Stephen Dubner
Appearances
Candace
BREAKING: My FIRST Prison Phone Call With Harvey Weinstein | Candace Ep 153
It turns out that the theater's PA system had crashed. We had been told earlier that it was a new system, state-of-the-art, but, well, I don't know what happened. The next hour was pretty chaotic. The microphones aren't working, speakers aren't working, keyboard player can't get any sound out of his keyboard setup. Meanwhile, Ari Emanuel, the most famous agent in show business...
Candace
BREAKING: My FIRST Prison Phone Call With Harvey Weinstein | Candace Ep 153
is waiting backstage. What the f*** are these people doing? And then suddenly the system starts working again, at least partially. By now, it's way past the scheduled start time. So we hustle up, we wish each other good luck, and we start the show. We hang out for a little bit more at the theater and then we go to a little after party, mostly friends and family, maybe 40, 50 folks.
Candace
BREAKING: My FIRST Prison Phone Call With Harvey Weinstein | Candace Ep 153
And that's when our excellent editor, Ellen Frankman, comes up to me with a look on her face that I couldn't quite figure out. In retrospect, she looked ecstatic. Really ill. She was shaky. Her face was pale. So I ask her what's wrong. And she tells me that in addition to the audio failures we had earlier, there was another even bigger failure. The show had not been recorded, she says.
Candace
BREAKING: My FIRST Prison Phone Call With Harvey Weinstein | Candace Ep 153
And I didn't understand. I asked her to repeat herself. She said they didn't record the show. At least one journalist had recorded the entire Ari Emanuel interview, but it's iPhone on the lap quality, not radio quality. So we ditched that recreation idea.
Freakonomics Radio
Policymaking Is Not a Science — Yet (Update)
You know, it's a hard one. That is Patti Chamberlain, senior research scientist at Oregon Social Learning Center.
Freakonomics Radio
Policymaking Is Not a Science — Yet (Update)
Chamberlain also looks at scaling as a process. So it's almost like there's stages that you have to go through. And if the first stage is research that involves an RCT, a randomized controlled trial, there's already an important choice to make.
Freakonomics Radio
Policymaking Is Not a Science — Yet (Update)
One program Chamberlain founded is called Treatment Foster Care Oregon.
Freakonomics Radio
Policymaking Is Not a Science — Yet (Update)
The success of Chamberlain's program caught the eye of researchers who were working on a program for a federal agency called the Office of Juvenile Justice and Delinquency Prevention.
Freakonomics Radio
Policymaking Is Not a Science — Yet (Update)
If the program was successful at one site, how hard could it be to make it work at 15?
Freakonomics Radio
Policymaking Is Not a Science — Yet (Update)
Patty Chamberlain had run up against something that Dana Suskin had come to see as an inherent disconnect when you try to scale up a research finding.
Freakonomics Radio
Policymaking Is Not a Science — Yet (Update)
If only there were another science, a science to help these scientific entrepreneurs and institutions come together to implement this new research. Maybe something that could be called...
Freakonomics Radio
Policymaking Is Not a Science — Yet (Update)
Implementation science. Okay, let's define implementation science.
Freakonomics Radio
Policymaking Is Not a Science — Yet (Update)
That is Lauren Suplee. When we spoke with her, Suplee was the deputy chief operating officer of a nonprofit called Child Trends, which promotes evidence-based policy to improve children's lives.
Freakonomics Radio
Policymaking Is Not a Science — Yet (Update)
The cochlear implant is a remarkable piece of technology, but really it's just one of many remarkable advances in medicine and elsewhere, created by devoted researchers and technologists and sundry smart people. You know what's even more remarkable? How often we fail to take advantage of these advances.
Freakonomics Radio
Policymaking Is Not a Science — Yet (Update)
So coming up after the break, can implementation science really help? You know, I want policy science not to be an oxymoron. You're listening to Freakonomics Radio. I'm Stephen Dubner. We will be right back.
Freakonomics Radio
Policymaking Is Not a Science — Yet (Update)
That, again, is Dana Susskind from the University of Chicago.
Freakonomics Radio
Policymaking Is Not a Science — Yet (Update)
The scaling science. That is what Suskind and her economist collaborator John List, who's also her husband, and other researchers have been working on. They've been systematically examining why interventions that work well in experimental or research settings often fail to scale up. You can see why this is an important puzzle to solve.
Freakonomics Radio
Policymaking Is Not a Science — Yet (Update)
Scaling up a new intervention, like a medical procedure or a teaching method, has the potential to help thousands, millions, maybe billions of people. But what if it simply fails at scale? What if it ends up costing way more than anticipated or creates serious unintended consequences?
Freakonomics Radio
Policymaking Is Not a Science — Yet (Update)
That'll make it that much harder for the next set of researchers to persuade the next set of policymakers to listen to them. So List and Susskind have been looking at scaling failures from the past and trying to categorize what went wrong.
Freakonomics Radio
Policymaking Is Not a Science — Yet (Update)
And when you say the wrong people, the people that are being studied then are to what?
Freakonomics Radio
Policymaking Is Not a Science — Yet (Update)
So I think of some of the experiments that are done on college campuses, right, where there's a professor who's looking to find out something about, let's say, altruism and racism. The experimental setting is a classroom where 20 college students will come in, and they're a pretty homogeneous population, and they're pretty motivated.
Freakonomics Radio
Policymaking Is Not a Science — Yet (Update)
Maybe they're very disciplined, and that may not represent what the world actually is. Is that what you're talking about?
Freakonomics Radio
Policymaking Is Not a Science — Yet (Update)
There are many factors that contribute to this voltage drop, including the admirably high standards set by the original researchers.
Freakonomics Radio
Policymaking Is Not a Science — Yet (Update)
Another problem in this third bucket, it's a big bucket, is when the person who designed the intervention and masterminded the initial trial can no longer be so involved once the program scales up to multiple locations. Imagine if instead of talking about an educational or medical program, we were talking about a successful restaurant and the original chef.
Freakonomics Radio
Policymaking Is Not a Science — Yet (Update)
Those blood pressure numbers are even worse today than they were when we first published this episode in 2020. Clearly, we still have not figured out how to get the science to the people who need it. Prescription adherence is a very difficult nut to crack.
Freakonomics Radio
Policymaking Is Not a Science — Yet (Update)
Now, if you are the kind of pizza eater who doesn't think Domino's or Papa John's is good pizza, well, welcome to The Scaling Dilemma. Going big means you have to be many things to many people. Going big means you will face a lot of trade-offs. Going big means you'll have a lot of people asking you, do you want this done fast or do you want it done right?
Freakonomics Radio
Policymaking Is Not a Science — Yet (Update)
Once you peer inside these failure buckets that List and Susskind describe, it's not so surprising that so many good ideas fail to scale up. So what do they propose that could help?
Freakonomics Radio
Policymaking Is Not a Science — Yet (Update)
And how often is that already happening in the real world of, let's say, education reform research? I can't name one. Wow. How about in the realm of medical compliance research?
Freakonomics Radio
Policymaking Is Not a Science — Yet (Update)
So that suggests that policymakers or decision makers, they are being what? over-eager, premature in accepting a finding that looks good to them and want to rush it into play? Or is it that the researchers are overconfident themselves or maybe pushing this research too hard? Where is this failure really happening?
Freakonomics Radio
Policymaking Is Not a Science — Yet (Update)
After the break, how can researchers make sure that the science they are replicating works when it scales up? Before the break, we were talking with the University of Chicago economist John List about the challenges of turning good research into good policy. One challenge is making sure that the research findings are in fact robust enough to scale up.
Freakonomics Radio
Policymaking Is Not a Science — Yet (Update)
This is the dreaded voltage drop that implementation scientists talk about.
Freakonomics Radio
Policymaking Is Not a Science — Yet (Update)
Fidelity meaning that the scaled-up program reflects the integrity of the original program.
Freakonomics Radio
Policymaking Is Not a Science — Yet (Update)
Remember, it was Chamberlain's good outcomes with young people in foster care that made federal officials want to scale up her program in the first place.
Freakonomics Radio
Policymaking Is Not a Science — Yet (Update)
She found the scaling up initially very challenging.
Freakonomics Radio
Policymaking Is Not a Science — Yet (Update)
But in time, Treatment Foster Care Oregon became a very well-regarded program. It's been around for roughly 30 years now, and the model has spread well beyond Oregon. One key to this success has been developing fidelity standards.
Freakonomics Radio
Policymaking Is Not a Science — Yet (Update)
You wouldn't think you'd have an adherence issue with something like the cochlear implant. It has such an obvious upside.
Freakonomics Radio
Policymaking Is Not a Science — Yet (Update)
The series reminded me of another episode we once made that I thought was worth hearing again. So we're playing it for you here as a bonus episode. It is called Policymaking is Not a Science Yet. We have updated facts and figures as necessary. As always, thanks for listening.
Freakonomics Radio
Policymaking Is Not a Science — Yet (Update)
you Thank you. Thank you. Thank you.
Freakonomics Radio
Policymaking Is Not a Science — Yet (Update)
In one study, only half of the participants wore their device full-time.
Freakonomics Radio
Policymaking Is Not a Science — Yet (Update)
Today on Freakonomics Radio, what to do about that very real issue, because you see the same thing not just in medicine, but in education and economic policy and elsewhere. Solutions that look foolproof in the research stage are failing to scale up.
Freakonomics Radio
Policymaking Is Not a Science — Yet (Update)
We'll go in search of that magic sauce right after this.
Freakonomics Radio
Policymaking Is Not a Science — Yet (Update)
John List is a pioneer in the relatively recent movement to give economic research more credibility in the real world.
Freakonomics Radio
Policymaking Is Not a Science — Yet (Update)
Hey there, it's Stephen Dubner. We just published a two-part series on what some people call sludge, meaning all the frictions that make it hard to fill out tax forms or find a health care provider or even cancel a subscription. One part of our series involved government sludge and how it interferes with getting policy done.
Freakonomics Radio
Policymaking Is Not a Science — Yet (Update)
Okay, so you and others moved experiments out of the lab and into the real world, but have you been able to successfully translate those experimental findings into, let's say, good policy?
Freakonomics Radio
Policymaking Is Not a Science — Yet (Update)
The way List sees it, academics like him work hard to come up with evidence for some intervention that's supposed to help alleviate poverty or improve education, to help people quit smoking or take their blood pressure medicine. The academic then writes up their paper for an incredibly impressive-looking academic journal, impressive at least to fellow academics.
Freakonomics Radio
Policymaking Is Not a Science — Yet (Update)
To the rest of us, it's jargony and indecipherable. But then, with paper in hand, the academic goes out proselytizing to policymakers. He might say, you politicians always talk about making evidence-based policy. Well, here's some new evidence for an effective and cost-effective way of addressing that problem you say you care so much about.
Freakonomics Radio
Policymaking Is Not a Science — Yet (Update)
And then the policymaker may say, well, the last time we listened to an academic like you, we did just what they told us, but it didn't work. And it cost three times what they said it would. And we got hammered in the press. And here's the thing. The politician and the academic may both be right. John List has seen this from both sides now.
Freakonomics Radio
Policymaking Is Not a Science — Yet (Update)
This was in the early 2000s under George W. Bush.
Freakonomics Radio
Policymaking Is Not a Science — Yet (Update)
Because the intentions are obviously good. For instance, improving literacy for grade schoolers or helping low-income high schoolers get to college.
Freakonomics Radio
Policymaking Is Not a Science — Yet (Update)
It's just a travesty. List has firsthand experience with the failure to scale.
Freakonomics Radio
Policymaking Is Not a Science — Yet (Update)
Dana Suskind is a physician scientist at the University of Chicago. And, more dramatically, she is a pediatric surgeon who specializes in cochlear implants.
Freakonomics Radio
Policymaking Is Not a Science — Yet (Update)
Wow. If you had asked me to guess all the ways that a program like that could fail, it would have taken me a while to guess that you simply didn't get parental uptake.
Freakonomics Radio
Policymaking Is Not a Science — Yet (Update)
If you were to attach a noun to what this is, the scalability blank, is it a... problem? Is it a dilemma? Is it a crisis?
Freakonomics Radio
Policymaking Is Not a Science — Yet (Update)
So John List and Dana Susskind and some other researchers are on a quest to address this scalability crisis. They've been writing a series of papers, for instance, The Science of Using Science Towards an Understanding of the Threats to Scaling Experiments. A lot of their focus is on early education, since that is a particular passion of Susskind's.
Freakonomics Radio
Policymaking Is Not a Science — Yet (Update)
It is kind of like a superhero in reverse. During the day, you're doing the big dramatic stuff, and at night, you're going home to analyze the data and figure out what's happening.
Freakonomics Radio
Policymaking Is Not a Science — Yet (Update)
And was that a recognition that some kids after the surgery sort of zoomed up the education ladder and others didn't?
Freakonomics Radio
Policymaking Is Not a Science — Yet (Update)
Susskind started what was then called the 30 Million Words Initiative, 30 million being an estimate of how many fewer words a child from a low-income home will have heard than an affluent child by the time they turn four. But these days, the project is called the TMW Center for Early Learning and Public Health.
Freakonomics Radio
Policymaking Is Not a Science — Yet (Update)
Hot-button because it's so hard to believe that the number is legit?
Freakonomics Radio
Policymaking Is Not a Science — Yet (Update)
So you didn't make TMW stand for something else?
Freakonomics Radio
Policymaking Is Not a Science — Yet (Update)
Okay, now you all know it too. Anyway, they started the center with this idea of
Freakonomics Radio
Policymaking Is Not a Science — Yet (Update)
Okay, so far so good. The research is clear that heavy exposure to language is good for the developing brain. But how do you turn that research finding into action? And how do you scale it up?
Freakonomics Radio
Policymaking Is Not a Science — Yet (Update)
It is pretty phenomenal. If you ever need a good cry, a happy cry, just type in cochlear implant activation on YouTube. You'll see little kids hearing sound for the first time and their parents flipping out with joy.
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
Okay, so Powerful I'm Buying, was it effective? Did it change behavior?
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
So that's a case where dialing up the disgust was fruitful. Another example, those horribly graphic anti-cigarette ads you may have seen with rotten teeth and blackened lungs. But let's now consider the flip side. Rather than exploiting disgust in order to promote a certain behavior change, are there other behavior changes that are best promoted by reducing disgust?
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
From an evolutionary standpoint, disgust has often served us well. There is good reason to not eat poop, as well as other disgusting things that might harm us.
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
So that's a case where there could be large environmental and economic gains from ratcheting down the disgust, maybe even geopolitical gains, considering that water scarcity is a source of great friction in many places. There is another disgust-related mission that Paul Rosen is even more enthusiastic about, getting people to eat more insects.
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
As with recycled water, you can imagine the various gains from increasing the consumption of protein-rich insects, especially compared with meat, which is incredibly resource-intensive to produce. In 2013, the UN's Food and Agricultural Organization published a report promoting insect eating as an
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
especially relevant issue in the 21st century due to the rising cost of animal protein, food insecurity, environmental pressures, population growth, and increasing demand for protein among the middle classes.
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
As Razin notes, more than a billion people around the world already eat insects.
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
But a billion people eating insects leaves another seven billion not eating insects. At least we think we're not eating insects.
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
But what if I told you that disgust is also holding us back? That it prevents us from pursuing strategies that could improve the environment, the economy, even our health?
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
We did look it up. That, again, was Val Curtis, by the way. And according to the Food and Drug Administration, there's actually an average of eight insect fragments per chocolate bar. Anything up to 60 fragments per 100 grams is acceptable, as is a small amount of rodent hair. And have you ever eaten a salad or peanut butter or canned tomatoes? Have you ever had a beer or glass of wine?
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
If so, then you have been routinely ingesting your fair share of insect all along. That said, most of us do not knowingly eat insects, especially in toto, because they disgust us.
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
Curtis, you will recall, is a professional disgustologist with a background in public health and anthropology. I got to wondering whether the field of economics had anything worthwhile to say about disgust. Economists don't usually think about disgust.
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
Repugnance would seem at least moderately linked to disgust as it often centers around the human body.
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
He set out to answer this question with a set of experiments. Even though Ambul says he was thinking about repugnance, he plainly understands disgust because he built his experiments around the eating of insects. Yeah, that's right.
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
Today on Freakonomics Radio, we will explore the roots and types of disgust. There's basically six different types of disgust. How incentives may change your disgust threshold.
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
He used mealworms and silkworm pupae and a variety of crickets.
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
Maybe because the people who knew they'd throw up were the ones who opted out of eating insects during the experiment because you were given that choice.
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
Ambul wanted to measure how both financial and informational incentives affected the decisions that his research subjects made. There was a separate experiment to see how much he'd have to pay students to eat a whole scorpion.
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
This goes back to the idea of whether financial incentives might skew someone's judgment towards selling their kidneys or eggs.
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
In other words, the bigger incentive increases their appetite to persuade themselves that what they're about to do is a good idea. Among the research subjects who were offered just $3 to eat the insects, around a third decided to do it, even without access to a video.
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
Among the subjects who were offered $30, nearly 60% decided to eat the insects without video access, and more than 70% after watching the video about why eating insects is a good idea.
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
Now, how does this apply to Paul Rosin's mission of getting people to eat more insects?
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
In other words, as all researchers like to say always, further research is needed. But with the incentives unclear, where does that leave you if your mission is to get people to eat more insects?
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
And we ask what it might take to overcome.
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
Razin has seen several examples of the mere exposure effect.
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
Coming up after the break, will one of the world's biggest food companies make that leap?
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
I'm Stephen Dubner. This is Freakonomics Radio. We'll be right back. I got to wondering, what would it take to persuade a big food manufacturer to get into the business of edible insects?
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
Since we spoke with Kimmons in 2020, she has a new job title. She is now the R&D lead for sensory and consumer science at Kraft Heinz, which is one of the world's biggest food and beverage companies. They make Kraft mac and cheese, Philadelphia cream cheese, Oscar Mayer hot dogs and dozens of other products you have likely run across.
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
This means managing the company's professional tasters.
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
Kimmons says that simply surveying consumers about a potential new product, something with insects maybe, isn't useful.
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
So when it comes to new food ideas, volume is important.
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
Okay, so when we say insects, Emily Kimmons of Kraft Heinz says what?
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
We begin with someone who is an elder statesman and a pioneer.
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
Before you turn up your nose at the notion of eating insect cheese, especially if you're an American... Do you know what beef cattle raised in the U.S.
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
All of this may or may not make the transition to insects more palatable for a company like Kraft Heinz.
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
And of course, not all consumers think alike.
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
So we probably shouldn't expect Heinz to be slipping any insects in their ketchup, at least knowingly.
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
Does Kimmons really think insects are viable, even for a big mainstream company like Kraft Heinz? We asked her to rate the probability, with 1 being definitely and 10 being no way.
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
Rosen is one of two scholars of disgust we'll be hearing from today. He is a professor of psychology at the University of Pennsylvania.
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
And, of course, there is this classic move.
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
It's also worth keeping in mind how tastes change over time.
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
So what we find repugnant in one era may be standard in another. This concept holds not just for what we eat, but what we believe, how we behave. Slavery, for instance, was for centuries treated like a standard business practice. On the other hand, consider life insurance.
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
Until the middle of the 19th century, it was considered, as the sociologist Viviana Zelizer once wrote, a profanation which transformed the sacred event of death into a vulgar commodity. If we are capable of making such big shifts in matters like these, can it really be so hard to make insects appealing?
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
In 2021, the European Union's Food Safety Authority ruled that mealworms are safe for human consumption. Two years later, the EU approved the sale of insect proteins in powdered and dried forms for human consumption. But what about human demand? Here again is Sandro Ambul.
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
It was Rosen who we heard say in the open of this episode that there are enormous variations in disgust.
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
They'd think it was pretty good. I met up with Paul Rosin, the Penn psychologist, scholar of disgust, insect advocate at The Black Ant, a modern Mexican restaurant in Manhattan's East Village. Are you hungry? I can eat. The chef is Ileana Cermeno.
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
Can I prepare you one, Paul? Sure. I'm going to give you a little bit bigger dose of ant than I... How many ants are you giving me? That looks to be about 100 ants. Wouldn't you say, maybe? They're pretty small. Yeah.
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
I can't keep my hands off the grasshoppers. They're addictive. They're like cocktail peanuts.
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
So do you personally feel it's your mission to make insect eating more acceptable, or you just happen to land here?
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
Is there any advice you could give generally on the idea of making insects more palatable to people?
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
So you'll take the ants and the grasshoppers and the ant-flecked guacamole home? Yeah, yeah. Thank you very much, and it was a great meal.
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
That meal I shared with Paul Rosen at the Black Ant was in February of 2020. I'm sorry to report that the Black Ant closed last year. I'm even more sorry to report that Val Curtis, the British hygiene scholar we interviewed, died in October of 2020. She was 62. The cause was cancer. Thank you.
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
Anyway, we have updated facts and figures as necessary. I hope you enjoy it. As always, thanks for listening. If you sat down at my kitchen table and I put an insect in front of you, maybe a cricket or a grasshopper, would you eat it? If you answered no, and I'm guessing you did, then why not? Your answer likely has something to do with disgust.
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
Because, you know, the poop association. As for Paul Rosen's personal disgust levels? I'm probably in the 20% of people who are least disgusted. Are there things that you are particularly disgusted by that aren't the common ones? Yeah, and I'm puzzled by it.
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
The Freakonomics Radio Network staff includes Alina Kullman, Augusta Chapman, Eleanor Osborne, Ellen Frankman, Elsa Hernandez, Gabriel Roth, Greg Rippin, Jasmine Klinger, Jeremy Johnston, John Schnarz, Morgan Levy, Neil Carruth, Sarah Lilly, Tao Jacobs, and Zach Lipinski. You can find our entire archive on any podcast app, also at Freakonomics.com, where we publish transcripts and show notes.
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
Our theme song is Mr. Fortune by the Hitchhikers, and our composer is Luis Guerra. As always, thank you for listening.
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
It was also Rosen who noted in the open of this episode that he would eat dog, roadkill, even human flesh.
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
I've always wondered what parts of the human do you think would make for the best eating?
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
Would you like to see endocannibalism as you've just described it become more popular?
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
Disgust doesn't exist in a vacuum. It has ramifications.
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
That is the other scholar of disgust we'll be hearing from today. I'm Professor Val Curtis. I'm a disgustologist. In Curtis's case, that means a background in engineering, public health, and evolutionary anthropology.
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
How does one become a disgustologist and is that a large field?
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
Hey there, it's Stephen Dubner. We just finished publishing our series on rats, which reminded me of an episode from the archives that I thought you might like to hear. You will understand within the first few seconds why I was reminded of this episode. It was first published in early 2021, although we began making this episode in early 2020 and put it aside when the pandemic struck.
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
But have you ever wondered why eating an insect is disgusting? You ever wondered why disgust exists? And what else do you find disgusting? Are there any universal disgusts?
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
So those are the categories of things that generate disgust. What about our responses? We'll start with the physical ones. The first is called the disgust face.
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
And then there are the verbal expressions of disgust.
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
So you're saying that that ych or blech or whatever is literally a pre-vomit sound, yes?
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
But beyond the physical expressions of disgust, there is an emotional component, which goes beyond the things we put in our mouths.
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
When someone says that they are, quote, disgusted by another person's actions, something they consider immoral or unethical, maybe cruel, is that something that you consider disgust, an extension of the food disgust, or is it more, in your view, metaphorical?
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
But what if I say I'm disgusted by the actions of, let's say, a politician? What he did disgusts me. I can't imagine there's actual nausea attached to that, for instance.
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
You've noted that people are much less disgusted by the notion of eating rotten food when they're very hungry. Also that people are less disgusted by certain sexual matters when they're aroused. So how malleable is our disgust system?
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
But once you get past poop, absolutes are hard to find.
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
Okay, what have Val Curtis and Paul Rosin taught us so far? Disgust is driven by biological and quite likely evolutionary factors. It's got strong emotional components. It's also malleable and variable among individuals and cultures. The next question is, how useful can disgust be?
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
Considering it is an ancient force and that we're living in a modern world, should we learn to dial down the disgust in some cases? And are there other cases where we might want to turn up the disgust?
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
Consider, for instance, the animals we eat and don't eat.
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
We have been hearing that disgust can be a powerful deterrent to steer people away from negative behaviors or substances. But can it also push them toward positive ones? So, yeah, it is a double-edged sword. That's Val Curtis, the London disgustologist we heard from earlier.
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
As the COVID pandemic has reminded us, hand hygiene is an excellent weapon against infectious disease.
Freakonomics Radio
EXTRA: The Downside of Disgust (Update)
But let's be honest, the benefits of hand hygiene have been known for a long time now. Some people just aren't very diligent. So Curtis got to wondering if she could apply what she had been learning about disgust.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
The NFL is the richest and most successful sports league in history. Each team is worth at least $4 billion.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
When you look at the overall results of your survey, especially the team rankings, the teams that come in ranked high and the teams that come in ranked low, among the top-ranked teams, what do they have in common, whether it's ownership, whether it's an attitude?
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
So some of that is just random when the survey is done. So in 10 years, those facilities will be getting a little ratty and whoever else has new facilities, they'll probably rank a little bit higher because of that.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
The owners of the Minnesota Vikings and the Miami Dolphins both made their money in real estate development. So it probably shouldn't surprise us that they brought their real estate chops to their football investments. The big surprise, to me at least, is that some of the best teams in football rank toward the bottom.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
If you look at the winners of the past six Super Bowls, the New England Patriots, the LA Rams, the Tampa Bay Buccaneers, and the Kansas City Chiefs, who won it three times, none of them ranked higher than 24th out of 32 teams in 2023. I asked J.C. Tretter if he was surprised to see so many top-performing teams at the bottom of his list.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
What do the teams at the bottom have in common? Is it something as simple as they typically have older practice facilities?
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
And what does the data have to say? Among U.S. employees in general, job satisfaction is higher than it's been in decades. How satisfied are NFL players? Now, you may be saying to yourself, who cares about the workplace environment of NFL players? They make so much money, the environment shouldn't matter.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
The Washington Commanders, with their backed-up showers, ranked dead last in the NFL report card. But that wasn't their biggest problem. The team was plagued with a variety of scandals concerning workplace harassment and financial impropriety. Finally, the wildly unpopular owner, Dan Snyder, gave in to pressure from the league and agreed to sell the team.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
This season, with new owners and a new head coach and general manager, the Commanders had a remarkable turnaround, making the NFC championship game for the first time since 1991. Washington's problems during the Snyder era got a lot of press, but at most clubs, routine problems don't get much coverage. And J.C.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
Tretter says that when players change teams, they often don't have much information until they show up at their new workplace.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
So even if I'm making eight, 10, $15 million a year and the facilities are poor, it's enough to have buyer's remorse, you're saying?
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
So is this NFL team report card working? Yeah. Coming up, we'll hear from an agent, an economist, and later, the people who run the teams. I'm Stephen Dubner. I love making Freakonomics Radio, and I love that you're listening to it. We'll be right back. Jim Ivler has worked for more than 25 years as an agent for NFL players, although he isn't an agent technically.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
Technically, we are called certified contract advisors. Ivler's job, as the name implies, is to advise players on their contracts. For players coming into the NFL from college via the draft... Remember, they don't choose where they'll play, and their salary is predetermined by how high they were picked in the draft.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
Or you may say, pro football is so different from what I do for a living, there's no way I'm going to learn anything worthwhile from this. Well, if we have done our job in making this episode, you will. At the very least, with another NFL season in the books, you will learn which teams got the best grades and the worst. Never really heard of an F-minus before.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
And it's probably not a total coincidence that that's just before the unrestricted free agency kicks in.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
OK, let's say you represent a player who has just become a free agent and you do your thing and you get offers from three teams. What are the primary factors that will go into the decision of where your client will want to go? And I especially want to know if workplace conditions are at all a major factor.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
So it sounds like you put a lot less stock into the impact of the survey than someone like J.C. Treader. So I'm trying to get a read on how much this survey really matters in the end. What do you think?
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
So the Washington Commanders got an F or lower. They actually got an F minus in a few categories. In one, two, three, four of the categories. And then a couple Ds, a C, and an A plus in strength coaches. So the players loved the strength coaches. But in terms of the things the team does otherwise, locker room, F minus. Team travel, F minus. Treatment of families, F minus.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
Can you talk about why those things matter so much to a player that they're going to give their own team an F minus?
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
Are you surprised that so many I mean, these are billion dollar franchises and they could pretty easily fix some of these problems if they cared with a little bit of money, like the family room is going to cost some money plainly, but not a ton. Are you surprised that there's this sort of penny wise pound foolish approach?
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
This is Freakonomics Radio, the podcast that explores the hidden side of everything with your host, Stephen Dubner.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
So that's a big fat no, plainly.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
Stevenson may not know football, but she does know labor economics.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
Can I have an example of some labor economics advice you may have given?
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
So what makes a good job? That's an easy answer, yeah? Yeah.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
So when a company does provide what economists like Stevenson call compensation outside of wages, why do they provide that?
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
Imagine that you have just graduated from college with a degree in, say, mechanical engineering, and you know exactly what kind of company you want to work for. And let's say there are 32 such companies within a hundred mile radius of where you want to live. So which company will you end up at? To a large degree, that is up to you.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
Betsy, I know you took a look at the NFL Players Survey. How do you think about their non-wage compensation in terms of this first bucket?
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
You can apply wherever you'd like, and if that company thinks you are qualified and they make you an offer, you can decide whether to accept or reject the job. This is not how it works in professional sports. Imagine now that instead of studying mechanical engineering, you went to college to play football.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
OK, split by three players with, let's call it, eight home games a season. So a little over $6,000 a game you're paying out of pocket. I'll trust your math.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
That, again, is the economist Betsy Stevenson.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
Betsy, are you surprised that firms that are paying their key employees a relatively very high salary, that at least some of them on some dimensions are apparently so cheap when it comes to perks and benefits?
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
Like one more victory would be worth quite a bit of money.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
We've updated facts and figures as necessary, although the team rankings we discuss are from the 2023 report card. So stick around to the end to hear what changed in 2024. As always, thanks for listening. Hi, what can I get for you today? Maybe even something like this. Stand clear of the closing doors, please. What you probably don't think about when I say workplace environment is this.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
Do you think the issue here is that they're not connecting it necessarily or not believing the connection to productivity? Because otherwise it's hard for me to understand why they would cheap out.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
Can I just say, if this economist thing doesn't work out for you, maybe NFL training room decorator would be a lovely second career.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
Are NFL team owners and bosses really just doing stupid things? We'll find out after the break. If you like this episode of Freakonomics Radio, there are three things you can do. Number one, listen every week. We're here. You should be too. Number two, tell your friends and family to listen. That's the gift that keeps giving.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
And number three, if you're really ambitious, leave us a review or rating on your podcast app. Thanks in advance. We'll be right back. So, according to a recent survey conducted by the NFL Players Union, many pro football teams are not such great places to work. We reached out to all 32 teams asking for an interview with their owner or president. Nine never responded.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
If you are good enough to play in the National Football League or if you're an athlete good enough to play in any of the other major American sports leagues, you don't get to choose which team you play for. It's the teams that choose the players in an annual draft. Teams with the worst records the previous season typically get to pick earlier in the draft and the best teams pick later.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
21 declined, with one communications director asking why we thought he would ever let us speak with his boss about this topic. In the end, two teams did agree to speak. Not surprisingly, they were the top two teams in the player survey. This is Mark Wilf, owner-president of the Minnesota Vikings. So, Mark, congratulations on acing the NFLPA's reporter card.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
You can keep an A grade, the number one ranking on this report card for, let's say, 10 years, but not win a Super Bowl. Would that be worth it? I mean, maybe winning isn't everything. Maybe treating people well is in the long run more important.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
Garfinkel is the top lieutenant to Stephen Ross, the real estate developer who is majority owner of the Dolphins.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
So congratulations on doing so well on this NFL team report card. What was your first response when you saw your grades?
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
The Dolphins got an A or A-plus in every one of the eight categories except for the treatment of families. That grade was a C-plus, with some players saying they didn't get enough passes to the postgame area. But otherwise, great reviews. Not coincidentally, the Dolphins recently opened a new $135 million practice facility.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
Long before they broke ground, Garfinkel says he and Ross toured a bunch of other football facilities, including college facilities, which tend to be extra deluxe since colleges can't use actual money to recruit players.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
In the NFL, most rookie contracts will bind you to that team for four years. The top-ranked players may sign huge rookie contracts with millions of dollars guaranteed, but that's just the top of the pyramid. Around 50% of NFL players make the league minimum. This year, that was a base salary of $840,000 for a rookie, with gradual increases for each year of service.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
So during the course of the day, players are going from where to where to where?
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
Is the locker room kind of where you come in, you drop your stuff? You get ready to do your day, and then are you cycling back through the locker room during the day because, in part, that's where your stuff is?
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
Because I would make that argument.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
So we did a rough analysis with the NFLPA report card, the grades versus win-loss records, basically. And it turns out there's very little correlation. In fact, it might be a little bit negative. A lot of teams that do really well on the report card have not had great seasons lately, haven't won a Super Bowl in a long time. Dolphins haven't won a Super Bowl in a long time.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
Whereas a lot of the teams who've won Super Bowls lately rank really low. That surprised me. I'm curious what you make of that back of the envelope correlation.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
For a lot of reasons, including especially the pandemic, there's been a realignment of the relationship between firms and their employees. The pendulum kind of swings. It'll go really strong one side, then it'll come back. I'm just curious what the last several years, including the pandemic, has taught you about what it means to be an employer in the modern era.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
Garfinkel is talking about Mike McDaniel, the Dolphins head coach.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
That is Jason Kelsey. When we spoke with him in 2023, Kelsey was a longtime member of the Philadelphia Eagles. He played center, the anchor of the offensive line, and he was considered one of the best players at that position in years. In March of last year, Kelsey announced his retirement.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
So, yes, that's a big paycheck compared to most first jobs, but... The average NFL career is barely three years long, so a lot of players are out of the league before their rookie contract expires. They are replaced by someone even younger and cheaper.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
He's also the brother of Travis Kelsey, who plays tight end for the Kansas City Chiefs and who may wind up being the best player at his position in history. The brothers played against each other in the 2023 Super Bowl, the Kelsey Bowl, some people called it. Travis's Chiefs won. Since we spoke with Jason Kelsey for this episode, the brothers' public profile has only increased.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
They signed a huge podcast deal. They appear in what seems to be pretty much every commercial you see on TV. And Travis continued his very public romance with Taylor Swift. Oh, and the Chiefs won another Super Bowl and are going for their third in a row this week. Once again, they're playing the Eagles. Back then, I asked Jason about his Super Bowl experiences.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
He was a key part of the Eagles team that won Super Bowl 52 in 2018. And then there was his second one against the Chiefs a few years later.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
For better or worse, or it could be either?
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
Did you feel you were able to do that in this past year's Super Bowl?
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
Did losing a Super Bowl add to your wanting to come back or subtract to wanting to come back?
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
On the 2023 team report card, Jason Kelsey's Eagles came out middle of the pack, 14th out of 32 teams, with A's for food and the weight room, but a C- for the training room and a D for travel. I asked Kelsey if those grades reflected his own views.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
If you are good enough to stick around past that rookie contract, and if you're lucky enough to have remained healthy – those are two big ifs – then you become what is called an unrestricted free agent, and you can sell your services to whichever team wants you – Finally, after four years in the NFL, you have achieved the workforce freedom of a newly graduated mechanical engineer.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
So for the Eagles, I'm looking at your report card. Strength coaches, A+. Training staff, A+. But training room, C-, locker room, C+. Explain why there's such a split there.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
Give me an example, if you don't mind, of the forward innovative things.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
Those changes were the result, I assume, almost entirely of NFLPA, the players' union requests and negotiations over the years, not from the teams. But tell me if I'm wrong there.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
Your team got an A in food service and nutrition.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
Why have you not invited me for lunch yet?
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
During the season, are there days where you eat three meals a day at the facility or no?
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
Okay, so walk me through those meals. I'm not asking you to name everything you eat, but give me a typical breakfast, typical lunch, typical dinner.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
At this point, you may be in for big money, five or 10, even $50 million a year. And how does a free agent decide which team to play for? Your agent will speak to all the interested teams, try to drive up your price, and help you sort through the offers. There's a lot to consider.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
Okay, so I can see why that gets an A. The D grade the Eagles got for team travel, would you agree with that assessment?
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
If I was any higher, it was a C. I'm reading here, it says only half of the players feel they have enough room to spread out. I guess that's on the plane. You don't have roommates in a hotel at least, which some teams do, but you're one of only seven teams that don't offer first-class seats to their players.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
Now, what about being charged for food in Arizona, let's say? Did that surprise you?
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
How the payout will be structured, what kind of incentives and bonus clauses you can get in the contract, even the occasional restrictive clause, like in the recent contract the Arizona Cardinals offered to re-sign their star quarterback, Kyler Murray. They wanted Murray to... I'll read from the contract. They wanted him to complete at least four hours of independent study each week.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
What about the rats in Jacksonville? Did that surprise you?
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
Do you think this report card will lead to any change?
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
above ground outdoors, like in the winter.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
What can the rest of us learn from this process of a union representing the workers goes in, asks everybody a lot of questions and then produces a report and it lands. And now we're going to see what happens. What should we be learning from this process? What would you say to a CEO who might be listening to this and saying, holy cow, yeah, this is low-hanging fruit.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
I fixed the mats in the weight room, and I don't have Jason Kelsey trashing me.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
Now, I'm curious to know what you've heard from teams about the survey. Have you heard anything directly from the teams?
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
In other words, they want to make sure he's doing his homework, studying the playbook, watching film at night, things like that. Arizona was criticized for adding this clause and they ultimately removed it. And Murray did sign the contract, a five year deal that could pay out more than two hundred and thirty million dollars.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
After the report cards were released, the Falcons announced a $30 million upgrade to their locker room, weight room and cafeteria. Although they also said the renovations had already been planned and they were not done in response to the report card where they came in 23rd out of 32 teams.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
Considering that an NFL workplace is substantially different in many ways from a typical workplace, what's there to be learned from this survey for workers and employers who have nothing to do with pro sports, etc.?
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
I went back to Tom Garfinkel, the Miami Dolphins CEO and president, with a similar question. What kind of lessons are there to be drawn from this report card for the companies that aren't NFL teams? Are there things that are applicable or is the NFL work environment just too different to be useful for comparison?
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
When players get to choose their team, they usually go with the highest dollar offer. But there are other factors to consider. How good is the team? Most players want to play for winners. How good is the coaching staff and how secure? If they're in danger of getting fired, you may be too. You might consider the weather. Are you a Miami guy or a Minnesota guy?
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
I have to say, when we started working on this episode about workplace conditions in the NFL, I never thought we'd end up at Viktor Frankl, but I'm glad we did. Frankl was an Austrian psychologist, a Holocaust survivor, best known for writing Man's Search for Meaning. If you haven't read it, I'd suggest you do. It will make you think. as it made Tom Garfinkel think.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
Thanks to him, as well as all the other guests on today's show. Also, let me share an update on the 2024 NFL Players Association report card. The Philadelphia Eagles jumped from 14th out of 32 teams all the way up to fourth Too bad Jason Kelsey had retired and wasn't around to enjoy that.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
The Eagles opponent in the upcoming Super Bowl, the Kansas City Chiefs, still get lousy marks on their report card, ranking 31st due to poor facilities and low grades for team owner Clark Hunt. The biggest jump on the ratings list was the Jacksonville Jaguars, who went from 28th to fifth thanks to upgrades in their facilities, which are now rat free.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
Hey there, it's Stephen Dubner, and I thought you might need a bonus episode of Freakonomics Radio for the upcoming Super Bowl. We recently put out a new episode about the economics of the running back position in the NFL. This episode, which we first published in 2023, looked at NFL teams as employers.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
And the very best team to work for, according to the 2024 report card, was the Miami Dolphins, in part because Tom Garfinkel kept the promise he told us about to fix the family room. Second and third this year were the Minnesota Vikings and the Green Bay Packers. That's it for this update. We will be back soon with another new episode. Until then, take care of yourself.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
And if you can, someone else too. Freakonomics Radio is produced by Stitcher and Renbud Radio. This episode was produced by Ryan Kelly and updated by Dalvin Abouaji and Tao Jacobs.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
The Freakonomics Radio network staff also includes Alina Kullman, Augusta Chapman, Eleanor Osborne, Ellen Frankman, Elsa Hernandez, Gabriel Roth, Greg Rippin, Jasmine Klinger, Jeremy Johnston, John Schnarz, Morgan Levy, Neil Carruth, Sarah Lilly, and Zach Lipinski. You can find our entire archive on any podcast app, or at freeconomics.com, where we also publish transcripts and show notes.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
Our theme song is Mr. Fortune by the Hitchhikers. Our composer is Luis Guerra. As always, thanks for listening. How'd you bowl today, by the way?
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
A poor carpenter blames his tools.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
The Freakonomics Radio Network. The hidden side of everything. Stitcher.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
And maybe you will also consider the workplace conditions at your new club. How good is the locker room and the weight room? What about the food? How does the team treat your family members on game day? Those are the kind of questions most of us wouldn't think to ask. But Joseph Carl Tretter Jr. isn't most people.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
When we interviewed Tretter for this episode, he was president of the NFL Players Association. His tenure ended in 2024, and he was succeeded by Detroit Lions linebacker Jalen Reeves-Maben. You'll hear from him a little later in this episode. I asked Tretter to start with his college background.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
The election, Tretter mentioned, was for the union presidency. He had a long, successful career in the NFL, nine seasons as an offensive lineman for the Green Bay Packers and the Cleveland Browns with around $45 million in career earnings. He retired in 2022 at age 31, and he had two years left on his term as union president.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
This being the workplace survey of all current NFL players, which the union had been talking about for years. And then as we saw the responses start pouring in, this is kind of a proof of concept that
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
What would be in a five rated locker room and what would be in or maybe missing from a one rated locker room?
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
Three were about the physical facilities. The locker room, weight room and training room. That's where a player goes for a massage or the hot tub or to get an injury treated. There was one question about nutrition. How well does each team feed and hydrate the players? Also travel. How comfortable are the airplane seats? How about the hotel rooms? And do you have to have a roommate?
