Archive for Tuesday, March 20, 2018

Opinion: Economist’s podcasts smartly get to the heart of the matter

March 20, 2018

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There are so many things to lament about the modern world — fracturing families, the rise of authoritarianism, the rage for torn jeans — but there is also much to celebrate and savor. One is the abundance of great conversation available through podcasts. There’s my own, of course, “Need to Know,” and then there is the master.

If you’re not familiar with Russ Roberts’ “EconTalk,” you are in for a treat. Once a week, for 12 years, Roberts has been taking the dismal out of the dismal science. An economist and fellow at Stanford University’s Hoover Institution, Roberts has a knack for identifying the next big thing. I had heard about driverless cars, Bitcoin, and machine learning, for example, long before these developments became widely discussed, because EconTalk had tackled them — and in the most engaging way.

For most of the topics Roberts covers, no specialized knowledge is required. By now, everyone knows that driverless cars are coming. But in one of the first discussions of the technology, EconTalk considered not just how it would affect jobs (an estimated 3.5 million Americans are employed as truck drivers) but how it might change many aspects of life. If everyone had a driverless car, everyone would, in effect, have a chauffeur. Time spent commuting could become much more productive, as people worked on their laptops while being ferried to and from the office.

But wait, would people even need to own their own cars anymore? If you could summon a driverless car with your phone app, you could get where you needed to go, and then release the car to the next person who required it. Many fewer vehicles would be needed. Think of all the garage space in office buildings and homes that could be freed up for other uses. You could call a car to take you to the supermarket — or maybe you wouldn’t need to go the supermarket at all. Deliveries would be cheap. Traffic jams might be a thing of the past.

The podcast on price gouging laws should be required listening for every well-meaning politician. Duke University’s Mike Munger joined Roberts to discuss the effect of such laws after natural disasters like hurricanes. Bottom line: If prices are allowed to spike temporarily for essentials like gasoline, suppliers will have the incentive to invest in generators and so forth to provide them. The sooner gas is flowing, the sooner everyone’s power will be back up and running, at which time, prices will fall. Anti-gouging laws, though they sound good (“Why should unscrupulous merchants profit from disaster?”), actually prolong the crisis.

Often Roberts agrees with his guests, but when he doesn’t, he is the model of polite demurral. It’s a cliche that we should approach all subjects with an open mind, but to encounter Roberts is to realize, with force, how rare a truly open mind actually is. Always prepared to be convinced by a good counterargument, Roberts gives his interlocutors the opportunity to make their best case. He’s willing to say, “I hadn’t thought of it that way,” or “I might be wrong.” Tied into his open-mindedness is a skepticism about dogma in general and also an awareness of the fallibility of science.

On several podcasts, Roberts has explored the “replicability crisis” in psychology and other disciplines and biases of various kinds in economics, climate science, medicine and other fields. He’s also sensitive to the law of unintended consequences. One guest that I recall from a few years ago spoke of the irony that as we make appliances more energy efficient, we can actually increase energy usage rather than reducing it. Gas stations take advantage of the lower price of refrigerators, for example, by stocking more sodas and other drinks. Each refrigerator is more efficient than its predecessor, but the result can be more overall energy use.

Roberts is unyielding on the topic of the bank bailouts. Several podcasts have explored the run-up to the financial crisis of 2007-2008. Roberts’ explanation of how we came to be a country that privatizes bankers’ profits and socializes their losses is soon to be a book.

Though the podcast is titled “EconTalk,” it’s really about much more — from organ selling, to empathy (an overrated virtue, according to Paul Bloom), to how museums hoard art, to food waste (it’s OK!), to the moral (not just economic) insights of Adam Smith. The podcast stimulates the soul as well as the mind.

— Mona Charen is a columnist with Creators Syndicate.

Comments

Kendall Simmons 2 months ago

Conservative columnist Mona Charon apparently left her brain somewhere else while writing it. Or was so giddy about what Russ Roberts was spouting on his podcast that she stopped thinking and just started scribbling.

She seems to have completely missed the fact that, if people stop buying cars because everyone can simply call driverless "cabs", the job losses will be ENORMOUS. But we're supposed to be excited about all the garage space in homes and office buildings that is nw free for other uses!

She also argues that price gouging is fine! "If prices are allowed to spike temporarily for essentials like gasoline, suppliers will have the incentive to invest in generators and so forth to provide them. The sooner gas is flowing, the sooner everyone’s power will be back up and running, at which time, prices will fall".

Apparently rushing more gas to an area will make prices go down...when there's no incentive to lower those prices. After all, price gouging isn't dependent on a shortage of something...just on the desperation of people buying. (Remember the price gouging after 9/11?) To claim that anti-price gouging laws prolong a crisis is nonsense.

Then there's how more energy-efficient appliances, like refrigerators, will lead us to an INCREASE in the use of energy. How? Well, "gas stations take advantage of the lower price of refrigerators...by stocking more sodas and other drinks. Each refrigerator is more efficient than its predecessor, but the result can be more overall energy use".

Huh??? Apparently she believes that energy-efficient frigs will cost less to buy...and gas stations have unlimited space...so gas stations can buy bigger collers and, because those bigger frigs can hold more soda pop, they will use more energy. And, of course, gas stations have all this extra money, so they can go out and buy new frigs.

Plus she tells us that wasting food is OK!!! Yeah, sure. We waste $165 billion (about 40% of our food) on wasted food every year. About half of all produce (60 million tons) is thrown away.

Now, you can argue that jobs would be lost if we didn't waste so much food. But we also lose water resources and increase our greenhouse gas emissions. And people go hungry in the US alone every day...almost 13% of all Americans...and it noticeably (and negatively) affects our education and healthcare systems. And who benefits??? (Can you say "corporate farms"? And how many people complain about illegal immigrant farmers "taking jobs from hard-working Americans"???)

Yes. There are government health restrictions in many places that force restaurants to throw away food, rather than donate it to food banks or homeless shelters. Like hunger and lack of nutritious food isn't a health problem. These regulations need to be reviewed...and revised.

Other approaches are viable...and far more useful. But Mona apparently doesn't like thinking about them.

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