Episode 33: Transcript

Podcast: Our Opinions Are Correct, Episode 33

Transcription by Keffy

Charlie Jane: [00:00:00] Welcome to Our Opinions Are Correct. A Hugo-nominated podcast about the meaning of science fiction. I'm Charlie Jane Anders. I'm a science fiction writer who thinks a lot about science.

Annalee: [00:00:09] And I’m Annalee Newitz. I'm a science journalist who writes science fiction.

Charlie Jane: [00:00:14] And today we're going to be talking about economics and science fiction with our incredible special guest, Noah Smith, who blogs about economics at Bloomberg and also tweets as @Noahpinion and is just found everywhere that people are freaking out about economics.

[00:00:31] Welcome Noah.

Noah: [00:00:31] Hey, thanks for having me on.

Charlie Jane: [00:00:34] Super exciting. We're going to talk about like how science fiction deals with economics and how actual real-life economics is kind of science fictional and just like how to make sense of all of it.

[00:00:43] Intro music plays: Drums with a bass drop and more science fictional bells and percussion.

Charlie Jane: [00:01:10] So we wanted to start out by kind of thinking about how economics is a form of world building, both in fictional worlds and in the real world and in what ways do economists kind of build versions of the world in order to try to understand economic forces? Do you think that economists are basically writing speculative fiction when they create models? And kind of forecasts?

Noah: [00:01:31] To some degree, yeah they are. But I think that, you know, economists these days don't think that much about what kind of overall world they're building. They're a little more humble. The era of economists who just wrote these big tracts about like how we organize society is kind of on the way out. Milton Friedman, you know, he's kind of on the way out. There are still a few people who do it. Thomas Piketty, you know, is one of those, but for the most part, economists in academia try to focus on how can I understand this one thing that's happening in the world?

Annalee: [00:02:00] I’m curious about that because I feel like so much of economics now often comes back to Game Theory and looking at pretty much the prisoner's dilemma as like the smallest unit of economic life. Is that true? Is that just because I'm reading, you know, journalism about economics and so I'm not seeing what's really going on in academia?

Noah: [00:02:21] Well, no, I mean that you're absolutely right. Game Theory has kind of taken over. In the old days, economists liked to think that the whole economies in this equilibrium, everything just sort of equilibrates. And then along came the Game Theorists and said, well no actually sometimes, like the prisoner's dilemma you can get a bad outcome even if everyone's behaving very rationally. Strategically you can get a bad outcome because people are inefficiently competing with each other. Or it can enable some, some pretty interesting stuff to happen as well when people cooperate. So, so now people are thinking about that.

Charlie Jane: [00:02:51] Right. And actually it's interesting that you sort of mentioned the idea of people behaving rationally because that's something that I, you find in old-school science fiction, like old-school science fiction from the ‘40s, ‘50s. The golden age, or whatever. All of the characters are incredibly rational and have these very kind of serious reasoned conversations where they analyze their situation and very kind of like rational ways. And I feel like old-school economics also has this assumption that everybody is a rational actor in that everybody is acting in their perfect self-interest with perfect information. And do you think that as science fiction has kind of moved towards a more complicated view of human nature, economics is kind of done that as well? Maybe a little bit?

Noah: [00:03:29] Definitely so. I think less so, than science fiction, which is focused more on characters and realistic emotions and things. Economics went through this phase where basically, people realized that rationality had… Thinking that everyone is hyper-rational had hit a dead end. And Larry Summers, who is a famous economist and commentator wrote a paper, which he never published because they would've made them take this out. But the first sentence of it was, “There are idiots, look around.”

Annalee: [00:03:58] So I wonder if you could talk to us… getting away from these questions about science fiction for a minute. Let's just talk about economics. So what would you say is a kind of mainstream idea in economic theory about why people are forming relationships with each other and why the economy functions? Because maybe this goes back to that prisoner's dilemma again, because I feel like just as writers kind of tried to come up with reasons why people behave in a certain way, economists are also thinking about like, well, why do people do idiotic things? Or, why do people do things that are against their own interests or against other people's interests? So what's—how do you do that as an economist? How do you think about that?

Noah: [00:04:37] Oh, there's a million different ways. So, you know, behavioral economists—

Annalee: [00:04:38] What’s the best way?

Noah: [00:04:39] No one knows, yet. Ask us in a hundred years, by that time we’ll have either solved all our problems are we'll all be dead. So.

Annalee: [00:04:47] Okay!

Noah: [00:04:47] Or both.

Annalee: [00:04:48] Yeah. Well, all of us in this room will probably be dead. So that's great. Let's just put it off ‘til then.

Noah: [00:04:51] I'll be a brain in a vat.

Annalee: [00:04:54] So, okay. So there's different ways.

Noah: [00:04:56] Right. So for example, if you're a behaviorist, you could think about your inability to commit to something. You say, I'm going to go to the gym. You buy a gym pass, then you just don't go. If you are a sort of political economist, you could talk about how people, you know, how these voting coalitions form that don't always achieve the happiest results for all the people in the coalitions. If you're a macroeconomist, you could talk about sort of failures at the macroeconomic level, you know, or not. You know, some people argue, well this isn't actually failing, this is actually the best that we could do.

Annalee: [00:05:23] What’s an example of a macroeconomic failure?

