Speaker 1: Hello, and welcome to another episode of the Odd Thoughts Podcast.
Speaker 1: I'm Tracy Allaway and I'm Joe wisn't thal So, Joe,
Speaker 1: do you think it's fair to say that people are angry? Yes,
Speaker 1: for many reasons. I would say that as a fair
Speaker 1: characterization of how a lot of people feel these day. Yeah,
Speaker 1: and obviously people are angry about a wide variety of
Speaker 1: different things. But I gotta say, both you and I
Speaker 1: live a lot of our lives on social media, and
Speaker 1: I always feel like that you can sense public anger
Speaker 1: by some of the replies on platforms like Twitter. People
Speaker 1: just get i don't know, much more responsive and much
Speaker 1: more outspoken and angrier. That's the only word for it. Yeah.
Speaker 1: I mean there's a lot of very legitimate reasons to
Speaker 1: be angry. I'll just say, And it's not going to
Speaker 1: take care of uh, you know, it's not going to
Speaker 1: eliminate anger. But I just keep thinking, Boy, it would
Speaker 1: be really good for people if we could get a
Speaker 1: vaccinata for this virus, said, people could get it outside
Speaker 1: and a chance to return to something resembling normal life,
Speaker 1: Because I think the combination of everything that's going on
Speaker 1: these days, the economic destruction, angered police, violent, the frustration
Speaker 1: that people have of being inside. People need a break,
Speaker 1: and it's clearly not a good not a good moment
Speaker 1: right now for a lot of people. Yeah, I think
Speaker 1: a lot of people are sitting at home with nothing
Speaker 1: else to do except sort of see with anger, and
Speaker 1: a lot of that is coming out now. But even
Speaker 1: before the coronavirus crisis, I think it's fair to say
Speaker 1: that people were getting angrier, or at least, you know,
Speaker 1: whenever we had a populist politician suddenly voted into office,
Speaker 1: people would explain that through anger. Well, everyone's angry, So
Speaker 1: of course this is going to happen. After the two
Speaker 1: thousand eight financial crisis, lots of people were angry at
Speaker 1: the financial system and the bankers. So it feels like
Speaker 1: this general trend of public anger has been building up
Speaker 1: for a long time and maybe is sort of the
Speaker 1: year when when it tipped over into um well, when
Speaker 1: it tipped into the public in a in a very
Speaker 1: obvious way. I think that's fair. I mean, I think
Speaker 1: like post great Financial crisis, and maybe you could arguably
Speaker 1: trace it to the aftermath of the Iraq War in
Speaker 1: the US. Those two things, the slow recovery, weak wage growth,
Speaker 1: polarizing impacts of media. It's been a it feels like
Speaker 1: that's a trend that has been with us for a while,
Speaker 1: and it feels like, if anything, the only real effect
Speaker 1: on that from the current crisis, it's just been an
Speaker 1: excelerant exactly. But you know, people get angry about different things,
Speaker 1: but rarely do hear people sort of take a step
Speaker 1: back to consider why that anger exists or what are
Speaker 1: the overarching trends that are driving that anger. So we
Speaker 1: know people are upset about inequality, they're upset about racism,
Speaker 1: they're upset about corruption, things like that. Those are sort
Speaker 1: of individual things to be upset about, but what are
Speaker 1: the trends driving those overall dynamics, right, and what are
Speaker 1: the consequences of them long term? Because you know, one
Speaker 1: of the things that we've been talking about on some
Speaker 1: recent episodes is could this crisis create a policy ship,
Speaker 1: like meaningful changes from the way economic policy was conducted
Speaker 1: pre crisis to post crisis, and a lot of that
Speaker 1: look politicians, they are they're responsive to the public mood.
Speaker 1: And one of the interesting questions to my mind is
Speaker 1: whether the changing public mood uh means that it's hard
Speaker 1: to go back to the status quo or do we
Speaker 1: just find a way to just sort of return to normal.
Speaker 1: I think it's a huge question, and again one that
Speaker 1: has a lot of implications for the economy and asset
Speaker 1: prices and markets. So I think even something is nebulous
Speaker 1: as a public anger, it's a pretty important thing to
Speaker 1: wrap our head around, even if you're just sort of
Speaker 1: looking at this from a pure sort of dollar since
Speaker 1: since standpoint, Yeah, I think that's exactly right. And I'm
Speaker 1: glad you brought up the policy angle because I think
Speaker 1: weirdly people seem to forget that the whole point of economics,
Speaker 1: aside from explaining the way the economy works, is actually
Speaker 1: to boost prosperity and well being of people. Um And
Speaker 1: funnily enough, you don't you don't often see that said
Speaker 1: explicitly in economics. So today we are going to be
Speaker 1: talking about what economics can teach us about why people
Speaker 1: are so angry at the moment. And well, there's your clue.
Speaker 1: For our guest, We're going to bring on Eric Lonergan.
Speaker 1: He's the co author of a book appropriately titled Angry Nomics.
Speaker 1: So Eric, thanks so much for coming on the podcast. Again,
Speaker 1: it's a real pleasure. Great, it talked about you. I'm
Speaker 1: just listening here intently. I mean, I should just just
Speaker 1: interview you guys on Anger, because I think you guys
Speaker 1: have got to work out. Great. Okay, Well it was
Speaker 1: nice talking to you. Appreciate you. No, what tell us
Speaker 1: about your new book? What's the what's the deal? Cool? Well,
Speaker 1: as you know, Mark and I are economists. You know,
Speaker 1: he's a he's a professor Brown University and political economy.