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
The survey also asked how well the team takes care of the players' families during the games. Is there, for instance, a place for your mom or maybe your wife and young kids to watch where they won't get pelted by beers? And finally, the survey asked about the training staff and the strength staff, but interestingly, not the coaching staff.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
But if you are one of the roughly 2,000 men who play in the National Football League, that's your office. I mean, it's business. Let's not get it wrong. It's business. The NFL Players Association, or NFLPA, is the union that represents the players. And in 2023, they conducted their first ever employee survey about workplace conditions.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
Tritter says the players' union had two primary goals in running the survey and giving each team letter grades. The first was to give players information that could help them decide where to work if they ever got that choice. The second goal was to help raise the standards across each club by bringing problems out into the open. That's why the union published the results.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
We will put the link in our show notes if you want to take a look. And why they graded each club in all eight categories. Because in the NFL, turnabout is fair play.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
That is Jalen Reeves-Maben. He is a linebacker with the Detroit Lions and president of the NFL Players Association.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
Reeves-Maben has been in the league since 2017. He started his career with Detroit, then went to Houston for one season. And when we spoke with him, he was back with Detroit on a one-year contract with a base salary of $1.25 million. He played well, and last year he signed a two-year extension with the Lions for $7.5 million.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
The NFL is a commercial juggernaut. If you look at Variety's list of the top 25 primetime TV broadcasts from last year, you'll see that 18 of those 25 were NFL games. The exceptions were the Oscars, the Summer Olympics, the Grammys, the presidential debate, the World Series, and a college football semifinal. I mean, there's so much money involved.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
And with so much money, the league has TV deals worth more than $100 billion over roughly a decade. Reeves-Maben says the survey findings were pretty surprising.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
Tretter was also surprised to learn that some players were being charged for food at team facilities.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
I would never have thought to ask, are there rats in your locker room? And they gave letter grades to each of the league's 32 teams.
Freakonomics Radio
When Is a Superstar Just Another Employee? (Update)
Can you talk about what you mean with that know your place sentiment? Because I I think the public sees football players as superstars, not as employees coming into a workplace with bosses and needing to know their place.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
I've heard you say that. I really like that. I want to steal that because I think most of us, it's hard to do when you don't like someone, but you need to work productively with them. So what do you do? Do you picture him naked? What do you do?
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
I'm sure it'll work out okay, but... Okay, yeah. The hecklers begin. Okay. So in case it's not clear, this is not what we typically do. I assume most of you know Freakonomics Radio. You wouldn't be here otherwise. The show that we make is the opposite of a live show. OK, the show we make is really I'm a writer and it's a writer's show. We come up with an idea. We do a bunch of research.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
As we speak, you have a few days left in office, and I want to know what you're planning next, if you have plans. And I also want to know, the Democrats got crushed this year, coast to coast, and there's an election in about a month from now for DNC chair. Is that something that you've poked around at by any chance?
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
Let's just pretend that you're elected DNC chair in a month, whatever it is. What would you say, considering the shellacking that the party had, what's a thing or two that you think the Dems need to do to put themselves in position to win some more elections?
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
Do you think the Republicans have done that well or do you think that they're because, look, Trump is no one's idea of an ideal candidate. And yet one by a lot, you could read that a few ways. A lot of people like Trump a lot, which is plainly the case and or the Democrats. Democrats were really unpopular. I'm just curious. And I know you faced it yourself. Your far left hit you very, very hard.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
You had to deal with a lot of things as ultimately a centrist Dem. So I'm just wondering if the big tent needs to be reconfigured for the Dems.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
How do you feel about open primaries? Ah.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
Because why? What's the advantage? I mean, there are a lot of good arguments for why a two-party system is not as bad as we always say it is. Because when you look at the alternatives, there are many countries with, you know, five, ten parties, and they're in worse chaos, honestly.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
That's really, really nicely said. Congratulations on your career, everything. Thank you for coming out tonight. We will be back with more from our live show in San Francisco right after this. OK, back now to our recent live show in San Francisco. OK. All right, I'm having a good time. Are you? Are we okay?
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
You may be wondering why we are here at this big theater in San Francisco on this rather awkward date. It's January 3rd, I guess. Nobody does events this week, the week of New Year's, but we're here because this week in San Francisco is the annual meeting of the American Economics Association. The AEA is, as you can imagine, it's a huge gathering of economists from all over the world.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
We figure out what kind of people to interview. Then we prepare for the interviews. We do a lot of interviews. We start to put together a script, a draft script. We rewrite it. We start to mix the tape. It takes many, many, many, many hours to make one episode. And you know, that's the way we like it. Tonight, we've got like an hour and a half or two hours. That's it. We have no pause button.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
And it really is as exciting as that sounds. But then you ask, well, why would they hold it now in the week of New Year's when everything is dead, everybody's traveling and so on? And the reason is because economists are really cheap. And... When they're booking these conferences every year in a different city, they want the cheapest week for the hotels and the conference center.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
And therefore, they hold it immediately after New Year's. And so when we heard it was coming to San Francisco this year, major city, we decided... You know, we go to these AEA conferences to scout stories and to see our economist friends and to look for new economist friends for the sake of Freakonomics Radio and so on.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
But then we also decide this year, because we would be in a major city, that we would put on this live show at the same time. We had the mayor, which is, you know, fantastic. But we have another couple guests that we were able to wrangle because the AEA was here. We've got two more economists to come. Let's welcome the first one. Please give a warm hand to Mr. Coleman Strumpf.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
Coleman, come on out. Coleman, here are a few things I know about you. As a kid, you got into trouble bringing candy bought at retail to school and selling it at a very high markup, correct? Yeah, my introduction to crime. Introduction to crime or introduction to thinking like an economist? Maybe they're not so different. Maybe they're not so different. I've been saying that a long time.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
Nobody believed me. I also know that as a child, you appeared in a TV commercial for Tang, the astronaut beverage. Is that true?
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
All right. You're now an economist at Wake Forest. And most of your research that I'm familiar with, at least, has been about what I would characterize as illicit and taboo activities. Would you name a few that you've looked into over the years?
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
You're an empirical economist. You work with data. How do you get the data when you're dealing with illicit goods?
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
I get a little revenge. The reason I wanted to have you on the show tonight is you appeared in an episode we made back in, I guess, the fall, not long before the election, talking about betting markets, prediction markets, which are sometimes the same as betting markets, some legal, but mostly kind of illegal. Also, you helped us out with a later episode.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
We have no reconsideration. It's just us here together. So if you're up for that, I think we're going to have a very good time together. That's the intention, at least. When I was a kid, I was very shy. I still am, truthfully. I had another problem in addition to shyness, which was that I really was curious. I wanted to find out stuff. In the old days, it took a lot of effort to find out stuff.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
We did a series on the economics of cannabis, and you had a lot of data that nobody else had about legal and illegal weed shops. How can you tell... An illegal from a legal weed shop, let's say in California, other than maybe you go sample door to door. I don't know how that works.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
Should we turn the house lights on and have a show of hands or something?
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
Now, when they're listed on the site, whether it's the Weedmap site or the California data, there's a license number, I assume, right? That's what makes a legal shop legal. Do the illegal shops just make up a number?
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
Now, the thing that blows me away is when in a place like California, let's take L.A. versus San Francisco. In L.A., you told us something like 70% of the weed shops are illegal. So can you explain how the economics of that works? Why do they proliferate? Obviously, it's cheaper because you're unlicensed, but why are they allowed to proliferate?
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
But I would imagine that let's say you and I teamed up and we said, you know what? Alcohol is pretty cheap to make. If you think about it, just ferment some stuff and you put it in a bottle and then you brand it and then you can sell it for like 20, 30, 50, 80, a hundred dollars. And we know there's a lot of tax associated with that.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
So let's say that you and I could either fake it or get the real stuff a little bit cheaper and just open a liquor store without having to pay any of the taxes and regulation stuff. Why do we never see that?
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
The good news is apparently Tang is not a gateway drug then.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
Also, one thing you told us was that in San Francisco, there are many fewer illegal shops, which has to do with the way that they run their programs. So I don't know if Mayor Breed had anything to do with setting up that program. We actually interviewed the guy who did that, but something like 20% of the shops here are illegal versus... L.A., about 70, right? That's what your data said?
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
But I would think that the illegal shops benefit further by having legality because that drives the price up with the licensing and it makes their stuff, which might be identical, much cheaper, yeah?
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
You'd have to go to the library, or you would have to ask an adult. And when you're shy, asking a stranger questions was not so easy. My solution to all of that was to become a journalist, where... Okay, I've never heard journalism applauded before, so thank you.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
We could talk a long time about cannabis. It's a very interesting economy. Also, the elections this year were interesting. It got voted down in Florida, I think North and South Dakota. But it's interesting that, you know, we're talking about what people used to call vices, right? Sports betting, but it's now mostly legal in the U.S. Cannabis, mostly legal in the U.S.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
What about betting on elections? You know a lot about that. Do you think that will become fully legal in the U.S.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
Where's the information coming from?
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
Right. So why would it, on average, be more accurate than polling? Look, we've learned this election and past elections that many pollsters are just not very good. Let's be honest, right? It's not a particularly scientific science, if you want to call it that. But still, why would they who are setting out to do one thing in a very binary way?
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
I ask a bunch of people, this candidate or that candidate, why would they not be better than a group of people who are looking to profit from feeling they know a piece of information.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
David Dinkins, I don't know if you remember this, in New York City, the first black mayor of New York City, he over-polled by a lot. A lot of people wanted to be seen saying that, yes, I will vote for the first African-American mayor.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
Does this suggest that pollsters next time around will basically emulate that methodology of asking a question that's not so binary, it's not so what are you going to do?
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
So becoming a writer, becoming a journalist really solved both problems, because all of a sudden you have permission to ask anybody any question, and you're getting to find out stuff all the time. Now, in the old days, writing for newspapers and magazines, and I wrote books for a while, it was old-fashioned, fun, physical, analog labor.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
The thing that most surprised me about your work, talking to you, was how... The betting markets on elections have been around for a long time and have been accurate for a long time and have been robust for a long time. Do you know anything about San Francisco history?
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
I like the sound of that.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
So for losing the bet, he had to dress as a woman and because it was illegal to dress as a woman, he was arrested? He was arrested. Wow. Crime really does not pay. That's brutal. No. When was cross-dressing illegal until? In San Francisco, I think 40 years ago. Really? And that's San Francisco. Yeah. Yeah. Major city. All right. Well, Coleman, thank you. It's always great to talk to you. Great.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
Thanks. This is Stephen Dubner, and you were listening to a Freakonomics Radio show we recorded live in San Francisco on January 3rd. We will be right back with our final guest. We have one more guest tonight. He is an economist at a nearby school called Stanford, I believe it's pronounced. Would you please welcome Eric Brynjolfsson. Okay, I'm very fond of this man.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
Very, very interesting and bright fellow. So Eric, it says that you are a senior fellow at the Stanford Institute for Human-Centered AI. Is that correct so far? So far, so good. And you're also director of the Stanford Digital Economy Lab. So I just want to know what both of those are. I want to know what human-centered AI is, honestly.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
You'd go out with people, might be writing a piece about one person over many weeks or months. You'd follow them around, might be a whole scene. And you'd come back after those weeks or months with a whole bunch of cassette tapes that you would then transcribe yourself as a writer. That's how you got to really know the material. You'd come back with all these notebooks full of stuff.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
Here's the thing about New York in sports. When you're a major city, the sports don't really matter that much.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
When you talk about human-centered, I mean, one thing that comes to my mind is labor, right?
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
You and I have had this conversation on the show for probably eight or 10 years now about to what degree does automation and AI mean job replacement? And if so, how big a problem is that? But you're talking about more than just machines doing human jobs. You're talking about
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
If we were having this conversation a year ago about AI generally, the first five questions would be, so are the machines going to wipe out humanity? Now, it's not that nobody's thinking about that and concerned about it anymore, but it's no longer the conversation. Why is that?
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
It is a recording of that show edited down to podcast length. We have got another live show coming up in Los Angeles on February 13th. L.A. has been through so much with the wildfires, so much destruction and death and fear. All of us who love that place are eager for its recovery. And we are hoping to do our tiny part just by showing up. A portion of our ticket sales will go to relief efforts.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
Say more about pathogens and AI.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
And then you would sit down to sift it and sort and write. And I loved that. I loved every single piece of it. I still have all my notebooks. I still have all those cassette tapes. It was very, very labor intensive, but it was wonderful labor. And my favorite part of it was always just the hanging out with the people.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
So you know a lot more about this than most of us do. You've come at it from a variety of angles. We'll talk about the economic angle in a little bit. But would you call yourself generally a techno-optimist?
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
Okay, but we'll call you a mindful optimist is what you say. Do you know much about what they call nominative determinism? You ever heard that phrase? No. It's the idea that your name, your very name has some effect. That sounds like a good Freakonomics chapter. You know, okay, we wrote a chapter about names that almost everybody remembers wrong. Like we wrote that there is no such a thing.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
Mr. Baker is a baker. Yeah, exactly. My name is Stephen Baker and I open a bakery or my name is Dennis and I become a dentist and so on. But there are people who believe that. But with you, I got to thinking. I looked up the etymology of your name, Erik Brynjolfsson. The internet tells me the last name is an Icelandic patronymic. Correct. Son of Brynjolf.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
with Brynjolf broken into Bryn, which means armor. Yes. And Jolf meaning wolf, so son of the armored wolf. That is exactly right. And then Eric usually translates to eternal ruler or ever powerful. So you are the ever powerful son of the armored wolf. Do you think that's why you're an optimist?
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
I've heard you talk in the past about as I understand it, essentially a new way of measuring our economy. You call it GDPB. So I want you to tell us about that. I want you to tell us what the B stands for. But I want you to start at the beginning because many people, even people who have nothing to do with economics, think GDP is a highly imperfect measure of what we want it to measure.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
And if I recall correctly, I don't know much about this, but I'm sure you do, but the inventor, Simon Kuznets, when he created GDP, warned that it should not be used for essentially what we're using
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
A lot of it, honestly, was really boring, but the parts that were exciting were so exciting when you really learned something. It makes me think of what the physicist Richard Feynman, who's been a hero of mine for a long time, what Feynman called the pleasure of finding things out. And it was just so pleasurable that I never stopped.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
So it's interesting because where you're heading here plainly is that we are richer than we appear because how we're counting wealth is imprecise and incomplete. On the other hand, if we're even richer than the numbers say, why are so many people so miserable? Yeah.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
There is this famous in economics idea of basically diminishing return on wealth and happiness. It was argued by Danny Kahneman and someone else. I can't remember who that original paper.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
Yeah. And I guess this is what gets us to GDPB. So tell us what the B stands for. Yeah. Who are you working with or for? And what is the intention of invoking this new measure?
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
And you're trying to measure that.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
What we do now with the radio show may seem different because it's audio and yada yada, but it's really the same thing. Coming up with ideas, putting yourself in position to have interesting conversations with people who are smart or weird or maybe all of the above. You know, I think if we were to go back 20 or 30 years to when digital everything was really starting to explode,
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
And is this a government project?
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
The thing that's so interesting to me – I mean the whole thing is fascinating. I'm curious to know what the ramifications would be if your measure were to become widely embraced. But one consequence that I could imagine is that the way that our government currently looks at regulation and antitrust especially, which is going to change with the new administration for sure –
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
But when you're talking about basically the hidden or uncounted benefits of many, many, many firms that are the targets of regulators now, it could be that those benefits that are not being counted should be reason for antitrust legislation to be considered very differently. Would you say that's the case?
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
Hey there, it's Stephen Dubner. Every once in a while, we get out of our recording studio and take Freakonomics Radio on the road. We recently put on a live show in San Francisco at the historic Sidney Goldstein Theater. If you were in the audience that night, thank you. We had a blast. Hope you did too. If you were not there, this bonus episode is for you.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
That's really interesting. I mean, I'm guessing that the way that European regulators think about American tech firms, that argument, as true as it might be, is probably not going to change the regulatory position.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
I would argue that Silicon Valley and Northern California generally have created an innovation economy that is now global and just massively large and massively influential in many ways, in a way – I feel like the global economy kind of is at root the Silicon Valley economy.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
I know we still do a lot of other stuff in this country and it's not the majority of the economy by any stretch, but it's such a fundamental part and more so it has such sway in our daily lives, in our political lives and so on. And when I hear you talk about GDP, I think if anything, we are underweighting the leverage of this economy here.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
So I'm curious to know if you think I'm medium wrong, totally wrong, only a little bit wrong, or maybe a little bit right.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
I don't know if any of us would have thought that we'd have so much communication as we do and so little conversation. I feel like because everyone is able to publish and be their own bullhorn, that in a way we've sort of forgotten how to talk to each other. By now I've probably interviewed I don't know, 5,000, 10,000 people in my life.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
And what about the, I mean, I said it derisively and half jokingly, but what about the failed state feel that San Francisco has projected to the world? At least how do you reconcile the, you know, the epicenter of the global tech machine and economy with the fact that this is a city that has repelled people?
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
So if you were mayor for, you know, a month.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
You sometimes advise Singapore?
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
On Thursdays or what?
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
I see why they call you the ever powerful son of the armored wolf. That was fantastic. Eric Brynjolfsson, thank you so much. I would like to thank Eric Brynjolfsson, Coleman Strumpf and Mayor London Breed for joining us on stage in San Francisco. And I would especially like to thank the 1500 folks who bought a ticket and came to hang out with us. If you want to see Freakonomics Radio Live.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
We have an upcoming show on February 13th in Los Angeles with Ari Emanuel and other special guests. Tickets are at Freakonomics.com slash live shows. One word. And if you liked hearing what Eric Brynjolfsson had to say about the impact of AI, be sure to catch the next episode of Freakonomics Radio, where we will hear about a new technology designed to thwart AI.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
And I can't think of a single one where afterward I didn't feel like my brain grew a little bit or my heart grew a little bit. It's an unbelievably valuable human trait that we overlook, this ability of ours to have language and have a conversation where we can learn about each other, move each other, and so on. And so really tonight, That's what I want to do.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
That's right here in your podcast feed at our new time, Friday morning. Until then, take care of yourself. And if you can, someone else, too. Freakonomics Radio is produced by Stitcher and Renbud Radio. This episode was produced by Abigail Lowenthal, Ellen Frankman, Morgan Levy, and Zach Lipinski, with research help from Dalvin Abawaji.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
Special thanks to Jesse McDaniel with Fresh AV, all the folks at Another Planet Entertainment, the crew at the Sidney Goldstein Theater, and our partners Sirius XM and KQED Live.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
The Freakonomics Radio Network staff also includes Alina Kullman, Augusta Chapman, Eleanor Osborne, Elsa Hernandez, Gabriel Roth, Greg Rippin, Jasmine Klinger, Jeremy Johnston, John Schnarz, Neil Carruth, Sarah Lilly, and Tao Jacobs. Our theme song is Mr. Fortune by The Hitchhikers. Our composer is Luis Guerra. Once again, thanks for listening.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
I just want to have some good conversations. We've lined up some people I think are going to be excellent for you and me to hear about. So we'll get started. Does anyone have any complaints before we begin? I get your emails. I know who you are. All right, so we're going to have some good conversations. Our first one, I think you will enjoy quite a bit. Would you please welcome our first guest?
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
She is the mayor of San Francisco, London Breed.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
So you call it freedom. For those who don't know, you've got just a few days left.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
You must have some wild s*** planned.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
Let me start with, I mean, I hate to say it, a lot of people think of San Francisco as kind of a failed state. Not quite Haiti or Libya, but the stuff they see... They see the worst of the worst. That's what the media does. The media is really good at that. And then it becomes a political weapon as well. I mean, COVID was really hard.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
You personally seem to have done, you know, the shutdown handled that really well, aggressively early and so on. But tell me how the city is recovering.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
I hope you'll join us if you can. You can get tickets at Freakonomics.com slash live shows. One word. That's Thursday, February 13th in Los Angeles. One of our guests will be the inimitable Ari Emanuel. Okay, here now is what happened in San Francisco. As always, thanks for listening. There are so many of you. This does not seem like a fair fight. There's one of me and all of you.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
So driving in, I mean, it's a cliche, like, you know, you talk to a taxi driver, Uber driver, you drive in from the airport. I realize I'm not really seeing the city.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
I have to say I'm a little bit scared of the Waymos so far. How do you feel about them?
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
Because you want someone to talk to?
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
All right. Well, stick with me. Okay. I will say, driving in from the airport, what I saw mostly were billboards for AI companies, which I don't see in New York. And then I get to the Tenderloin, and I feel like I'm in a Hieronymus Bosch painting. It is wild. And it's heartbreaking. I know it's been there forever, and I know it predated you.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
But, you know, I just wonder how much the perception hurt you running. Okay, let me just ask the question I really want to ask. Why'd you lose? You stood for re-election.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
Is this all Levi's money?
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
When you say bureaucracy, do you mean mostly the board of supervisors?
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
Let's talk about the major city thing, because I come from New York, and... And things happen.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
But that's my problem, is I don't think of you as a major city. I think of you as a very, very nice... LAUGHTER Now you understand why I don't do this live thing.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
Well, that's not a nice way to make friends for the out-of-towners. But no, but where was I now? Major city, I'm going to skip that question. You lost some population during COVID. I did read you say something about how you had fewer people die here per capita than any other big city in America. But I was wondering, okay, but wait a minute.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
Wait, save your applause because you'll boo me in a second. But I wondered if that's just because everybody left.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
I'm really glad to hear that. I do love your city. By saying I didn't think it was a major city, I mean to imply that I didn't love it.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
This makes me think, I live in New York, and we lived there during the 9-11 attack, and it was scary. Very different event, obviously, than COVID. And I have a sister who lives in Buffalo who called us up, and she was very worried about our family. She said, Steve, you know, You should really pick up and my kids were very young, pick up and move to Buffalo.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
And I didn't even think it was so terrible what I said. I said, Beth, you know, I'd rather die in New York than live in Buffalo. And to be fair, Buffalo is a wonderful major city. So let me ask about you. You grew up hard in public housing, raised by your grandmother, all kinds of stuff around. There was crime, there was drugs, your own family suffered from all that.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
And the thing that I really want to know about you, you know, we have this idea when there are people in the public eye, we just think they're invincible. Everybody always has challenges and it's how they overcome them that really defines us. So with you, I can't figure out how you got to where you got with the odds that you faced.
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
And I'm not asking you for advice necessarily, or if you have a superpower, but can you just describe what it took not just to survive, but to thrive with those barriers?
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
Obviously, you worked hard. Obviously, you were disciplined and all that. But how much do you think is just temperament?
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
Do you feel that you were treated differently than the mayors who came before you who came from more traditional backgrounds?
Freakonomics Radio
Is San Francisco a Failed State? (And Other Questions You Shouldn’t Ask the Mayor)
How do you handle that in the moment?
Freakonomics Radio
The Show That Never Happened
and who's been making excellent documentaries ever since, including a recent one about Martha Stewart. We also had Luis Guerra, who composes and performs a lot of the music you hear on this show. He had put together a live band for the evening, which I was definitely looking forward to. I love... Luis and his music, and he has a network of musicians that is amazing.
Freakonomics Radio
The Show That Never Happened
Now, I'm not going to say the mood before the show was buoyant. Exactly. Los Angeles had, of course, been hit by those terrible, fatal wildfires, and now it was cold. and raining hard. When I got to the theater around 4 p.m. for soundcheck, the wind was whipping. It felt like a monsoon outside. Plus, there are jitters always with a live show.
Freakonomics Radio
The Show That Never Happened
But we were excited, and we were excited to have a sellout crowd. The soundcheck went fine, and then I rehearsed some cues with the band. They sounded great. No problems whatsoever. I I started my final prep, which mostly consists of sitting somewhere alone, going over my notes for a show like this. I write a short monologue. In this case, it was about how L.A.
Freakonomics Radio
The Show That Never Happened
and New York may look like such different places, but how they have a lot in common. They're both places where people come to invent themselves or reinvent themselves. I always think the great line from E.B. White, no one should come to New York to live unless he is willing to be lucky. And I would argue the same is very much true for Los Angeles.
Freakonomics Radio
The Show That Never Happened
So I'm going over my monologue notes, going over my notes for the Ari and RJ interviews. And then Ari arrives early. He is always early. I recently heard a story about a Zoom meeting that someone had with him that was supposed to start at 2.30 a.m. And by the time they joined at 2.30, Ari had come and gone. The meeting was over.
Freakonomics Radio
The Show That Never Happened
For tonight, he had promised us 40 minutes on stage, but with a hard out, he had a plane waiting to take him to New York for the Saturday Night Live 50th anniversary celebrations. So anyway, Ari gets to the theater early. He's backstage. He is incredibly fun and interesting to talk to, a total live wire. It is true that some people are intimidated by him.
Freakonomics Radio
The Show That Never Happened
He was recently voted the most feared agent in Hollywood. Big surprise. Anyway, then R.J. Cutler shows up, totally different energy from Ari, less rat-a-tat, but obviously lovely. And the two of them are getting along nicely, which is not a bad thing for me. So I'm feeling good. And then I notice something strange. The theater is quiet. By now, the doors should be open.
Freakonomics Radio
The Show That Never Happened
The audience should be settling in. And our pre-show playlist should be playing. I put this one together myself. There was some Thelonious Monk, some Arcade Fire, a piece from Handel's Messiah. Long story. And also some music specific to tonight's guests. For RJ, we're playing Young Gravy's Martha Stewart and Ocean Eyes by Billie Eilish.
Freakonomics Radio
The Show That Never Happened
RJ made a great film about Billie called The World's A Little Blurry. And for Ari, we're playing Superhero by Jane's Addiction. That was the theme song from Entourage. At least we're supposed to be playing all those songs. Instead, there is no sound coming out of the speakers. And then when I look out from behind the curtain, I see there are no people in the seats either. So what's happening?
Freakonomics Radio
The Show That Never Happened
Last Thursday, on February 13th, we were scheduled to do a live Freakonomics Radio show at the Wilshire E. Bell Theatre in Los Angeles. Now, a live show for us... We'll be right back.
Freakonomics Radio
The Show That Never Happened
It turns out that the theater's PA system had crashed. We had been told earlier that it was a new system, state-of-the-art, but, well, I don't know what happened. The next hour was pretty chaotic. The microphones aren't working, speakers aren't working, keyboard player can't get any sound out of his keyboard setup. There's a grand piano backstage.
Freakonomics Radio
The Show That Never Happened
We start trying to wheel it out onto the stage, but it's missing a wheel. So that doesn't work. Meanwhile, Ari Emanuel, the most famous agent in show business, is waiting backstage. What the f*** are these people doing? He's saying. We're getting close to showtime. The theater is still empty. It turns out they didn't want to let anyone in while they're trying to fix the PA system.
Freakonomics Radio
The Show That Never Happened
As I later learned, some ticket holders were left standing outside. in the cold rain, Finally, they opened the doors and people started filling the seats. We still didn't have a PA system. At some point, I take the stage to speak with the crowd. And people see me. They start clapping. They think the show is starting. And I announce as loudly as I can that, no, the show is not starting yet.
Freakonomics Radio
The Show That Never Happened
We don't have a sound system. And then I ask people in the back rows of the balcony if they can hear me without mics. And they shout, yes, they can. So that's a good sign. I mean, these old theaters were built before amplification, so maybe we can pull it off without mics. Ari, meanwhile, is getting even antsier backstage. He says, let's just do it without mics. I can shout.
Freakonomics Radio
The Show That Never Happened
So that's the new plan. We're going to do the show as best as we can without a PA system. The band is getting ready. Still no mics, still no keyboards. And I have no idea if the video clips we had planned to play during the show are going to work. And then suddenly, the system starts working again, at least partially. By now, it's way past the scheduled start time.
Freakonomics Radio
The Show That Never Happened
So we hustle up, we wish each other good luck, and we start the show. The monologue goes pretty well. And then I introduce Ari. He comes out and we have a pretty sassy conversation, covers everything from Donald Trump to Elon Musk to open AI to the Blake Lively, Justin Baldoni mess and a lot more. He stays for nearly an hour. He's a real pro and a good sport.
Freakonomics Radio
The Show That Never Happened
And then I do a quick AMA and ask me anything with a member of the audience named Christina. She asks me how I came up with the sign off for this show. Take care of yourself. And if you can, someone else, too. It is a question I wasn't expecting. And I tear up as I tell the story because I started using that sign off pretty early on.
Freakonomics Radio
The Show That Never Happened
In the pandemic, my wife had been very sick with COVID and we hadn't been sure that she would recover, but she did. And that line just came to me, like when you're writing a line to a song and it stuck. After the AMA, we bring out R.J. Cutler, and he's just great, thoughtful and personal. He's telling great stories about himself and all the people he has embedded himself with over the years.
Freakonomics Radio
The Show That Never Happened
Life is funny. I think we all know that. And it's unpredictable. But just how unpredictable? Once in a while, something happens that is so outlandish that you never even considered it possible. Nassim Taleb calls this a black swan event. In my case, I'm going to call it... Actually, I don't know what to call it yet. Maybe you can help me name it. Let me explain.
Freakonomics Radio
The Show That Never Happened
We play some clips from his films, and even that works out okay. So I finish up with R.J., we say some thank yous, then we say goodnight. The audience claps. They seem to enjoy it, although I couldn't really tell how good the show was. Live shows... are always a bit of a blur, but this one even more so because of the circumstances.
Freakonomics Radio
The Show That Never Happened
It struck me as a bit of a miracle that the show ended up happening at all. So we hang out for a little bit more at the theater and then we go to a little after party, mostly friends and family, maybe 40, 50 folks, including my daughter who just moved to LA last year after college. Honestly, she was a big reason I wanted to do a show out here in the first place.
Freakonomics Radio
The Show That Never Happened
So we're eating, we're drinking, we're laughing now about how close we came to having no show at all. And that's when our excellent editor, Ellen Frankman, comes up to me with a look on her face that I couldn't quite figure out. In retrospect, she looked really ill. She was shaky. Her face was pale. So I asked her, what's wrong?
Freakonomics Radio
The Show That Never Happened
And she tells me that in addition to the audio failures we had earlier, there was another even bigger failure. The show had not been recorded, she says. And I didn't understand. I asked her to repeat herself. She said they didn't record the show. And I still didn't quite understand. I mean, I've been recording stuff for many years now. I was a musician and I used to work in all kinds of studios.
Freakonomics Radio
The Show That Never Happened
I was a reporter and used to record all kinds of interviews. I've been doing this show now for 15 years. We've recorded thousands of studio and live interviews, many other things. And not once have the people responsible for recording just failed to record it. But tonight, that's apparently... What happened?
Freakonomics Radio
The Show That Never Happened
I am pretty sure we did do a live show with Ari Emanuel and RJ Cutler and Luis Guerra's band and Christina from the audience, but there's no recording of it, so I'm not really sure. The next several hours were even more of a blur than the hour before the show. We thought about trying to partner with RJ Cutler to make a forensic documentary of the show, trying to recreate it as best as we could.
Freakonomics Radio
The Show That Never Happened
Some Friends who had been in the audience had already started sending in bits of video and audio they had recorded. At least one journalist had recorded the entire Ari Emanuel interview, but it's iPhone on the lap quality, not radio quality. So we ditched that recreation idea. For some reason, I wasn't angry. I was just flabbergasted. It was a new feeling, a new experience.
Freakonomics Radio
The Show That Never Happened
It's not going to have the depth or the flow of a regular episode, but there is something thrilling about the live setting, the interviews that you're not really sure where they're going to go, the response from the audience that you can't predict. And, of course, any number of strange things that might happen when you try to do something that resembles show business. Coming into this L.A.
Freakonomics Radio
The Show That Never Happened
I woke up the next morning still more confused than anything. I went out to Brentwood to have breakfast with my daughter. We saw Don Cheadle, whom I recognized, and Tom Holland, whom I didn't. A friend dropped by, a college friend of my daughter. He grew up in L.A. and he still lives there. He's one of the people who had sent us some audio files when he heard about our recording catastrophe.
Freakonomics Radio
The Show That Never Happened
He's a really nice kid and the three of us had a nice breakfast. I asked him how his work was going and also where he's living now. He grew up in Pacific Palisades and his family's house burned to the ground last month. When we said goodbye to him after breakfast, he was shivering outside in a T-shirt. He hadn't even been able to get a new coat yet.
Freakonomics Radio
The Show That Never Happened
As a writer, I've always been petrified about losing anything I've written. I panic if the computer glitches and I lose even a sentence or two. And now, here, we had lost an entire show. But how does losing a show compare to losing your childhood home? Thousands of homes burned to the ground during those L.A. fires. At least 29 people died.
Freakonomics Radio
The Show That Never Happened
It'll cost billions of dollars to replace what can be replaced and a lot of it can't. So I guess I'm the lucky one. I thought back to this passage from a book called Genius and Anxiety, How Jews Changed the World, 1847 and 1947 by Norman Lebrecht. The passage goes like this. Moses said, the law is everything. Jesus said, love is everything. Marx said, money is everything.
Freakonomics Radio
The Show That Never Happened
Freud said, sex is everything. And Einstein said, everything is relative. To the 900 people who came out to our show that rainy night, thank you. It's nice to know there were some witnesses. And to everyone else who will never hear the show that never happened, well, take care of yourself. And if you can, someone else too.
Freakonomics Radio
The Show That Never Happened
show, we felt pretty good. We had two excellent guests lined up. Ari Emanuel, the super agent and CEO of Endeavor, who was also the model for Ari Gold from the TV show Entourage. And we had the award winning filmmaker R.J. Cutler, who got his start on the Clinton campaign documentary The War Room.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
Duke has had particular trouble with medical research. There was one physician researcher who faked the data in his cancer research. There were allegations of federal grant money being mishandled, also failing to protect patients in some studies. At one point, the National Institutes of Health placed special sanctions on all Duke researchers.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
Most of the researchers we have been talking about are already well-established in their fields. If they feel pressure to get a certain result, it's probably the kind of pressure that comes with further burnishing your high status. But junior researchers face a different kind of pressure. They need published papers to survive. Publish or perish is the old saying.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
If they can't consistently get their papers in a good journal – They probably won't get tenure and they may not even have a career. And those journals are flooded with submissions. So the competition is fierce and it is global. This is easy to miss if you're in the U.S. since so many of the top universities and journals are here.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
But academic research is very much a global industry and it's also huge. Even if you are a complete nerd and you could name 50 journals in your field, you know nothing. Every year, more than 4 million articles are published in somewhere between 25,000 and 50,000 journals, depending on how you count, and that number is always growing.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
And we'll hear how the rest of us contribute, because after all, we love these research findings.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
You have got journals called Aggressive Behavior and Frontiers in Ceramics, Neglected Tropical Diseases, and Rangifer, which covers the biology and management of reindeer and caribou. There used to be a Journal of Mundane Behavior, but that one, sadly, is defunct. But no matter how many journals there are, there is never enough space for all the papers.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
And this has led to some, well, let's call it scholarly innovation. Here, again, is Ivan Oransky.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
We'll also hear from the reformers who are trying to push back.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
Now, what do the other co-authors have to say about this?
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
What about fraudulent journals? Do those exist or fraudulent publication sites that look legit enough to pass muster for somebody's department?
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
It sounds like there are thousands of people who are willing to pay journals that are quasi-real to publish their papers.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
Who are the kind of authors who would publish in those journals? Are they... American, not American? Are there particular fields or disciplines that happen to be most common?
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
Recent research by John Ioannidis, Thomas Collins, and Jeroen Bas has examined what they call extremely productive authors. They left out physicists, since some physics projects are so massive that one paper can have more than 5,000 authors.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
So leaving aside the physicists, they found that over the course of one year, more than 1,200 researchers around the world published the equivalent of one paper every five days. The top countries for these extremely productive authors were China, the U.S., Saudi Arabia, Italy, and Germany.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
When there is so much research being published, you'd also expect that the vast majority of it is never read by more than a handful of people. There's also the problem, as the economics blogger Noah Smith recently pointed out, that too much academic research is just useless, at least to anyone beyond the author. But you shouldn't expect any of this to change.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
Global scholarly publishing is a $28 billion market. Everyone complains about the very high price of journal subscriptions, but universities and libraries are essentially forced to pay. There is, however, another business model in the research paper industry, and it is growing fast. It's called open access publishing. And here it's most often the authors who pay to get into the journal.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
If you think that sounds problematic, well, yes. Consider Hindawi, an Egyptian publisher with more than 200 journals, including the Journal of Combustion, the International Journal of Ecology, the Journal of Advanced Transportation. Most of their journals were not at all prestigious, but that doesn't mean they weren't lucrative.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
A couple of years ago, Hindawi was bought by John Wiley and Sons, the huge American academic publisher, for nearly three hundred million dollars.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
In 2023, Hindawi retracted more than 8,000 papers. That was more retractions than there had ever been in a year from all academic publishers combined. Right. Wiley recently announced that they will stop using the Hindawi brand name, and they folded the remaining Hindawi journals into their portfolio. But they are not getting out of the pay to publish business.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
Last week, we heard about two alleged cases of data fraud from two separate researchers in one paper. The paper claimed that if you ask people to sign a form at the top before they fill out the information, you will get more truthful answers than if they sign at the bottom.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
It's hard to blame publishers for wanting to earn billions from an industry with such bizarre incentives. But if publishers aren't looking out for the integrity of the research, who is? That's coming up after the break. I'm Stephen Dubner, and this is Freakonomics Radio.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
That is Brian Nosek. He's a psychology professor at the University of Virginia, and he runs the Center for Open Science. For more than a decade, his center has been trying to get more transparency in academic research. You might think there would already be transparency in academic research. At least I did.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
But here's what Nosek said in part one of the series when we were talking about how researchers tend to hoard their data rather than share it.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
So that is a lot of change. Here's one problem Nosek and his team are trying to address. Some researchers will cherry pick or otherwise manipulate their data or find ways to goose their results to make sure they come up with a finding that will capture the attention of journal editors.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
After many unsuccessful attempts to replicate this finding and allegations that the data supporting it had been faked, the original paper was finally retracted. The two alleged fraudsters are Dan Ariely of Duke and Francesca Gino, who has been suspended by Harvard Business School. Gino subsequently sued Harvard, as well as the three other academic researchers who blew the whistle.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
So Nosek's team created a software platform called the Open Science Framework, where researchers can pre-register their project and their hypothesis before they start collecting data.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
It sounds like you're basically raising the cost of sloppiness or fraud, yes?
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
The idea of pre-registration isn't new. It goes back to at least the late 19th century. But there is a big appetite for it now. The Data Collada team came up with their own version. Here is Yuri Simonson from the Asade Business School in Barcelona.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
Brian Nosek says the registered report model can be especially helpful to the journals.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
So this is almost like before you build a house, you're going to show us your plan. And we're the building department. We're going to come and say, yeah, that looks legit. It's not going to collapse. It's not going to infringe on your neighbor and so on. Is that the idea?
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
And so even if the results are uninteresting, not new, etc., we'll know they're legitimate. But there would seem to be a conflict of incentive there, which is that, oh, now do I need to publish this uninteresting, not new result? What do you do about that?
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
The lawsuit against the researchers was dismissed. The whistleblowers maintain a blog called Data Collada. They have written that they believe there is fake data in many of the papers that Francesca Gino co-authored, perhaps dozens. Gino and Ariely, meanwhile, both maintain their innocence. They also both declined our request for an interview.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
I think we should say a couple of things here about academia. The best academics are driven by a real scientific impulse. They may know a lot, but they're not afraid to admit how much we still don't know. So they're driven by an urge to investigate and not, not necessarily at least, an urge to produce a result that will increase their own status.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
But academia is also an extraordinarily status conscious place. I'm not saying there's anything wrong with that. If status is the reward that encourages a certain type of smart, disciplined person to do research for the sake of research, rather than taking their talents to an industry that might pay them much more, that is fantastic.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
But if the pursuit of status for status's sake leads an academic researcher to cheat, Well, yeah, that's bad.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
Brian Nosek says that more than 300 journals are now using the registered reports model.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
Is Brian Nosek too optimistic? Maybe. 300 journals is a great start, but that represents maybe 1% of all journals. For journals and authors, the existing publishing incentives are very strong.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
On that one paper that caused all the trouble about signing at the top, there were three other co-authors, Lisa Hsu, Nina Mazar, and Max Bazerman. None of them have been accused of any wrongdoing. So let's pick up where we left off with Max Bazerman, the most senior researcher on that paper. He also teaches at Harvard Business School.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
That is Samin Vazir, a psychology professor at the University of Melbourne.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
And here's a reason to think that Brian Nosek is right to be optimistic about research reform. Some of his fellow reformers, including Samin Vazir, have been promoted into prestigious positions in their field. Vazir spent some time as editor-in-chief of the journal Social, Psychological, and Personality Science.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
So it was basically like, do you know who I am?
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
So what happened to you and that journal then?
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
Vazir recently took on the editor-in-chief job at a different journal, Psychological Science. It is one of the premier journals in the field. It's also the journal where Francesca Gino published two of her allegedly fraudulent papers. So I asked Vizier what changes she is hoping to make.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
So as a journal editor, how do you think about the upside risk of publishing something new and exciting against the downside risk of being wrong?
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
Right now, the rewards for whistleblowers in academia may seem backwards. Remember, the Data Collada whistleblowers were sued by Francesca Gino, one of the people they blew the whistle on. They needed a GoFundMe campaign for their legal defense. So, no, the whistleblowers aren't collecting any bounties, nor do they cover themselves in any kind of glory.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
That's Leif Nelson, another member of Data Colada. He's a professor of business administration at UC Berkeley. In a recent New Yorker piece by Gideon Lewis Krauss about these fraud scandals, Nelson and his Data Colada partners were described as having a, quote, basic willingness to call bulls**t.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
Bazerman was close with Francesca Gino. He had been her advisor and he trusted her. So he has been spending a lot of time lately thinking about the mess. He recently published a book called Complicit, How We Enable the Unethical and How to Stop. And he's working on another book about social science fraud. This has led him to consider what makes people cheat.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
So now that you've become part of this group that are collectively, you know, I would think of as the primary whistleblower, police or steward, whatever word we want to use against fraudulent research in the social sciences. What?
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
does that feel like I'm guessing on one level it feels like an accomplishment on the other hand it makes me think of a police force where there's the you know internal affairs bureau where detectives are put to find the bad apples and even though everybody's in favor of rooting out the bad apples everybody kind of hates the IAB guys and I'm curious what the emotional toll or cost has been to you wow
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
In the New Yorker piece, there are still people who call you pretty harsh names. You've been compared to the Stassi, for instance.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
If they were to say that to you directly, why fix what isn't broken, what would you say?
