reagan in the

3:26

United States, obviously, are coming into power, neoliberalism

3:29

wasn't really the status quo.

3:32

The status quo is

3:34

late-stage New Deal

3:36

America, New Deal consensus kind of coming apart in

3:38

late 1970s. Then in Great Britain,

3:41

it's the kind of come down from having

3:43

to come to a court of the fact

3:45

that World War Two and World War One

3:47

meant the empire just by that definition was

3:49

like in decline. So I think at its

3:51

best, like there is no alternative thinking, was

3:54

able to serve at a

3:56

political level as a like anti-declinist

3:59

kind of mess. I'm kind of curious how

4:01

you would think about how you hear that term, especially in

4:03

the context of the 1980s. Yeah,

4:07

you know, that's a fascinating point. I

4:09

think you do sort of need political

4:11

economy rather than just economics to really

4:14

answer that question. One

4:16

thing I talk about in the

4:18

first chapter of the book, which

4:21

is all about the battle within

4:23

academia to control how economics gets

4:25

taught. One thing I talk about

4:27

is the Cold War. And,

4:29

you know, in

4:31

the late 1940s, early 1950s,

4:34

one of the best-selling economics textbooks was

4:37

by a guy named Paul Samuelson. And

4:39

there was a little controversy at MIT

4:42

over whether Samuelson's book should be taught.

4:45

So today Samuelson reads fairly

4:48

conservative. I think a lot of people would not

4:50

think of it as a radical text at all.

4:53

At the time, though, in the 1950s, the

4:56

president of MIT was receiving letters sort

4:58

of accusing Samuelson, or at least insinuating

5:00

that he was a communist, that

5:02

the book was way too radical

5:04

and that it should not be

5:07

taught. Now, Samuelson's interesting because he

5:09

sort of famously says later in

5:11

his career something to the effect, you

5:13

know, I'm not going to get it perfectly,

5:15

but he says, I don't really care

5:17

who writes a nation's laws if

5:19

I get to write its economics textbooks. So

5:23

in fact, he did get to do that. And

5:25

he, I think, was absolutely correct

5:27

that there's enormous influence within the

5:29

field of economics. So in

5:32

part because of its place

5:36

in the imagination as a sort

5:38

of quasi-natural science, people take things

5:40

in economics books very seriously. So

5:43

if you're told businesses cannot

5:46

wage raises, that'll

5:48

just cripple the economy, we'll have widespread

5:50

unemployment, or if you're told free trade

5:52

is the best economic policy, there's a

5:54

tendency to think that somehow science has

5:57

shown this is true, and especially as

5:59

mathematics became... more and more integral

6:01

to economics, people were understandably impressed.

6:03

They would think, oh my God, look at all

6:05

this modeling, look at all these numbers. These

6:08

really brilliant people have just told me how

6:10

the world must

6:13

be. I think the

6:15

deeper level to the Margaret Thatcher quotes,

6:18

is once again the sense that what's

6:21

inevitable and what's perceived as inevitable

6:23

has enormous political stakes. Samuelson

6:25

realizes that, so

6:27

do the businessmen in America who are writing to

6:30

the administration at MIT

6:32

saying, don't let Samuelson's book

6:34

into this country. He

6:36

was basically introducing Keynesian economics to America,

6:38

and they were terrified of that. They

6:40

wanted a much more free market, a

6:43

much more Margaret Thatcher-esque

6:45

vision of the economy. I

6:48

don't think I gave you a great answer, but what I'm

6:50

trying to get at is just that, the

6:53

political atmosphere is crucial to

6:55

shaping what gets perceived as

6:57

possible versus what's just an

6:59

inevitable, unchangeable part of the

7:02

status quo. That's

7:04

the reason why I was bringing this up, because I

7:06

just hear the framing

7:08

you're giving, of the intersection of

7:10

economics and politics, and then obviously

7:13

how that relates to the broader

7:15

society as a whole. I do

7:17

a lot of interviews in this post neoliberalism space.

7:20

I'm basically looking to hear

7:23

a politician or an actor or an

7:25

intellectual, kind of give their own version

7:28

of there is no alternative. Because

7:31

what you could basically say to yourself is like, what are

7:33

Reagan and what are Thatcher doing? They're looking at the 1970s,

7:36

the Malays, the

7:39

shifting the economic picture, the Cold War is

7:41

going into a different transition state, and they're

7:43

saying, look, the body politic in the broadest

7:45

broadly doesn't feel satisfied with that. So our

7:48

set of policies are the thing

7:50

that have to be done to

7:53

address those feelings that you basically have right now.

7:55

I think that's separate from the economic case. So you

7:57

could debate whether or not those are the right

7:59

economic. policies, but as a political program,

8:01

they were quite successful. So I just am

8:04

always just struck by kind of thinking like,

8:06

what would the post neoliberalism late

8:09

stage, it's been 30, 40

8:11

years since the 1980s, like what would that version

8:13

look like if you're giving a modern speech? I

8:15

don't know if you have any thoughts on that.

8:17

What would you really say is just not working

8:20

in these economic categories right now? I

8:23

think I lost the thread a little. So

8:25

are you asking if I were? Basically,

8:28

but this way. So if

8:30

you look at the there is

8:32

no alternative speech, you would

8:34

say, okay, mass unionization, big

8:37

government, quote unquote, all

8:39

these policies are not working. And they are

8:41

leading to the broader climate of decline that

8:43

you as a voter are experiencing in the

8:45

1980s or early or late 1970s. I'm

8:48

curious today, like the work that you're doing in

8:51

the alternative, the work that a lot of folks

8:53

in the post neoliberalism space are doing is basically

8:55

focused on saying there are all these things in

8:57

the status quo right now that are just not

8:59

working. And then those critiques

9:02

of the status quo have to be transitioned

9:04

to a broader, just like

9:06

a critique of the economy into an actual political

9:08

program. What issues and

9:10

areas that you kind of get

9:12

in the book, would you identify

9:14

as being the not working categories?

