Priceonomics

This post was written by Dan Kopf, Priceonomics Staff Writer

Not every economist has had the chance to talk with Nobel laureate Milton Friedman. Even fewer have talked about economics with the pop star Ke$ha. But economist Russ Roberts – who earned his PhD in Economics at the University of Chicago and is currently a fellow at the Hoover Institution – has done both.

Roberts hosts a popular podcast, has published a popular novel about free trade, and has written for the New York Times. But the apex of Roberts’ pursuit to popularize economics was a rap video. 

In 2010, Roberts collaborated with TV producer John Papola to create a song about contrasting views of economic stimulus — particularly those of early 20th Century economists John Maynard Keynes and Friedrich Hayek. Not exactly the usual setup for a viral video. 

To help the video reach a wider audience, Roberts and Papola chose to make a hip-hop song (because, Roberts says, “kids like rap”) and didn’t skimp on the visuals – the production values are nearly on par with the latest Rihanna or Justin Bieber video. Still, the lyrics remain as economics-nerdy as can be. At one point, the rapper playing John Maynard Keynes boasts:

I had a real plan any fool can understand

The advice, real simple—boost aggregate demand!

C, I, G, all together gets to Y

Make sure the total’s growing, watch the economy fly

 

After releasing the video, Roberts visited NPR to promote it. Ke$ha, whose Tik Tok was the #1 song in the country, was also in the building for an interview about her album. So a staff member at NPR’s Planet Money asked Ke$ha to listen to Roberts’ rap video.

“I thought Ke$ha was an intern,” Roberts says, “She had this crazy glitter on half her face, and she had this feather coming out of her hair, and I thought, ‘Okay, colorful intern.’”

Ke$ha was impressed. “It’s like legit,” she said, “and it’s really good rapping!”

The public responded to the video with similar enthusiasm. It now has five million views on YouTube, and a sequel has over three million views. When we spoke to him, Roberts admitted, with a combination of resignation and pleasure, that these videos are “the most important single thing” he’s done to communicate economic ideas.

Russ Roberts has never been satisfied to simply reside in the ivory tower. He believes deeply in the importance of the people understanding the repercussions of economic policy.

“It’s always going to be the case that people will exploit a lack of knowledge of economics to try to get people to favor what they want that is good for them and not necessarily good for the country.” Roberts says. “That’s very sad. It gives me a job.”

This is the story of Russ Roberts’ quest to educate the public in economics.

***

In 1980, Russ Roberts graduated with a PhD in Economics from the University of Chicago. At the time, Roberts’ plans were similar to those of your average economist. “I wanted to win the Nobel Prize and be a great researcher,” Roberts explains. “I wrote standard economic research papers for the first ten years of my career. I had no dream or thought of trying to become an economic communicator of the kind I am now.”

Roberts’ epiphany moment came in the early 1990s:

After the first Gulf War, Frontline, the PBS documentary, had a piece on the U.S. economy and Japan, and how Japan was stealing all our jobs and what was left for us. [Japan] would give us some of the jobs like customer service calls for Nintendo. [They talked about] how our productivity was going to be stripped… 

I really didn’t like the show. At the end, they showed a parade of Gulf War soldiers returning, and the narrator said, ‘Well, we can win that war. Why can’t we win this war, the economic war with Japan?’ 

While I was watching that, I got goosebumps, even though I hated the argument. And I thought, ‘How can I create something that would capture people’s hearts—and not just their minds—with how free trade affects our world?'

In an unlikely move for a career economist, Roberts decided he would use storytelling to incite the same kind of emotion, but portray trade in a way that he viewed as more accurate. 

Roberts considered various mediums, but eventually settled on writing a novel. He had always had an interest in literature – much preferring William Faulkner to the dry prose found in the Quarterly Journal of Economics. An eminent professor at the University of Chicago once told him that his writing style was poor because he didn’t write like an economist. He took it as a compliment.

Roberts’ novel, The Choice: A Fable of Free Trade and Protectionism, sold over 100,000 copies. Economics professors often assign it as supplemental reading in Economics courses. 

