Podcast appearances and mentions of Garett Jones

Do Europeans work hard enough? Why do you pay higher interest rates than banks? And can a Hawaiian rum company end one of our worst protectionist laws? Garett Jones joins Dominic Pino to discuss these questions on the latest episode of Econception. Garett Jones is a professor of economics at George Mason University.

The complete archive of Subversive episodes, including exclusive episodes and my writing, is available on Substack. For a bit less, you can also subscribe to the podcast sans writing on Patreon. This is how the show is financed and grows, so I appreciate every contribution! Please subscribe at: ⁠⁠https://www.alexkaschuta.com/ ⁠⁠⁠⁠https://www.patreon.com/aksubversive⁠ In this conversation, we explore the significance of national IQ over individual IQ, the impact of cultural externalities on immigration, and the disparities in income across countries. We also discuss the implications of population decline, fiscal responsibility, and the role of the US in global economics. The conversation also delves into the concept of smart fractions in innovation, the effects of cultural transplants on immigration policy, and the challenges facing democracy in the West. Garett Jones is an economist, a professor at George Mason University, and an author. His research covers areas from macroeconomics, monetary policy, and IQ in relation to productivity, short-term business cycles, and economic development. His most recent book is The Culture Transplant: How Migrants Make the Economies They Move To a Lot Like the Ones They Left. Chapters 00:00 The Importance of National IQ 02:46 Cultural Externalities and Immigration 06:00 Cross-Country Income Disparities 08:45 Population Decline and Economic Implications 12:06 Fiscal Sustainability and Government Spending 14:49 US Hegemony and Global Economics 18:11 Smart Fractions and Innovation 21:10 The Role of Elites in Democracy 23:59 Cultural Transplants and Immigration Policy 27:11 Democracy and Ethnic Diversity 29:57 The Influence of the EU on Eastern Europe 32:46 Leadership and Collaboration 35:56 The Future of Democracy 39:03 Recommended Thinkers and Closing Thoughts

Garett Jones is Associate Professor of Economics at the Mercatus Center at George Mason University. He joins Bob to discuss his book, detailing the impact that immigrants' culture has on the institutions of their new home.Professor Jones' New Book, The Culture Transplant: Mises.org/HAP449aThe Mises Institute is giving away 100,000 copies of Murray Rothbard's, What Has Government Done to Our Money? Get your free copy at Mises.org/MoneyHuman Action Podcast listeners can get a free book: Mises.org/HAPodFree

Garett Jones is Associate Professor of Economics at the Mercatus Center at George Mason University. He joins Bob to discuss his book, detailing the impact that immigrants' culture has on the institutions of their new home.Professor Jones' New Book, The Culture Transplant: Mises.org/HAP449aThe Mises Institute is giving away 100,000 copies of Murray Rothbard's, What Has Government Done to Our Money? Get your free copy at Mises.org/MoneyHuman Action Podcast listeners can get a free book: Mises.org/HAPodFree

The Culture Transplant - is diversity really our strength? In this episode of SDPtalk, William Clouston is joined by Garett Jones, professor of economics at George Mason University and author of three books known as the Singapore Trilogy. In his latest book The Culture Transplant, Garett demonstrates that immigrants retain the socio-economic norms of their mother country across multiple generations. He claims that full assimilation within a generation or two is therefore impossible. Instead, the cultural attitudes of the immigrants shape the institutions and influence the economic productivity of their new country. Garett and William discuss the implications of this for migration policy, particularly in the most innovative Western nations. They agree that moderate levels of migration bring many benefits, but mass migration from poor to rich countries could ultimately “wound the goose that lays the golden eggs of global innovation and worldwide prosperity.” Learn more about the SDP at: https://sdp.org.uk/ The opening and closing music for SDP Talks is "Prelude in C (BWV 846)" by Kevin MacLeod (incompetech.com). Licensed under Creative Commons: By Attribution 4.0 License http://creativecommons.org/licenses/by/4.0/

Economic giant Robert Solow died in December 2023. He was a Nobel laureate, and four of his PhD students went on to also receive the Nobel. He is known for the growth model named in his honor. Garett Jones of GMU joins Bob to discuss the work of Solow, focusing on the possible tension between the Solow model's conclusions about capital accumulation vis-à-vis the Austrian School. Join Tom DiLorenzo, Joe Salerno, and Patrick Newman in Tampa on February 17: Mises.org/Tampa2024Use code "Action24" for 15% off admission. Human Action Podcast listeners can get a free copy of Murray Rothbard's Anatomy of the State: Mises.org/HAPodFree

Economic giant Robert Solow died in December 2023. He was a Nobel laureate, and four of his PhD students went on to also receive the Nobel. He is known for the growth model named in his honor. Garett Jones of GMU joins Bob to discuss the work of Solow, focusing on the possible tension between the Solow model's conclusions about capital accumulation vis-à-vis the Austrian School. Join Tom DiLorenzo, Joe Salerno, and Patrick Newman in Tampa on February 17: Mises.org/Tampa2024Use code "Action24" for 15% off admission. Human Action Podcast listeners can get a free copy of Murray Rothbard's Anatomy of the State: Mises.org/HAPodFree

Economic giant Robert Solow died in December 2023. He was a Nobel laureate, and four of his PhD students went on to also receive the Nobel. He is known for the growth model named in his honor.  Garett Jones of GMU joins Bob to discuss the work of Solow, focusing on the possible tension between the Solow model's conclusions about capital accumulation vis-à-vis the Austrian School. Join Tom DiLorenzo, Joe Salerno, and Patrick Newman in Tampa on February 17: Mises.org/Tampa2024Use code "Action24" for 15% off admission.   Human Action Podcast listeners can get a free copy of Murray Rothbard's Anatomy of the State: Mises.org/HAPodFree]]>

Economic giant Robert Solow died in December 2023. He was a Nobel laureate, and four of his PhD students went on to also receive the Nobel. He is known for the growth model named in his honor. Garett Jones of GMU joins Bob to discuss the work of Solow, focusing on the possible tension between the Solow model's conclusions about capital accumulation vis-à-vis the Austrian School.

Economic giant Robert Solow died in December 2023. He was a Nobel laureate, and four of his PhD students went on to also receive the Nobel. He is known for the growth model named in his honor. Garett Jones of GMU joins Bob to discuss the work of Solow, focusing on the possible tension between the Solow model's conclusions about capital accumulation vis-à-vis the Austrian School. Join Tom DiLorenzo, Joe Salerno, and Patrick Newman in Tampa on February 17: Mises.org/Tampa2024Use code "Action24" for 15% off admission. Human Action Podcast listeners can get a free copy of Murray Rothbard's Anatomy of the State: Mises.org/HAPodFree

Economic giant Robert Solow died in December 2023. He was a Nobel laureate, and four of his PhD students went on to also receive the Nobel. He is known for the growth model named in his honor. Garett Jones of GMU joins Bob to discuss the work of Solow, focusing on the possible tension between the Solow model's conclusions about capital accumulation vis-à-vis the Austrian School. Join Tom DiLorenzo, Joe Salerno, and Patrick Newman in Tampa on February 17: Mises.org/Tampa2024Use code "Action24" for 15% off admission. Human Action Podcast listeners can get a free copy of Murray Rothbard's Anatomy of the State: Mises.org/HAPodFree

Economic giant Robert Solow died in December 2023. He was a Nobel laureate, and four of his PhD students went on to also receive the Nobel. He is known for the growth model named in his honor. Garett Jones of GMU joins Bob to discuss the work of Solow, focusing on the possible tension between the Solow model's conclusions about capital accumulation vis-à-vis the Austrian School. Join Tom DiLorenzo, Joe Salerno, and Patrick Newman in Tampa on February 17: Mises.org/Tampa2024Use code "Action24" for 15% off admission. Human Action Podcast listeners can get a free copy of Murray Rothbard's Anatomy of the State: Mises.org/HAPodFree

Economic giant Robert Solow died in December 2023. He was a Nobel laureate, and four of his PhD students went on to also receive the Nobel. He is known for the growth model named in his honor. Garett Jones of GMU joins Bob to discuss the work of Solow, focusing on the possible tension between the Solow model's conclusions about capital accumulation vis-à-vis the Austrian School. Join Tom DiLorenzo, Joe Salerno, and Patrick Newman in Tampa on February 17: Mises.org/Tampa2024Use code "Action24" for 15% off admission. Human Action Podcast listeners can get a free copy of Murray Rothbard's Anatomy of the State: Mises.org/HAPodFree

Originally Recorded August 11th, 2023 About Professor Garett Jones: https://economics.gmu.edu/people/gjonesb Check out Professor Jones's new book The Culture Transplant: How Migrants Make the Economies They Move To a Lot Like the Ones They Left: https://www.amazon.com/Culture-Transplant-Migrants-Make-Economies/dp/1503632946 Get full access to Unlicensed Philosophy with Chuong Nguyen at musicallyspeaking.substack.com/subscribe

My guest today is Garett Jones. Garett is an associate professor of economics at George Mason University. His interests include macroeconomics, the micro foundations of economic growth, IQ, the power of culture, and public choice economics. The books we focus on in this episode are "10% Less Democracy: Why You Should Trust Elites a Little More and the Masses a Little Less" and "The Culture Transplant: How Migrants Make the Economies They Move To a Lot Like the Ones They Left"We talk about the intellectual environment of George Mason University. We talk about about UAPs. We discuss the benefits and drawbacks of democracy. We discuss the possibility of so-called benign dictatorships. We talk about the crisis of expertise, the Electoral College and then we move on to the topic of immigration. We talk about whether and in what ways immigrants assimilate. We talk about the idea of the melting pot. We discuss high trust versus low trust cultures and much more. I hope you enjoy this conversation as much as I did.

My guest today is Garett Jones. Garett is an associate professor of economics at George Mason University. His interests include macroeconomics, the micro foundations of economic growth, IQ, the power of culture, and public choice economics. The books we focus on in this episode are "10% Less Democracy: Why You Should Trust Elites a Little More and the Masses a Little Less" and "The Culture Transplant: How Migrants Make the Economies They Move To a Lot Like the Ones They Left" We talk about the intellectual environment of George Mason University. We talk about about UAPs. We discuss the benefits and drawbacks of democracy. We discuss the possibility of so-called benign dictatorships. We talk about the crisis of expertise, the Electoral College and then we move on to the topic of immigration. We talk about whether and in what ways immigrants assimilate. We talk about the idea of the melting pot. We discuss high trust versus low trust cultures and much more. I hope you enjoy this conversation as much as I did. Learn more about your ad choices. Visit megaphone.fm/adchoices

My guest today is Garett Jones. Garett is an associate professor of economics at George Mason University. His interests include macroeconomics, the micro foundations of economic growth, IQ, the power of culture, and public choice economics. The books we focus on in this episode are "10% Less Democracy: Why You Should Trust Elites a Little More and the Masses a Little Less" and "The Culture Transplant: How Migrants Make the Economies They Move To a Lot Like the Ones They Left"We talk about the intellectual environment of George Mason University. We talk about about UAPs. We discuss the benefits and drawbacks of democracy. We discuss the possibility of so-called benign dictatorships. We talk about the crisis of expertise, the Electoral College and then we move on to the topic of immigration. We talk about whether and in what ways immigrants assimilate. We talk about the idea of the melting pot. We discuss high trust versus low trust cultures and much more. I hope you enjoy this conversation as much as I did.

Has the word “democracy” become a catch-all for good government? At this point, the idea is so romanticized that it may go unnoticed that the way America is run today is somewhere between a democracy and an oligarchy.Garett Jones, associate professor of Economics at George Mason University, delves into those questions in his book 10% Less Democracy: Why You Should Trust Elites a Little More and the Masses a Little Less. He also studies the factors and foundations of economic growth in his book The Culture Transplant: How Migrants Make the Economies They Move To a Lot Like The Ones They Left. Garett and Greg discuss the true meaning of the word “democracy,” whether it's better to have a well-educated elite calling the shots, and how migration can actually determine how prosperous a country will be. *unSILOed Podcast is produced by University FM.*Episode Quotes:What we love about our so-called ‘democratic system” are its most undemocratic parts03:18: When people use the phrase "we're a nation of laws, not of men," that's a way of saying in the short run, democracy doesn't decide how this trial turns out; the voters don't get to rule on this. We have some rules we set a long time ago. We have some nerdy judges who oversee the system, and they're making the decisions. So a lot of what we love about our so-called “democratic system" are its most undemocratic parts.08:54: The closer a politician is to voters, the further the politician is from wisdom.How do we measure democracy?06:09: The modern methods of measuring democracy often make this mistake of blurring together, like actual voter participation in government with neutral rules that can't be manipulated in the short run. So the first part, to me, is truly democratic. The second part is pretty much judicial independence, which is not democratic.Can migration determine how prosperous a country will be?43:04: The most important channel through which immigration of people from places like China and Western Europe the way that ends up shaping broadly shared prosperity is through our old cliche in economics, which is institutions. So for reasons that are somewhat poorly understood, countries that wind up with a lot of migrants from Eastern Europe, Western Europe, or Eastern Asia tend to wind up with better institutions, better rules of the game. Better rule of law, lower corruption, and that by itself creates a better set of rules that help create broadly shared prosperity for everyone.Show Links:Recommended Resources:The Myth of the Rational Voter: Why Democracies Choose Bad Policies by Bryan CaplanPolitical Realism by Jonathan RauchIron law of oligarchyPolitical Parties by Robert MichelsTammany HallGuest Profile:Faculty Profile at George Mason UniversityGarett Jones WebsiteGarrett Jones on LinkedInGarett Jones on TwitterHis Work:10% Less Democracy: Why You Should Trust Elites a Little More and the Masses a Little LessThe Culture Transplant: How Migrants Make the Economies They Move To a Lot Like The Ones They LeftHive Mind: How Your Nation's IQ Matters So Much More Than Your OwnBanking Crises: Perspectives from the New Palgrave Dictionary of EconomicArticles on EconlibMore scholarly articles

In this episode, Tim Kane chats to American economist and author Garett Jones. We hear about Garett's most recent book, The Culture Transplant: How Migrants Make the Economies They Move To a Lot Like the Ones They Left. We also hear why he believes America should open its borders to anyone from China. Plus, why ethnic diversity isn't necessarily the answer to a booming economy. Your host is Tim Kane, President and Founder of The American Lyceum. --- Send in a voice message: https://anchor.fm/the-american-lyceum/message

Link from the show:* The Culture Transplant: How Migrants Make the Economies They Move To a Lot Like the Ones They Left* Connect with GarrettBook blurb:A provocative new analysis of immigration's long-term effects on a nation's economy and culture.Over the last two decades, as economists began using big datasets and modern computing power to reveal the sources of national prosperity, their statistical results kept pointing toward the power of culture to drive the wealth of nations. In The Culture Transplant, Garett Jones documents the cultural foundations of cross-country income differences, showing that immigrants import cultural attitudes from their homelands―toward saving, toward trust, and toward the role of government―that persist for decades, and likely for centuries, in their new national homes. Full assimilation in a generation or two, Jones reports, is a myth. And the cultural traits migrants bring to their new homes have enduring effects upon a nation's economic potential.Built upon mainstream, well-reviewed academic research that hasn't pierced the public consciousness, this book offers a compelling refutation of an unspoken consensus that a nation's economic and political institutions won't be changed by immigration. Jones refutes the common view that we can discuss migration policy without considering whether migration can, over a few generations, substantially transform the economic and political institutions of a nation. And since most of the world's technological innovations come from just a handful of nations, Jones concludes, the entire world has a stake in whether migration policy will help or hurt the quality of government and thus the quality of scientific breakthroughs in those rare innovation powerhouses.About my guest:After earning a BA in history from Brigham Young (with a sociology minor), an MPA from Cornell, and an MA in political science from UC Berkeley, I earned my Ph.D. at UC San Diego in 2000. My dissertation was on how the Federal Reserve can control short-run interest rates, and used accidental increases and decreases in bank reserves to estimate the economic effects of what we would now call quantitative easing. I enjoy backpacking in the High Sierra, getting lost in Venice, and looking for the best food in Chengdu. In the past, I've worked in the U.S. Senate, and my research areas include behavioral economics, monetary economics, corporate finance, and economic growth. Media appearances include C-Span's Washington Journal, the Washington Post, the Wall Street Journal, Bloomberg BusinessWeek, Fox Business, and the New York Times; a more complete collection here. Get full access to Dispatches from the War Room at dispatchesfromthewarroom.substack.com/subscribe