9:18

Got you. Yeah, no, I

9:20

think that's a great question. You

9:22

know, I'm not sure that my answer

9:25

to what's not working is particularly

9:28

unique. The

9:32

big things that come right to mind and that

9:34

in a way, almost every chapter of the book

9:36

is dealing with environmental crisis

9:39

or or wealth

9:41

inequality and some of the sociological

9:43

and political implications of wealth inequality.

9:48

Where I hope there is a little bit

9:50

more of a unique intervention is the curation

9:52

of potential solutions to these problems.

9:55

So the problems I think

9:57

are pretty widely agreed upon. And, you

9:59

know, you have people. even

10:01

on the conservative side who are

10:03

very concerned about environmental collapse and

10:06

maybe to a lesser extent extreme wealth

10:08

inequality. In

10:11

order to really sort of leverage

10:13

enthusiasm and expand imaginative

10:16

possibilities, you know, it's

10:19

just a precondition that there has to be

10:21

an alternative, right? So if

10:24

I were sort of saying these are the things that must

10:26

change, you

10:29

know, that's... let

10:32

me take that again. If I were

10:34

saying these are the things that must

10:36

change, that presupposes that, you

10:39

know, we're not in a world in

10:41

which, to sort of paraphrase Milton Friedman,

10:46

economics is akin to one of the

10:48

natural sciences. And in principle, it can

10:50

be just as objective as physics or

10:52

chemistry. You know, I'm

10:55

a little skeptical of people who want to sort of

10:58

remain closely wedded to that same

11:00

model of economics and just

11:02

replace all of their own goals with the

11:05

neoliberal goals. So I think even

11:07

if I might share your politics

11:09

and say, yes, you know, living

11:11

wages, job guarantees, worker

11:14

ownership, participatory democracy and

11:16

economic democracy. Even

11:18

if I agree with all of those things, and I

11:20

do, I write about those things in the book, if

11:22

the way you're justifying those is just saying, it's

11:25

inevitable, we must have these things because science

11:28

has shown it. I think

11:30

that's kind of falling under the same

11:32

fallacy that Thatcher and Friedman

11:34

and the entire tradition of economics

11:37

as a natural science is committing.

11:40

So this is a... maybe

11:42

I'm getting a little bit too academic or subtle in

11:44

this point, but... Oh, no, because my next question is

11:46

about the academic part, so please keep going on. I

11:49

think this actually... I recently did an

11:51

interview with Jennifer Burns, who just did her big

11:53

Milton Friedman bio. And the

11:55

first part of the book is

11:57

illustrating all of the debates and the dynamics. the

12:00

year describing. So yeah, please keep going. I think

12:02

this actually really matters. Well,

12:05

so you know, to bring it back to

12:07

Samuelson, again, the American economist and textbook author,

12:09

you know, I think his

12:12

point about not caring about legislation as long

12:14

as he can control the textbooks, right? If

12:18

you took that seriously, and you were a

12:20

sort of Machiavellian political actor on on

12:22

the progressive side or on the left, you

12:24

would say, well, look, let's just dress up

12:27

all of our goals as natural science and

12:29

try to push them through and hope for the

12:31

best. And you know, that

12:33

might work. But you might also end up just sort

12:35

of locked

12:37

in endless ideological warfare and

12:40

further eroding public trust in

12:42

expertise. I think a

12:44

more kind of reasonable and honestly, a

12:47

more democratic approach is just to be

12:49

very transparent and explicit about what

12:51

things are normative

12:54

and philosophical. Where do we have to have a

12:56

debate about morals and values? And where can we

12:58

just look at numbers? I'll give you a quick

13:00

example. You know, in the book, I tell a

13:02

little anecdote about an

13:04

undergraduate in London who's studying economics.

13:07

And they say to their teaching assistant,

13:10

right in class, they say, well,

13:12

what are the data telling us about

13:14

the ideal genie coefficients, genie is just

13:16

a measure of inequality in a society,

13:19

right? And so they say, what are

13:21

the data showing us about like the

13:23

optimal genie? And it's a category

13:25

error, right? The data cannot give you

13:27

an answer and say, this is the

13:29

best level of wealth inequality. That's in this,

13:32

essentially, that's a philosophical political question, you

13:34

have to discuss values. You

13:38

Know, so well, what's what's what's positive there? Because

13:41

I Want to make this very clear, because

13:43

this is what's interesting. Because, For example, the question,

13:45

like, what is like the optimal like genie

13:47

coefficient? It's like, well, does optimal mean you don't

13:49

have a civil war? Does It mean you don't

13:52

have like favelas, where like all rich people like

13:54

live in like a nice gated community, all the

13:56

people are like a poor? Does It mean

13:58

that you've optimized we're hitting. Four percent

14:00

economic growth over all other costs, even

14:02

if it's loosely environments. I just added

14:04

a such a good example because like

14:06

with with, I just came up with

14:08

spy of different things that we get

14:10

out and podcast episodes about like just

14:12

on their own one is a individual

14:14

metric. Absolutely Absolutely. I

14:17

You know you're gonna end up teaching

14:19

economics in a way that. That.

14:22

Frankly, leads to more complacency, more

14:24

of the status quo, more financial

14:26

crises, and more of this kind

14:28

of constricted imagination, which is precisely

14:30

what what Margaret Thatcher was counting

14:32

on and also really sort of

14:34

perpetuating with her. Or. Speech.

14:37

I think what's interesting here is on

14:40

I target A P. I

14:42

micro or macro back in high school.

14:44

I just remember like the section on

14:46

free trade. Was. Kind of gives the

14:48

you I Chino up. You could make oranges

14:50

and Uk this are you grow oranges, you

14:52

to grow this other widget and then you

14:54

could trade these things as busy the way

14:56

the free trade works. And I think if

14:58

there's an interesting area of bipartisan consensus, I.