The novel is the Dickensian tale of Ed Johnson, the fictional owner of a TV manufacturing company, who in 1960 considers supporting a protectionist measure against the import of Japanese goods. The long dead 19th Century economist David Ricardo visits Johnson from the heavens. Ricardo shows Johnson two different visions of the future – one in which free trade came to be, and the other in which it did not.

“[I wanted] to make the case for trade without lying about it.” Roberts said. “There are a lot of downsides to trade, and I tried to make those vivid in the book. As vivid as I tried to make the upsides.”

With Trump advocating protectionist measures and almost every presidential candidate opposing the Trans-Pacific Partnership (TPP), the latest trade deal, the book remains incredibly relevant. As Roberts says, “Nothing changes, alas.”

The Choice was Russ Roberts first novel and first foray into communicating economic ideas broadly.

Roberts went on to publish two more novels. The Invisible Heart: An Economic Romance is the story of two teachers in Washington DC falling in love; it lays out the case for classical liberal economics. 

Roberts considers The Price of Everything: A Parable of Possibility and Prosperity to be his best novel. The book uses the fictional story of a Cuban immigrant – who comes to Stanford to play on the tennis team – as a prism through which to explain the concept of emergent order. Emergent order is the idea that, in Roberts’ words, “There is order that can emerge without central control and that can respond the way you would want it to respond.” Stephen J. Dubner of Freakonomics called the book “wildly enjoyable”, though he wasn’t impressed with the plot.

Roberts had found his love for communicating to a general audience.

In his search for more ways to communicate his views and challenge prevailing wisdom, Russ Roberts turned to a format that few had heard of: the podcast.

Russ Roberts interviewing the Nobel Laureate Vernon Smith

In 2005, Roberts was invited to appear on the now defunct podcast Radio Economics to discuss Wal-Mart. Roberts asked how many people might listen, and the host said that it might be two to three thousand.

Roberts was impressed. “That seems like a really big number. That’s like an enormous auditorium,” he says. “If somebody said to me, ‘Do you want to come to an enormous auditorium and chat with somebody and there will be 3,000 people listening?’ I’d say, ‘Well sure, I’d do that.’” And so he figured he would try it himself.

The first episode of EconTalk, Roberts’ rather blandly named podcast, premiered on March 16, 2006. Over the next ten years, Roberts would broadcast over 500 interviews with many luminaries of economics, including more than ten Nobel Prize winners. Some of the more famous guests include Milton Friedman, Joseph Stiglitz, Thomas Piketty and Michael Lewis. Around 80,000 people download the podcast every week, and it is regularly listed as one of the best business and economics podcasts.

The show is not successful because of its high production values. The interviews are about an hour long and unstructured, and Roberts airs them without much editing. The economist and best-selling author Tim Harford describes it as “eavesdropping on a one-hour conversation between smart economists.”

Instead, EconTalk’s popularity is the result of something exceedingly rare: approachable but substantive discussions of ideas, which are frequently – and most memorably – between Roberts and economists who disagree with his ideology.

In the battlegrounds of modern economics, Russ Roberts is associated with the right-wing. He believes in a limited role for the state that allows voluntary mechanisms to emerge to solve life’s problems. He calls himself a “classical liberal” or libertarian. He used to hate labels, but he has come to terms with it. “I've come to embrace the reality that I am, to some extent, an ideologue,” Roberts says. “I have priors about the way the world works.”

Roberts grew up in a conservative household under ardent anti-communist parents, and he suspects this influenced his intellectual path. As a young person he enjoyed Ayn Rand, but he now finds her work soulless. Though not a fan of government, Roberts believes that other motives besides profit are a large part of what makes society function well.

Roberts’ transparency about his ideology make him unique. He believes economists should be more open about their beliefs so people can assess the ways their research might be biased, and he has been commended for the “sympathetic hearing” he offers his guests, who come from across the political spectrum: 

Deep down, I have an idea that part of what the show communicates is civility… I wouldn’t have said that, but so many people write me and thank me for not being rude to my guests even when I disagree with them.

Some of the most riveting EconTalk episodes are the ones that feature Roberts and an economist with an opposing viewpoint. His interviews with Jeffrey Sachs on the Millennium Development Villages and Thomas Piketty on rising inequality are unusual opportunities to hear cogent arguments from people who vehemently disagree.