Noah: [00:05:27] Macroeconomic failure would be the Great Recession. That was a big failure. Suppose that all the companies, you know, depend on banks to lend to them or else they can't get financing to buy all this stuff they need to buy or pay their workers on time or whatever.

[00:05:41] And then suddenly all the banks suddenly say, sorry, we can't lend to you because we are now involved in saving ourselves from some stupid mess that we got into by buying and selling a whole bunch of ridiculous housing bonds, which were very science fictional. And, sorry we can't lend you anymore because we have to deal with that. And people are like, well, I guess I'm going to have to close up shop and fire all my workers and blah blah blah. And a whole bunch of people get unemployed and they get really mad.

Charlie Jane: [00:06:06] So I want to drag it slightly back to science fiction and talk about like someone who was a science fiction writer and also is one of the most important economic thinkers if the era we're living in, and I'm of course referring to Ayn Rand. And here's actually a clip from Ayn Rand explaining her philosophy of Objectivism and how perfect selfishness is perfectly rational.

Ayn Rand: [00:06:25] That each man must need as an end in himself and follow his own rational self-interest.

Charlie Jane: [00:06:33] Obviously, Ayn Rand wrote science fiction. Her novel Atlas shrugged is kind of this futuristic story of like government repression and railroads and steel and everything. Is she an important economic thinker? It feels to me like she's shaping the era we’re living in a lot of ways. What do you think about that?

Noah: [00:06:50] Maybe so, but I think that to a large degree, people want to believe certain things and then they go looking for a thinker who seems to validate what they already want to believe. Your average Ayn Rand fan, he's like an 18-year-old guy who thinks, “I am a superman, I can do anything. Why don't people recognize my greatness? Why don't people recognize that I am a great thinker and deserve all the money and power, etc.”

[00:07:15] And then, you know, he goes looking for a thinker who's going to validate this. So he reads Atlas Shrugged or whatever. And then sort of that becomes a mythos that validates his own self-conception. I knew that guy think we all knew that guy.

Charlie Jane: [00:07:28] But you actually had like the other day, Herman Cain was talking about the gold standard. He used the word moochers, which is like this quintessential, you know, Ayn Rand word to describe like this kind of theory of, yeah. Moochers.

Noah: [00:07:41] You know, just speaking for myself, I think it's obvious that in any society you have the possibility that someone's gonna try to free ride on communal resources. You have the “tragedy of the Commons.” You have people who pee in the pool and it turns out that's why your eyes burn in a public pool, not chlorine. I just found this out. I'm very mad about it because it's from pee. But, so, there's people who pee in the pool and who spoil sort of public resources and every society does kind of have to be vigilant against those people in some way or else it's very hard because then you have some people who are working for the good of the community and other people who were just sort of taking from the community.

[00:08:18] Maybe cause they read Ayn Rand, I don't know that. See what's ridiculous is that you read Ayn Rand, you become enamored of this idea of take whatever you can get, be selfish and then you, that actually makes you into a moocher. Thinking the rest of the world is trying to mooch off you kind of turns you into moocher. You're like, well they're all trying to mooch off me so I'm going to mooch off them. Then you become a moocher. And the people who didn't read in Ayn Rand are off, you know, thinking, well I should give back to my community. And then, and then so that's how I think the moochers really get started. But, um…

Charlie Jane: [00:08:46] That’s the irony. It’s like the tragic irony of moochers.

Noah: [00:08:49] Right.

Charlie Jane: [00:08:49] So to what extent are we living in a world that's shaped by bad science, fictional ideas? Like all of the bad ideas about automation and robots and the idea that like basically nobody's going to have a job anymore in five minutes because of robots. And some of the other ideas that kind of come from science fiction but that become mainstream policymaking ideas.

Noah: [00:09:07] You know, I wonder about that and I just don't know because the robots idea, we've seen no evidence of it so far. All the, you know, the research that says that robots are replacing people gets debunked really quickly. We have, you know, essentially record low levels of unemployment right now. And essentially everyone who wants a job probably now has a job, not necessarily a good job, but a job of some sort.

Annalee: [00:09:28] You mean in the United States?

Noah: [00:09:29] In the United States. That's right. That's exactly right.

Charlie Jane: [00:09:31] Well, and there have been industries that have been kind of automated—

Noah: [00:09:34] Or Japan.

Charlie Jane: [00:09:34] Tere have been industries where… like the coal mining industry where there used to be tons of jobs and the jobs have been reduced because of more efficient—

Noah: [00:09:41] Yeah. That's great. I don't have to be a coal miner. I didn't want to be or, or a farmer or you know, or I mean not to knock farmers, but I don't want to actually manually pick crops in the field. I'd rather have a machine do it anyway. And if you look at the countries that have the most robots, South Korea and Japan and Germany, these countries are all doing—and Denmark, these countries are doing great unemployment. Everybody has a job in these countries. Not necessarily a great job, not necessarily job they'd love, but everybody has a job. And so there's just no evidence is happening so far.

[00:10:10] But for hundreds of years now, literally hundreds of years because the Luddites were about 200 years ago. People have been scared of being put out of a job automation and the mass obsolescence of humanity has not happened yet. But I can't guarantee it won't happen sometime. Maybe it will and we don't know. So I mean, you know, people will always, this argument will never go away.

Charlie Jane: [00:10:30] Are we kind of living in a bad science fiction novel right now though because of just, you know, all of this like upheaval and fear of technological change and like weaponized nostalgia and all these like terrible theories of human nature that are becoming policy?