Speaker 1: Mark Blythe is your co author. That's right, Yeah, Mark
Speaker 1: Blood the co author, and we gotta got to know
Speaker 1: each other. I think we met at a hedge fund
Speaker 1: conference ten years ago or something, and we just really
Speaker 1: hit it off. We had a lot in comment. We
Speaker 1: used to enjoy arguing and debating amongst ourselves, and we
Speaker 1: thought we had a kind of explanation for what was
Speaker 1: going on in the world, and we thought we'd write
Speaker 1: a book as a series of dialogues. And at one
Speaker 1: point Mark, we were about the third of the way through,
Speaker 1: to be honest, and he said, he said, what about Anger?
Speaker 1: And it was just one of those moments where we've
Speaker 1: just sort of paused and suddenly the kind of intellectual
Speaker 1: juice has got flowing because we suddenly realized, God, we
Speaker 1: don't really know anything about anger, right, It's just something
Speaker 1: that we all assume we know because at one level
Speaker 1: we're all familiar with it. Even children know what anger is.
Speaker 1: And yet we found ourselves completely inarticulate on the subject.
Speaker 1: And that is really interesting when you get something that's
Speaker 1: so commonplace and yet I couldn't tell you if you know,
Speaker 1: I suddenly think, well, why do people get angry? You know,
Speaker 1: why anger rather than some other reaction? What types of
Speaker 1: anger are there? Is anger? Anger a good thing or
Speaker 1: a bad thing? Um? Suddenly I found I realized how
Speaker 1: ignorant I was, and then we started. We decided to
Speaker 1: go off and research it, and it became a sort
Speaker 1: of fascinating pursuit, and that was really on the result
Speaker 1: of that pursuit is the book. So before we talk
Speaker 1: about why people get angry, I'm curious, like you know,
Speaker 1: Tracy mentioned, you know, like we Tracy and I have
Speaker 1: jobs that basically consist of city at our computers all day,
Speaker 1: and you know, reading the news and writing emails and
Speaker 1: looking at Twitter, etcetera. Perhaps not the best way to
Speaker 1: view the world or view something like anger. Certainly feels
Speaker 1: like people are angrier than they have in the past,
Speaker 1: and they're certainly pretty compelling reasons why that anger is legitimate.
Speaker 1: But is that is our perception of the world accurate,
Speaker 1: like our people getting angrier? And how do you go
Speaker 1: about quantifying or actually answering that question. Yeah, so I
Speaker 1: think that I think I said yes and no answer.
Speaker 1: I mean, I think anger is something that has existed
Speaker 1: as long as there have been human beings, and that
Speaker 1: in of itself is an interesting question which maybe we'll
Speaker 1: get to touch upon, but that it must clearly serve
Speaker 1: some kind of function. And then there's another issue, which
Speaker 1: is why is anger so prevalent currently? Is it particularly prevalent?
Speaker 1: And I think we wouldn't say this is the angriest
Speaker 1: of times we've observed, really when things go significantly wrong economically,
Speaker 1: when there's as we just we described the economy in
Speaker 1: the book as kind of hardware and software, and that
Speaker 1: the capitalist system in the sense is your hardware, and
Speaker 1: we've we've written new software every time it's had a
Speaker 1: major crash. And every time you have a major crash,
Speaker 1: because it affects people's lives, you get a kind of
Speaker 1: angry reaction and to some extent. What's interesting about you know,
Speaker 1: you referred in the production to two thousand eight and
Speaker 1: the Great Financial crisis is we would say there hasn't
Speaker 1: been a rewriting of the code. So in a sense,
Speaker 1: the anger has just continued to bubble away under the
Speaker 1: surface and still hasn't been really addressed. Um. But I
Speaker 1: think the most in some ways the most interesting aspect
Speaker 1: of the book, which which people might find enlightening, is
Speaker 1: the different types of anger. So you know, and if
Speaker 1: you read the literature and anger, the original ideas about
Speaker 1: anger could date all the way back to Aristotle, and
Speaker 1: to be honest, there there are still the main view
Speaker 1: of anger, even if you look at neuroscience today, and
Speaker 1: this is the idea of moral outrage, um. And this
Speaker 1: is kind of what Tracy was alluding to with Black
Speaker 1: Lives matter or you know, extinction rebellion. Even if you
Speaker 1: think of you know, the views post financial crisis about
Speaker 1: the financial system. So these are this is a kind
Speaker 1: of ethical reaction to a perceived injustice or wrongdoing. But
Speaker 1: that's really only one type of anger, maybe the one
Speaker 1: that people are sort of most obviously familiar with. What
Speaker 1: could reference Eric, you mentioned this and I'm going to
Speaker 1: buy it, But what's the why do people get angry?
Speaker 1: What's the sort of evolutionary benefit of getting angry about something? Okay, Well,
Speaker 1: so there seemed to us to be broadly the typology
Speaker 1: of anger that we came up with. So so we
Speaker 1: kind of then once we got to this point where
Speaker 1: we said, right, let's try and understand this thing, we
Speaker 1: realized we have to do a whole load of reading.
Speaker 1: So we kind of went away for six months and
Speaker 1: just read truckloads of research on on anger and that,
Speaker 1: which is fascinating. But there's no uniform, unifying typology. So
Speaker 1: nowhere could we find a clear distinction of the different types.
