Do you approach the world and the challenges it imposes more like a scout or a soldier? What’s the difference? Both are mindsets, and bot are appropriate in particular situations, according to guest Julia Galef. In this episode, host Russ Roberts welcomes Galef to talk about her new book, The Scout Mindset, and explore these questions. Galef suggests we would be better served by utilizing scout mindset more often than we do. Fortunately, she says, it’s also something we can learn and train ourselves to do. We easily employ scout mindset when, for example, we mentally survey the best way to get to the library. Yet in bigger- and perhaps more significant- situations, such as whether to observes a religious tradition or who to vote for in an upcoming election, we tend to operate with soldier mindset. So, what’s the problem with that, and why might you want to learn to be more scout? Help us continue the conversation, and let us know your reaction to the prompts below. As always, we love to hear from you.     1- How do you understand the difference between the scout and soldier mindsets? What are some examples of situations in which you thought you needed a soldier mindset, but you didn’t? What might you have done in these instances to be more “scout?” How about the reverse?   2- To what extent do you think Galef is right when she says scout mindset has positive externalities? Would the world really be a better place? Why?   3- How does the scout-soldier contrast help explain why it’s often so hard to say, “I don’t know” and/or admit you were wrong? How might this have been helpful in an evolutionary sense, according to Galef? It it still an adaptive behavior? And how might this episode help Russ with the dinner party conversation on minimum wage we asked about in this Extra?   4- How might scout mindset help you in situations where information is hard to find or not of the sort you need, such as whether to have children?   5- Early in the episode, Roberts confesses he’s become much more pessimistic about the efficacy of widespread economic literacy. How might scout mindset help Russ (and the rest of us!) recover hope? (Or, should we lose hope, and why?) Are we holding our identity as economic educators too tightly? (0 COMMENTS)

The op-ed on vaccines and industrial policy written by Deirdre McCloskey and me for Project Syndicate prompted a very interesting comment from Dallas Weaver. It is on the Project Syndicate website, so I feel free in reprinting it below: On the claim of the government inventing the Internet, I am old enough to remember the initial contracts that created the protocols and got it working. The objective was to network the few super computers of the day. I was at LLL and my friend was in charge of computation at Standford as we sat in his kitchen after dinner using a modified typewriter to talk to the computers on campus. None of us or DARPA had any vision of todays Internet. If we did have such a vision we surly would have not built in the assumption of “trust” that the packet coming in was from where it says it is from. With just a few super computers (my watch is more powerful than they were) run by people we knew, the trust assumption is fine. However, for oil pipelines assuming trust is not very satisfactory. All bureaucratically evolutionary systems such as the internet or biological evolutionary systems have the problem of building in errors that can’t be fixed. Internet security is one which allows China to do packet injection using the “great cannon” and put malcode in your computer when you think you are talking to Google. The vertebrate eye is designed backward where you have blood and nerves between the light source and the sensors (a real stupid design) which can only be corrected by starting over like the squid did. The government isn’t smart enough to plan the future, they are just people who just go with the flow and don’t innovate, if it means you may get into trouble for a failure. If the government is so smart why doesn’t it get rich betting on wall street instead of just taxing the people. The existence of design stupidities demonstrates evolutionary type of design methods by governments or gods. (0 COMMENTS)

When I started blogging in early 2009, I pushed back against the view that the housing market had gone through a “bubble”. I pointed out that prices in countries such as Canada had risen as much or more than in the US, and yet had not crashed. Commenters told me, “you just wait, the Canadian market is starting to correct.” The same predictions were made about the Australian market.More than 12 years later, I’m still waiting. Some of my bubble commenters have finally given up and drifted away. In fact, it looks more and more like real housing prices are persistently higher in the 21st century, due to “fundamentals” such as NIMBY regulations and very low equilibrium interest rates. That’s not to say that real house prices cannot fall in the next few years. They fell in a few markets in 2006-12, and could do so again. Real asset prices in efficient markets move around unpredictably. Here’s The Economist: The government in New Zealand, where prices are rising at an annual rate of 22%, has taken steps to dampen speculation. The governor of the Bank of Canada has worried about “excess exuberance”, and plans to watch the housing market closely. The best way the New Zealand and Canadian governments could help would be to eliminate restrictive zoning regulations. Some people believe that the housing bubble of 2006 somehow caused the Great Recession, and a tech stock bubble in 2000 somehow caused a recession in 2001.  I’ve never bought those arguments.  Today, almost all assets are very expensive, from homes to stocks to Bitcoin.  So can we expect a big depression in 2022? The economics profession needs to revise its theory of what caused the Great Recession.  I have a book coming out in July that offers an alternative view. (0 COMMENTS)