Noah: [00:10:44] Well I feel like we're living in a good science fiction novel because good novels are about things you wouldn't want to actually have happened to you. No one wants to actually walk into Mordor or get their hand cut off by Darth Vader. But it's pretty fun to watch a movie about or read a book about.

Charlie Jane: [00:10:59] Right.

Noah: [00:10:59] We really are living in the cyberpunk dystopia that the cyberpunk authors imagined. And it is just amazing to me every day because I read so many books by William Gibson and Neal Stephenson and Bruce Sterling and all of those people in the ‘80s. I read that stuff and that's real, now. You have, China has the social credit score and people are wearing these like biometric ankle monitors and giant corporations know everything about you and can use it to screw you over with algorithms. You can never even tell they're screwing you over. And there's cyber warfare and there's, you know, sort of international cyber spies doing crazy stuff and it's just… We are living in the world that they envisioned and of course it's more fun to read about than live in sometimes.

Annalee: [00:11:43] Yeah. I mean one of the things that's interesting about the cyberpunk feature is that it's imagining how capitalism will evolve into something that looks a little bit more like feudalism. So we won’t get kind of a post-capitalist world, we'll get like a pre-capitalist world because of capitalism. Do you think that's something that's going on right now? Is that a thing that can really happen from the point of view of economics?

Noah: [00:12:04] I think that there is that distinct possibility. No one really knows because those aren't the kinds of things you can really get evidence for and test with a statistical model. So we don't really know. But you know, feudalism was sort of a system that evolved over a couple thousand years of agricultural age. So maybe it is just a natural end state of what economies evolve toward without major external disruption such as invention of new kinds of technology, massive wars, environmental catastrophes, blah blah blah. Maybe feudalism is the stable thing where you just have some parasites, called nobles, grown to—

Annalee: [00:12:37] Moochers.

Noah: [00:12:37] Moochers.

Charlie Jane: [00:12:38] You beat me to it.

Noah: [00:12:38] The real moochers grow to enormous size and sort of teach everybody else,
“You're a peasant. This is your lot in life. You will labor as a peasant,” and that's just sort of the stable state of humanity when we have technological, environmental and geopolitical stability. And then along comes Genghis Khan and knocks it all over.

Annalee: [00:12:55] That would mean, because we're in a period of instability in the, in the real world, not in like Game of Thrones or whatever. But like in the real world, where are you saying that that couldn't really happen? Like we couldn't head toward like this kind of stable state of feudalism because we're dealing with say environmental catastrophe and like impending nuclear war or could we?

Noah: [00:13:15] I do think climate change will severely disrupt the existing economic and geopolitical and social systems. But in terms of technology, you know we constantly see new things getting invented, but in terms of actual productivity in the economy, that's really been slowing down, recently. We saw a slowdown in the 1970s and ‘80s and then this burst of new productivity in the ‘90s when we invented information technology and stuff and sometime around 2005 or 2006, that petered out as well. And we're back to slow productivity growth.

[00:13:43] Not quite as bad as before the industrial revolution, but it's actually pretty slow. And so you have to be thinking maybe all this stuff they're inventing now is just easier ways to sort of just like annoy people or entertain people or attract people that we don't like or imprison migrants or something like that. And then it's not really stuff that's producing better standards of living for the mass of society nearly as much as it used to be.

[00:14:04] If that is our future as technological disruption actually disintegrates despite the rhetoric of Silicon Valley venture capitalists to tell you that disruption is everywhere. If actual technological disruption goes away, what you might have is just these giant companies like Amazon becoming the new nobility that just sort of rules over you and you're on Amazon's manor, which is now a warehouse.

Annalee: [00:14:24] Oh Man.

Charlie Jane: [00:14:25] Yay.

Annalee: [00:14:26] So I have just one more question about that, which always irks me when I read economists talking about this idea of productivity. Why is that so great? Why do we always need expanding productivity? Like isn't there maybe a possibility that we might aim for like some kind of stable state where it's like, well we don't have huge productivity but everybody can eat. Or is it just that if we don't increase productivity, people's lives will get worse?

Noah: [00:14:52] Well there's three good answers to that, so I'll give you all three.

Annalee: [00:14:56] Ooh.

Noah: [00:14:57] The first answer is that Africa is still quite poor and much of South Asia is still quite poor and they will get rich by us buying their stuff. And the more our productivity grows, the more of their stuff we will want to buy. And so that's good. Uh, the second reason is because productivity growth will also allow us to become more environmentally sustainable because, well it won't necessarily, so it could make us less sustainable. Or if we invent, you know, like, better clean energy and—

Annalee: [00:15:24] Green tech.

Noah: [00:15:24] Yeah, green tech, then we really need that to sort of become sustainable. And not just from climate change, but a lot of environmental sort of resource over use in many ways.

[00:15:33] And then the third reason is sort of more speculative, but the idea is that with slow productivity growth, people start to think of the world as a zero-sum game. People start to think that anything that I gain, you must lose. The only way that I can gain is by taking your stuff. And I think that takes us back to a very scary period in world history where everyone was always thinking about war.

Annalee: [00:15:53] That's really interesting. Yeah. So we need that productivity growth to keep reminding ourselves that like just because people have a better life, that doesn't mean that other people necessarily have to suffer. Like we could all have a better life basically.

Noah: [00:16:06] I think so, yeah.