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
After the break, multifold we shall. I'm Stephen Dubner. This is Freakonomics Radio. We'll be right back. Can academic fraud be eliminated? Certainly not. The incentives are too strong. Also, to be reductive, cheaters are going to cheat. And I doubt there is one field of human endeavor, no matter how noble or righteous or honest it claims to be, where some cheating doesn't happen.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
Let's take the case of Diederik Stapel, a Dutch professor of social psychology who, after years of success, admitted to fabricating and manipulating data in dozens of studies.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
But can academic fraud at least be greatly reduced? Perhaps. But that would likely require some big changes, including a new type of gatekeeper. Samin Vazir, the journal editor we heard from earlier, is one kind of gatekeeper.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
And there's another important gatekeeper in academic journals, one that we've barely talked about, the referees who assess journal submissions. Peer review is a bedrock component of what makes academic publishing so credible, at least in theory. But as we've been hearing about every part of this industry, the incentives for peer reviewers are also off.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
Here again is Ivan Aransky from Retraction Watch.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
Hey there, it's Stephen Dubner. This is the second and final part of a series we are revisiting from last year. Stick around for an update at the end of the episode. Last week's episode was called Why is there so much fraud in academia? We heard about the alleged fraudsters. We heard about the whistleblowers and then a lawsuit against the whistleblowers.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
This is a very hot topic. And that, again, is Leif Nelson from UC Berkeley and Data Collada.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
By the way, we've mostly been talking about the production side of academic research this whole time. What about the consumer side? All of us are also looking for the most interesting and useful studies. All of us in industry, in government, in the media, especially the media. Here's Ivan Aransky again.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
Well, you may have heard about that one recently. And on that note, I went back to Max Bazerman, one of the co-authors of that paper, which inspired this series. For Bazerman, the experience of getting caught up in fraud accusations was particularly bewildering because the accusations were against a collaborator and friend that he fully trusted, Francesca Gino.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
So here's something that Stoppel wrote later when he wrote a book of confession essentially about his fraud. He wrote, I was doing fine, but then I became impatient, overambitious, reckless. I wanted to go faster and better and higher and smarter all the time.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
Can I tell you, Max, that is what upsets me about this scandal, even though I'm not an academic, but I've been writing about and interacting with academics for quite a while now. And the problem is that I maybe gave them overall too much credit.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
I considered academia one of the last bastions of... I mean, I do sound like a fool now when I say it, but one of the last bastions of honest, transparent... empirical behavior where you're bound by a sort of code that only very rarely would someone think about intentionally violating. I'm curious if you felt that way as well, that you were sort of played or were naive in retrospect.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
It's worth pointing out that scientific research findings have been refuted and overturned since the beginning of scientific research. That's part of the process. But what's happening at this moment, especially in some fields like social psychology, it can be disheartening. It's not just a replication crisis or a data crisis. It's a believability crisis. Samin Vazir acknowledges this.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
I thought it would help if I just took this one tiny little shortcut, but then I found myself more and more often in completely the wrong lane. In the end, I wasn't even on the road at all. What struck me about that, and I think about that with Dan Ariely and Francesca Gino as well, which is that the people who have been accused of having committed academic fraud are really successful already.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
So just how bad is the believability crisis? Danny Kahneman, who died last year, was perhaps the biggest name in academic psychology in a couple of generations, so big that he once won a Nobel Prize in economics. His work has been enormously influential in many fields and industries.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
But in a New York Times article about the Francesca Gino and Dan Ariely scandals, he said, when I see a surprising finding, my default is not to believe it. Twelve years ago, my default was to believe anything that was surprising. Here again is Max Bazerman, who was a colleague and friend of Kahneman's.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
And that is Joe Simmons, the third member of the Data Collada Collective. He teaches judgment and decision-making at the University of Pennsylvania's Wharton Business School.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
And I'm curious what that tells you about either the stakes or the… the incentives or maybe the psychology of how this happens? Because honestly, it surprises me.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
That, again, was Joe Simmons. Since we published this series last year, there have been reports of fraud in many fields, not just the behavioral sciences, but in botany, physics, neuroscience, and more. So we went back to Brian Nosek, who runs the Center for Open Science.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
At his center, Nosek is trying out a new plan.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
But the need for corrections can move in mysterious ways. Brian Nosek himself and collaborators, including Leif Nelson of Data Collada, had to retract a recent article about the benefits of pre-registration after other researchers pointed out that their article hadn't properly pre-registered all their hypotheses. Nosek was embarrassed.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
We heard about feelings of betrayal from a co-author who was also a longtime friend of the accused.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
Still, trust in science in the U.S. has been declining. So we asked Nosek if he is worried that this new transparency, which will likely uncover more errors, might hurt his cause.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
I agree. These are hard problems. To be fair, easy problems get solved or they simply evaporate. It's the hard problems that keep us all digging. And we at Freakonomics Radio will keep digging in this new year. Thanks to Brian Nosek for the update. Thanks especially to you for listening. Coming up next time on the show. This sign right here is 12 foot tall. The economics of highway signs.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
And after that, some 30 million Americans think that they are allergic to the penicillin family of drugs. And the vast majority of them are not. Why does this matter?
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
We go inside the bizarro world of allergies. That's coming up soon. Until then, take care of yourself. And if you can, someone else too. Freakonomics Radio is produced by Stitcher and Renbud Radio. You can find our entire archive on any podcast app, also at Freakonomics.com, where we publish transcripts and show notes. This episode was produced by Alina Kullman.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
Our staff also includes Augusta Chapman, Dalvin Abouaji, Eleanor Osborne, Ellen Frankman, Elsa Hernandez, Gabriel Roth, Greg Rippin, Jasmine Klinger, Jason Gambrell, Jeremy Johnston, Our theme song is Mr. Fortune by The Hitchhikers. Our composer is Luis Guerra. As always, thanks for listening.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
That's right. A lot of the fraud and suspected fraud comes from researchers who explore fraud. In 2012, Francesca Gino and Dan Ariely collaborated on another paper called The Dark Side of Creativity. Original thinkers can be more dishonest.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
They wrote, we propose that a creative personality and a creative mindset promote individuals' ability to justify their behavior, which in turn leads to unethical behavior. So just how much unethical behavior is there in the world of academic research? That's a hard question to answer precisely, but let's start with this man.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
Ivan Oransky is a medical doctor and editor of a neuroscience publication called The Transmitter. He's also a distinguished journalist in residence at NYU. And on the side, he runs a website called Retraction Watch.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
He began Retraction Watch in 2010 with Adam Marcus, another science journalist. Marcus had broken a story about a Massachusetts anesthesiologist named Scott Rubin. Rubin had received funding from several drug companies to conduct clinical trials, but instead he faked the data and published results without running the trials.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
We also heard an admission from inside the house that the house is on fire.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
But when you call it misleading or opaque, you're saying the explanation for the retraction is often not transparent.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
So let's say we back up and I ask you, how significant or widespread is the problem of, we'll call it academic fraud?
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
That episode was a little gossipy, for us at least. Today, we are back to wonky, but don't worry, it is still really interesting. Today, we look into the academic research industry, and believe me, it is an industry.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
Retraction Watch has a searchable database that includes more than 45,000 retractions from journals in just about any academic field you can imagine. They also post a leaderboard, a ranking of the researchers with the most papers retracted. At the top of that list is another anesthesiologist, this one a German researcher named Joachim Bolt. He came up briefly in last week's episode, too.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
Bolt has had more than 200 papers retracted.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
Bolt was caught in 2010 after an investigation by a German state medical association. The method he had been promoting was later found to be associated with a significant increased risk of mortality. So in this case, the fraud led to real danger. And what happened to Bolt?
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
Let's just take three of the most recent high-profile cases of academic fraud or accusations of academic fraud. We've got Francesca Gino, who was a psychology researcher at Harvard Business School, Dan Ariely, who's a psychologist at Duke, and then Marc Tessier-Levine, who was president of Stanford, a medical researcher. Three pretty different outcomes, right?
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
Tessier-Levine was defenestrated from his presidency. Geno was suspended by HBS. And Dan Ariely, who's had accusations lobbed at him for years now, is just kind of going on. Can you just comment on that heterogeneity?
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
A Stanford report found that Tessier-Levin didn't commit fraud or falsify any of his data, although work in his labs, quote, fell below customary standards of scientific rigor, and multiple members of his labs appear to have manipulated research data.
Freakonomics Radio
Can Academic Fraud Be Stopped? (Update)
Dan Ariely also remains a professor at Duke, and Duke has declined to comment publicly on whether an investigation into the allegations of data fraud even occurred. As Ivan Aransky told us, universities are run by lawyers.
Freakonomics Radio
616. How to Make Something from Nothing
Now, you say this as if people didn't leave and cry at the end of a New York Times magazine meeting when you were.
Freakonomics Radio
616. How to Make Something from Nothing
I did speak with five, six, seven former employees of yours, some of whom I overlapped with at the Times Magazine, some of whom I didn't. If we were making a word cloud, I think withholding was probably the big word.
Freakonomics Radio
616. How to Make Something from Nothing
And what they all got was just a deep, deep satisfaction of accomplishment and a recognition that you don't get that satisfaction without having a lot of failure and bumps along the way. Not humiliation. And you didn't humiliate people ever, as far as I know. I don't know. I don't think so. I hope not. So when I left the Times Magazine working for you, I left because I just wanted to be a writer.
Freakonomics Radio
616. How to Make Something from Nothing
I loved being an editor. Editing was the best training for me to be a writer, in part because I saw how many big time writers, when they would turn in their manuscripts, they were terrible. And I thought, holy cow. If they can turn in stuff like that, I can do this. Yes, Pulitzer Prize winners. I was shocked. But it was also just amazing experience and fun. It's really fun to do the work.
Freakonomics Radio
616. How to Make Something from Nothing
But then you gave me a six-month leave to go start working on my first book. And I remember coming back and saying, this is the life I want. I like alone. And then I remember, at least my recollection, is that I said, I'm really appreciative of The leave you gave me, and I love this place, I love this work, but that's what I want to do long term. And so I'd like to stay here for another year.
Freakonomics Radio
616. How to Make Something from Nothing
Many people who know Adam Moss were surprised that he wrote a book. He was one of the few magazine editors who didn't either start out as a writer or want to be a writer or think of themselves as a writer. He was a full-fledged editor. An editor is mostly backstage. There's a lot of power and a bit of risk. A writer, meanwhile, is out front, directly in the line of fire.
Freakonomics Radio
616. How to Make Something from Nothing
That's the deal that I remember crafting. And then I remember our relationship changed because I was a lame duck. So what, did I just not...
Freakonomics Radio
616. How to Make Something from Nothing
I think it was more like plow horse idea. Get as much out of you as I could. And it wasn't bad. The work was still really exciting. But another reason I left was that I recognized when you succeed in a place like that, I mean, this happens in many occupations, when you succeed in In some kind of maker role, you end up getting promoted into a manager role, a boss. And I did not want to be a boss.
Freakonomics Radio
616. How to Make Something from Nothing
So leaving the Times to write meant I would never have to be a boss of anyone other than myself. But then I wrote books and then the books turned into this thing that we're doing now. You're a boss. We have a company. Yeah. We have 20 people. And I think the boss that I became is very much like the boss that you were. Oh, really? Oh, my God.
Freakonomics Radio
616. How to Make Something from Nothing
All learned. That's what I'm saying. That's why I would call you a mentor, even if an unintentional or accidental mentor. Oh, how interesting. God, that's scary. I'm a writer. You know, writers are writers, right? You have a way of seeing the world. You have a way of, and a lot of this is what I learned from you. You have a way of assessing, is this idea worth doing? Definitely.
Freakonomics Radio
616. How to Make Something from Nothing
That's a big part of it. Execution is important, but I always think of it a little bit like pro athletes. Like you wouldn't be here if you didn't have the talent. And then you realize that what you're really after is development. developing your taste or your sense of what's interesting, what's important, what's fun, what's new. And those are all things I learned from you.
Freakonomics Radio
616. How to Make Something from Nothing
Maybe to some degree, but I think anybody who's learning, who takes their thing seriously, it's thrilling when you encounter someone who sets a standard high and But the problem is, when you go from being a writer to then being a boss, my first producing partners, the word that got attached to me was like, Dubner's too exacting. And I was pissed because I thought, like, what's wrong with that?
Freakonomics Radio
616. How to Make Something from Nothing
I think the thing that's most important or attractive about what you just said, but also very much animates your book, is that it's not just the thrill of accomplishing because something is good. It's doing something different.
Freakonomics Radio
616. How to Make Something from Nothing
You work on a thing for months or years, and then it goes out into the world with your name on it. So if people hate it, they know where to find you. That's why it was so intriguing that Adam Moss would write a book. So we will talk about that today, but some other things, too. Especially his tenure at the New York Times Magazine, where he happened to be my boss. This was in the late 1990s.
Freakonomics Radio
616. How to Make Something from Nothing
And what happened when Adam Moss's imagination started producing something new?
Freakonomics Radio
616. How to Make Something from Nothing
I'm Stephen Dubner. This is Freakonomics Radio. We'll be right back. In 2019, Adam Moss stepped down as editor-in-chief of New York Magazine. Here's what he said at the time. I've been going full throttle for 40 years. I want to see what my life is like with less ambition. I'm older than the staff. I'm older than the readers. I just want to do something new.
Freakonomics Radio
616. How to Make Something from Nothing
That new thing, at least for a while, was painting.
Freakonomics Radio
616. How to Make Something from Nothing
Was kindness in a mentor slash teacher important to you? It's important to me.
Freakonomics Radio
616. How to Make Something from Nothing
if you look through history at creators of all types and people of all types, people who have mentors, if you had to guess, would you say that on average, kindness is a benefit or an attribute at least? Because when I think of a lot of what people claim at least to be successful mentorships, there's often, I don't know about an absence of kindness, but a presence of something else.
Freakonomics Radio
616. How to Make Something from Nothing
I was what's called a story editor, which meant I came up with ideas, assigned them to writers, and then shepherded those pieces through the editorial and publishing processes. The Times Magazine was considered a great magazine during this era, and it was a thrill to be inside of that.
Freakonomics Radio
616. How to Make Something from Nothing
If you were to generalize what a successful mentor is, would you use that as a template or do you think that's just for you?
Freakonomics Radio
616. How to Make Something from Nothing
I have never seen one of Adam Moss's paintings. That's quite on purpose, yes. He insists that he is just not a very good painter. I'm more mediocre than bad. I'm okay, but that's not good enough for me. When someone is exacting, which we have already established Adam Moss is, then mediocrity can feel worse than death.
Freakonomics Radio
616. How to Make Something from Nothing
So he needed to find something else to make, something that he would be good at. And that's how he came to write The Work of Art, a book about how other creative people make something from nothing. It's a book about the process of making.
Freakonomics Radio
616. How to Make Something from Nothing
Yeah, but also chapters differ because in some chapters they're through written by you with quotes. In other chapters, it's more oral history. And in that way, it's very much like a big, big, big magazine. Absolutely.
Freakonomics Radio
616. How to Make Something from Nothing
Also terrifying sometimes, but mostly a thrill and mostly because our boss was really good at his job and we all got to watch and learn. That said, I quit The Times after about five years. It used to be that when someone left that place voluntarily and was relatively young, I was in my 30s. that people would think you're crazy. I was doing well as an editor and an occasional writer.
Freakonomics Radio
616. How to Make Something from Nothing
Let me just point out, the difference between being an editor and being a writer might seem not that large. It's huge. It's like... marathon versus sprint. They're both running, but I wouldn't think it could have felt so similar to what you'd spent your life doing.
Freakonomics Radio
616. How to Make Something from Nothing
So for some of the creators in your book, the people who influenced them were often people that they never interacted with.
Freakonomics Radio
616. How to Make Something from Nothing
So Eggleston and David Lynch and all those make a lot of sense.
Freakonomics Radio
616. How to Make Something from Nothing
I guess the big distinguishing factor for me would be an influence can be distant and unaware of you, whereas a mentor, there's necessarily some kind of estuarial exchange. Yeah.
Freakonomics Radio
616. How to Make Something from Nothing
I think the book is a bit of a, not a smoke and mirror, but a bit of sleight of hand in that it's called The Work of Art, and it's plainly about the process of making creative things. And it's plainly about what it took for those creators to even get to the point where they were able to create something. I know you love process. That was a word that you said probably 30 times a day.
Freakonomics Radio
616. How to Make Something from Nothing
And it's a word that I just have come to despise.
Freakonomics Radio
616. How to Make Something from Nothing
The bosses told me I might be a boss before long. That was the last straw. I didn't want to be an editor or a boss. I just wanted to be a writer and I wanted to work on my own, not within a hierarchy. So I quit and I went off to write books, which is how I ended up here talking to you. When Adam Moss's book came out in early 2024, I read it right away.
Freakonomics Radio
616. How to Make Something from Nothing
I feel like as a magazine editor, some of your favorite stories, or at least my conception of some of your favorite stories, were when there was a process of something being described over time. And written text, not that documentary film can't do it, a lot of things can do it, but text is great at that. because it can move in and out of time and it can magnify and shrink.
Freakonomics Radio
616. How to Make Something from Nothing
So as much as you say that this book is about process and artifacts and so on, it was a thrill to read because I love your work and I loved working with you, but you never talked that much. You dropped hints about what made something great or not. We all learned the language of Adam Moss, but it was often fragments, rarely sentences, never paragraphs.
Freakonomics Radio
616. How to Make Something from Nothing
Horrible, definitely not. Definitely not. But maddening among nine other things. Yeah, okay. But what struck me the book was really about was something separate than the process of creation, really more about what it takes to become the kind of person who can create things from whole cloth. That's really hard to do. And I don't think people understand the bravery it takes to do that.
Freakonomics Radio
616. How to Make Something from Nothing
Your book nods at failure. I think it's a lot about failure. Okay, but ultimately... Everybody succeeds. Everybody succeeds. Yeah. And so as I'm reading it, I'm thinking, yeah, this failure is instructive and real and useful to hear about, but... It's an exercise in what some people call survivorship bias, right? We read about the winners. Sure, of course.
Freakonomics Radio
616. How to Make Something from Nothing
I've always had this theory that I think is wrong. But as a writer, or if you're a creative person of any type, an editor or an entrepreneur or whatever, I think it's natural to try to mimic success. Yeah. but I think that most successes are pretty singular. I completely agree with you. And so I felt that learning from failure was really the way to go.
Freakonomics Radio
616. How to Make Something from Nothing
For me and many others who worked for him, it was a bit like discovering his journal. Everything that made him tick as an editor, as a boss, was right there on the page. At the time, I was trying to make a podcast series about mentorship.
Freakonomics Radio
616. How to Make Something from Nothing
David Simon was a police reporter for the Baltimore Sun before he started writing books and making TV shows. One of those shows was The Wire, which many people consider one of the best TV shows ever made. If you would like to hear an interview with him, check out the People I Mostly Admire podcast, another show in the Freakonomics Radio Network. It's episode 109 called David Simon is on Strike.
Freakonomics Radio
616. How to Make Something from Nothing
Again, January 3rd and February 13th, San Francisco and LA. Meanwhile, today on the show, A conversation with someone I know quite well, or at least used to. Someone who is smart, shrewd, very good at his work, and someone who taught me a lot, even if not always on purpose. Why don't you just say your name and what you do?
Freakonomics Radio
616. How to Make Something from Nothing
Here's why. We'll hear more from Adam Moss in a minute. I am Stephen Dubner, and this is Freakonomics Radio.
Freakonomics Radio
616. How to Make Something from Nothing
The idea was that mentorship is this standard and successful practice in many realms, in education, in sports, the military, in the medical and legal professions. And yet in other realms, there's no standard mentorship at all. I wanted to know why not and whether something should be done about that. But the mentorship series just never came together.
Freakonomics Radio
616. How to Make Something from Nothing
It's interesting as you're describing you coming to accept what these people were telling you about their perpetual dissatisfaction because you make it sound so foreign. But that's exactly the way that I and everybody else who ever worked with you would describe you. When you were happy with the work that I or anyone else did, everyone described it as this like great thrill. It was like a high.
Freakonomics Radio
616. How to Make Something from Nothing
Getting your approval or praise was incredibly powerful. Then there's the corollary, getting your dissatisfaction could be demoralizing for many people. You had to kind of fight through that. But the steady state was more like, yeah, it was a really good issue this week. That was it. And that implies many other things. Like, it wasn't a great issue. And more important, there's next week also.
Freakonomics Radio
616. How to Make Something from Nothing
To the degree that it's hard to know oneself, let's call it the internal versus the external, on a scale of zero to five, how bad or good do you think you are?
Freakonomics Radio
616. How to Make Something from Nothing
We couldn't find a center of gravity and eventually we gave up, which is fine. That happens all the time in this kind of work. But there was one interview we did for the series that I was not willing to ditch. This one, the one with Adam Moss. Was he in fact a mentor to me or maybe more like the master who teaches an apprentice? Or was he just an old fashioned boss trying to extract labor?
Freakonomics Radio
616. How to Make Something from Nothing
That was Adam Moss, the most influential boss I ever had by a mile, who did me the great favor of showing me that I didn't want to be boss, that I just wanted to make things, but who also taught me how to be better at making things. So thanks, Adam. His book is called The Work of Art, although it might just as easily have been called The Art of Work.
Freakonomics Radio
616. How to Make Something from Nothing
And the other book he just mentioned, Salt, Fat, Acid, Heat, is also well worth reading. And you can hear its author, Samin Nasrat, on a couple of Freakonomics Radio episodes from 2023. One is called What's Wrong With Being a One-Hit Wonder? And the other is Samin Nasrat Always Wanted to Be Famous. Coming up next time on the show, we ask, why is there so much fraud in academia?
Freakonomics Radio
616. How to Make Something from Nothing
She was at the center of everything, being a prestigious faculty member at Harvard and all of her public speaking and her books. That's next time. Until then, take care of yourself. And if you can, someone else too. Freakonomics Radio is produced by Stitcher and Renbud Radio. You can find our entire archive on any podcast app, also at Freakonomics.com, where we publish transcripts and show notes.
Freakonomics Radio
616. How to Make Something from Nothing
This episode was produced by Morgan Levy and Zach Lipinski. The Freakonomics Radio Network staff also includes Alina Kullman, Augusta Chapman, Dalvin Aboaji, Eleanor Osborne, Ellen Frankman, Elsa Hernandez, Gabriel Roth, Greg Rippin, Jasmine Klinger, Jason Gambrell, Jeremy Johnston, John Schnarz, Lyric Bowditch, Neil Carruth, Rebecca Lee Douglas, Sarah Lilly, and Tao Jacobs.
Freakonomics Radio
616. How to Make Something from Nothing
Our theme song is Mr. Fortune by the Hitchhikers. Our composer is Luis Guerra. As always, thank you for listening. I'm going to shut up. Can you just say that again? Gigantic. No, say it the way you did. Gigantic.
Freakonomics Radio
616. How to Make Something from Nothing
The Freakonomics Radio Network. The hidden side of everything. Stitcher.
Freakonomics Radio
616. How to Make Something from Nothing
That's what today's conversation is about. It's the latest in our series of one-on-one conversations to end the year. Even if you are not a big fan of magazines, even if you have never held a paper magazine in your hands, I suspect that you will benefit from hearing Adam Moss's perspective because all of us at some point try to make something from nothing.
Freakonomics Radio
616. How to Make Something from Nothing
So you might as well learn from a good teacher like I did.
Freakonomics Radio
616. How to Make Something from Nothing
This is Freakonomics Radio, the podcast that explores the hidden side of everything, with your host, Stephen Dubner. Whoa!
Freakonomics Radio
616. How to Make Something from Nothing
The title of Adam Moss's book, The Work of Art, is, of course, a double entendre. He is the kind of person for whom entendres rarely come singly. There is a layer and then another layer and usually a few more. This book is ostensibly a set of interviews with a variety of makers. Stephen Sondheim, Twyla Tharp, David Simon, Samin Nasrat, Will Shortz.
Freakonomics Radio
616. How to Make Something from Nothing
And their stories unfold on pages that are packed with sketches and graphics, sidebars, footnotes. It is very much a magazine in book form, which makes sense considering that Adam spent nearly 40 years making magazines, and this is his first book. Some people end up in magazines by accident, like me. I just wanted to write, and that's where the writing jobs were. Adam was different.
Freakonomics Radio
616. How to Make Something from Nothing
Hey there, it's Stephen Dubner, and I would like to remind you about two live shows that we are putting on soon. The first one is on January 3rd in San Francisco. The second is in Los Angeles on February 13th. We have got some excellent guests for both shows, so please come hang out with us. Tickets are at Freakonomics.com slash live shows, one word.
Freakonomics Radio
616. How to Make Something from Nothing
He was in love with the magazine form. So I asked what first drew him in.
Freakonomics Radio
616. How to Make Something from Nothing
So this was the medium that you loved and then you sought it out. Yes.
Freakonomics Radio
616. How to Make Something from Nothing
Give an example of you as a young editor, as a mentee, let's call it. What do you think Lee Eisenberg got from you?
Freakonomics Radio
616. How to Make Something from Nothing
for a long time adam moss was widely considered the best magazine editor around he was the founding editor of seven days magazine a clever and slightly transgressive arts and culture weekly from there he went to the new york times magazine and after many years there he took over new york magazine which he radically remade for the digital era He won all the awards an editor can win.
Freakonomics Radio
616. How to Make Something from Nothing
So you were the editor of a few different magazines for a long time. Can you explain the role, just briefly, of what it means to be the editor-in-chief of the magazine? I think a lot of people who aren't writers or editors don't really understand that.
Freakonomics Radio
616. How to Make Something from Nothing
So you as a magazine editor are renowned, right? In the field of magazine making, Adam Moss is considered a great editor, and I certainly agree. And one of the many things that I and a lot of people think you did well was that you were very—the word that people like to use is exacting. There's a standard that is extremely high, but also a little bit elusive and ethereal.
Freakonomics Radio
616. How to Make Something from Nothing
You don't quite know what it is, but you know you want to get there. Let's say you agree that you're exacting.
Freakonomics Radio
616. How to Make Something from Nothing
But let's agree that you're exacting. My question would be, when you are an exacting person—and I'm sure many people listening to this conversation either are or want to be that— But you also can't control every single thing. In fact, the process is set up so that you're not controlled. You're not writing the articles. You're not editing the articles heavily. So how do you live with that paradox?
Freakonomics Radio
616. How to Make Something from Nothing
I was very happy that you landed on the parenting analogy because as you were speaking, that's what it sounded like for sure. So parent-ish, I think, applies. What about mentor? Do you think of yourself as a mentor or is that not a word that fits?
Freakonomics Radio
616. How to Make Something from Nothing
He directly shaped the careers of hundreds of writers and editors. Indirectly, he did the same for millions of readers. He left New York Magazine in 2019, still on top, but feeling a bit too old for the game, a bit burned out and ready for something new. The something new eventually took the form of a book called The Work of Art, How Something Comes from Nothing.
Freakonomics Radio
616. How to Make Something from Nothing
How do you choose, though, as a teacher, how do you choose who to spend time with? Because you were supervising a lot of people at a place like the Times Magazine. I don't know how many story editors there were, maybe 8, 10, 12. You had very different relationships with each one. How does that work for you? Is it a choice? I don't think it's a choice exactly.
Freakonomics Radio
616. How to Make Something from Nothing
Do you have advice for people who are not naturally, you know, I do believe there's an astonishing amount of human capital in the world that is untapped because the possessor of it doesn't know how to export it. and others don't know how to import it.
Freakonomics Radio
Highway Signs and Prison Labor
Coming up after the break, Zachary Crockett takes a look at prison labor.
Freakonomics Radio
Highway Signs and Prison Labor
That's coming up. I'm Stephen Dubner, and you were listening to a bonus episode of The Economics of Everyday Things. We'll be right back. We are back with this special episode from The Economics of Everyday Things. Here's Zachary Crockett.
Freakonomics Radio
Highway Signs and Prison Labor
Coming up after the break, not all prison jobs teach key skills.
Freakonomics Radio
Highway Signs and Prison Labor
I'm Stephen Dubner. This is Freakonomics Radio, and you are listening to a special episode of The Economics of Everyday Things with Zachary Crockett.
Freakonomics Radio
Highway Signs and Prison Labor
Hey there, it's Stephen Dubner again, and I hope you enjoyed this special episode of The Economics of Everyday Things with Zachary Crockett. I hope you liked it enough to follow the show on your podcast app. We will be back very soon with a new episode of Freakonomics Radio. Although, for the new year, we are switching our regular publication schedule from Wednesday night, Eastern Time,
Freakonomics Radio
Highway Signs and Prison Labor
to early Friday morning. So if you are an early downloader, which I know you are, and you aren't seeing the episode on Wednesday night, do not freak out. We'll be there Friday morning. Until then, take care of yourself. And if you can, someone else too. Freakonomics Radio and the Economics of Everyday Things are produced by Stitcher and Renbud Radio.
Freakonomics Radio
Highway Signs and Prison Labor
This episode was produced by Zachary Crockett and Sarah Lilly with help from Daniel Moritz-Rabson. It was mixed by Jeremy Johnston. The Freakonomics Radio Network staff also includes Alina Kullman, Augusta Chapman, Dalvin Aboaji, Eleanor Osborne, Ellen Frankman, Elsa Hernandez, Gabriel Roth. Our theme song is Mr. Fortune by the Hitchhikers. Our composer is Luis Guerra.
Freakonomics Radio
Highway Signs and Prison Labor
If you like this episode, be sure to follow the show on your podcast app. Again, it's called The Economics of Everyday Things. And let us know what you think. Our email is radio at Freakonomics.com. OK, here is Zachary Crockett.
Freakonomics Radio
Highway Signs and Prison Labor
Hey there, it's Stephen Dovner. And today we've got a bonus episode for you. It is an episode of another show in our network. It's called The Economics of Everyday Things, which is hosted by Zachary Crockett. In the past, Zachary and his team have made episodes about Michelin stars, snake venom, prosthetic limbs. Today, they bring us their reporting on highway signs and prison labor.
Freakonomics Radio
Your Brain Doesn’t Work the Way You Think
More of Steve Levitt's conversation with David Eagleman in this special episode of People I Mostly Admire. Okay, back now to this special episode of People I Mostly Admire. This is my Freakonomics friend and co-author Steve Levitt in conversation with the neuroscientist David Eagleman.
Freakonomics Radio
Your Brain Doesn’t Work the Way You Think
You are listening to a special bonus episode of People I Mostly Admire with Steve Levitt and the neuroscientist David Eagleman. After the break, what are large language models missing? It has no theory of mind. It has no physical model of the world the way that we do. That's coming up after the break. So
Freakonomics Radio
Your Brain Doesn’t Work the Way You Think
entrepreneur and author of several books, including Live Wired, The Inside Story of the Ever-Changing Brain. It is a fascinating conversation. You are going to love it. To hear more conversations like this, follow people I mostly admire in your podcast app. Okay, that's it for me. Here is Steve Levitt.
Freakonomics Radio
Your Brain Doesn’t Work the Way You Think
Hey there, it's Stephen Dubner again. I hope you enjoyed this special episode of People I Mostly Admire. I loved it. And I would suggest you go right now to your podcast app and follow the show, People I Mostly Admire. We will be back very soon with more Freakonomics Radio. Until then, take care of yourself. And if you can, someone else too.
Freakonomics Radio
Your Brain Doesn’t Work the Way You Think
Freakonomics Radio and People I Mostly Admire are produced by Stitcher and Renbud Radio. This episode was produced by Morgan Levy with help from Lyric Bowditch and Daniel Moritz-Rabson. It was mixed by Jasmine Klinger.
Freakonomics Radio
Your Brain Doesn’t Work the Way You Think
Our staff also includes Alina Kullman, Augusta Chapman, Dalvin Abawaji, Eleanor Osborne, Ellen Frankman, Elsa Hernandez, Gabriel Roth, Greg Rippin, Jason Gambrell, Jeremy Johnston, John Schnarz, Neil Carruth, Rebecca Lee Douglas, Sarah Lilly, Tao Jacobs, and Zach Lipinski. Our composer is Luis Guerra. As always, thank you for listening.
Freakonomics Radio
Your Brain Doesn’t Work the Way You Think
Hey there, it's Stephen Dubner. Today, a holiday treat, a bonus episode from people I mostly admire, one of the other shows we make here at the Freakonomics Radio Network. It is an interview show hosted by Steve Levitt, my Freakonomics friend and co-author, who is an economics professor emeritus now at the University of Chicago. On this episode, Levitt interviews David Eagleman, a neuroscientist,
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
OK, so your Amazon paper clearly struck a deep chord. But how did you go from being a law student, admittedly a high profile law student, to being chair of the FTC?
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
Coming up after the break, Lina Khan puts her Amazon research to work. I'm Stephen Dubner. This is Freakonomics Radio. We'll be right back. When she was a law student at Yale, Lena Kahn wrote what would become one of the most famous law review articles of the current century.
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
It accused Amazon of using novel forms of monopolistic practice, including deliberately underpricing its goods and services with the goal of becoming an e-commerce behemoth, a goal that Amazon has achieved. OK, while you were running the FTC, you and 18 state attorneys general in Puerto Rico sued Amazon over monopolistic practices. There is a trial scheduled to start in 2026.
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
I'd like you to take us full circle from writing the Amazon antitrust paradox paper in law school to now having brought this suit and waiting for the trial to begin.
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
You might call this the Lena Kahn paradox. And how does Kahn herself feel about this paradox? Based on the conversation you are about to hear, I would put it this way. When it comes to antitrust policy, Kahn doesn't care who gets it done as long as it gets done.
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
Why was it called that? You know?
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
And would you care to predict the outcome of the Amazon trial?
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
What do you think Amazon looks like in 20 years?
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
So the Amazon case has thus far been a win for you in the FTC, but there were losses as well.
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
One legal scholar that I spoke with noted that a lot of your lawsuits were just seen as unlikely to succeed in the courts and wondered when is it legitimate to bring a lawsuit that doesn't have a great chance of succeeding and whether that's an attempt to influence the law as opposed to carry out a successful prosecution.
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
Today on Freakonomics Radio, we review Lena Kahn's FTC track record.
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
Let's talk about the work you did on non-competes. These are the employment clauses that might forbid an employee from leaving one company to work for another in the same industry, for instance.
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
And I realize it didn't have the happy ending you were looking for, but I'd love you to walk us through it so people can understand both the scope of what you identify as the problem and what you see as remedies.
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
And we talk about how to do good work in a world where bad behavior is often rewarded.
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
So I have two very basic questions about it. Number one, once you get beyond the top tier employees, right? I don't want my chief blank officer going to a rival firm. I understand that. Or I don't want people with trade secrets leaving my firm and potentially going to a rival firm. Those I understand.
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
But beyond that, all the other people that you just named, what is the reasoning for why a non-compete would even be considered worthwhile in And then how can it be legal?
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
So that gets quickly to the second part, which is how did it become legal to enact these non-competes so broadly?
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
Reality, facts and more with former FTC chair Lina Khan, starting now.
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
In the case of the security guards, Prudential was the name of that firm?
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
What was the ultimate outcome of that case?
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
So that's a small victory, but the larger effort has been so far a defeat for you, correct?
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
So one big function of the FTC is plainly policing, but also when it comes to your antitrust activity, an implicit argument is that cracking down on monopolistic behavior, cracking down on non-competes also is good for competition and it's good for the markets. Good markets theoretically benefit a lot of people, startup firms and employees, consumers.
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
In other words, competition is seen, at least by economists, as win-win-win. So what's your best evidence that your work has actually produced these kinds of victories?
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
And what happened to the share prices of those firms?
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
They didn't go out of business, though.
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
Can you talk a bit more about the price of insulin?
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
We did a series on private equity consolidation in the pet care industry, and we found a lot of problems there for employees and consumers, but we also learned something that seems to apply to a lot of the human healthcare industry. If you look at nursing homes, doctor's offices, dentist's offices,
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
What we heard is that the founders of these offices and companies, when it's time to retire, they might prefer to sell to one of their junior partners. That's what often happened before private equity was around. But now those junior partners have so much debt from medical school or veterinary school or whatever that they can't afford to buy the practice.
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
It's fun to say that, I would imagine, yes? Yeah.
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
So the only likely buyer is an outside investor like a private equity firm. The PE firm is... Satisfying a real need there, but the resulting roll-ups or consolidations are often worse for existing employees and worse for consumers. Do you have any thoughts for how that might work differently?
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
While she was still in law school, Kahn published a journal article called Amazon's Antitrust Paradox, which went on to become famous and which painted a picture of capitalism gone wild, where too many firms have become too big and too powerful, posing a threat not just to consumers and employees, but to the economy itself and maybe even to democracy.
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
Can you just give us in a nutshell how you got here, there, in such a relatively short time?
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
If the government is concerned about over consolidation in those kind of spaces, right, health care, whether human, animal, whatever, would it be viable to consider something like low interest loans to junior partners to help keep firms a smaller size rather than succumb to the one possible sellout outcome, which is to a bigger investment firm like private equity?
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
Let's talk for a minute about the merger guidelines released by the FTC under your watch. Just start with the process, maybe the idea or the theory and then the drafting. What were you hoping to accomplish and why did you think it was important?
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
What about from the industry side? The draft of the merger guidelines was open to them as well. It sounds like you're saying most of the public sentiment was saying, yes, we would like stronger guidelines. What about from industry, though?
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
This was the open markets group at the New America think tank, yeah?
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
I assume that the goal of these merger guidelines is to act as a deterrent against some mergers that might be seen later as anti-competitive. Assuming that is true, how do you measure the effect of deterrents?
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
So if you read the Wall Street Journal editorial pages, these merger guidelines are an attack on the free markets. There's been a lot of criticism on that front. Mark Andreessen, the very prominent venture capitalist, he said when Trump was reelected, it was like, quote, getting a boot off the throat for people like him, for people in the tech and business sectors.
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
I gather that you're the person wearing that boot in the Andreessen comment.
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
We've learned recently that the merger guidelines put out on your watch will be retained by the Trump administration. Are you surprised by that?
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
I know J.D. Vance is a fan of yours. He recently said, I look at Lina Khan as one of the few people in the Biden administration I actually think is doing a pretty good job. Considering how much Biden administration work has already been undone by the Trump administration, I wonder what it feels like for you to have one of your signature policies continue under Trump.
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
You once wrote that your hobbies include, quote, trying to find the most obscure industry where I can find consolidation. Can you name some industries that we may not think of as heavily consolidated, but are?
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
Lina Khan's example here, a consolidated market in ugly produce, points to a larger philosophical argument about how the U.S. economy should work. Just about every economist agrees that consolidation above a certain level can be a big problem.
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
The history of our economy includes a long line of creators and innovators, operators and aggregators who, through their grit and savvy, cornered markets or created monopolies. Some of these companies were intensely exploitative. But they were also helping create what would become perhaps the most dynamic economy in the history of the world.
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
It's one of those things that in retrospect seems obvious, like, yes, there's been so much consolidation in our economy, full stop. But at the time, I'm wondering if you felt like you were toiling in some forgotten corner of the economy, that this was something that people weren't paying much attention to at the moment?
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
And this dynamic capitalism has helped produce huge gains for many people over the years. It's hardly perfect. Everybody knows that. And over consolidation is one big flaw. But... How do you dampen the appetite for domination while keeping alive the incentives to create? How do you encourage people to keep risking their time and money and brainpower if they're punished for winning too big?
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
If someone comes up with a clever idea like buying up ugly produce and building a market around it, and they come to dominate that market, is that reason alone to break them up? That is essentially the same question Google is facing in court right now. So where is the appropriate middle ground? After the break, we will try to find it.
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
I'm Stephen Dubner. This is Freakonomics Radio. We'll be right back. Lena Kahn had plenty of critics during her tenure as FTC chair from a variety of ideological camps. Some conservatives accused her of overreach. Some liberals said she was more bark than bite. But there is one thing about her that just about everyone agrees on.
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
She is a serious person who eats, sleeps, and breathes antitrust reform. She has been fixated on corporate power since she was at least a high school sophomore. In 2004, she wrote an article for her school newspaper about a nearby Starbucks that wouldn't allow students to congregate. The New York Times followed up her article with one of their own called A Tempest in a Coffee Shop.
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
I asked Khan if she could identify where this crusading spirit of hers comes from.
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
You have been praised in some quarters for your work at the FTC, but also attacked. And I would argue the attacks were much more intense than is typical for the FTC chair. How do you manage the criticism? Do you try to seek out criticism that has value and try to learn from it and sort that out from the rest that's just noise? Do you not pay attention to any of it?
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
Where does the Wall Street Journal editorial page sit on the tethered to fact spectrum?
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
Although I will say this, one critic of yours, this is an academic who doesn't like your work very much. He works in the antitrust space. He made the argument that your work is almost universally, in his view, ideological and not empirical. How would you respond to that?
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
What kind of a boss are you? I'm told you're not the let's all grab a beer after work kind of boss.
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
Some people complained about your leadership style. People said there was low morale at the FTC during your tenure. There were a lot of resignations. I'm also aware that when you're a political appointee coming into an agency like this and you try to do things quite differently, there's going to be friction.
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
Looking back now after four years, if you could start again, would you approach your management style any differently?
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
It sounds as though you're coming into an agency that had operated under a sort of political ideology, a consistent political ideology for, let's call it, 40 years. Does an agency like that therefore attract civil servants who jibe with that ideology?
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
In other words, did you take over an agency that was staffed quite robustly by a bunch of people who really liked the Reagan and the Bork and the Chicago School of Thinking?
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
Were there particular quadrants of the FTC that you bulked up on or tried to slim down?
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
What share of this new wave of FTC employees would you say will still be there a month or a year from now?
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
What was your favorite thing about working in government?
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
What are some of your least favorite things about working in government?
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
I'm curious to know your thoughts on the choice of Kamala Harris as the candidate with no outside competition after Biden withdrew. I mean, doesn't it feel that that was handled in a similar way to some of the anticompetitive cronyism that you're fighting?
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
I don't know if you're familiar with the work of the political scientist Yunyun Ong. She's at Johns Hopkins and she studies political corruption. She makes the argument that countries like China and Russia have significant levels of corruption in forms that to an American seem patently illegal. Suitcases full of cash and no-bid contracts, things like that.
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
But she argues that political corruption in the U.S. is also very significant. It's just that it's essentially legal corruption in the form of corporate capture of government. I'm curious to hear your thoughts on corporate capture and how serious you think that problem is.
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
So, Lena, your life has already had this amazing arc with a lot of accomplishment and drama. It feels like enough to write a book about maybe an opera, but you're still very young. So let's assume that your life today is act one of that opera. What do you want the second and third acts to look like? Yeah.
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
I understand you're back teaching at Columbia now, at least for this semester. Is that right?
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
Do you have any concrete items on your wish list? Does policy and politics remain toward the top of that list or something quite different, perhaps?
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
If President Trump had asked you to stay on, I realize that may sound unlikely to a lot of people hearing this, but the more they know about you and your work and how the Trump administration thinks about your work, it's actually maybe not so unlikely. But would you have stayed under Trump?
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
I see that Bernie Sanders has embarked on what he calls a national tour to fight oligarchy. He's drawing pretty big crowds, a lot of enthusiasm. I'm curious if he has asked you to put in an appearance and if you would, if you were asked.
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
When I hear you mention Ames, Iowa, I cannot help but think that perhaps you might have aspirations of being elected to office one day. Is that the case?
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
It's always good to speak with someone who enjoys being a bureaucrat. I'd like to thank Lina Khan for the good conversation today. I learned a lot. I hope you did, too. Let us know what you are thinking. Our email is radio at Freakonomics.com. Coming up next time on the show, another one-on-one conversation around another set of important government functions.