While EconTalk has amassed a huge audience by the standards of academia and wonky interviews, the show might have hit its ceiling.

Roberts says the audience for EconTalk is growing, but very slowly. He feels that he needs to do a better job of getting the word out to people interested in economics, but he also sees a structural issue. Due to the Great Recession, “A lot more people were interested in economics in 2010 than they were in 2013,” Roberts explains. He feels that with economic issues at the center of the coming presidential election, the show is likely to see a boost.

Another possible issue that limits the appeal of the show is the lack of diversity of guests backgrounds. The vast majority are older white men, like Roberts himself.

For Roberts, the podcast is an incredible opportunity to reach people with a strong interest in economics. But to communicate to people not already interested in the subject, he would need to try another more popular, more viral medium. An Econtalk fan helped him do it.

Russ Roberts and John Papola made two viral videos about the disagreements between John Maynard Keynes and Friedrich Hayek

In 2007, John Papola was the creative director of Spike TV. Papola had recently read The Black Swan by risk scholar Nassim Taleb. When an intrigued Papola searched out interviews of Taleb, he found an EconTalk episode and became a fan of the show. He started listening to EconTalk on his commute.

In the spring of 2009, Papola contacted Roberts about collaborating on a video. Roberts was wary. Past collaborations had turned into unsucessful “time sinks”. 

But Papola was different. Roberts says that Papola was so “relentless” and his video work was of such a high quality that he decided he had to give it a try. 

Their collaboration began during the Great Recession. They were interested in explaining the contrasting theories of John Maynard Keynes and Friedrich Hayek, whose work addressed the causes of economic downturns. Both Roberts and Papola prefer Hayek’s less interventionist approach to the economy. Roberts is a particular fan of Hayek’s famous quote, “The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.”

The real Friedrich Hayek and John Maynard Keynes.

“We started off with the ridiculous idea that we would create a sitcom about Keynes and Hayek as roommates in Manhattan,” Roberts explains. “Their activities would represent their views.” Keynes might borrow money for a project, and then later find himself in debt.

Creating an entire pilot was too daunting, so they turned to writing a theme song. Eventually, the project turned into making a music video about the long dead economists’ views on business cycles.

The resulting song and video, Fear the Boom and Bust, was a viral sensation—or at least as viral as any song with the following lyrics could be:

And if the Central Bank’s interest rate policy tanks

A liquidity trap, that new money’s stuck in the banks!

 

The video now has over 5.5 million views on YouTube, and it has received coverage by the New York Times, NPR, and PBS

Roberts was taken aback by the “absurd” amount of attention the videos received. He believes that one reason for the song’s success is the effort Roberts and Papola made to treat Keynes fairly. “We tried to give each economist equal time and wanted to be fair to both of them,” says Roberts. “John and I love Hayek and don’t particularly like Keynes, but we didn’t want to do a hatchet job.” Roberts tells us that Keynes biographer Robert Skidelsky agreed that the lyrics were an accurate portrayal of Keynes’ views.

Roberts and Popola put out a sequel to Boom and Bust called Fight of the Century: Keynes vs. Hayek Round Two. The second video focuses on what each economic thinker believed was the proper cure for a recession. The video has over 3 million views.

Roberts continues to think about creative ways to communicate economic ideas.

In 2014, he published a book on what we can learn about happiness from Adam Smith. He is working on a children’s book about emergent order, and a video that demonstrates the challenges of measuring economic phenomena like growth, poverty and inflation. He even recently played Adam Smith in what he calls an “off off” Broadway play.

But after all Roberts and others have done, he still sees politicians prey on the public’s lack of understanding about economics. Roberts’ beliefs about the importance of free trade remain unpopular. Bashing free trade, without acknowledging its benefits, is common among most of the presidential candidates.

Explaining complex economic ideas can be a sisyphean task — a fact that Roberts acknowledges.  “Of course it’s frustrating and sometimes it’s very depressing,” he says. But he is philosophical about what one person can do. “I follow what the Talmud says about this. It is not up to you to finish the work, but neither are you free to desist from it.”

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