Charlie Jane: [00:16:08] And is there another way to have that kind of faith in a better life and improvement and more efficient use of resources that doesn't involve this kind of like obsession with growth and with raising—

Annalee: [00:16:18] Buying shit.

Charlie Jane: [00:16:19] —profits and consumerism and just endlessly disposable, you know, goods.

Noah: [00:16:24] Maybe. I mean remember that growth doesn't have to mean just using more resources and you know, more like disposable plastic packaging and stuff like that.

Annalee: [00:16:34] Good.

Noah: [00:16:34] You know, growth can be anything that we like. Economic growth is not… In the past, it was, of course. Like if you're thinking about people in the ‘50s it's like wow, suddenly I have a blender. I dunno when that was invented, but okay, yeah. I have a color TV. I have little plastic packages. But it doesn't have to be that, you know, people say like millennials consume experiences. It can be that, but there really is also this thing about monetization and sometimes, and this is a real problem for economics because economics has real trouble measuring the value of stuff we can't monetize. And so that really is… that's a problem for economics, not necessarily for the world because we create a lot of value, and I think.

[00:17:14] The highest value thing that we actually do is just to be kind to each other and, and to emotionally support each other. And unless it's some formalized thing like psychotherapy, that really isn't monetized. And I think that as that becomes a more important function of what humans do, economics will be less and less able to measure the real value that's being created and the real growth that's going on. Because if you could really measure that, you'd see that real growth could just be growth in how nice we are to each other.

Charlie Jane: [00:17:35] And we don’t value things like childcare, and we don't value things like keeping house at home or whatever.

Annalee: [00:17:40] Teaching.

Charlie Jane: [00:17:41] Teaching is reimbursed but it's not reimbursed adequately.

Annalee: [00:17:43] Barely. Yeah, it's not reimbursed at the level that it at the value that it creates basically, if that makes sense.

Noah: [00:17:48] Probably not. Yeah, yeah, that's right.

Charlie Jane: [00:17:50] And we don't put an economic value or a correct economic value on like clean water and clean air and things like that.

Annalee: [00:17:56] Well, It's like the whole, yeah, I mean that’s—

Charlie Jane: [00:17:57] There’s a lot of externalities that we don't, yeah.

Noah: [00:18:00] Just people not being jerks. We don't value that. Ultimately economics is not a theory of everything in society. People treat it like this theory of everything and it’s not. It is a theory of some of the things that happen in a society, but you need other social sciences and ways of understanding things that are not necessarily sciences, or codified at all to understand human society.

Charlie Jane: [00:18:20] Yeah. So now we're going to take a little quick break and then we're going to talk to Noah about one of the most famous books ever.

[00:18:27] Segment change music plays. Drums with a bass line including bass drops.

Charlie Jane: [00:18:40] Let's talk about Isaac Asimov's Foundation. A lot of economic thinkers like Paul Krugman and our former boss, Nick Denton have kind of held up Foundation is like one of the great works of science fiction that deals with economics. And what do you think about it?

Noah: [00:18:56] It's not.

Charlie Jane: [00:19:00] Care to expound further?

Annalee: [00:19:00] Tell us more about it. First, tell us what the economic system is in Foundation and then tell us why it’s not.

Noah: [00:19:07] So in Foundation… the basic conceit of Foundation is that some really smart scientists figure out how to predict history with extreme precision and then are able to guide it through, you know, thousands of years of development in—

Annalee: [00:19:18] These are the psycho-historians.

Charlie Jane: [00:19:19] Psycho history.

Annalee: [00:19:20] Psycho history.

Charlie Jane: [00:19:21] Psycho.

Annalee: [00:19:21] Sorry.

Noah: [00:19:23] That's exactly right. Psycho-historians. And so the point is… so that idea was an idea that lots of people in the early 20th century had, and especially Soviet mathematicians and social scientists were extremely interested in this idea.

[00:19:35] And they took some of their smartest people and they said, go figure out how to do this. And those people created things like the law of large numbers and statistics. And a lot of modern statistics actually does come out of that effort and that belief that you could predict society that way. But it doesn't work because it's just too complex. I mean, you can't even predict earthquakes. Our prediction is very short term.

[00:19:56] There's something called classical chaos. Even if you didn't have, you know, quantum randomness, you don't even need that. There are situations, lots of situations… In most situations in the normal world where tiny, tiny perturbations in initial conditions that you can't even measure balloon into giant changes in the future state of the world. And the most well-known example of this is called the three body problem and there's a famous science fiction novel by that name.

[00:20:19] But basically if, which, ironically has people being hyper-rationalist and predicting thousands of years in the future. So it’s… they didn't… the book didn't learn its own lesson. But if you just take like three atoms or three balls orbiting each other, tiny, tiny disturbances can make it behave completely differently. And that's infinitely more true in economics, infinitely more true in society.

[00:20:42] There's no way that Harry Seldon, the scientist in Foundation could have predicted that far in the future with any degree of accuracy at all.

Annalee: [00:20:49] Especially because presumably there's more than three bodies involved. So there's like, it's like…

Noah: [00:20:54] There’s many.

Annalee: [00:20:54] Yeah, it's like the 4 billion body problem or, whatever.

Noah: [00:20:56] Exactly. And in fact, even in Foundation, this ends up happening. The whole plan, you know, goes to hell when a sort of a Trumpian figure called the Mule… this guy just comes out of nowhere and wrecks the whole plan.