I just rewatched Election for the first time in twenty years, and it was even better than I remembered.  And this time around, I had better conceptual tools to understand it.  Most notably, the movie features three election speeches that elegantly exemplify Social Desirability Bias – and its absence. First, the front-runner, Tracy Flick, delivers a classic firehose of SDB: Poet Henry David Thoreau once wrote, “I cannot make my days longer, so I strive to make them better.” With this election, we here at Carver also have an opportunity to make our high school days better. During this campaign, I’ve spoken with many of you about your many concerns. I spoke with Eliza Ramirez, a freshman who said she feels alienated from her own home room. I spoke with sophomore Reggie Banks who said his mother works in the cafeteria and can’t afford to buy him enough spiral notebooks for his classes. I care about Carver, and I care about each and every one of you. And together, we can all make a difference. When you cast your vote for Tracy Flick next week, you won’t just be voting for me. You’ll be voting for yourself and for every other student here at Carver. Our days might not be any longer, but they can sure be better. Thank you. Notice the hyperbole.  Notice the Will to Power thinly masked by maudlin anecdotes. Then the second candidate, Paul Metzler, delivers some incompetent (and incompetently delivered) SDB: As many of you know, I broke my leg pretty bad this year, and the experience has made me reevaluate what I want to do with my life, and that is help people. When you think about it, a school is more than a school. It’s our second home, where we spend all our time and grow as individuals in the community. But is our school everything it could be? I want our school to reach its true potential. That’s why I’m running for president. I know what it is to fight hard and win, like when we almost went to State last fall and I threw the fourth quarter pass against Westside for the touchdown that won the game by 3  points. I won’t let you down like I did then, and I promise we can all score a winning touchdown together. Vote Paul Metzler for president. Thank you. “I won’t let you down like I did then” – do not put that in your power-seeking speech. Finally, the third candidate, Paul’s sister Tammy Metzler, deliberately spurns SDB in favor of cold, hard truth: Who cares about this stupid election? We all know it doesn’t matter who gets elected president of Carver. Do you really think it’s gonna change anything around here, make one single person smarter or happier or nicer? The only person it does matter to is the one who gets elected. The same pathetic charade happens every year, and everyone makes the same pathetic promises, just so they could put it on their transcripts to get into college. So vote for me because I don’t even wanna go to college, and I don’t care. And as president, I won’t do anything. The only promise I will make is that, if elected, I will immediately dismantle the student government so that none of us will ever have to sit through one of these stupid assemblies again! Or don’t vote for me! Who cares?! Don’t vote at all! I totally forgot about this speech.  When I heard it again, I cheered for Tammy.  (And so did the whole high school, but that’s another story).  The speech doesn’t just replace hyperbole with candor; it blows the whistle on politics’ thinly-veiled power hunger and careerism.  Indeed, she openly calls for the abolition of her own position.  Literally speaking,  of course, the school won’t let her abolish student government immediately… or ever.  But if you interpret “promise” as “promise to try,” you can hardly doubt Tammy’s honesty. At this point, I can hear David Henderson in my head saying, “Would you want a U.S. presidential candidate to deliver Tammy’s speech?  How would that improve policy?”  Well, it would largely prevent policy from getting worse.  But yes, if an intricate status quo of bad policy already exists, brutal honesty isn’t enough.  You need extreme candor to clear the air.  But then you have to build on it with a steely program of liberalization. Still, out of the three candidates, only Tammy is persuadable to accomplish anything good. P.S. Watch Tammy’s full brilliant speech here. (0 COMMENTS)