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
But this person is not embraced by politicians on both sides. My nonpartisan approach is to be critical of everybody in Washington. Do you have any friends? No, not really. Jessica Riedel has two main messages. Number one, the federal debt crisis is even worse than you think, and few politicians have the courage to do anything about it. And number two, just about everything you know about U.S.
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
tax policy is wrong. That's next time on the show. Until then, take care of yourself. And if you can, someone else, too. Freakonomics Radio is produced by Stitcher and Renbud Radio. You can find our entire archive on any podcast app. also at Freakonomics.com, where we publish transcripts and show notes. This episode was produced by Teo Jacobs, with help from Zach Lipinski.
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
The Freakonomics Radio Network staff includes Alina Cullman, Augusta Chapman, Dalvin Abouaji, Eleanor Osborne, Ellen Frankman, Elsa Hernandez, Gabriel Roth, Greg Rippin, Jasmine Klinger, Jeremy Johnston, John Schnarz, Morgan Levy, Neil Carruth, and Sarah Lilly. Our theme song is Mr. Fortune by The Hitchhikers. Our composer is Luis Guerra. As always, thanks for listening. I would think so, yes.
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
Less multitasking while making dinner or breakfast.
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
I think most people pay a little bit of attention to what's going on in the world that they live in right now. Not a lot of attention, but a little bit of attention. And very few people read a lot of history. So we tend to respond to what's going on in the news, let's say in anti-competitive practice, based on what we know about the last couple of years.
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
Lina Khan was just 32 years old when Joe Biden appointed her to lead the Federal Trade Commission in 2021. She became the youngest FTC chair in history, and this agency goes back to 1914. Khan was also considered one of the most progressive chairs in FTC history.
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
Yeah, Facebook has gotten too big, Google's gotten too big, and therefore X or Y needs to be done. But that's not a particularly fruitful way to look at the world. It's nice to have some historical and even philosophical underpinnings. So if you could just talk about a quick history of competition law and how people long before us saw it
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
One of the signature achievements of her FTC term done in collaboration with the Department of Justice was an updated set of the government's merger guidelines. This is a 50 page blueprint for pushing back against over consolidation, for limiting both horizontal and vertical acquisitions, and for making the economy more resilient by reducing corporate power.
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
That wholesale revolution you're referring to, that includes what antitrust people call the Chicago School of Thought, named for University of Chicago legal scholars Robert Bork and Richard Posner, the economist Aaron Director and others. One person I spoke with who used to work with you made the note – and I'm curious if you think this is true –
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
That your youth really served you well in thinking this through, because rather than just accepting the current regulatory environment as it stood, you felt compelled to dig into that Chicago history. Can you walk me through what you saw there and how it shaped your thinking?
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
These are ideas we have dug into repeatedly on Freakonomics Radio. We have done episodes about consolidation in the eyeglass industry, in the pet care and dialysis industries. We made an episode called Are Private Equity Firms Plundering the U.S. Economy?, Now, with Donald Trump back in the White House, Lena Kahn is, of course, gone, replaced by a Republican chair, Andrew Ferguson.
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
Do you feel that was a legitimate expectation or it was a little bit of a fig leaf?
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
When you say that it rebuts those, can you put that in the form of more and more empirical evidence that what?
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
OK, so that's the context for the antitrust climate you walked into. Let's back up. You're at the open markets think tank. You're finding out everything there is to know about the history of antitrust policy and the poultry market, for instance. What happens then?
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
The abstract alone is fascinating. I'll just read one sentence back to you. In addition to being a retailer, Amazon is now a marketing platform, a delivery and logistics network, a payment service, a credit lender, an auction house, major book publisher. It goes on and on and on and on.
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
And the Trump administration has been moving quickly to undo or wipe out any number of Biden administration policies. But not those merger guidelines. They are being retained and embraced by the Trump administration. Here's how one former Biden administration official put it to me. It's like being in your house when a tornado comes and wipes out everybody's house except for yours.
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
Elements of the firm's structure and conduct pose anti-competitive concerns, yet it has escaped antitrust scrutiny. Is that the paradox of your title, that it's acting like a monopoly but escaping the scrutiny?
Freakonomics Radio
625. The Biden Policy That Trump Hasn’t Touched
What do you mean by those blind spots? And I'm curious how that was accomplished. Was that just Jeff Bezos and his leadership being very, very good at corporate strategy or was it more than that?
Freakonomics Radio
621. Is Professional Licensing a Racket?
Resources meaning this is typically a volunteer board where they don't have all these investigators going out to look through all these files and talk to witnesses and so on, yes?
Freakonomics Radio
621. Is Professional Licensing a Racket?
Rebecca Allensworth is a law professor at Vanderbilt University, and she's written a book about professional licensing. We Americans like to think of our economy as open and dynamic. Allensworth shows that in many ways it's not, and that these licensing boards help too many bad actors stay in their professions and keep too many good ones out.
Freakonomics Radio
621. Is Professional Licensing a Racket?
What happens when misconduct is bad enough that the criminal justice system gets involved? What do the licensing boards do then? Do they feel chastised? Are they themselves ever subject to penalty?
Freakonomics Radio
621. Is Professional Licensing a Racket?
Meaning they were not called up to the board?
Freakonomics Radio
621. Is Professional Licensing a Racket?
So you're saying if I'm a doctor and I'm selling opioids out of my car trunk and I get charged and whether convicted or not, you're saying that then my medical licensing board, which you would suspect would call me in for discipline or a hearing or something, they just don't even call them.
Freakonomics Radio
621. Is Professional Licensing a Racket?
During which time they're still seeing patients.
Freakonomics Radio
621. Is Professional Licensing a Racket?
And that's why she called her book The Licensing Racket.
Freakonomics Radio
621. Is Professional Licensing a Racket?
In the legal profession, which is your profession, should I assume, as with medicine, that the lower you are on the income chain, the more likely you are to have a lawyer who has been disciplined and you may not even know about it?
Freakonomics Radio
621. Is Professional Licensing a Racket?
You explain in the book how complaints against professional licensees can come from a variety of sources. They might come from law enforcement. They might come from the licensing board's own investigators. But one thing that surprised me is that boards rarely hear complaints brought by consumers or customers. Why is that?
Freakonomics Radio
621. Is Professional Licensing a Racket?
Why do licensing boards rarely hear directly from the patients of doctors, the clients of lawyers? I don't know. Maybe someone whose haircut went terribly wrong.
Freakonomics Radio
621. Is Professional Licensing a Racket?
Can anyone look up licensing board disciplinary action or investigative action on their lawyer, doctor, etc., etc. ?
Freakonomics Radio
621. Is Professional Licensing a Racket?
And how do you feel about that as a lawyer yourself?
Freakonomics Radio
621. Is Professional Licensing a Racket?
Remember, Rebecca Allensworth believes that the licensing racket, as she calls it, has two main flaws. It protects bad actors, which is what we've been hearing about so far, but also that it keeps too many good people out of the occupations they would like to join.
Freakonomics Radio
621. Is Professional Licensing a Racket?
That's coming up after the break. I'm Stephen Dubner. This is Freakonomics Radio. We'll be right back. The legal scholar Rebecca Allensworth spent years investigating the power, reach and shortcomings of professional licensing boards. Here's how she puts it in her book, The Licensing Racket. When it came to barriers to entry and restrictions on practice, boards went too far.
Freakonomics Radio
621. Is Professional Licensing a Racket?
When it came to disciplining dangerous providers, they didn't go nearly far enough. Before the break, Allensworth told us about the disciplining problem, but she argues that the lockout effect of professional licensing is also damaging.
Freakonomics Radio
621. Is Professional Licensing a Racket?
When you look across the labor force in the U.S., you say that roughly one in five workers in America do a job that requires a license. What do you think is the appropriate share of workers? Should it be a third of that? Should it be a tenth of that?
Freakonomics Radio
621. Is Professional Licensing a Racket?
The medical and legal professions, how big are they as a part of the whole workforce?
Freakonomics Radio
621. Is Professional Licensing a Racket?
They'd have to change their name, though, wouldn't they?
Freakonomics Radio
621. Is Professional Licensing a Racket?
You write that professional licensing is, quote, an especially onerous form of regulation erecting high financial and educational barriers and that it therefore has a big effect on, quote, equality, public health, the economy and the American dream. So that's a lot.
Freakonomics Radio
621. Is Professional Licensing a Racket?
OK, so that's how licensing hurts the American dream. How about the other categories, the economy, public health, equality?
Freakonomics Radio
621. Is Professional Licensing a Racket?
So it exacerbates inequality essentially.
Freakonomics Radio
621. Is Professional Licensing a Racket?
But advocates of licensing argue that licensing can help raise wages for lower education or low-income workers, especially minorities, by providing a better path to economic sustainability because they are in a licensed profession. How much sympathy do you have for that argument?
Freakonomics Radio
621. Is Professional Licensing a Racket?
Among all licensed professions in the U.S., which ones do you think clearly don't need licensing?
Freakonomics Radio
621. Is Professional Licensing a Racket?
I'm laughing only because there aren't that many people in the world making the arguments that you're making today about the licensing racket. But it seems that every person that does make the argument uses haircutting and hairstyling as an example. Why is that?
Freakonomics Radio
621. Is Professional Licensing a Racket?
Around 20% of the American workforce is subject to professional licensing. The system is sanctioned by state governments across the country, and it has been expanding like crazy. Today, in an episode of the Freakonomics Radio Book Club, how much licensing is too much? And where has this system gone especially wrong?
Freakonomics Radio
621. Is Professional Licensing a Racket?
What happens during fifteen hundred hours of hair styling training? What happens during that time? Is it just an apprenticeship, essentially?
Freakonomics Radio
621. Is Professional Licensing a Racket?
In many of the occupations that Allensworth looked into, there were English-only written tests that worked to exclude non-native speakers. And while tests and training are designed to improve the quality of services offered by a profession, the evidence is mixed, to put it generously.
Freakonomics Radio
621. Is Professional Licensing a Racket?
During her research, Allensworth found that licensing boards put far more energy into enforcing their own requirements than protecting the public. Consider the board in Tennessee that licenses alarm systems contractors. Allensworth found them, quote, 10 times more likely to take action in a case alleging unlicensed practice than one complaining about service quality or safety.
Freakonomics Radio
621. Is Professional Licensing a Racket?
And then there are the licensing turf wars.
Freakonomics Radio
621. Is Professional Licensing a Racket?
Let this guy keep his license in part because there just aren't enough doctors to go around.
Freakonomics Radio
621. Is Professional Licensing a Racket?
The racket is real. The solution? That's the hard part. But we'll get into all that starting now.
Freakonomics Radio
621. Is Professional Licensing a Racket?
This is Freakonomics Radio, the podcast that explores the hidden side of everything with your host, Stephen Dubner.
Freakonomics Radio
621. Is Professional Licensing a Racket?
At Vanderbilt Law School, Rebecca Allensworth teaches contracts and antitrust law. Those are pretty standard law school topics. But when she was starting out, she got obsessed with a topic that very few legal scholars, really few scholars from any discipline, have studied closely, professional licensing boards. Let's start by defining some terms.
Freakonomics Radio
621. Is Professional Licensing a Racket?
I think it's going to be an amazing night, at least on paper it is. You never know what happens with a live show. And that's part of the fun. So I hope you'll join us. Tickets at Freakonomics.com slash live shows. One word. Get them fast. Only a few left. February 13th in L.A., produced in partnership with LAist and SiriusXM. I'll see you there.
Freakonomics Radio
621. Is Professional Licensing a Racket?
What's wrong with competition? Economists love competition. Some governments proclaim to love competition. It creates better quality and cost for most consumers. So in what way am I totally wrong when I say that?
Freakonomics Radio
621. Is Professional Licensing a Racket?
Your argument intersects with the new Trump administration and especially, you know, Trump himself, but mostly Elon Musk vowed to shrink the federal government. Is it possible that a so-called Department of Government Efficiency will start pushing things in the direction that you would like on the state level?
Freakonomics Radio
621. Is Professional Licensing a Racket?
So you're saying that the Musk Trump version of efficiency just means unregulated versus capable regulation?
Freakonomics Radio
621. Is Professional Licensing a Racket?
So my profession, journalism, does not require a license?
Freakonomics Radio
621. Is Professional Licensing a Racket?
Okay, so for all the reporting you did, all the board meetings you sat in on, the conversations you had, and the legal scholarship you added on top of all that, and then writing the book itself, do you think your work will have any significant effect?
Freakonomics Radio
621. Is Professional Licensing a Racket?
OK, so that's what a licensing board is. What is it not?
Freakonomics Radio
621. Is Professional Licensing a Racket?
I'd like to thank Rebecca Allensworth for helping me think about licensed professionals a little bit differently. This is a subject I've been interested in for a long time, but I was always looking for the right opportunity, the right person, really, to explain it. I appreciate how much legwork and brainwork Allensworth put into it. Again, her book is called The Licensing Racket.
Freakonomics Radio
621. Is Professional Licensing a Racket?
I'd love to hear your thoughts on this topic. Our email is radio at freakonomics.com. Coming up next time on the show.
Freakonomics Radio
621. Is Professional Licensing a Racket?
The brown rat, also known as Rattus norvegicus, is one of the most reviled animals in the world. Why?
Freakonomics Radio
621. Is Professional Licensing a Racket?
It doesn't help that they supposedly killed off half of Europe in the Black Death. So most people respond to rats with disgust, fear, even anger. But not everyone. They're, in some sense, our natural city partner.
Freakonomics Radio
621. Is Professional Licensing a Racket?
And just wait until you hear the backstory of the film Ratatouille. Can I just say, Ratatouille is an idea, as a story, it's an allegory. We have made a three-part series that we're thinking about calling Sympathy for the Rat. That starts next time on the show. Until then, take care of yourself. And if you can, someone else too. Freakonomics Radio is produced by Stitcher and Renbud Radio.
Freakonomics Radio
621. Is Professional Licensing a Racket?
You can find our entire archive on any podcast app. It's also at Freakonomics.com, where we publish transcripts and show notes. This episode was produced by Tao Jacobs.
Freakonomics Radio
621. Is Professional Licensing a Racket?
The Freakonomics Radio Network staff also includes Alina Kullman, Augusta Chapman, Dalvin Abouaji, Eleanor Osborne, Ellen Frankman, Elsa Hernandez, Gabriel Roth, Greg Rippin, Jasmine Klinger, Jeremy Johnston, John Schnarz, Morgan Levy, Neil Carruth, Sarah Lilly, and Zach Lipinski. Our theme song is Mr. Fortune by the Hitchhikers. And our composer is Luis Guerra. As always, thank you for listening.
Freakonomics Radio
621. Is Professional Licensing a Racket?
The Freakonomics Radio Network. The hidden side of everything.
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621. Is Professional Licensing a Racket?
Early on in her research, Allensworth did what you would expect a legal scholar to do. She read everything she could find about professional licensing. She sifted through legal databases to try to understand first the broad strokes of the system and then the nuances. She checked out the economics literature on licensing. And she worked all of this into a critique that she was starting to build.
Freakonomics Radio
621. Is Professional Licensing a Racket?
Before long, her work was being cited by the Supreme Court. She was invited to speak in Congress and in the Obama White House. At this point, her critique was legalistic and theoretical. She'd never actually attended a meeting of a licensing board. But when she did that, the obsession deepened.
Freakonomics Radio
621. Is Professional Licensing a Racket?
Allensworth wound up embedding herself for four years in the licensing system of Tennessee, where she lives. She attended many board meetings. She interviewed more than 180 people covering 28 professions. She started writing some journalism on the subject, and now she has published her book, The Licensing Racket, How We Decide Who Is Allowed to Work and Why It Goes Wrong.
Freakonomics Radio
621. Is Professional Licensing a Racket?
Hey there, it's Stephen Dubner with one last reminder to come see Freakonomics Radio live in Los Angeles on February 13th. I will be joined on stage by Ari Emanuel, the CEO of Endeavor, and RJ Cutler, the documentary filmmaker who made the recent Martha Stewart doc, as well as films on Billie Eilish, Elton John, and Coming soon, the Dodgers-Yankees World Series.
Freakonomics Radio
621. Is Professional Licensing a Racket?
The minute you start reading, you can see why she wanted to call the book Bored to Death.
Freakonomics Radio
621. Is Professional Licensing a Racket?
And that's how Rebecca Allensworth came to understand how the licensing system works. As she describes it, the path to licensing usually starts small. Members of a profession, often backed by a professional association, will approach a state legislature with a proposal for licensure.
Freakonomics Radio
621. Is Professional Licensing a Racket?
These proposals, known as practice acts, set the scope and entry requirements and ethics rules for a given profession. Once a profession secures its initial licensing law, it gains control of the regulatory board that oversees it. Today, there are around 300 licensed professions in the U.S. regulated by around 2000 licensing boards across the country. How did all this get started?
Freakonomics Radio
621. Is Professional Licensing a Racket?
Some of the first licensees were physicians.
Freakonomics Radio
621. Is Professional Licensing a Racket?
What does a hairdresser have in common with a lawyer? How about an interior designer and a doctor, an auctioneer and a funeral director? These are not jokes. I'm sorry. I wish they were. What these jobs all have in common is that they require a professional license, which is administered by a licensing board that is often made up of other doctors and funeral directors and hairdressers.
Freakonomics Radio
621. Is Professional Licensing a Racket?
Okay. And all the licensed professions you write about have boards. And earlier you said that the board situation is terrible. Why is it terrible?
Freakonomics Radio
621. Is Professional Licensing a Racket?
So the policing and disciplinary functions are just not performed well?
Freakonomics Radio
621. Is Professional Licensing a Racket?
Here's a sentence from the book Jacket that I particularly love. When Rebecca Allensworth began attending board meetings, she discovered a thicket of self-dealing and ineptitude. The self-dealing we can get to later. Let me hear a favorite example of ineptitude.
Freakonomics Radio
621. Is Professional Licensing a Racket?
So it's really interesting reading about all the reasons for that and all the ways in which a licensing board, even if well-intentioned, is underpowered. That would seem to be most prominent in medical boards, right?
Freakonomics Radio
621. Is Professional Licensing a Racket?
You write that licensing boards, quote, combine the most dangerous features of a professional association. And I have to say, I'd never really thought about professional associations as dangerous before. And the government agency boards have all the interests and incentives of a private club and the police power of the state to back them up.
Freakonomics Radio
621. Is Professional Licensing a Racket?
When I first read that, I was sure that you were overstating your case. By the time I finished your book, I was pretty certain that you weren't. But if I read that out of context, I might take you for some kind of deep state conspiracist. Maybe you are, but can you give me a sense of why you've got such a harsh indictment in that sentence?
Freakonomics Radio
621. Is Professional Licensing a Racket?
There's more than that. They may have a license, but there's a lot that can be buried within a valid license that is still not very good for consumers.
Freakonomics Radio
621. Is Professional Licensing a Racket?
And in that case, who were the members of the board? Did they have any relationship with the person whose license was being considered?
Freakonomics Radio
621. Is Professional Licensing a Racket?
This may not be something you've ever thought about, and I wouldn't blame you. It's one of those things a friend of mine calls a MIGO topic. MIGO standing for my eyes glaze over. But when you think about how our economy works, these labor licensing rules are pretty important.
Freakonomics Radio
621. Is Professional Licensing a Racket?
You cite many examples of professionals who face discipline from their licensing board, but then they encounter, as you put it, a system full of second, third, and even fifth chances. And you write that a lot of these regulatory failures come from the most legitimate professions, you call them, like medicine. Talk about the Michael LaPaglia story.
Freakonomics Radio
621. Is Professional Licensing a Racket?
His license was ultimately revoked, yes?
Freakonomics Radio
621. Is Professional Licensing a Racket?
Would the revocation have happened if not for the federal criminal charge?
Freakonomics Radio
621. Is Professional Licensing a Racket?
In a case like that, how much evidence does a board have or seek out? They're essentially acting as a court, but in an actual court, the judge and the prosecutors have a lot more opportunity, it seems, to gather evidence than these licensing boards do. Or maybe not more opportunity, but maybe more incentive, I hate to say.
Freakonomics Radio
628. Sludge, Part 2: Is Government the Problem, or the Solution?
It's probably not surprising that many of the personal sludge stories we received had to do with government sludge. And when you think about government sludge at this moment in time, you may well think of Elon Musk, the world's wealthiest man and one of its most unusual. He has been deputized by Donald Trump to drain the DC swamp. To take a chainsaw to bureaucracy, pick your metaphor.
Freakonomics Radio
628. Sludge, Part 2: Is Government the Problem, or the Solution?
There are plenty to go around. Musk runs a new entity called Doge, the Department of Government Efficiency, which took over and renamed an existing entity called the USDS or US Digital Service. So we thought it'd be good to speak with one of the people who founded the USDS a little over 10 years ago under President Obama.
Freakonomics Radio
628. Sludge, Part 2: Is Government the Problem, or the Solution?
Palka no longer works in government, but she is usually adjacent.
Freakonomics Radio
628. Sludge, Part 2: Is Government the Problem, or the Solution?
That nonprofit is called Code for America. Polka does some other things as well.
Freakonomics Radio
628. Sludge, Part 2: Is Government the Problem, or the Solution?
It was in 2014 that Polka co-founded the U.S. Digital Service. It was imagined as a kind of anti-sludge strike force going from agency to agency to help them update their digital infrastructure. And how did Jennifer Polka become this kind of a fixer? I asked her. Specifically, I asked what sort of superpower this requires.
Freakonomics Radio
628. Sludge, Part 2: Is Government the Problem, or the Solution?
Intra-English translation, you're saying?
Freakonomics Radio
628. Sludge, Part 2: Is Government the Problem, or the Solution?
Do you know the story of how red tape got its name? Here, it's a cute story. I'll tell you. It apparently dates back to 16th century Spain and King Charles V, who had his most important legal documents bound in red ribbon, eye-catching and expensive ribbon befitting a king. versus the plain ribbon used for less important documents. This tradition spread through Europe and to America.
Freakonomics Radio
628. Sludge, Part 2: Is Government the Problem, or the Solution?
So in the case of a government function, who would be the two parties that you're translating for?
Freakonomics Radio
628. Sludge, Part 2: Is Government the Problem, or the Solution?
So is government sludgier in a different way than other institutions or firms, or is sludge pretty much the same everywhere?
Freakonomics Radio
628. Sludge, Part 2: Is Government the Problem, or the Solution?
Like you or I can't decide to give unemployment benefits. I mean, we could, but we don't.
Freakonomics Radio
628. Sludge, Part 2: Is Government the Problem, or the Solution?
I'd like you to talk for a minute about the very not good rollout of healthcare.gov way back when. That was a website where you could buy insurance under the new Affordable Care Act.
Freakonomics Radio
628. Sludge, Part 2: Is Government the Problem, or the Solution?
So what happened? What were the problems that led to that failure and what kind of lessons can you draw from the failure?
Freakonomics Radio
628. Sludge, Part 2: Is Government the Problem, or the Solution?
And as governments and legal institutions expanded, there was ever more need to go back into the archives to find these important foundational documents. This meant that lawyers and clerks had to constantly untie and retie those red ribbons, later called red tape. OK, that concludes our history for today. Back to the sludgy present.
Freakonomics Radio
628. Sludge, Part 2: Is Government the Problem, or the Solution?
In 2020, early in the COVID pandemic, Jennifer Palka was brought in by the state of California to help with a similar problem, a state-run website that was overwhelmed by applications for unemployment benefits.
Freakonomics Radio
628. Sludge, Part 2: Is Government the Problem, or the Solution?
How do you address that without starting over?
Freakonomics Radio
628. Sludge, Part 2: Is Government the Problem, or the Solution?
So if you set an LLM to work on those 7,000 plus pages of just New Jersey unemployment compensation regulations, I'm guessing it could do perfectly well at giving you a three-page version. But I'm also guessing it would point out what are inherent contradictions that are unresolvable. Yes?
Freakonomics Radio
628. Sludge, Part 2: Is Government the Problem, or the Solution?
And just let's keep with this thought experiment. What if you, Jen Palka, had the ability and the permission? What do you think would be the result if you said, let's actually try this? Let's reduce the 10,000 pages of X regulations around whatever it is. voting registration or unemployment or clearing someone's felony conviction after marijuana is decriminalized, et cetera, et cetera.
Freakonomics Radio
628. Sludge, Part 2: Is Government the Problem, or the Solution?
And we can take those thousands of pages and turn it into a one pager. Then we just need to take a step back, get rid of the stuff that's not working and that we can't agree on and move forward in a streamlined way with the stuff that is working and or that we can agree on. Would that work?
Freakonomics Radio
628. Sludge, Part 2: Is Government the Problem, or the Solution?
In last week's episode, we met the Stanford economist Neil Mahoney, who spent time in both the Biden and Obama administrations. He is particularly interested in consumer finance, which often means protecting consumers from financial exploitation.
Freakonomics Radio
628. Sludge, Part 2: Is Government the Problem, or the Solution?
Give me some specifics of safeguards. Let's stick with the realm of unemployment insurance. I'm guessing that most of the safeguards are to prevent fraud of different sorts. Is that correct?
Freakonomics Radio
628. Sludge, Part 2: Is Government the Problem, or the Solution?
You just mentioned judgment. I once heard someone really smart. She used to run universities and she would talk about how she hires people generally. She said, I don't want to hire people who are good at following rules. I want to hire people who have good judgment.
Freakonomics Radio
628. Sludge, Part 2: Is Government the Problem, or the Solution?
And that really stuck with me because I've come to see that a lot of the trouble in the world, or at least a lot of the sludge is caused by people who are pretty sure that they're doing the right thing by following the rules. And it's very simple to follow rules. It's kind of paint by numbers. Do you agree or disagree with that?
Freakonomics Radio
628. Sludge, Part 2: Is Government the Problem, or the Solution?
One thing that made me want to do this episode was trying to do something very simple with my bank that turned into a comedy of errors. I wanted to buy a CD. The rates were good. I had a And then when the CD was getting ready to expire, it was not so simple. I thought I would have the option to either re-enroll, roll it over, or just move the money back into checking or whatnot.
Freakonomics Radio
628. Sludge, Part 2: Is Government the Problem, or the Solution?
And it turns out that no, I couldn't do that. I had to get on the phone with my banker. He said it would take about 20 minutes. I said, what are you talking about? Why? My first instinct was, well, this is the way companies like to work. They make it easy to buy and hard to sell, easy to subscribe, hard to unsubscribe.
Freakonomics Radio
628. Sludge, Part 2: Is Government the Problem, or the Solution?
It turns out that he needed a lot of identity verification, which struck me as absurd because I was already identified. But he attributed it to government compliance laws, know your customer laws and things like that. I do wonder how much government sludge tips over into and infects private firms and all the rest of us.
Freakonomics Radio
628. Sludge, Part 2: Is Government the Problem, or the Solution?
From the government side or from the firm side?
Freakonomics Radio
628. Sludge, Part 2: Is Government the Problem, or the Solution?
Meaning it's easy to sign up for something and forget about it. and keep paying for it. For example, a digital subscription to a newspaper.
Freakonomics Radio
628. Sludge, Part 2: Is Government the Problem, or the Solution?
So I hate to be impatient, and what you just described about policy implementation is plainly part of the solution, but I want more solution. We could talk about the formation of the problem forever, but it doesn't sound that surprising. It's a little bit like, you know, if we were...
Freakonomics Radio
628. Sludge, Part 2: Is Government the Problem, or the Solution?
geologists we'd talk about this sedimentary accumulation that's happened over billions of years like we get it there were fires earthquakes it all added up but now it's a big rock and we need to move the rock so how do you move the rock
Freakonomics Radio
628. Sludge, Part 2: Is Government the Problem, or the Solution?
The Loper-Bright decision that Paul just mentioned is a 2024 ruling that overturned what is known as the Chevron doctrine, which required courts to defer to federal agencies on how statutes are interpreted. Loper-Bright will require courts to independently assess certain statutes and sometimes overrule the agencies. As Palka says, nobody knows exactly what this is going to look like.
Freakonomics Radio
628. Sludge, Part 2: Is Government the Problem, or the Solution?
Critics say Loper Bright will give the courts too much leverage on issues like health care, the environment, consumer safety. But Palka sees at least the potential for good reform. She and Andrew Greenway recently wrote a position paper about this.
Freakonomics Radio
628. Sludge, Part 2: Is Government the Problem, or the Solution?
You're saying these are 50 newspapers spread out across the country, but you're doing the signing up and canceling in Massachusetts.
Freakonomics Radio
628. Sludge, Part 2: Is Government the Problem, or the Solution?
And why is it relevant where you're doing it from? Because the laws apply to where your IP address is.
Freakonomics Radio
628. Sludge, Part 2: Is Government the Problem, or the Solution?
We heard how insurance companies use sludge to ration health care, how subscription services use sludge to avoid cancellations, and how governments are full of sludge because, well, because sludge is an almost inevitable byproduct of bureaucracy. Today, in part two, we look at ways to fight sludge through better legislation,
Freakonomics Radio
628. Sludge, Part 2: Is Government the Problem, or the Solution?
And that's just because California has always been pretty consumer progressive in that way, correct? That's right. Okay. So you've got a team, some are in California, some are in Massachusetts, and you're doing the same thing from those two places. Is that right?
Freakonomics Radio
628. Sludge, Part 2: Is Government the Problem, or the Solution?
Thank you. Thank you.
Freakonomics Radio
628. Sludge, Part 2: Is Government the Problem, or the Solution?
So what did Mahoney and his team learn from this research? Remember, in Massachusetts, fewer than half of the biggest newspapers in the country let you cancel online in the first place. Of those that did allow online cancellation, the vast majority slowed down the process with the kind of sludge that Mahoney was just describing.
Freakonomics Radio
628. Sludge, Part 2: Is Government the Problem, or the Solution?
And how about in California, consumer-friendly California, which already has laws that are supposed to make it as easy to cancel as it is to sign up. Even there, only 64% of the newspapers actually allowed online cancellation. And of those that did, 83% made the process sludgy.
Freakonomics Radio
628. Sludge, Part 2: Is Government the Problem, or the Solution?
In other words, firms purposely sludge up the cancellation process in order to discourage customers from canceling. But soon, this should be a thing of the past. Thanks in part to Mahoney's research and his work in the Biden White House, the FTC recently enacted a rule known as click to cancel. Here's how then-FTC chair Lina Khan put it when the rule was proposed.
Freakonomics Radio
628. Sludge, Part 2: Is Government the Problem, or the Solution?
Last week, in the first episode of this two-part series, the Nobel Prize-winning economist Richard Thaler described one of the most common afflictions of our time.
Freakonomics Radio
628. Sludge, Part 2: Is Government the Problem, or the Solution?
Some businesses too often trick customers into paying for subscriptions they no longer want or didn't sign up for in the first place. The proposal would save consumers time and money, and businesses that continued to use subscription tricks and traps would be subject to stiff penalties. The penalty phase, with potentially large fines, begins in May of this year.
Freakonomics Radio
628. Sludge, Part 2: Is Government the Problem, or the Solution?
Click to cancel is part of a bigger agenda on what are called junk fees that Mahoney worked on in the White House.
Freakonomics Radio
628. Sludge, Part 2: Is Government the Problem, or the Solution?
Yes, that was the apex of the launch. The junk fees agenda was meant to address problems like the one that Mahoney described in last week's episode.
Freakonomics Radio
628. Sludge, Part 2: Is Government the Problem, or the Solution?
through the use of artificial intelligence, and maybe by hiring a personal sludge coach. I'm not available. That's okay. We are available, starting now.
Freakonomics Radio
628. Sludge, Part 2: Is Government the Problem, or the Solution?
Presidential administrations, of course, change. And there's no guarantee that a regulatory agenda like this one will continue as planned. But for now, both click to cancel and all in upfront pricing are set to become the norm. Mahoney says there is broad support for this kind of thing.
Freakonomics Radio
628. Sludge, Part 2: Is Government the Problem, or the Solution?
Criticize it as government going too far, government getting in the business of business?
Freakonomics Radio
628. Sludge, Part 2: Is Government the Problem, or the Solution?
For anyone who is anti-sludge, these junk fee rules are real victories. But if we're being honest, they are relatively tiny victories considering how much sludge there is in the world. Consider the U.S. health care system. We got into this a bit last week with Ben Handel, a health care economist at UC Berkeley.
Freakonomics Radio
628. Sludge, Part 2: Is Government the Problem, or the Solution?
He told us that a lot of health care sludge is intentional, a way for insurance companies to ration care in order to profit maximize. He also described how sludgy it can be to simply figure out what is covered in the health care contract you're signing up for. And then once you're signed up, there's more sludge in trying to find a health care provider who actually has some availability to see you.
Freakonomics Radio
628. Sludge, Part 2: Is Government the Problem, or the Solution?
So I went back to Handel and asked if he had any fixes in mind, any solutions.
Freakonomics Radio
628. Sludge, Part 2: Is Government the Problem, or the Solution?
Come on, say what you really mean. What do you mean by that exactly? What needs to be done that requires too much cleverness?
Freakonomics Radio
628. Sludge, Part 2: Is Government the Problem, or the Solution?
This is Freakonomics Radio, the podcast that explores the hidden side of everything with your host, Stephen Dubner.
Freakonomics Radio
628. Sludge, Part 2: Is Government the Problem, or the Solution?
What Ben Handel just said there, that there's not really money to be made in health care, that's not quite right. There is money being made in health care. It's just that the business model is different with most products. The more you sell, the more money you make. But when you sell someone a health insurance policy, you get paid a fixed amount.
Freakonomics Radio
628. Sludge, Part 2: Is Government the Problem, or the Solution?
And the way you make money is by making sure that you pay the health care providers that you contract with less than that fixed amount. This is part of the reason why insurers make it hard for you to consume the health care you may want. So this is a case where commercial entities use sludge to boost their profits. Coming up after the break, how about government sludge?
Freakonomics Radio
628. Sludge, Part 2: Is Government the Problem, or the Solution?
It is a natural temptation to think that your problems are worse than other people's problems. Also, to think that the problems of our generation are worse than previous generations. But as it was written way back in Ecclesiastes, there is nothing new under the sun. And so it is with sludge. For many years, it went by another name, a prettier name, red tape.
Freakonomics Radio
628. Sludge, Part 2: Is Government the Problem, or the Solution?
I'm Stephen Dubner. This is Freakonomics Radio. We'll be right back. A little while back, we asked you, our listeners, to send in your personal sludge stories. Here's one from Paul Gabriel.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
Let's pull back here, just in case you haven't been following the recent psychodrama with the New York Giants that McCoy was talking about. Saquon Barkley is a name that comes up again and again in the argument about the value of a running back, in part because of the monster season he's had this year with the Eagles. But it's more interesting than that.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
The Giants took Barkley in the 2018 draft with the second overall pick. His five seasons in New York ranged from good to very good. He was hurt a few times and the Giants offensive line was weak, but he was still considered a top running back. The Giants chose to not offer him a new contract. Instead, they use what's called a franchise tag.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
That's an NFL rule that allows a team to keep a good player for one year at a relatively high salary rather than letting him become a free agent and pursue a longer term deal. While the Giants had Barkley on this one year hold, they gave their quarterback, Daniel Jones, a four year contract averaging $40 million a year.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
When Barkley became a free agent, he left the Giants and signed a three year contract with the Philadelphia Eagles for about $12 million a year. So less than a third of what Daniel Jones was being paid. And how did Jones and Barkley do this year? Well, Barkley had one of the best seasons an NFL running back has ever had, and his Eagles are in the Super Bowl.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
Daniel Jones played so badly that the Giants benched him and then released him. Like LaShawn McCoy asked, how is that fair? Well, fair may not be the right word. The real issue is value. The value of a running play versus the value of a passing play.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
But if you ask football fans of a certain age who they idolized when they were kids, it probably wasn't a wide receiver or even a quarterback. It was probably a running back.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
So, Brian, the reason I was really eager to speak with you is that Roland wrote this piece in the Wall Street Journal about the decline of running back salaries. And I've been told that if we had to point to one person in the universe who who is perhaps most responsible for that decline, it might be you. Do you wanna claim that credit or blame?
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
Describe your role in that larger movement then.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
Now, football stats were only a hobby at the time because you were a U.S.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
In what ways would you say that your military background contributed to the way that you frame the questions you're trying to answer in football?
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
So in a war-like setting, when you're trying to advance into enemy territory, which weapon is more valuable, the ground game or the passing game? Brian Burke's analytic approach allowed him to answer that question.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
Let's back up a bit. You don't have to go back to the 1920s or the 1950s, but pick whatever seems like a sensible starting point in modern NFL history and tell me how the running game evolved and was eventually superseded by the passing game.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
So the story you're telling me is simply that football people, including coaches and analytics people like you, have been discovering over the years that passing is more valuable than running. Additionally, the league itself decided over many years to make passing more prominent by rule changes.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
And so now we've just arrived at this new circumstance where passing is just more valuable than running. Where does that leave the running back in the modern football economy?
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
Could it be that this generation is different? And is Saquon Barkley the difference maker? Over the past 20 Super Bowls, the top rusher on the winning team has averaged only 70 yards. If you look at the betting markets for this year's Super Bowl, Barkley is expected to gain 115 rushing yards.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
When the Eagles beat the Washington Commanders last week to get into the Super Bowl, Barkley ran for 118 yards and three touchdowns. This led Fox Sports announcer Kevin Burkhart to call the Eagles pickup of Barkley, quote, one of the best free agent signings of all time.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
Still, the Eagles' opponent in the upcoming Super Bowl, the Kansas City Chiefs, are going for their third Super Bowl in a row, which would be a record, and their fourth win in six years. Even a casual football fan can name the Chiefs' starting quarterback, Patrick Mahomes, and their super-studly tight end, Travis Kelsey, who is even better known for dating Taylor Swift.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
But can you name the running backs who helped the Chiefs win all these Super Bowls? Probably not. They've been practically interchangeable, most of them earning between $1 and $3 million a year, compared to Kelsey's $17 million and Mahomes' $45 million. Now, you may be thinking, I understand that running backs have become somewhat less valuable, but are they really that much less valuable?
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
The three men we just heard from, we will meet them later. Two of them are former NFL running backs themselves, and the other has represented many running backs as an agent. The running back I loved as a kid was Franco Harris of the Pittsburgh Steelers. To be honest, I was a little obsessed with Franco.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
The answer to that question has to do with something that happened in 2011.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
That's coming up after the break. I'm Stephen Dubner and you were listening to Freakonomics Radio. Back in September, at the start of the NFL season, the economist Roland Fryer and I decided to team up to try to learn why running back salaries have fallen so much since their heyday. Salaries are driven in part by where a player is selected in the NFL draft.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
In 1990, 12 running backs were taken in the first two rounds of the draft. This year, there was one. So what's driving this decline? We've already heard about the analytics revolution that showed the value of passing versus running. We've heard about rule changes the NFL adopted to privilege passing game.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
But there was another big change in 2011 that shook things up for NFL rookies generally and running backs in particular. team has control of you for five years. That is Robert Turbin. He was an NFL running back for four teams over eight seasons, including a Super Bowl win with the Seattle Seahawks. Today, he does football commentary for CBS Sports. Roland Fryer spoke with him.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
The CBA is the collective bargaining agreement, the contract between NFL teams and the NFL Players Association, the union that represents the athletes. The negotiations over a CBA are long and often contentious as they establish pay standards and other terms for years to come. The current CBA was agreed to in 2020 and runs through the 2030 season. The one before that went into effect in 2011.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
Overall, the 2011 CBA was a lucrative affair for the players. Their share of league revenues rose from 42% to 47%. But that agreement also came with some restrictions for rookies. Before 2011, a drafted player could freely negotiate a contract with the team that chose him. This led to some bad deals for teams when the player didn't play well or got hurt.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
The 2011 agreement created a rookie wage scale that set contract terms based on draft order. It also mandated a four-year contract with a cost-controlled fifth-year option that their team could exercise. This structure is still in place today, and that's what Robert Turbin is talking about when he tells Roland Fryer that the team has control of you for five years.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
We don't need to get into the details here, but I did once write a book about him called Confessions of a Hero Worshipper. Like I said, a little bit obsessed. I liked everything about Franco, the way he carried himself off the field, but especially how he ran. Some running backs, like Jim Brown, were known for their power, for running people over.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
For some positions in football, including quarterback, a player is just coming into his prime at age 27. That is not the case for running backs.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
If you go back 20 years, the average career length for an NFL running back was around five and a half years. That number started dropping right around the 2011 collective bargaining agreement. And today, the average length is around two and a half years. Let's hear now from another former running back, Robert Smith. Like Robert Turbin, Smith played for eight years.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
All of his were with the Minnesota Vikings. Smith retired after the 2000 season.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
Today, Smith calls NFL and college games for Fox Sports. His reverence for the running back position goes deep.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
Others, like Gale Sayers, were so fast and graceful that it was hard to get a hand on them. Franco was somewhere in the middle, strong but elusive, a darter and a dodger. In football, every play is a miniature drama packed into just a few seconds. 22 athletes moving at once, as complicated as a blueprint, as brutal as war, as delicate as ballet. A passing play is a bit of a magic trick.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
Those occasional bursts of excitement are, of course, offset by thousands of hours of training and by the physical punishment.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
Robert Smith had a lot of reasons to walk away, a lot of things beyond football that excited him. He is an amateur astronomer, a prolific reader, and in addition to his broadcasting duties, he is working on a health and wellness startup, plus which he made good money as a younger man. His final contract paid him $25 million over five years.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
In his last season, the best of his career, he ranked second in the NFL in rushing yards. But it was clear by then that running back money was drying up. Every team has a league imposed salary cap and they're constantly trying to figure out which players they can give less money to in order to give more money to the players they think they cannot win without.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
And running backs had fallen off the cannot win without list. Over the past few decades, NFL revenues have more than doubled to about $20 billion a year. Since players get a percentage share of revenues, that means the overall player pool has also more than doubled. But running backs have barely shared in that gain.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
The pay for running backs and fullbacks over the past two decades has risen around 11%. For all other offensive positions, salaries have risen at least 90%. If you don't believe me, just ask an agent.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
So how many athletes do you represent now, your firm?
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
It would appear to me that an agent is busy and important when you're making a deal, but I don't know how much maintenance that deal requires as time goes on. Can you just talk about in the life cycle of an athlete, how involved are you?
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
And number two, we need your voice for an episode that we are in the middle of producing. It's about sludge, not the physical sludge that gunks up machinery and things like that. I am talking about the administrative and bureaucratic sludge that can make it hard to do simple things like cancel a subscription or pick the best health care coverage or sign up for some government service.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
Among agents that represent NFL players, what would you say that you're most known for?
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
The quarterback and receiver try to trick the downfield defenders into being in the wrong place at the right time. A running play is more predictable, since the running back has to get through a wall of massive defenders. But if he does and breaks free into open space, that is a special kind of thrill.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
Do you still represent the same share of running backs?
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
I don't mean to accuse you of chasing the money yourselves. You say, you know, you're responding to the market. But in a case like this, where you guys were known as a running back agency and then the market for running backs changes really pretty dramatically. I mean, who ends up representing the running backs?