[00:21:09] And in the end the plan has to be reestablished or put back on course by a bunch of telepathic wizards who show up out of nowhere—

Charlie Jane: [00:21:17] Spoilers.

Noah: [00:21:17] And kick the Mule’s ass and make him go away. And so in the end, really, you needed a bunch of wizards.

Charlie Jane: [00:21:25] Telepathic wizards. I mean, that is what we need it in real life.

Annalee: [00:21:28] It’s true.

Charlie Jane: [00:21:29] So it's this sort of—

Annalee: [00:21:29] Gandalf for president.

Charlie Jane: [00:21:30] So it’s this sort of fantasy of like, again, hyper-rational people who are, who can control everything. And like, I think you said on your blog that it's basically the kind of social sciences envy of physics.

Noah: [00:21:43] Well, I mean, if anyone really thinks you can predict the vast sweep of history like that, they're being a lot more arrogant than physicists because physicists understand that you can't use the motions of particles to predict a tree.

Charlie Jane: [00:21:55] Right.

Noah: [00:21:56] Physicists understand that you can't do that much less, you know, human society. And the economists who think that they could derive a theory of everything and there aren't many, but there are some economists who try to say, well, okay look just with these few variables measuring like the quality of institutions, we can predict the development of society thousands of years in the future, hundreds of years in the future.

[00:22:15] There are people who say things like that and I don't think a heck of a lot of that research to be honest, but there are people out there trying to be Harry Seldon and I don't think they're going to succeed.

Annalee: [00:22:25] What is some science fiction that you think is good for thinking about economics with? That actually offers us economic models that are fun to think about it that aren't just kind of like, oh we need some wizards to solve this.

Noah: [00:22:38] Cory Doctorow has done a really good job of this. Makers is probably my favorite science fiction book economically.

Annalee: [00:22:46] Oh that's interesting.

Noah: [00:22:48] It really foretold told the era when everybody sort of becomes a hustler. This sort of fragmentation of the economy where everyone's trying to like do their startup and you know, like…

Annalee: [00:22:56] The gig economy.

Noah: [00:22:56] The gig economy. It really did foreshadow that. And also Down and Out in the Magic Kingdom, a short novella, it really foreshadows what happens when a lot of the value that people create can't be monetized and people are creating value through their human interactions. And how do we make a society with institutions that deal with that. That was incredibly interesting, too. Cory Doctorow’s just really good at this.

[00:23:17] Another book that I really like is The Dispossessed.

Charlie Jane: [00:23:21] Yeah.

Annalee: [00:23:22] By Ursula LeGuin.

Charlie Jane: [00:23:23] That books is amazing.

Annalee: [00:23:23] What do you like about that?

Noah: [00:23:24] By Ursula LeGuin. So, The Dispossessed shows how basically economic systems are very contingent on your situation because you have this, this moon that is basically this anarcho-syndicalist society where nobody owns anything but it only works because everybody's just always so desperately poor. And, and that's really realistic. I mean I, I actually don't know what her background was, but she must have known a lot of anthropology because like that's very realistic.

Charlie Jane: [00:23:49] Her parents were famous anthropologists.

Noah: [00:23:50] Well, there you go.

Charlie Jane: [00:23:50] Her father Alfred Kroeber was like one of the founders of anthropology.

Annalee: [00:23:54] Yeah, Kroeber Hall at Berkeley, which is the anthropology building is named after her dad.

Noah: [00:23:58] Wow!

Charlie Jane: [00:24:00] And Her dad's best friend or one of her dad's best friends was, was Edward Sapir who came up with the Sapir-Whorf hypothesis.

Noah: [00:24:06] Oh holy crap.

Annalee: [00:24:06] We just not where Whorf gets his name.

Charlie Jane: [00:24:08] No, sadly.

Annalee: [00:24:09] It does create a lot of bad science fiction.

Noah: [00:24:11] Wait, was she friends with Samuel Delany? Did that influence Babel-17.

Charlie Jane: [00:24:15] Sure, yeah. And she was friends with Delany, I think.

Noah: [00:24:17] Oh, gosh!

Annalee: [00:24:17] Yeah, they were in the same circles for sure.

Charlie Jane: [00:24:19] They hung out.

Annalee: [00:24:19] Yeah. So I have a question which maybe is orthogonal, which is that now we have fantasy worlds like World of Warcraft which generate their own economies. Is that like, would you have predicted that? Is that kind of a natural outgrowth of fantasy worlds that we've seen before, or…

Noah: [00:24:36] Of course, and you know economists… Actually, Eve Online is the one they love. That's the one that economists are always studying because Eve Online, you think it's about giant space battles. But actually it's about getting other people to do work for you. And so it's great. Yeah. You have, you actually built a whole fantasy economy which people enjoy simply because it looks like spaceships.

Annalee: [00:24:56] So you think that that's more interesting than World of Warcraft where it's just kind of like it's just trading things in the game I guess, or?

Noah: [00:25:03] So, there actually have been economic models that work like World of Warcraft but World of Warcraft, everything's sort of just falls into your lap instead of you having to go produce it.

Annalee: [00:25:10] I see what you're saying, so you don't have to hire anyone. There's no like principal-agent relationship where I'm like paying you to mine shit for me or whatever.

Noah: [00:25:18] They did have an inflation problem.