15:00

Was Ninety Nine is is just the

15:03

right. Okay, When we looked at trade

15:05

policy debates, everything from should we admit

15:07

China to the derby two hours to

15:09

okay wife is it possible to wake

15:11

retrain workers If we're going to do

15:13

trade adjustment assistance centers and etc, We

15:16

kind of. I stuck. To.

15:18

The literally to the idea by economics

15:20

as being a that like once against

15:22

your boy like empirically driven we can

15:24

identify Like the awful number of Orange

15:26

is they were growing routes to what

15:29

China could be growing. saw. I think

15:31

this is a good example of how.

15:33

At. Its best with economics to serve

15:35

as a means of bricks thinking, suicide

15:37

or debates and problem sets, but if

15:40

we were kind of stick to rigidly

15:42

to eighties ninety side economics it actually

15:44

doesn't reveal. actually kind of confusing cause

15:46

more trouble down the line. Absolutely

15:49

Absolutely. I mean. You

15:52

know, there's a a pretty famous quote from John

15:54

Maynard Keynes where. He. says that if

15:56

economists could manage to get themselves thought

15:58

of like like dentists this would be

16:00

a splendid thing. I

16:02

think what he's getting at is

16:04

just what you're saying, really, that

16:06

there is a contribution for economics.

16:08

It can clarify debates, it gives

16:10

you relevant, empirical understanding of

16:12

a huge range of issues. That

16:15

being said, there is a difference between

16:18

dentistry and heart surgery, and there's a

16:20

difference between these

16:22

narrowly economic questions and these much

16:25

broader political and philosophical questions about

16:28

what's the value of an ecosystem,

16:30

what's an ideal level of wealth

16:32

inequality or equality, what

16:35

do we owe to working class

16:37

people in our country, but also around the world

16:39

who make a lot of the stuff that we

16:41

consume. These are not just

16:43

questions for economists, and so I think that's

16:45

what Keynes had in mind, and I think

16:47

that's still something that's worth taking seriously today.

16:50

I think something interesting that also comes

16:53

from Jennifer Burns's Milton Friedman bio is

16:55

she's really making clear that Milton Friedman

16:57

as an economist is profoundly

16:59

shaped by him rising in the

17:02

economics field during the Great Depression,

17:05

and so much of

17:07

what late mid-20th century

17:09

economics comes about is thinking

17:11

through why the Great Depression happened, what was

17:13

the proper response, what mistakes were made, et

17:15

cetera, et cetera, et cetera. I'd

17:18

be curious, because you're writing about

17:20

ways that the academic space is

17:22

shifting through these debates and these

17:24

concepts, what are ways that this

17:26

post-2008 financial crisis world has

17:29

raised new problems and questions that any

17:31

rising economist is going to be thinking

17:33

about as they're defining their careers and

17:35

interest sets? You know,

17:38

I think that's a really subtle,

17:40

interesting question, and based on my

17:42

reporting and research, I talked with

17:44

a lot of economics

17:47

professors around the world. It's

17:51

sort of a fascinating sociological

17:53

experience, you know, just to talk

17:55

to a bunch of experts in the field, to hear

17:57

them complain, to hear them... of

18:01

think about their own motives, their own aspirations.

18:04

You know, I mean, one thing

18:06

that a lot of people do

18:08

seem aware of is that if

18:14

economists want to sort of remain relevant, they

18:18

have to take seriously things that a lot

18:20

of their students care about, right? Like in

18:23

the first chapter of the book, I write

18:25

about this new textbook for

18:27

Econ 101 that's called CORE. And

18:31

CORE's ambition is really to bring

18:33

more of an empirical but also

18:35

a political lens into

18:38

economics education. So it's not just

18:40

the kind of idealized abstractions of

18:42

supply and demand and efficient

18:44

markets. It's much

18:47

more engaged with game theory,

18:49

with behavioral economics, but also

18:52

with questions like that involve

18:54

climate change, democracy, and inequality.

18:57

One thing the researchers at CORE did was they actually

19:00

kind of created word frequency analyses

19:02

of their book versus other

19:04

leading textbooks like Greg

19:06

Mankiw's book. He's an economics

19:08

professor at Harvard, best-selling book

19:11

in the world, but other textbooks

19:13

as well that are much more conventional. And

19:16

it was interesting just to look at these

19:18

word clouds where you could actually see a

19:20

kind of visual representation of the density of

19:22

attention paid to certain topics. Again, things

19:25

like climate change,

19:27

democratic collapse, wealth

19:29

inequality, these are things

19:31

that economics can illuminate, but they're also things

19:33

that students, especially post 2008, if

19:37

you're not talking about this in an

19:39

economics class, students are kind of confused. And

19:41

yet in order to talk about those things, you

19:44

have to assume this more political and

19:46

philosophical lens for all the reasons

19:48

we've been discussing, that there's not some

19:51

data set that's ever going to give you the optimal

19:54

genie coefficient. Something

19:56

I'm curious about, why are questions

20:00

Okay, so I'd love to hear an example then because

20:02

if you're discussing climate change and

20:04

democracy, etc, etc, etc Why

20:08

does that belong in an econ textbook

20:10

and not in a political science class

20:12

or a engineering class or climate science

20:14

class? But what what is

20:16

the specific lens through which we could

20:18

consider those questions in the textbook context?