Garett Jones is an economist at George Mason University and the author of The Cultural Transplant, Hive Mind, and 10% Less Democracy.This episode was fun and interesting throughout!He explains:* Why national IQ matters* How migrants bring their values to their new countries* Why we should have less democracy* How the Chinese are an unstoppable global force for free marketsWatch on YouTube. Listen on Apple Podcasts, Spotify, or any other podcast platform. Timestamps(00:00:00) - Intro(00:01:08) - Migrants Change Countries with Culture or Votes?(00:09:15) - Impact of Immigrants on Markets & Corruption(00:12:02) - 50% Open Borders?(00:16:54) - Chinese are Unstoppable Capitalists (00:21:39) - Innovation & Immigrants (00:24:53) - Open Borders for Migrants Equivalent to Americans?(00:28:54) - Let's Ignore Side Effects?(00:30:25) - Are Poor Countries Stuck?(00:32:26) - How Can Effective Altruists Increase National IQ(00:39:13) - Clone a million John von Neumann?(00:44:39) - Genetic Selection for IQ(00:47:02) - Democracy, Fed, FDA, & Presidential Power(00:49:42) - EU is a force for good?(00:55:12) - Why is America More Libertarian Than Median Voter?(00:56:19) - Is Ethnic Conflict a Short Run Problem?(00:59:38) - Bond Holder Democracy(01:04:57) - Mormonism(01:08:52) - Garett Jones's Immigration System(01:10:12) - Interviewing SBFTranscriptThis transcript was autogenerated and thus may contain errors.[00:00:41] Dwarkesh Patel: Okay. Today I have the pleasure of speaking with Garrett Jones, who is an economist at George Mason University. . He's most recently the author of the Cultural Trans. How migrants make the economies. They move to a lot like the ones they left, but he's also the author of 10% Less Democracy and Hive Mind. We'll get into all three of those books. Garrett, welcome to the podcast. [00:01:06] Garett Jones: Glad to be here.Thanks for having me.[00:01:08] Migrants Change Countries with Culture or Votes?[00:01:08] Garett Jones: Um, [00:01:09] Dwarkesh Patel: first question is, isn't the cultural transplant still a continuation of your argument against democracy? Because the isn't one of the reasons we care about the values of migrants, the fact that we eliminate democracy. So should review this book as part of your critique against democracy rather than against migration specifically.[00:01:27] Garett Jones: Um, well, I do think that, uh, governments and productivity are shaped by the citizens in a nation in, in almost any event. Um, I think that even as we've seen recently in China, even in a very strong authoritarian dictatorship, which some would call totalitarian, even there, the government has to listen to the masses.So the government can only get so far away from the masses on average, even in, uh, an autocracy. If you had [00:01:57] Dwarkesh Patel: to split apart the contribution though, um, the, the impact of migrants on, let's say the culture versus the impact that migrants have on a country by voting in their political system, um, uh, how, how would you split that apart?Is, is the, is mainly the impact we, the cultural impact we see for migration due to the ability of migrants to vote or because they're just influencing the culture just by being [00:02:19] Garett Jones: there? I'll cheat a little bit because we don't get to run experiments on this, so I just have to kind of guess, uh, make an informed guess.I, I'm gonna call it 50 50. Um, so the way people, uh, the way citizens influence a country through formal democracy is important. Uh, but citizens end up placing some kind of limits on the government anyway. And the people in the country are the, they're the folks who are gonna work in the firms and be able to either establish or not establish.Those complicated networks of exchange that are crucial to high productivity. . ,[00:02:52] Mean vs Elite IQ[00:02:52] Dwarkesh Patel: I wanna linger on hive mind a little bit before we talk about the cultural transplant. Um, if you had to guess, does, do the benefits of National IQ come from having a right tail of elites that is smarter or is it from not having that strong of a left tail of people who are, you know, lower productivity, more like markedly to commit crimes and things like that?In other words? Uh, yeah, go ahead. [00:03:14] Garett Jones: Yeah. Yeah. I, I think, uh, the upper tail is gonna matter more than the lower tail, um, in, in the normal range of variation. Uh, and I think part of that is because, uh, nations, at least moderately prosperous nations have found tools for basically reducing the influence of the least informed voters.And for. Uh, basically being able to keep productivity up even when there are folks who are sort of disrupting the whole process. Um, you know, the, the, the risks of crime from the lower end is basically like a probabilistic risk. It's not like it's, it's not like some, uh, zero to one switch or anything. So we're talking about something probabilistic.And I think that, uh, it's the, the median versus the elite is the, is the contrast that I find more interesting. Um, uh, median voter theorem, you know, normal, the way we often think about democracy says that the median should be matter more for determining productivity and for shaping institutions. Um, and I tend to think that that's more important in democracies for sure.So when we look at countries, if you just look at a scatter plot, just look at the raw data of a scatter plot. If you look at the few countries that are exceptions to the rule, where the mean is the mean, IQ is the best predictor of productivity compared to elite iq. Um, . The exceptions are non democracies and South Africa.So you see a few, uh, places in the Gulf where there are large migrant communities who are exceptionally well educated, exceptionally cognitively talented. Um, and that's associated with high productivity. Those are a couple of Gulf states. It's probably cutter, the UAE might be Bahrain in there, I'm not sure.Um, and then you've got South Africa. Those are the, those are the countries where the average test score, it doesn't have to be iq, it could be just Pisa, Tim's type stuff. Um, those are the exceptions to the rule that the average iq, the mean IQ is the best predictor of national productivity. [00:05:14] Dwarkesh Patel: Hmm. Uh, interesting.Um, does that imply the fact that the, um, at least in certain contexts, the elite IQ matters more than the left tail. Does that imply that we should want a greater deviation of IQ in a country? That you could just push a button and increase that deviation? Would that be good? [00:05:33] Garett Jones: No. No, I don't think so. Uh oh.If you could just increase the deviation, um, holding the mean constant. Yeah. Yeah. I think so. In the normal range of variation. Yeah. Yeah. Yeah. So, mm-hmm. , um, is it, and I think that it has more effects. It, no, it's people at the top who are, um, tend to be coming up with, uh, the big breakthroughs, the big scientific breakthroughs, the big intellectual breakthroughs that end up spilling over to the whole world.Basically the, the positive externalities of innovation. This is a very, almost Pollyanna-ish, uh, Paul Roamer new endogenous, new, uh, new growth theory thing, right? Which is the innovations of the elite, a swamp, uh, the negatives of the low skilled among. , [00:06:14] Dwarkesh Patel: can we just apply this line of reasoning to low skilled immigration as well?Then that maybe the average goes down, the average IQ of your country goes down if the, if you just let in, you know, millions of low skilled immigration immigrants, and maybe there's some cultural effects to that too. But, you know, you're also going to the, that the elite IQ will still be preserved and more elites will come in through the borders, along with the low scale migrants.So then, you know, since we're caring about the devi deviation anyways, uh, more immigration might increase the deviation. Uh, and then, you know, the, we just, uh, that's a good [00:06:46] Garett Jones: thing. So notice what you did there is you, you did something that didn't just, uh, increase the variance. You simultaneously increase the variance and lowered the mean Yeah.Yeah. And median, right? And so I think that, uh, hurting the mean and median is actually a big cost, especially in democracies. And so that is very likely to swamp, uh, the benefits of, um, the small, the small probability of getting. Hire elite folks in as part of a low-skilled immigration policy. Mm-hmm. , so pulling down the mean or the median is that that's a, that's that swamps that swamps the benefits of increasing variants there.Yeah. Yes. [00:07:26] Dwarkesh Patel: But if you get rid of their migrant's ability to vote, and I guess you can't do that, but let assume you could do that. Yeah. What exactly is, like, what is the exec mechanism by which the, the, the cultural values or the lower median is impacting the elite's ability to produce these valuable externalities?You know, like there's a standard compared to advantage story that, you know, they'll, they'll do the housework and the cooking for the elites and they can do the more productive [00:07:52] Garett Jones: Yeah. Taking all the institutions as given, which is what a lot of open borders optimists do. They take institutions as given they take cultural norms as given.Um, all that micro stuff works out just fine. I'm totally, I'm totally on board with all that sort of Adam Smith division of labor. Blah, blah, blah. Um, but, institutions are downstream of culture and, uh, cultural norms will be changing partly because of what I call spaghetti theory, right?We meet in the middle when new folks come to a country. There's some kind of convergence, some part where people meet in the middle, um, between the, the values, uh, that were previously existing and the values that have shown up, uh, that migrants have brought with them. So, you know, like I I call it spaghetti theory because, um, when Italians moved to America, that got Americans eating more spaghetti, right?And if you just did a simple assimilation analysis, you'd say, wow, everybody in America eats the same now, like the burgers and spaghetti. So look, the Italians assimilated, but migrants assimilate us. Um, uh, native Americans certainly changed in response to the movement of Europeans. Um, English Americans certainly changed in response to the migration of German and Irish Americans.So this meeting in the middle is something that happens all the time, and not just through Democratic channels, just through the sort of soft contact of cultural norms that sociologists and social psychologists would understand. [00:09:15] Impact of Immigrants on Markets & Corruption[00:09:15] Garett Jones: Um, no, I'm sure you saw the book that was released, I think in 2020 titled, uh, retro Refuse, uh, where they showed, uh, slight positive relationship between, uh, immigration and, you know, pro-market, uh, laws.[00:09:27] Dwarkesh Patel: And I guess the idea behind that is there's selection effects in terms of who would come to a country like America in [00:09:32] Garett Jones: the first place. Well, they never ran the statistical analysis that would be most useful. I think they said that. Uh, so this is Powell and Na Roth Day. Yeah. They ran a statistical analysis that said, and they said, in all of the statistical analysis we've ever run, we've never found negative relationship between low-skilled migration, any measure of it, and changes in economic freedom.And, um, I actually borrowed another one of Powell's data sets, and I thought, well, how would I check this theory out? The idea that changes in migration have an effect on economic freedom? And I just used the normal economist tool. I thought about how do economists check to see if changes in money, changes in the money supply, change the price level.That's what we call the quantity theory, right? Mm-hmm. , the way you do that is on the x-axis. You, you show the change in the money supply On the y axis, you show the change in prices, right? This Milton Friedman's idea. Money's always everywhere. Yeah. Inflation's always neverwhere Montessori phenomenon. So that's what I did.Uh, I did this with a, with a, um, a student. Uh, we co-authored a paper doing this. And the very first statistical analysis we ran, we looked at migrants who came from countries that were substantially more, uh, corrupt than the country's average. And we looked at the, the different, the relationship between cha, an increase in migrants from corrupt countries, and subsequent changes in economic freedom.Every single statistical analysis we found had a negative relationship. , we ran the simplest estimate you could run. Right? Change on change. Change in one thing, predicts change in another. They somehow never got around to running that very simple statistical analysis. CH one change predicts another change.Hmm. We found negative relationships every time. Sometimes statistically significant, sometimes not always negative. Somehow they never found that. I just don't know how . But [00:11:21] Dwarkesh Patel: what about the anecdotal evidence that in the US for example, the, in the periods of the greatest expansion of the welfare state or of governed power during the New Deal or great society, the levels of foreign-born people were at like historical lows.Uh, is that just a coincidence or what, what do you think of? I'm [00:11:38] Garett Jones: not really interested in, uh, migration per se. Right. My story is never that, like migration per se, does this bad thing. Migrants are bad. That's never my story, right? Mm-hmm. , as you know, right? Yeah. Yeah. So my story is that migrants bring, uh, cultural values from their old country to their new country.And sometimes those cultural norms are better than what you've got, and sometimes they're worse than what you've got. And sometimes it's just up for debate. [00:12:02] 50% Open Borders?[00:12:02] Dwarkesh Patel: So if you had to guess what percentage of the world has cultural values that are equivalent to or better than the average of Americas? [00:12:11] Garett Jones: Uh oh.Equivalent to or better then? Yeah. Uh, I mean, just off the top of my head, maybe 20%. I dunno, 30%. I'll just throw something out there like that. Yeah. So I mean, like for country averages, right? Yeah, yeah, yeah, yeah, yeah. Um, [00:12:25] Dwarkesh Patel: currently we probably don't have, uh, it would probably be hard for like 20% of the rest of the world to get into the us.Um, w w would you support some, uh, PO policy that would make it easy for people from those countries specifically to get to the us? Just, uh, have radical immigration liberalization from those places? [00:12:44] Garett Jones: Um, that's really not my comparative advantage to have opinions about that, but like, substantial increases of people who pass multiple tests, like, let's take the low hanging fruit and then move down from there.Right? So people from, uh, countries, uh, that ha um, on average have say higher savings rates, um, higher, uh, education levels. Higher s what I call s a t, deep root scores and, um, countries that are, say half a standard deviation above the US level on all three, [00:13:18] Dwarkesh Patel: right? Why do they have to be higher? Why not just equivalent, like, uh, you get all the gains from trade and plus it can't be, you know, equivalent.So it's, there's no [00:13:27] Garett Jones: trade. Part of the reason is because the entire world depends on US innovation. So we should make America as good as possible, not just slightly better than it is. So very few firms would find that their optimal hiring policy would be hire anyone who's better than your current stock of employees.Would you agree with that? [00:13:42] Dwarkesh Patel: Yeah. But you, uh, have to pay them a salary. If you're just, uh, if it's just somebody just comes to the us, you don't have to like pay them a salary, right? So if somebody is better, that, if somebody's producing more value for a firm than the salary would pay them, I think [00:13:52] Garett Jones: like is is a firm's job to maximize its profits or to just make a little bit more than it's making right?Maximize profits. But yeah, there you go. So you pack, you find the best people you can, you know, sports teams that are hiring don't just say, we wanna hire people who are better than what we got. They say, let's get the best people we can get. Why not get the best? That was Jim Jimmy Carter's, that was Jimmy Carter's, uh, biography.Why not the best. But you, [00:14:16] Dwarkesh Patel: you can do that along with getting people who are, you know, unexpected, uh, terms as good as the existing Americans. Why gives [00:14:24] Garett Jones: y'all like, I don't care what you, why you want this? This seems like crazy, right? What are you talking about? But [00:14:29] Dwarkesh Patel: I, I'm not sure why not the best what the trade out there, huh?No, I'm not saying you don't get the best, but I, I'm saying once you've gotten the best, what is the harm in getting the people who have equivalent s a t scores and, and the rest of the things you [00:14:41] Garett Jones: mentioned. I think part of the reason would be you'd wanna find out, I mean, if you really wanna do something super hardcore, you'd have to find out what's best for the planet as a whole.What's the trade off between, um, Having the very best, uh, most innovative, talented, frugal people in America doing innovating that has benefits for the whole world, versus having an America that's like 40% better, but we're the median's a little bit, the median of skills a little bit lower. Right. Uh, because the median's shaping the productivity of the whole team.Right? Yeah. This is what you, you know what it means when you believe in externalities, right? [00:15:14] Dwarkesh Patel: But if you have somebody who's equivalent by definition, they're not moving the median down. [00:15:19] Garett Jones: That's, you're, you're totally right about that. Yeah. But like, why wouldn't I want the best thing possible? Right. Okay.I'm still trying to figure out why you wouldn't want the best thing possible. You're trying to go, why? I don't want the best thing possible. I'm like, why not? [00:15:31] Dwarkesh Patel: I'm not disagreeing with you. I'm just, I'm a little bit confused about why that that precludes you from also getting the second best thing possible.At the same time you're, because you're not limited to just the best. [00:15:42] Garett Jones: Right. Well, uh, because the second best is going to have a negative externality on the first best. Everything's externalities. This is my worldview, right? Everything's externalities. You bring in the second best, you're like, you're not, that person's gonna make things on average a little worse for the first best person.[00:16:00] Dwarkesh Patel: But it seems like you were explaining earlier that the negative externalities are coming from people from countries with, uh, low s a t scores. And by the way, s a t you can explain what that means just for the audience who's not familiar with how you're using that term. [00:16:11] Garett Jones: Oh yeah. So, um, there, there are three prominent, uh, measures in what's known as the deep roots literature and, uh, that are widely used.Uh, two are s n a, that state history and agricultural history. That's how many thousands of years your ancestors have had experience living under organized states or living unsettled agriculture. And then the T-score is the tech history score. I used the measure from 1500. It's basically what fraction of the world's technology were your ancestors using in 1500 before, uh, Columbus and his expansive conquest ended up upending the entire world.Uh, the world map. So s a and T are all predictors of modern prosperity, but especially when you adjust for migration. [00:16:54] Chinese are Unstoppable Capitalists [00:16:54] Garett Jones: Gotcha. [00:16:55] Dwarkesh Patel: We can come back to this later, but one of the interesting things I think from the book was you have this chapter on China and the Chinese people as a sort of unstoppable force for free market capitalism.Mm-hmm. . Um, and it's interesting, as you mentioned in the book, that China is a poorest majority Chinese country. Um, what do you think explains why China is a poorest, uh, majority Chinese country? Maybe are there like non-linear dynamics here where, uh, if you go from 90 40 to 90% Chinese, there's positive effects, but if you go from 90 to 95% Chinese, there's too much?[00:17:26] Garett Jones: No, I think it's just, I think just communism is dumb and it has terrible, like sometimes decades long effects on institutional quality. I don't really quite understand. So I'd say North Korea, if we had good data on North Korea, North Korea would be even a bigger sort of deep roots outlier than China is.Right? It's like, don't, don't have a communist dictatorship in your country. Seems to be pretty, a robust lesson for a national prosperity. China's still stuck with a sort of crummy version of that mistakes still. North Korea, of course, is stuck with an even worse version. So I think that's, I, my hunch is that that's, you know, the overwhelming issue there.Um, it's, it's something that, it's, it's sort of a China's stuck in an ins. Currently China's stuck in an institutional cul-de-sac and they just don't quite know how to get out of it. And it's, uh, bad for a lot of, for the people who live there. On average, if the other side had won the Chinese Civil War, things would probably be a lot, lot better off in China today.Yeah. [00:18:22] Dwarkesh Patel: Um, but what, what is that suggestion about the deep roots literature? If the three biggest countries in the world, China, India, and America, Um, it, it, it under predicts their performance, or sorry, in the case of China and India, it, uh, it, it over predicts their performance. And in the case of America, it under predicts maybe the, how, how reliable is this if like the three biggest countries in the world are not, uh, adequately accounted for?[00:18:45] Garett Jones: Uh, well, you know, communism's a really big mistake. I, I think that's totally accounted for right there. Um, I think India's underperformance isn't that huge. Um, the US is a miracle along many ways. Um, it's, we should draw our lessons from the typical country, and I think, uh, population weighted estimates, I don't think that basically one third of the knowledge about the wealth of nations comes from the current GDP per capita of China, India, and the us, right?I think much less than one third of the story of the wealth of nations comes from those three. And, uh, again, in, in all three cases though, if you look at the economic trajectories of all three of those people, oh, all three of those countries, uh, they're all, uh, China and India growing faster than you'd expect.And also, I wanna point out. This is the most important point actually. Um, when we look at, uh, when Kaplan made this claim, right? Brian Kaplan has made this claim, right? Yeah. That the SATs, that the ancestry scores, the deep root scores don't predict, um, the prosperity of, uh, the, the low performance of Indian China.He only checked the S and the A and the s a T scores. Okay. Which letter did he not predict? Which letter did he never test out? He never tested the T. What do you think happens when he tests the T? Does it predict, uh, China [00:20:02] Dwarkesh Patel: and India and America, [00:20:03] Garett Jones: Hey, start, they t goes back to being statistically significant again, UhhuhSo with T, which we've always known is the best of the deep root scores, somehow Kaplan never managed to measure that one. Just as Powell Naste never managed to run the simplest test change in, uh, migrant corruption versus change in economic institutions somehow, like the simplest test just never get run.[00:20:26] Dwarkesh Patel: Okay. And then what is the impact if you include t. If you, [00:20:29] Garett Jones: if you, if you look at tea, then, um, then, uh, contrary to what Kaplan says, uh, the deep roots, that deep roots measure is sig statistically significant. [00:20:38] Dwarkesh Patel: Okay. Um, yeah, I, [00:20:40] Garett Jones: interesting. The puzzle goes away, [00:20:42] Dwarkesh Patel: interesting. [00:20:43] Garett Jones: Um, yeah. So somehow these guys just never seem to run like the simple things, the transparent things.I don't know [00:20:49] Dwarkesh Patel: why the, um, the weird, huh? The, the, the one you mentioned from, what was it Nassa, the name of the guy who wrote the Richard at re refuse [00:20:57] Garett Jones: the Yeah, yeah. Powell Naste. [00:20:59] Dwarkesh Patel: Yeah. Yeah. That you said you did the regression on institutional corruption, uh, and from the countries to come from. Is that, was that right?I, [00:21:06] Garett Jones: and so yeah. The, the measure they use, I just took, I took Powell's dataset from another study, and it was the percent. Of it was basically, um, the percentage of your nation's population, the percentage increase in your nation's population from relatively poor or corrupt countries. They had multiple measures, UhhuhSo, and what is on the y axis there? Y axis is change in economic freedom. That's my preferred one. Gotcha. There's also a change in corruption one, which is a noisier indicator. Um, you get much clearer results with change in economic freedom, so. Gotcha, [00:21:38] Dwarkesh Patel: gotcha. [00:21:39] Innovation & Immigrants [00:21:39] Dwarkesh Patel: Um, now does the ideas getting harder to find stuff and great stagnation, does that imply we should be less worried about impinging on the innovation engine in these, uh, countries that people might wanna migrate to?Because worse comes to worst. It's not like there are a whole bunch of great new theories that were gonna come out anyways. [00:21:58] Garett Jones: Uh, no. I think that, I think that it's always good to have great things, um, and new ideas. Yes, new ideas are getting harder to find, but, um, that, but that the awesome ideas that we're still getting are still worth so much.Right. If we're still increasing lifespan a month, a year, uh, for every year of research we're doing, like, that just seems great. Right? A decade that adds a year to life, so, mm-hmm. , just to use a rough, uh, ballpark measure there. But, so we [00:22:25] Dwarkesh Patel: have a lot of these countries where a lot of innovation is happening.So let's say we kept, uh, one or two of them as, you know, immigrate, uh, havens from any potential, uh, downsides, from radical changes. You know, we already had this in the case of Japan or South Korea, there's not that much of migration there. Mm-hmm. . What is, what is a harm in then using the other ones to decrease global poverty by immigration or something like [00:22:48] Garett Jones: that?Well, um, it's obviously better to create a couple of innovation powerhouses, um, rather than none. Right? So obviously that's, that's nice. But instead, I would prefer to have, um, open borders for Iceland if the Open borders advocates are right and open borders. , we'll have no noticeable effect on institutional quality, then it's great to move, , to have our open borders experiment run in a country that's lightly populated, has a lot of open land, and, um, has good institutional quality.And Iceland fits the bill perfectly for that. So we could preserve the institutional innovation skill, uh, the institutional quality of the, the what I call the I seven. Uh, that's, you know, China, Japan, South Korea, the us, Germany, uk, France, and choose any country out of the a hundred, out of the couple of dozen countries that have good institutional quality.Just pick one of the others that aren't one of those seven, pick one that's not an innovation powerhouse and turn that into your open borders, uh, country. Um, you could, uh, if you wanted to get basically Singapore levels of population density in Iceland, that'd be about 300 million people, I think. I think I, that's about what the numbers end up looking like.Something like that. But [00:24:00] Dwarkesh Patel: the, so you can put entire, but, but the value of open borders comes from the fact that you're coming to a country with high conglomerations of talent and capital and other things, which is, uh, not true of Iceland. Right. So isn't the entire [00:24:13] Garett Jones: No, no. I thought the whole point of open borders, that there's institutional quality and there's some exogenous institutions that make that place more productive than other places.Mm-hmm. . And so by move, I, I, that's my version of what I've been exposed to as open borders, the, is that institutions exogenously exist. There's some places have, uh, moderately laissez, fairer institutions in their country and moving a lot more people there will not reduce the productivity of the people who are currently there, and they'll become much more productive.And so, like the institu, you know, the institutional quality's crucial. So, I mean, if you're a real geography guy, you'd be excited about the fact that Iceland is so far, so close to the north. because latitude is a predictor of prosperity. [00:24:53] Open Borders for Migrants Equivalent to Americans?[00:24:53] Dwarkesh Patel: Um, I want to go back to the thing about, well, should we have open border for that 20% of the Popula global world's population that comes from Yeah.Um, equivalent, s a t and other sort of cultural traits as America. Mm-hmm. , because I feel like this is important enough to dwell on it. You know, it seems similar to saying that once picked up a hundred dollars bill on the floor, you wouldn't pick up a $20 bill on the floor cuz you only won the best bill.Uh, the $20 bills is right there. Why not pick it up? Um, [00:25:18] Garett Jones: so what if you have, yeah. What if the $20 bill makes your, turns, your, uh, a hundred dollars bill into like an $80 bill and turns all of your 80 a hundred dollars bills and $80 bills. [00:25:27] Dwarkesh Patel: But is it, aren't your controlling for that by saying that they have equivalent scores along all those cultural tests that you're.[00:25:34] Garett Jones: No, because, um, the median, so, so take the simple version of my story, which is the median of the population ends up shaping the productivity of everybody in the country. Right? Or the mean, right? The mean skill level ends up shaping the productivity of the entire population. Right? So that means we end up, I mean, I, I try not to math this up.I don't wanna math this up for the, you know, in a popular book, but it means we face a trade off between being small, a small country with super awesome, uh, positive externalities for all the workers by just selecting the best people. And every time we lower the average skill level in the country, we're lowering the average productivity of everyone else we're creating.We didn't, [00:26:11] Dwarkesh Patel: what? We didn't lower it. So you have to have skills that are lower compared to, than the median of a median American. You, [00:26:18] Garett Jones: so this is, this is a c Paraba story, right? Like if you could suppose the US is at 80 now on a zero to a hundred scale, right? Just, just saying it's 80. Yeah. Yeah. And you have a choice between being hundred and being 99.if you're at 99, the 99 is making, all compared to the world of average of a hundred, the world of an average 99 is making, reducing the productivity of all those hundreds. Okay. So if we chose 90, we're reducing the productivity of all those hundreds. [00:26:48] Dwarkesh Patel: Yes. Okay. So let's say we admit all the smartest people in the world, and that gets us from 80 to 85.That's a new, that's a new media in America. Yeah. At that point. And, but this is because we've admitted a whole bunch of like 90 nines that have just increased our average. Yeah, yeah. Um, at that point, open borders for everybody who's ever been 85, [00:27:08] Garett Jones: like I, this is, this is, ends up being a math problem. It's a little hard to solve on a podcast, right?Because it's the, it's the question of do I want a smaller country with super high average productivity? Or a bigger country with lower average productivity. And by average productivity, I don't just mean, uh, uh, a compositional effect. I mean negative external, I mean relatively fewer positive externalities.So I'll use the term relatively fewer positive externalities rather than negative externalities, right? So like, I don't exactly know where this is. Trade off's gonna pan out, but, um, there is a case for a sort of Manhattan when people talk about a Manhattan project, right? They're talking about putting all like a small number of the smartest people in a room.And part of the reason you don't want like the 20th, smartest person in the room. Cause, cuz that person's gonna ruin the ruin stuff for our, for the other smart people. I, it's amazing how your worldview changes when you see everybody as an external. I, [00:28:02] Dwarkesh Patel: I'm kind of confused about this because just having, at some point you're gonna run outta the smartest people, the remainder of the smartest people in the world.If you've admitted all the brilliant people. Yeah. And given how big the US population is to begin with, you're not gonna change the median that much by doing that. Right. So it's, it's almost a global end to just having more births from the average American. Like if, if the average American just had more kids, the population would still grow.Mm-hmm. and the relative effect of the brightest people might dilute a little bit. Um, but I I, [00:28:33] Garett Jones: and that maybe that's a huge tragedy. We don't know without a bunch of extra math and a bunch of weird assumptions. We don't know. So like I'm, there's a point at which I have to say like, I don't know. Right. Okay.Yeah. Uh, yeah. Is diluting the power of the smartest person in America, like keeping us from having wondrous miracles all around us all the time? I mean, probably not, but. I don't know, [00:28:53] Dwarkesh Patel: but, [00:28:54] Let's Ignore Side Effects?