Annalee: [00:25:19] But also in reality with World of Warcraft, outside the game, like people were paying other people to play for them and things like that.

Charlie Jane: [00:25:26] To gold farm.

Annalee: [00:25:25] So, it did create, yeah, this whole weird external economy.

Noah: [00:25:30] Which is the subject of another Cory Doctorow book.

Annalee: [00:25:33] Yeah. Also, I mean, you know, Neal Stephenson writes about this in Reamde, as well, and not, not about World of Warcraft, but a different game, a fake made up game that creates its own gold and stuff. So yeah. Is that something that's happened historically before that people have invented like fantasy worlds that created their own economy?

Noah: [00:25:51] I don’t know.

Annalee: [00:25:51] Unless, I mean, maybe the nation state is that or something.

Charlie Jane: [00:25:53] Yeah.

Noah: [00:25:53] Maybe…

Annalee: [00:25:54] The central bank is like…

Noah: [00:25:57] I don't know. That's a really good question. I mean there's—there were, I guess like back in the old days of Judaism, people used to get paid to sit around and argue about the Bible and the commentaries and stuff like that. But then, um, I don't know. I mean that's sort of like…

Annalee: [00:26:13] That’s sort of—Yeah. I don't know. Like as Jews, I don't know if we should…

Noah: [00:26:17] We still have universities…

Annalee: [00:26:20] Should we say that our ancestors were playing an RPG or whatever.

Noah: [00:26:24] Anyway.

Annalee: [00:26:24] An RPG with Yahwe.

Noah: [00:26:29] Right.

Charlie Jane: [00:26:29] So I wanted to play a clip from like one of the most famous science fiction novels, which deals with a very specific economic situation.

Dune Clip: [00:26:38] He who controls the spice controls the universe!

Charlie Jane: [00:26:40] So that was Dune. So that’s a story, basically about like a scarce resource where there's like a monopoly that controls it and whoever controls it controls the universe. And you know, how useful is Dune for thinking about things like fossil fuels but also other kinds of scarce resources and, and the limits of monopoly power, I guess?

Noah: [00:26:57] Well, I read Dune for about five pages before I realized it was all just an allegory for the modern Middle East and oil industry with Paul Muad’dib as Osama bin Laden.

Charlie Jane: [00:27:09] Well, before…

Annalee: [00:27:09] But what about the worms? The worms are like so cool.

Noah: [00:27:13] That's, no, it's true. The worms are cool, but—

Annalee: [00:27:16] There's no real-world equivalent of the worms.

Noah: [00:27:18] In real life. We just started very slowly making a synthetic version of the spice, which was of course batteries. And so that's, that's a way of transporting energy. And we can capture energy from the sun or from wind or whatever and store it in the batteries and then we won't need oil anymore. And then, you know, Saudi Arabia's economy will be in trouble.

[00:27:38] But interestingly, Dune, I mean Dune’s, a fantasy book really. And ultimately the fact that they didn't substitute away from spice, that all the incentives for innovation didn't make scientists go figure out how to create something better than the spice was very interesting. And oil’s are great example of this because we, we've been trying to replace oil for a very long time with hydrogen fuel cells and with all kinds of other stuff and it just has never worked. And finally, we may now, you know, knock on wood with electric cars and other stuff, we may replace oil. We tried with biofuels. That didn't really work well. We kept trying. We were still yoked to nature by our dependency on this one resource and that influenced geopolitics and economics a lot. Uh, we may finally get away from it.

Charlie Jane: [00:28:22] So I want to talk about one of my favorite fantasy stories about economics, which is Obelix and Co., which is one of the Asterix graphic novels. Asterix ,of course, is a famous French cartoon character who is like a tiny little guy, hence Asterix, um, who has magic powers. Like everybody in his village has super powers from this potion that they all drink that enables them to resist Julius Caesar and the encroaching Roman Empire. And in Obelix and Co., one of the Romans comes up with this genius plan to just finally destroy this one locus of resistance, these super powered French guys by basically getting Obelix, who is Asterix’s best friend who makes these like giant obelisks. Hence that's why he's called Obelix.

[00:29:17] And basically they, the Romans convinced Obelix to produce a lot more obelisks and sell them to them and it becomes a giant industry. And soon everybody's making obelisks and there's a huge obelisk fad in Rome and everybody's buying. All the fancy Roman patricians are buying obelisks and it becomes a runaway obelisk bubble. And the whole village is like, instead of fighting the Romans, there being co-opted by Roman capitalism.

[00:29:41] And then of course the obelisk bubble bursts and there's no more demand for obelisks and the obelisk industry collapses. And everybody is like horrified and it's, like…

Annalee: [00:29:50] They needed planned obsolescence.

Charlie Jane: [00:29:53] They needed obelisk obsolescence.

Annalee: [00:29:54] They needed obelisks that could crumble.

Charlie Jane: [00:29:55] They needed obsolete obelisks.

Annalee: [00:29:55] Yeah.

Charlie Jane: [00:29:58] They needed obelisk obsolescence. Yeah. But it's this amazing depiction of this like bubble economy and how this is both a deliberate strategy for destabilizing resistance, and also it's this kind of unsustainable thing because you can only sell so many obelisks before everybody who wants an obelisk has an obelisk.

Noah: [00:30:19] Right. Well, so that's, um, you know, I haven't read this obviously, sorry. But—

Charlie Jane: [00:30:23] You're missing out.