20:22

you know, that's a good a really good question

20:24

and I'm not sure that it It

20:28

does belong exclusively to economics. I mean my

20:30

my view I guess

20:32

would be that Again,

20:35

you know to quote Keynes he

20:37

thought that economists were were really

20:39

political philosophers He has this wonderful

20:41

line where he says the the

20:43

good economist must be mathematician historians

20:45

statesman and philosopher so

20:48

That's that's a tall order right? That's

20:50

hard to get through in 15 weeks of an

20:52

undergrad class but I think what he's

20:54

speaking to is that there's a necessary breadth of

20:59

Training that is requisite to

21:01

really doing serious work as an

21:03

economist and you know I like

21:05

that you mentioned earlier the phrase political economy

21:07

because that for for a lot

21:10

of the history of the field of

21:12

economics political economy really was

21:14

the the way that people

21:16

referred to the subject that became

21:18

economic so this this narrowing down

21:20

to just Mathematics when as Keynes

21:22

and many other thinkers realized

21:25

there are these historical diplomatic

21:27

philosophical dimensions I

21:29

guess I think that's unfortunate Maybe

21:33

I'll pause there. I have a few others Because

21:36

what's interesting is what you're basically just saying is

21:38

I was asking you about the more politically tension

21:40

topics But you're kind of your point is if

21:43

you just by definition exclude the

21:45

policy topics you mentioned it does kind

21:47

of reduce econ To

21:50

math and you have some interesting like stats in the

21:52

book like towards the beginning where you're talking about how

21:54

like If you're

21:56

surveying like econ serious econ

21:59

students like They're obviously

22:01

intensely math focused, but they're skeptical

22:04

of adjacent categories. And not just like in terms

22:06

of like climate change, but sort of like other

22:08

baselines of knowledge and information

22:10

that actually need to do their job well. So here's where I'll

22:12

kind of ask you the question. It

22:14

seems the way we can determine what

22:17

should be the way to determine the scope of

22:19

econ from my perspective would be, what

22:21

does our society expect from

22:23

economists? Do you know what I mean? What

22:26

jobs are we actually expecting the economists

22:28

to provide in the 21st century? I'm

22:32

tempted to say that we

22:34

treat them like priests. We expect

22:37

almost divine truth, oracular

22:39

pronouncement. But

22:41

we also, in some sense, we treat

22:43

them like priests in that we tend not to question

22:46

too closely some of the ex-Cafedra

22:48

utterances from the high

22:50

oracles. That's

22:52

a little glib. I'm not sure

22:54

how seriously I would defend that as post-

22:57

One thing on this. Maybe

22:59

it's not that they're treated as, well, I think in

23:01

so actually, especially in ideological content,

23:03

I think when people are weaponizing the

23:06

economic profession and economists, they are treated kind of like

23:08

priests. But I think like the better, not that you're

23:10

being bad, but I think a way to articulate it

23:12

is we kind of treat the work

23:14

of an economist as being akin to the work

23:17

of Albert Einstein. And this is the point you're

23:19

making about science, which is like, look, this is

23:21

just math. You could not like free

23:25

trade policy, but that's how the math comes out.

23:27

That's the way the world has to go. So

23:29

I think that's why I think the later on,

23:31

inevitabilityism and whether or not there's an alternative is

23:34

like, that's where it really matters. But as you're

23:36

treating something that's actually driven by values is something

23:38

that can just be determined by putting some numbers

23:40

in like not just a fancy calculator, but kind

23:42

of in that context, but go on. No,

23:46

absolutely. One

23:48

thing that might sort of focus this

23:51

point a little bit would be

23:53

to talk about externalities and true pricing. So

23:55

in the second chapter of

23:57

the book, I get into... to

24:00

some level of depth on this

24:02

family of accounting methods that's sometimes

24:04

called true cost accounting. I

24:07

kind of like the phrase true price,

24:10

which is this idea. And

24:13

it's also the name of an organization in Amsterdam.

24:16

But true price is the idea

24:18

that for any given good or service,

24:21

the whole set of externalities, the

24:25

production of that, and the transportation. Actually,

24:27

let me back up. I think that

24:29

was a little windy. I'll take this

24:31

again. OK.

24:34

One thing that I think could focus this

24:36

topic a little bit is the idea of

24:38

true pricing. In the second chapter of the

24:41

book, I profile an organization out of

24:44

the Netherlands that is developing a

24:46

whole set of accounting methods. And

24:48

their basic goal is to

24:50

try to include more of

24:52

the externalities of goods back into the

24:54

price signal itself. So for

24:56

example, let's say you

24:59

buy organic tomatoes. Organic

25:03

means it has a legal definition.

25:06

It means that certain pesticides were not

25:08

used. But it

25:10

doesn't actually say anything about the conditions

25:13

or the workers. So true price

25:15

is kind of paying attention to the

25:18

fact that currently we have a patchwork

25:20

of terms and labels. But

25:23

they're not totally illuminating. If you just

25:25

want to do the right thing as a

25:27

consumer, or if as a

25:29

policymaker you want to know the actual

25:31

total cost of something like the US

25:34

food system or one supply chain, let's

25:36

say for microprocessors,

25:40

right now you can

25:42

pay attention to environmental

25:44

things. You can pay attention to human

25:46

rights things. You can pay attention to

25:48

transportation. Is

25:50

this good getting delivered with a fleet of

25:53

electronic vehicles? Sorry,

25:56

electric vehicles. But if

25:58

you wanted just a single method, that said,

26:00

here is what all of that adds up

26:02

to. You know, there's

26:05

nothing that can tell you that. True price is trying

26:07

to solve this problem. I

26:11

think if you think about

26:13

economics as a field that is

26:15

becoming increasingly empirical, true price is

26:17

a really interesting example because what

26:19

they're doing is basically saying, look,

26:23

we're going to look at all sorts of studies

26:25

for all sorts of products, and we're going to

26:27

come up with the best

26:29

possible data that we have on

26:33

the currently unpriced costs of

26:37

production and consumption. Why are

26:39

we doing that? It's not just an

26:41

academic exercise. They're doing that in

26:43

order to actually give a

26:45

very important signal to consumers, to companies,

26:47

to governments that can change behavior. So

26:50

to me, it's a very compelling marriage

26:52

of the sort of mathematics

26:54

and morality components that are

26:57

both arguably central to economics.