Speaker 1: So to cut along story short, we observed really the
Speaker 1: following typology. First of all, this public and private anger,
Speaker 1: and they appear to be opposites, and we can we
Speaker 1: can come back to that distinction. But the interesting one
Speaker 1: is between the types of public anger. So there appear
Speaker 1: to be two types of public anger. One is moral outrage,
Speaker 1: which we've just described, and the other one, which we
Speaker 1: came to in the most is both obvious is and
Speaker 1: kind of mysterious, right, which, so we did a big
Speaker 1: data search of news stories by categorized by anger, and
Speaker 1: the second most frequent type of news story which cites
Speaker 1: anger refers to angry sports fans. Mhm. Now, as soon
Speaker 1: as you say that, I mean, anybody who goes to
Speaker 1: any sporting event immediately goes of course, did you really
Speaker 1: have to do a data certainty me, it's blinding the
Speaker 1: obviously when Marshall arrived uh and said show me this
Speaker 1: this strange human emotion at work, you know, I just
Speaker 1: go down and take them to watch a football match.
Speaker 1: And that was the really interesting moment, was when we
Speaker 1: suddenly discovered this, these two types of public anger. And
Speaker 1: when you start to look into the research, there isn't
Speaker 1: really specific research and angry football fans as a kind
Speaker 1: of anger phenomenon. There's lots of research on football fans,
Speaker 1: but we started to look at it and work work
Speaker 1: out what function are they serving? And I started to
Speaker 1: go to football matches and watch how fans were behaving
Speaker 1: all the time, and I was interested in the football.
Speaker 1: And what was really interesting is they regulate their own
Speaker 1: team as much as they attack the opposition. So I
Speaker 1: don't know if you're familiar with this, but but certainly
Speaker 1: you'll see them shouting at their own players because they're
Speaker 1: not They're not loyal enough or committed enough. We're saying
Speaker 1: I have been a season hit ticket holder for you,
Speaker 1: or you should be singing. So this this whole loyalty
Speaker 1: identity regulation. And so we realize that there's this kind
Speaker 1: of there's an anger of angels, which is regulates our
Speaker 1: norms on our values and our sense of injustice. And
Speaker 1: then there's the anger of devils, which is tribal energy,
Speaker 1: and they are literally opposites because one requires us to
Speaker 1: be ethical and the other one requires us to be
Speaker 1: completely a moral and destroy the other. That is the
Speaker 1: functional role of kind of tribal energy. And if you
Speaker 1: put it in kind of as an economist, I'm immediately thinking, well,
Speaker 1: what function is this serving? And I realized it solves
Speaker 1: the collective action problem. I've done a lot of studying
Speaker 1: of moral philosophy. The philosophy is kind of always a
Speaker 1: collective action problem because you can free ride in a
Speaker 1: sense you want other people to obey the norms and
Speaker 1: then reach from yourselves a bit like paying taxes. As
Speaker 1: long as every gales based your tax, you know, the
Speaker 1: individual is incentivized to a Vada taxation. So ethical questions
Speaker 1: are are are collective action ones? And what's really interesting
Speaker 1: is this idea of loss of temper is that we're
Speaker 1: threatening you with violence. So if you break our norm
Speaker 1: don't keep doing that. If you ignore us and carry
Speaker 1: out this injustice, there's going to be a consequence. And
Speaker 1: you absolutely see that with with something like Black Lives Matter.
Speaker 1: There's a great reference to this by Cornell West where
Speaker 1: he was on CNN. I don't know if you've seen
Speaker 1: the YouTube video, it's it's well worth watching, and he says,
Speaker 1: what would it say about our society if people weren't
Speaker 1: out in the streets enraged and protesting when they've witnessed
Speaker 1: this level of police brutality. And that is actually Aristotle's
Speaker 1: view of anger. It's an appropriate response and a measure
Speaker 1: of our sense of ethics and values. So that's the
Speaker 1: one function. Now the other one, why the hell do
Speaker 1: we do we go all tribal? And I think that's
Speaker 1: because for most of human evolution we existed under conditions
Speaker 1: of scarcity. And this is really interesting when you map
Speaker 1: it onto politics, because how did the tribal is manipulate you?
Speaker 1: Is they give you a false sense of scarcity. You know,
Speaker 1: immigrants are taking your jobs, that bins are affecting your wages. Um,
Speaker 1: it's almost boils down to land rights. So I think
Speaker 1: that the reason, from an evolutionary perspective, we formed these
Speaker 1: kind of tribal groups is because periodically we did actually
Speaker 1: have to go to war because there was a scarcity
Speaker 1: of resource. And we still have that highly that instinct
Speaker 1: which is we're on the verge of triggering so easily,
Speaker 1: which is this kind of tribal identity. So the title
Speaker 1: of the book is angry Nomics, and you've broken down
Speaker 1: anger into these sort of two types of categories. There's
Speaker 1: the tribal instinct keeping uh people online a sort of
Speaker 1: solution of the collective action problem, and then moral anger
Speaker 1: about anger directed at injustice. But talk to us further.
Speaker 1: I mean, obviously you just mentioned the sort of the
Speaker 1: history that all humans have with scarcity. But why angry nomics?
Speaker 1: How else does it sort of apply to our understanding
Speaker 1: of the economy, particularly today's economy. Yeah, well so so
Speaker 1: the so the other really interesting kind of discovery when
Speaker 1: we went on this journey is you have these two faces,
Speaker 1: this this angelic and devilish face of public anger, which
Speaker 1: which which I think plays a role in our political economy,
Speaker 1: which is very important. But then you also have pry
Speaker 1: at anger, which is which occurs in our personal lives,
Speaker 1: which again seems to be qualitatively different to public anger.