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
Just different agents who are starting out, who don't have as much luxury to pick their roster the way you guys do. Is that the way it works?
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
What about rule changes that facilitated an opening up of the passing game?
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
When you say that the NFL responded to what the market wants, give me some specific examples of how the league has added leverage to make passing more prominent, either passing and or quarterback play more prominent.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
Let's talk about injuries and perishability generally. Just talk about the physical punishment that comes along with running back position, where it ranks with other offensive players.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
Back when Franco Harris was in the league and for a long time after, many of the game's biggest stars were running backs, and they were paid accordingly. If you go back 30 years and take the average salary of the top players by position, running backs ranked second, just behind quarterbacks. This year, running backs ranked 13th. So what happened?
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
What Whitney is talking about here when he says running backs by committee is when teams substitute in multiple players throughout the game or the season to share the workload. Here again is Brian Burke, the ESPN analyst.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
I think when most people watch football, they see the quarterback hand the ball to the running back who, when a play succeeds, he gets through the line and then keeps running and gains a bunch of yards and finally gets tackled. And they think, oh, my God, that running back is so talented. Explain what's actually happening to make that run a success.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
And then the people executing those blocks. Let's just talk about the offensive line. There's one running back who carries the ball, who succeeds. But then there are five or six other guys who are probably averaging, what, around 290 pounds on the offensive line? Oh, gosh, probably more now. Yeah. Some football fans really do pay attention to offensive linemen, but really it's mostly their moms.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
But there are a lot of them that are necessary for it to work. So what does that mean about the market?
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
Coming up after the break, do running backs have any chance of returning to their previous glory? Everything is cyclical, right? If you keep those bell bottoms long enough, they'll come back. I'm Stephen Dubner. This is Freakonomics Radio, and we will come back right after this. Most of us don't respond well when something is taken away from us.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
Psychologists like to talk about loss aversion, the fact that we feel more pain from loss than we feel pleasure from a gain of the same size. Well, imagine being an athlete who's been working hard since age five or six, driven by the very slim hope that you might live out your dream and become an NFL running back, only to succeed and discover that your position has been downgraded.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
Everyone knows the NFL has become much more pass-happy these last few decades, but still, how did running backs fall so far? As it turns out, I wasn't the only one with these questions.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
An elite running back in the NFL can still make millions of dollars, but keep in mind that A, running back careers are short, and B, many of your teammates will be making more millions than you. So what are your options? You could stage a holdout.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
That's what both Saquon Barkley and Josh Jacobs did in 2023, sitting out training camp after being franchise tagged by their respective teams, the New York Giants and the Las Vegas Raiders. Both of them left their teams at the end of the season, and both have prospered with their new teams, Barkley with the Eagles and Jacobs with the Green Bay Packers. But a holdout doesn't always go as planned.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
In 2018, Pittsburgh Steelers running back Le'Veon Bell, one of the best backs in the league at the time, held out for the entire season rather than play under a franchise tag. Here again is Brian Burke, the ESPN data scientist.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
He got a big money contract with the Jets, but then he wasn't very good there. Then his career was kind of over. What would you have advised him when he was doing really well with the Steelers on his rookie contract?
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
And it's usually the Jets, to be honest. He found that one for sure. Bell's agent at the time was Jeffrey Whitney, who we heard from earlier. He told us he didn't want to discuss the Bell situation. Beyond a holdout, what other options are available to dissatisfied running backs?
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
A few years ago, there was an attempt at creating a carve-out, a running back-specific labor designation proposed by a group called the International Brotherhood of Professional Running Backs. They petitioned the NLRB, the National Labor Relations Board, for what labor lawyers call a unit clarification. They argued that the unique physical demands of the running back position were
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
set them apart from other football players and that they should therefore be allowed to break away from the NFL Players Union and negotiate on their own. A clever idea, maybe, but the NLRB rejected their request. I asked Robert Smith, the former Vikings running back, what he thought of this idea.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
Roland Fryer, an economist at Harvard and a friend of Freakonomics, recently wrote a Wall Street Journal column called The Economics of Running Backs.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
So if carve outs and holdouts aren't the answer, how about a good old fashioned running back Zoom call? In 2023, Austin Eckler, now with the Washington Commanders, organized a Zoom with other top running backs, including Barkley, Jacobs, Christian McCaffrey, and Nick Chubb, to discuss the state of their position. Right now, there's really nothing we can do, Chubb said afterward.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
We're kind of handcuffed with the situation. We are the only position that our production hurts us. If we go out there and run 2,000 yards, the next year they're going to say, you're probably worn down.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
Still, it's worth wondering, given the exceptional season that Saquon Barkley had with the Eagles, if he also has a great Super Bowl and the Eagles beat the Chiefs, maybe the NFL will fall back in love with the running back?
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
Let's say you have a relative or a family friend who's 11, 12 years old, great athlete. What would you tell that kid if they're hoping for a long career in the NFL? Do you say, get the heck out of the running back position? I tell them to become a long snapper.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
We once made an episode about the economics of the long snapper position. It's called Why Does the Most Monotonous Job in the World Pay $1 Million? Episode 493, if you want to listen. As for running backs, LaShawn McCoy, the six-time pro bowler, was more optimistic about their future. Here he is again talking with Roland Fryer.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
I asked Roland if he would sit for an interview to help answer those questions. He said yes, but he had another idea that he insisted would be even more fun. So here's the thing that really puzzles me. When I called you up and asked if we could talk about your Wall Street Journal column and make an episode based on this idea, you said yes, and I would actually like to co-host that episode.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
There is some evidence to back up McCoy's optimism. In recent years, the running game has recovered a bit. In 2016, only 40.6% of the plays from scrimmage were run plays. That was a 20-year low. This year, it was 43.4% run plays. I asked Robert Smith, the former Vikings running back what he thought of this uptick.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
Is it possible that there might be somewhat of a return to the retro world of run first?
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
Brian Burke of ESPN agrees with Smith that Henry and Barclay are the exceptions that prove the rule. But his reasoning is different, and it goes back to his military training.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
I went back to my economist friend and co-host, Roland Fryer, and I asked him if a young running back came to him for advice, what would he say?
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
And yet, the end of your Wall Street Journal piece... It goes like this. The economist in me likes the results, meaning the results of your analysis, finding that running backs get paid less because they're less valuable relatively. But you write, the kid in me hopes for a running back renaissance. That's right.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
So as, you know, as cool, calm and collected and economist acting as you are right now saying, come on, the market is the market. There's part of you emotionally that's attached to my argument. Yeah. A hundred percent.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
Can you explain that? I know very few Harvard economists or anybody really who's interested in co-hosting a grubby little podcast.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
Market forces are real, but are they unstoppable? And what happens when they meet an immovable object or even better, an object in motion like Saquon Barkley, who also appears to be unstoppable? We'll find out soon. Thanks to Roland Fryer for inspiring and collaborating on this episode. He was right. It was a lot of fun.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
And big thanks to all our guests, LaShawn McCoy, Robert Smith, Robert Turbin, Jeffrey Whitney, and Brian Burke. I think they all did a great job explaining a complicated game that many of us love, but which many others are often baffled by. And thanks especially to you for listening. Coming up next time on the show...
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
The legal scholar Rebecca Haw Allensworth has just published a book called The Licensing Racket, how we decide who is allowed to work and why it goes wrong. That's next time on the show. Until then, take care of yourself. And if you can, someone else too. Freakonomics Radio is produced by Stitcher and Renbud Radio. You can find our entire archive on any podcast app.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
Also at Freakonomics.com, where we publish transcripts and show notes. This episode was produced by Tao Jacobs. The Freakonomics Radio Network staff also includes Alina Kullman, Augusta Chapman, Dalvin Abouaji, Eleanor Osborne, Ellen Frankman, Elsa Hernandez, Gabriel Roth, Greg Rippin, Jasmine Klinger, Jeremy Johnston, John Schnarz, Morgan Levy, Neil Carruth, Sarah Lilly, and Zach Lipinski.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
Well, other than that... I guess the serious question I'm asking is, what kind of questions do you hope to answer or explore as we move forward? You've got some data, you've talked to a bunch of people, but plainly your appetite is deeper than that. Why? What do you want to know?
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
Our theme song is Mr. Fortune by the Hitchhikers, and our composer is Luis Guerra.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
I can't marry anyone who I can't run faster than backwards. So that's a no.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
Yeah, but I've had a series of birthdays.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
Hey there, it's Stephen Dubner. Before today's show, two quick things. Number one, on February 13th, we are putting on a live Freakonomics radio show in Los Angeles. Come see us. As of this recording, there are some tickets left, but not many. So don't dawdle. Go to Freakonomics.com slash live shows, one word, to get tickets.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
So today on Freakonomics Radio, Roland Fryer and I explore the decline of the running back. We speak with one of the analytics gurus who sparked the revolution.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
We will hear an agent explain why the position is so difficult.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
The upcoming Super Bowl, the Philadelphia Eagles against the Kansas City Chiefs, will feature a running back who had a historically great season. So does this mean we're looking at a running back renaissance? I don't think so. The causes and consequences of the running back decline starting now.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
This is Freakonomics Radio, the podcast that explores the hidden side of everything with your host, Stephen Dubner.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
If you have a good sludge story or example, we want to hear it. Use your phone to record a short voice memo and send it to radio at Freakonomics.com. Please include your name, where you live, what you do, and tell us what's your sludge story. How did you respond to this sludge? And do you think it was accidental sludge or intentional? Make sure you record your voice memo in a quiet place.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
Roland Fryer is a Harvard economist. He has also co-founded a few companies and he's won some major awards for his research on education and policing. You may remember him from an episode we made a few years ago called Roland Fryer Refuses to Lie to Black America. But when he was a kid, he did not dream of being an economist.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
In the early 1980s, when the running backs Eric Dickerson and Walter Payton were tearing up the NFL, Rowland was doing the same in Pop Warner football.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
So what was your view of the running back position then? Did you just feel like you were king of the hill?
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
It wasn't just back then in the early 80s that running backs were revered. They had been at the center of the game since it began in the mid-1800s. It wasn't until 1906 that the forward pass was allowed in professional football. The NFL was founded in 1920, and for its first few decades, passing was rare.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
On the vast majority of plays, the ball was snapped to the quarterback, who would then hand it off to a running back. who would follow the blocks of his offensive linemen to try to get through the defensive linemen. It was not necessarily exciting. Football was a slow and grinding affair. Three yards and a cloud of dust was how people described it.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
Perhaps not coincidentally, football was not very popular either. The big American sports back then were baseball and boxing. It wasn't until the 1960s and 70s, with the rise of the passing game, that football started to become the juggernaut it is today. But for at least a couple more decades, running backs remained the star attraction.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
The position has always required a certain amount of physical sacrifice.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
So how long ago did you start thinking about this decline in the value of the running back?
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
And again, send it to radio at freakonomics.com. Thanks muchly. And now here is today's episode. The National Football League, a phenomenally successful piece of the sports and entertainment industry, is largely built around the forward pass.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
They've had the biggest drop relative to any other position. This season, the average salary of a starting quarterback in the NFL was just over $30 million. The average for starting running backs? $6 million. There are still plenty of running backs who are considered superstars. Saquon Barkley, Derrick Henry, Josh Jacobs, Christian McCaffrey. But they're not paid like superstars.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
None of those four are among the five highest paid players on their team. Why not? Roland Fryer wondered whether this was a supply story or a demand story. In other words, were running backs just not as good as they used to be? Or did teams no longer value what running backs had to offer?
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
The NFL Combine is a showcase where teams assess the abilities of the college players they are looking to draft.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
Is it that simple? To find out, we wanted to hear from some running backs. Roland took the first interview.
Freakonomics Radio
620. Why Don’t Running Backs Get Paid Anymore?
That's when the quarterback, the star of the show, throws the ball downfield to one of his sprinting receivers who tries to catch the ball and sprint even further down the field. This can be a very exciting thing to watch. In recent years, the passing game has gotten even more exciting and more sophisticated, and it has helped drive the league's massive growth.
Freakonomics Radio
627. Sludge, Part 1: The World Is Drowning in It
What happened at AAA surprised me, especially because after I'd made my appointment, I received a couple emails confirming it and asking me to let them know if I'd be late. So I really thought I had an appointment, the way the word is commonly used. But I realize now that their definition and mine were not the same.
Freakonomics Radio
627. Sludge, Part 1: The World Is Drowning in It
How much of this complication is due to the fact that the U.S. has such a different system of healthcare providers than just about every other wealthy country? Going back to what some people think of as the original sin after World War II when health insurance became something that companies buy for their employees rather than having some kind of national health service system.
Freakonomics Radio
627. Sludge, Part 1: The World Is Drowning in It
Either that or I had simply run into a situation where a seemingly simple thing is made complicated or slow or frustrating. Has this sort of thing ever happened to you? Of course it has. It happens all the time, and it comes in many flavors. For instance, when it takes 30 seconds to sign up for some subscription service and then forever to cancel it.
Freakonomics Radio
627. Sludge, Part 1: The World Is Drowning in It
One reason the US healthcare system is so sludgy is because it is primarily made up of private firms, a massive constellation of actors, each with their own incentives. So this makes any across-the-board sludge reduction hard. The U.K. system is at least more centralized, which means one move can affect millions of people.
Freakonomics Radio
627. Sludge, Part 1: The World Is Drowning in It
Prime Minister Keir Starmer recently made such a move by abolishing an oversight body called NHS England. He said he wants to cut bureaucracy and duplication, or as he called it, stodge, a sludge by any other name, I guess. Coming up after the break, how does all that health care sludge affect physicians? I'm Stephen Dubner. This is Freakonomics Radio. We'll be right back.
Freakonomics Radio
627. Sludge, Part 1: The World Is Drowning in It
Here is one of the biggest riddles of our time. How can it be that Americans spend more on health care than any other country, way more, but that we don't have the best health outcomes? There are a lot of answers to that question, a lot of different kinds of answers, and we've explored some of them before on this show. One answer you don't often hear is sludge.
Freakonomics Radio
627. Sludge, Part 1: The World Is Drowning in It
But just think about how much of our time and money is turned into waste by our gigantic health care machine just because things don't work the way they're designed to work. Take something as simple as how health care providers communicate with their patients.
Freakonomics Radio
627. Sludge, Part 1: The World Is Drowning in It
It's often confusing, sometimes contradictory or impenetrable, also wildly redundant, a blizzard of automated notifications and requests to fill out the form you've already filled out and that no one will end up looking at anyway. One effect of sludge is that it turns all of us into our own administrative assistants. Even simple email threads are no longer simple.
Freakonomics Radio
627. Sludge, Part 1: The World Is Drowning in It
They've gotten sludged up by those long legal disclaimers that some people attach to their every email signature. So what could have been a nice, clean email thread becomes a sludge forest that you have to hunt through in order to find the actual message. And now try doing this on a screen the size of your palm.
Freakonomics Radio
627. Sludge, Part 1: The World Is Drowning in It
This kind of sludge is not only frustrating, it's deeply inefficient and costly, and it leads to mistakes. There is, of course, one way to fight sludge by hiring someone to process it for you. As some academic researchers have pointed out, sludge favors the powerful, the wealthy and the healthy.
Freakonomics Radio
627. Sludge, Part 1: The World Is Drowning in It
But if you don't have the ability or the resources or the time to process all that sludge, you are at a big disadvantage. So getting back to the question I raised a minute ago, how can it be that we spend so much money on health care and don't get the best health outcomes? I would argue that sludge is probably a major contributor.
Freakonomics Radio
627. Sludge, Part 1: The World Is Drowning in It
For instance, there is research showing that a huge share of older adults struggle to use medical documents like forms or charts. So what good is a world class system of clinical and research expertise if people can't properly access that system?
Freakonomics Radio
627. Sludge, Part 1: The World Is Drowning in It
I went back to the economist Ben Handel and asked him how much he thinks sludge contributes to our very high cost of health care and our less than great outcomes.
Freakonomics Radio
627. Sludge, Part 1: The World Is Drowning in It
Or when you fill out some massive government form online, but that one data field won't accept your answer, and when you try to hit submit, the whole thing freezes. Or when your insurance company sends you a menu of health care plans and you literally cannot understand the difference between the options or how much they will actually cost. There is a word for this kind of thing.
Freakonomics Radio
627. Sludge, Part 1: The World Is Drowning in It
Let's back up for a minute here to see where Handel is coming from. His interest in healthcare economics goes back to when he was getting his Ph.D. from Northwestern University. He managed to get his hands on a very large and detailed set of insurance data.
Freakonomics Radio
627. Sludge, Part 1: The World Is Drowning in It
Handel found that just about every health plan offered to employees included what he calls a dominated option. That's a phrase that comes from game theory. And in this case, it means an option that is objectively worse than every other option. Theoretically, firms should not offer this option and no employees should choose it. But they did choose. And they do.
Freakonomics Radio
627. Sludge, Part 1: The World Is Drowning in It
Here's how Ben Handel put it later in a research paper he wrote along with Joshua Schwartstein. There is strong evidence that people do not translate readily available information into knowledge that would help them make better decisions.
Freakonomics Radio
627. Sludge, Part 1: The World Is Drowning in It
I mean, my first question there would be, you're saying these are employed people getting insurance through their employer. Why are the firms offering such bad choices?
Freakonomics Radio
627. Sludge, Part 1: The World Is Drowning in It
Exactly. But still they were doing it. The story that you're telling now about... These firms offering pretty bad plans to their employees suggest that firms have as hard a time navigating these health care insurance plans as civilians do. Is that too shorthandy or is that what this amounts to?
Freakonomics Radio
627. Sludge, Part 1: The World Is Drowning in It
So is it in that case the, quote, fault of the firm or is it the, quote, fault of the health care provider who is knowingly offering a suboptimal plan with the knowledge that most people are going to have a really hard time telling good from bad?
Freakonomics Radio
627. Sludge, Part 1: The World Is Drowning in It
Meaning the firm comes up with a subsidy that they are going to then recoup from the employees, but they may differ from plan to plan. Exactly. And you're saying they're mispricing those subsidies, it sounds like. Yes. Is this a case where the price that you're looking at and the terms that you're looking at are simply not transparent enough? Or is it miscalculations on behalf of the employer?
Freakonomics Radio
627. Sludge, Part 1: The World Is Drowning in It
When something is made easier to do, that is called a nudge. When it's made harder, that is sludge. It's no coincidence that these words rhyme. As we will hear later, they come from the same person. But where does sludge come from? Is it the inevitable residue of bureaucracy? Does it come from a lack of effort or maybe sheer incompetence? Is sludge ever a strategic maneuver?
Freakonomics Radio
627. Sludge, Part 1: The World Is Drowning in It
But the kind of certainty you're talking about isn't just the certainty of what you will need over the coming year. It's what the plan actually includes. Is that right?
Freakonomics Radio
627. Sludge, Part 1: The World Is Drowning in It
The more I hear from Ben Handel, the more I believe that sludge isn't just a nuisance. It's a cancer. It's a malignancy that turns otherwise healthy tissue sick. Think about it.
Freakonomics Radio
627. Sludge, Part 1: The World Is Drowning in It
Administrative burden for physicians that leads to more and more independent practices being essentially forced to join a big corporate practice, which, given the way big corporate health care operates, will produce even more sludge, which will infect even more healthy tissue. Healthcare is obviously a big and important sector, but let's be honest, sludge is everywhere.
Freakonomics Radio
627. Sludge, Part 1: The World Is Drowning in It
And the digital revolution has driven the spread. Early on, the internet was relatively free of sludge. Now, it's soaking in it. In 2023, the American Dialect Society named as its word of the year, which had been popularized by the writer Cory Doctorow. Let me read you a passage that Doctorow wrote. Here is how platforms die. First, they're good to their users.
Freakonomics Radio
627. Sludge, Part 1: The World Is Drowning in It
Then they abuse their users to make things better for their business customers. Finally, they abuse those business customers to claw back all the value for themselves. Then they die. Thank you. Thank you. Thank you.
Freakonomics Radio
627. Sludge, Part 1: The World Is Drowning in It
Today on Freakonomics Radio, we will try to answer all those questions as we begin a two-part series on sludge. Did we really need two episodes for this? We did, because sludge is everywhere, and it's time to fight back.
Freakonomics Radio
627. Sludge, Part 1: The World Is Drowning in It
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Freakonomics Radio
627. Sludge, Part 1: The World Is Drowning in It
But as I read the letter, I see there is a loophole that if you are a member of AAA, the American Automobile Association, which I happen to be, then you can renew your license at their office. And even better, you can set up an appointment ahead of time. That was exciting.
Freakonomics Radio
627. Sludge, Part 1: The World Is Drowning in It
Here's a voice you may recognize. He's been on the show a few times.
Freakonomics Radio
627. Sludge, Part 1: The World Is Drowning in It
And you co-wrote a book years ago, a beloved book, really, called Nudge. Correct.
Freakonomics Radio
627. Sludge, Part 1: The World Is Drowning in It
Richard Thaler likes to talk about what he calls the curse of knowledge, this idea that when you're the firm making some interface or product or service for you consumers, you know how everything works and it doesn't seem that complicated. Whereas if you're coming at it from the outside, it's a different picture. How much credit do you give that theory?
Freakonomics Radio
627. Sludge, Part 1: The World Is Drowning in It
So one more thing, Neil, do you think that maybe sludge has peaked?
Freakonomics Radio
627. Sludge, Part 1: The World Is Drowning in It
Okay, we will not lessen our resolve either. Next week, in part two of this sludge series, we look for solutions. I'd like to thank our guests today, Richard Thaler, Ben Handel, and Neil Mahoney. Although, between you and me, that's not how we say Mahoney's name around here.
Freakonomics Radio
627. Sludge, Part 1: The World Is Drowning in It
When we were preparing to interview him, we kept misspelling his last name in our internal emails, so we came up with a mnemonic device to remember. M-A, as in Massachusetts, where Mahoney grew up, and then H-O-N-E-Y, Honey. And that's why Neil Mahoney is known around here as Massachusetts Honey Boy. I hope he doesn't mind. You don't even want to know what we call Richard Thaler.
Freakonomics Radio
627. Sludge, Part 1: The World Is Drowning in It
Anyway, thanks to all of them. And special thanks to all our listeners who sent in their sludge tape. If you want to hear more about healthcare sludge, check out an episode we made a while back, number 456, called How to Fix the Hot Mess of U.S. Healthcare. And we will be back next week with Sludge Part 2. Until then, take care of yourself. And if you can, someone else too.
Freakonomics Radio
627. Sludge, Part 1: The World Is Drowning in It
Freakonomics Radio is produced by Stitcher and Renbud Radio. You can find our entire archive on any podcast app, also at Freakonomics.com, where we publish transcripts and show notes. This episode was produced by Augusta Chapman.
Freakonomics Radio
627. Sludge, Part 1: The World Is Drowning in It
The Freakonomics Radio network staff includes Alina Kullman, Dalvin Abawaji, Eleanor Osborne, Ellen Frankman, Elsa Hernandez, Gabriel Roth, Greg Rippin, Jasmine Klinger, Jeremy Johnston, John Schnarz, Morgan Levy, Neil Carruth, Sarah Lilly, Tao Jacobs, and Zach Lipinski. Our theme song is Mr. Fortune by the Hitchhikers, and our composer is Luis Guerra. As always, thanks for listening.
Freakonomics Radio
627. Sludge, Part 1: The World Is Drowning in It
As for the word itself, the way we're talking about it today, who pioneered the use of the word sludge in this context? Are you laying claim to having invented that?
Freakonomics Radio
627. Sludge, Part 1: The World Is Drowning in It
I'd like to hear you talk about your parents a little bit. I mean, I read a little bit about what they do, but I'm just curious how... Goodness, you've been stalking me.
Freakonomics Radio
627. Sludge, Part 1: The World Is Drowning in It
Let me intrude here for just a second to say that Thaler, compared to his fellow academic economists, is a bit unusual. He is plenty smart. He has a Nobel Prize, for instance, but he also engages with the real world in a way that many academics don't. Even in very serious matters, he manages to bring the fun. Some years back, I spent one of the most enjoyable afternoons of my life with Thaler.
Freakonomics Radio
627. Sludge, Part 1: The World Is Drowning in It
We both happened to be in London for work, and he had been asked to visit a few cabinet ministers to discuss how they might employ nudge strategies. So he suggested I come along. As we went from ministry to ministry, he'd say, hey, you're getting two for the price of one today, nudge and for economics.
Freakonomics Radio
627. Sludge, Part 1: The World Is Drowning in It
And he proceeded to dispense nudgy advice about tax forms and how to get more people to insulate their attics, all of which left the ministers pleased and enthused. Thaler has a can-do spirit, and this applies even to the challenge of eradicating sludge. So I asked him to start by giving a general description of the problem and whether most sludge is intentional, accidental, avoidable, or what.
Freakonomics Radio
627. Sludge, Part 1: The World Is Drowning in It
I have a story to tell you, and I'm curious if anything like this has ever happened to you. I recently got a letter from the Department of Motor Vehicles saying it's time to renew my driver's license. This is a letter that no one looks forward to receiving. In many places, the DMV is famously hard to deal with. Long lines, confusing protocols, et cetera, et cetera.
Freakonomics Radio
627. Sludge, Part 1: The World Is Drowning in It
Don Norman is a design scholar who is willing to point out bad design, including what are now called, in his honor, Norman doors.
Freakonomics Radio
627. Sludge, Part 1: The World Is Drowning in It
So I made my appointment online, put it in my calendar, got all my documents together, and I showed up on the right day, the right time, and found, to my surprise, a long line of people waiting for what looked to be just two or three clerks. I asked a couple people online what time their appointments were for, and they said they didn't have appointments. They had just walked in.
Freakonomics Radio
627. Sludge, Part 1: The World Is Drowning in It
Okay, so that's an example of physical sludge. Give me a nice example of a more virtual or representative sludge.
Freakonomics Radio
627. Sludge, Part 1: The World Is Drowning in It
In cases like that, how intentional and or strategic is it? Is that the firm making it harder to, in this case, cancel because canceling means less money and they're trying to profit maximize by essentially not letting you cancel? Is that what it's about or is it more incompetence or is it something else?
Freakonomics Radio
627. Sludge, Part 1: The World Is Drowning in It
When we started working on these episodes, we asked listeners to send in examples of sludge in their lives. And a lot of them did have to do with medical sludge.
Freakonomics Radio
627. Sludge, Part 1: The World Is Drowning in It
And so I, being an optimist, I thought maybe there's a separate line for appointments. So I asked around and one helpful AAA employee told me that, no, the line is the line, is how he put it. And how long do you think that line will take? I asked. Oh, probably just two hours, maybe three, he said.
Freakonomics Radio
627. Sludge, Part 1: The World Is Drowning in It
One reason that healthcare sludge is such a big problem is that healthcare is such a big industry. It makes up nearly 20% of our GDP and it employs more people than any other industry. So I went back to Richard Thaler to find out more about healthcare sludge. Talk to Ben about that. Talk to Ben about that, he says. In the history of Freakonomics Radio, there's only been one ironclad rule.
Freakonomics Radio
627. Sludge, Part 1: The World Is Drowning in It
Let's take that example and drill down a bit. Where does that sludge come from? Is the insurer just not working hard enough to keep their database updated? Maybe they don't have the commercial incentive to do so. Or are they intentionally making it harder to find a doctor because if the customer doesn't find a doctor, the insurer won't have to pay?
Freakonomics Radio
627. Sludge, Part 1: The World Is Drowning in It
Or is the list maybe a mess because doctors are moving out of insurer networks because doctors have encountered so much sludge?
Freakonomics Radio
627. Sludge, Part 1: The World Is Drowning in It
I had pictured myself buzzing in with my appointment being done in 15 minutes, maybe 30, even an hour would have been okay, but two hours or three, that I could not swing. So the next time you hear about a guy being arrested for driving with an expired license, that will be me.
Freakonomics Radio
627. Sludge, Part 1: The World Is Drowning in It
Let me just devil's advocate that for a second. Providing health care is obviously more complicated than providing technology. you know, a box of paperclips, even if the paperclips are coming from a factory in China that you have no relationship with, there are middlemen who make that really easy. And it's a commodity product.
Freakonomics Radio
627. Sludge, Part 1: The World Is Drowning in It
And health care is not a commodity product on either the provider or the consumer side. So I think we can all understand why it would be a lot more complicated to find let's say a good specialist within my healthcare plan than it would be to find the paper clips that I want on Amazon.
Freakonomics Radio
627. Sludge, Part 1: The World Is Drowning in It
That said, as you just noted, these healthcare firms are among the biggest firms in the country and healthcare is one of the biggest industries. So overall, how costly is all this sludge? Not just in dollars and time loss, but in healthcare not provided.
Freakonomics Radio
624. The Animal No One Loves, Until They Do
The cost of a lab rat can range from around $25 a piece to a few thousand dollars for a specially bred or genetically engineered specimen. But as many lab rats as there are, they are outnumbered by lab mice. No, they're cheaper. They're smaller. That is Bethany Brookshire. We heard from her in part one of the series. She's the author of a book called Pests, How Humans Create Animal Villains.
Freakonomics Radio
624. The Animal No One Loves, Until They Do
Are there research projects or experiments for which rats are prima facie better than mice?
Freakonomics Radio
624. The Animal No One Loves, Until They Do
I thought you were going to say that mice, their hands are too small to hold a joint and that rats somehow... If you could teach them to roll joints, I imagine that the mice would just roll a smaller one. Before she was a science writer, Brookshire was a practicing scientist at the Wake Forest School of Medicine, where she got a Ph.D. in physiology and pharmacology.
Freakonomics Radio
624. The Animal No One Loves, Until They Do
What were some drugs that you were giving to mice and rats?
Freakonomics Radio
624. The Animal No One Loves, Until They Do
That was going to be my guess, but you know.
Freakonomics Radio
624. The Animal No One Loves, Until They Do
I've read that the mouse or rat model in research can be really fruitful for certain kinds of research, but unfruitful for others. What can you tell me about that?
Freakonomics Radio
624. The Animal No One Loves, Until They Do
And there's a new garbage boy in the kitchen named Linguini. Linguini does want to cook, but he doesn't have much talent. Remy has talent, but he's a rat. So the two of them become secret collaborators.
Freakonomics Radio
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What are the other things that make mice and rats still really popular subjects of this kind of research? Is it that they're available, cheap, docile, that they breed quickly, that they respond quickly?
Freakonomics Radio
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And how do you feel about that as a human?
Freakonomics Radio
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Says the woman who, as a scientist, did her share of rat and mouse experiments. Sure did. And I'm guessing a bunch of them died in the process of that, yes?
Freakonomics Radio
624. The Animal No One Loves, Until They Do
Okay. For the record, I'm looking here at your author photo where you're looking like a regular human, right? Dressed nicely, standing in a nice place. But then you've got this rat kind of curled, not even curled up, like luxuriating in the crook of your arm.
Freakonomics Radio
624. The Animal No One Loves, Until They Do
This kind of affection toward the rat, expressed here by Brookshire and earlier by Julia Zichello, would seem to be rare. Anti-rat sentiment is widespread and it is vocal. Let's not forget, New York Mayor Eric Adams calls rats public enemy number one. But there are other voices out there and other sentiments.
Freakonomics Radio
624. The Animal No One Loves, Until They Do
A researcher at Utrecht University in the Netherlands named Koen Bomer published a paper called Catching the Rat, in which he examines the portrayal of rats in 20th century novels, movies, comics and more. In this analysis, Bomer found an extraordinarily diverse spectrum of human-rat relations. He argues that for many people, rats are no longer seen chiefly as villains.
Freakonomics Radio
624. The Animal No One Loves, Until They Do
You may remember the story that Brookshire told us in part one of this series about the temple in India where rats are worshipped.
Freakonomics Radio
624. The Animal No One Loves, Until They Do
Coming up, we go back to Jan Pinkova to find out the real mission of the film Ratatouille. Really to help us get along with each other. I'm Stephen Dubner. This is Freakonomics Radio. We'll be right back. When the film Ratatouille was released in 2007, the New York Times critic A.O.
Freakonomics Radio
624. The Animal No One Loves, Until They Do
Remy hides on top of Linguini's head under his chef's toque and becomes his puppet master chef. Together, they make beautiful food, potato leek soup, the perfect French omelet, and a twist on sweetbreads a la Gusteau. It turns out that Linguini is the son of the great Gusteau, and the secret collaboration between Linguini and Remy turns out to be a big hit. as was the film itself.
Freakonomics Radio
624. The Animal No One Loves, Until They Do
Scott described it like this, "...a nearly flawless piece of popular art, as well as one of the most persuasive portraits of an artist ever committed to film." The screenwriter and director was Brad Bird, who a few years earlier had made The Incredibles. Bird was also one of three people credited with Original Story. The other two were Jim Capobianco and the man we met earlier, Jan Pinkova.
Freakonomics Radio
624. The Animal No One Loves, Until They Do
Pinkova was born in what was then Czechoslovakia. But after the Soviet invasion of 1968, his family moved to England. He was six years old. He was interested in film from early on. When he was 12, he got an eight millimeter camera for Christmas. He won a national competition for young filmmakers run by the BBC. He was good at finding ideas in unusual places.
Freakonomics Radio
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For instance, watching his grandfather play chess by himself.
Freakonomics Radio
624. The Animal No One Loves, Until They Do
And yeah, it took a while. Jan Pinkova studied computer science as an undergraduate, and he got a PhD in robotics. This led to a career as a computer animator, and in 1993, he landed a job at Pixar. They were then starting pre-production on Toy Story, and Pinkova was assigned to the commercials group.
Freakonomics Radio
624. The Animal No One Loves, Until They Do
After a few years, he made an animated short called Jerry's Game about an old man who plays chess against himself. Jerry's Game earned Pinkova an Academy Award and a chance to pitch a feature film to the Pixar Brain Trust.
Freakonomics Radio
624. The Animal No One Loves, Until They Do
Just because it's so time intensive and expensive, yes?
Freakonomics Radio
624. The Animal No One Loves, Until They Do
So what happened then? I mean, I know the end of the story, but just give me the shortish version of what happened over the next couple of years between the full prototype, let's say, and the film being released.
Freakonomics Radio
624. The Animal No One Loves, Until They Do
Ratatouille, released in 2007, won the Oscar for Best Animated Feature, and it grossed over half a billion dollars. That made Ratatouille a big outlier in Hollywood. And Remy the Rat was an outlier, too. As we've been learning in this series on rats, it is a rare day when a rat is the hero of any story. Since the days of the bubonic plague, rats have been associated with death and disease,
Freakonomics Radio
624. The Animal No One Loves, Until They Do
Was there rat research as well? Yeah, there was rat research. Was that something that you were personally involved in or were you having researchers feed you information? And what was the information? Was it the biology, the history, the personality of rats?
Freakonomics Radio
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Okay. And that was a piece of real rat biology you chose to not include in the film.
Freakonomics Radio
624. The Animal No One Loves, Until They Do
What's it like to see a film like this have such great success, knowing that you gave birth to it and you raised it, but weren't around to, let's say, see it graduate?
Freakonomics Radio
624. The Animal No One Loves, Until They Do
Pinkova left Pixar soon after, and he worked on a few other features and shorts, but none have achieved as much acclaim or prestige as Ratatouille or the other projects he worked on at Pixar. And where is Jan Pinkova today?
Freakonomics Radio
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This reminds me of hearing Werner Herzog talk not that long ago about when he was in film school. Mostly he just stole cameras from school and went out and shot. Yeah.
Freakonomics Radio
624. The Animal No One Loves, Until They Do
To call someone a rat is a special kind of insult. It suggests they've behaved so badly as to be subhuman. But is it time to reassess the rat's reputation, perhaps even rehabilitate it? Today on Freakonomics Radio, we dissect Ratatouille with Jan Pinkova. In a way, Ratatouille is like ballet dancing with Nazis. We look at why rats have been so valuable to human science.
Freakonomics Radio
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I've heard you speak about the mission of filmmaking and storytelling generally, which is to give people not just an opportunity to be engaged and entertained, but an opportunity to change their perspective on something. When you began thinking about and writing Ratatouille, what perspective were you thinking about changing?
Freakonomics Radio
624. The Animal No One Loves, Until They Do
I didn't think about the Nazis until the scenes well along in the film after Remy gets reunited with his rat family and his rat tribe in the sewers. And then later... He gets lost on the streets of Paris and he runs into some humans who plainly hate rats. They scream when they see him. They literally kick him to the curb and he's made to feel disgusting, dirty, worthless, etc., etc. Yeah.
Freakonomics Radio
624. The Animal No One Loves, Until They Do
That was the first time that the allegory really hit me. I'm curious, when you grow up in Europe as you did, you have a different relationship to the war plainly than Americans do and different relationship to Germany and Nazism. It's interesting that you're now living in Germany. Obviously, so much has changed. But I am curious about
Freakonomics Radio
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you know, the way Remy in that moment was seen as an outcast, as dirty, as ruinous.
Freakonomics Radio
624. The Animal No One Loves, Until They Do
And Remy tries to convince his father that the course of events can change. The course of events, in this case, being rat relations with humans. In your film, it's hard to say whether the rats hate the humans more or the humans hate the rats more. It's intense on both sides. And the father argues that, you know, son, nature is nature, right? What were you going for there?
Freakonomics Radio
624. The Animal No One Loves, Until They Do
Was your original ending, even if just in your head, as happy an ending as the film ultimately had?
Freakonomics Radio
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In that moment, it will remind many of us of that Proustian rush when Proust eats the madeleine and his entire, you know, childhood life philosophy comes... It all comes rushing back to him and provokes this unbelievable examination of his own life.
Freakonomics Radio
624. The Animal No One Loves, Until They Do
In your case, when Anton Ego tastes the ratatouille and has this reverie and trip back to a very different place in time for him, in that case, is the ratatouille, the food itself, an allegory as well, or is it just food?
Freakonomics Radio
624. The Animal No One Loves, Until They Do
So the restaurant critic loves the rat's ratatouille. The rat loves to cook. And Jan Pinkova loves to tell stories about the human condition, sometimes in the form of an animated rat. I asked him if he thinks Ratatouille may have shifted the public's perception of rats.
Freakonomics Radio
624. The Animal No One Loves, Until They Do
Come along for this third and final episode in our series, Sympathy for the Rat.
Freakonomics Radio
624. The Animal No One Loves, Until They Do
I often wonder whether the demonization of the rat is a little bit random and or driven by earlier pop culture references. Because I think about the mouse. We had Mickey Mouse and Minnie Mouse. Whereas rats, you know, we had Templeton from Charlotte's Web, voiced by Paul Lynn, who is sinister. We had the film Willard. Rats are never the heroes.
Freakonomics Radio
624. The Animal No One Loves, Until They Do
None of them are about the soul or the mood or the abilities.
Freakonomics Radio
624. The Animal No One Loves, Until They Do
We have to remind ourselves that Jan Pinkava's view of the rat, despite all his research, is a fictional rat. Remy is a chef, after all. And none of the rats in Ratatouille seem bound by the rat's real lifespan of just two or three years. But is Pinkova's view of the rat any less realistic than New York Mayor Eric Adams's view?
Freakonomics Radio
624. The Animal No One Loves, Until They Do
He seems to see the rat as intentionally evil rather than as just another animal hustling to survive, much like New Yorkers hustle to survive and thrive. Neither of those views is very realistic. So what is a realistic view? Having now made these three episodes, I would put it this way. The rat is the animal no one loves until they do. So what's your view of The Rat?
Freakonomics Radio
624. The Animal No One Loves, Until They Do
Let us know what you think about this series, Sympathy for The Rat, or any of our episodes. You can reach us at radio at Freakonomics.com. Big thanks to Jan Pinkova and everyone else who helped tell this story. Bethany Brookshire, Kathy Karate, Bobby Corrigan, Ed Glazer, Neil Stenseth, Robert Sullivan, Jessica Tisch, Karen Wickerson, and Julia Zichello. Coming up next time on the show.
Freakonomics Radio
624. The Animal No One Loves, Until They Do
Lina Khan was just 32 years old when Joe Biden appointed her to lead the Federal Trade Commission. With Donald Trump back in the White House, Khan is gone, but Trump has let stand one of Khan's signature achievements, an updated set of merger guidelines that is designed to modernize antitrust.
Freakonomics Radio
624. The Animal No One Loves, Until They Do
Why would a new administration that seems to be reversing everything from the old one want to keep those guidelines? We'll find out next time on the show. Until then, take care of yourself. And if you can, someone else too. Freakonomics Radio is produced by Stitcher and Renbud Radio. You can find our entire archive on any podcast app.
Freakonomics Radio
624. The Animal No One Loves, Until They Do
It's also at Freakonomics.com, where we publish transcripts and show notes. This series was produced by Zach Lipinski with help from Dalvin Abouaji.
Freakonomics Radio
624. The Animal No One Loves, Until They Do
The Freakonomics Radio Network staff also includes Alina Kullman, Augusta Chapman, Eleanor Osborne, Ellen Frankman, Elsa Hernandez, Gabriel Roth, Greg Rippin, Jasmine Klinger, Jeremy Johnston, John Schnarz, Morgan Levy, Neil Carruth, Sarah Lilly, and Tao Jacobs. Our theme song is Mr. Fortune by the Hitchhikers, and our composer is Luis Guerra. As always, thank you for listening.
Freakonomics Radio
624. The Animal No One Loves, Until They Do
I think if you say that, that means you are. Yeah, that was bad. Can you cut that out for me?
Freakonomics Radio
624. The Animal No One Loves, Until They Do
We humans really love some animals. Two thirds of American households have at least one pet, most of them dogs or cats. We often treat them like members of the family. When we hear about an animal being mistreated or killed, the outcry can be as loud as if it happened to a fellow human, if not louder.
Freakonomics Radio
624. The Animal No One Loves, Until They Do
And yet, in 2022, when New York City Mayor Eric Adams declared war on rats and appointed a rat czar to get rid of them, there was almost no outcry. The rat seems to have crossed some invisible border from animal to pest, even menace. But it wasn't always thus.
Freakonomics Radio
624. The Animal No One Loves, Until They Do
This is Julia Zichello. She lives on the Upper West Side of Manhattan and is an evolutionary biologist at Hunter College. But her rat experience is not just academic.
Freakonomics Radio
624. The Animal No One Loves, Until They Do
I know that rats are extraordinarily fertile. They have really short gestation. They have a lot of pups. Do you know if maybe your car was also a rat baby hospital as well?
Freakonomics Radio
624. The Animal No One Loves, Until They Do
Zichello had never thought deeply about rats until they moved into her car. And even then, her attitude was relaxed. She wasn't strongly anti-rat, nor did she find a reason to become pro-rat. But soon after the car incident, things changed.
Freakonomics Radio
624. The Animal No One Loves, Until They Do
So you didn't have any breeding, obviously.