[00:28:54] Dwarkesh Patel: but I guess the sort of the meta question you can ask about this entire debate is, listen, there's so much literature here and it's hard to tell what exactly will happen.You know, it's possible that culture will become worse. It's possible, it'll become better. It's possible to stay the same, given the fact that there's this ambiguity. Why not just do the thing that on the first order of effect seems good? And, you know, just like moving somebody who's like in a poor country to a rich country, first order effect seems good.I don't know how the third and fourth order effect shapes out. Let's just, you know, let's just do the simple obvious thing. [00:29:22] Garett Jones: I, I thought that the, one of the great ideas of economics is that we have to worry about secondary and tertiary consequences. Right? [00:29:28] Dwarkesh Patel: But if, if we, if we can't even figure out what they are exactly, why not just do the thing that at the first order seems, uh, good.[00:29:35] Garett Jones: Um, because if you have a compelling reason to think that the, uh, direction of strength of the second and third and fourth order things are negative and the variances are really wide, then you're just adding a lot more uncertainty to your outcomes. So, And adding uncertainty or outcomes that has sizable negative tail, especially for the whole planet.Isn't that great? Go ahead and run your experiments in Iceland. Let's run that for 50 years and see what happens. It's weird how everybody's obsessed with it running the experiment in America, right? Why not running in Iceland first? Because America's [00:30:05] Dwarkesh Patel: got a great, a lot of great institutions right there.We can check and see what [00:30:08] Garett Jones: Iceland Iceland's a great place too. Um, and I use Iceland as a metaphor, right? Like it's, people are obsessed with running it in America. Like there's some kind of need. I don't know why. So let's try in France. Um, let's try, let's try Northern Ireland. , [00:30:24] Dwarkesh Patel: uh, are,[00:30:25] Are Poor Countries Stuck?[00:30:25] Dwarkesh Patel: are places with low s a t scores and again, s a t we're not talking about the, uh, in case you're skipping to the timestamp, we're not talking about the college test.Um, the deep roots. [00:30:35] Garett Jones: S a t Exactly. Uh, state history, agricultural history, tech history. [00:30:38] Dwarkesh Patel: Right. Exactly. Are, are those places with, uh, low scores on, um, on that test? Are they stuck there forever? Or, uh, is there something that can be done if you are a country that has had a short or not significant history of, um, technology or agriculture?[00:30:56] Garett Jones: Well, the, I start off the book with this, which I really think that, uh, one thing they could do is, uh, create a welcoming environment for large numbers of Chinese migrants to move there persistently. I don't think that's of course the only thing that could ever work, but I think it's something that's within the range of policy for at least some poor countries.I don't know which ones, but, uh, some poor countries could follow the. Approach that many countries in Southeast Asia followed, which has created an environment that's welcoming, welcoming enough to Chinese migrants. Um, it's the one country in the world with large numbers of high s a t score, uh, with alar, with a high s a T score culture, large population.It's enough of an economic failure, so for at least a little longer that, uh, folks can, might be able to be interested in moving to a poor country with lower s a t scores. In a better world, you can do this with North Korea too, but the population of North Korea isn't big enough to make a big dent in the world, right?Mm-hmm. , uh, China's population is big enough. Yeah. [00:31:54] Dwarkesh Patel: Another thing you're worried have to worry about in those cases though though, is the risk that if you do become successful in that country, there's just gonna be a huge backlash and your resources will. AppD, like what happened famously. [00:32:05] Garett Jones: So in, in Indonesia, right?Yeah. There have been many Oh, yeah, yeah. Times across Southeast Asia where anti-Chinese pogroms have been, um, uh, unfortunately a fact of life. So, yeah. Yeah. [00:32:15] Dwarkesh Patel: Or Indians in Uganda under, uh, IDI. I, I mean, yeah. Yep. Um, yeah. Yeah. Uh, okay. So actually I, I'm curious how you would think about this given the impact of National iq.[00:32:26] How Can Effective Altruists Increase National IQ[00:32:26] Dwarkesh Patel: Um, if you're an effective altruist, what, uh, are you just, uh, handing out iodine tablets, uh, across, across the world? What, what are you doing to increase national [00:32:34] Garett Jones: iq? Yeah. This is places, this is something that I, yes. Uh, finding ways I, this is what I call a, a Flynn cycle. Like I wish, I'm hoping for a world where there are enough public health interventions and probably K through six education interventions.to boost test scores in the world's poorest countries. And I think that ha ends up having, um, uh, a virtuous cycle to it, right? As people get more productive, then they can afford more public health, which makes them more productive, which means they can afford more public health. I think brain health is an important and neglected part of child development.Um, fortunately we've done a fair amount to reduce the amount of environmental lead, um, in a lot of poor countries. That's probably having a good effect right now as we speak in a lot of the world's poorest countries. You're right. Um, iodine, basic childhood nutrition, uh, reliable healthcare, uh, to, you know, prevent the worst kinds of just mild childhood infections that are probably, uh, creating what the, what they, what economists sometimes call health.Things that end up just hurting you in a way that causes, uh, an ill-defined long-term cost. A lot of that's gonna have to show up in the, in the brain. Um, I'm a big fan of the, of the view that part of the Flynn Effect is, uh, basically nutrition and health. Mm-hmm. , uh, Flynn wasn't a huge believer in that, but I think that's, um, certainly important in the poorest countries.Yeah. [00:33:57] Dwarkesh Patel: Um, I, I think Brian showed an open voters that if you look at , the, um, IQ of adoptees from poor countries, um, who go, uh, Sweden is the only country that collects data, but if you get adopted by a parent in, um, uh, Sweden, uh, the, the half the gap between the averages of two countries, half gap, yeah, yeah, yeah, yeah.Goes away. So, I mean, is one of the ways we can increase global IQ just by moving kids to, uh, countries with good health outcomes that, uh, will nourish their [00:34:27] Garett Jones: intelligence. Well, that's a classic short run versus long run effect, right? So, uh, libertarians and open borders advocates tend to be focused on the short run, static effects.So, um, and so you're right, moving kids from poor countries to richer countries is probably gonna raise their test scores quite a lot. And, uh, then the question is, in over the longer run, are those, uh, lower skilled folks, the folks with lower test scores, uh, going to degrade the institutional quality? of the places they move to, right?So if you close half the gap between the poor country and the rich country, half the gap is still there. Right? And if I'm right, , that IQ has big externalities then, , moving people from a, uh, lower scoring country to a richer scoring country and closing half the IQ gap still means on net you're creating a negative externality in the country the kids are moving to.[00:35:17] Dwarkesh Patel: Um, yeah, yeah. Uh, we can come back to that, but yeah. Yeah. So [00:35:23] Garett Jones: it, it's, it's basically, you just look at the question, is this lowering the mean test scores in your country? And if it's lowering the mean test scores in the long run, it's on average gonna lower institutional quality productivity savings rates, those.Um, it's hard to avoid that. It's hard to avoid that outcome. So, uh, I don't [00:35:38] Dwarkesh Patel: remember the exact figures, but didn't Brian address this in the book, um, in the Open Borders book as well, that you can, even if there's a, the, a national iq, uh, lowers on average, if you're just, uh, if you're still raising the global iq, that, that it's still nets out positive, or am I [00:35:54] Garett Jones: remembering that wrong?Well, that, notice what he's, he, what he does is he attributes, uh, he says there's some productivity that's just in the land, that's just geographic factors. Yeah. So basically being close for, and so that, so basically moving people away from the equator boost productivity substantially. And again, that's, uh, a static result.Um, the reason I, uh, I mentioned that ignores all the I seven stuff that I'm talking about where anything that lowers. Um, level of innovation in the world's most innovative countries has negative costs for the entire planet in the long run, but that's something you'd only see over the course of 20, 30, 50 years.And libertarians and open border advocates are very rarely interested in that kind of [00:36:33] Dwarkesh Patel: timeframe. Is there any evidence about, uh, the impact of migration on innovation specifically? So not on the average institutional quality or on, you know, uh, the, the corruption or whatever, but like, just directly the amount of innovation that happens or maybe the Noble Prizes won or things [00:36:48] Garett Jones: like that?Um, no. I mean, I would presume, I think a lot of us would presume that, uh, the European invasion of North America ended up having, uh, positive effects for global innovation. It's not an invasion that I'm in favor of, but if you wanna talk crudely about Yeah, yeah. Whether migrations had an effect on innovation, uh, you'd probably have to include that as any kind of analysis.[00:37:07] Dwarkesh Patel: Yep. Yep. , do you think that the people who are currently Americans, but , their ancestry, traces back to countries with low s a t scores? I i, is it possible that US GDP per capita would be higher, without that contribution?Or how do you think about that? [00:37:21] Garett Jones: I mean, that it follows from thinking through the fact that we are all externalities positive or negative, right? I don't know what in, in any particular, any one particular country could turn out to be some exciting exception to the rules, some interesting anomaly. Um, but on average, we should presume that the average skill level of voters, the average, uh, traits that we're bringing from, uh, the nations, that the nations of our, of our ancestors are as having an effect on our current productivity for gut ori.So just following through the reasoning, I'd have to say on average, that's most likely. Uh, but it, there could always be exceptions to the rule. [00:37:56] Dwarkesh Patel: I guess we see large disparities in income between different ethnic groups across the world, not just in the United States. Yeah. Doesn't that suggest that some of the gains can be privatized from whatever the cultural or other traits there are? Cuz if these, if over decades and centuries these sorts of, uh, these sorts of gaps continue, [00:38:18] Garett Jones: I don't see why that would follow.Right. Um, [00:38:21] Dwarkesh Patel: uh, if everything is being, if all the externalities are just being averaged out over time, what did you expect that these GA gaps would [00:38:29] Garett Jones: narrow? Well, I mean, I'm being a little rhetorical when I'm saying everything's literally an externality, right. I don't literally believe that's true. Um, for instance, people with higher education levels do actually earn more than people with lower education levels.So that's literally not an externality. Right. So some of these other cultural traits that people are bringing with them from their, um, ancestors, nations of origin, um, could be one or one likely one source of these income differences. I mean, if you think about differences in frugality, uh, differences in personal responsibility, which show up in the surveys, uh, that are persistent across generations, those are likely to have an effect on long run productivity for you, yourself and your family.So, mm-hmm. , let alone the hive mind stuff, where you find that there's a positive relationship between test scores and, and product. [00:39:13] Clone a million John von Neumann?[00:39:13] Garett Jones: There was a [00:39:14] Dwarkesh Patel: blogger who took a look at your 2004 paper about the, um, impact of National IQ on, um, on G uh, G D P. Um, and they calculated, so they were just speculating. Let's say you cloned a million John Mond Nomans, and as assume that John Mond Noman had an IQ of 180, then you could, uh, let me just pull up the exact numbers.You could, um, you could raise the average IQ of the United States by 0.21 points, um, and if it's true that one IQ point contributes 6% to, uh, G increasing G, then this proposal would increase U US GDP by, uh, 1.2, uh, six two 6%. Do you buy these kinds of extrapolations or 1.26%? Yeah. Yeah, because you're only cloning a million, [00:39:58] Garett Jones: Jon.Oh, yeah. Yeah. Okay. So this is about 1 million Jon. Yeah. Yeah, that sounds. I mean, that's the kind of thing where I wouldn't expect it to happen overnight. Right. I tend to think of that, uh, the IQ externalities as being two, three generations. I, I lump it in with what economists call organizational capital.That sounds about right. Yeah. Yeah, yeah. I mean, I, I can't remember where I saw this. I think I, I stumbled across it myself at some point too, so. [00:40:19] Dwarkesh Patel: Yeah. Yeah. Uh, by the way, his name is Avaro Dam Bernard, if you wanna [00:40:22] Garett Jones: find it. Oh, okay. Yes, yes. Okay. Yeah, it's, I mean, in, in, it's in that ballpark, right? It's just this idea that, and, and more importantly, um, a million John Bon Nomans would be a gift to the entire planet, right?Yep. Yep, yep. So, yeah, if you had a, if you had a choice of which country to have the John Vno, the million John Von Nomans, uh, it's probably gonna be one of the I seven maybe there's, maybe there's a, maybe Switzerland would be a good alternative. [00:40:46] Dwarkesh Patel: What is the optimal allocation of intelligence across the country?Because one answer, and I guess this is the default answer in our society, is you just send them where they can get paid the most, because that's a good enough proxy for how much they're contributing. Yeah. And so you have these high glomeration of talent and intelligence in places like Silicon Valley or New York.Um, and, you know, because their contributions there can scale to the rest of the world. This is actually where they're producing the most value. Another is, you know, you actually, you should disperse them throughout the country so that they're helping out communities. They're, you know, teachers in their local community.Um, I think there was, uh, A result. There was an interesting anecdotal evidence that during the Great Depression, the crime in New York went down a ton, and that was because the cops in New York were able to hire the, you know, they had like a hundred applications for every cop they hired. And so they were able to hire the best and the brightest, and there were just a whole bunch of new police tactics and every that were pioneered at the time anyways.So, is the market allocation of intelligence correct? Or do you think there should be more distribution of intelligence across the country? How do you think about that? [00:41:50] Garett Jones: Yeah, I mean, the mar the, the market signals aren't terrible. Uh, but, uh, this is my, my Interpol Roamer kicks in and says, uh, innovation is all about externalities.And there's market failures everywhere when it comes to, in the fields of innovation. Mm-hmm. . And so, you know, I, I personally, I mean, I, I like the idea of finding ways to allocate them to, to stem style, stem style technical fields, and. , we do a fair amount of that, and maybe we do the, maybe the US does a pretty good job of that.I don't have any huge complaints at that, at the, at the crudes 50,000 foot level, um, for the, you know, the fact that people know that there's, uh, status games they can play within academia that are perhaps more satisfying or at least as satisfying as the sort of corporate hierarchy stuff. So, yeah. Yeah. I I You don't want 'em all just, I wouldn't encourage them to solely follow market signals.Right. I'd, I'd encourage them to be more HandsOn and, uh, play a variety of status games because the academic, um, and intellectual status game is worth a lot, both personally and than it leads to positive spillovers for. [00:42:58] Dwarkesh Patel: But how about the geographic distribution? Do you think that it's fine that there's people leave, uh, smart people leave Kentucky and go to San Francisco or, yeah, [00:43:08] Garett Jones: I'm a big glomeration guy.Yeah. I'm, I'm, yeah, I'm a big glomeration guy. Yeah. I mean, the internet makes it easier, but then like, still being close to people's, being in the room's important. Um, there, there's, there's something, uh, both HandsOn and Gerard in here about, like, we need to find role models to imitate, and that's probably important for productivity.[00:43:30] Dwarkesh Patel: Um, are there increasing or decreasing returns to National iq?No, [00:43:38] Garett Jones: I think, um, you know, my findings were that it was all basically log linear. And so log linear looks crudely, like increasing returns. . So yeah, it looks exponential, right? So yeah, there's increasing returns to National iq. Yeah. Are are you? But, but this is, this is a commonplace finding in a sense because so many, uh, like human, all the human capital relationships I'm familiar with end up having something like a log linear form, which is exponential.So why is that? Um, yeah, there's something multiplicative that that's how, what I have, that's all I have to say is like it's something. Somehow this all taps into Adam Smith's pin factory, and we have multiplicative not additive effects when we are increasing brain power.Um, I have, I suspect it does have something to do with, uh, a, a better organization of the division of labor between people, which ends up happening something close to e to, uh, exponential effects on productivity. [00:44:39] Genetic Selection for IQ[00:44:39] Garett Jones: A are, uh, are you a fan of genetic selection for intelligence, uh, as a means of increasing national iq or do you think that's too much playing at the margins if it's voluntary?I mean, people should be able to do what they want and, um, after a couple day decades of experimentation, I think people would end up finding a path to, uh, government subsidies or tax credits or something like that. I think people voluntarily deciding what kind of kids they want to have. is a, a, a good thing.And so by genetic selection, I assume you're meaning at the most elementary level people testing their embryos the way they do now, right? Yeah. So I mean, we, we already do a lot of genetic selection for intelligence. Um, anybody, you know, who's, uh, in their mid thirties or beyond who's had amniocentesis, they've been doing a form of genetic selection for intelligence.So it's a widespread practice already in our culture. Um, and, uh, welcoming that in a voluntary way is probably going to have good effects for our future. What [00:45:40] Dwarkesh Patel: do you make of the fact that G B T three, or I think it was Chad g p t, had, uh, measured IQ of 85? Yeah, [00:45:47] Garett Jones: I've seen a few different measures of this, right?You might have seen multiple measures. Um, yeah, I think it's, I think it's a sign that basically, and, and when you see people using non IQ tests to sort of assess the outputs of G P T on, um, long essays, it does does seem to fit into that sort of, not quite a hundred, but not, not off by a lot. Yeah. I mean, I think it's, I think it's a sign that a lot of, uh, uh, mundane, even fairly complex, moderately complex human interactions can be simulated by a large, uh, language learning model.Mm-hmm. . And I think that's, that's, uh, gonna be rough news for a lot of, uh, people whose life was in the realm of words and dispensing simple advice and solving simple problems. That's pretty bad news for their careers. I'm, I'm disappointed hearing that, so [00:46:36] Dwarkesh Patel: Yeah. Yeah. [00:46:37] Garett Jones: Um, at least for the transition. I dunno what the, I dunno what's gonna happen after the transition, but [00:46:41] Dwarkesh Patel: Yeah.I'm hoping that's not true of programmers or economists. I like you. I mean, [00:46:46] Garett Jones: it might be right. I mean, it's, if that's the way it is, I mean, I, the, I mean, the car put a lot of, uh, people who took care of horses right out of outta work too, so. [00:46:55] Dwarkesh Patel: Yep. Um, even, okay, so let's talk about democracy that I thought this was also one of your really interesting books.No, thanks. Yeah. [00:47:02] Democracy, Fed, FDA, & Presidential Power[00:47:02] Dwarkesh Patel: even controlling for how much democratic oversight there is of institutions in the government. There seems to be a wide discrepancy of how well they work. Like the Fed seems to work reasonably well. I, I, I don't know enough about macroeconomics to know how the object level decisions they make, but mm-hmm.you know, it seems to be a non-corrupt, like, uh, technocratic organization. Um, enough, but yeah. Yeah. Uh, if you look at something like the fda, it's also somewhat insulated from democratic processes. It seems to not work as well. Mm-hmm. , what determines controlling food democracy? What controls, what, what determines how well an institution in the government works?[00:47:38] Garett Jones: Well, I, I think, um, in the case, the Fed, it really does matter that they, uh, the people who run it have guaranteed long terms and they print their own money to spend mm-hmm. . So that means that they're basically, Congress has to really. Make an effort to change anything of the Fed. So they really have the kind of independence that matters.Right. You know, they have a room of their own. And, uh, the FDA has to come to Congress for money more or less every year. And the fda, uh, heads do not have any kind of security of appointment. Their appoint, they serve at the pleasure of the president. Mm-hmm. . So I do think that they don't have real independence.Uh, I do think that they're basically, um, they're living in this slack, this area of slack to use this sort of mcno gas PolySci jargon. They're living in this realm of slack between the fact that the president doesn't wanna me, uh, muddle with them, uh, metal with them, excuse me. And the fact that Congress doesn't really wanna medal with them.But on the other hand, , I really think that that the f d A and the C d C are doing what Congress more or less wanted them to do. They reflect, they reflect the muddled disarray that Congress was in over the period of say, COVID. Hmm. Uh, that I think that's a first order importance. I mean, I do think the fact, it's the fact that, uh, f d A and c d C don't ha, uh, seem to have that culture of, um, raw technocracy the way the Fed does that, I think that has to be important on its own.But I think behind that, some of that is just like F D A C D C creatures of Congress much more than the Fed is. Should the [00:49:17] Dwarkesh Patel: power of the president be increased? [00:49:20] Garett Jones: Uh, no. No. Like the power of independent committees should be increased. Like more Congress should be like the Fed. If, uh, my plan for a Fed re for an FDA or CDC reorganization would be.Making them more like the Fed, where they have appointed experts who have long terms and they have enough of a long term that they can basically feel like they can blow off Congress and build their own culture. [00:49:42] EU is a force for good?[00:49:42] Dwarkesh Patel: Mm-hmm. , , so the European Union is an interesting example here because they also have these appointed technocrats, but they seem more interested in creating anno annoying popups on your websites than with dealing with econo, the, you know, the end of economic growth on the continent.Is this a story where more democracy would've helped, or how do you think about the European Union in this context? [00:50:04] Garett Jones: No. And the eu, like, uh, the European, European voters just aren't that excited about democracy. I, excuse me, aren't that excited about markets overall. The EU is gonna reflect that, right? Um, what little evidence we have suggests that, uh, countries that are getting ready to join the eu, they improve their economic freedom scores, their sort of laissez fairness.Hmm. Uh, on the path to getting ready for. , uh, join an eu. So, and then they may increase it a little bit afterwards once they join. But basically it's like, it's like, uh, when you're deciding to join the eu, it's like you decided you have your rocky training montage and get more laissez-faire. And so EU on net is a mess at polls in the direction of markets compared to where, uh, Europe would be otherwise.I mean, just look at the nations that are in the EU now, right? A lot of them are, um, east of Germany, right? And so those are countries that don't have this great, you know, uh, history of being market friendly. And a lot of parties aren't that market friendly, and yet the EU sort of nags them into their version, like as much markets as they can handle.So [00:51:05] Dwarkesh Patel: what do you think explains the fact that the Europe, uh, Europe as a whole and the voters in there are less market friendly than Americans? I mean, if you look at the sort of deep roots analysis of Europe, you would think that they should be the most. Uh, most in favor of, I don't know if the deep roots, uh, actually maybe they apply that, but Yeah, [00:51:23] Garett Jones: compared to the planet as a whole, they're pretty good.Right? So, um, I, I'm, I never get that excited about like, the small little distinctions between the US and Europe, like these 30% GDP differences, which are very exciting to pundits and bloggers and whatever. I'm like 30% doesn't matter very much. That's not really my bailiwick. What I'm really interested in is the 3000% between the poorest countries and the richest countries.So, like I can speculate about Europe, I, I don't really have a great answer. I mean, I, I think there's something to the, the naive view that, um, the Europeans with the most, uh, what my dad would call gumption are those who left and came to America. Some openness, some adventurousness. Uh, and maybe that's part of what trans, uh, made we, so basically there's a lot of selection working, uh, on the migration side to, uh, make America more open to laissez fair than Europe would be.[00:52:14] Dwarkesh Patel: Does that overall make you more optimistic about migration to the US from anywhere? Like, you know, the same story [00:52:20] Garett Jones: of Yeah. Center is perab us like America, America gets people who are really great, right? I went with you there. Yeah. [00:52:26] Dwarkesh Patel: Does, um, elite technocratic control work best in only in high IQ countries?Because otherwise you don't have these high IQ elites who can make good policies for you, but you also don't get the democratic protections against famine and war and things like that. [00:52:43] Garett Jones: Oh, I mean, I don't know. I think, I think the case for, for, uh, handing things over to elites is pretty strong in anything that's moderately democratic, right?Um, I don't have to be. Anything that's substantially more democratic than the official measure of Singapore, for instance. I mean, that's why my book 10% Less Democracy, really is targeted at the rich, rich democracies. Once we get too far below, uh, the rich democracies, I figure once you put elites in charge, they really are just gonna be old-fashioned Gordon to rent seekers and steer everything Jordan themselves and not give a darn about the masses at all.So that's, you know, uh, elite control in a democracy, a a lot of elite control in any kind of democracy, I think is gonna have good effect. If it's re you're really looking at something that is, uh, that meets a Mar Sen's definition of a democracy competitive market. Competitive party's free press. [00:53:38] Dwarkesh Patel: Mm-hmm.does Singapore meet that criteria? [00:53:41] Garett Jones: No. Because their parties aren't really allowed to compete. I mean, that's pretty obvious. Yeah. The, the pa the People's Action Party really controls, uh, party competition there. [00:53:52] Dwarkesh Patel: So, but it, I guess Singapore is one of the great examples of technocratic, um, technocratic control, and [00:53:59] Garett Jones: they're just an exception of the rule.Most countries that try to pull off that lower level democracy wind up much [00:54:03] Dwarkesh Patel: worse. So what is your, uh, what is your opinion of Neoreactionaries? I guess they're not in favor of 10% less democracy. They're more in favor of a hundred percent less democracy. [00:54:12] Garett Jones: But yeah, I think they're like kind of too much LARPing, too much romanticizing about the roheim, I guess.I don't know. What is rheum? Yeah. The, these guys in the Lord of the Rings, you know? . , romanticizing Monarch is a mistake. Um, it's worth noting that, uh, as my colleague Gordon Tok pointed out, as along as many others, uh, in Equilibrium Kings are almost always king and council, right.and so it's worth thinking through why King and Council is the equilibrium. Something more like a corporate board and less like, um, either the libertarian ideal of the entrepreneur who, who owns the firm, or the monarch who has the long-term interest in being a stationary bandit in real life. There's this sort of muddled thing in between that works out as the equilibrium, even in the successful so-called monarchies.So it's worth thinking through why it is that the successful so-called monarchies aren't really monarchies, right? They're really oligarchies. [00:55:12] Dwarkesh Patel: Yep. Yep. Um, if you look at the median voter in terms of their preferences on academic policies, it seems like they're probably more, um, in favor of government involvement than the actual policies of the United States, for example.Yeah. What explains this? Shouldn't the media voter theorem that we should be much less libertarian as a country than? Yeah, that's a great [00:55:35] Garett Jones: point from, um, Brian Kaplan's excellent. Bill Smith of the rational voter. Right? Yeah. I think part of it, I mean, I think his stories are right, which is that, uh, politicians facing reelection have this tradeoff between giving voters what the voters say they want and giving the voters the economic growth that will help the politicians get reelected, right?Mm-hmm. Um, so it's, uh, it's a version of saying like, you know, I don't want you to p