Speaker 1: So in other ways, if you stop somebody on an
Speaker 1: extinction rebellion protest and you say why are you angry,
Speaker 1: they're just as likely to say, well, why aren't you angry?
Speaker 1: Because look at the environmental degradation that's occurring. You know,
Speaker 1: there's no concern for future generations. Look at the destruction
Speaker 1: to damage the human cost of suffering. Right, So they
Speaker 1: give you reasons, and they are almost there's almost a
Speaker 1: pride associated with the moral righteousness. Now, if you can
Speaker 1: imagine if you have a colleague who comes in to work,
Speaker 1: if we ever come into work again or just suddenly
Speaker 1: starts appearing on Twitter ranting and raving at everybody, um,
Speaker 1: you might take them to one side and say, listen,
Speaker 1: is everything okay? Right? So, in our private lives, anger
Speaker 1: is usually indicative of something that's going wrong internally. That's
Speaker 1: not uniformly the case, but but very often. So we've
Speaker 1: kind of now got a macro and a growth, and
Speaker 1: we were then interested in how do how does this
Speaker 1: public and private anger interact with the economy. And so
Speaker 1: we've got a kind of macro political economy story, and
Speaker 1: then we've got a microeconomic consequences, which we think maybe
Speaker 1: some of the changes in our micro economies have actually
Speaker 1: had consequences for stress levels, anxiety, the epidemic that's occurring
Speaker 1: if you look in mental health in the developed world,
Speaker 1: there may be economics might have contributed to those philomenals.
Speaker 1: So one of the things I always wonder, particularly with
Speaker 1: reference to US politics, is why so many people get
Speaker 1: really angry about policies that would seemingly actually benefit them
Speaker 1: as a social group. So you know, for instance, Republican
Speaker 1: voters have traditionally been told that big government is very,
Speaker 1: very bad, even though they would arguably benefit from additional
Speaker 1: government spending. What is your study of anger tell you
Speaker 1: about that dynamic? I mean, that is a great question.
Speaker 1: And actually nobody has asked me that. I've been doing
Speaker 1: a lot of stuff on the book, and nobody has
Speaker 1: asked me that, And that is a really interesting question. Um,
Speaker 1: And maybe a couple of observations because I don't have
Speaker 1: a complete answer to that, but I have some thoughts
Speaker 1: and I'd be interested to know what you guys think,
Speaker 1: because that's a really interesting question. One is that I
Speaker 1: think part of the reason we are seeing so much
Speaker 1: anger in our politics at the moment is what Mark
Speaker 1: and I have thought of as a kind of identity vacuum,
Speaker 1: which is, if you go back twenty or thirty years ago,
Speaker 1: people were very motivated by intellectual ideas in their politics.
Speaker 1: You know, the right and the left really meant something
Speaker 1: where you pro the state or pro the market. Um,
Speaker 1: you know, did you want to privatize industries or nationalized industries?
Speaker 1: And you felt that your political representatives were really making
Speaker 1: a they represented you in a real sense, but also
Speaker 1: they would make a difference if they got into power.
Speaker 1: And we think one of the things that happens is
Speaker 1: when when the move towards the center for once the
Speaker 1: better term or just kind of this liberal consensus in
Speaker 1: the economic sense of the word liberal, meant that we
Speaker 1: lost our motivation so people, and you can see this
Speaker 1: empirically in terms of voter turnout. Now, the political class,
Speaker 1: the political elite are still incentivized to get electric, so
Speaker 1: they have to find the means to motivate us. And
Speaker 1: someone like Trump is really phenomenal at this if you
Speaker 1: look at it through the lens of angry nomics, because
Speaker 1: angry people are more likely to vote, and elections are
Speaker 1: won by minorities. And he he only needs to motivate
Speaker 1: a d thousand people to win the presidential election, which
Speaker 1: is what he did. If he can trigger that AD
Speaker 1: thousand angry people, uh, he can win. And he he
Speaker 1: will effortlessly switch between moral outrage and tribal rage, so
Speaker 1: he'll go out of the rust bait at rust belt
Speaker 1: and actually use ethical arguments. I mean, I am your voice,
Speaker 1: he I'm your representative, I am listening to you. Um.
