00:01:51.080And I think it's a method and it's the way I go about things, which is to stay away from pre-cooked conclusions, whether they're in my discipline, in any other discipline or in politics or anywhere else.
00:02:04.540And so that leads me to kind of figure stuff out for myself.
00:02:08.180And if that sounds like a cliche, it is.
00:02:10.000But it takes a long time to unlearn all the things that you're being taught and to kind of go through the process of actively deprogramming yourself against all these messages that are coming in.
00:02:25.620That's my value prop as a contributor to public debate on economics and more widely.
00:02:35.460Well, that's fantastic. And that's why we wanted to have you on the show. And we'll talk about economics and the academia side of things as well a little bit later. But just tell us a little bit about what's happening in Australia. One of the things we talk on this show a lot about is the culture wars and all this kind of stuff. Where are you guys with that?
00:02:51.020Well, I think we were in a very good place in the 80s and 90s where we led the world in economic policy and we had a government.
00:03:01.280In fact, there was a bipartisan consensus on things like race, gender and so on.
00:03:08.860And that broke down as you could if you were looking to blame the Labor Party, you would blame Paul Keating because he was who was the prime minister from 90 from 1991 to 1996.
00:03:24.260And he was very divisive, but he was still part of the bipartisan consensus, which didn't go after culture wars.
00:03:32.800But then on the change of baton to John Howard as Prime Minister, he famously was very insightful in revving up what seems to have been latent in the Australian psyche, which is that if white Rhodesian farmers were boat people floating off our coast, I'm sure we would have wanted to save them.
00:03:53.700But if they're brown people from the Middle East or Asia, not so much.
00:03:57.500And so we've slid into a pretty unpleasant state of affairs where, you know, where, well, we are keeping people out.
00:04:16.100Now, of course, we have to keep people out.
00:04:17.720There are 60 million refugees who not all of which could come to Australia.
00:04:22.000but it's appropriate that we don't just say any old person can come in here,
00:04:29.120but the lengths that we've gone to in dehumanising people
00:04:32.940is a national shame, and most people feel it.
00:06:46.400They underestimate the extent to which a culture can remain, can protect the best parts of it and then become more exciting.
00:06:55.060We have a commentator in Australia called Philip Adams who I think his line is that we invited a lot of European migrants into Australia and found that it was so much fun we wanted more.
00:13:16.980I think of ideology as both impossible to avoid
00:13:20.860and a good starting point because it orients the world.
00:13:24.240But then I do, I don't pick sides to be contrary or anything like that, but I do spend a lot of my time trying to find ways to express an idea which don't trigger, to use a word that would work on this program, that don't trigger a response from the other side which is, oh, he's just a lefty or he's just right wing.
00:13:50.700I will actually try and work out a way, a subversive way, to make a point which tries to get under those early warning systems and trick people into thinking for themselves or at least not having all these incredibly strong mechanisms doing the thinking for them, if that makes sense.
00:14:13.440And I've found that it's just been wonderful because I'm able to wander around and I can pick low-hanging fruit.
00:14:21.640I can say, hang on, well, why don't we...
00:14:25.120All right, so you're a free market person, you're an intervention person.
00:14:28.100Forget all that. What's the problem here?
00:25:19.160Now, in the example that I gave you, the reasons why people don't have good information about workplaces, it's sort of subtle and it's not very easily susceptible to simple modelling.
00:25:36.120And most simple modelling just assumes that people know what they need to know and that they have the cognitive power to do whatever calculations are necessary.
00:25:45.620and I think you would say, I would hope you would say commonsensically
00:27:39.900Yeah. This happens in economics all the time. And sometimes you should make silly assumptions because they kind of get you to somewhere which is fertile. But that's really not what's happened in economics. What happens in economics is that it's this analogy I made with where you wear your belt.
00:29:51.260It's a very serious situation and everyone, well, I can't count the number of times, the number of conversations I've had with young academics who say, yeah, yeah, I know all that and I'll play the game for a while and I'll become more influential and I'll change it.
00:30:09.040I respect that. I mean, that's an interesting, worthwhile mission to give yourself.
00:30:15.920But we've heard that from politicians too.
00:30:18.400And I see this as there's something very unsatisfying about it.
00:30:24.580Now, you could say there's something unsatisfying about what I've done,
00:30:27.260which is to go and try and look at problems on their merits,
00:30:31.700which is a snake oil salesman's way of saying I don't know what.
00:30:35.580I mean, I try and be as rigorous as I can.
00:30:37.960I talk to people who know the field better and so on.
00:30:42.080And when people ask me, what does lateral economics,
00:30:45.880does it focus on energy or transport or macro or labour market?
00:33:24.740So Elon Musk says this and Charlie Munger and Warren Buffett say this, which is we make most of our money mostly by trying not to be stupid, not by trying to be very clever.
00:35:57.580We'd gone from an inefficient but effective system
00:36:01.060To an efficient but ineffective system
00:36:03.580And, I mean, so if you take the fast food example, if you think that McDonald's is to food, what porn is to sex, and what modern politics is to what we imagine politics should be.
00:36:20.700So modern politics has been optimised with an inch of its life.
00:36:24.940people who are selling a political message and I was talking to somebody yesterday about Brexit
00:36:30.060and she was saying well we know what emotional message Theresa May will go with if she gets a
00:36:38.340deal from Europe what's our emotional message and I said to her yes well Adolf Hitler said of course
00:36:44.340I reserve reason for the few and emotion for the many and our politics is so optimized around
00:37:22.520And again, people blame the internet, and of course the internet's a very important part of this story, but it's also very important to realise, at least for me, I was very upset and concerned about democracy before the internet, and the best stat I can give you on that is that on American TV, the length of a soundbite went from 48 seconds to 8 seconds, from 1968 to 1988.
00:37:49.320and we're not going to survive as a democracy
00:45:41.540Now, a citizen's chamber would be several hundred people chosen at random.
00:45:45.540And the one thing that it would do is it would take our eye just ever so slightly off the opinion of the people and give us another view of the considered opinion of the people, which in the case of mandatory sentencing is the difference between, you know, 15 or 16 out of 24 and 3 out of 24.
00:52:32.560But Julia went from being a feisty, forensically intelligent deputy leader with fiery red hair to being a talking point zombie. Sorry about that, Julia.
00:52:47.920And I had this little fantasy. And the fantasy was that I'd traipse around after her as a staffer for her, because I've worked as a staffer for other politicians.
00:52:57.820and she'd come out of an interview and she'd say,