Our speakers will be economists Ran Abramitzky from Stanford and Garett Jones from George Mason. Ran is the author of Streets of Gold: American's Untold Story of Immigrant Success and Garett wrote the book The Culture Transplant: How Migrants Make the Economies They Move to a Lot Like the Ones They Left. Both speakers are pro-immigration, but Garett wants us to focus our efforts on recruiting immigrants with skills. Garett believes that the success of immigrants' descendants is a function of the culture imbued from the old country. In addition, the immigrants social and cultural mores will affect America's social mores as well, so be very careful who you let in. Get full access to What Happens Next in 6 Minutes with Larry Bernstein at www.whathappensnextin6minutes.com/subscribe

The Culture Transplant: How Migrants Make the Economies They Move To a Lot Like the Ones They Left by: Garett Jones The Comfort Crisis: Embrace Discomfort to Reclaim Your Wild, Happy, Healthy Self by: Michael Easter Infinite Jest by: David Foster Wallace What If? 2: Additional Serious Scientific Answers to Absurd Hypothetical Questions by: Randall Munroe The Sandman: Book One by: Neil Gaiman Failure Mode: Expeditionary Force, Book 15 by: Craig Alanson

Garett Jones is a Professor of Economics at George Mason University. He joins the podcast to talk about his new book, The Culture Transplant. Richard asks whether IQ is superior to other measures used to predict prosperity, and the relationship between Garett's new book and Hive Mind. He also presses the author on whether there is a selection effect in data showing that people preserve the traits of their original culture over time. The conversation then gets into issues of causal inference, namely whether we should focus more on American history or cross-national trends to inform our understanding of US policy. Richard suggests that while immigration might in some contexts lead to larger government, in the US it is arguably the case that diversity has been a hindrance to the expansion of the welfare state. And how important is trust, actually? It correlates with a lot of good things, but how much is that relationship simply driven by observations from Scandinavia? Garett makes the case for trust having an important causal role. This leads to a discussion of whether trust is simply a proxy for trustworthiness, and whether the latter trait is more important. Garett also explains why Chinese migration could be a key force in lifting the third world out of poverty. Near the end, he discusses what he thinks America would look like after his preferred immigration policy, and what he's working on next.Listen to the podcast here or watch on YouTube. Links:* Garett Jones on the Institutionalized podcast* Previous Jones appearance on the CSPI podcast* Alex Nowrasteh, critiques of The Culture Transplant, Part 1 and Part 2* Bryan Caplan review Get full access to Center for the Study of Partisanship and Ideology at www.cspicenter.com/subscribe

Garett Jones is Associate Professor of Economics and BB&T Professor for the Study of Capitalism at the Mercatus Center, George Mason University. His first book, published in 2015 by Stanford University Press, is entitled Hive Mind: How Your Nation's IQ Matters So Much More Than Your Own, and was reviewed in the Wall Street Journal. His second book, also with Stanford, published in 2020, is entitled 10% Less Democracy: Why You Should Trust Elites a Little More and the Masses a Little Less, and was reviewed in The Economist. Garett's most controversial opinion: https://www.ideassleepfuriously.com/p/garett-jones-most-controversial-opinion

In this podcast, Kushal speaks with Garett Jones about his book "The Culture Transplant: How Migrants Make the Economies They Move To a Lot Like the Ones They Left". Follow them: Twitter: @GarettJones Website: culturetransplant.com Book: https://tinyurl.com/3t47z49p #Immigration #Migrants #TheCultureTransplant ------------------------------------------------------------ Listen to the podcasts on: SoundCloud: https://soundcloud.com/kushal-mehra-99891819 Spotify: https://open.spotify.com/show/1rVcDV3upgVurMVW1wwoBp Apple Podcasts: https://podcasts.apple.com/us/podcast/the-c%C4%81rv%C4%81ka-podcast/id1445348369 Stitcher: https://www.stitcher.com/show/the-carvaka-podcast ------------------------------------------------------------ Support The Cārvāka Podcast: Become a Member on YouTube: https://www.youtube.com/channel/UCKPxuul6zSLAfKSsm123Vww/join Become a Member on Patreon: https://www.patreon.com/carvaka Become a Member on Fanmo: https://fanmo.in/the_carvaka_podcast UPI: kushalmehra@icici To buy The Carvaka Podcast Exclusive Merch please visit: http://kushalmehra.com/shop ------------------------------------------------------------ Follow Kushal: Twitter: https://twitter.com/kushal_mehra?ref_src=twsrc%5Egoogle%7Ctwcamp%5Eserp%7Ctwgr%5Eauthor Facebook: https://www.facebook.com/KushalMehraOfficial/? Instagram: https://www.instagram.com/thecarvakapodcast/?hl=en Koo: https://www.kooapp.com/profile/kushal_mehra Inquiries: https://kushalmehra.com/ Feedback: kushalmehra81@gmail.com

On this episode of Unsupervised Learning Razib discusses the new book, The Culture Transplant: How Migrants Make the Economies They Move To a Lot Like the Ones They Left, with author Garett Jones. Jones is a professor of economics at George Mason University, and The Culture Transplant is the third book in what he likes of think of as his “Singapore trilogy,” beginning with Hive Mind: How Your Nation's IQ Matters So Much More Than Your Own, and then moving to 10% Less Democracy: Why You Should Trust Elites a Little More and the Masses a Little Less. Jones explains how cultural assimilation and acculturation is actually not nearly as powerful as we might think and that ancestral folkways and norms persist for centuries, transforming nations like the US and Argentina over time as migration streams alter their demographic makeup. He argues that this is important because some nations are highly productive and innovative, and their cultural frameworks are necessary to foster their economic role in the global system. The Culture Transplant takes a contrarian position, going against the stance of mainstream economics, whereby every individual is an interchangeable “homo economicus.” https://razib.substack.com This is where you will find all the podcasts from Razib Khan's Substack, https://razib.substack.com, and original video content.