Elon Musk seems engaged in resistance against government controllers, those whom people softly, politely, and incorrectly call “regulators.” A Wall Street Journal story recently explained how, not content to publicly cross swords with the untouchable Securities and Exchange Commission, the famous entrepreneur has also refused to obey injunctions of other regulators, “ignored enforcement attempts,” and refused government inspectors access to his large factory in Nevada (Susan Pulliam et al., “Elon Musk’s War on Regulators,” April 28, 2011). The subtitle of the article reads: The Tesla and SpaceX chief courts conflict with an alphabet soup of government agencies—and generally gets away with it. It is not sure that Mr. Musk is defending a principle of private property and economic freedom. He has not shied from government subsidies. “99.9% of the time,” he tweeted, “I agree with regulators.” But whatever his motives, his resistance is refreshing. If he pursues it successfully, libertarians and other lovers of individual liberty will be indebted to him. The reason is that resistance to mounting regulations and controls creates a disincentive for Leviathan to impose them in the first place. At least that would seem to be true in a free and peaceful society where individuals are more jealous of their liberty than governments are of their power.  In other types of society, resistance can instead provoke more repression or even generate a dynamics of civil war. (Economists have used “reaction functions” to explore this sort of dynamics: see Kenneth Boulding, Conflict and Defense: A General Theory [Harper, 1962], pp. 24-29 for the simplest model.) The possibility of stopping the encroachments of government through resistance has been invoked by Anthony de Jasay: Self-imposed limits on sovereign power can disarm mistrust, but provide no guarantee of liberty and property beyond those afforded by the balance between state and private force. What de Jasay meant by “private force” certainly includes the standing obstacle of decentralized and private institutions but also the actual capacity of physically resisting the expansionary power of the state, democratic or not. This capacity requires individuals and organizations powerful enough to resist. Otherwise, we will meet the problem of collective action: free riders will wait for their neighbors to take the risk. (See the classic book of Mancur Olson, The Logic of Collective Action [Harvard University Press, 1971].) Note that the limits of collective action also affect voting not only because a minority cannot win against a tyrannical majority but also because of other problems in democratic politics, of which voters’ ignorance (rational and not) is not the least one (see my forthcoming “The Impossibility of Populism,” in the Fall issue of The Independent Review). An interesting example of the capacity to resist (or at least its belief) is given in the delicious 1906 book of historian Marc Chassaigne, La lieutenance générale de police de Paris (The General Police Lieutenancy of Paris). The modern police as we know it, powerful and intrusive, may have been born in Paris when, in 1667, King Louis XIV created the General Police Lieutenancy of Paris. The nascent police spied enthusiastically on the population, but the surveillance was mainly aimed at common criminals. Nobles did not fear the Paris police, even if the king loved to be informed on their personal affairs. And here is the example: policemen tried to stay clear of the Hôtel de Soissons, domain of the Princess of Carignan, lest they were insulted or worse. Is Elon Musk an attenuated version of the Princess of Carignan? The economics of resistance to tyranny is complex. Resistance against the rule of law, as opposed to resistance to an arbitrary ruler, can be counterproductive. The purpose of the rule of law was to deliver us from the rule of men and it would be a disastrous consequence if resistance should bring us back under the latter. But note that Musk’s resistance remains within the legal system. And we may wonder whether the current level of regulation and control is consistent with the rule of law or represents the rule of men in disguise. Another factor to consider: the later the resistance comes, the more costly it is likely to be. Federal regulations alone only contain more than one million restrictions as measured by the use of such words as “shall,” “must,” and “prohibited.” In Federalist No. 62, Madison did not quite imagine what Americans (and other people in the West) have become accustomed to: The internal effects of a mutable policy are still more calamitous. It poisons the blessing of liberty itself. It will be of little avail to the people, that the laws are made by men of their own choice, if the laws be so voluminous that they cannot be read, or so incoherent that they cannot be understood; if they be repealed or revised before they are promulgated, or undergo such incessant changes that no man, who knows what the law is to-day, can guess what it will be to-morrow. Law is defined to be a rule of action; but how can that be a rule, which is little known, and less fixed? (0 COMMENTS)