27:01

I think I'm glad you gave that example of

27:03

what they're doing in the Netherlands because you said

27:05

this earlier in the podcast, but I want to

27:07

emphasize this for listeners. The

27:10

key point here is this isn't a book, I mean,

27:12

obviously the book has an ideological bent, but this

27:15

isn't just like the next

27:17

manifesto about why neoliberalism is

27:19

bad. Like you're giving these

27:21

specific examples of alternate models

27:24

that can take in some of these primacies we're

27:26

discussing. So I'd love to hear some

27:28

other examples, like maybe the jobs guarantee. That'd be an interesting one

27:30

to kind of go through here for listeners. Absolutely,

27:33

absolutely. So, you know,

27:35

one chapter in the book does

27:38

a deep dive on a job guarantee

27:40

that is currently being piloted in a

27:43

town outside of Vienna, Austria. It's

27:46

a really interesting town

27:49

for a few reasons, one of which is

27:51

that it was the location of a study

27:53

on unemployment in the 1930s that

27:55

became an early classic of sociology. And

27:58

what Those earlier research... They

28:00

found in the nineteen thirties was

28:02

just are psychologically devastating. Lack of

28:04

employment can be. An. Even

28:07

people who who did have enough to eat.

28:10

When. They were surveyed an interview. They.

28:13

They basically described what today

28:15

we would describe and mental

28:17

health terms as a cent

28:19

of total collapse, anxiety, depression,

28:21

purposeless, and as lack of

28:23

motivation. Your. They had more free

28:25

time they were. after all they were unemployed.

28:27

but they they did last. They stayed in

28:29

bed all day. They didn't go out

28:31

to see their friends. So. Fast.

28:34

Forward Nine Years. The

28:37

same town gets chosen as the

28:39

site of a job guarantee. So

28:41

earlier they're studying unemployment. Now they're

28:43

studying. Guaranteed. Employment. A

28:46

few interesting features of how that studies that up.

28:49

Never takes to define just the jobs

28:51

guarantee. you agree that it's kind of

28:53

obvious what what does it mean specifically.

28:55

Yeah. So anyone who has been

28:57

unemployed. Beyond a certain

28:59

number of weeks and would like

29:02

to participate is guaranteed a job

29:04

that they helped to design. That's.

29:07

How it works in Vienna or outside

29:09

of yeah, it's a small town outside

29:11

Vienna so what it means is if

29:13

if you're unemployed and you want to

29:15

join, you can. It's important that

29:18

is voluntary, right? So this distinguishes

29:20

it from a kind of work

29:22

sir, where you're compelled to take

29:24

any job. Whether. Or

29:26

not you're interested or even able to do

29:28

it. Really? This. Is something

29:30

that as a participate in the programs

29:32

you get to say. I have

29:35

these interests. I have the skills and you

29:37

know you work collaboratively with a social worker

29:39

who then says okay, here's some of the

29:41

local need to the community, so there's an

29:44

effort to see to to sort of make

29:46

it useful in some broader social sense, but

29:48

also. Psychologically. Kind of

29:51

compelling to the individual. Both of

29:53

those elements are are important on.

29:57

Saw. one thing that's quite compelling

29:59

about this is that they

30:01

actually pay attention to psychology as

30:03

an economic factor.

30:06

So if you

30:08

were thinking about some of the

30:10

things we discussed earlier and you

30:12

had a very narrow lens kind of

30:14

econometric focus on this kind of pilot,

30:17

you might say, all I

30:19

care about are any

30:21

effects on the broader labor market, right?

30:23

Do other employers have trouble filling jobs

30:25

if we have a job guarantee? Do

30:29

people save their money? You might only look at those

30:31

numbers. The economists who are studying

30:33

this out of Oxford, they're

30:37

not doing that. They're doing very detailed

30:39

psychological surveys that collaborating with sociologists

30:42

and they're sort of giving importance

30:45

and weight to this objective

30:47

dimension of like, do

30:49

I have more motivation? Is my wellbeing

30:52

as I experience it higher? And they're

30:54

saying, these are legitimate reasons,

30:56

right? It's almost like, it

30:59

seems maybe, depending on your point of view, it

31:01

seems so obvious that like, of course it matters

31:03

whether people are not miserable and depressed. I mean,

31:06

I quote in this chapter, a meta-analysis

31:08

of suicide around the world and unemployment

31:11

is implicated in a huge number

31:13

of early deaths, right? This is

31:15

not really a controversial

31:17

finding. But once again, it's

31:19

like the expansion of economics to pay

31:22

attention to things that might previously have

31:24

been classified as epidemiological or psychological. It's

31:26

like, no, no, this

31:29

is important for economists to think about. And

31:31

if you're designing a program that gives

31:33

people a sort of guaranteed thing to

31:36

do, so there's community, there's

31:38

purpose, there's time structure, all those

31:40

elements that the researchers in the

31:42

1930s found missing from the lives

31:44

of the people in this town, those

31:47

are vital to wellbeing and mental

31:49

health. And of course, these have political and

31:51

sociological ripple effects. So

31:54

it's a fascinating example of a kind

31:57

of expanded vision of economics that's

31:59

actually being operationalized

32:01

in a pilot program,

32:03

helping people. So

32:05

I spent some time in the town and

32:07

talking with folks in this job

32:10

guarantee is fascinating because they

32:12

come from a huge range of backgrounds. I mean, some

32:14

of them have advanced degrees. Some of them have not

32:16

finished high school. Some of them are immigrants. Some of

32:18

them are from Austria. Everyone

32:21

who was given

32:24

the offer to participate chose to.