Noah: [00:30:24] And yeah, you do have destabilizing bubbles. Absolutely. That's a real thing that happens all the time. But one thing it interestingly shows is the limits of this idea of late capitalism. You know late capitalism.

Charlie Jane: [00:30:34] Yeah.

Noah: [00:30:35] And there's this idea of capitalism, you know, sort of keeps perpetuating itself by telling you to want more and more things and creating demand through advertising and making these insatiable demands and blah blah blah. I think that that is, you know, that's obviously a fear. And that was a important fear in the mid-20th century when people were getting more and more material stuff. And I, but I think you actually do see a satiation point. You see people saying, you know what, I have enough stuff and now what I want to buy is advice from a Japanese person on how to get rid of my stuff.

Annalee: [00:31:07] Yeah, I was going to say. Marie Kondo comes along and destabilizes the destabilization.

Noah: [00:31:11] Right?

Charlie Jane: [00:31:11] Right.

Noah: [00:31:12] And we just don't know what people are going to want in the future. We can make a few guesses, but we just don't know. And we don't know how the economic system will evolve. And you know, Marxists tried to be Harry Seldon and predict the evolution of history, but in fact they can't. So I want to refer to a tweet of mine that I liked, which is, “After late capitalism comes later capitalism, even later capitalism, ‘Are you sure this train is running? I feel like we've been standing here way too long’ capitalism and our current stage, ‘No wonder the bands didn't show up. The concert was last week.’ capitalism.”

Annalee: [00:31:45] So does that mean that you think were already…. Capitalism’s already dead? And we're in some new system that we haven't named yet.

Noah: [00:31:50] The capitalism that prevailed in the mid 20th century is mostly dead. The capitalism that prevailed in the early-20th century is essentially completely dead in America and is now functioning in like China and Bangladesh. And it just turns into something else and people have stuff they want and they try to figure out ways to get it and sometimes they try to buy it and sometimes they try to make it and sometimes they try to get other people to make it for them. And sometimes they get a whole tribe of people to steal it from other people. And then sometimes they vote for people they think will give it to them and blah blah blah. And we'll figure it out even more ways. Please contribute to my Patreon, of getting the stuff we like. I don't really have a Patreon. I was kidding.

Annalee: [00:32:25] But we have a Patreon.

Charlie Jane: [00:32:27] We have a Patreon.

Noah: [00:32:27] Please contribute to these people's Patreons. And so basically things are going to get weirder and it's not going to be anything that that Marxists predicted when they coined the term late capitalism.

Annalee: [00:32:38] So we're not going to have a socialist revolution.

Noah: [00:32:41] We might, but it won’t look like the one they predicted.

Annalee: [00:32:43] So what would you call this system that we're in right now? Is there any kind of unifying narrative theme? I mean, I think the reason why, you know, I think back in the 19th century when Marx said like, okay, the defining characteristic of our economic system is this thing called Capitol and it has to do with surplus value and it has to do with, you know, a lot of other stuff that we're not going to go into. But we talked about in our capitalism episode. I mean, is there any kind of defining feature of this economic system that we have right now in the US and part of the West?

Noah: [00:33:15] That’s a deeper question than I know an answer to. I mean, there's obviously things that are really important. You know, capital will still be important because you know private equity comes in and buys all the houses in a neighborhood and raises the rent. So, the idea that who has the capital rules is still very much an important factor in advanced economies. In some ways has become more important. And then… but you also have all these digital things that we don't pay for and network stuff and people consuming experiences instead of goods. And this is all new. This is all weird. And I don't know if we have a name for this yet. Sort of hype-it-alism. Everybody just hyping everything and trying to hustle other people out of their money constantly all the time. It takes almost no capital and it's not really labor producing stuff anymore either.

[00:34:00] It's not like I labored and then I produced this cup. It's like I labored spouting bullshit on Twitter and then people gave me money cause they liked that. And so, I don't know, it’s weird.

Charlie Jane: [00:34:12] I mean, that's the same as like the way television used to work or the way a lot of other media I used to work in terms of, you know, people produce the bullshit and other people, subsidize them in one way or another.

Annalee: [00:34:21] It's still a commodification.

Noah: [00:34:23] But it used to take—

Charlie Jane: [00:34:24] It’s still commodification.

Noah: [00:34:24] Right. It used to take so much capital to do that you had… now that everybody is abandoning TV and everybody who has just a little bit of money can start a podcast, can start a Medium or just shit post on Twitter all day or on Reddit. And so like that is slowly replacing, you know, instead of like supermodels who are backed by all this institutional money to tell you that like in the ‘80s, like Cindy Crawford is the most beautiful woman, blah blah blah blah blah. And now you just have random people posting photos of themselves on Instagram and that's replaced supermodels

Annalee: [00:34:57] And they are commodifying themselves. Like they're doing it to sell products. In some cases. In other cases they're just doing it for free.

Noah: [00:35:01] But it's not always the same because commodification is different. If you slap a price tag on it, when you say please give money to my Patreon [uses two different pronunciations of Patreon]. I'm agnostic on that. You don't put a price tag on it and that's different. That's an important difference because you never quite know. You know, different people are actually paying different prices for these things. So it is commodification, but it's a different kind and it doesn't require as much capital. It doesn't require these big institutions to do massive amounts of financing and to push all this stuff. People are still buying and selling stuff and trying to get stuff from each other in ways and provide stuff to each other in exchange for other stuff. But it's different.