Speaker 1: And then you know, talking about the industrialization, the decline
Speaker 1: of American manufacturing, the fact that the the elites in
Speaker 1: Washington aren't listening to you, aren't paying at any attention
Speaker 1: to you. These are all effectively ethical arguments. And then
Speaker 1: he will effortlessly switch to talking about marauding Mexicans and
Speaker 1: building walls in a constituency where there is tension associated
Speaker 1: with ethnicity or where these issues are are relevant. So
Speaker 1: I think that's where there's there's no doubt that in
Speaker 1: that sense we are being manipulated. However, even though there
Speaker 1: is a clear distinction analytically between moral outrage and tribal energy,
Speaker 1: as as we all know when you get involved in politics,
Speaker 1: and I think this is particularly insightful in America. What
Speaker 1: starts off as sort of disagreements over policies very quickly
Speaker 1: become of that part of tribal identity. So that's something
Speaker 1: that does intrigue me is how our propensity to take
Speaker 1: sides is so strong that even when it comes to
Speaker 1: issues of ethics, we almost want to be on a site, right,
Speaker 1: and so politics can very quickly to say and I
Speaker 1: think that's one of the ways you actually get people
Speaker 1: to support things that are against their interests is by
Speaker 1: giving them the impression that you're on their side. So
Speaker 1: one of the I mean, one of the interesting things
Speaker 1: about the Trump phenomenon is that despite his ability to
Speaker 1: appeal to different types of anger, which is a politician,
Speaker 1: he's extremely good at and arguably channeling a lot of
Speaker 1: people's anger, nothing much like has really changed from a
Speaker 1: sort of like economic policy perspective during his administration. I mean, like, yes,
Speaker 1: the trade tension with China has been ratcheted up. It
Speaker 1: mostly it entails China buying more soybeans, and nothing fundamental
Speaker 1: about our trading relationship with the world. Nothing major changing
Speaker 1: on the taxation front, except that wealthy people who you know,
Speaker 1: are not the people that he's going talking about immigrants
Speaker 1: to they got a tax break and so forth. What
Speaker 1: does it take for anger, the anger that we're all
Speaker 1: talking about, to actually channel into Wow, this is a
Speaker 1: very different set of policies than the status quo, because
Speaker 1: right now, for all the rising anger in America, there's
Speaker 1: been a certain certain especially on the economic front, sort
Speaker 1: of established status quo of democratic and republican administrations. It
Speaker 1: just hasn't changed very much despite all kinds of changes
Speaker 1: to the world. Well, this is another great question, and
Speaker 1: in a sense that that the final third of the
Speaker 1: book tries to to say, Okay, what are we gonna
Speaker 1: do about this? You know, are we just you know,
Speaker 1: we can't accept ultimately the populism and tribalism reigns. And
Speaker 1: also because tribalism is a precursor ultimately to some form
Speaker 1: of violence, that's the function it serves. And I think
Speaker 1: the challenge to politics now is actually to tap into
Speaker 1: the moral outrage, but converted into ideas that are tangible,
Speaker 1: could across partisan device and will actually change people's daily lives,
Speaker 1: so you can really motivate people to care about elections.
Speaker 1: And in a sense, I would say the challenge that
Speaker 1: Trump has posed to his opponents is where is your bravery?
Speaker 1: Because we we gener we need politicians who are willing
Speaker 1: to take risks and be brave. And I think there's
Speaker 1: a great opportunity to do this because I think there
Speaker 1: are three questions around which there is a huge consensus.
Speaker 1: One is about sustainable economic growth and sustaining the planet
Speaker 1: for future generations. Like I think there is an overwhelming
Speaker 1: local consensus that we need to do something about it.
Speaker 1: There's an overwhelming global consensus that the levels of inequality
Speaker 1: have reached a point that they are dysfunctional. It cannot
Speaker 1: be an optimally functioning society where assets held by one
Speaker 1: percent of the population. That makes no sense. And the
Speaker 1: other area of complete agreement is that nobody thinks for
Speaker 1: sessions are a good idea, apart from a few nutters. Okay,
Speaker 1: so there's so there are three huge issues. The problem
Speaker 1: is that no political party has got three policies that
Speaker 1: everybody understands which are going to change all of those
Speaker 1: really quickly. And I would blame I blame my own profession.
Speaker 1: I blame the politicians. I blame the intellectuals. I blame
Speaker 1: the economists because we're all complaining. We can all identify
Speaker 1: what the problems are, but nobody has really put enough
Speaker 1: thinking into simple cut across partisan lines, big changes to
Speaker 1: those mark as. It has a great line here, which
Speaker 1: is he hates the word policy because you know policy,
Speaker 1: you come up with thirty different policies to tweet this
Speaker 1: and njuice into the And he says, what we need
Speaker 1: to do. We need to be furniture makers. We need
Speaker 1: to rearrange the furniture because it's furniture that determines the
Speaker 1: relationships between people and the conversations that they are and
Speaker 1: really changes things. And I think we need a major
Speaker 1: change in how we've we've fixed our furniture right. We
Speaker 1: need to rearrange the furniture and side so that people
Speaker 1: care enough to get out and vote for matter. Ultimately,
Speaker 1: what are ethical questions? So the onus, I mean the
Speaker 1: onus on solving his anger problem is clearly on policymakers.
Speaker 1: But at the same time it feels like people are
Speaker 1: angry at the policymakers themselves. How do we rectify that
Speaker 1: tension and is there room I guess for UM more
Speaker 1: like direct participation or populism in these policy solutions. And
Speaker 1: you know, I say that having observed that one of
Speaker 1: the things that Trump is very good at is disparaging experts,
Speaker 1: disparaging UM public officials, casting doubt on those exact policymakers.
Speaker 1: Who's been really really good at that? So I don't know,
Speaker 1: how do you how do you get policymakers to solve
Speaker 1: the anger problem when they are the targets of anger themselves. Well,
Speaker 1: I mean this, this probably reflects my bias, but I
Speaker 1: think we need I think there's been a vacuum of ideas.