32:26

So whatever their background, people preferred

32:28

this to just remaining on unemployment

32:30

benefits, which are quite generous in

32:32

Austria. So if your view is

32:34

like, look, humans are just lazy. If they can sort

32:36

of get a free lunch, get money

32:39

for doing nothing, they'll just stay at home and

32:41

watch binge

32:43

watch TV and do nothing. Like this

32:45

is such a dramatic reputation of that

32:47

idea. Like people wanted to work. They

32:50

wanted to do something interesting with their

32:52

days. I think

32:54

the question though is, I'd love

32:56

to hear more about your point around how

32:58

they kind of like work with

33:00

the relevant body to like kind of find

33:03

or construct a job or work that's interesting because I

33:05

think, I don't know, the

33:08

skeptical side of me is like, look, like if I could create like

33:10

a job where I like

33:12

record podcasts, so I guess I kind of

33:14

did do this. But if I could create

33:16

a job where I want unemployment and I've

33:18

like interviewed smart people like you all day,

33:20

obviously I would do that. But it's a

33:22

question whether or not that's like economically efficient

33:24

or like a valid, like trade off from

33:26

a societal perspective. Like how does the actual

33:28

construction of work come about? Two

33:31

points are important here. One is

33:33

that it costs less to run

33:35

this job guarantee than it

33:37

does to pay for unemployment benefits. This

33:40

was strategically important in the design of the

33:42

study because it preempts the

33:44

argument that, we can't afford this. On

33:47

the contrary, this money is getting spent

33:50

on unemployment benefits anyway. So if we're

33:52

gonna be spending the money and people

33:54

are happier and would prefer to be

33:56

doing something, then the question is, can

33:59

we find activity? and jobs

34:01

that are both satisfying to

34:03

people and fulfilling some social need.

34:06

And the answer seems to be

34:08

yes so far. So people in the job guarantee,

34:10

some of the people I met did sort

34:13

of greening work in

34:15

the town, they would do planting,

34:19

renovation of landscape, depending

34:21

on their health conditions, again, right? It's a sort

34:24

of tailored program. So you'll work

34:26

with a social worker, if you

34:28

can only do 20 hours a week before your back

34:30

starts hurting, okay, you do 20 hours and then we'll

34:32

do something else for the other hours, right? Other

34:35

people were working with kids, others were

34:37

working with animals. One

34:40

idea that they had, which I'm not sure if

34:42

they have actually been able to launch it,

34:44

but one idea was like taking walks

34:46

with older people who are lonely and shut

34:49

into their apartments basically, who don't have

34:51

young people. So you can

34:53

imagine like with a little creativity, chair

34:56

work, the green economy, there

34:58

are lots of things that private

35:00

markets are actually not particularly good

35:03

at satisfying the scale of need

35:06

for a society.

35:09

And yet a job guarantee, because

35:11

it has a little bit more freedom, they

35:15

can try to address some of those

35:17

urgent issues. If

35:19

you had a national one, it's sort of fun to brainstorm

35:22

a little about how a green

35:24

transition, infrastructure work, I

35:26

think there'd be no shortage of sort

35:29

of socially important, but

35:31

also psychologically

35:33

fulfilling jobs for folks to do.

35:37

I think what's fascinating here is as I was

35:39

thinking about this idea and the way you're

35:41

framing it, I caught myself

35:44

kind of framing it in economics terms in

35:47

a way that kind of gets to the point where we're making the start of the

35:49

conversation where I'm like, okay, well, look,

35:51

if I come to debate in this

35:53

policy, how economically productive is it to

35:56

pay someone to walk grandma, not their

35:58

grandma, like you should always. walk

36:00

your own grandmother, she's lonely. But to

36:02

have someone walk another elderly person around,

36:04

is that the best use of money?

36:07

But I was just framing the

36:09

entirety of that policy debate in

36:11

this purely GDP growth maximizing economics

36:13

trade-off rather than a question of

36:16

alternate metrics, which is, hey, what's

36:18

the mental health of your village going to

36:21

look like? Hey, to what level does that

36:23

feed broader community engagement in the society in

36:25

the first place? Hey, to what degree does

36:27

that encourage someone to maybe get into multi-family

36:29

housing? A multi-generational housing unit? Is this kind

36:32

of interesting how there are always different rubrics

36:34

by which we can assess policy? And

36:36

it's not to say that the economic one isn't

36:38

important. It's not to say that GDP growth isn't

36:40

important. It's just to say that we shouldn't, I

36:43

think the point you're making in the book is

36:45

that we shouldn't be too constrained by

36:47

a specific one that limits

36:49

the specific problems that we have. Yeah,

36:53

no, I totally agree with that. One

36:58

other sort of point that people make when

37:00

they're discussing job guarantees is just about the

37:02

importance of an outside option. So

37:06

if I'm a worker and I don't have a

37:08

lot of training, I'm

37:10

sort of looking basically for work and

37:12

my options without a job guarantee, let's

37:14

say they're only kind of gig work

37:17

or a service job that's low paying,

37:19

kind of low quality work. As

37:22

soon as a job guarantee offers me another

37:24

option, I have

37:26

some bargaining power. So the

37:29

upward pressure on wages and

37:31

pressure on private sector

37:33

folks to actually improve conditions to

37:35

make work more meaningful, maybe

37:38

to give me more advanced notice before my schedule

37:41

changes. I mean, whatever the sort of issues people

37:43

have with low wage, low quality

37:45

work, another

37:47

potential value of a job guarantee is

37:49

that it would provide people with bargaining

37:52

power. This

37:54

can actually have very high stakes, right? So

37:56

there was a study in America on tip

37:59

sub minimum wage. where in

38:01

some states, basically, restaurant

38:04

workers have to rely on

38:06

tips to make up a lot of their wage. Now,

38:09

if you have a state that does that and another

38:11

state that doesn't, so a state that just guarantees a

38:13

wage and you don't have to kind of play

38:16

nice with customers to get tips, to

38:18

get to your basic wage, this

38:21

is a sort of interesting natural experiment. You

38:23

look at two states that have different policies.