Freakonomics Radio
624. The Animal No One Loves, Until They Do
Are you a chef? Are you a home cook? I can cook. He says reluctantly. I sometimes cook well.
Freakonomics Radio
624. The Animal No One Loves, Until They Do
It was only when they were socializing with each other or would they vocalize when they were hanging with you?
Freakonomics Radio
624. The Animal No One Loves, Until They Do
Can you imitate the sounds that you did hear?
Freakonomics Radio
624. The Animal No One Loves, Until They Do
Here's what those special recordings sound like.
Freakonomics Radio
624. The Animal No One Loves, Until They Do
Did you take your grinder into the bathroom or a closet or something?
Freakonomics Radio
624. The Animal No One Loves, Until They Do
Is it possible that one partial solution to the infestation of wild rats in a city like New York The widespread embrace of pet rats?
Freakonomics Radio
624. The Animal No One Loves, Until They Do
I first came across Julia Zichello when I read a piece she wrote for a hyperlocal news site called the West Side Rag. If you live on the Upper West Side and don't read the rag, well, I don't even know what to say. Here is the first line of Zichello's piece. Almost a year has passed and I can finally write about it.
Freakonomics Radio
624. The Animal No One Loves, Until They Do
That feature film was Ratatouille. It's about a rat named Remy who lives in a farmhouse in the French countryside and dreams of becoming a chef.
Freakonomics Radio
624. The Animal No One Loves, Until They Do
So Pele died, you think of heartbreak, essentially?
Freakonomics Radio
624. The Animal No One Loves, Until They Do
I want to read a couple sentences from the piece you wrote. I regularly walk the Upper West Side and spot swashbuckling rats at all hours, but other times I find them squashed. I don't exactly feel sad about the dead rats, but I also don't feel nothing. The dead rats make me think about life, death and somewhere stuffed between the pavement and the pellage. I guess pellage is the fur of the rat.
Freakonomics Radio
624. The Animal No One Loves, Until They Do
Yes. Correct. Yeah. There is something about love in there, too. Can you say more about that love?
Freakonomics Radio
624. The Animal No One Loves, Until They Do
Are you going to replace them? Maybe that's unfair to say. Are you going to get more rats?
Freakonomics Radio
624. The Animal No One Loves, Until They Do
Julia Zichello, as a scientist living in New York, is by now familiar with what you might call the three main categories of rat. The wild ones who live on the streets, the domesticated ones who live in your home, and the rats that are bred to live and die in research labs.
Freakonomics Radio
624. The Animal No One Loves, Until They Do
But then Remy, his family, and his entire rat tribe are chased into exile, and he winds up in the sewers of Paris. As he explores the city above ground, Remy comes across the legendary Gusteau's restaurant. The late chef Auguste Gusteau was Remy's hero. His famous book is called Anyone Can Cook. But Remy sees that Gusteau's restaurant is now run by a corrupt, tyrannical chef named
Freakonomics Radio
624. The Animal No One Loves, Until They Do
For all the parallels there may be between a rodent like a rat and humans, one gigantic difference is fertility and lifespan. Is that meaningful in any significant way to us?
Freakonomics Radio
624. The Animal No One Loves, Until They Do
Coming up after the break, what other virtues does the lab rat have?
Freakonomics Radio
624. The Animal No One Loves, Until They Do
And how did the rat become a lab animal in the first place? I'm Stephen Dubner. This is Freakonomics Radio. We'll be right back. In one recent year, the market for laboratory rats in the U.S. was estimated at $1.5 billion. And that number is expected to rise as biomedical research keeps expanding.
Freakonomics Radio
619. How to Poison the A.I. Machine
Well, it took a while to get there, right? Napster really thrived for several years before it got shut down. Right, exactly. But in that case, you're saying that the people who not necessarily generated but owned or licensed the content were established and rich enough themselves so that they could fight back against the intruders.
Freakonomics Radio
619. How to Poison the A.I. Machine
I mean, that has become kind of an ethic of a lot of business in the last 20, 30 years, especially coming out of Silicon Valley. You know, you think about...
Freakonomics Radio
619. How to Poison the A.I. Machine
How Travis Kalanick used to talk about Uber, like it's much easier to just go into a big market like New York where something like Uber would be illegal and just let it go, let it get established and then let the city come and sue you after it's established. So better to ask for forgiveness than permission.
Freakonomics Radio
619. How to Poison the A.I. Machine
Indeed, the biggest tech firms in the world are all racing one another to the top of the AI mountain. They've all invested heavily in AI and the markets have, so far at least, rewarded them. The share prices of the so-called magnificent seven stocks, Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla, rose more than 60% in 2024.
Freakonomics Radio
619. How to Poison the A.I. Machine
And these seven stocks now represent 33% of the value of the S&P 500. This pursuit of more and better AI will have knock-on effects, too. Consider their electricity needs. One estimate finds that building the data centers to train and operate the new breed of AI models will require 60 gigawatts of energy capacity. That's enough to power roughly a third of the homes in the U.S.
Freakonomics Radio
619. How to Poison the A.I. Machine
Understanding a story and answering questions about it. Human level automated translation. Interpreting what is going on in a photograph. As Brynjolfsson is reading this list from the lectern, you're thinking, wait a minute, AI has solved all those problems, hasn't it? And that's when Brynjolfsson gets to his punchline. The Wooldridge book was published way back in 2021.
Freakonomics Radio
619. How to Poison the A.I. Machine
In order to generate all that electricity and to keep their commitments to clean energy, OpenAI, Amazon, Google, Meta and Microsoft have all invested big in nuclear power. Microsoft recently announced a plan to help revive Three Mile Island.
Freakonomics Radio
619. How to Poison the A.I. Machine
If you want to learn more about the potential for a nuclear power renaissance in the U.S., we made an episode about that, number 516, called Nuclear Power Isn't Perfect, Is It Good Enough? Meanwhile, do a handful of computer scientists at the University of Chicago have any chance of slowing down this AI juggernaut? Coming up after the break, we will hear how Ben Zhao's poison works.
Freakonomics Radio
619. How to Poison the A.I. Machine
I'm Stephen Dubner. This is Freakonomics Radio. We'll be right back. In his computer science lab at the University of Chicago, Ben Zhao and his team have created a pair of tools designed to prevent artificial intelligence programs from exploiting the images created by human artists. These tools are called Glaze and Nightshade. They work in similar ways, but with different targets.
Freakonomics Radio
619. How to Poison the A.I. Machine
The underlying process of creating this AI poison is, as you might imagine, quite complicated. But for an artist who's using Nightshade, who wants to sprinkle a few invisible pixels of poison on their original work, it's pretty straightforward.
Freakonomics Radio
619. How to Poison the A.I. Machine
The pace of AI's advance has been astonishing, and some people expect it to supercharge our economy. The Congressional Budget Office has estimated economic growth over the current decade of around 1.5% a year. Erik Brynjolfsson thinks that AI could double that. He argues that many views of AI are either too fearful or too narrow.
Freakonomics Radio
619. How to Poison the A.I. Machine
That entirely different thing is not chosen by the user. It's Nightshade that decides whether your image of a cow becomes a 1940s pickup truck versus, say, a cactus. And there's a reason for that.
Freakonomics Radio
619. How to Poison the A.I. Machine
And what do the artificial intelligence companies think about this nightshade being thrown at them? A spokesperson for OpenAI recently described data poison as a type of abuse. AI researchers previously thought that their models were impervious to poisoning attacks. But Ben Zhao says that the AI training models are actually quite easy to fool.
Freakonomics Radio
619. How to Poison the A.I. Machine
His free Nightshade app has been downloaded over 2 million times. So it's safe to say that plenty of images have already been shaded. But how can you tell if Nightshade is actually working?
Freakonomics Radio
619. How to Poison the A.I. Machine
Is it the case that your primary motivation here really was an economic one of getting producers of labor, in this case artists, simply to be paid for their work, that their work was being stolen?
Freakonomics Radio
619. How to Poison the A.I. Machine
When you say these are people you respect and have affinity for, I'm guessing you being an academic computer scientist, that you also have respect and affinity for, and I'm sure you know many people in the AI machine learning community on the firm side though, right?
Freakonomics Radio
619. How to Poison the A.I. Machine
Zhao is talking here about Suchir Balaji, a 26-year-old former researcher at OpenAI, the firm best known for creating ChatGPT. Balaji died by apparent suicide in his apartment in San Francisco. He had publicly charged OpenAI with potential copyright violations, and he left the company because of ethical concerns.
Freakonomics Radio
619. How to Poison the A.I. Machine
So that sounds promising. But what about the machines that are just imitating humans? What about machines that are essentially high-tech forgers? Today on Freakonomics Radio, we will hear from someone who is trying to thwart these machines on behalf of artists.
Freakonomics Radio
619. How to Poison the A.I. Machine
I feel that we don't speak so much about ethics in the business world. I know they teach it in business schools, but... My feeling is that by the time you're teaching the ethics course in the business school, it's because things are already in tough shape. Many people obviously have strong moral and ethical makeups, but I feel there is an absence of courage.
Freakonomics Radio
619. How to Poison the A.I. Machine
And since you just named that word, you said you have to have an enormous amount of courage to stand up for what you think may be right. And since there is so much leverage in these firms, as you noted, I'm
Freakonomics Radio
619. How to Poison the A.I. Machine
I'm curious if you have any message to the young employee or the soon-to-be graduate who says, yeah, sure, I would absolutely love to go work for an AI firm because it's bleeding edge, it pays well, it's exciting and so on. But they're also feeling like it's contributing to a pace of technology that is too much for humankind right now. What would you say to that person?
Freakonomics Radio
619. How to Poison the A.I. Machine
How would you ask them to examine, if not their soul or something, at least their courage profile?
Freakonomics Radio
619. How to Poison the A.I. Machine
The Dutch painter Han van Meegeren, a master forger of the 20th century, was so good that his paintings were certified and sold, often to Nazis, as works by Johan Vermeer, a 17th century Dutch master. Now there is a new kind of art forgery happening and the perpetrators are machines. I recently got back from San Francisco, the epicenter of the artificial intelligence boom.
Freakonomics Radio
619. How to Poison the A.I. Machine
Bloomberg News recently reported that OpenAI, Google and Anthropic have all had trouble releasing their next generation AI models because of this plateauing effect. Some commentators say that AI growth overall may be hitting a wall. In response to that, OpenAI CEO Sam Altman tweeted, there is no wall. Ben Zhao is in the wall camp.
Freakonomics Radio
619. How to Poison the A.I. Machine
Ben Zhao is a professor of computer science at the University of Chicago. He is by no means a techno pessimist, but he is not so bullish on artificial intelligence.
Freakonomics Radio
619. How to Poison the A.I. Machine
Coming up after the break, why isn't Ben Zhao out in the private sector trying to make his billions? I'm Stephen Dubner. This is Freakonomics Radio. We'll be right back. It's easy to talk about the harms posed by artificial intelligence, but let's not ignore the benefits. That's where we started this episode, hearing from the economist Eric Brynjolfsson.
Freakonomics Radio
619. How to Poison the A.I. Machine
If you think about something like the medical applications alone, AI is plainly a major force. And just to be witness to a revolution of this scale is exciting. Its evolution will continue in ways that, of course, we can't predict. But as the University of Chicago computer scientist Ben Zhao has been telling us today, AI growth may be slowing down.
Freakonomics Radio
619. How to Poison the A.I. Machine
And the law may be creeping closer to some of these companies, too. OpenAI and Microsoft are both being sued by The New York Times. Anthropic is fighting claims from Universal Music that it misused copyrighted lyrics. And related to Zhao's work, a group of artists are suing Stability AI, Midjourney and DeviantArt for copyright infringement and trademark claims.
Freakonomics Radio
619. How to Poison the A.I. Machine
But Zhao says that the argument about AI and art is about more than just intellectual property rights.
Freakonomics Radio
619. How to Poison the A.I. Machine
So when you talk about the scope of the potential problems, everything from the human voice, the face, pieces of art, basically anything ever generated that can be reproduced in some way, It sounds like you are, no offense, a tiny little band of Don Quixotes there in the middle of the country tilting at these massive global windmills of artificial intelligence and technology overlordship.
Freakonomics Radio
619. How to Poison the A.I. Machine
But Zhao isn't just waiting for the bubble to burst. It's already too late for that. Because the harms that are happening to people is in real time. Zhao and his team have been building tools to prevent some of those harms. When it comes to stolen art, the tool of choice is a dose of poison that Zhao slips into the AI system. There is another old saying you probably know.
Freakonomics Radio
619. How to Poison the A.I. Machine
And the amount of money being invested right now in AI firms is really almost unimaginable. They could probably start up a thousand labs like yours within a week to crush you. Not that I'm encouraging that, but I'm curious. On the one hand, you said, well, there is a bubble coming because of, let's call it data limitations.
Freakonomics Radio
619. How to Poison the A.I. Machine
On the other hand, when there's an incentive to get something for less or for nothing and to turn it into something else that's profitable in some way, whether for crime or legitimate seeming purposes, people are going to do that. And I'm just curious how hopeless or hopeful you may feel about this kind of effort.
Freakonomics Radio
619. How to Poison the A.I. Machine
What gives you such confidence that the storm will blow over or that there will be maybe more umbrellas? other than what you pointed out as the data limitations in the near term. And maybe you know better than all of us, maybe data limitations and computing limitations are such that the fears that many people have will never come true. But it doesn't seem like momentum is moving in your favor.
Freakonomics Radio
619. How to Poison the A.I. Machine
If I were a cynic or maybe a certain kind of operative, I might think that maybe Ben Zhao is the poison. Maybe, in fact, you're a bot talking down the industry, both in intention and in capabilities. And who knows for what reason? Maybe you're even shorting the industry in the markets or something.
Freakonomics Radio
619. How to Poison the A.I. Machine
I kind of doubt that's true, but, you know, we've all learned to be suspicious of just about everybody these days. Where would you say you fall on the spectrum of makers versus hardcore activists, let's say?
Freakonomics Radio
619. How to Poison the A.I. Machine
It takes a thief to catch a thief. How does that work in the time of AI? Let's find out.
Freakonomics Radio
619. How to Poison the A.I. Machine
Because I think in every realm throughout history, whenever there's a new technology, there are activists who overreact and often protest against new technologies in ways that in retrospect are revealed to have been either short-sighted or self-interested. So... That's a big charge I'm putting on you. Persuade me that you are neither short-sighted nor self-interested, please. Sure.
Freakonomics Radio
619. How to Poison the A.I. Machine
You have your own lab at the University of Chicago with your wife. When I read about this, I think, how did you get the funding? Did you have some kind of blackmail material on the UChicago budget people?
Freakonomics Radio
619. How to Poison the A.I. Machine
When you say that you don't want to commercialize these tools, I assume the University of Chicago is not pressing you to do so?
Freakonomics Radio
619. How to Poison the A.I. Machine
Since you're not going to commercialize or turn it into a firm, let's say you continue to make tools that continue to be useful and that they scale up and up and up. And let's say that your tools become an integral part of the shield against villainous technology, let's just call it.
Freakonomics Radio
619. How to Poison the A.I. Machine
Are you concerned that it will outgrow you and will need to be administered by other academics or maybe governments and so on?
Freakonomics Radio
619. How to Poison the A.I. Machine
That's what Elon Musk once said about open AI, I believe, correct?
Freakonomics Radio
619. How to Poison the A.I. Machine
I'm feeling a strong Robin Hood vibe here. Stealing from the rich, giving to the poor. But also what you're describing, your defense mechanism, it's like you are a bow, but you don't have an arrow. But if they shoot an arrow at you, then you can take the arrow and shoot it back at them and hit them where it really hurts.
Freakonomics Radio
619. How to Poison the A.I. Machine
Got it. Can you maybe envision or describe what might be a fair economic solution here, a deal that would let the AI models get what they want without the creators being ripped off?
Freakonomics Radio
619. How to Poison the A.I. Machine
I'm just curious why you care about artists. Most people, at least in positions of power, don't seem to go to bat for people who make stuff. And when I say most people in positions of power, I would certainly include most academic economists. So of all the different labor forces that are being affected by AI, there are retail workers, people in manufacturing, medicine, on and on and on.
Freakonomics Radio
619. How to Poison the A.I. Machine
Ben Zhao and his wife Heather Zhang are both computer scientists at the University of Chicago, and they run their own lab.
Freakonomics Radio
619. How to Poison the A.I. Machine
That was Ben Zhao. He helps run the Sand Lab at the University of Chicago. You can see a lot of their work on the Sand Lab website. While you're online, you may also want to check out a new museum scheduled to open this year in Los Angeles. It's called Dataland, and it is the world's first museum devoted to art that is generated by AI.
Freakonomics Radio
619. How to Poison the A.I. Machine
Maybe I will run into Ben Zhao there someday, and maybe I'll run into you, too. I will definitely be in L.A. soon. On February 13th, we are putting on Freakonomics Radio Live at the gorgeous Ebell Theater. Tickets are at Freakonomics.com slash live shows. I hope to see you there. Coming up next time on the show, are you ready for some football?
Freakonomics Radio
619. How to Poison the A.I. Machine
The Super Bowl is coming up, and we will be talking about one of the most undervalued positions in the game, the running back.
Freakonomics Radio
619. How to Poison the A.I. Machine
But wait a minute. Running backs used to be the game's superstars, and they were paid accordingly. What happened?
Freakonomics Radio
619. How to Poison the A.I. Machine
Okay, that doesn't sound very exciting, but the details are, I promise. We will hear from the eggheads, the agents, and the players.
Freakonomics Radio
619. How to Poison the A.I. Machine
And we'll ask whether this year's NFL season has marked a return to glory for the running back. That's next time on the show. Until then, take care of yourself. And if you can, someone else too. Freakonomics Radio is produced by Stitcher and Renbud Radio. You can find our entire archive on any podcast app, also at Freakonomics.com, where we publish transcripts and show notes.
Freakonomics Radio
619. How to Poison the A.I. Machine
This episode was produced by Tao Jacobs. The Freakonomics Radio Network staff also includes Alina Kullman, Augusta Chapman, Dalvin Abouaji, Eleanor Osborne, Ellen Frankman, Elsa Hernandez, Gabriel Roth, Greg Rippin, Jasmine Klinger, Jeremy Johnston, John Schnarz, Morgan Levy, Neil Carruth, Sarah Lilly, and Zach Lipinski.
Freakonomics Radio
619. How to Poison the A.I. Machine
Our theme song is Mr. Fortune by the Hitchhikers, and our composer is Luis Guerra. As always, thank you for listening. When I don't have a shredder around and I need to put something in the trash that I don't want anyone to see, I just put some ketchup on it.
Freakonomics Radio
619. How to Poison the A.I. Machine
What's your lab look like? If we showed up, what do we see? Do we see people milling around, talking, working on monitors together?
Freakonomics Radio
619. How to Poison the A.I. Machine
When there's a tool that you're envisioning or developing or perfecting, is it all hands on deck? Are the teams relatively small? How does that work?
Freakonomics Radio
619. How to Poison the A.I. Machine
I read on your webpage, Ben, you write, I work primarily on adversarial machine learning and tools to mitigate harms of generative AI models against human creatives. So that's an extremely compelling bio line. Like if that was a dating profile and I were in AI, I would say, whoa, swiping hard left. But if I'm someone concerned about these things, oh my goodness, you're the dream date.
Freakonomics Radio
619. How to Poison the A.I. Machine
Before he got into his current work, protecting creatives, Zhao made a tool for people who are worried that Siri or Alexa are eavesdropping on them, which, now that I've said their names, they may be. He called this tool the Bracelet of Silence.
Freakonomics Radio
619. How to Poison the A.I. Machine
I was out there to do a live show, which you may have heard in our feed, and also to attend the annual American Economic Association Conference. Everywhere you go in San Francisco, there are billboards for AI companies. The conference itself was similarly blanketed.
Freakonomics Radio
619. How to Poison the A.I. Machine
The one I'm looking at looks like 12. I also have to say, Ben, it's pretty big. It's a pretty big bracelet to wear around just to silence your Alexa or HomePod.
Freakonomics Radio
619. How to Poison the A.I. Machine
There's an old saying that I'm sure you've heard, imitation is the sincerest form of flattery. But imitation can easily tip into forgery. In the art world, there have been many talented forgers over the years.
Freakonomics Radio
619. How to Poison the A.I. Machine
Okay, that's the bracelet of silence. I'd like you to describe another privacy tool you built, the one called Fox.
Freakonomics Radio
619. How to Poison the A.I. Machine
Does it make you look more like someone else in the actual context that you care about or only in the version when it's being scraped? That's right.
Freakonomics Radio
619. How to Poison the A.I. Machine
There were sessions called Economic Implications of AI, Artificial Intelligence and Finance, and Large Language Models and Generative AI. The economist Erik Brynjolfsson is one of the leading scholars in this realm, and we borrowed him for our live show to hear his views on AI.
Freakonomics Radio
619. How to Poison the A.I. Machine
Okay, so Fox is a tool you invented to fight that kind of facial recognition abuse. Is Fox an app or software that anyone can use?
Freakonomics Radio
619. How to Poison the A.I. Machine
When Ben Zhao says that some artists reached out, that was how he started down his current path, defending visual artists. A Belgian artist named Kim Van Dun, who's known for her illustrations of fantasy creatures, sent Zhao an invitation to a town hall meeting about AI artwork.
Freakonomics Radio
619. How to Poison the A.I. Machine
It was hosted by a Los Angeles organization called Concept Art Association, and it featured representatives from the U.S. Copyright Office. What was the purpose of this meeting? Artists have been noticing that when people search for their work online, the results were often AI knockoffs of their work. It went even further than that.
Freakonomics Radio
619. How to Poison the A.I. Machine
Their original images had been scraped from the Internet and used to train the AI models that can generate an image from a text prompt. You've probably heard of these text to image models, maybe even use some of them. There is Dolly from OpenAI, Imagine from Google, Image Playground from Apple, Stable Diffusion from Stability AI, and Midjourney from the San Francisco Research Lab of the same name.
Freakonomics Radio
619. How to Poison the A.I. Machine
In the case of an artist like Van Duyn, this might include her online portfolio, which is something you want to be easily seen by the people you want to see it, but you don't want sucked up by an AI.
Freakonomics Radio
619. How to Poison the A.I. Machine
So, Ben, I know that some companies, including OpenAI, have announced programs to let content creators opt out of AI training.
Freakonomics Radio
619. How to Poison the A.I. Machine
So Ben Zhao wanted to find a way to help artists fight back against their work being either forged or stolen by these mimicry machines.
Freakonomics Radio
619. How to Poison the A.I. Machine
In addition to identity theft, there can be the theft of a job, a livelihood.
Freakonomics Radio
619. How to Poison the A.I. Machine
So Zhao's solution was to poison the system that was causing this trouble.
Freakonomics Radio
619. How to Poison the A.I. Machine
They came up with two poisoning tools, one called Glaze, the other Nightshade.
Freakonomics Radio
619. How to Poison the A.I. Machine
The day after Brynjolfsson came on our show, I attended one of his talks at the conference. It was called Will AI Save Us or Destroy Us? He cited a book by the Oxford computer scientist Michael Wooldridge called A Brief History of Artificial Intelligence. Brynjolfsson read from a list of problems that Wooldridge said AI was nowhere near solving. Here are a few of them.
Freakonomics Radio
619. How to Poison the A.I. Machine
Can you just talk about the leverage and power that these AI companies have and how they've been able to amass that leverage?
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
The tikka masala, the carne asada, the gochujang almonds. That's why Sheena Iyengar thinks of shopping there as... A variety-seeking exercise.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
They also offer a rather unsubtle blend of healthy, or at least healthy-seeming, and hedonistic. Yes, you can buy kohlrabi salad and cauliflower crust pizza, but you've also got your peanut butter-filled pretzels and sea salt and turbinado sugar chocolate almonds. Speaking of which, turbinado sugar, also known as natural brown sugar, but still sugar, why add the turbinado? I have a few guesses.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
One, to say you're just adding sugar to your already chocolate-covered almonds doesn't sound very healthy, but turbinado sugar, hmm, intriguing, possibly even sophisticated. Additionally, Trader Joe's seems to understand what everyone in sales understands, especially real estate agents. Adjectives are inexpensive and often useful, especially when the actual virtues are limited.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
And that is Michael Roberto. He's a business professor at Bryant University, formerly of the Harvard Business School. There's one lecture he likes to start by giving his students this fictional Shark Tank pitch.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
A charming house is often, in fact, a small house. Trader Joe's reportedly puts a great deal of effort into scouting, sourcing, and producing food that their customers truly love, but they also pay a lot of attention to package design and descriptive salesmanship. They publish an old-fashioned newsprint bulletin, the Fearless Flyer, with in-depth descriptions of new products.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
When you walk into a Trader Joe's, there's a playful vibe, as if to say, hey, you're just buying food. Food is delicious, so enjoy yourself. There's also an artsy vibe, a writerly vibe, more so, oddly enough, than in a typical bookstore. These details, as casual as they might seem, would also appear to be strategic.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
In a 2011 interview with the LA Times, Joe Colombe said that when he started Trader Joe's in the 1960s, he was inspired by an article he read in Scientific American about the huge spike in Americans attending college. I felt this newly educated class of people would want something different, he recalled, and that was the genesis of Trader Joe's.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
Why did he choose Pasadena as the first store location? Because, he said, Pasadena is the epitome of a well-educated town. Trader Joe's is for overeducated and underpaid people, for all the classical musicians, museum curators, and journalists, he said.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
This suggests that from the very beginning, Trader Joe's understood cream skimming, targeting a certain kind of customer and letting the rest slide by. As for the underpaid part of Cologne's equation, that would appear to be outdated.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
An analysis by the research firm AgData found that Trader Joe's stores today are located in counties with higher household median income than any other grocery chain, including Whole Foods, and about $10,000 higher than the U.S. median income. But, and this seems to be another key component of Trader Joe's success, they also value frugality.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
As Michael Roberto found, they usually set up shop in the cheaper parts of the expensive areas.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
The real estate firm Zillow found that homes near Trader Joe's stores appreciate more quickly than homes in the city as a whole, concluding that either Trader Joe's is really good at picking areas that are on the rise or that they are in part causing the rise. So how about a new store in Seward, Alaska? That is Kirk DeSermia's dream.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
Unless you think DeSermia is one of those guys who makes a Facebook page for everything.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
Seward, Alaska does have a relatively high median household income, but the population is a problem. Fewer than 3,000 people. DeSermia concedes that Anchorage, a few hours away, would be a more sensible site for the first Trader Joe's in Alaska, and he'd happily make the drive. He just really wants a Trader Joe's.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
Coming up after the break, we'll get into the economic details of Trader Joe's success. We'll hear how they flipped the script on customer relations. Just imagine if you would.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
And we'll answer the question we know you've been thinking. What does Trader Joe's have in common with Michelangelo? It's coming up right after this. Of all the mysteries concerning the success of Trader Joe's, here's what strikes me as the most interesting one. Their stores, as we've learned, are generally quite small, roughly a third the size of a typical supermarket. Michael Roberto again.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
Moreover, as we've learned, Trader Joe's prices are relatively low, and yet they also take in much higher revenues in stores that have more variety and more expensive items. So how? Remember, Trader Joe's doesn't sell a lot of brand name groceries. Roughly 80% of their products are private label items, also known as store brands.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
And of course, you're supposed to think, there is no way I'd invest in that company. That sounds like the stupidest company ever. And of course, you get a lot of consternation. That's when Roberto reveals that not only does such a grocery store already exist, but they're crushing the competition.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
And when you're selling something that you also manufacture, or at least source directly, you obviously stand to make more money than if you're buying from a middleman. That said, even store-branded products need to taste good. Judging from the chain's success, they do. In fact, some Trader Joe's branded items may taste identical to brand-name foods. Why? Because, it appears, they are identical.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
An investigation by the food website Eater, using Freedom of Information Act requests, found that many Trader Joe's items are, in fact, manufactured by the same companies that make the brand name versions of products that you can buy in many other grocery stores, usually for significantly more money. For instance, those Trader Joe's pita chips with sea salt?
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
They appear to be exactly the same as Stacy's Simply Naked pita chips. Trader Joe's gluten-free chocolate chip cookies, according to the investigation, are, quote, nearly identical in taste, packaging, and ingredients to Tate's Bake Shop cookies. There's nothing wrong with this, and it's hardly unusual for brand name manufacturers to run a side business selling to private labels.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
But most places that sell a lot of house brands are seen as downmarket discounters, not upmarket superstars like Trader Joe's. So why are they different? Some of the credit must go to the clever packaging and the artful product descriptions. But to get to the real secret of Trader Joe's, what I think might be the single biggest reason for its success, you have to go back to Sheena Iyengar.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
Iyengar's PhD is in social psychology. As an undergrad, she double majored in psychology and economics. She was born in Toronto to parents who'd immigrated from India. Her background, she believes, gave her a different perspective on decision-making when she started working in the field.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
She wanted to explore this question with kids from different backgrounds. Her theory was that Asian American kids and white American kids might think differently about choice. Before comparing the two groups, she wanted to establish a baseline to confirm that for the white kids, choice indeed had a positive effect. This baseline experiment turned out to be pretty interesting on its own.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
Here's how it worked. She brought a bunch of three-year-olds, one by one, into a room full of toys. Half of them were allowed to choose any toy and they could switch as they pleased. The other half would be given just one toy with no option to switch.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
What prior scientists would say and had been saying for decades is that choice is motivating. That having choice or even the illusion of choice is associated with increased satisfaction and feeling more control over your life. Therefore, the kids who could choose their toy should be happier for having the options and more likely to play longer.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
These ideas about choice were prominent not just in psychology. They were baked into the foundation of economic thinking at the time. That more choice is almost always better than less choice. But when Iyengar started her study and brought in the kids who could choose from an entire room full of toys.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
So Iyengar went back and examined some of those earlier studies about choice and decision-making. She realized that when those researchers described giving people lots of choice, in reality, that meant something like two to six options. Not a roomful like she had tried. So Iyengar ran a different study, this time limiting the number of choices.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
So it sounds like customers love this place, but you might think a store like this would be brutal to work for. And yet, it's ranked among the 100 best American companies to work for. So what's it called? Trader Joe's. Trader Joe's. Trader Joe's.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
And now she confirmed what her predecessors had found. But she kept thinking about what happened in that first study with the roomful of toys.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
The store is called Draeger's Market. It's a Northern California institution. Iyengar was at Stanford at the time.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
So Iyengar designed an experiment at Draeger's to answer the question. She set up a tasting booth for jams, and she alternated the choice set. Sometimes the booth would feature six different jams, and sometimes 24.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
Interesting. A larger choice set generates more interest. The smaller choice set generates more action. Sheena Iyengar's JAM study, very simple but very powerful, would go on to become one of the most famous studies in decision science because it illustrates what a lot of us feel when we enter, for instance, a gigantic supermarket.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
Iyengar followed up her JAM study with a look at employee participation in retirement savings plans.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
There's a good chance that you have never shopped at a Trader Joe's, maybe never even heard of it. It's got just over 600 stores. The big chains like Kroger and Albertsons have well over 2,000. Walmart sells groceries in more than 4,000 of its stores. And as Michael Roberto told us, Trader Joe's doesn't advertise or do a lot of things the typical grocery store does.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
This phenomenon has come to be called the paradox of choice. But Iyengar doesn't think that's quite right. It's not that more choice is always worse and that less is always better. She argues that choice is both a limiting and a powerful tool. Every context is different.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
You can imagine that a huge choice set is particularly welcome in the digital realm, where you can search for exactly what you want with a few keystrokes, assuming that is you know what you want.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
But in the analog world, in the world of a grocery store, for instance, the size of a choice set matters, not just because of the cost of real estate and transportation, storage and labor to stock the shelves, but because of how we, people, make decisions. Envision a shelf in a typical supermarket.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
And having just a few choices per domain is more likely to lead to action. Imagine yourself standing in an aisle in Trader Joe's and you come across their five-seed almond bars. And your lizard brain says, well, there are no four-seed almond bars or six-seed almond bars. I don't even know why I need seeds in my almond bars, but sure, I think I'll get some of those.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
Trader Joe's understands less is more. It understands, to use a word of the moment, curation.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
There is a story, probably not true, about Michelangelo. Someone supposedly asked him how difficult it had been to sculpt his famous David. And he said, it's easy. Just chip away the stone that doesn't look like David. I am not saying Trader Joe's is quite on Michelangelo's level, but you get the idea. There is great value in clearing away the clutter.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
Which is one reason Sheena Iyengar personally loves shopping at Trader Joe's.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
One of the joys of making this show is going after stories that simply seem interesting and worthwhile without any set agenda to follow. And you never know which episodes are going to strike a chord like this one did. Today, we have gone into the archive to play you another episode that struck a chord when it was first published. It's called Should America Be Run by Trader Joe's?
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
Novelty is also a powerful tool in sales, and this too Trader Joe's understands. It is famous for constantly introducing new products, experimenting with them really, which means old products have to go. Thank you. Thank you very much.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
I don't know. Thank you. Thank you.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
The grocery business is famous for low profit margins, lots of competition, and lately an even bigger problem. American consumers now spend more money in restaurants and bars than in grocery stores. Trader Joe's does seem to be bucking this downward trend. It doesn't just have customers, it has fans.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
It's never been easy to run a grocery chain, but Trader Joe's makes it look easy and weirdly fun.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
So how do they do it? That's the question we'll try to answer today. A question made more difficult by the fact that Trader Joe's is a fairly secretive company. I think that some of the secrecy is probably due to who owns them. So we put on our Freakonomics goggles in an attempt to reverse engineer the secrets of Trader Joe's. which, it turns out, are incredibly Freakonomical.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
Things like choice architecture and decision theory. Things like nudging and an embrace of experimentation. In fact, if Freakonomics were a grocery store, it might be a Trader Joe's, or at least try to be. It's like a real-life case study of behavioral economics at work. So, here's the big question. If Trader Joe's is really so good, should their philosophy be applied elsewhere?
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
Should Trader Joe's, I can't believe I'm going to say this, but should Trader Joe's be running America?
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
I first got interested in Trader Joe's around 15 years ago. I'd never been to one of their stores, but I had a general impression. Cheap and cheerful, relatively laid back and sort of groovy for a grocery store, apparently a reflection of its surfy California roots. Also, not aggressively health conscious, but leaning in that direction.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
And then I read a Wall Street Journal article about a German grocery chain called Aldi that was ramping up its U.S. expansion. Aldi is a super cheap, super generic grocery store. 95% of its products were house brands. And it was beating even Walmart on price. The article said the Aldi chain had two branches back in Germany, separately owned by two wealthy brothers named Albrecht.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
and that one of those branches also owned Trader Joe's. I found this fact surprising only because when I think of German business practices, I don't think of a groovy, earthy, crunchy, California surfy vibe, but there it was.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
I also learned that Trader Joe's stores were much smaller than typical supermarkets, that they had their own way of doing things, and that places without Trader Joe's often started petitions to bring one to their town. It was a sort of loony devotion usually reserved for sports teams or your favorite band. What kind of grocery store has a following like that?
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
We've updated facts and figures as necessary. I should note that Trader Joe's did not participate in the making of this episode. Their executives don't tend to give interviews. Although we did receive a note from then-CEO Dan Bain after we first published this episode in 2018. He wrote, you pose the question, should America be run by Trader Joe's?
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
And then when I learned that Trader Joe's outsells all other grocery stores per square foot, I really started paying attention. Then one opened up near my office here in New York. I started shopping there and for the most part, loving it. I realized it's not for everyone. In fact, part of their strategy is trying not to be for everyone. But I did want to know the secrets to their success.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
We reached out to the Trader Joe's headquarters in Monrovia, California, and were politely told to get lost. As we mentioned earlier, the company is known for its secrecy.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
Hey there, it's Stephen Dubner, and I wanted to say thanks for the overwhelming response to our most recent episode, which was called 10 Myths About the U.S. Tax System. There were a lot of good suggestions for follow-up episodes, and we will certainly keep those in mind.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
It's a strange combination, a firm that prides itself on user friendliness while also keeping its distance, which means that a lot of what's known about it comes from industry analysts and other secondary sources. Let's start here. In the very beginning, there really was a Joe behind Trader Joe's, Joe Colombe. He opened the first store in 1967 in Pasadena, California.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
He went with a South Seas theme, beachy tchotchkes, Hawaiian shirts, calling employees captains and crew members. In 1979, Colombe sold the chain to one of the secretive Albrecht brothers, Theo. Theo Albrecht was a recluse, perhaps, it was said, because he had once been kidnapped and held for ransom for 17 days in Germany. Albrecht died in 2010, but Trader Joe's remains notoriously press shy.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
It's also a privately held company, so no earnings calls with investment analysts, no public proclamations of any sort, really, about how it does business. And so to figure out how it works, we'll rely on a few people who've spent a lot of time thinking about Trader Joe's, including the business school professor Michael Roberto, whom you've already met. Correct.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
Also, the Columbia Business School professor Sheena Iyengar, whose research specialty is particularly relevant here.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
Seward, by the way, does not have a Trader Joe's, nor does the state of Alaska. The closest store from DeSermia's house is 2,295 miles away by car in Bellingham, Washington. DeSermia is the guy who we heard earlier say this.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
And we'll hear from a spy in the house of Trader Joe's, a former advertising executive named Mark Gardner, who became obsessed with the chain.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
We are pretty sure such work would likely require a coat and tie. We like Hawaiian shirts, so we will pass. Thanks. Let me know what you think of this episode. You can always leave a comment on your podcast app or send us an email to radio at Freakonomics.com. As always, thanks for listening.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
What Gardner learned about the company is that just about everything Trader Joe's does outside of exchanging food for money is unorthodox for a modern grocery store. There's a lot to talk about. The products, of course. The economics of their business model. Their very homemade, do-it-yourself aesthetic, including the hand-painted murals that reflect the neighborhood of every store.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
But let's start with one of the first things I noticed when I started shopping there. The employees. Yes, they are friendly and helpful and enthusiastic.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
But what really caught my eye was the sheer number of employees. There are so many of them. If you go in during a slow time, you can easily be outnumbered by employees in their TJ's t-shirts and Hawaiian prints. One reason is that rather than stocking shelves overnight, like most grocery stores, Trader Joe's stocks them during business hours. Why?
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
As Mark Gardner learned when he went to work there, the priority is to maximize customer interaction.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
So that explains why there's so many employees in the aisles. But there are also a ton of employees staffing the checkout. On one level, this makes sense. It makes the long checkout line move fast. And checkout, after all, is where a store takes the customer's money. Lesson number one in sales, don't make it hard for people to give you their money.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
But Trader Joe's also has employees directing traffic at the checkout line. one telling you which register to go to, one pulling you out of the big queue and into the final queue, and one or two holding up handmade signs marking the middle of the queue and the beginning. That's three or four employees to do the job that most stores use zero employees to do, or maybe they use some software.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
But Trader Joe's seems to be aggressively low-tech. No self-checkout aisles, no online ordering and pickup, no customer loyalty programs, and apparently Trader Joe's gathers no significant data on customers at all. In the modern business world, this is heresy. If you shop at Whole Foods, which is owned by Amazon, you can be sure the company has an algorithmic target on your back.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
So this is a riddle. Here's a company that doesn't harness big data, doesn't generally seem to embrace a lot of technology. It employs a lot of real live people and offers decent pay and benefits. But this is also a company that sells its products at low prices.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
One head-to-head comparison of grocery prices in Washington state found that Trader Joe's was 19% cheaper than the local average, 12% cheaper than Target and 24% cheaper than Whole Foods. So how on earth can Trader Joe's, as Michael Roberto told us, take in the most revenue per square foot in the industry? They're at the top by a wide, wide margin.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
A 2024 analysis found that Trader Joe's sells around $1,750 of groceries per square foot. Kroger, $800. Walmart, $600. How is this happening? We should probably start with the products that Trader Joe's sells. Here, let me read some of what they say are their most popular items.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
Mandarin orange chicken, mushroom and black truffle flatbread, butter chicken and basmati rice, Italian truffle cheese, dark chocolate peanut butter cups, spicy tempura seaweed snacks.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
These are the sort of foods that light up Instagram accounts and Facebook pages, that inspire fanatical devotion even among people who don't have a Trader Joe's within 2,300 miles, like Kirk DeSermia, who works as a facilities manager for the National Park Service in Alaska.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
What is it about Trader Joe's foods that creates such a lust? Let's put aside for a moment the question of how good their food is, especially since taste is subjective, at least to some degree. But there are a few things to say about how Trader Joe's is at least different from a typical grocery store. First, there is a sense of globetrotting adventure.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
Wickerson told us that she gets about 500 reports of rat sightings a year, but that only around 30 of them are legitimate. How can this be? Apparently, when rats are rare, a lot of people don't even know what a rat looks like.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
So what does it take to be essentially rat-free? Alberta has run a strict anti-rat program since the 1950s. The Norway rat was migrating then in great numbers from the eastern part of Canada, and farmers out west saw the potential for crop damage.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
Among rat people, Alberta is famous the way Pine Valley is famous among golf people as a remote and sanctified place, almost too good for this world.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
So how did Karen Wickerson enjoy her visit to the super ratty jurisdiction of New York?
Freakonomics Radio
623. Can New York City Win Its War on Rats?
As a New Yorker, I am, of course, proud that we keep coming up with new ways to entertain visitors. But we should talk about the garbage.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
That's coming up after the break. I'm Stephen Dubner and this is Freakonomics Radio. When we first set out to make this series on rats, we were inspired by what you might call a foundational text. A book called Rats, Observations on the History and Habitat of the City's Most Unwanted Inhabitants by Robert Sullivan.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
I remembered reading an excerpt of the book in the New York Times Magazine when it was published in 2004. And then recently, a dear old friend of mine died and I inherited some of his books. Rats was one of them. My friend, Ivan, was the kind of reader who likes to underline interesting passages of a book as he goes.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
When I sat down to read his copy of Rats, I found that roughly half of it was underlined. And that's what I told Robert Sullivan when I called him up.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
So you have written a lot of articles, several books. Are you still best known for rats, do you think?
Freakonomics Radio
623. Can New York City Win Its War on Rats?
I asked Sullivan to explain how he had come to write about rats.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
And this was a Native American tribe that had kind of a grandfathered-in license to hunt them? They had it in their treaty rights.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
Bobby Corrigan, as you can tell, is something of an enthusiast when it comes to rats. Although his enthusiasm is a strange blend of appreciator and exterminator.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
So that's what led Robert Sullivan to write about rats, but it is the depth of the reporting and the thinking and writing that makes his book spectacular. It is brash and clever and interesting on every page. I can see why Ivan couldn't stop underlining. The book feels like a cross between punk anthropology or rodentology, I guess, but there is a lot of anthro in there, and cheeky encyclopedia.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
Rat control programs, Sullivan writes, are like diets in that cities are always trying a new one. In the city, rats and men live in conflict, one side scurrying from the other or destroying the other's habitat, an unending and brutish war. Rat stories are war stories, and they are told in conversation and on the news, in dispatches from the front that is all around us."