Speaker 1: So I think it's been far too easy to criticize
Speaker 1: the politicians. Um. But but I just asked myself. You know,
Speaker 1: if I say, most of the mainstream politicians over the
Speaker 1: last twenty years, they have not had an answer to
Speaker 1: the environmental problem, they haven't had an answer to the
Speaker 1: problem of recessions with just in another one with catastrophic
Speaker 1: human costs associated with it, and they've done nothing about
Speaker 1: any quality. So they should not be surprised. It's a
Speaker 1: plea to me. It's a failing of ideas and the mind,
Speaker 1: you know, and Joe has been a big promoter of
Speaker 1: the ideas of MMT, and I would say, other than MMT,
Speaker 1: where are the ideas? You know? And I have huge
Speaker 1: you know, I've had I've had a to and fro
Speaker 1: relationship with them. But but you know, I'm a huge
Speaker 1: fan of Stephanie Gelton. I think she's one of the
Speaker 1: few economists he has done an extraordinary job at making
Speaker 1: these ideas accessible to people. And they've got real ideas
Speaker 1: to which I think are broadly correct, which I agree
Speaker 1: on the most important features with them, which could make
Speaker 1: a real difference. And I think there's a group of
Speaker 1: people coming out of Europe who do as well. You know,
Speaker 1: I think people like Philip Blaine at ECP. People are
Speaker 1: even and I think the ideas of Mark Simon rhyn
Speaker 1: lewis there. There. There's a whole series of I think
Speaker 1: we've got three or four ideas Roger Farmer um, you know,
Speaker 1: on national wealth funds, on changing the way central banks operate,
Speaker 1: on dual interest rates. These are really simple ideas that
Speaker 1: would have a dramatic gampacts on our economies and societies,
Speaker 1: but they're very they're they're currently the domain of a
Speaker 1: tiny minority of thinkers they are spreading. But we need
Speaker 1: to kind of wake up more generally and realize how
Speaker 1: origin today is. Tracy always trolls me for bringing up
Speaker 1: m MT, but this is the second This is the
Speaker 1: second episode in a row where I didn't bring it up,
Speaker 1: but the guests did, like sort of like preempted. So
Speaker 1: I just wanna you know, it's not always me who
Speaker 1: brings it up, but you you you, I think you're
Speaker 1: colluding ahead of the episode, I'll tell you the text layer.
Speaker 1: I'm not sending d m s with Eric while we have,
Speaker 1: but but I want to you said something really interesting
Speaker 1: and mmt aside, I do think you hit on something
Speaker 1: really I think to hit on something really interesting, which
Speaker 1: is that I think you compare the quality of the
Speaker 1: economic discussion this time around, uh, this crisis versus two
Speaker 1: thousand and two. THO, it is some you better. There
Speaker 1: are so many like in the sort of like editorial pages,
Speaker 1: in even politicians, central bankers. It just feels like there's
Speaker 1: a higher quality of understanding. And maybe it's because of
Speaker 1: we just went through the last crisis. Maybe it's because
Speaker 1: of some sort of more heterodox thinkers having made headway
Speaker 1: in the mainstream debate. It just feels though that like
Speaker 1: there is less crankery and a more sophisticated understanding of
Speaker 1: how these various policy tools work than we had ten
Speaker 1: years ago. And I'm curious if you feel the same way. Absolutely,
Speaker 1: it's a great observation. One of the you know, there
Speaker 1: there's things about human progress is you know, we CanCERN
Speaker 1: disaster to our advantage. I mean, I think things would
Speaker 1: be an awful lot worse now if we hadn't had
Speaker 1: two thousand a night, ironically, because we've done an awful
Speaker 1: lot of thinking since then, not nearly enough. You know,
Speaker 1: I still think, you know, the whole of the monetary
Speaker 1: policy is absurd, which is why the hell we're trying
Speaker 1: to in of ven on a vast scale and asset
Speaker 1: markets to solve a really simple problem, which is trying
Speaker 1: to stabilize how so corporate incomes, which we should just
Speaker 1: do directly, and why we've wasted a decade not putting
Speaker 1: in place the infrastructure when you know, we have how
Speaker 1: many articles do we have to write on this for
Speaker 1: somebody to go, yeah, it might be a good idea
Speaker 1: to prepare for a recession, right exactly, it's ridiculous when
Speaker 1: you think about and then we end up saying, well,
Speaker 1: the massive intervention in the corporate market and the equity market,
Speaker 1: the vast amount of balance feed expansion, because we're hoping
Speaker 1: about a tiny amount of it trickles over into the
Speaker 1: real economy. But you know, that's on the negative side.
Speaker 1: But on the positive side, you're absolutely, absolutely right, the
Speaker 1: debate has has come forward considerably. Just on that note,
Speaker 1: And you know, going back to your hardware versus software analogy,
Speaker 1: what are the chances that after this crisis we get
Speaker 1: some sort of hardware upgrade or you know, a real
Speaker 1: dramatic shift in the economic system versus you know, an
Speaker 1: other short term software patch. I'm hopeful because I think
Speaker 1: and again this is one of just the random, marbitrary
Speaker 1: facts of life. Is so it's interesting we go through
Speaker 1: the kind of history of of of capitalism and the
Speaker 1: hardware crashes, and this the kind of capitalism one point
Speaker 1: pre war, two point post war where you have the
Speaker 1: welfare state and then kind of mixed economy, and then
Speaker 1: three point oh, which was kind of the year of
Speaker 1: neoliberalism and kind of rolling back of the involvement of
Speaker 1: the state. And we're really saying we need a four
Speaker 1: point oh. And I think what's odd in the sense
Speaker 1: is why didn't we get a four point out after
Speaker 1: the financial crisis. And for me, the reason for that
Speaker 1: is we didn't have one to take off the shelf.
Speaker 1: I mean, we had Kanes post war, and then we
Speaker 1: had Friedman in the eighties and nineties, so there actually
Speaker 1: was there was a new operating system you could take
Speaker 1: off the shelf. I think the operating system is being
Speaker 1: constructed now, and it's part of the m m T debate.
Speaker 1: It's part of the debate about sovereign wealth funds, national
Speaker 1: wealth funds, these changes to monetary policy, whether it's helicopter
Speaker 1: money in various sorts, and absolutely the challenge of sustainable growth.