38:26

As soon as people are not

38:29

depending on tips as heavily, rates

38:33

of reported sexual harassment of

38:35

waitresses go way down, they

38:38

cut almost in half. So

38:40

if you think about a job guarantee as an

38:42

expansion of that same idea, suddenly

38:45

people might have more options. Whereas before,

38:47

it was like my only job is

38:51

at a place where my boss sucks

38:53

and customers treat me badly. As soon

38:55

as I have a guaranteed option somewhere

38:58

else, either I take it

39:00

or if I don't take it, I

39:03

can still sort of, the knowledge

39:05

that I could take it could still

39:07

motivate better behavior by my boss.

39:10

It can motivate, like, if you're not

39:12

keeping anyone at your business, suddenly you

39:14

have to sort of rethink

39:17

what, let me take that again.

39:21

I don't know where I'd love that. Let's

39:25

see, so if you

39:29

think about a job guarantee as an

39:31

expansion of the same concept, suddenly

39:33

people who have an outside option don't

39:35

have to remain in abusive environments at

39:37

work. So that's another value

39:40

that a lot of economists

39:42

and policy folks talk about with a job

39:44

guarantee. I

39:46

think the last big question, I'd be really

39:48

curious, to your point, you're talking to people

39:50

all around the world, these experiments are happening

39:53

all around the world, to

39:55

what degree has this

39:57

writing you've been doing here and in New York are obviously...

40:00

informed how you think about what

40:03

makes America unique as a country versus other

40:05

countries. So for example, the way you would

40:08

debate a jobs guarantee in an Austrian village,

40:10

I'm sure is quite different than the way

40:12

you'd debate a job guarantee in

40:14

America, like for good or for ill,

40:16

right? So I'm just curious, like, what

40:18

has this taught you about ways that,

40:21

like, our national identity or even national

40:23

story, like, more focus on individualism rather

40:25

than communitarian ideals? How has that kind

40:27

of like come through in your reporting?

40:29

Yeah, that's a fascinating question. You

40:33

know, the role of culture is a

40:35

little nebulous, but I think

40:38

it's absolutely vital, right?

40:40

I mean, in a way, it connects to just what

40:42

we've been talking about in different forms, this whole conversation,

40:45

right? You can't necessarily quantify all of

40:47

these cultural forces, and yet they

40:50

are absolutely decisive. Here's an example,

40:52

you know, I have a chapter

40:54

in the book, and this was also a New Yorker story

40:57

where I spent a lot of time

40:59

in Mondragon. This is

41:01

a town in northern Spain,

41:03

home to an enormous network

41:06

of worker-owned cooperatives. These cooperatives

41:08

have what to an

41:10

American sounds almost like a science fiction

41:12

utopian pay ratio between the highest and

41:14

the lowest paid workers. It's always capped

41:16

at six to one, and at

41:18

many of the co-ops, it's much smaller, three

41:21

to one, two to one, and

41:23

yet they're enormously successful. You know,

41:26

they do industrial manufacturing, they make

41:28

jet engines, elevators, trains, they

41:31

have a consulting firm, they have

41:33

grocery stores, so this cooperative model

41:36

is kind of content

41:38

neutral. You can pour lots of different

41:40

specific industries and businesses

41:42

into it, and yet a

41:45

lot of the folks in Mondragon, if you ask them

41:47

like, well how does this work? Why does this work?

41:49

How are you able to have such

41:52

a low ratio of executive

41:54

to worker pay? They

41:57

love to talk about culture, right? They

41:59

talk about the sort of the founder

42:01

of the co-ops who was a priest. They

42:04

talk about cooperative schools,

42:06

building cooperative people. They

42:08

talk about culinary clubs,

42:10

which are places where people just kind

42:12

of get together. These clubs are cooperatively

42:14

run, so they basically sort

42:16

of give you access to a restaurant quality

42:19

kitchen with your friends and

42:21

people trade nights throughout the month. You go

42:23

cook, you hang out, you drink, you talk with

42:25

your friends. Everyone pays a little bit, and

42:27

it's cheaper than going out all the

42:29

time, but kind of as much fun. The

42:32

idea that culture is at the root of

42:34

it, that's how folks there

42:36

tend to explain it. I

42:39

don't think it's really controversial to say that it's more

42:41

complex than that. Culture

42:43

drives some of it, but then these

42:45

structures themselves drive culture. You have

42:48

this kind of complicated feedback loop where

42:51

if you've worked in a co-op your whole life and

42:54

you're given voice at work, it's

42:56

democratically run, so you're voting on

42:58

important decisions. This is

43:00

going to show up in how you raise

43:02

your kids, how you go to a school board meeting, what

43:05

you expect from local government, what

43:07

you expect from national government. I

43:10

think it's a vitally important question. If I

43:12

were to sort of generalize about America

43:15

versus Europe, those were the two areas of

43:17

real focus in the book. It's

43:19

not surprising to me that one of the

43:22

more compelling things I found in America were

43:24

models of addressing wealth inequality

43:26

that are largely private sector

43:28

and that largely depend on

43:31

individuals. You do have really

43:33

interesting things with investment funds,

43:35

private equity, using huge

43:38

amounts of capital to acquire businesses and

43:40

convert them into worker ownership models. I

43:44

think it's a really compelling model, but it's also in

43:46

some ways a very American model. You're

43:49

sort of bypassing government and

43:51

you're using private capital

43:53

to distribute capital more

43:55

effectively. So

43:58

that's certainly a kind of generalization

44:00

that I think has some validity

44:03

is that the kind of individualistic

44:05

American model of wealth acquisition that's

44:08

relatively unfettered and then sort of

44:10

relying on individual generosity to redistribute

44:13

it as opposed to these more

44:15

institutional structures whether it's participatory

44:18

budgeting in Portugal which I talked

44:20

about or worker ownership models like

44:22

in Mondragon or even the job

44:24

guarantee in Austria these are maybe

44:27

a little bit more characteristically European

44:29

interventions. So

44:32

here is the last big

44:34

question here. The key thing if

44:36

we're thinking about Keynes and Friedman

44:38

they are coming

44:41

to power and writing these very powerful

44:44

econ textbooks at a

44:46

period of high institutional trust in the United States.