Freakonomics Radio
623. Can New York City Win Its War on Rats?
I asked Sullivan what he thought of New York Mayor Eric Adams' war on rats and the recent rat summit. Typically, I try to ignore what mayors say about rats. He was indicted not long after. Do you think that was a coincidence or no? Do you think the rats have the pull to make that happen?
Freakonomics Radio
623. Can New York City Win Its War on Rats?
When Sullivan talks about Eric Adams drowning rats in beer, he is referring to an idea that Adams promoted in 2019 when he was borough president of Brooklyn. This involved an Italian rat trap called an echo meal. It is baited with nuts or seeds. A rat, upon entering, drops through a trap door into a vat filled with a green alcohol based solution.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
He acknowledges that his work has its disadvantages.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
Say what you will about Eric Adams as an elected official. He's got a lot of problems at the moment. And by the time you hear this, he may have been shoved out of office. But he could never be accused of flip-flopping on rats. Shortly after he was elected mayor in 2022, he signed into law a rat action plan. It included four key components. Rat-resistant trash containers. More timely trash pickups.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
the creation of rat mitigation zones and a crackdown on rats around construction sites. Here's what one city council member said at the time. Today, we declare that rats will no longer be the unofficial mascot of New York City. This rat action plan, of course, required a rat czar in the person of Kathy Karate. And she explained that a major focus of the plan is to cut down the rat's food supply.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
If you have never visited New York City, it may surprise you to learn that most trash is simply left out for pickup on the sidewalk in big plastic bags. As Karate says, trash used to be put in metal cans with lids. During a sanitation strike in 1968, those cans overflowed with tons of loose trash and newly invented plastic bags came to the rescue.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
Plastic was also quieter and much lighter, which made the returning sanitation workers happy. There was just one problem. Rats had an easy time chewing through the plastic. So what's the new plan?
Freakonomics Radio
623. Can New York City Win Its War on Rats?
When you walk around these old city streets with Corrigan, it's easy to feel that it's a rat's world and we're just living in it. As we learned last week in part one of this series, New York and other cities are struggling to control their rat populations. The problem here got so bad that the city declared war on rats. Today on Freakonomics Radio, how do you execute such a war?
Freakonomics Radio
623. Can New York City Win Its War on Rats?
And here's the person who can tell us more about that.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
That's what Tish was when we spoke a few months ago. She has since become commissioner of the New York City Police Department. The previous one resigned in the midst of a federal investigation. The one before that resigned after clashing with the mayor. Like I said, the Adams administration has been a mess.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
That is Bobby Corrigan. He is an urban rodentologist, a former rodent researcher who now works for the city of New York.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
In any case, when Jessica Tish was running sanitation, she understood just how important that job is.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
Okay, so let's get into the details. Smaller buildings and single-family homes will have their own bins.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
These new large on-street containers will also require new garbage trucks.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
If you've ever seen garbage trucks in Germany or Singapore or, well, a lot of places, the sight of a New York City garbage truck extending its claws to lift and dump a big trash can may not impress you. But here, it's a big deal. The program is currently being piloted in a few uptown neighborhoods, including Harlem.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
When someone posted a video of the truck in action on social media, the sanitation department retweeted the video with a message. This was our moon landing. Now, before we go making fun of New York City for what some people might consider an overstatement, let's consider this. Trash tech is one thing to get right. Trash behavior is another. Jessica Tisch realizes this.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
And that's not the only behavior change to worry about. Back on the street with Bobby Corrigan, we still haven't seen a rat, but on a nearby park bench, we do come across signs of recent human activity. A discarded wrapper from a raisin cake.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
We will hear about some battle tactics.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
Further down the street, we come across a bank of the new trash containers for big buildings. Corrigan is impressed.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
But what if it's too late for prevention?
Freakonomics Radio
623. Can New York City Win Its War on Rats?
Actually, everything about New York's new trash plan is expensive. The new bins, the new trucks, the new vigilance.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
That's a nice thought, in theory at least, that New York City's rats will just move on to some other place if their food supply is constrained. But first, there needs to be evidence that the new containerization plan is actually working. The other day, walking down the street, I came across a few of the new wheelie bins that Jessica Tisch is so excited about.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
They were lying on their sides, the lids broken off the hinges. And if I were a rat, I would be excited. What do we have here? Shake Shack, Luke's Lobster, maybe even per se. There have also been reports of rats chewing through these supposedly rat proof trash bins.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
In a recent interview, the president of New York's Sanitation Workers Union said things that work throughout the country don't work in New York. New York is New York. It's its own thing. Now, given his position, he may be sending a message because the more you automate trash pickup, the fewer jobs there will be for sanitation workers. Coming up after the break, is a rat-free city even possible?
Freakonomics Radio
623. Can New York City Win Its War on Rats?
It's clearly possible that you can have an urban area without rats, but they do love it there. I'm Stephen Dubner. This is Freakonomics Radio. We'll be right back. Before the break, we heard New York City rat czar Kathy Karate say that by the end of 2024, some 70 percent of the city's trash was no longer being placed in flimsy plastic bags, but rather in sturdy plastic bins.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
We'll hear about rat traps, rat poisons, rat birth control.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
That whole of city approach will still include some poisons or treatments, as Karate calls them.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
And how about the rat birth control we discussed earlier with Bobby Corrigan?
Freakonomics Radio
623. Can New York City Win Its War on Rats?
And we will consider some other ideas. If prepared well, sure, I'm open. Is someone actually serving Norway rat? You want fries with that rat? Part two of Sympathy for the Rat begins now.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
So the mayor who appointed you, Eric Adams, this administration is turning out, especially in recent weeks as we speak, to be one of the most problematic, potentially corrupt administrations recently, all sorts of issues. investigations, seizures of cell phones, the resignation of the police chief and so on.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
What's it like to be representing a city agency like you are now with all that storm going on around? I'm just curious from the personal perspective of how hard it makes your job.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
I could also see that because of your job and because of how much people care about rats. I could imagine if you do this well that you are mayoral material. Is that an ambition?
Freakonomics Radio
623. Can New York City Win Its War on Rats?
So how are Karate and her colleagues performing in the early days of this war on rats? As she told us in part one, the science of rat measurement is not very sophisticated. There is no reliable rat headcount. So the metrics she uses are a bit removed. Rat complaints called into the city's 311 line, for instance. and rat sightings in the new mitigation zones.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
Those numbers are down, but much more data is needed, and there is a potential countervailing force. A new research paper by a large team of biologists and pest control experts argues that climate change is contributing to the rise of the rat population in New York and other big cities. So maybe the rat will remain our unofficial mascot.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
It's clearly possible that you can have an urban area without rats, but they do love it there. That is the Harvard economist Ed Glazer. We heard from him in part one of the series as well. He is an expert in and huge fan of cities, and he grew up in Manhattan. I asked Glazer what he thinks of the city's rat action plan.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
I don't know how much time you've been spending in New York lately, but there has been a wholesale change, which is the conversion from from plastic bags of trash that you just throw out onto the sidewalk and wait for sanitation to come pick up, which plainly doesn't seem very rat proof. In fact, it's not at all to a requirement that trash be contained in plastic bins with a top.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
It seems pretty darn sensible and indeed easy.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
Now, what about you, Ed? If you were rat czar, in addition to changing the way food is disposed of, what other solutions might you think about?
Freakonomics Radio
623. Can New York City Win Its War on Rats?
As far as we can tell, there's not really been any kind of decent rat census. Why do you think that is?
Freakonomics Radio
623. Can New York City Win Its War on Rats?
You know, there was one solution we didn't touch on, one potential solution, which has been tried before. I believe in Egyptian cities in the old days used this, which is just armies of cats.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
Yeah, I read now the rats that are currently eaten in China are often the bamboo rat, says they're specifically bred for consumption, an estimated 66 million raised annually in China. You don't happen to know how a bamboo rat tastes versus a Norway rat, do you?
Freakonomics Radio
623. Can New York City Win Its War on Rats?
What about eating a Norway rat in New York, if prepared well?
Freakonomics Radio
623. Can New York City Win Its War on Rats?
We did look around to see if anyone in New York is serving rat. We checked in with a restaurant where for another episode, I once ate a bunch of insects, which were delicious, but they had shut down. We could not find rat on a single restaurant menu in New York City. We also wrote to some private chefs. I figured they get unusual requests all the time, but no luck there either.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
Bobby Corrigan was born in Brooklyn, but his family moved out to the suburbs of Long Island when he was a kid. This suited Bobby well.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
Here's how one chef replied. Unfortunately, I am not able to source this for you. However, I would be happy to cook for you and your guests a beautifully constructed dinner using squab. We passed on that. Squab is too easy.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
That, again, is Bobby Corrigan, the urban rodentologist. We're still huddled with him outside in an alleyway.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
Our next question for Corgan was, well, you know, the next question, did his rat taste like chicken?
Freakonomics Radio
623. Can New York City Win Its War on Rats?
Standing in the cold with Corrigan today, we aren't hoping to eat rats. We're still just trying to spot one. So far on this tour, we have seen plenty of ARS, active rodent signs, but no active rodents. Corrigan still has faith.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
We head over to a small park in Tribeca.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
We do find a hole, and then another, then four more, six burrow holes in one small area of one small park.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
It's late afternoon by now, starting to get dark, and we give up without having spotted a rat. Does this mean New York City's rat problem is getting better? Maybe, but maybe not. The Norway rat is primarily nocturnal.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
It does make you wonder just how much of our war on rats is a war against some part of ourselves.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
So, should we be leaning into our shared experience? Coming up next time in the third and final episode of Sympathy for the Rat, we will hear about rats as pets. If you want to love them, you have to know about them. Rats as research subjects.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
Still, he didn't plan on a life devoted to extermination.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
And rats as movie stars. Can I just say, Ratatouille is an idea. As a story, it's an allegory. That's next time on the show. Until then, take care of yourself. And if you can, someone else too. Freakonomics Radio is produced by Stitcher and Renbud Radio. You can find our entire archive on any podcast app. Also at Freakonomics.com, where we publish transcripts and show notes.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
This series is being produced by Zach Lipinski with help from Dalvin Abouaji. We had recording help this week from Niamh Yan and Digital Island Studios. The Freakonomics Radio Network staff also includes Alina Kullman, Augusta Chapman, Eleanor Osborne, Ellen Frankman, Elsa Hernandez, Gabriel Roth, Greg Rippin, Jasmine Klinger, Jeremy Johnston, John Schnarz, Morgan Levy, Neil Carruth,
Freakonomics Radio
623. Can New York City Win Its War on Rats?
Sarah Lilly, and Tao Jacobs. Our theme song is Mr. Fortune by The Hitchhikers, and our composer is Luis Guerra. As always, thanks for listening.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
Sometimes we go to war with our neighbors, and sometimes those neighbors are rats.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
But that fear only boosted his interest. After working as an exterminator for a few years, Corrigan did go to college and he studied under a prominent entomologist named Austin Fishman, a pest control pioneer, Corrigan calls him. After that, Corrigan joined a graduate program at Purdue University in their School of Agriculture.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
Corgan wound up getting a Ph.D. from Purdue in rodent pest management. And he stayed out there for a while as a professor. But eventually he felt the siren call of his hometown and he took a job with the New York City Department of Health and Mental Hygiene. In a way, this was a very rat like behavior as rats experience that same pull toward home.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
It is a cold and windy afternoon in lower Manhattan, one of the oldest parts of the city. Most of the humans have scurried back to their offices from lunch. At the intersection of Murray and Church Streets, Corrigan points to a sidewalk curb that has collapsed in on itself.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
From the rat perspective, that sounds lovely. From generation to generation, the kind of thing that humans cherish. But from the human perspective, rats are rarely a thing to cherish. Most people see them as disgusting pests at the very least. Some people think of them as mass murderers.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
Although, as we heard in part one of this series, some scientists have recently exonerated rats on the charge of having spread the Black Death in Europe. Still, the rat's reputation is terrible. So if you are facing the kind of multi-generational infestation that Bobby Corrigan was just talking about, what do you do? The most obvious tool in many cases is poison.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
A good example of the environmental threat of rat poison is the story of Flacco the Owl, a beautiful Eurasian eagle owl who lived in Central Park Zoo in New York City. Flacco became a celebrity when in 2023 he escaped from the zoo, thanks to a vandal cutting a hole in the cage, and he took up residence in Manhattan.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
There were concerns at first that he wouldn't be able to survive outside of captivity, but he seemed to be thriving.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
After nine months on the outside, Flacco was killed when he flew into a building on the Upper West Side. A postmortem showed that he had debilitating levels of rat poison in his system. But it's not just escaped zoo animals who are endangered by rat poison. Dogs are. Children are. Like Bobby Corrigan said, poison should probably be a last resort, not a first.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
And how does Corrigan feel about rat traps?
Freakonomics Radio
623. Can New York City Win Its War on Rats?
We talked in part one of this series about the thin line between animals we love and treat kindly. and the animals we consider pests and treat violently. It is true that some people do keep rats as pets, and of course we've used them for years as research subjects in medicine, psychology, even space travel, but we mostly think of them as a thing to be eliminated.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
Even though they are, like us, mammals, and not so different from the mammals we celebrate and love, so does it make sense to torture a rat when you wouldn't torture a cat or a dog? Another rat mitigation solution that's been gaining traction is birth control.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
So how do you keep down the rat population in a place like New York? The unfortunate answer seems to be that there is no one clear solution. Part of the problem is that rat data is usually unreliable. This is frustrating for someone like Bobby Corrigan.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
And where did these burrowing rats come from?
Freakonomics Radio
623. Can New York City Win Its War on Rats?
And what makes Corrigan say this, that the compass is pointing in the right direction? Well, last fall, New York City hosted the first ever National Urban Rat Summit. You know, the credit here goes to Kathy Karate. Karate is the new citywide director of rodent mitigation, also known as the Rat Czar.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
Like Bobby Corgan, Kathy Karate is both exterminator and appreciator. She knows the animal well. I asked her if she could explain the secret of the rat's success in New York.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
I spoke with Karate shortly before the inaugural Rat Summit last fall. I asked her for a preview.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
The day of the Rat Summit arrived. Mayor Eric Adams helped set the stage. He began by praising Kathy Karate.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
So you've got rats in the sewers, rats burrowing under the sidewalks. What else can we see?
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623. Can New York City Win Its War on Rats?
And then the presentations got underway. Our friend Bobby Corrigan gave a talk called Remote Rat Sensor Technology, Public Health Canaries in the Coal Mine.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
A rat researcher named Kaylee Byers gave a talk called More Than Pests, Rats as a Public and Mental Health Issue. Byers teaches at Simon Fraser University in British Columbia, Canada. She opened her talk by showing a global map of the rat's reach. Only a very few places are spared. Antarctica, for instance, and a big rectangle in the middle of Canada.
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623. Can New York City Win Its War on Rats?
And here's a person responsible for keeping Alberta rat-free.
Freakonomics Radio
623. Can New York City Win Its War on Rats?
Wickerson was not able to make the rat summit, although she did visit New York not long after. We spoke with her in a studio.
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623. Can New York City Win Its War on Rats?
Alberta is just over 250,000 square miles. That's roughly the same size as Texas, where there are many rats. But Alberta says it does not have a single breeding population of rats. Karen Wickerson gives some credit to the public.
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
As Gilbook said earlier, experienced agents perform better than newbies, but newbies continue to flood the market. Why?
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
In other words, that five or six percent commission is so attractive, almost like a lottery payout, that it draws many new players, even though they have a slim chance of getting that payout. So what would happen if commissions were smaller?
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
The National Association of Realtors insists that commissions are not fixed, that fees are negotiable. That may be true in theory, but in practice, the NAR has maintained its leverage. How do they do that? We live in an economy where new technologies and new entrants are constantly pushing aside the old guard. Why hasn't that happened in residential real estate? Here's Chad Severson again.
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618. Are Realtors Having an Existential Crisis?
This is Freakonomics Radio, the podcast that explores the hidden side of everything with your host, Stephen Dubner.
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618. Are Realtors Having an Existential Crisis?
What you're describing sounds like a word that we don't like to throw around casually, but it's a word that you certainly used to describe this ecosystem, which is collusion. In what ways does collusion exist in this system?
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
But in 2023, the NAR was the main defendant in a class action lawsuit in Missouri. The lead plaintiff, Rhonda Burnett, argued that in 2016, she and her husband wanted to sell a home, and her real estate agent gave her a form with four commission rate boxes to choose from, 6%, 7%, 8%, or 9%.
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
When Burnett asked if the commission was negotiable, which the NAR says it always is, she was told that a lower commission might diminish the likelihood of her home being shown. The Burnetts and other plaintiffs argued that the NAR and several brokerages conspired to impose a, quote, The trial evidence included a training script from one of the brokerages. It instructed agents to say, quote,
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
The National Association of Realtors, which is headquartered in Chicago, is the largest trade organization in America with more than 1.5 million members. There are real estate agents who are not realtors with a capital R, but the NAR is where the action is. The organization has endured a variety of scandals, especially among their leadership.
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
If an agent has 10 different houses, nine of which come with a 3% commission, one of which comes with a 2.5% commission, which houses do you think they're going to show? It took a jury barely two hours to rule against the NAR. The court awarded damages of $1.8 billion, which in a settlement, the NAR negotiated down to $418 million. But the trouble is not over.
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
The NAR is facing lawsuits in several other states charging monopolistic behavior.
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
OK, in the first chunk of this episode, we heard from economists who were beating up on the National Association of Realtors. Let's hear now from the NAR.
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618. Are Realtors Having an Existential Crisis?
Yeah, you almost left that one out. That's a big deal, no?
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
Give me a little bit on the NAR. What is the NAR exactly?
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
I've read that the organization holds more than a billion dollars in assets. Why would a trade organization have that many assets?
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
The NAR charges annual dues of $156 and with 1.5 million members, well, it pays to be the country's biggest trade association. But when you're thinking about real estate agents, the important number to keep in mind, the top line number, is the total amount that Americans pay them every year, around $85 billion. That is not the value of the real estate they sell.
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
That is $85 billion in sales commissions. You might take this to mean that those 5% and 6% commissions, whether set by tacit collusion or otherwise, are simply too high.
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
Allegations of sexual misbehavior, financial misbehavior, monopolistic behavior. There's quite a list. In the past few years, presidents of the organization have come and gone as quickly as the cookies at an open house. Another big problem? There just isn't as much business as there used to be. In 2023, only 4 million existing homes were sold, the fewest in 30 years.
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
economists that I know, when they look at the NAR, National Association of Realtors, they describe it as somewhere between a monopoly and a mafia, that it's got all the power on the selling and buying side of the housing market in the US. I assume you disagree with that characterization. Tell me why they're wrong.
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
Let's talk about the recent settlement. Tell me what it means for your organization and what kind of changes you're making because of that.
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
So that is the take on the NAR settlement from the president of the NAR. We spoke with another high-level executive there.
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
And how would you describe the state of the housing market at the moment?
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
So your organization, the NAR, recently got a pretty big spanking from a federal jury trial in Missouri in a class action suit brought by homeowners. What's your response to that verdict and then the settlement that the NAR entered into?
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
There are a variety of reasons for this slump. The COVID pandemic had produced a spike in sales that has since receded. Mortgage rates are still relatively high, and there's been a lot of political and economic uncertainty. There's also the simple fact that buying or selling a home can be stressful and complicated and confusing to the point of intimidation.
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
Here's something you said about the lawsuit and the settlement. You said a couple of lawyers were able to find two, three unhappy owners and make a lawsuit. And you have nine, 11 jury members. So you can count the number of people involved in the lawsuit. Now, to me, Lawrence, it sounds like you're saying the NAR was screwed over by the legal injury system. Is that a fair assessment?
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
Who conducted the survey that you're citing about the customer satisfaction with realtors?
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
I could imagine that if an industry or a trade association like yours is commissioning a survey to understand how happy people are with their services, it might be tempting to find within that large data set of all people who have completed transactions, the home buyers or sellers who you know were particularly satisfied with their transaction.
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
Persuade me that the data here are more representative than that and not cherry-picked like that.
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
How is the recent NAR settlement changing things for not only the organization, but the brokerages down the line and then the real estate agents down the line?
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
How do you see real estate transactions being conducted differently in five or 10 years based on the new rules put in place by this settlement?
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
But that's where the real estate agent comes in. Real estate agents are there to help you.
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
So you said, Lawrence, that the NAR does not gather data on commissions because you don't want it to seem like there is a collusive element there. But people do gather those data. Economists do that. We talked to Chad Severson. He and others have pretty decent data.
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
It shows that the traditional rate of 6% has maybe slipped a little bit over the past couple of decades, gets into the five something range, but that it's pretty consistent across the country.
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
And in fact, it's pretty consistent even in high value markets like New York City versus lower priced markets, which to me seems strange because 6% of a $5 million apartment is an awful lot bigger commission for not necessarily the five times the work of a million-dollar house somewhere or 10 times the work of a $500,000 house somewhere.
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
So why do you think that commissions are so routinely in that range in so many different markets?
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
But if you ask most economists, they have a different view of this industry.
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
So that's how Lawrence Yoon, the chief economist of the NAR, sees the after effects of the lawsuit and settlement. And how about NAR president, Kevin Sears?
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
Do these explanations leave you a bit confused? No. Yeah, me too. Coming up after the break, the financial incentives may change in home buying, but how about the behavioral incentives?
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
I'm Stephen Dubner. This is Freakonomics Radio. We'll be right back. OK, I feel we need a quick recap. The NAR, or National Association of Realtors, recently agreed to pay damages of more than $400 million and change some policies after they were beaten in a class action lawsuit in Missouri. One change is that home buyers will need to sign a compensation agreement with their agents up front.
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
Severson started out as a mechanical engineer, so he understands how something like a house is built. As an economist, his job is to understand how houses are bought and sold. And part of that is understanding the incentives of the players involved.
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
And realtors can no longer post what are called cooperative compensation offers on multiple listing services. Theoretically, this might lead to lower commissions for home buyers and sellers. And economists who analyze this market think this might lead to lower housing prices.
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
I was surprised to hear Lawrence Yoon, the NAR's chief economist, say earlier that they don't compile data on realtor commissions. The reasoning for that is that we don't want to set a focus point. I did ask him for some other NAR numbers. You talk about the new entrance into the NAR every year is about 200,000 new entrepreneurs.
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
So that sounds to me like a very high rate of churn, especially if that many people are leaving each time, which suggests that the median realtor is making very, very, very little money because it's really hard to get listings, especially when you're starting out. What can you tell us about the annual earnings of a median realtor?
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
Some years back, Severson co-authored a research paper, along with my Freakonomics friend and co-author Steve Levitt, which found that real estate agents do not necessarily act in the best interests of their clients. They argued that when you are selling a home, an agent may push you to accept the first decent offer rather than hold out for a better price.
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
One of the interesting conversations among economists and others over the past 10 years has been how much free labor was provided by women in the home that was never valued, never counted, no price put on it. And people are now trying to factor that into the economy.
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
With so many women as realtors, with so many of them earning not very much money, it strikes me that this is yet another area in which a lot of women are doing a lot of work and getting paid very little. Is that uncharitable or do you think that's accurate?
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
And here's something the economist Sonia Gilbook told us that she had come across in her research.
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
It's hard to think of another profession where 30% of the workers are unpaid. If you don't sell a listing that you control or if you don't connect with a buyer who finds a home and actually buys it, there is zero compensation, actually less than zero. You may pay fees to the NAR and then there are all the costs associated with trying to get a sales commission.
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
So you can see why there is so much churn at the bottom of the pyramid. At the top of the pyramid, meanwhile, there is a relatively small fraction of agents who earn a good living since they are routinely tapping into that 5 or 6 percent commission pool. This is what economists call a tournament model.
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
A lot of players are hoping to climb that pyramid, competing against the field while knowing that success is unlikely. In this regard, selling real estate is less like a profession and more like the path followed by artists and performers and athletes. I went back to Chad Severson, the University of Chicago economist, to ask why this is the case.
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
Knowing what you know about real estate sales and knowing what you know about incentives generally as an economist, how do you think this change in incentives is going to change behavior, whether among buyers, sellers, or agents on the buy side or on the sell side? One possibility is nothing changes.
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
Most agents work on commission, which means they are only paid when there is a sale. Historically, the commission has been roughly 6%. which is split between the seller's agent and the buyer's agent. And then each of those agents often kick back half of their fee to their brokerage, which means that the seller's agent earns roughly one and a half percent of the sale.
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
So let's say that, I mean, this is a very unlikely scenario, but let's say the NAR looks at what's coming and says, oh, we're losing our grip here. Our lovely model from the old days that made a lot of money for a handful of agents is going away.
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
And they come to you and say, Professor Severson, I know you've been a critic of this industry to some degree, but you also appreciate the value that some real estate agents can bring. We want to design a new system from scratch for home sales. What would that look like in your mind?
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
Let's assume that the NAR settlement really does change how the commission structure works. And let's pretend that five or 10 years from now, it is a very disintermediated market the way that travel agents were disintermediated, which means a lot of people are booking travel on their own. I don't know really how large this movement is, but I have read about a return to travel agents.
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
Consumers want them because even though, yeah, I can book the flight and the hotel and rental car and other things I want to do all by myself online, it's a lot of work and it's a hassle and it can be confusing and so on.
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
Could you see a future in which a similar thing happens with real estate sales that agents really do get disintermediated and that buyers and sellers end up doing a lot on their own and they don't like it and they want to return to the current ecosystem as inefficient as it may be for buyers and sellers?
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
Not enough, Severson and Levitt argued, to help the seller max out. I asked Severson if he got any hate mail when the original paper was published.
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
So, Chad, I know you've got four kids. I believe half of them have gone off to college. Is that right? Yep. OK, let's say the other half go off to college and you and your wife say, hey. Time for a life change. We're going to upsize, downsize, move somewhere warm, whatever. How do you think about selling the place you're in now and buying the place you end up wanting to buy?
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
What about the buying side? Let's say you spend a couple hours looking at things online and you say, oh, these look like three properties I'd really like to go check out. Would you want to hire a buy-side agent to do that or would you want to do it on your own?
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
That, again, was Chad Severson from the University of Chicago. Thanks to him and to Sonia Gilbook from Baruch College, as well as to Lawrence Yoon and Kevin Sears from the National Association of Realtors. I'd love to know what you think about this topic and about this episode. Our email is radio at Freakonomics.com. Coming up next time on the show, a lot of big things happened in 2024.
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
One of the biggest was a great leap forward in artificial intelligence.
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
That's next week in our regular time slot, which is now Friday morning's Eastern Time. But before then, you will get a bonus episode. You remember me telling you we were going to San Francisco for a live show? Well, we did that. We spoke with a couple economists and the outgoing mayor.
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
Pull out those phones because you guys are going to see a different mayor breed.
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
That's next time. Until then, take care of yourself. And if you can, someone else too. Freakonomics Radio is produced by Stitcher and Renbud Radio. This episode was produced by Augusta Chapman.
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
The Freakonomics Radio Network staff also includes Alina Kullman, Dalvin Abawaji, Eleanor Osborne, Ellen Frankman, Elsa Hernandez, Gabriel Roth, Greg Rippin, Jasmine Klinger, Jason Gambrell, Jeremy Johnston, John Schnarz, Lyric Bowditch, Morgan Levy, Neil Carruth, Sarah Lilly, Tao Jacobs, and Zach Lipinski. Our theme song is Mr. Fortune by The Hitchhikers, and our composer is Luis Guerra.
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618. Are Realtors Having an Existential Crisis?
As always, thank you for listening.
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618. Are Realtors Having an Existential Crisis?
The Freakonomics Radio Network, the hidden side of everything. Stitcher
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
Yes. I mean, you can have very good intentions, but if you're in a system that's exploitive of the consumer, then it's exploitive of the consumer, even if you are a good, hardworking, honest person.
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
This is an industry that most of us interact with rarely. But when you do, the stakes are high.
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
Would you just describe how the residential real estate sector is an unusual sector, maybe atypical?
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
I mean, it happens with lawyers, for instance. If I need to hire a lawyer to work on something, then the party that I'm in a conflict with, they've got a lawyer, too.
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
Today's episode is about an industry that, like many industries, often talks about how competitive it is and how that competition is good for customers.
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
Let's say I'm buying And I've got an agent and there's a property I'm interested in. They've got their agent. It's quite possible that my agent and that agent know each other and have perhaps collaborated before and indeed maybe even work for the same firm. Is that possible? That's totally true.
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
If I wanted to sue you, Chad, I probably wouldn't hire a lawyer who works at the same firm that your lawyer works at. Yeah.
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
But is your hand being held or is it being forced?
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
And what are the ramifications of the fact that a buy-side agent in one moment may be a sell-side agent the next moment? If I wanted to think about it positively, I could think, well, that makes sense because if I'm buying, my agent has also sold a lot of properties and therefore knows what to look for. On the other hand, I could think, well...
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
It feels like maybe they are part of a fraternity that I'm not a part of. And even though I feel like they're representing me and me alone, in fact, they work both sides of the aisle.
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
I've been in a case a few times as a buyer where I would say to the selling agent, I don't have a buyer's agent. I'm just going to operate on my own. So can we agree from the outset that we're going to subtract 3% off the price? And I get the meanest looks and I'm told that that's not the way it works. I mean, is that not the way it works? Well, there you go.
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
Offense noted. But also worth noting, the National Association of Realtors, the NAR, just settled an antitrust lawsuit that requires it to pay hundreds of millions of dollars in damages and change the way realtors charge their customers. Today on Freakonomics Radio, we speak with the president of the NAR as well as its chief economist.
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
I was also told that my client would never accept that. And I'm like, why the heck would your client not accept that? Because the money is going to get deducted from the sale price that they get. Was that client in the room with you when that was said? The client was not in the room.
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
So how do sales commissions affect housing prices?
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
You may be wondering, why do real estate agents get paid on a percentage basis in the first place? Why not an hourly rate like lawyers and accountants and electricians and consultants and, well, like a lot of people? To answer that question, you have to go back to 1908 and the founding of the National Association of Real Estate Boards.
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
Back then, local boards in places like Chicago, Omaha and Los Angeles had set fixed commission fees, and this eventually became the standard. In 1950, the Supreme Court declared that this amounted to price fixing in violation of the Sherman Act. The workaround was fee suggestions, which some observers thought looked an awful lot like the fixed schedules that they supposedly replaced.
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
In 1972, the National Association of Real Estate Boards became the National Association of Realtors. It didn't take long for the federal government to once again declare their practice anti-competitive. This government scrutiny and the legal back and forthing has continued ever since. And yet commissions have remained relatively steady at five to six percent.
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
Home prices, meanwhile, have continued to rise. The current median price in the U.S. is around four hundred thousand dollars, double what it was 20 years ago. The same percent commission on a higher price means a higher commission.
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
Imagine that instead of buying a house 20 years ago, you were buying 1,000 shares of stock in Apple Inc. The share price back then, adjusting for splits, was around $1. So the stock would cost you $1,000. And if you went through a brokerage, you might pay a $20 fee, which works out to a 2% commission. Now imagine you buy 1,000 shares of Apple stock today.
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
The share price is well above $200 now, so it would cost you over $200,000. Would you still expect to pay a 2% brokerage fee, a $4,000 commission? No, you would not. In fact, you would probably pay close to zero. In most industries, transaction prices fall over time thanks to technology, economies of scale, and competition. But again, residential real estate is not like most industries.
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
So does this commission inflation mean that every real estate agent is getting filthy rich? It very much does not. Let's bring in another economist to help explain.
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
And we hear from two other economists who don't see much competition, but instead what looks more like collusion.
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
And are you putting help them in quotes?
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
To be fair, there are alternatives. It is legal in every state to buy or sell a home without representation, but it is rare. Only around 7% of sellers go the route known as FSBO or for sale by owner. What Gilbook wanted to understand was what happens in the other 93%. And she was particularly interested in how much the individual real estate agent matters.
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
Gilbook recently published a study, along with her husband and fellow economist Paul Goldsmith Pinkham, that looked at data from the MLSs or multiple listing services in 60 markets across the U.S. Around 95 percent of MLSs are owned by the National Association of Realtors.
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
An MLS is a database where agents post their sales listings and communicate with one another about prices and commissions, including how much a buyer's agent should expect to receive. This is called a cooperating compensation agreement, and it is at the root of the alleged fixing of rates.
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
Gilbook and Goldsmith Pinkham used this MLS data to analyze the comings and goings of individual agents as well as their performance. What did they find?
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
This may not surprise you that experienced agents tend to be better. But when you consider how many agents are out there, you may be concerned with your odds of getting a good one. Roughly 3 million people in the U.S. currently hold a real estate license. Remember what I said earlier about the total number of home sales in a year, 4 million.
Freakonomics Radio
618. Are Realtors Having an Existential Crisis?
Even if there are two agents per sale, one on the buy side and one on the sell side, that gets us to 8 million transactions. Do we really need three agents for every eight transactions? So why does the market attract this many agents? Here's Chad Severson again.
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
You write, as Washington prepares for 2025 dominated by tax policy, the debate is likely to bring a fresh recirculation of the most common myths. Let me just explore that first statement of yours. Are we sure that 2025 is going to be dominated by tax policy? Because it seems that in the first several weeks of the Trump administration, as we speak,
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
that the agenda has been dominated by many, many, many issues, big issues, Russia and Ukraine, Doge, immigration and so on. And one topic I'm hearing very little conversation about, so far at least, is tax policy.
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
That sounds like a nice little Washington conspiracy theory. Can you unpack it?
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
And number two, just about everything you know about U.S. tax policy is wrong. Today on Freakonomics Radio, federal debt and tax myths. Could we possibly be having any more fun? That starts now.
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
Isn't that interesting? When you say putting together four trillion, you mean in the form of extending the 2017 cuts, correct? At least. Yeah. You write that there are, quote, false narratives about taxes from both the conservative and liberal sides. Could you just lay out quickly the false narratives? Let's do first the conservative side. The conservative tax framework...
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
Now let me have the principal false narratives from the liberal sign.
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
Can you talk for a moment about where those misperceptions come from? Because as I hear you speak, the only legitimate source I can imagine for these misperceptions is from the politicians themselves, in which case it's the political system that is largely responsible for the misperception.
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
You make the point that Republicans typically campaign on this set of lower taxes, lower spending ideas. But if they win and especially if they control Washington, then they just spend like crazy, spend as much, if not more than Democrats.
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
Now, for the Democrats, would you say that at least they tend to be a little bit more honest in carrying out their campaign promises in that they say they want to tax and spend and then they do?
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
And so you get spending without taxation, which just drives your beloved deficit even further. Exactly. Coming up after the break, we run through Jessica Riedel's 10 tax myths one by one. I'm Stephen Dubner. This is Freakonomics Radio. We'll be right back. OK, here are what Jessica Riedel calls the top 10 tax myths in the U.S. system.
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
In December, a month after Donald Trump was elected to his second term, but before he had taken office, Jessica Riedel published a few articles that made me think she would be a good person to speak with and to learn from. First came her piece in City Journal, which is published by the Manhattan Institute. It was called Correcting the Top Ten Tax Myths.
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
OK, those are your 10 myths on the final one about corporate tax rates. I assume you were giving substantial credit there to the 2017 Trump cuts or no. I mean, that's where it came from.
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
When you're talking about the perception that if you just tax the rich a lot more, then everything will be fine, and you lay out in this piece why that is an absurdly narrow and wrong view, it does make me think of the famous quote, I guess, from Warren Buffett, talking about how, my secretary pays a lower tax rate than I do. Can you talk me through that?
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
I think this is one of the big misunderstandings, the difference between a salaried worker and someone whose earnings are coming from investment generally.
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
In promoting what you call this myth that high earners are underpaying, you talk about how the Biden administration recategorized a bunch of income from the top piece of the pyramid. Can
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
And then came a pair of op-eds in the Boston Globe. One was called What Conservatives Get Wrong About Taxes. The other, What Liberals Get Wrong About Taxes. I started our conversation by asking for some background on her employer, the Manhattan Institute.
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
I know a lot of economists who have worked in Republican White Houses and Democratic White Houses and in different organizations affiliated with the White House. And I know them primarily from academia. Within academia, I've always had the belief that you have to be an honest broker because your arguments and research are being interrogated so rigorously by your peers and you just can't really BS.
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
So when I hear you talk about economists and policymakers in the Biden administration telling this story that just doesn't sound like you could justify it at all, it makes me wonder what's going on there. When... bright and I assume well-intentioned people, economists and others, come to Washington and I'm talking about the left and the right. Is this dishonesty going on?
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
Is this just like how the game is played and we have to play it this way? Is it that it's such a complicated scenario that they figure they can tell a little white lie and get away with it because it's too hard to figure out the bigger truth?
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
Here's a sobering line from your article. You write, What would you say are the ultimate costs of tax policy being so widely either misunderstood or manipulated?
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
It's interesting to admit that something is a right-of-center think tank or a left-of-center think tank because I find that so many institutes, there are a bunch on the Right. There are a bunch on the left. Nearly all of them talk about how they aim to be nonpartisan. I just about never buy it. So can you give us a quick buyer's guide to assess the research coming out of institutes like yours?
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
What share of our current fiscal irresponsibility, let's call it, would you say can be attributed directly to tax policy? Oh, boy. I can't believe I stumped you on that one.
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
So if we somehow miraculously had what Jessica Riedel considers the optimal tax policy, how far would that go toward addressing the larger issue of fiscal irresponsibility?
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
So if we want to look at the big picture, the entire fiscal irresponsibility, including the national debt, I'm starting to wonder if these 10 tax myths may be more like the hole and not the doughnut.
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
Okay, let's address that side. I'm Stephen Dubner. This is Freakonomics Radio. We'll be right back. OK, let's define some terms. The federal deficit is the difference between what the government spends and what the government takes in over a given year. Last year, the U.S. deficit was $1.8 trillion. When you stack last year's deficit onto the previous year's and the years before that,
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
This is what's called the national debt. As of this recording, the U.S. national debt is around $29 trillion. To put that in perspective, here's one more number. Our national debt currently stands at around 98% of our GDP, and that is the highest it's been since right after World War II.
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
So when people like Jessica Riedel say they are very concerned about our national debt and the lack of a political plan to address it, Well, they are right to be concerned. For starters, just paying the interest on that debt is extraordinarily expensive.
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
There is no one simple explanation for why the debt has ballooned like this. There are a variety of contributors, and the COVID pandemic certainly didn't help. But if you had to identify one main villain, Riedel has an obvious candidate, a federal government that absolutely cannot stop spending money.
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
You say politicians make these promises. What would happen if they didn't? Would they simply lose?
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
I mean, you make Washington sound like a flock of tweens who just discovered Klarna or Afterpay, and they just go crazy buying every pair of shoes and gaming system. Is that essentially what we're looking at?
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
You mentioned that Trump outspent Biden two to one. Now, in Trump two, I'm curious where you think that's heading.
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
Let's talk a little bit more about you. How and when did you become interested in tax policy and budget policy? I've read about some US News and World Report challenge to readers to balance the budget that got you enthusiastic. Is that true?
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
So whether it's the second Trump administration, whether it's the administration that follows that one, which if you listen to Trump himself, he might like it to be a third Trump administration. But whoever comes after him. If you look down the road for 8, 12, 16, 20 years, do you see that this is how the republic ends?
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
The problem you're describing now, which is that politicians make promises that are bad for the country but good for them to get elected, and they believe that if they made promises that were good for the country, they simply wouldn't get elected. It feels as though a very clever game theorist could help adjust that equilibrium. I've heard you talk about politicians as being weather vanes.
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
They just reflect what's blowing out there. They don't actually set the agenda. Can you see a way, whether it's through game theory or something perhaps more practical, that would reset the notion of what it means to be a sane and fiscally responsible elected official?
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
There are two arguments you make to address the problem that stick out as particularly interesting to me. And I would think they'd stick out to most listeners as particularly vexing. One of them is the need for entitlement reform, especially Social Security, but also Medicare and Medicaid. And the second is the need to raise taxes on the middle class.
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
So let's do those one at a time, starting with entitlement reform. What solutions do you propose there?
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
Okay, even I can tell that's a lot of money. But let me just back up for a minute. Why doesn't tax withholding cover that?
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
Is that because when Social Security benefits first began being distributed, there was nothing in the bank because the beneficiaries of those distributions hadn't contributed via tax?
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
So do you have any ideas to deal with that problem? And let's keep in mind what happened in France when Emmanuel Macron died. required that people work a little bit longer before they draw their retirement savings, and that produced a political catastrophe. What do you see as viable ways to address that problem?
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
Why are lower benefits for high earners not already either on the table or standard? That's a good question.
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
What you're talking about is a form of means testing, correct? Absolutely. Means testing as a concept seems to have become a bit of a third rail in Washington. Am I wrong on that?
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
So why do you think that kind of reform gained zero traction, as far as I'm aware, at least during the Biden administration, other than the obvious fact that it would be electoral suicide?
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
These people work behind the scenes on all sorts of important matters like U.S. tax policy or the runaway national debt. Our guest today is a specialist in both those matters.
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
What do you think would have happened if Joe Biden in the last year of his term, let's say before he dropped out when there was still. a substantial amount of credibility, had made a commercial and looked in the camera and said, Look, the deficit has gotten crazy. Democrats have contributed. Republicans have contributed. It's been going on for many, many years.
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
No one seems to acknowledge it's a big problem. But those of us who know in D.C. on both sides realize it is a big problem. A huge part of that is Social Security benefits. And a huge part of the issue there is that many people who don't, quote, need those Social Security benefits If they drew less, we would go a long way toward solving this problem.
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
And let me nominate myself as someone who's earned enough money over the course of my lifetime that the Social Security benefit that I receive is literally meaningless to me. And I'm going to surrender it. And I'd like to lead a charge to do that by the millions. What do you think would happen with that?
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
I would assume he does. Social security, you have to start drawing at a certain point. So that suggests we have another president who could give the same commercial. What do you think would happen if Donald Trump would say to the camera, look, people, I've looked at the deficit situation. Social security is a huge part of this.
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
And a huge part of that is that too many rich people are drawing social security benefits that they don't need. So for the good of this country, let's stop that. I'm a billionaire. I don't need the social security. I'm going to give it up. Why don't you? What would happen then?
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
But based on everything you've told me today, there is no way I'm going to hold my breath until that happens.
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
That was my next question. In fact, I was looking them up as you were talking and I was finding no help online.
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
Let's go to your second big argument that stood out to me as particularly vexing for some people, the need to raise taxes on the middle class.
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
Let me pause you there for a moment and just reflect on what you just said. The middle class in America is dramatically undertaxed. I would guess that maybe 3% of the people who listen to this show would nod their heads and the other 97% are sure that either they misheard or that you are some kind of fill in the blank with the worst word you can imagine. Don't shoot the messenger, please.
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
How would you characterize the tax rate paid by lower earners in the U.S. ?
