Are The Humanities Underrated? (And Other Questions) : Planet Money We invite Tyler Cowen once again to play another round of overrated/underrated.
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Are The Humanities Underrated? (And Other Questions)

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Are The Humanities Underrated? (And Other Questions)



Hey, everyone. This is THE INDICATOR FROM PLANET MONEY. I'm Cardiff Garcia. Today on the show, we are going to play a game of Overrated versus Underrated with George Mason economist Tyler Cowen, a frequent guest on the show. For those of you who haven't heard these episodes before, Overrated versus Underrated is when we start listing things and then ask our guest to tell us if those things are overrated, underrated or correctly rated by society. Most of the things we list are about economics, but sometimes we bring in other stuff as well. And Tyler Cowen actually invented this game. We kind of stole it from him with permission. And since it had been so long since we've played it with him, we thought we'd invite him onto the show to do it one more time. That is coming up right after the break.


GARCIA: Tyler Cowen, welcome back to the show, man.

TYLER COWEN: Hello, Cardiff.

GARCIA: You ready to play a game of Overrated/Underrated?

COWEN: I am ready for the game.

GARCIA: OK, excellent. Here we go. Let me start with this. In the last few weeks, we've seen protests in Chile, Ecuador and Lebanon. Those protests appear to have been triggered by economic events. And so overrated or underrated - economic trends as the causes of domestic conflicts - overrated or underrated?

COWEN: Economic trends are overrated. It's really about the perceptions of those trends. So if you look, say, at Chile, what they were going to do was raise the price of a subway ride by three cents, and a lot of people went crazy. Now, is that technically an economic factor? Yes. Median income in Chile has gone up about 50% over the last decade. It's that there are rising expectations, and people perceive the system as unfair. So I opt for the subjective element as underrated, objective economic conditions as overrated.

GARCIA: Sure, although inequality in Chile is quite high, and the government doesn't do much about it, at least when you measure state sector spending as a share of the Chilean economy. I mean, don't you think that's still a pretty big part of what's going on there?

COWEN: Well, keep in mind Chile has the highest real wages in Latin America by some amount, and you're not seeing comparable political troubles in a bunch of countries that have much lower absolute pay. So I think that gets us back to it being about the perceptions - do I feel this is fair? - and not just what's in your paycheck.

GARCIA: OK. Next up - and I guess related to that last one - do you think that narratives play a big role in determining economic behaviors - in other words, the stories that we tell each other and that we tell ourselves and which is the subject of a new book by economist Robert Shiller, who we had on the show last week? Narratives - overrated or underrated?

COWEN: I would say underrated. So culture matters a great deal. If you're born in the United States, there's a natural inclination to think that you can be the best in the world at something if you're going to have ambition. We even call it the World Series in baseball, but of course, it's not the World Series. But that is how we as Americans talk and think. So we develop more world-dominant, world-beating firms than a lot of, say, smaller countries would, and that is because of our narratives and our cultural frameworks.

GARCIA: Do you think those narratives also drive a lot of the business cycle?

COWEN: I think some business cycles are determined by bad monetary policy. Some are determined by oil prices occasionally being too high. And then there's a bunch we can't explain at all. And maybe those latter ones are about subjective narratives, but I'd say we still don't know.

GARCIA: OK. Next up, majoring in, let's say, literature or another one of the humanities - overrated or underrated as a sort of determinant of how successful you're going to be in your professional life after college?

COWEN: Well, I think it's a bit overrated and underrated at the same time. So I see undergraduates choosing those majors and then not doing any work and getting out of college, and they end up working as bartenders or Uber drivers. That's the overrated side of it. On the other hand, if you actually learn the humanities and figure out how to synthesize concepts and how to speak well and how to write well and how to be a good editor and good reader, then you're in a quite strong position to have a leadership role in business someday, and then it's underrated. So it depends.

GARCIA: Yeah, so it depends on the person, then. The usual story here is one of tension between learning how to actually do something - in other words, majoring in something that is immediately practical like engineering or science versus the humanities, which are thought to be subjects that teach you how to think and therefore might be longer-lasting than learning the thing that's immediately practical. What do you think about that story in general?

COWEN: You know, Peter Thiel was a philosophy major, and he claims that helped him see the value that Facebook would create. And he invested early in it as a venture capitalist and, of course, earned a great deal from that investment. So it depends on what you do with it, but using the humanities fruitfully, I think, is still underrated at the margin.

GARCIA: OK. Overrated or underrated - artificial intelligence as something that will transform the economy radically in the future?

COWEN: Artificial intelligence isn't a single thing. It's just a term that people or journalists make up. You know, it's a series of very different capabilities. So Google is artificial intelligence, yes. That's changed our lives a lot. But the notion that robots will take over all jobs or that driverless cars will be ready soon - those are overrated. But I would say the claim is mostly ill-defined.

GARCIA: OK, Tyler. To close out the show, can you tell us who you think is the most underrated economist of all time?

COWEN: The most underrated economist of all time probably is Adam Smith.

GARCIA: Really?

COWEN: He's very highly rated, but people do not grasp the full subtleties of his work, how well it holds up, how deep the history it is, how good a philosopher he was, how interdisciplinary a thinker he was. And on most major issues in economics, he was correct. For 1776, that is pretty awesome - Adam Smith.

GARCIA: Yeah. I mean, do you think part of the reason he might be underrated now is that so much of his work has already kind of entered into the way that people think about economics, the way we all accept some things and reject other things in economics, but when he did it, it was truly innovative?

COWEN: But I think also there were innovations in Smith that people still haven't picked up. So "Wealth Of Nations" is a very long book. Hardly anyone reads it, and I think that's why it's still underrated. People think they know it, and really, they don't.

GARCIA: What about the most overrated economist? And you're welcome to limit yourself to dead economists if you don't want to insult one of your colleagues right now.

COWEN: Well, you know, as a die-hard economist, I'm not sure there are many economists who are overrated. But I suppose I would have to say Karl Marx, who influenced nations such as the Soviet Union, Eastern Europe, communist China, and most of what he said was wrong. So capitalism does not have to destroy itself. The paradise of the workers' proletariat is not going to rule a society very well. So Marx was an economist. His reputation is quite in tatters, but I'd say he's still overrated, and it seems like some of it's making a comeback.

GARCIA: Bonus overrated or underrated - the NBA, the National Basketball Association.

COWEN: The NBA is still quite underrated. To me, it's the most fun sport. Analytics apply to it very well. You can follow it on the Internet. You can watch only parts of games. With five players on a team on a court at the same time, you can actually see and understand who is doing what. It's also a game about different styles across nations. It's a game about searching for talent. It's a game about how people learn to cooperate together. It's a game about discovering new strategies, such as more three-point shots or changing how you play his own defense. It's about innovation. It's about narrow relations between the United States and China. It's a microcosm onto race relations in the United States. So there's so much going on in NBA basketball. To me, it is by far the most interesting major sport.

GARCIA: Tyler Cowen, thanks so much.

COWEN: Thank you.

GARCIA: This episode of THE INDICATOR was produced by Leena Sanzgiri, edited by Paddy Hirsch. Our intern is Nadia Lewis. THE INDICATOR is a production of NPR.


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