Speaker 1: So I think we're getting there. And the other thing
Speaker 1: that makes me optimistic about this, and this is always
Speaker 1: the way humans operate is One good thing about reverting
Speaker 1: to kind of nation level decision making is we have tens,
Speaker 1: if not hundreds of nations experimenting with the same problems.
Speaker 1: As soon as one of them takes a leap and
Speaker 1: embarks on one of these policies and it's shown to succeed,
Speaker 1: everybody else will copy because the risk for politicians shift
Speaker 1: at the moment. Politicians are risk averse. You know, I'm
Speaker 1: trying to get the Irish just set of a national
Speaker 1: wealthfund of the amount. It's so clear to me the
Speaker 1: politicians want to wait until somebody else does it, so
Speaker 1: they'll see how it works and then they'll do it.
Speaker 1: You know. But and and that's the but if somebody
Speaker 1: does it and it works, the psychology completely changes because
Speaker 1: suddenly then you're an idiot for not doing it right.
Speaker 1: It's a bit like investing. So I think we've got
Speaker 1: half a chance. Now. There are some genuinely interesting ideas
Speaker 1: out there that are relatively simple, would be very very effective,
Speaker 1: and once somebody does them that there could easily be
Speaker 1: a kind of domino and they become conventional wisdom to me,
Speaker 1: And this is uh, you know, I've got obsessed with
Speaker 1: his question, which is does the post crisis period actually change?
Speaker 1: You know, I think, you know, from the perspective of markets,
Speaker 1: which is what we talk about most of the time,
Speaker 1: we've sort of been in this world in which sort
Speaker 1: of conventional central bank policy is primarily what we use.
Speaker 1: And as you mentioned, historically, it's a very blunt tool
Speaker 1: it's either interest rates or sort of propping up financial assets.
Speaker 1: More broadly, it's not great for real economic growth. That
Speaker 1: doesn't do that much for actually stabilizing household incomes or
Speaker 1: business incomes, which is the key. And so to me,
Speaker 1: the big question Shin is do we get policies post
Speaker 1: prices that are sustained. It really looked different from the
Speaker 1: sort of like central bank rate policy dominated status quo,
Speaker 1: and it sounds like, you know, you think there's a
Speaker 1: real chance of that. I do, because I think the
Speaker 1: difference reads to a decade ago is those policies are
Speaker 1: now out there, so they the code has been written,
Speaker 1: and it's just a question that you've taken it off
Speaker 1: the shelf and upgrading because I think now we've had
Speaker 1: enough time and there's been enough debate, and there's an
Speaker 1: and there's a building consensus. I mean, you know, you
Speaker 1: know this jokes because you followed some of my left
Speaker 1: field ideas. But you know, when I first started about
Speaker 1: by the idea of transferring cash to households, it was
Speaker 1: a completely fringe idea for central pranks. You know, now
Speaker 1: I've got Stanley Fisher philippil Brand writing a piece work
Speaker 1: for black Rock saying the European central banks should think
Speaker 1: about doing perpetual teltras that you know you've got. Those
Speaker 1: two are probably about us conservative mainstream representation being call
Speaker 1: as you can get. Still hasn't been done, but that's
Speaker 1: a huge shift. I mean, if you look at the
Speaker 1: debate about m MT, I mean when I first came
Speaker 1: across m MT, you know, maybe ten than years ago,
Speaker 1: it was complete fringe. Now most people go, it's like
Speaker 1: Caine said, you know, first of all they dismiss you.
Speaker 1: Then then they say, that's what they always they thought
Speaker 1: all along. A lot of what Stephanie has been arguing
Speaker 1: people now. But but I always believe that, Yeah, now
Speaker 1: you have US basketball players um talking about m m T.
Speaker 1: We gotta again, we gotta get deal with the on
Speaker 1: the program. But you know, I would like I'd like
Speaker 1: them to embrace some bigger ideas though as well. You know,
Speaker 1: I think they needed, they needed to look at what's
Speaker 1: happening in Europe too, because I think there are you know,
Speaker 1: and again, so to me, like one thing that's really
Speaker 1: fascinating there if I can, like Stephanie to me, and
Speaker 1: again this is testament to her insight focusing on institutional
Speaker 1: functions was fall on about Europe. Now, I wasn't aware
Speaker 1: of her work at the time, but kind of independently
Speaker 1: a number of us has come to a similar conclusion here,
Speaker 1: because the problem in Europe is the Italy CAPTURENT money.
Speaker 1: It's as simple as that. So the reason Italy has
Speaker 1: a public death problem in Japan doesn't is because it
Speaker 1: really can't create bank reserves. So it really it's almost
Speaker 1: dependent on the kindness of strangers, the stranger being the
Speaker 1: central Bank sitting in frankfurt Um in order to stabilize
Speaker 1: it's it's market. But but it does mean in a
Speaker 1: sense that you know a lot of the recommendations and
Speaker 1: framework them, and we're advocating our contingent on the fact
Speaker 1: that you can create bank reserves, and that really, to
Speaker 1: me just doesn't work in Europe. We have to accept it.