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
Let's take that pyramid from the bottom up now, the lower earners, the middle earners, and the upper earners. What's the best way to give a macro description of the share of tax revenues being gleaned from those three sections?
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
Way up, meaning the system has gotten more progressive over time. Substantially more progressive. Have Republicans contributed to that progressivism as much as Democrats or no?
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
Now, to be fair, that net negative federal tax was essentially a tradeoff for lower entitlements, no? Possibly, but entitlement spending is still pretty high up. So let me ask you finally, tell me some favorite tax reforms that you think might work in this country or tax policies from other places and or times.
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
Consider all of us scared. Let's go back for a minute. I'd like to hear about your experience staffing and advising political candidates and elected officials.
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
Well, let me ask you this. I already brought up the game theorists. There's another sector in economics, the behavioral economists.
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
One thing that behavioral economists and psychologists like Danny Kahneman and others focus on is the very problem that you've identified, which is people are really bad at making decisions now with the future in mind, whether it's their future self or the future economy and the future debt of their country.
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
Is there anything in the behavioral economics literature that you feel might be fruitful in trying to change public perception?
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
I love that I asked you for a solution. You gave me more of the problem, which I guess indicates how bad the problem is. But maybe you could go back to a time or maybe you can point to other countries where people believe the reality that even if future gains cannot be held in your hand today, they are very valuable. Can you point to a place or time where that belief has been mainstreamed?
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
So it sounds to me as though you consider yourself a principled empirical researcher. I'm in favor of all three of those words, I have to say. Is there room in the world for a creature like you?
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
I'd like to thank Jessica Riedel for this conversation and for the information. I take her last point as a challenge to all of us to apply the same standards to the politicians you support as the ones you don't. It's probably unrealistic to suggest this, maybe even idiotic, but
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
If every one of us were to start thinking that way and acting that way, we might start pushing back against the political absurdities that have gotten us locked into this situation. I'm probably wrong. It's unlikely to happen. But I'd rather start rowing in the right direction, even against the tide, than to keep drifting further out to sea. What do you think? Let me know.
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
Our email is radio at Freakonomics.com. Coming up next time on the show, what would the U.S. look like if it were run by Trader Joe's?
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
I am, of course, kidding when I say that America should be run by Trader Joe's. But am I? That's next time. Until then, take care of yourself. And if you can, someone else too. Freakonomics Radio is produced by Stitcher and Renbud Radio. You can find our entire archive on any podcast app. Also at Freakonomics.com, where we publish transcripts and show notes.
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
This episode was produced by Tao Jacobs. The Freakonomics Radio Network staff includes Alina Kullman, Augusta Chapman, Dalvin Abouaji, Eleanor Osborne, Ellen Frankman, Elsa Hernandez, Gabriel Roth, Greg Rippin, Jasmine Klinger, Jeremy Johnston, John Schnarz, Morgan Levy, Neil Carruth, Sarah Lilly, and Zach Lipinski. Our theme song is Mr. Fortune by the Hitchhikers. Our composer is Luis Guerra.
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
As always, thank you for listening. I think our listeners are going to love this conversation, and I really appreciate it.
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
In Washington, D.C., there is a set of people who move into town when their party comes to power and who eventually leave once their party is voted out. These are the high profile residents of D.C., the ones who make headlines. But for every one of these people, there are thousands more that you rarely hear about or hear from. This is the other Washington, D.C.
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
OK, so you were known for most of your life as Brian Riedel. In fact, that's your byline on this piece in City Journal. But now you're Jessica Riedel. Can you just give me the TLDR on that?
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
I'm really happy for you. That's great news to hear, Jessica. I do wonder whether working in policy and politics, which is not the most serene environment, let's be honest, there's a lot of fighting, there's a lot of dug in heels and entrenched positions. I'm wondering if that political journey in any way prepared you for this personal transition?
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
When you say that people would become angered by your cold economic truths, give me an example.
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
So do you see yourself as someone who's sounding the alarm?
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
What kind of policies were you proposing or critiquing that inflamed the White House?
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
We checked in with Karl Rove to see if he had indeed reached out to the head of the Heritage Foundation to shut Riedel up. Here's what Rove told us. Not true. I'm actually a fan of Riedel's work, and we had better things to do than try dictating the think tank CEO's who to hire.
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
So if I had to nutshell your political, economic or fiscal position in the spectrum of our current political scheme, where would you put yourself?
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
So if you consider yourself pragmatic and right of center, the Biden administration was what?
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
The $4 trillion in new spending in the Biden administration, give me the top three or five categories there.
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
Okay. And now same thing for the second Trump administration. Again, your pragmatic right of center, he or it is what?
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
You've written that Donald Trump's economic policies are, quote, aggressively inflationary. Can you say a bit more on that?
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
Despite her claim to failure, Riedel is consistently named by Washingtonian Magazine as one of the most influential economic policy professionals in D.C. She has testified before Congress. She routinely briefs lawmakers in both political parties. And she has two messages. Number one, the federal debt crisis is even worse than you think, and few politicians have the courage to do anything about it.
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
So, Jessica, you recently published a piece in City Journal, the journal of the Manhattan Institute. The headline was Correcting the Top Ten Tax Myths. I never thought I would say this about a fairly long, wonky, chart-filled article about taxes, but it was borderline thrilling. First of all, thank you for making tax policy a little bit sexy. I want to dig into the 10 myths.
Freakonomics Radio
626. Ten Myths About the U.S. Tax System
But first, let me just ask you, why did you write this and what were the circumstances? Because I could imagine that you or someone decided that this needs... discussion now because tax policy is always important. But I also wonder if this is just what you think about and maybe even dream about every night. Is it just something you dash off on a napkin and publish?
Freakonomics Radio
622. Why Does Everyone Hate Rats?
That's coming up after the break. I'm Stephen Dubner, and this is Freakonomics Radio. One reason that rats are so despised is because they spread disease. The most famous instance being the Black Death, a pandemic of bubonic plague in the 14th century that killed millions upon millions of Europeans. But scientists have recently challenged the claim that rats caused the Black Death.
Freakonomics Radio
622. Why Does Everyone Hate Rats?
As you may have heard, Adams was indicted last year on five federal criminal charges, including bribery and wire fraud. Although in a remarkable departure from legal precedent, the Trump administration Justice Department just ordered those charges dismissed. Through it all, the mayor's anti-rat fervor has been undiminished.
Freakonomics Radio
622. Why Does Everyone Hate Rats?
Scientists including Niels Christian Stenseff at the University of Oslo. Challenging a claim like this is not a simple thing.
Freakonomics Radio
622. Why Does Everyone Hate Rats?
The standard epidemiological model of the Black Death is that humans were exposed to the plague by rats who had been bitten by diseased fleas. But in 2018, Stenseth and his colleagues published a paper in the Proceedings of the National Academy of Sciences where they presented a different model.
Freakonomics Radio
622. Why Does Everyone Hate Rats?
Despite the historical significance of the disease, they wrote, the mechanisms underlying the spread of plague in Europe are poorly understood. While it is commonly assumed that rats and their fleas spread plague, there is little historical and archaeological support for such a claim.
Freakonomics Radio
622. Why Does Everyone Hate Rats?
we show that human ectoparasites like body lice and human fleas might be more likely than rats to have caused the rapidly developing epidemics. And what is Stenseth's evidence that rats were not responsible for the Black Death?
Freakonomics Radio
622. Why Does Everyone Hate Rats?
He and his co-authors looked at plague death rates from the 1300s to the 1700s, drawn from census records and historical accounts from cities including London, Barcelona, Florence. Based on the velocity at which the plague spread in these places, Stenseth concluded, the human parasite model was much more likely than the rat parasite model.
Freakonomics Radio
622. Why Does Everyone Hate Rats?
That's right. Glazer is an economist, not an epidemiologist or a biologist or even a rat expert. But Glazer is an expert in cities, which is where rats thrive and where disease spreads. And when we told him we were working on this rat series, he did some extra credit reading.
Freakonomics Radio
622. Why Does Everyone Hate Rats?
So having determined that, that there is at least some guilt of the rat in at least the third pandemic, but perhaps not the most famous, the Black Death – How would you say that the modern day reputation of the rat has been affected by or informed by its implication in past disease carrying?
Freakonomics Radio
622. Why Does Everyone Hate Rats?
Glazer is the author of a book called Triumph of the City, how our greatest invention makes us richer, smarter, greener, healthier, and happier. And the fact is that cities and rats seem to be an inevitable pairing. In the ruins of Pompeii, there were rats. To estimate the size of human populations in ancient cities, modern scientists use archaeological evidence of rat populations.
Freakonomics Radio
622. Why Does Everyone Hate Rats?
To an economist, do rats present an obvious economic angle or maybe even multiple ones? Well, sure.
Freakonomics Radio
622. Why Does Everyone Hate Rats?
Now, there was reportedly a big surge in rat population in New York City starting around 2020. I'm curious to know your thoughts on why. Obviously, COVID is a factor to consider. There were, in the aftermath of COVID, the eruption of hundreds, maybe thousands of outdoor dining sheds outside of restaurants. So I'm curious what you think of all that.
Freakonomics Radio
622. Why Does Everyone Hate Rats?
Now, if I recall correctly, you were born and raised in Manhattan. Indeed. One could imagine that rats destroy or degrade the reputation of a city like New York. Do you put much stock in that argument?
Freakonomics Radio
622. Why Does Everyone Hate Rats?
And that job that was posted on NYC.gov, that was Eric Adams searching for his hero, who turned out to be this person.
Freakonomics Radio
622. Why Does Everyone Hate Rats?
Although from what I've seen, the last number is 2023. It looked like in New York City, 24 people were diagnosed with leptospirosis, the highest number of reported cases in a single year. But this city of over 8 million. So that sounds like a pretty minor threat.
Freakonomics Radio
622. Why Does Everyone Hate Rats?
But that's also people. I understand dogs get leptospirosis as well. And that maybe is a bigger problem for New Yorkers.
Freakonomics Radio
622. Why Does Everyone Hate Rats?
Coming up after the break, is the threat of disease really what this is about?
Freakonomics Radio
622. Why Does Everyone Hate Rats?
I just want to read it to verbatim. The job posting called for someone with a, quote, swashbuckling attitude, crafty humor, and a general aura of badassery.
Freakonomics Radio
622. Why Does Everyone Hate Rats?
I'm Stephen Dubner. This is Freakonomics Radio, and we will be right back. I'm sorry. We will be right back. A rat is a rodent, a member of the order Rodentia, which contains over 2000 species. Nearly half of all mammals are rodents. They are famous for their gnawing ability, which is carried out by large pairs of upper and lower front incisors.
Freakonomics Radio
622. Why Does Everyone Hate Rats?
Squirrels, mice, beavers, hamsters, prairie dogs, porcupines, they are all rodents. But it seems fair to say that rats are the most despised member of this order. Why? For that, let's go back to Bethany Brookshire.
Freakonomics Radio
622. Why Does Everyone Hate Rats?
Talk about just the title itself and what kind of work you're asking that word pests to do.
Freakonomics Radio
622. Why Does Everyone Hate Rats?
Do you think the rat has been unfairly tarnished its reputation over time by having been associated with the Black Death?
Freakonomics Radio
622. Why Does Everyone Hate Rats?
Humans do like to assign blame to other animals, but as Brookshire points out, the blame can be assigned somewhat randomly. Consider the rabbit. The rabbit is not a rodent, although it used to be classified as such. Today, it is considered a lagomorph since it has four upper incisors, not two. For most people, the rabbit is thought of as... believe the technical term is cute. It's fluffy.
Freakonomics Radio
622. Why Does Everyone Hate Rats?
But come on, it sounds like you fit pretty well.
Freakonomics Radio
622. Why Does Everyone Hate Rats?
It hops. It has facial features that kind of look like a human baby. If we think of rats as trash eaters, we think of rabbits as carrot nibblers. So cute. But not everywhere is the rabbit considered so benign. In Australia, where rabbits nibble some $125 million worth a year of agricultural crops, there is a new rabbit czar tasked with curbing the Australian bunny population.
Freakonomics Radio
622. Why Does Everyone Hate Rats?
In her book, Bethany Brookshire writes about many other animals who are considered pests in some circumstances, even if they don't deserve to be, like snakes and elephants and coyotes and the well-known bird that some people today call rats with wings.
Freakonomics Radio
622. Why Does Everyone Hate Rats?
And that swashbuckling badass is... Kathy Karate.
Freakonomics Radio
622. Why Does Everyone Hate Rats?
Okay, so that history of pigeons is really interesting. But now pigeons, they're what, just another pest essentially? Yeah.
Freakonomics Radio
622. Why Does Everyone Hate Rats?
How would you say that the history of the human-pigeon relationship compares with the history of the rat-human relationship?
Freakonomics Radio
622. Why Does Everyone Hate Rats?
Okay. And if I were to ask you to summarize the downsides and the upsides of rats generally, how would you characterize that?
Freakonomics Radio
622. Why Does Everyone Hate Rats?
Give me an example of where rats are not thought of as disgusting.
Freakonomics Radio
622. Why Does Everyone Hate Rats?
New York and many other cities have seen a rise in their rat populations, especially during COVID. And now they are fighting back. But is wholesale slaughter really the way to go? That is one of the many rat questions that I am eager to answer over the next few episodes. The brown rat, also known as Rattus norvegicus, is one of the most reviled animals in the world.
Freakonomics Radio
622. Why Does Everyone Hate Rats?
What would you say are the drivers of the difference between one place or one culture and another, one in which the rat is looked at as just disgusting, a menace, dangerous, scary, et cetera, and one where it's not? What constitutes that difference, do you think?
Freakonomics Radio
622. Why Does Everyone Hate Rats?
To the animals that we call pests, what are humans? Are we just pests that text and build parking lots?
Freakonomics Radio
622. Why Does Everyone Hate Rats?
Since rats are no longer a big disease vector, at least for now in most places, do you think our frightened view of them is simply outdated and that for the most part, rats are, yes, a negative externality of humans in cities, but a really minor one that we shouldn't worry so much about?
Freakonomics Radio
622. Why Does Everyone Hate Rats?
So, Ed, let's play a quick game of word association. When I say rats, you say what? Cuddly. Come on now, you're just trying to make me happy now, aren't you?
Freakonomics Radio
622. Why Does Everyone Hate Rats?
I want to run past you at a couple of titles we're considering for the series. Let me know what you think. One is The Exoneration of the Rat. Too much?
Freakonomics Radio
622. Why Does Everyone Hate Rats?
Although the Rolling Stones sympathy, this is sympathy for the devil. The devil is the narrator of that song. You know, I shouted out who killed the Kennedys when after all it was you and me. So it's not the purest sympathy, let's say. Do you still like this angle?
Freakonomics Radio
622. Why Does Everyone Hate Rats?
We will hear the details of New York's rat mitigation plan.
Freakonomics Radio
622. Why Does Everyone Hate Rats?
Coming up next time in part two of Sympathy for the Rat, we will talk about how to control this urban partner of ours.
Freakonomics Radio
622. Why Does Everyone Hate Rats?
And we'll explore the city with a master of the urban rat.
Freakonomics Radio
622. Why Does Everyone Hate Rats?
And we'll visit a place that claims to be nearly rat free.
Freakonomics Radio
622. Why Does Everyone Hate Rats?
That's next time on the show. Until then, take care of yourself. And if you can, someone else too. Freakonomics Radio is produced by Stitcher and Renbud Radio. You can find our entire archive on any podcast app, also at Freakonomics.com, where we publish transcripts and show notes. This episode was produced by Zach Lipinski with help from Dalvin Alboagy.
Freakonomics Radio
622. Why Does Everyone Hate Rats?
Special thanks to Freakonomics Radio listener Jason Weeks for suggesting this topic. The Freakonomics Radio Network staff also includes Alina Kullman, Augusta Chapman, Eleanor Osborne, Ellen Frankman, Elsa Hernandez, Gabriel Roth, Greg Rippin, Jasmine Klinger, Jeremy Johnston, John Schnarz, Morgan Levy, Neil Carruth, Sarah Lilly, and Tao Jacobs. Our theme song is Mr. Fortune by the Hitchhikers.
Freakonomics Radio
622. Why Does Everyone Hate Rats?
Our composer is Luis Guerra. As always, thank you for listening.
Freakonomics Radio
622. Why Does Everyone Hate Rats?
And I want to know if you have anything to share. Maybe it's a story about how you were influenced or inspired by something from Freakonomics. Maybe it's some kind of memory or coincidence that you'd like to tell us about. Whatever it is, send us an email or a voice memo, whichever you prefer. Our address is radio at Freakonomics.com. Thanks in advance for that.
Freakonomics Radio
622. Why Does Everyone Hate Rats?
I'm going to take that as a yes. Our three-part series on rats begins now.
Freakonomics Radio
622. Why Does Everyone Hate Rats?
Hey there, Steven Dubner. This year will mark a pair of anniversaries for us. And even though I ignore most anniversaries, these two have got their hooks in me. It has been 20 years since Steve Levitt and I published Freakonomics. And it's been 15 years since I started Freakonomics Radio. So we are thinking about making some kind of anniversary episode.
Freakonomics Radio
622. Why Does Everyone Hate Rats?
I understand that your relationship with rats goes back pretty far to when you were a kid growing up in New York. I understand that you circulated a petition in your neighborhood to get rid of some rats. Is that true?
Freakonomics Radio
622. Why Does Everyone Hate Rats?
Karate wound up getting an undergraduate degree in biology and a master's in urban sustainability. She taught elementary school for a while, and then she took a job in New York City's Department of Education in their sustainability office.
Freakonomics Radio
622. Why Does Everyone Hate Rats?
Most people, when they think about sanitation, generally do not think of New York City. There are many things to love about this place, many things worth admiring, but let's be honest, it is not a particularly clean city. Trash on the sidewalks is a thing, especially food wrappers and big bags of restaurant trash. For a population of rats, all that food waste represents something like paradise.
Freakonomics Radio
622. Why Does Everyone Hate Rats?
I have seen an estimate by M&M Pest Control that puts the city's rat population at around 3 million. Do you think that's ballpark or no chance?
Freakonomics Radio
622. Why Does Everyone Hate Rats?
And as always, thanks for listening. In the fall of 2022, a new job listing was posted on a New York City government website. The ideal candidate, the listing read, is highly motivated and somewhat bloodthirsty, determined to look at all solutions from various angles, including data collection, technology innovation and wholesale slaughter.
Freakonomics Radio
622. Why Does Everyone Hate Rats?
Now, let me go back to your official title, Director of Rodent Mitigation. Does that include squirrels, chipmunks, etc.?
Freakonomics Radio
622. Why Does Everyone Hate Rats?
How do you think about rats versus the other rodents that are sometimes a problem? Rats look like bigger mice, sort of. And then there are squirrels, which most people seem to think are really cute. And people feed squirrels outside. I've never seen anybody feeding a rat outside. But is a rat just a squirrel with less attractive body hair?
Freakonomics Radio
622. Why Does Everyone Hate Rats?
I mean, chipmunks always look pretty dumb to me. They're super cute, but they look dumb. Maybe I'm wrong.
Freakonomics Radio
622. Why Does Everyone Hate Rats?
Rats have been exploiting New York City's urban space for at least a few hundred years. The ancestors of today's rats are thought to have arrived in the 18th century on ships from Europe. But in the historical rat timeline, that is still relatively recent. Genetically, they date back to the time of dinosaurs.
Freakonomics Radio
622. Why Does Everyone Hate Rats?
Today, there are two main species, the black rat, Radus radus, which likely originated in India. And then the brown rat that we are familiar with, Rattus norvegicus, the Norway rat, even though it did not originate in Norway. So why is it called that?
Freakonomics Radio
622. Why Does Everyone Hate Rats?
Brookshire is a science journalist with a PhD in physiology and pharmacology. She recently published a book called Pests, How Humans Create Animal Villains. So you can see where her allegiance lies. Here is some more rat history.
Freakonomics Radio
622. Why Does Everyone Hate Rats?
How did that association come to be made and how much does it intersect with the plague in Europe?
Freakonomics Radio
622. Why Does Everyone Hate Rats?
And what kind of government job requires wholesale slaughter? Here is the man responsible for this listing.
Freakonomics Radio
622. Why Does Everyone Hate Rats?
To be clear, the plague persists today in very small numbers, just a few hundred reported cases a year, fewer than a dozen in the U.S. But this third wave of bubonic plague continues. has done terrible damage over the past hundred years in India, especially during the early 20th century, and in Vietnam during its war in the 1960s and 70s.
Freakonomics Radio
622. Why Does Everyone Hate Rats?
The plague is caused by a bacterium known as Yersinia pestis. You see, it's right there in the name, Yersinia pestis. The Yersinia part comes from Alexandre Yersin, the first scientist to describe and culture these bacteria.
Freakonomics Radio
622. Why Does Everyone Hate Rats?
And how much do we know about how the plague is spread?
Freakonomics Radio
622. Why Does Everyone Hate Rats?
Okay. And then how is plague spread between humans? For that, we will bring in another scientist.
Freakonomics Radio
622. Why Does Everyone Hate Rats?
That is Niels Christian Stenseth, a professor of ecology and evolution at the University of Oslo.
Freakonomics Radio
622. Why Does Everyone Hate Rats?
The Black Death tore through Europe in the mid-14th century. It is hard to believe just how brutal it was.
Freakonomics Radio
622. Why Does Everyone Hate Rats?
During the Middle Ages, it was neither rats nor fleas who were thought to be responsible for the Black Death. Most of the blame was put on witches and Jews, but time and science eventually caught up with the rats. And if anything is gonna give an animal species a bad reputation, It's killing off half of Europe. The association between rats and plague remains strong today.
Freakonomics Radio
622. Why Does Everyone Hate Rats?
In the opening credits of The Decameron, a new Netflix show set during the Black Death, a massive swarm of rats come together to spell out the title. And the recent remake of the film Nosferatu shows a pack of rats following the vampire, carrying the plague with them. But were rats really responsible for the Black Death?
Freakonomics Radio
629. How Is Live Theater Still Alive?
The Freakonomics Radio Network. The hidden side of everything. Stitcher.
Freakonomics Radio
629. How Is Live Theater Still Alive?
This is Freakonomics Radio, the podcast that explores the hidden side of everything with your host, Stephen Dubner.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
So often it might even not have been a bacterial infection. It might have been a viral infection.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
So the moral of the story is, if your kid is really sick, just let them stew. Is that the moral of the story or not quite?
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
The penicillins are in fact a family of antibiotics, including amoxicillin, ampicillin, methicillin, and several others. All these years later, they are still among the safest, cheapest, and most reliable drugs around. They have saved hundreds of millions of lives. Even with all the new antibiotics since then, penicillin is still prescribed at the highest rate of any antibiotic.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
But to be fair, when the parent rushes them in, then it's the physician's opportunity to slow things down.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
When Blumenthal was in medical school, she became fascinated by the idea that two patients with the same infection could have entirely different outcomes depending on how they were treated.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
So if we're drawing a kind of SAT style analogy and penicillin is to these bacterial infections as a hammer is to a nail, let's say, it's the right tool for the right moment. What would the typical non-penicillin antibiotic, what would that be if one suspects that a patient is allergic to penicillin?
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
Would it be like a leg of lamb, perhaps?
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
So talk about your own practice as a clinician and tell me roughly, if you can, how many people have you tested over your career who thought they were allergic to penicillin and what share of them actually were?
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
And when you say you've seen 3,000, those are 3,000 who are suspected of being penicillin allergic?
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
It's even worse than most of the published numbers I've seen. Most of the published numbers say that roughly 10% of the U.S. population is thought to be penicillin allergic. But of that 10%, roughly 90% are not. According to you, it sounds like it's more like 99% that are not. 99% in my practice are. Can you think about another area of medicine where that rate of false positives exists?
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
Coming up after the break, we take a look at misdiagnosis around food allergies.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
But there's one big problem. 10% of Americans, more than 30 million people are allergic to it. At least that's what the conventional wisdom says. But the new year is also a good time to tear down conventional wisdoms, especially if they are disastrously wrong. And this one is. So today on Freakonomics Radio, why do so many of us think we have this allergy?
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
I'm Stephen Dubner. This is Freakonomics Radio. We'll be right back. You could imagine that artificial intelligence will soon be helpful in sorting out things like who's allergic to what. But we're not there yet. For now, allergy is often a guessing game, a bit of grasping in the dark. It's estimated that roughly 40 percent of humans have some kind of allergy.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
That's expected to rise to 50 percent by the next decade. Why? We've already heard from a couple of allergists, but to answer this question, we need someone with a broader view. We need a medical anthropologist.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
McPhail recently published a book called Allergic, Our Irritated Bodies in a Changing World. She writes that roughly half a billion people suffer from food allergies alone.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
Just tell me why and how you became interested in the notion, the big notion of allergy.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
Can you just say what an allergy is and what an allergy is not?
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
Are allergic rates rising or is there just more awareness and or diagnosis and or treatment?
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
What should be done about all these false positives?
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
As with penicillin, the discovery and isolation of adrenaline is another great story for medical history. I won't go into the details here, but it's worth reading about if you're so inclined. A dose of adrenaline or epinephrine administered in an EpiPen, for instance, is the first line treatment for anaphylaxis.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
When Teresa McPhail cites the huge spike in EpiPen prescriptions as evidence of a huge spike in allergies, well, she also points out that much of the demand was driven by the supplier. Mylan Pharmaceuticals marketed the EpiPen aggressively across many channels. Over one 10-year period, McPhail writes, they hired more lobbyists than any other U.S. company.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
This led to a relabeling of the drug by the FDA, which made more people eligible to take it. Mylan also lobbied state legislators as a means to get more EpiPens into schools. They also partnered with Disney to produce children's books about allergy sufferers. So how big is the allergy market? The global market for epinephrine is about $2 billion a year, with 60% of that sold in the U.S.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
And what about all the other allergy controversy we hear about, like food and environmental allergies? How bad is the confusion there?
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
If you look at hay fever, one recent study put the cost of treating Americans at over $4 billion a year, more than a billion of which goes to medication. If you look at the entire category of allergy remediation, the global sales of tests and treatments is around $40 billion a year. So how much of the allergy boom has been driven by more allergies versus well-run pharmaceutical campaigns?
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
It's hard to say. There are a variety of factors that may be driving allergy increase. Some research shows that environmental and chemical disruption may play a big role. I asked Teresa McPhail about some other potential drivers.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
Many, many, many people have by now heard or read about the notion of allergy rising because we, especially we of the children variety, are not exposed to enough things, pathogens or allergens or whatnot, that we don't roll around in the dirt and so on.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
What can we tell you? A lot, starting now.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
It feels as though every time I go to a restaurant these days, the server will ask, is anyone allergic to anything? Do you know anything about that?
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
This is Freakonomics Radio, the podcast that explores the hidden side of everything with your host, Stephen Dubner.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
Can you explain? I do see on the FAIR website that 50 to 60 percent of all blood tests and skin prick tests for food allergy testing will yield a false positive result. Correct. So that sounds absurdly bad. Is it not as bad as it sounds or is it that bad?
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
What about false negative? That's what we should be really concerned about.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
So you mentioned in the book that your aunt and your grandmother were allergic to penicillin.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
Given everything we've discussed about testing or the lack of great testing and the murkiness surrounding this area, do you think that they actually were allergic to penicillin or maybe?
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
I suppose it doesn't matter, Teresa McPhail says. That's what I used to think, that a penicillin allergy is no big deal since there are other newer antibiotics that do the same thing. But the allergists we heard from earlier, Elena Resnick and Kimberly Blumenthal, they told me that that is simply not accurate.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
OK, here is the startling fact that I recently learned. While it is true that around 10 percent of Americans believe they are allergic to penicillin, fewer than 1 percent actually are. How can there be such a huge gap? And what are the costs of that gap, the medical and economic and social costs? Those are some of the questions we will try to answer today, starting with this new friend of mine.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
Resnick told me about a pregnant patient of hers who showed up with a penicillin allergy on her chart twice.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
Why did she come to you in the first place?
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
The fact is that a mislabeled penicillin allergy, and as we've established, the vast majority of penicillin allergies are mislabeled. This is a serious thing. The risk of post-surgical infection is much higher. So are your chances of dying.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
Kimberly Blumenthal from Mass General Harvard published a study comparing the long-term outcomes of 60,000 patients with a penicillin allergy in their medical record versus more than 200,000 patients without it.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
If being labeled penicillin allergic is producing that many more deaths, what exactly are the adverse outcomes that you're avoiding if you're able to take penicillin?
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
This may be impossible to say, but let's say there are two observationally equivalent patients. Let's say me and let's say I have a twin. OK, and one of us has been labeled penicillin allergic. The other hasn't. We have the same medical problem come up. I'll let you pick the problem. One of us receives a penicillin drug. The other is not eligible to do so.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
Even if his allergy isn't real, we think it's real. How would you think about comparing the medical and economic outcomes of person A and person B?
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
I mean, I don't know what any of those are, but all those syllables sound bad to me.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
And how does one get interested in allergy and immunology?
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
OK, that's not simple. But this is. Misdiagnosed penicillin allergies are costing all of us a lot of suffering and dollars. So why isn't more being done to solve this problem?
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
That's coming up after the break. This is Freakonomics Radio and I'm Stephen Dubner. Once you know about the benefits of penicillin and how millions of people wrongly believe they are allergic, you can't help but think about the costs of this misdiagnosis, not just the bad health outcomes and the complications, but the financial costs, too.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
That's why some specialists are pushing for more testing and de-labeling of people who think they are allergic. That might cost a lot up front, but when one in 10 people think they have a medical handicap and they don't, This actually presents an opportunity to save money. It might even be worth testing every single person whose medical history says they are allergic.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
Here again is Kimberly Blumenthal from Mass General Harvard.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
How much money could you save by doing this?
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
Just because penicillins are cheaper than the other antibiotics?
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
Meaning penicillins don't cause as many adverse effects as other antibiotics?
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
Blumenthal is trying to make these cost savings a reality in the Mass General Hospital system.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
Your vital signs are already on record there. Yeah. And is the idea as simple as you feed the key vital signs into the allergy algorithm and see if indeed... There's a likelihood that that person is not allergic and then maybe do some challenge testing. Is that the way it works?
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
Since there is a treatment for the allergic response, but the default is to not give penicillin if there's a suspicion of allergy... What would happen if you just flipped the default and said, no, no, no, we're just going to give penicillin. And if they happen to be in the small group of people who are allergic, then we'll watch and we'll treat it.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
Is that such a terrible idea or would you kill a bunch of people by accident that way?
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
Because we don't want to kill anybody, you're saying?
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
The hospitals where Blumenthal works have achieved a 9% delabeling rate over a decade. The national delabeling rate is less than 1%. There's something interesting to notice about Blumenthal's approach. Many specialists in many industries are always trying to grow their leverage to become ever more powerful gatekeepers. Blumenthal is moving in the opposite direction.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
She wants to shift leverage away from the allergists in order to help more patients. This would happen through better technology, better training, and better regulation. In some states, pharmacists are now allowed to perform the skin tests for penicillin allergy. Last year, a Republican congressman with Democratic support introduced the PAVE Act.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
That stands for Penicillin Allergy Verification and Evaluation. It would fold allergy awareness into annual wellness visits and the preventive welcome to Medicare visits that Blumenthal mentioned earlier. So that all sounds good, but let's not get too excited. Overall, the false positive problem in penicillin is underexamined and underfunded.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
Every time I laughed, it would trigger a coughing fit, which is a problem because I like to laugh. Thanks to the cough, I couldn't sleep through the night. I also had some ferocious night sweats and crazy dreams. During the day, my entire body ached like I'd been hit by a car. Also, no appetite, no energy. Physically, it was the worst few months of my life. But at least I got a story out of it.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
And when disciplines cross, disciplines compete. Given the cost of medical research, these can be multi-billion dollar competitions. There's a pecking order in medicine.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
Give me a little bit of fascinating medicine. I find almost every branch of medicine pretty fascinating, in part because there's so much mystery still. I mean, as much as we've learned, there's still so much that we don't know. So what was it that really got you hooked there?
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
Platt's Mills is a giant in the field of allergy research. Some of his early work was on the connection between asthma and dust mites. More recently, he and his team have found that getting bitten by the lone star tick can trigger an allergy to a sugar molecule called alpha-gal, which is found in the blood of mammals, which means the tick bite can therefore render a person allergic to red meat.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
As Platts Mills said, tick bite research is hot.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
Why do you think ticks are such a good selling point for voters, Congress, et cetera? Just because it's relatable.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
When you were embarking on the research about the alpha-gal red meat allergy related to ticks, Did your colleagues think or maybe even say that you were bonkers?
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
It does strike me and I'd love you to tell me if I'm wrong, but my sense is that when it comes to allergy, the pharmaceutical side of the equation is doing very well. There's a lot of money being made selling treatments that may or may not work. but on the research and the public health side of the equation, plainly not nearly as robust.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
And I'm curious why it would be in a case where if you think of just supply and demand, there's plainly a lot of demand for allergy remediation and so on. The public would like to know more, to suffer less and so on. If the split I'm describing is accurate, why do you think there is such a big split?
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
This connection that Platts Mills has drawn between leash laws and the boom in the tick population is not his only unusual theory.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
But a totally different causal mechanism, yes?
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
What are your views on celiac disease and gluten allergy?
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
This LEAP study, that stands for Learning Early About Peanut Allergy, was published in 2015 by the pediatric allergist Gideon Lack. It argued that feeding peanuts to babies will actually reduce their risk of a peanut allergy. Much of the evidence came from Israel, where babies routinely eat bamba, a puffy peanut butter flavored snack. Full disclosure, some adults also love Bomba.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
Given what we've been hearing about allergies these past few decades, especially peanut allergies, you can imagine that many parents would be terrified to let their baby get anywhere near a peanut snack. Once a conventional wisdom is established, it can be hard to dislodge, which gets us back to the allergy with which we began this episode.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
So what are some solutions? Can you talk about clearing people of penicillin allergy, for instance? By the way, the reason we're doing this episode is this is something that happened with me. I was told as a child I was allergic to penicillin. I avoided it for approximately 50 years. My current doctor, she said, you know, we should test. So I did. And you were negative.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
I was negative, but I had to go through this two-day, first the test and then the challenge test, where you actually get a little bit of it. And it's plainly something that's not scalable right now. So I'm curious what you think are solutions.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
Can you explain why it's so difficult? Because as much as medical technology has changed, I mean, everything from time-release medicines to the mRNA vaccine, I mean, there's so much technology that has accelerated discovery in medicine. Why is it so hard in this case to come up with a, let's say, cheaper, faster, more scalable way to clear people?
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
Kimberly Blumenthal is one of the people who has been working on a better blood test for penicillin allergy.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
But you're making progress, it sounds like.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
I mean, by the time you're 600 years old, this problem will be solved.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
So what would your message be to anyone who believes that they are allergic to penicillin now?
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
If we were to jump ahead 20, 30, 50 years or something, I would imagine that given the benefits of gene sequencing and machine learning and artificial intelligence, it would be pretty simple at birth to either understand everything that a given person might be susceptible to allergy-wise or just correct it.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
Peanuts and pollens, milk and eggs, soybeans and shellfish. These are just a few of the most prominent allergies that tens of millions of people report today. Like Resnick says, harmless substances for most people that cause allergic reactions in some. Given the magnitude of allergies, especially in the U.S.,
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
I realized, though, as I asked that question, that it's a little touchy for you because I'd be putting you out of business. You OK with that?
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
And you just open a florist shop or something like that and be OK?
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
Well, there you go. I would like to thank Kimberly Blumenthal for the good conversation today, as well as Thomas Platz-Mills, Theresa McPhail, and Elena Resnick. Thanks also to Dr. Resnick for clearing my stupid penicillin allergy label.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
And thanks to Becky Kurth, Dr. Deb Jones, Dr. Leni Hurst, and all the other medical professionals who helped turn me from a bone-tired coughing machine into, well, back into me. I am grateful. Making this episode was a good reminder of how much I love physicians, their drive, their curiosity, their willingness to admit what they don't know yet and then to work ridiculously hard to find out more.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
Coming up next time on the show, there is another group of professionals out there who may not be quite as beloved as doctors. Their professional association has been described as somewhere between a monopoly and a mafia. Yeah, I take great offense at that characterization. The National Association of Realtors was recently sued for conspiring to inflate agent commissions.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
That's next time on the show. And remember, our episodes now come out on Friday morning, East Coast time. Until then, take care of yourself. And if you can, someone else, too. Freakonomics Radio is produced by Stitcher and Renbud Radio. You can find our entire archive on any podcast app, also at Freakonomics.com, where we publish transcripts and show notes.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
This episode was produced by Dalvin Aboaji. The Freakonomics Radio Network staff also includes Alina Kullman, Augusta Chapman, Eleanor Osborne, Ellen Frankman, Elsa Hernandez, Gabriel Roth, Greg Rippin, Jasmine Klinger, Jason Gambrell, Jeremy Johnston, John Schnarz, Lyric Bowditch, Morgan Levy, Neil Carruth, Sarah Lilly, Tao Jacobs, and Zach Lipinski.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
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Freakonomics Radio
617. Are You Really Allergic to Penicillin?
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Freakonomics Radio
617. Are You Really Allergic to Penicillin?
You might think that there are a million Elena Resnick's out there, but she is one of just 5000 allergists in the US. If you need an anesthesiologist, there are more than 40000. If you need a pediatrician, there are 60000. But I needed an allergist and Elena Resnick was the one that my primary doctor sent me to. Here's what happened. Like I said earlier, I got sick last year.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
They say that the new year is a good time to express gratitude. So here's what I am most grateful for right now. My health. For much of last year, I was sick. It started in the spring with a cough that turned into a respiratory infection. That turned into a whole other thing. And for a few months, I was miserable. It hurt to talk or swallow.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
It started with a dry cough that wouldn't go away. So I went to my primary doctor who I've been seeing for years. Her name is Rebecca Kurth. I love Dr. Kurth. She is very smart, a true scientist. She's determined and methodical, but also a friend and an ally. She's taught me to be vigilant about my health without being paranoid, which I think is a good middle ground.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
There was one thing she had been wanting me to take care of for a while, but I never did My medical history says that I'm allergic to penicillin. The first time I saw her, she asked, how do you know? And I told her the story that lives in my memory, that I've been allergic since I was a little kid based on what my mother told me, which was based on what our family doctor told her.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
And that's when Kurth told me that this kind of story is very common, but that the vast majority of people who think they are allergic to penicillin are in fact not. So at some point, this was still years ago, Dr. Kurth told me I should try to get my penicillin allergy cleared. This was the first I'd ever heard of being cleared of an allergy. It's also called being delabeled.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
Way back then, she gave me Elena Resnick's phone number, but I never called. It just seemed like a hassle, time consuming and expensive. And I didn't see why getting cleared for penicillin was a big deal since there are so many modern antibiotics. So I did not go see the allergist back then. Fast forward to 2024, and here I was, sick with a cough that wouldn't go away.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
Dr. Kurth gave me what's called a Z-Pak or azithromycin. That's a short course of antibiotic that's used in a variety of cases, especially for patients allergic to penicillin. The Z-Pak didn't help. I got sicker. The cough got worse. I went to a radiologist and had a lung scan to look for cancer. No cancer. I began to wonder what would happen if I could take penicillin.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
Would it fix me or would it maybe kill me? There is a scary sounding word we all think of when we think about allergies, anaphylaxis. Here is Elena Resnick again.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
This one. Today's episode is about penicillin. You may remember the famous story of how penicillin was discovered accidentally nearly 100 years ago by Alexander Fleming. This was at St. Mary's Hospital in London. Fleming was just returning from holiday. In his lab, he had left behind a petri dish where he'd been culturing bacteria, and he found some mold growing in the dish.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
So what's happening when you die from anaphylaxis? Your airway is basically constricted? Exactly.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
So what share of people in the U.S., let's say, who believe that they are allergic to penicillin are in fact allergic to penicillin?
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
So that sounds absurd, obviously, that so many people are walking around with this false belief about themselves. Are there any similar wrongly held beliefs in medicine that you can think of?
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
The story that I told myself my whole life when I was thought to be allergic to penicillin was, well, you know, medical research has been so amazing. There are all these other drugs and like penicillin or the class of drugs called penicillin. It doesn't really matter if I can't have access to them. How wrong was I in that assessment?
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
So you can see the problem here. A lot of people who would benefit from penicillin think they are allergic to it and that they might die if they take it. The vast majority of them are not allergic, but many of them don't even think to get cleared and doing so takes some effort. It starts with what's called a prick test. Elena Resnick again.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
So you're not giving me enough to hurt me if I am allergic. Exactly. But if I am allergic, then what happens?
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
Interestingly, where the mold grew, the bacteria did not. It turned out that this mold juice, as Fleming called it, could kill many types of bacteria, not just the one growing in that Petri dish. Penicillin was eventually used to treat strep throat, meningitis, dental infections, gonorrhea, and much more. It came to be thought of as something like a miracle drug.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
This clearing process that Dr. Resnick just described, that's what I did in her office a few months ago. I did the skin prick test. I did the intradermal test, both negative. And then at a later visit, I took a dose of penicillin and I waited in her office for a couple hours to see if I had an allergic response. I did not.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
I could now definitively say that I am not allergic to penicillin, probably never was, although it is true that some people grow out of allergies over time, just as some people grow into them.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
But whatever childhood rash or temperature spike had led our family doctor to declare me allergic to the penicillin he gave me was likely due to something else, perhaps a viral infection rather than a bacterial one. So now I could take penicillin if I needed it. And it appeared I might because my illness had deepened.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
I went back to Dr. Kurth's office for another round of tests and we turned up some interesting evidence this time. By now, I had something called non-group A strep throat, which seemed to be responsible for some of my symptoms. But I also had thyroiditis, an inflamed thyroid gland. This was the first time in my life I'd ever thought about my thyroid gland. I didn't even know where it is.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
It turns out it's in the front of the neck and shaped like a butterfly. It is also a quiet superstar of the immune system. The thyroid produces hormones that help regulate everything from brain and muscle function to body temperature and heart rate. It can also pitch in when your immune system is already under attack. And that's probably what happened to me.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
The strep got so bad that the thyroid marched in like some auxiliary army. But without any specific orders, it just started shooting out hormones. So I was a mess, but I was no longer allergic to penicillin. So I swallowed as much amoxicillin as Dr. Kurth would allow. And even though it took a while, the healing began. My cough gradually died down.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
My voice started to come back and then my energy, too. I started sleeping through the night. That was probably the biggest thing. For the first time in months, I felt human. Could all that suffering have been prevented if I had taken penicillin back when the trouble started? No. It's hard to say for sure, but it's quite possible. Here is another physician who specializes in allergy.
Freakonomics Radio
617. Are You Really Allergic to Penicillin?
Blumenthal has written dozens of papers about penicillins, not just about the allergy confusion, but about their effectiveness.