On this episode we sit down with Garett Jones to discuss to discuss the dark sides of immigration. Recommendations: The Godfather Movie Disneyland with the Death Penalty by William Gibson Open Borders: The Science and Ethics of Immigration by Bryan Caplan From Third World to First: The Singapore Story: 1965-2000 by Lee Kuan Yew The Culture Transplant: How Migrants Make the Economies They Move To a Lot Like the Ones They Left by Garett Jones

Garett Jones is a professor of economics at George Mason University and the author of several books: Hive Mind, 10% Less Democracy, and his latest book: The Culture Transplant.Buy The Culture Transplant:https://www.sup.org/books/title/?id=35594Garett's other books:https://www.sup.org/books/title/?id=28088https://www.sup.org/books/title/?id=23082My Interview With Tyler Cowen:Ezra Klein and Matt Yglesias:https://www.nytimes.com/2022/10/21/podcasts/transcript-ezra-klein-interviews-matthew-yglesias.htmlTimestamps:0:00 Democracy33:00 Libertarianism37:00 Singapore43:00 Intelligence1:10:10 State Capacity1:18:30 Immigration and Culture1:41:00 Diversity1:50:00 Public Trust2:00:00 Populism and Shorism This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit cactus.substack.com

Garett Jones joins us to discuss why it's better to surround yourself with smart people than trying to become one. He also turns us towards his book 10% Less Democracy: Why You Should Trust Elites a Little More and the Masses a Little Less. He ends with some suggestions on how to move forward and govern ourselves a little better and fight a little less. Lyn Alden on the Petro-Dollar: https://youtu.be/sTKObw_-OBY Keith Dicker explains why the US Dollar is King: https://youtu.be/gLmoJYqZuks Jim Rogers on the Rise of China: https://youtu.be/SfLaJtXfx3w Paul Kingsnorth critiques Neo-liberalism: https://youtu.be/HJViqeBovvQ First Interview with Simon Mikhailovich: https://youtu.be/Na9SA84JJ1E Jeff Booth on Tech Deflation: https://youtu.be/qlF_AG-0QC8

In this episode I interview Garett Jones on his book 10% Less Democracy. We talked about term limits, lobbying, the workings of the Senate and how do policies go from ideas to implementation. Buy his book here: https://www.amazon.com/10-Less-Democracy-Should-Elites/dp/1503603571 Subscribe to my newsletter here: http://brettongoods.substack.com/ --- Send in a voice message: https://anchor.fm/pradyumna-sp/message

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Garett Jones is a Professor of Economics at George Mason University. He is the author of 10% Less Democracy and Hive Mind. He joins the podcast to talk about his latest book arguing that some countries may have too much democracy. In the course of the discussion, Richard and Garett discuss experts and the Iraq War, judicial review, the Singapore model, the western response to COVID-19, and whether China can be considered a non-democratic success story.

How much democracy is too much? Societies have been toying with different democratic models — from how often to hold elections, to who gets to vote and what the public can vote on — for centuries. Garett Jones, an economist and former Senate staffer, argues the current setup in the U.S. desperately needs some tinkering. Jones says the ancient Greeks, who granted brief political mandates and gave some citizens direct input on law, would be shocked by our modern American politics: “you’re letting people have power for six years?” But he believes our retreat from direct democracy has been positive, and that there’s still further to go. In his latest book, 10% Less Democracy: Why You Should Trust Elites A Little More and The Masses a Little Less, Jones argues that embracing expertise and lengthening congressional terms would make for better politics and more “courageous” politicians.

During the 2016 and 2020 presidential elections, both Donald Trump and Bernie Sanders argued that elites were hurting the economy. Steve talks with Garett Jones, author of 10% Less Democracy: Why You Should Trust Elites a Little More and the Masses a Little Less, who says otherwise. [...]

During the 2016 and 2020 presidential elections, both Donald Trump and Bernie Sanders argued that elites were hurting the economy. Steve talks with Garett Jones, author of 10% Less Democracy: Why You Should Trust Elites a Little More and the Masses a Little Less, who says otherwise. [...]

How do you define Democracy? Dr. Garett Jones and Jason Hartman traverse through a broad range of capitalism and democracy played out in different countries. Does one influence the other, or can they exist in moderation together? As well, Jones speaks to the typical choices of more educated people. Are groups more willing to cooperate if they have a higher or lower IQ?  Books: Hive Mind : How Your Nation's IQ Matters So Much More Than Your Own 10% Less Democracy: Why You Should Trust Elites a Little More and the Masses a Little Less Key Takeaways: [2:00] Democracy is an absolutely sacred value, but don't know what they mean? [3:15] In most countries, judges kept "arm's length" away from voters who seem to have better economic performance. [6:30] The American founders were not for pure democracy.  [8:00] Math and Science scores are pretty good predictors of individual life outcomes. [11:00] More educated people are most likely to see the invisible hand and support laissez-faire.  [14:00] To some degree, Milton Friedman's prophecy was right: capitalism leads to democracy.  [16:00] What's the Da Vinci Effect for nations? [18:20] Are smarter groups more cooperative? [20:20] Willingness to delay gratification is a sign of intelligence.  [22:50] Are banks stealing our money through inflation, savings, or wealth? Websites: jonesgarett.com JasonHartman.com 1-800-HARTMAN

How do you define Democracy? Dr. Garett Jones and Jason Hartman traverse through a broad range of capitalism and democracy played out in different countries. Does one influence the other, or can they exist in moderation together? As well, Jones speaks to the typical choices of more educated people. Are groups more willing to cooperate if they have a higher or lower IQ?  Books: Hive Mind : How Your Nation's IQ Matters So Much More Than Your Own 10% Less Democracy: Why You Should Trust Elites a Little More and the Masses a Little Less Key Takeaways: [2:00] Democracy is an absolutely sacred value, but don't know what they mean? [3:15] In most countries, judges kept "arm's length" away from voters who seem to have better economic performance. [6:30] The American founders were not for pure democracy.  [8:00] Math and Science scores are pretty good predictors of individual life outcomes. [11:00] More educated people are most likely to see the invisible hand and support laissez-faire.  [14:00] To some degree, Milton Friedman's prophecy was right: capitalism leads to democracy.  [16:00] What's the Da Vinci Effect for nations? [18:20] Are smarter groups more cooperative? [20:20] Willingness to delay gratification is a sign of intelligence.  [22:50] Are banks stealing our money through inflation, savings, or wealth? Websites: jonesgarett.com JasonHartman.com 1-800-HARTMAN