44:48

Higher ed is kind of at its peak from

44:50

a trust perspective like Milton Friedman part of his

44:53

skill set as an economist and he's also able

44:55

to write these textbooks but also

44:57

then go and host

44:59

an incredibly popular PBS documentary

45:01

that talks about his political

45:04

vision in the economics profession.

45:07

Now that we are in an era of lower

45:10

trust there is just a lot more

45:12

noise out there you could get

45:14

the most prominent like let's say you had Thomas you probably

45:17

wouldn't select Thomas Piketty. Let's say you had Thomas

45:19

Piketty do a PBS 10 part

45:22

PBS show it would be way less impactful from

45:25

Friedman whether or not you disagree or

45:27

agree with either person it's a different

45:29

dynamic. To what degree do you

45:32

think in the 21st century economics

45:34

as a profession the

45:36

whole point about I'd much rather write the textbook

45:39

than do the other point they made at the

45:41

start of the episode. To what degree is that

45:43

still true or has the world just shifted too

45:45

much? I think it's less true you

45:48

know I think that's a really astute point

45:50

and I guess I would

45:53

say that the decline in influence

45:58

is not really living to economics

46:00

authors, it's I think part of

46:02

a broader decline in influence that,

46:04

you know, like the New

46:07

Yorker magazine is probably less influential than it was

46:09

50 years ago. Same with the New

46:11

York Times and the Wall Street Journal, same with

46:13

the big TV networks. I think there's so much

46:16

noise, there's so much competition

46:18

for attention and there's so much distrust,

46:20

you know, whatever you think

46:22

of the legitimacy of that distrust, there's so

46:25

much distrust of institutions that you're absolutely right

46:27

that there's a decline in influence. I mean,

46:30

one thing that's a little bit hopeful

46:32

about that is that it

46:34

can be less easily abused, right? A

46:37

lot of the folks I talked

46:39

with when reporting on the battle

46:41

to reform economics education, they

46:44

were basically of the opinion that

46:47

economics is increasingly, at least

46:51

as an educational sort

46:53

of field, it's increasingly

46:57

falling behind the real world. But you have people,

46:59

and these are a lot of the folks that

47:01

the rest of the chapters of the book talk

47:03

about, you have people who are sort of

47:05

just doing things already, right? They're creating

47:08

a new worker ownership model, they're

47:11

creating a nonprofit to

47:14

enable supply

47:16

chain, externality tracking, right? So

47:18

I think some level

47:21

of catch up is happening where econ is

47:23

kind of looking out at the world and

47:25

saying, okay, if we're going to remain relevant,

47:27

like there are all of these initiatives, there

47:29

are all of these kind of analytical and

47:31

political frameworks that are sometimes

47:34

being created by economists and sometimes

47:36

not sometimes being created by other

47:39

academics, private sector folks, democratic

47:41

movements, like participatory

47:43

budgeting, or workplace democracy,

47:46

economic democracy, all

47:48

of these movements, I think, like a hopeful

47:50

way to look

47:52

at the declining influence of elite institutions

47:54

and education, a hopeful way is that

47:57

there's more space for other folks, there's

47:59

more breathing room, there's more opportunity

48:02

to sort of create

48:04

something interesting and prove

48:06

that it works. And then maybe the journalists

48:09

like me and the academics and the other

48:11

folks come along and say, hey, this

48:13

is cool. Like people should pay attention to this. So

48:15

it's a different model of almost

48:18

idea innovation. I think

48:21

we'll close up then is the really

48:23

encouraging thing from what you just said

48:25

then is if

48:28

we acknowledge that there are unsolved

48:30

problems and unanswered questions in

48:32

the world, the degree to which institutions

48:36

and individuals and

48:38

experts, if you use these kind of interchangeably,

48:40

the degree to which they can focus their

48:42

attention on those questions and those issues will

48:44

be how you retain your actual relevance. So

48:46

you're not going to get you

48:48

can't just like, you know, you know, that's right,

48:50

50 years ago, like there's more where you could

48:52

just write the New Yorker article, and it would

48:54

be the definitive topic on the

48:56

issue. All the right people would read it. Think

48:59

back to the 1990s when people called New

49:01

Republic magazine like Air Force One's in-flight

49:03

magazine. That was just the deal. That

49:05

concept doesn't even make any sense today.

49:07

But it does just mean that if

49:09

you could say to yourself, okay,

49:13

separate from US China policy, everyone and their

49:15

cousin is trying to figure out how you

49:17

deal with a supply chain crunch if there's

49:19

an invasion of Taiwan, or if there's a

49:22

blockade, or if there are trade tensions. If

49:24

we can be the institution that does that

49:26

work before that work is

49:28

inherently on top of everyone's hands, that's how

49:30

we're relevant. And that's a separate question then,

49:32

arc, you know, a hundred million people tuning

49:35

in to watch you on PBS on Friday.

49:37

So I think it's just like encouraging to

49:39

have institutions and figures and professions say, hey,

49:41

we need to be relevant. We have to

49:43

sit with the time because that's how we're

49:45

actually helpful. I think kind of like rehashing

49:47

yesterday's answers. Absolutely.

49:50

Yeah, no, I sort of, I share your

49:52

views on that. I think that's a nice

49:54

way to frame it. Yeah. Point

49:57

of agreement is a great way to end the conversation. Nick,

50:00

thank you so much for joining me on the Realignment. The

50:02

book is out now. I hope everyone

50:04

picks up a copy. It's available in

50:06

our bookshop. Thank

50:09

you, Marshall. Really enjoyed it. Hope

50:16

you enjoyed this episode. If you learned

50:18

something, like this sort of mission, or

50:20

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50:33

See you all.