Tyler Cowen and Paul Krugman

Forget your priors and lower your guard. This is about as good a conversation as you will get among economists. Early in the discussion Tyler suggests that this sort of conversation could be more educational than a conventional economic lecture, and I think that is true. I think if I were teaching from it, I would pause every few minutes to explain to students what is going on, and also perhaps to explain my own point of view where it is not expressed by either of the speakers.

About 28 or 29 minutes in, Krugman makes the point that some really major industries do not conform to textbook economic models, and he raises the question of why we then rely so much on the textbook model. I strongly agree, and in fact I have drafted a long essay about the implications. I wish they would have spent more time on this topic,abut perhaps they exhausted everything they could say.

9 thoughts on “Tyler Cowen and Paul Krugman

  1. About 28 or 29 minutes in, Krugman makes the point that some really major industries do not conform to textbook economic models, and he raises the question of why we then rely so much on the textbook model.

    Or maybe the economic textbooks can point in the right direction. Graduating with an Econ degree in 1992, tech firms hardly existed at that point but I still find guidelines on how to think about these firms. So why do tech firms so quickly become dominated by a few big players:

    1) The marginal cost of an extra byte is tiny so they have long tail Marginal Curves and never seem to reach the increasing Average Cost Curves. They are almost a natural monopoly in that regard.
    2) To become more monopoly, constant falling MC, and high profits, they pay the best to get the best talent to continue their domination. So tech firms are similar to almost nationalized Sports Leagues that can dominate the rare top talent. (There are no monopoly protections of NFL, NBA and NHL while MLB is really soft. And there have been potential but unsuccessful NFL competitors in my lifetime.)
    3) The idea of QWERTY keyboard. Once a person learns a tech system they are slow to move. There might be better potential social media than Facebook but who wants to learn a new system.

    • It should be notes that AWS S3 storage has dropped from $0.15/GB/Mo in 2006 to $0.023 today.

  2. “if I were teaching from it, I would pause every few minutes to explain to students what is going on, and also perhaps to explain my own point of view where it is not expressed by either of the speakers.”

    I predict that such an exegesis would be well worth watching. An alternative might be to get a couple of co-conspirators and do a Mystery Science Theater 3000 -style version. I’m thinking Dr. Kling would do well as Tom Servo.

    Unexpectedly, Cowen annoyed me more than Krugman. Several of his points seemed wilfully wrong-headed or to ignore basic realities.

    Brazil does not have bad institutions of government, it is just that socialists have been running things. Presidente Bolsonaro will get results.

    They seem to have willfully ignored Inda. 8.2% growth. Modi has been deemed a nationalist so of course none of that matters and no right-thinking intellectual may take note, despite the Modi reform agenda doing a lot of the right things one would expect to produce growth like deregulating and opening up to foreign investment. The CSIS website has an excellent scorecard (indiareforms).

    And Cowen declaims that we are only now entering a cold war with China. Ha ha. As if China had ever been anything but the nationalist and imperialist power that it is today. The fact that you have been appeasing a hostile imperialist power does not mean that that power was not at war with you. Discontinuing the appeasement posture does not create the war. China has and will continue to elevate its national status relative to the US by any means necessary.

    There did seem to be affirmation for Kling themes among other topics PSST, information goods, disaggregation, and sociology watch.

  3. Just 13 days before this post, I made a comment here to “The Academic Bubble” which called from “Pedagogical Adversarialism”. Law School is not taught in this way, but the study of law proceeds in a manner such that debates and arguments of incentivized rivals are presented in this fashion, following the pattern and frame of trials, and presenting both sides of a particular matter, prepared by professionals who are intimately familiar with the contours of the opposing argument and who are held to rigorous standards by the system’s structure. Students are expected to know the arguments on both sides, to be prepared to persuasively argue either side of a question at interest. And, as of often as not, one finds that one sympathizes with the dissenters over the majorities.

    I don’t think an open-ended and casual conversation would be sufficiently structured to accomplish this end. A trail really is a kind of “conversation”, just a dialectic following rules of order and appealing to a third party referee instead of dealing directly with each other, similar to the practice of Congressmen addressing the Speaker.

  4. “I think if I were teaching from it, I would pause every few minutes to explain to students what is going on, and also perhaps to explain my own point of view where it is not expressed by either of the speakers.”

    I’d love to see a video or transcript of this.

  5. I haven’t listened to the podcast, but the comments above make it sound like a complete bust. Not one commenter says anything about the substance of the discussion. Sounds like no one made a single memorable point.

    • Not a complete bust. Here is the synopsis:

      Tyler: Deep, yet of course provocative thought
      Krugman: I haven’t thought about that at all, but take money from evil rich people and drop it from helicopters.
      Repeat 10 times.

      • Guys, if you don’t want to listen to the podcast, that’s fine. But don’t comment on something you didn’t watch.

  6. “Early in the discussion Tyler suggests that this sort of conversation could be more educational than a conventional economic lecture, and I think that is true.”

    This is also the operating principal behind Econtalk.

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