I had a chat with Mark Lutter, founder and executive director of Charter Cities Institutes about the potential of charter cities to boost a nation’s prosperity and development. Our conversation touched on state capacity, why American institutions appear to be failing, and why Silicon Valley elites have no political influence.You can download or listen right in the player above - or from your favourite players and podcast providers here. You can rate us here, this helps others find the show. Reference guides by CCI for people new to the idea are here. You can also read my writings on cities (here and here). TranscriptTL: Welcome to Ideas Untrapped. Joining me is Mark Lutter. Mark Lutter is an economist and he is the founder and executive director of [the] Charter Cities Institute. You're welcome, Mark. ML: Thanks for having me on. TL: Yeah briefly, please. What are Charter Cities and what do they bring to economic development? ML: Sure, so Charter Cities are new cities with a special jurisdiction that allows them to have a more competitive business environment. And we believe they are important because, over the long run, they're a key determinant of economic performance, economic outcomes and […] governance. If you have good governance, a country will do relatively well and if you have poor governance, a country will do relatively poorly. The challenge can be that it's difficult to reform governance on a national level. There's a lot of special interests groups. There's a lot of politics that goes on that sometimes make the reforms quite difficult to implement. And, Charter Cities, because they're new cities, they can be built on Greenfield sites where there are fewer special interests and because they have a special jurisdiction, it can be politically feasible to implement deeper reforms than might be possible at the national level.So these deeper reforms are to improve the business environment combined with a new city allow for more economic development to occur than otherwise might take place. So if we look at the last 40, fifty, 60 years, we've seen cities like Shenzhen, Singapore, Hong Kong and Dubai emerge from practically nothing to become global metropolises. And we believe that success is replicable. Particularly because there are a little under 80 million new urban residents annually, so urbanization is growing extremely rapidly across Africa and across Asia, and we believe it's quite important to make sure that we get things right now because it's much harder to change governance, It's much harder to change infrastructure once a city is already built. And so we believe that if we can help set up this sort of right institutions now, the right set up now, the right layout of new cities now, it can basically save a lot of headaches over the next fifty [to] hundred years, and help lift tens of millions of people out of poverty and make things better for economic development. TL: Yeah, so, obviously, I'm not new to this idea and we've talked a couple of times about it. Thinking about Charter Cities, it's a big project. So what do you think are the effective financing structures that make them feasible knowing the fiscal challenges that some poor countries face?ML: Sure, so the way we think about Charter Cities is as Public-Private Partnerships with the host country. So we're not asking the host country to build the city, we're asking the host country to help create a governance framework that can make the Charter City more competitive. And we think that this is especially important now in the post-COVID world where a lot of countries, particularly in emerging markets might be resource dependent on oil and like Nigeria. Or copper, like Zambia. And prices have rebounded somewhat over the last few months, but given that they're much lower than they were a year ago, I think there is a reasonable expectation that demand will continue to be relatively low, at least, until a vaccine is discovered. And so that means these countries have big holes in their budget and will need new financing mechanisms and we view Charter Cities as potentially one of those financing mechanisms. Charter Cities, because they're new cities, they can be built on Greenfield sites where there are fewer special interests and because they have a special jurisdiction, it can be politically feasible to implement deeper reforms than might be possible at the national level - ML The Charter City would have a revenue-sharing agreement with the central government. It will be able to attract a lot of foreign investment, create a lot of economic activities, create a lot of jobs and then some of that wealth that is being created would be transferred to the central government that might be able to help plug the hole that is currently being left by low commodity prices. Additionally, we just think if you build a successful city, it will generate a tremendous amount of wealth. We're still in the early Charter Cities phases and the specifics for financing Charter Cities haven't all been sort of worked out, but the general hypothesis is 'look, if you create a successful, functioning city, then there will be a lot of wealth that is created and you just need to capture some of that wealth that can pay for the initial infrastructure investment that can pay for the costs associated with setting up and building a city. So, that's at least the eye level overview of how we think about financing Charter Cities.TL: The question of financing is important here because some would argue, and I think, Chris Blattman has actually made this argument that given the risks involved that these investments may not pay off, it's actually an objection to not doing it. How do you react to that? What are the big payoffs for charter cities as opposed to other development interventions like cash transfers and other forms of aid?ML: Sure, so, it's definitely possible that for one or more charter cities the investments will not pay off. That's the nature of an investment, they're not necessarily secure and so there is always risks associated with investments. The risks associated with charter cities might be higher depending on where the charter city is being built, depending on what the local politics are, depending on the sort of skill of the developer. But I think, I would, I guess, sort of, differentiate as to what we're talking about in terms of investment. So if we're talking about cash transfers. Cash transfers are not an investment per se. Cash transfers are a transfer of wealth. They are basically a donation. It is comparable to charity. And most of the evidence on cash transfers is relatively good. You give people more money, they're able to spend the money to get better things. Recent studies have suggested that this does have relatively long-lasting impact on improving people's lives, so I support cash transfers. Charter Cities, at least, the way we at the Charter Cities Institute conceive of them are led by private developers who are building the physical infrastructure themselves. So this is an investment, not a donation. The expectation is if you raise 700 million dollars to build a power plant, to build roads, to build water, electricity, etc, then you expect a return on that capital investment that can justify the risks associated with that particular project. So this is a commercial venture, not a development venture per se. And we believe that Charter Cities can pass this sort of commercial venture test where, okay, if people who are humanitarians want to get involved, that is great, but as a mechanism for social change, I think the profit motive tends to be important and can allow for more social change in a shorter period of time than asking everybody to change their behaviour out of the goodness of their heart. That being said, there is space for, I think, donations in the Charter Cities space. The Charter Cities Institute, for example, is a 501C3. We rely on donations. We are trying to kind of incubate this Charter Cities space, trying to bootstrap it, creating a network of different city developers, developing a set of best practices, things like that. But we have done at least internal calculations that we have published on the research portion of our website, where we look at GiveWell which is a well-known charity evaluator. And we look at GiveWell and the cost-effectiveness of various charities that they evaluate and based on some assumptions that we make about our own effectiveness and these assumptions, I believe, are quite conservative. We are comparable to the most cost-effective charities in the world; if not more effective than them. TL: Charter Cities, at least, as an idea, in its current framing, is not new. Paul Romer kind of reintroduced the idea a while back. And with implementation - Honduras, Madagascar - they've run into some problems. What are you doing differently at CCI, and how does your model differ from that proposition? ML: Sure, and that's a good question. So Paul Romer obviously pioneered this space but didn't have as much success as I think he would have liked. And what we've tried to do is learn from his impact and see how we could try to have a bit more success this time around. So first let me talk about differences with Paul Romer's model and our model for charter cities. The similarities are: both of the models involve cities with a special jurisdiction that allow them to have a different institutional framework than the rest of the country, an institutional framework that is more conducive to economic development, and to growth. Those are the similarities. I think the differences are that Paul Romer advocated a high-income country, for example, Canada administers a Charter City in a low-income country for example, Honduras. So Canada would help create the administrative structure, they would be responsible for it, and that is the mechanism by which part of Honduras could have good governance. We have not pursued that model for, I think, two reasons. One, we're not sure it's feasible. There is a lot of blowbacks associated with charter cities, we're sometimes accused of being neocolonialists, and I think having a high-income country act as a guarantor in a low-income country brings up some of those unpleasant historical memories that might make getting political buy-in a little bit more difficult. The second reason we're not pursuing that model is we're not sure it's the best model, even if you, sort of, assume away the political challenges of it. So looking at, for example, the response of many countries in the West to COVID, the US has had a relatively poor response to COVID. Our institutional capacity as somewhat decayed, we aren't as vibrant, as effective as we were 50, 60 years ago, there's a general lethargy in our own institutions, and I think that that lethargy would likely translate to helping to build new institutions in emerging markets. And so there is a question of 'is the high-income country the best institutional entity to help administer a charter city?' And we believe it is not. So what we do is we partner with new city developers. There are by Journalist Wade Shepherd...he estimates there are over 200 mass or fenced cities being built around the world right now. So we try to partner with these new city developers, typically private entities, sometimes they're public but we prefer our partner with the private ones because they tend to be a little bit more effective to figure out okay, they're building a new city which might have a hundred thousand residents, which might have a million residents, so we partner with them to try to improve their governance system. And this might mean working with the government to improve the special economic zone framework. If there is a relatively advanced special economic zone framework in place, we might work with the city developer to figure out okay, what does it actually mean to create this new administrative structure from scratch. So that's the difference in approach.I guess before I go into why I think we'll be effective, I think, a few other points. One, Paul Romer was quite effective at generating attention and, sort of, starting the conversation and working with governments, at least, up to a point. We're taking a bit more of what might be described as, sort of, a systematic approach. We're somewhat worried about the ecosystem of charter cities being too dependent on a single person or on a single country. So we try to diversify risk by partnering with a lot of different organizations, by working in a lot of different countries, by really helping to spread the idea of charter cities as far as possible such that if one project goes under a hard time or fails, there are other projects that we can shift our attention to make sure the momentum for charter cities is not lost. As to, I think why we think that we will be successful where he was unsuccessful, I think we've learned a lot from him; and in addition, I think the last 10 years, there's been a bit of an increased interest in charter cities. And then second, we're just seeing it on the ground. We have engaged two projects where we are helping them create these legal structures, these administrative entities from scratch to governing these cities. The projects have a degree of political buy-in. We are regularly reached out to by new city developers who are interested in improving governance in those cities. We're basically at the beginning of a charter city's moment, and I think over the next year, the next two years, it will become clear to everybody who isn't paying attention now that the charter city's moment is here, that these projects are real, people are building them, people are moving dirt, people are moving in, money is being raised, etc. that it is no longer just [an] academic discussion, but it is a matter of sort of on the ground, things happening and executing.TL: I mean, hearing you speak, I thought of a question, which is - to a layperson, like, what exactly are the channels of improvement to income and livelihoods in building a new city, for example?ML: Sure, so, If we look at a city like Shenzhen, 40 years ago in 1980, Shenzhen was a number of small fishing villages, the total population in the area was about a 100,000 residents. The average income was about $500 a year. It was a very impoverished area and currently, Shenzhen is the manufacturing capital of the world. It has a total population of around 20 million people, they have a subway system that rivals New York. It is a sort of, shiny, gleaming metropolis that really transformed in just 40 years. So while China had several sort of specific conditions that mean that the success of Shenzhen is unlikely to replicate at that magnitude. For example, China had first basically prevented urbanisation from occurring, so there was a pent up demand for urbanisation. As well as China had very stringent regulations and laws which had precluded a lot of economic development. And while Africa, for example, many countries have bad regulations, I'm not sure they were as bad as China in the 1980s. But that being said, we believe that a degree of that success is still possible even if you get half of Shenzhen, that's a city of ten million people, that sees your income rise by like 10, 20X over a 40 year period. That is a huge change. If you look in a lot of sub-Saharan Africa, for example, what's occurring now is called urbanization without industrialization. And this means that people are moving to cities. And typically when people move to cities, they become more productive, they are able to make more money, they live better lives, they leave their kids better off, and it's this virtual circle. And now, unfortunately, in some parts of sub-Saharan Africa this is not occurring. People are moving into cities but their productivity is not increasing, they're not making more money, and their kids are going to stuck at the same sort of level in income and quality of life that they are today. And what we believe charter cities can help do is to, I guess, help change that to help create these opportunities for these people that are currently being left behind by the global economy and to create this positive dynamic, this positive feedback cycle that leads to people's incomes being increased by 5 percent per year, 10 percent per year. Which because of the power of compounding interest, if your income is increasing at 5 percent per year, that means, every 14 years, your income doubles. So 28 years later, your income will be four times what it was originally. Forty-two years later, which is about the total working life of an adult (about 42 years), your income will be 8 times what it was when you started. You've seen an 8 fold increase in income, [which] is just tremendous. So if we can help create that dynamic, if we can help generate this type of growth, I think that will lead toad to a big improvement in a lot of people's lives.TL: It's interesting you talked about Shenzhen before we move into the specifics of that. Shenzhen is usually described as a special economic zone. Is that different from Charter Cities, or is essentially the same thing? ML: Sure. So, Special Economic Zones. We consider Charter Cities to be a subset of Special Economic Zones. The special economic zone is just an area that says that the laws of the host country don't apply to this area, or like some subset of the laws. But typically, special economic zones tend to be relatively narrow in their focus. They might only encompass an industrial park, they might only be a few dozen or a few hundred acres. They have a relatively set degree of difference from the host country in terms of laws, so it might have lower taxes or it might have a one-stop-shop but they don't really have this deep regulatory reforms. They tend to focus on a single industry, so maybe textile, manufacturing or maybe electronics, they aren't broad-based. Very rarely do special economic zones have residential. And lastly, they tend to be too small to generate sustained economic growth. If you have an industrial park that might be successful, that might create a lot of jobs but that's not really going to create this dynamic positive feedback cycle like a city can. Shenzhen whilst frequently described as a special economic zone, at least, according to our definition, it is more like a charter city. The jurisdiction is 320 square kilometres, so that's the size of a city. It is multi-use. They have residential, they have commercial, they have industrial. They have the sort of full dynamics that you expect to see in a city with a lot of different economic parts moving. There was a lot of authority devolved from the central government to the city government. So while many special economic zones might only have like a tax incentive, basically in Shenzhen, with the exception of military and like Mail distribution, you can almost experiment with whatever you want you on the Shenzhen city level. And that allowed for a lot more autonomy than most special economic zones allow. So while Shenzhen is sort of colloquially referred to as a special economic zone, it fits our definition and our understanding of what a charter city is a little bit more closely than most special economic zones around the world which are quite different from Shenzhen and as such haven't had the same impact that Shenzhen has had.TL: Two-part Shenzhen question here. I agree with you, Shenzhen fits better with what you are describing. I mean, there was an industrial zone in Shekou, and of course, there was the whole area that was developed for all kinds of things, tourism and the rest. Now, the first question is that there was a lot of planning and execution in making Shenzhen work. How does the administrative capacity of the host country, how does it affect the execution of a Charter City?ML: Sure, and I think this is an important point. One of the increasing discussions in economics and international development has been focusing on state capacity in which the administrative capacity of a country or a government can be thought of as - are they able to execute on tasks in a timely and effective manner? So a country with this higher state capacity would be able to build a road cheaper and more quickly than a country with a lower state capacity. And in Shenzhen it was the local government that administered the city. China has had 3000 years [of] history of statehood. So they have a lot of experience in capacity with administrating cities and they just had to adapt it the circumstances at hand. And I think one of the challenges in some emerging markets is that there isn't that long history of statehood. There isn't that long history of administrative capacity, and so the current governments are not being very effective in administering the entire country. So if they start to administer a charter city, you would see a similar type of dysfunction. To solve this problem, we are advocating a special jurisdiction with a separate administration from the host country. And so the city would remain part of the host country, it would be governed by a separate bureaucratic apparatus, it would have different standards for hiring, different standards for firing, different standards for promotion, etc, which would allow it to develop a more effective administration than the host country. And so, to this end, we're engaged in [a] sort of early-stage discussion about helping to establish this administrative apparatuses and we're beginning to think about what it means to develop a pipeline of administrators for a Charter City that would help [to] work with educational establishment to create certificates, to create courses that might help teach you how to administer a charter city. 'Cause this is sort of a monumental challenge, there are so many moving parts and you don't really want to hire people from the host country because then they bring the bad culture of the host country government, they bring the sort of, I don't know… the sclerosis that often exists in host countries' bureaucracies that leads to the need for charter cities. But you don't want to transplant that bureaucratic dysfunction to the charter city, so you would have to basically create a new administrative system and a new education system to train those administrators. TL: Yeah, so with the special jurisdiction, what guarantees continuity? I'm imagining that the government of the host country would still have some form of authority over that jurisdiction however limited. And what guarantees that another administration does not come in and say, 'Oh, yeah, well, for political reasons or whatever, we're going to withdraw our support for this.' Or is there a specific framework that you've outlined which guarantees long-term autonomy?ML: Sure. I'm glad you asked that question, that is one of the challenges for charter cities. How do you ensure that there is administrative continuity in the charter city and the host country hasn't changed their mind and limit some of the authority that they had previously granted to the charter city? We are seeing that, for example, right now in Hong Kong, where the Chinese government is passing a national security law that many on Hong Kongers believe changed the sort of terms of the agreement in 1997 when Hong Kong was transferred from the British to the Beijing government. There is no silver bullet for preventing, right? You can't do a magic trick and say 'alright, there is no risk of expropriation of the charter city' but there are a number of strategies that can be developed to mitigate that risk, and in fact, we published an outline of these strategies on our website called the Risk Mitigation Guide. It is in the reference guides. And it should give an understanding of strategies that can be taken to mitigate that risk. So basically, they're business project, they need to be profitable while obviously they're political projects as well. They need to get buy-in from the host country and so there are several ways to do that. First, you need to make sure that the development of the charter city itself has an extensive stakeholder management engagement in the planning processes. So you need to work closely with the host country at the central government, you probably want to work closely with the local government, whether it's state or provincial to make sure that you acquire the land justly, to make sure there is buy-in. You could, for example, offer the state or the national government an equity stake in the charter city to align interests of the government with the charter city itself. Second, you probably want to involve business and community leaders in the charter city. Successful institutional change requires the allegiance of the ruling elite, so making sure that there is an incentive for those people who are particularly influential in the country to align with the success of the charter city is important. Third, you probably want to attract industries that create a lot of jobs. It is politically difficult to change something if a lot of jobs are being created, if a lot of investment is being had, things like this. So, make it more difficult for the politicians to take action against the charter city by creating a lot of jobs, by making it successful, etc. Third, most countries in the world are signatories to a variety of international treaties. So if you sign a contract with the host country and they expropriate you, depending on how you draft that language, you might be able to go and sue them in the international court, and if you win to confiscate their overseas assets. This is basically a last-ditch solution. If you get to this stage you've already lost. But it might help sort of as a bit of a deterrent against host country trying to confiscate your assets by demonstrating that there is some recourse to that action of expropriation. Another strategy is to list the city on the Stock Exchange. So after 10 or 15 years after the city is successful, maybe you put a listing on the local Stock Exchange for a certain percentage of the value of the developer who has built out the city. What does this mean? Well, this oftentimes, the pension funds and other sorts of financial managers will buy that stock and so pension funds and these financial managers tend to be relatively politically powerful and therefore if their future income streams are depending on the success of the charter city, then the host country might be less likely to take actions against the charter city. And Lastly, I think just to really emphasize the first point - it's very important to make sure charter cities are integrated with the local government, with the community - that the benefits