Speaker 1: You know, we're not going to change you think you're
Speaker 1: not gonna reown the CB at a national level, so
Speaker 1: that as a result we've had to think about different
Speaker 1: ways of approaching these problems. Mhm. I have a more
Speaker 1: philosophical question, which is, you know, your study of anger
Speaker 1: basically shows that there's a reason it exists, So assuming
Speaker 1: that we do get some sort of major shift in
Speaker 1: policy that is supposed to make people more happy, do
Speaker 1: you think people are just going to move on to
Speaker 1: the next thing to be outraged about. Absolutely, you know,
Speaker 1: I mean, this is what you do realize. I guess
Speaker 1: one of the reasons humans keep on keep going ahead
Speaker 1: is that we do focus on what's wrong. The bit
Speaker 1: that really worries and I have to say is if
Speaker 1: you read the social psychology literature on there's a there's
Speaker 1: a theory called the minimal groups paradigm, which were studies
Speaker 1: done in the nineties sixties, and they're completely convincing about
Speaker 1: the little difference it takes to get people to form tribes.
Speaker 1: So they did studies of children in classrooms and and
Speaker 1: literally you can go put up a two paintings of
Speaker 1: two abstract artists and say which painting do you like,
Speaker 1: and split the room into two groups. So it's a
Speaker 1: totally arbitrary distinction, and they will then make decisions to
Speaker 1: punish the other group. And unfortunately, this is a real
Speaker 1: challenge I think that we have as a society is
Speaker 1: that we are it's such an instinct to form little
Speaker 1: tribes and little groups, which is why I think the
Speaker 1: only thing that we can do is make people aware
Speaker 1: of that. I mean, I think that that exercise should
Speaker 1: be taught in all schools to be very wary of
Speaker 1: politicians telling you and people pushing you into a little
Speaker 1: group or a tribe, because it's the antithesis of thought.
Speaker 1: We need independence of thought and critical thought. And it's
Speaker 1: ultimately the antithesis of ethical behavior because it's it's actually
Speaker 1: a precursor for violence. And that's the bit that does worry,
Speaker 1: and that's where I think, you know, the book is
Speaker 1: trying to tackle multiple levels, and part of it our
Speaker 1: practical solutions, but also part of it is about awareness.
Speaker 1: And I think if you do study anger and you
Speaker 1: look into how groups form, you know, you just realize
Speaker 1: the extent which you yourself are vulnerable to tribalism, but
Speaker 1: also the extent of which people are being manipulated all
Speaker 1: of the time. Eric, that's been an absolutely fascinating conversation.
Speaker 1: Thank you so much, and again, the book is angry
Speaker 1: not Thank you, Eric. That was great. Well, thank you
Speaker 1: both very much. I really really enjoyed it, and I
Speaker 1: love your podcast. Well. I love everything that you guys did,
Speaker 1: So keep up the good work. To kind of appreciate it. So, Joe,
Speaker 1: I thought that was a really good discussion. And what
Speaker 1: I really like about Eric's book is that he goes
Speaker 1: into that psychology of anger and goes, you know, all
Speaker 1: the way back to the early days of human beings
Speaker 1: to sort of trace the evolutionary meaning and purpose of anger.
Speaker 1: You don't get that in an economics book that often, no,
Speaker 1: you don't, but I think his um, I think his
Speaker 1: taxolomy of anger is sort of the difference between moral
Speaker 1: righteous anger anger at injustice versus anger designed to keep
Speaker 1: people in line is really interesting and useful because I think,
Speaker 1: like anger, it kind of has an negative connotation or
Speaker 1: it's a bad emotion. I mean, it feels bad, but
Speaker 1: it's seen as something that you should avoid it. But
Speaker 1: think about what its purposes. It's purposed in making the
Speaker 1: world better in many cases is useful and again, you know,
Speaker 1: just bring it back to our context, like what it
Speaker 1: means for policy is gonna be a huge question. Yeah,
Speaker 1: an instrument of change. And it's also interesting that Eric
Speaker 1: thinks there is after the coronavirus crisis, a real possibility
Speaker 1: of getting something substantial amended um in the economic system.
Speaker 1: That's pretty interesting. Yeah, I'm hopeful for that because, like
Speaker 1: I said, and it does feel like there's progress the
Speaker 1: converce I remember, you know two eight like that. I
Speaker 1: think about like the stuff I listened to back then
Speaker 1: or the articles I've read. It's like, is terrible. This
Speaker 1: sort of the economic discussion has come so far in
Speaker 1: the last ten years that you know, eventually, I do
Speaker 1: think there's a possibility that needs through to real action
Speaker 1: that's not just a sort of tripling down on the
Speaker 1: status quotes. So that could be good. Well, to be fair,
Speaker 1: I think after the financial crisis, because it's sprung from
Speaker 1: the banking system, there was so much focus on bank
Speaker 1: policy after that, and you know, people wanted to dismantle
Speaker 1: the banks and jail the bankers and all of that.
Speaker 1: Whereas what's really unique about what we're seeing right now
Speaker 1: is that the issues are stemming from the real economy.
Speaker 1: So we're sort of seeing a debate forced about how
Speaker 1: the real economy works, which is fascinating and possibly unprecedented. Great. Okay, well,
Speaker 1: this has been another episode of the All Thoughts podcast.
Speaker 1: I'm Tracy Halloway. You can follow me on Twitter at
Speaker 1: Tracy Alloway. I'm Joe wi isn't thought. You can follow
Speaker 1: me at the Stalwart and you can follow our guest
Speaker 1: on Twitter, Eric Lawndergan. He's at Eric lawn Earth to End.
Speaker 1: Follow our producer on Twitter, Laura Carlson at Laura M. Carlston.
Speaker 1: The Bloomberg had a podcast, Francesca Levi at Francesca Today
Speaker 1: and check out all of our podcasts under the handle
Speaker 1: at podcast. Thanks for listening.