I spent much of Friday catching up on Wall Street Journals from late April to mid-May. In the May 8-9 Review section of the Journal is a review of Simon Kuper, Spies, Lies, and Exile. It tells of famous Soviet spy George Blake. The reason the name rang a bell is that back in the mid-1990s my father sent me a long letter after having read Blake’s autobiography titled, tellingly, No Other Choice. My father was persuaded that Blake had no choice other than to work for the Soviets. I didn’t read the book but my father’s long letter did not persuade me. And Blake’s book didn’t persuade Simon Kuper. Here’s what I found striking. I’m assuming, of course, that Kuper is quoting Blake accurately. The reviewer, Henry Hemming, writes: Eventually Blake washed up in Moscow, where he remained for more than half a century. As he later said, “after a week in Moscow I knew that communism was the biggest disappointment of my life.” But he was not one to dwell on this. Ponder that quote for a minute. Blake spends years working for the Soviets and it takes him only a week to realize that communism sucks. Wow! (0 COMMENTS)

Journalist and author Jason Riley talks about race with EconTalk host Russ Roberts. Riley argues that the challenges facing Black America go beyond racial discrimination and the threat of police violence. He argues that both the history of Black Americans and the current situation has been distorted by activists who benefit from that distorted picture. The post Jason Riley on Race in America appeared first on Econlib.

Journalist and author Jason Riley talks about race with EconTalk host Russ Roberts. Riley argues that the challenges facing Black America go beyond racial discrimination and the threat of police violence. He argues that both the history of Black Americans and the current situation has been distorted by activists who benefit from that distorted picture. The post Jason Riley on Race in America appeared first on Econlib.

Journalist and author Jason Riley talks about race with EconTalk host Russ Roberts. Riley argues that the challenges facing Black America go beyond racial discrimination and the threat of police violence. He argues that both the history of Black Americans and the current situation has been distorted by activists who benefit from that distorted picture. The post Jason Riley on Race in America appeared first on Econlib.

Many margins matter. And the Warriors Got Screwed. You will often see professional NBA teams that lose games say that they lost it because of factor X. X could be one of many things: poor shooting, poor switching off on defense, careless turnovers, or silly touch fouls, to name four. In last Wednesday’s game against the Los Angeles Lakers, the Golden State Warriors did some of all those four, causing them to give up a comfortable halftime lead. There’s nothing wrong with that reasoning. But it leaves out other factors. One other such factor is poor referee calls. Referees miss even egregious fouls but hopefully they miss roughly the same number each way. But one poor referee call that’s beyond the pale is calling a play dead after one of the players about to pass the ball into play fumbles it and a player on the other side picks it up. That’s what happened in last Wednesday’s game. After the Warriors scored, LeBron James took the ball out of bounds to pass it in. But he fumbled and Warriors player (and fellow Canadian) Andrew Wiggins grabs it and is about to go up for an easy 2-pointer. Instead, the referee whistles the call dead and gives LeBron a do-over. You might argue that the official didn’t think LeBron had possession and that’s why he blew it dead. That could make sense except for one glaring fact: the official did think LeBron had possession, which is why he had started his 5-second count for LeBron to pass it in. Watch the 8-second video. If the official had called it right, the odds are about 0.99 that Wiggins would have scored. The Warriors lost by 3 points and needed a heroic 3-point play in the last 2 seconds, which they didn’t get. But if it had been called right, they would have been down by one one point, not three, and so would have had many options for a 2-point play. Many margins matter. Postscript: In some ways the picture accompanying this article is more apt. (0 COMMENTS)