of charter cities are being widespread. The best way, I think, to ensure that there's a minimum of risk of expropriation is just to make sure that it becomes very apparent that the charter city is being successful, it's creating jobs, that everybody is being engaged and participating in the upside of a charter city. TL: The second part question is that… I mean, I'm glad you talked about local governance. In building a charter city, I imagine there are allocative decisions that the government would have to make. I compare Shenzhen to maybe some other initiative like Gurgaon in India and one thing the Chinese government had with Shenzhen is that it still maintained control over the allocation of land. And, at least in my opinion, that allowed some kind of diverse development in terms of the industrial and residential developments that took place, and also in the building of public goods, in the provision of public goods generally. But what you see, at least, I wouldn't call them charter cities, with projects like Eko Atlantic City and others of such is that, yes, they are planned but, maybe for financial reasons, the allocative decisions are made solely for real estate developments. Maybe that helps in recouping some of the investment. So, I guess what I'm asking is, where should the allocative decisions lie to create the proper incentive for a truly income enhancing city to develop?ML: Sure, yeah, and I think that is an important question and looking at Shenzhen versus Gurgaon in India. Gurgaon is quite interesting, for the listeners who don't know, basically because of this sort of historical quirk, there was no government which allowed for no zoning and land use regulations and so a lot of tech companies and sort of large companies went and built offices there, advanced infrastructure there, so it has a lot of office buildings, things like that but because there is no governing structure, the public infrastructure tends to be quite poor. So if I remember correctly, there are basically no sewers, most of the buildings have to run on generators. It allows this freedom to build but it combines that with this lack of government. While Shenzhen, the government has been relatively effective in providing public goods, at creating an open space that allows for its success. And I think if we look at all the planned cities around the world being built today, Eko Atlantic being one example, I think you capture it well in saying that they are real estate, they're not really cities. So, real estate you tend to define everything very carefully, it's 'we build a thousand houses and we sell them each for this much money and this is what the margins are' etc, while a city is evolutionary, it's dynamic. The sort of level of planning of the city government tends to be much smaller. It's not saying we're going to build an apartment building here and we're going to build a commercial district here. It's trying to create the enabling conditions for growth and for success. And what we're trying to do is trying to kind of change the conversation with some of these new city developers to focus on more of an inclusive model where it's aimed at a broader set of residents. Where right now a lot of the new cities are aimed at sort of upper middle income or above, but how can you push the price point down? So one of the projects that we're working on is a document that is tentatively called a draft master plan. What this will do is it will be a master plan for a charter city. We're thinking about having it on 30,000 acres with 1 million residents, but we're explicitly targeting an income level of $1500 annually, which is a little under, I think, the per capita income of Nigeria. It's comparable to the per capita income of Zambia, of Kenya. We're explicitly trying to develop a model where it's accessible to this broad income segment, but we're not saying these are the types of houses that people would already build, we're just kind of thinking about okay, where is the infrastructure going to be? How do we attract an anchor tenant? How do we attract residents? How do we make it dynamic such that people's incomes increase over time? It's possible to build a sort of exclusive gated community where high-income people go and live and work and they end up being quite comfortable there, and I encourage people to do that. That's just not the model that we are particularly interested in. And I think it might be a good business venture but it has limited implications for [the] broader society and what we're interested in is how we can help effect social change to generate economic development and to lift people out of poverty, and I think to do that, it's important to help make sure charter cities are inclusive, allow for all segments of society experience the benefits of living in a fast-growing and dynamic city. TL: A bit of a curveball, so to speak, here. There's a lot of planning involved in charter cities. Do you think that that's a challenge to a free-market model of development?If you look in a lot of sub-Saharan Africa, for example, what's occurring now is called urbanization without industrialization. - MLML: In a way, I mean, I'm sure some market-oriented economist might not like what we are doing. I remember when I was doing my PhD at George Mason I was chatting about this with some people, they were like: well, how do you plan? But if we remember the Keynes versus Hayek rap video, the question is 'who plans for who?' So there always need to be some level of planning, right? We do it on an individual level. We do it on a corporate level, even government does it on some level. If you're just planning for, how many police, how many courts? What should the military do? Things like that. And so we might be taking a slightly more active role in planning than some free markets economists might advocate for in terms of thinking about what the anchor tenant should be, how to attract them, how to create these sort of supply linkages. In the draft master plan that we're developing, we are thinking about basically how to create a type of industrial policy because what we want is, okay, when it starts, maybe you focus on textile manufacturing or some relatively low skilled type of employment, but how do we make sure there is skill transfer over time such that the city can move its way up the value chain, can create more jobs and can have this positive dynamic to help lift people out of poverty rather than just being stuck at textile manufacturing now and then 30 years from now? TL: That's interesting. I spoke with Garett Jones, and one of the things he proposed that developing countries [should] try to do is to become an attractive destination for high skilled labour, you know, a labour quality argument of sorts. Do you think charter cities can be a channel for such attraction of high quality, high skilled labour to developing countries which obviously has benefits?ML: Yeah, I think it can. A charter city if developed correctly will probably be more safe than the host country because the place will be more effective. The charter city will be more dynamic. There will be more opportunities and so if there is a high skilled worker who are in their early career and want to do it abroad. Or maybe their ancestors are from a country and want to sort of return and kind of give back or maybe they are first-generation immigrant and want to give back, then I think a charter city would be a probably more attractive place to live than the rest of the host country because it would be more dynamic. There will be more opportunities. It would be a more exciting place to live. That being said, I think I disagree slightly with Garett Jones on the premise...you definitely want the higher-skilled workers for the knowledge transfer. It depends on exactly what he means by this, but Dubai, for example, was able to attract a lot of high skilled workers primarily from Europe, while Shenzhen developed without that many highly skilled workers. They had a lot of investment from Hong Kong. And they had a lot of managerial talent that could come from Hong Kong. So I think it's quite important to, I guess, create these linkages with different areas, different cities that can help the skills transfer process, and then you probably also want to help high skilled workers come in to fill senior administrative positions. But I think to make sure charter cities are scalable, the vast majority of the new urban residents over the next 30 years are not going to be highly skilled. They're going to be relatively impoverished coming from rural areas. We're not going to have sort of the skills that we typically associate with the modern economy, and I think what is important is to realize that and to create systems and processes to allow them to improve their skills, to allow them to get better, to allow them to, sort of, transform the city into somewhere that they would be proud to call home. TL: I'm curious. What exactly made you, Mark Lutter, interested in this problem? Why did you choose to work on this other than teaching at GMU or writing papers and other things you could have done as an academic?ML: Sure. Well, I'm not sure I could have done that much as an academic. I'm a pretty mediocre academic, I like getting my hands dirty a little bit more. LaughsWhat initially got me interested? I heard a talk where the speaker mentioned Michael [indistinct] and who tried to start a Freeport in Somaliland. And in fact, there is now a Freeport being built in Somaliland by Dubai Ports World in Berbera. And basically, what got me interested was I saw it as an Idea that has massive potential that not that many people were paying attention to and talking about and it got me really excited and so I stayed interested in it and sort of realized that I could have a meaningful contribution to making this, I think, really exciting idea take place. And that's why I've stayed interested in it. I like things that can have a big impact and to me, charter cities are one of the things that might be able to have the biggest impact in the 21st century and so it's quite exciting to be involved. TL: So how important is geography in the development of charter cities? I know proximity to ports is very important to facilitate trade. So, but how does it really feature in your own model?ML: Sure, so geography is obviously quite important because - are you on a trading route? Is there an urbanising population that you can draw from? What are the industries that in the area that you can sort of help supplement? We typically think about locating a charter city has being independent on several factors. You probably want to be within about 2 hours of an urban centre so you can piggyback back off their infrastructure because building an airport or a port is very expensive, but if you are within two hours of them you can acquire a large enough chunk of land to build the city because one of the challenges of building a charter city is actually getting enough land to build the city itself. But if you're 2 hours away, you might be able to acquire enough land but you're still close enough that you can access their airport, that you can kind of access their labour market, that you'll allow for a bit more trade than would take place if you were in the middle of nowhere.Like, you want to be on emerging trade routes. So for example, there's a lot of activities going on in East Africa right now. A lot of people are building ports there. That might be an opportunity for a charter city there. Thinking about how new technology might change sort of migration patterns. Maybe the Hyperloop comes, or maybe supersonic jets come, how does that change human sort of spatial organization? And then can you identify opportunities to locate cities because of that? There might be [an] opportunity for a charter city, for example, in Canada or maybe in Central Asia because Siberia and Northern Canada, with global warming, are going to open up and allow for more agriculture, for more natural resource extraction, things like that. So there will be a demand for people to live there and a new city might allow for it to become sort of a gateway to those respective regions. So basically looking at how human sort of trade and human migration patterns are occurring and then trying to identify those long-term trends and then build in a place that can take advantage of those trends to become a regional hub and provide services to the broader area.TL: The reason I asked that question is this. Someone like Paul Romer I think in his paper with Brandon Fuller would say - you need to build X amount of cities to take the addition we're going to see to the number urban dwellers by the middle of the century. I think their own calculation added about 3 billion additional people living in cities. But someone like Alain Bertaud will say you may not really have that much quality location to do what you want to do, at least, to have the kind of effect that you have in mind. So does geography, giving that land is fixed...does geography limit the potential of [a] charter city in a way? ML: Yeah it could, but this is a question that I think is dependent on data. Alain says that most of the good ports have already been taken. He's probably true (right) about that too a certain extent, because humans being, sort of, social, commerce-oriented mammals will tend to live in areas that are advantageous for that. So a lot of the natural ports already, probably have some degree of human settlement there. And so many of the good locations for cities have probably or even taken, have all of them been taken? Probably not. History is weird and people make decisions based on, sort of, contextual circumstances that might have left some potential city locations just untouched because of this weird set of historical events. So this is something that I'm certainly interested in exploring more. It's a project that I would like to undertake. It's basically hire some people, and identify 50 potential locations for charter cities. Just like lookout where trade is happening, where urbanization is happening, where it is possible to acquire large chunks of land and identify basically 50 of these potential charter city locations to see, okay is the land available? Is it good? How easy is it to acquire? To answer questions like that, if any of your listeners are interested in helping out, with some donations, we can actually start getting this sort of concrete answer to that question.TL: For the audience, I’m going to put up links to the reference guides from the Charter Cities Institute on the website and every other available resource. You wrote an article recently about America's foreign policy and how charter city can play a role in its geopolitical competition with China, specifically the belt and road initiative. Do you care to expatiate on that point?ML: Sure, so I think if we look at, um... the US in some way still has a positive image even with the recent sort of killing/murder of George Floyd. We saw a global outcry of that because I think people rightly hold America to a higher standard versus the outcry that we saw of the sort of Uighur, basically, a genocide in China where people have kind of ignored that because I guess they expected [the] Chinese to do it to a certain extent. But American engagement with the rest of the world has, I think, left a little something to be desired over the last 40 years. Iraq was a disaster, Afghanistan is a disaster, Libya is a disaster, so I think there's a need for rethinking American engagement. Combined with the fact that China is pretty aggressively now pursuing their image on the global stage in terms of building infrastructure with belt and road, in terms of wooing foreign politicians, foreign leaders, to get them to be China's friend. So my article was aimed at… particularly people in the, for example, the Development Finance Corporation in The United States to hopefully get them to see charter cities as a potential way to offer a positive influence on the world. And while specifically, I think what American engagement could look like is having Americans who can help with governance, having Americans who can provide financing options if you use American contractors to help build the city, to help develop governance norms, to basically provide the supporting infrastructure for charter cities which I think are important because right now when developing countries are looking around the world, they think 'okay, what policies do we adopt? Who do we want to be like?' All of them are thinking like let's be like China. China has had tremendous economic growth over the last 40 years. They've lifted tens of millions of people out of poverty which is a great thing. Unfortunately, at the same time that's been coupled with a sort of lack of respect of human rights, with no democracy, with no freedom of speech, these things that are inimical to human flourishing, and they think because America has developed so long ago, the possibility of following a similar pattern to America's development is just outside of people's minds. And so I think what charter cities can hopefully help demonstrate is this sort of we call them American values, but I think they are universal values of things like freedom of toleration of markets really can work for everybody and can provide an alternative development model to the one that China is currently claiming. TL: Sticking with the US, I know you write about it, others write about it, are the institutional (I want to say rot. I don't know maybe that's the right word), you know, are they as bad as some analysts say it is, especially in the light of COVID-19?ML: Yeah, I think it rot is probably an appropriate word. We basically have coasted the last kind of 40 years off of existing institutions. We haven't really been challenged. We haven't updated any of our systems. Everybody is complacent. If you think about it, part of the reason is that nobody has actually helped build an institution in the US. Rather, the most dynamic part of the economy is Silicon Valley because there are people there who are building new things. So people are required, to a certain extent, to have this like very broad set of managerial competencies that you don't need to have if you grow up... and I'm not just saying in government, in government you just develop these very specific set of skills, but also in a lot of large private corporations. How many new national banks have been invested in the last 30, 40 years? And so because of that, you grow up learning a very specific set of competencies which is OK in terms of like keeping the system going, but it means that anytime you're presented with an external shock, you just don't know how to react. And COVID was that shock, which I think exposed a lot of the existing inadequacies in the American system that people were unsure of, like unable to think outside the box. Our bureaucrats were quite skilled at figuring out how to pass the buck, how to not take responsibility for things. But they had no idea how to actually take responsibility and then how to actually enact change that will be beneficial. And we're seeing that continue today, you still can't buy N95 masks on Amazon, it's 3 months after the fact. This is a very solvable problem but our institutions are fundamentally broken and I think you can add that to the growing culture war where you have red states where a lot of people are refusing to wear masks because it's not a pandemic, it's a dempanic, this is a fake disease, really idiotic stuff like that. And then in blue states, you're seeing some of the elite institutions basically begin to eat themselves. The New York Times has basically been taken over by Social Justice Warriors staffers who sort of opposed an op-ed by Tom Cotton, the senator from, I think, Arkansas. And I didn't like that op-ed, it was a bad op-ed but he's a senator for goodness sakes. I mean, if you are the paper of record you should allow senators to publish sometimes even if you don't like their arguments. And so we're seeing this, sort of, I think deeply dysfunctional institutions combined with this deeply dysfunctional culture that will probably take decades or generation to really sort themselves out. There isn't a lot of sort of, I don't know, capacity left at the seams. Even the late 60s, '68 when we saw a similar social unrest, there was something solid. There was a core underneath and I think that core it's quite atrophied. I'm a little bit nervous about the future of the US. TL: And I mean it's interesting to me that you talked about Silicon Valley because, at least, from an outsider's perspective here, it amazes me how little political influence Silicon Valley has. LaughsAnd I have one analogy and I think I tweeted this though I got a lot of pushback here and there that I don't think, and I may be wrong about this... I don't think that the Koch Brothers, for example, would have struggled to build more housing in Silicon Valley. And we have people that are vastly richer than the Koch brothers in the Valley. I mean, what is going on? Why do they have so little political influence? They get railroaded even by the local government. ML: Yeah, I mean, I think that's a good question. One of my friends likes to joke that Silicon Valley thinks they're above politics, but in fact, they are below it. You've seen, I think, Apple pledged 2.5 billion dollars to affordable housing in the Bay Area. Microsoft, I think a billion to affordable housing in San Francisco, Mark Zuckerberg, I think, 500 million to affordable housing in the Bay Area. And like the problem is just that, okay, if you're spending half a billion dollars to put it crassly. Like just buy off the entire City Council and just tell them to legalise housing. And I think it's a sort of combination of historical circumstances. One is that because most of Silicon Valley is in the world of bits and not in atoms, they just haven't interacted with the government that much. So because of that, there was no need to really figure out how to work with government, it was like you ignore us, we ignore you. To use this sort of Chinese proverb - the emperor is far away, I'm on the other side of the country, and so they didn't really interact with the government that much, and because of that just saw it as kind of part of the ecosystem, not something that to pay attention to. I believe that is changing now.I think Mark Zuckerberg's congressional hearing like a year ago was a wake-up call where the congressmen were asking Mark Zuckerberg, how do you turn on the iPhone? And it's like, OK, well, when you have the political leaders who are that disconnected with what is actually going on, there is a serious challenge. That being said, it will take a number of years for Silicon Valley to actually figure or politics out. There is, I think, several challenges involved in that. One, I think Silicon Valley has a bias towards nonprofits, they figure if something is a good idea, you should be able to make money off it. But nonprofits are a kind of integral parts of influencing government. Second is Silicon Valley likes things that scale. Government necessarily doesn't really scale. At least it doesn't scale in the same manner that a technology startup does and so because of that you have to put all of these resources in, to help mobilize people, to help create a network, to help influence things and you're unable to tell whether it's actually working for a long period of time. So the technology startup, right, okay, you work for a year, you get product-market fit. After product-market fit, you grow at 10 per cent month over month for a period of like three years or something. So if you're growing 10 per cent month over month, you can see it's working, you can see something is happening. While with politics, you might pay activists on the ground, you might pay lobbyists, but it might take years before you actually see legislation that's even proposed, much less implemented. And most of Silicon Valley just doesn't really operate on those...they're not used to those time horizons and so they're unwilling to sort of put the resources necessary to actually engage them. Now I think a third reason is that Silicon Valley is very, I don't know...it has a very universal mindset. So New York, if you look at New York, all the high net worth people in New York, When they donate to charity, they typically donate to New York charities. So they donate to the Met, they donate to Central Park. They get status by paying for things in New York City, so you have all of these goods supported by basically the billionaire class in New York. In San Francisco, people get status by doing universal things. So the effect of altruist movement, for example, is quite popular in San Francisco. But these universal things, while I think they have a great impact on humanity because you don't get status by helping to improve housing in the city, there just isn't as much focus on the city itself, it's a little bit neglected and so there hasn't been this (the) same mobilization of Silicon Valley elite to coordinate to help fix the city as with New York where the elite do spend a lot more money on improving the city's quality of life. TL: That's interesting. I hope they wake up and they get it right.ML: Me too.TL: Final question, Mark. Ten years from now, if you're looking back at all these things you're working on, particularly charter cities, what do you hope to have achieved? ML: Yeah, in ten years I figure we probably [indistinct words] three dozens or so charter cities that are either up and running or are like in advanced planning stages. In ten years, probably a few million people living in charter cities and with the potential population to reach 10s of millions. I want charter cities to be sort of understood and discussed at every world forum, like the World Economic Forum. All these, like, sort of highfalutin events. I want them to be part of the language, like right now, for example, if we think about International Development there are some themes that come up all the time. I think gender equality and global warming kind of pervade every discussion, as well as randomized control trials, they all pervade every discussion about development, I want to charter cities to help pervade those discussions and not just pervade those discussions but actually be improving people's lives on the ground. TL. Yeah. That's a goal I can get behind. Thank you very much, Mark, and I wish you all the best. ML: Thank you for having me. This is a public episode. Get access to private episodes at www.ideasuntrapped.com/subscribe