Annalee: [00:35:37] Yeah.

Charlie Jane: [00:35:37] So if basically the future of capitalism is, it gets weirder and like that's kind of the, the framework. What are the stories that, that we should be reading that are already out there? Or should be writing or should be thinking of that kind of explain and help us to understand that it gets weirder model of like early 21st-century capitalism.

Noah: [00:35:58] I don't know. You know, I’ve read a lot of science fiction about post humanity and about humans who are just in comprehensively weird. And then I look at kids, you know, watching hours upon hours of videos about how to make slime or like playing Fortnite. The kids are weirder than the post humans in a Charles Stross story. Just the next generation is weirder or, or watching people like on Twitch or something about digital natives who grew up with social media and how they interact and how they get status and how they form love and hate and, and relationships and connections and stuff like that is already weirder than the post humans that we were trying to imagine back in like the early 2000s or the ‘90s. And so it's gonna get weirder and yeah, technology drives it and enables it. We can't predict it. We can't be Harry Seldon. I have no doubt that we will write many good stories. You guys will write the good stories and I will read the good stories. I will buy them.

Annalee: [00:36:52] Well, you can write good factual staff that helps us understand what's happening right now.

Noah: [00:36:55] I will try. I’ll do my best.

Annalee: [00:36:56] You do it. We like it.

Charlie Jane: [00:36:59] We appreciate it.

Noah: [00:37:01] Thank you.

Annalee: [00:37:01] Do you have any nonfiction, economics books that you would recommend people read to like figure out the weirdness.

Noah: [00:37:06] To figure out the weirdness of what's going on now? Uh, is very difficult. Economist won't know about it until after it already happened for years and they can measure the statistics. But one interesting book to read if you're interested in AI, the sort of economics of new technology of AI is called Prediction Machines. And that's, that's a good one.

[00:37:20] The Inner Lives of Markets is about the economics of platforms and then, they're, you know, there's lots of sort of business books about the business of free internet media and stuff like that. Anyway, there's books about the sociology of these things too, which ultimately could be even more informative, and the anthropology of these… of online stuff.

[00:37:41] Yeah, so if you want to understand like economic history and where we came from. There's some other books. There's a book called Concrete Economics by Brad Delong and Steven Cohen at Berkeley—Berkeley professors. Called Concrete Economics, which is about economic systems and what we want from economic systems and they have this thesis that what we really want is for the people in charge to tell us what we're going to get in some concrete manner.

[00:38:05] So it's a pun, obviously, because concrete. But the idea of that is that sort of predictability is more important when designing a system. That that's very important. People have to know like, I will get to do this. I will have, I think it was, I don't remember, maybe Hoover who is that a chicken in every pot and blah blah blah. And these, these very standard middleclass commodities for the early 20th-century. They said this is what you will get. You will get a house, you will get a two-car garage. You will get these things and now it's like our system has evolved in an unhealthy manner that just sort of tells people you will get something. We don't know what you're going to get. But maybe if we do these policies will get more of whatever that is.

Annalee: [00:38:46] It’ll feel Great. And you'll get—

Charlie Jane: [00:38:46] You’ll get a thing.

Annalee: [00:38:46] —to kick the guy that you don’t like. So that’ll be good, too.

[00:38:50] I know that you used to teach economics, so there are there any good introductory texts for someone who's just like, I really want to understand economics. I read a lot of sci-fi and I just want to know like what, like how do I start, you know, like a good introductory book?

Noah: [00:39:06] Well, so there's a project called The CORE Project, C-O-R-E, that is coming at economics education from a much more empirical angle, much less, you know, the old sort of like we'll tell you a hundred year old theory and this is how things might work, kind of obsolete stuff. Look at The CORE Economics Project. And it's all free.

Annalee: [00:39:26] So that's online.

Noah: [00:39:27] Open source. Yeah. And you don’t have to pay all the money.

Charlie Jane: [00:39:29] Nice.

Annalee: [00:39:29] That’s great. That's a good tip.

Charlie Jane: [00:39:31] Thank you so much for joining us. Noah. You can find Noah on Twitter as…

Noah: [00:39:35] @Noahpinion.

Charlie Jane: [00:39:35] Yeah. Which is N-O-A-H

Noah: [00:39:39] P-I-N-I-O-N.

Annalee: [00:39:40] And you can read him on Bloomberg and is there anywhere else people can read you?

Noah: [00:39:44] Oh, well, I still have my blog, Noahpinion, which I, which I post from. And once in a while I'll do something else, but mostly Bloomblerg and Twitter and blog.

Annalee: [00:39:53] All right. Check it out.

Charlie Jane: [00:39:54] Yay! And thanks so much for listening to us. This has been, Our Opinions Are Correct, the Hugo-nominated podcast about science fiction and the real world.

Annalee: [00:40:01] And we have a Patreon, so you can do some of that weird, post-capitalist economics with us. Give us what you can afford. Um, it helps us do this show and, and um, pay for our awesome production, which is from Veronica Simonetti, our producer here at Women's Audio Mission. You can also find us on Twitter @OOACpod, or you can follow us on Facebook.

[00:40:29] You can find our podcast probably wherever you found it, since you're listening to it right now, but you can find it on Apple Podcasts or any number of other places. Please leave us a review that helps people find us, and also you can hear us next week. And thanks for Chris Palmer for the music.

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