Garett Jones is one of the smartest people I have ever talked to - and he is at his usual brilliant best in this conversation. We started by trying to see how his latest book fit into the context of less developed countries with weak rule of law. I have often remarked that Garett is underrated as a development economist. I still think so.You can listen or download to the podcast on any platform of your choice (some links here), and you can also rate us here.TranscriptTobi: WeIcome to Ideas Untrapped and today I am on with economist, Garett Jones. Garett Jones is a professor of economics at George Mason University and he has written two excellent books "Hive Mind" and "10% Less Democracy". Welcome, Garett.Garett: Thanks very much for having me, Tobi.Tobi: Thinking on the margin is something I admire so much which is what you did quite well in your latest book 10% Less Democracy. Are economists just better at this than everybody else, and if yes, why?Garett: You're right. I do try to do that a lot in the book. I agree with you, Economists, I think, are better at this than other social scientists because it's just so much a part of our training. It's so normal for us to think, do you want to buy two more peanut butter sandwiches or two fewer? Should this company hire three more workers or fire two workers? So that kind of marginalist thinking which is where... the Marginal Revolution of the 19th century embodies that. Yeah, that really helps us think about big social questions in a very productive way. When I applied this to democracy what I realised it was quickly, something that a lot of people know, which is that all of the things we call democracies are a blend of democracy with oligarchy of one form or another. So getting the balance right is more important than an all-or-nothing question. All or nothing is off the table, thank goodness, but getting the blend right between insiders and outsiders, between elite and the masses, that's something that can be evaluated and fortunately, my economist friends have evaluated it. For some people, they'll quite naturally assume that democracy means an independent judiciary, the rule of law, impartial, fairly uncorrupt government. And those things are not democracy. They are good things but they are not democracy. - GJTobi: So given all the trade-offs that are involved with social decisions and reforms, how can we be better at thinking on the margins? We live in an era of protest movement where people want sweeping changes and that's not really how society works, so how can people better train themselves to be marginalist thinkers?Garett: Yeah, you're right. There aren't that many questions where we have to go all or nothing. Most policy questions can be a question of incrementalism, so I think whenever possible we should just ask ourselves 'if I can dial this up a little bit or dial this down a little bit, which would be the better way to work? Which would be the better way to move?' Whether that's thinking about whether I want my judges to have a little bit longer terms, whether I want my voters to have a little bit more information before they walk into the voting booth, whether I want a healthcare program to be available for people who are 62 rather than 65? Just thinking about it in terms of small changes helps us better evaluate...it helps the mind better weigh the benefits versus the cost of the decision. Because when we talk about revolutionary change, there are often just too many things going on for our brains to even weigh them, to even weigh the benefits, and weigh the costs. So marginalism, I think, is better suited for human minds and fortunately most, but not all, political decisions are well suited to a little more vs a little less.Tobi: I read your book, great book by the way...Garett: Thank you very much.Tobi: The writing is fantastic, I'm a big fan. In the book, I know you are applied the 10% Less Democracy framework to rich countries...Garett: Yeah.Tobi: But I've been trying to extrapolate and apply it to developing countries, and one thing I noticed (you can shed more light on this) is, sometimes it feels like low-income and middle-income countries are torn in some kind of institutional paradox. You have multilateral institutions like [the] IMF who have these prescriptions that are bureaucratic but have long-term benefits - Central Bank independence, don't manipulate the exchange rate, keep inflation low, be responsible with your budget, and all that. And on the other side of that, you have think tanks, aid agencies and other foundations (who are also interested in development and give it advice) who seem to favour radical democratisation of everything, basically. So what do you think, as a policymaker, as a voter in a low and middle-income country, how best to approach this paradox on a mental level?Garett: I think a message that I bring up early on in the book is that most of the clear benefits of democracy come from a moderate level of democracy. As Amartya Sen, the Nobel laureate who showed that if you want to avoid famines, what you need is democracy. In modern times there's never been a famine as he defines it in a functioning democracy. But his measure for functioning democracy is a pretty basic one. It's competitive elections and a free press. And that's not too hard a standard for a lot of countries to meet and more countries are meeting it now than they were meeting it, of course, three decades ago though, perhaps, less than a couple of years ago. So if you're pushing for democratisation, I think we should draw on the best evidence we have for what it is, what kind of democracy we need to get the benefits of democracy, and that seems to be a moderate level. Also, there is a lot of lazy talk about democracy where people stuff all of the good things they like into the word democracy. For some people, they'll quite naturally assume that democracy means an independent judiciary, the rule of law, impartial, fairly uncorrupt government. And those things are not democracy. They are good things but they are not democracy. So I think just clearly speaking about what it is that you want is valuable because we realised quickly that the things we like out of modern so-called democracies are a blend of the rule of the people and the rule of insiders, with a third thing that I don't talk much about in the book directly but the rule of law - the impartial rule of law, a bureaucracy that just operates on its own according to [the] rules that have been around for a long time. That is undemocratic and it seems to be very useful. So simply talking clearly about what it is we want in a reform and is this valuable reform truly about the voice of the people or is it more about something like an independent bureaucracy? That would help us get away from this lazy jargon of calling everything good democratic.Tobi: You also discussed the relationship between democracy and growth in your book and you conclude that the evidence is a bit of a muddle. What I was thinking when I was reading that part, I thought about Chile...Garett: Uh-huhTobi: And one of the famous examples when economists and some other thinkers discuss Chile is to look at GDP growth from the Pinochet years and the democratic years, and then they conclude that, oh, GDP growth is higher after Pinochet and hence democracy is better. But again, if you look at that history a bit, you'll see that there were some things, though they weren't palatable and I'm not saying I prefer autocracies here or anything...there were some hard reforms that Pinochet pushed through that clearly had benefits even during the Chilean democracy. One such rule was the inability of the parliament to hike the budget. You either cut it low or you pass it as it is which introduced a lot of fiscal responsibility in the budgeting process. So what do you think is responsible for this muddle in the evidence in the relationship between democracy and growth? Why can't we get a really clear picture?Garett: A big problem is the real-life fact which is just that a lot of autocrats do a terrible job. They come into power and they make the place worse off. So some autocrats come to power and appear to make the country better off, or at least, it predicts better performance and other autocrats come into power and things get worse. So when we stop looking at individual anecdotes and when we pull them together and do something rigorous and statistical, the evidence that autocrats are more likely to create great reforms looked pretty weak. There are plenty of anecdotes, right? We can call them case studies where autocrats are associated with and may have put into place things that look like good pro-growth reforms. Pinochet gets a lot of credit for this kind of stories but also Park Chung-hee of South Korea. The problem is that (a) we don't have a great counterfactual (b) maybe they just got lucky. And that's why using rigorous cross-country comparisons is more useful than individual case studies and when we do that, it's very hard to find evidence that either democracy causes growth or that an autocrat taking over causes growth. It's too much of a coin flip to recommend any particular policy if our goal in choosing a government is economic growth. So this is why we should stick to the things where we have better evidence and so these big changes - autocrat in charge versus free press multi-party democracy, there there's a muddle. That's the reason why the framing in my book 10% Less Democracy is about smaller changes where we have better identified better causal stories with better testings like independent central banks, independent judges. We have more evidence for the small things than we do for the big things.Thinking in marginalist terms is important but also good public education really can improve policy if we teach true important economic ideas to people - GJTobi: Looking at this really well, is it really about voter control? Because I imagine the issues are different, for example, I think voters care a lot about Central Bank independence than, say, a national minimum wage for example. So isn't the case that in some situations or on some issues, again, sticking with Central Bank independence, politicians adjust ill-informed or ignorant and they're not necessarily responding to voter preference?Garett: That's a great point. It's always a good idea to wonder whether the politicians themselves are poorly informed and they don't have an incentive to be very well-informed on most policy issues. A friend of mine had a conversation with the prominent United States politician who I won't name and this person said...the elected official said 'my job isn't to understand all the details of the policy, that's what my staff job is. My job is to keep track of all of the other members of Congress and find out how to cut deals with them.' So their real specialty is deal-making, deal cutting. They don't know that much about the detail of policy. So you are right that basically part of the problem is that the politicians themselves don't know that much, but they need to know enough to be able to pick someone who's good to run some of these things. So running [knowing] someone who is competent to run an independent central bank, it's kind of a hard job but you can outsource that to some staff; and if you're worried about things working pretty well for a long time, then you'll task your staff with picking somebody who seems like a pretty good candidate who won't cause much trouble and who will make the economy look pretty good before the electorate. So this idea that elected officials don't know that much themselves but they do have an incentive to get some things right when they know they're going to be held accountable by the voters.Tobi: But again, wouldn't less democracy, at least, in some cases lead to populist backlash? I mean, we're seeing that with Brexit...Garett: Oh, yes.Tobi: Some part of the American polity is also in that mode. The EU is a very good example where some British voters say 'oh, we are not going to be subjected to Brussels' rule'. There's a case of Africa, also, where people respond quite negatively to what they perceive as external technocratic interventions. So wouldn't less democracy run a risk of populism in the long-term?Garett: Actually, that's a great point and it's the one that I literally never discussed in the book - it's the idea of a populist backlash. Because it's one of these things that is important and too hard to quantify. The risk of a populist backlash to 10% Less Democracy is a little bit like the risk of a doctor being reluctant to give someone tough advice about diet and exercise because the person just might not come to the doctor anymore. So this is an important question - when should informed people, when should people who are relative experts just not push that hard for the best solution because they are afraid the patient won't take the medicine? In a way that's part of the reason I stick to 10% Less Democracy. I just want people to think about a little bit longer term, a little bit more independent Central Bank because I think these things are less likely to provoke that kind of backlash. But, you're right. But know this, to the extent you're right, this should tell us something about the cost of democracy - if one of the costs of democracy is that voters don't want things that are actually good for the voters, this should be part of our understanding [of] what democracy really is. If the problem is that the voters don't want to take advice that's just some person's opinion, 'ok, well, who cares?' Voters shouldn't have to listen to some person's random opinion. But if voters don't want to take [a] medicine that's actually good for the voters themselves, that should be part of our understanding of one of the weaknesses of democracy and something we should try to find a solution to. Maybe it's the solutions I present in my book, maybe it should be something else, but understanding the weaknesses of modern democracy is important to improving it.Tobi: A good illustration of that point is trade policy. I was just reading Matthew Klein and Michael Pettis's book where they basically say that trade wars are class wars.Garett: Uh-huh.Tobi: It's a reaction. And also it's a tactic for politicians to whip up voter sentiments and possibly win votes. How can people, again, I'm quite interested especially on the key issues that matters like central banking, like trade policy... things that affect the welfare and long-term prosperity, how can voters be a lot more informed to know that taking the choices out of my hands does not really mean I'm being oppressed?Garett: Yeah. This is really an important question. Part of it is that there is some evidence that just education in schools really changes people's minds. So when my colleague Bryan Caplan - he wrote a great book Myth of the Rational Voter, and he wrote a follow-up article where he looked at whether education or IQ scores were better predictors of pro-market attitudes. And he found that particularly on free trade, there was evidence that education itself, years of education was a better predictor of pro-trade attitudes than IQ. This is a signal and it's a reminder of something that made a lot of us believe which is that one of the things you learn in school is that people in other countries are good and, sometimes, they are great people and you should care about them. Also, you might learn some complicated ideas like the benefits of free trade. So education that is focused on teaching true and important facts about public policy, I think, can be a big part of this. But there is another element, another solution is just that we should think like a marginalist and go up the marginal cost curve. Push for a little less populism on topics where the voters aren't going to resist as much. Voters around the world have been pretty cool comparatively speaking with independent central banks - letting neutral banks lend out money and respond to financial crisis, (and) I think people can kind of understand why that's better than having one political party trying to lend to its buddies all the time. So, yeah, thinking in marginalist terms is important but also good public education really can improve policy if we teach true important economic ideas to people.Tobi: Let's let's go of the cuff a bit. Why did East Asia converge faster than the rest of the developing world?Garett: This is a great question. I mean part of it you could say that they actually had pretty high levels of productivity before say about 1800. This is part of what the deep roots literature shows, of Putterman and Weil and Bill Easterly at NYU - that, like, before 1500, before the great age of exploration, East Asia was pretty close to the technological frontier for the planet as a whole and so what's happened in the last 50 years in a way is a return to trend. That's not an answer. That's just more of a reminder that sometimes the more things change the more they stay the same. But when I look for the proximate cause, something more like a proximate cause, then I turned back to my first book, Hive Mind, which is that as far back as we have data on test scores, East Asia with particular countries we had good tests on in the ’60s and early 70s - Hong Kong, Taiwan, Japan, and soon after that Singapore - these countries were doing pretty well on standardised tests no matter how we measure it. And I think that good cognitive skills are [a] really important ingredient of being able to jump to the technological frontier, and I think that good cognitive skills are an important part of running a good competent government. Those aren't the whole story, fortunately, China's decision to turn away from communism was one of the best decisions in all of human history; that mattered a lot for well over a billion people. But the fact that as far as we can tell, test scores, human capital as currently measured was pretty high in East Asia in the sixties and early seventies, that gave them a good solid launching pad for modern prosperity.Tobi: You've hinted I think on your Twitter feed, I'm not sure anymore, that economists know the causes of long-run prosperity. What's your explanation for that?Garett: We're really good at the proximate causes, the very nearest causes. These are simple things that come from the Solow growth model. Robert Solow, [the] Nobel Laureate, just helped us think about where do GDP come from and having a lot of machines per worker, having a way for people to use them productively is really crucial. Machines aren't your enemy, they are your friend. A lot of technology isn't your enemy, it's your friend. But when we try to look one step behind that, say, why do some nations wind up with a lot more productivity and lot more capital per worker than others, then there's more debate but a lot of people would jump just straight to something like institutions. Some places have great institutions, good competent governance, neutral rule of law, and that means the capital is willing to flow from around the world to good places. I would also add on human capital however measured - whether it's years of education or test scores are both very quite robust predictors. So economists know what works and the simplest version is one I said years ago which is, have pretty high test scores and don't be communist, and you're probably going to be rich. So if a country can find a way to raise its test scores through better run schools, through better public health, and it can avoid the massive mistake of totalitarian communism, then it's got a pretty good future ahead of it.Tobi: In your view why did you choose test scores, I mean, what's the best case for cognitive ability in human capital and long-run prosperity ahead of all these other proximate causes you mentioned like institutions or geography or industrial policy and all these other factors?Garett: The simplest version is just that it's what shows up in the data when I and others have run very serious horse races. So Eric Hanushek, professor at Stanford, leading education researcher, he's found that test scores whether you call them IQ or math and science scores are very astonishingly robust predictors of national prosperity and they really beat out years of education. There's a lot of emphasis on trying to raise measured use of education but the problem is that we know that there is schooling and then there's schooling. So if you just get a diploma but nobody ever taught you anything, the schooling didn't really make you more productive. Another reason though is because of the well-known finding from psychology research which is that skills predict kills. People who are above average in math tend to be above average in verbal stuff. People who are above average at vocabulary test tend to be better at solving three-dimensional puzzles, and so for reasons that are still poorly understood there is what I call a DaVinci effect and what others call a g-factor across mental skills. So running a modern economy at a high-level involves kind of a little bit of everything. It's a little bit of a smorgasbord, it's a little bit of a casserole. It's probably unlikely to be the case that there is going to be this one simple thing that solves all the problems. What you really want is something that is equivalent of a Swiss army knife, something that's a mediocre tool for everything rather than one tool for just one thing. And cognitive skills whether you called them IQ or g or whatever seem to be this version of sort of Swiss army knife where there's a little bit of everything. So people who do better on standardised tests tend to be a little bit more patient. Groups of folks who do better on standardised tests tend to be more cooperative, they're more likely to see the invincible hand and support market-friendly policies, they are more likely to be tolerant of others who are unlike them and these are all great things for a nation. So like I said, running a modern economy near the frontier of productivity involves a lot of little things - low corruption, competent governance, foresight, voters who understand the benefits of trade; the one thing that I can get us a lot of all those little things is higher cognitive skills.Tobi: You wrote a paper a few years ago which I like very much...Garett: Thank you.Tobi: O-ring sectors and Foolproof sectors. And if I understand your model correctly (and you're welcome to set me straight here)... so thinking about this paper and this model, if I am a high-skilled worker in Nigeria, for example, overall you're saying the returns to skill for my education and my skill level is marginal compared to a low-skilled worker. But if I move to the United States of America where obviously there are a lot more high-skilled workers than in Nigeria, the returns to my skill will still be marginal but then there's this huge gains at the national level between both countries that are pretty large, can you explain how that works?Garett: Yeah, so I'm building here on the work of Michael Kremer who just won the Nobel prize last year. He wrote a great paper about the O-ring theory of economic development. He said that a lot of economic tasks in modern economies, especially the richest economies, are kind of like building a space shuttle where if you make one mistake, even in a very complex process of launching a space shuttle, the space shuttle tend to blow up killing everyone on board. This is actually why the space shuttle challenger was destroyed because of the failure of an O-ring (basically a big piece of big rubber band) that was an important part of keeping the rocket safe. So one small failure can destroy the value of an entire product, of course, that's true with a lot of things that we value like smartphones, automobile transmissions, one broken link can destroy the whole thing. Thing is that economists without even realising it, we use another model, routinely, that's not O-ring often without thinking about it - we kind of assumed that workers of different skill levels can get to be mushed together and it's nice to have skilled workers, but maybe you can throw maybe two high-skilled workers and three low-skilled workers, maybe they are perfect substitutes for each other. You know, just throw more bodies at it and eventually the job will get done, there are certainly jobs like that. So part of what I did and really my contribution in this paper, the O-ring sector and the Foolproof sector, was to say 'what if some parts of the economy work like Michael Kremer's world where things like building a space shuttle or smartphone? Not if other things are like the way economists normally think about the world, the Foolproof sector - where if you throw enough people at it eventually the job will get done.' And I said 'what if workers have to decide which of these two sectors they are going to work in?' So let me think about you as an example... high-skilled worker, and you're trying to decide what sector you're going to work in. Well, one of the great ideas in economics is that you're going to go to where the pay is highest, ignoring all the other complications for your life, and so really the net message is that there's always going to be some combination of workers balancing between the two sectors. So if low-skilled workers are superabundant and high-skilled workers are scarce, just about all of us are going to be taking on these foolproof tasks where perfection, exact precision is not crucial. And if high-skilled workers are really abundant, most of us will be working on O-ring type tasks but there will always be some of us, sort of, in-between. This helps explain why the capital goods, hi-tech goods are made in just a few places in the world and in particular, they're usually made in places where the workers are really really expensive. You would think that firms will try to find the cheapest workers possible for any task but instead hi-tech manufacturing, especially cutting-edge hi-tech manufacturing, tends to happen in countries that are pretty high wage. The only thing that can explain this, if people are rational, is that it must be critical, it must be crucial to have high-skilled workers working on those tasks. So one of the lessons of this is that lower-skilled workers can find something really useful to do in a high wage country because if they come to a high wage country, they are competing against a lot of other high-skill workers, so all they have to do is be an okay substitute for that high-skilled worker in some tasks, maybe it's mowing lawns, maybe it's doing routine legal work and all of a sudden those workers can earn a lot more than they would in their home country. So the O-ring-Foolproof paper is in a way an important message for the value of low-skilled workers in high wage countries, but it also helps explain why cutting edge, frontier technology innovation only happens in the highest skilled countries where workers are super expensive.Tobi: The national returns to skill, how does it work with these two sectors?Garett: Well, there is an element of, sometimes, the real world is more complicated than the model, and that's, of course, true here. I have to say that I suspect there is a critical mass element to high-skilled workers. For instance, if I can bring a million of Japan's best engineers to a lower-skilled country, a million of them could run a lot of fantastic factories, be great workers and end up giving a lot of great employment opportunities to lower-skilled folks, so there is this element of...outside the model of... a critical mass element. But the O-ring-Foolproof story is a reminder that high-skilled workers who are in relatively low-skilled countries are often going to be, like, unable to make use of their full potential. Being able to have an O-ring sector of your own to go work in is really where the magic happens of economic prosperity. The greatest things that are happening and the way that economic frontiers are being built is in these O-ring sectors, and, to me, it's a reminder that this is a case for the brain drain. A case that the brain drain actually helps the world as a whole. Brain drain issues are complicated and there are lots of forces pushing both ways but I want to emphasise that there is this positive element to the brain drain which is getting high-skilled workers into countries that can make great use of high-skilled workers really helps the whole world. Has Michael Clemens has pointed out, one benefit of that is that migrants who go from low-skilled to high-skilled countries send back a lot of remittances and those remittances are super valuable. I'd like to emphasise another point, which is getting those high-skilled workers from low average-skilled countries to higher average-skilled countries means that they can contribute to the growth of ideas which makes the global pie bigger.Tobi: You sort of preempted where I was going with that. There was also this essay by Michael Clemens and I think Justin Sandefur about this brain drain issue where they sort of asserted that another element to the brain drain issue that the incentive to migrate and earn more in high wage countries leads to more production of high-skilled workers even in low-wage countries. So Nigeria exports a lot of doctors to the UK, it means a lot more students would want to be doctors so that they can migrate to the UK or wherever where they can earn a lot more than they would in their home countries. Now, here is my question: isn't there a sort of negative effect to this in that their home countries get stuck in the poverty trap... a lot of these high-growth sectors never gets built and some of these countries just depend on remittances which can be pretty tricky?Garett: Yeah. This is a hard problem. Another problem with the brain drain is that it means that the government which really needs a lot of high-skilled workers to basically run competent bureaucracies and manage difficult technical questions, a lot of those folks are gone. They've gone to move to other countries where they can earn a lot more. So I don't want to pretend that the brain drain issues are simple to resolve. But I think that the point you're making, I tend to think of it as less of a problem because people are very reluctant to move. There's a lot of evidence that people are reluctant to move from their home country and they need a really big wage premium. So if things were even sort of mediocre, if there were some moderately hi-tech positions in the home country, you would have very high rates of retention. I think that's pretty clear from the evidence from the fact that people are very reluctant to move. If they can find any excuse to stay, they stay. That's speaking a little informally but I think the data backs that up. Also though, there is this element of where the threat of exit does make home countries behave a little better. The fact that some people might leave does make a home country government say: well, we want to make ourselves more inviting. If we think about what's happened in China (to give an extreme example) over the last few decades, there's been a lot of brain drain from China as Chinese graduates, high-skilled workers often, have moved to many different countries across Asia and across Europe and North America, and one of the reasons that the Chinese government wants to be somewhat open, somewhat...wants to be unlike its totalitarian past and more like [its] authoritarian present is because they want to feel like they can come back. So the threat of exit does discipline national governments in an important way that we shouldn't forget. Brain drain means it's harder to build these hi-tech sectors that you're pointing out, but a brain drain also gives those home country governments a better incentive to behave well. I think of this as a sort of Tiebout voting with your feet story which economies should always be open to, that people voting with their feet sends a very powerful message to governments and informal and formal evidence, I think, backs up that. Tobi: Can national IQ be deliberately raised on a scale that matters? I know you talked about nutrition in hive mind. Also, I look at things like assortative mating and other things but can it really happen on a scale that moves the needle on national prosperity?Garett: This is a great question. I feel like one reason I wrote Hive Mind was to get more people thinking about the very question you asked. Like, my comparative advantage is what does IQ cause rather than what causes IQ? But I believe the Flynn Effect is real. I believe [it is], at least, substantially real. The Flynn Effect is as you know, but your listeners may not, is the longtime rise intelligence scores that's been documented around the world. Public health interventions, people getting healthier and living longer lives, I think that obviously is increasing people's cognitive skills (like, the public health element has just got to be real). I'm less confident but I'm still fairly confident that good education raises cognitive skills big enough to move the needle. And the third one is this broadly cultural story which is really Flynn, I want to attribute this to Flynn himself. My colleague Tyler Cowen and I talked about this in our podcast back in January when I was on Conversations with Tyler - IQs in East Germany rose at least five points, maybe much more, in the decade or so after the end of communism. I think there are these cultural influences on intelligence that are not just teaching to the tests, there is something about a modern open society that I think challenges the mind and makes it work better in a wide variety of settings. So I want to stick with those three right now that public health interventions are first order, good broad-based education is suggestively very important but I can't say conclusively, and then third; there is more evidence I have to say for this big cultural effect - that when your country becomes more like Popperian open society, more [a] mixture of capitalist and loosely democratic, people seem to use their brains in different ways on a regular basis that shows up on the IQ tests. Tobi: Why and I'm sure you must have experienced this maybe in discussing your work or maybe on social media and in other ways. Why is intelligence still a taboo subject so to speak? When I sit with my friends and we talk about development and I bring up Hive Mind...and people bellyache about 'oh, we can't do this or that' and you mildly suggest that 'hey guys, have you considered that our national IQ is pretty low and maybe, maybe that's why we can't get some of these things done.' There's a natural push back that you get. Why is intelligent still such a taboo subject?Garett: I think part of it is because people assume that when you're talking about intelligence you're talking about something that is supposedly a hundred percent or nearly a hundred percent genetic and something that is essential to a person in some very deep way. So I think it's very essentialist as an explanation. I think that's a mistake, I think the evidence does not support that position. And here's a test of it, because instead of using the word "intelligence", use the word "national test scores" and you talk about how education can raise test scores in an important way, then people get much less defensive about it. People are much more open to these very same ideas, the very same channels. So I think a big part of it is that intelligence sounds like something that is intrinsic to a person, unchangeable, nearly immutable and so any ascription of causation to that is personal. So I think discussing it in a Flynnian way, the way that James Flynn has, which is very evidence-based (and) where we think of intelligence as being something like an intermediate outcome... it's not the deep root cause of everything, it's an intermediate outcome that in turn is caused by other stuff. I think that opens people up to thinking about how people's minds create the economy we live in. I'd much rather talk about how our minds create the world around us than talk about what some deep, supposedly essential thing called an IQ score. Of course, the history of the misuse of IQ test is important. The mistakes and evils that have occurred in the name of intelligence research are important. But there are many other things that have been used in evil ways in the past and we cut them slack, and democracy will be, of course, one of those. But I think something about intelligence makes people think it's intrinsic, it's basically immutable and so you're telling people to despair. And if there's one thing to think about when thinking about human cognitive skills is we shouldn't think about despair, we should think about trying to find ways to improve all of the nations in the world not just the lucky few.Tobi: That's interesting. Tell us about what you're working on right now what's your next big project.Garett: I'm on sabbatical and finishing up right now and I'm writing my third book in what I call my Singapore trilogy. And that's going to be a book really about the deep roots literature which I'd mentioned earlier. I'm interested in why the past is prologue. Hive Mind is a book, in a way, about the short-run. About almost proximate causes. 10% Less Democracy is a book about the rich countries. My third book is going to be a book about the whole world and a book about persistence. A book about why the more things change, the more they stay the same. So, again, this is going to draw on the deep roots literature, it's going to draw on the late Alberto Alesina's work on cultural persistence - how migrants carry their attitudes from their home country to the country they move to to a large degree. It's been a lot of fun to write this book because it's so data-driven and it's based on a lot of research that is very influential within economics and not influential at all outside economics and my job is to change that.Tobi: You've been an advocate so speak of high-skilled migration.Garett: Uh-huh.Tobi: How does your argument square with people like Bryan Caplan and who call for open borders, I mean, just let them come?Garett: So Caplan's comic book where I make an appearance on open borders, that's a great fun read I think people should look at that and give his ideas careful attention. I like to remind people that institutions do not just create themselves ex nihilo. That they are actually created by people and I just really want people to think about that a lot. High-skilled immigration means bringing in more informed voters and low-skilled immigration means, 'well, we really need to put a lot of effort into educating those folks' and hope that they support great institutions that will keep the country rich for a very long time. Fortunately, there is a lot of evidence that even the most optimistic supporters of open borders tend to emphasise that high-skilled immigrants have a lot of positive externalities, it's easy to make that case, and less skilled immigrants have... they are more like a wash, there is probably a plus in the short to medium run but closer to a wash than with high-skilled immigration. So I want people to think hard about where good institutions come from and if people coming to your country are going to support better institutions, that should be great news. And if people [who] come to your country are likely to tear it down, you have a little bit more concern. Caplan addresses this in his book in a number of ways with his keyhole solutions. But I think the next 20 to 30 years of both academic research and historical experience will let us know which way low-skilled immigration is going to shape the government of rich countries. Tobi: Charter Cities. Are you optimistic, are you a fan? How best to think about it from a skill and immigration perspective?Garett: Yes, so, Charter Cities which is an idea that's often associated with the Nobel Laureate Paul Romer. The idea that countries should create small little areas within there that are governed by another country's rules. A country that's well-governed, frontier. So say a poor country could say 'hey, we're going to let Singapore run a small part of our country or let Singaporean legislation or Singaporean case law hold sway in this part of our country. I tend to think that the biggest barrier to charter cities as the revenge of democracy. It's very hard to avoid what voters want. I would like to believe that countries with great institutions could franchise their institutions to other poor countries, but the problem is that institutions are created by people and we need to figure out why the institutions are weak in the first country (the country that's starting the charter city). There's a pretty good chance you're going to get a revenge of democracy there and a reversion to the old ways. Some of my GMU colleagues and I have joked that Singapore should franchise it's government to a lot of countries the way McDonald's franchises it's operating model. It would be great if we could do this but it's hard to avoid the norms of democracy especially when, as I note in 10% Less Democracy, some degree of democracy is really important to have. So Charter Cities being in tension with democracy, that's the real problem we have in making Charter Cities durable. I think the solution is to have moderate Charter Cities. Countries where, say, Singaporean law or Japanese law or South Korean law is the default but the local voters can overrule it with a two-thirds vote. Something like that might be much more durable than a full charter city solution. Starting with the default of some rich country's rules but let the local voters overturn it piece by piece and build that change into the original set of rules so that people don't feel like this is out of their control. Tobi: I'm going to ask you a very specific question. So, say, I win the election in Nigeria and I ask you 'hey, Garett, my country is going to be 300 million people in 2050, what are the policies that we can embark upon right now that can get us to a middle-income country over that time period', what would be your advice?Garett: I think my biggest piece of advice would be: find a way to become a credible, attractive place for massive amounts of high-skill immigration. How do I get five million people from China, a million and [a] half people from South Korea, two million people from America to move to Nigeria? Some of those folks will, perhaps, be people of Nigerian descent, people whose ancestors are Nigerian and who want to come back. Some of those folks will be folks who just saw that there is going to be some great tax deals, some great tax incentives to move back. I think people are policy and becoming an attractive place for high-skilled immigration like Singapore is a great way to make your country richer.Tobi: Thank you very much. I've been speaking with Economist Garett Jones and it's wonderful to have you Garett.Garett: It's been great talking with you, Tobi. This is a public episode. Get access to private episodes at www.ideasuntrapped.com/subscribe

Discussing how the Covid-19 pandemic could potentially change city living in urban areas around the world and in particular for the residents of Paris; Vincent was joined by Simon Kuper, author and journalist with the Financial Times. Garett Jones, Associate Professor of Economics and Professor for the Study of Capitalism at George Mason University & author of ‘10% Less Democracy: Why You Should Trust Elites a Little More and the Masses a Little Less’ joined Vincent to discuss the idea that the richest, most democratic nations, would be better off if they slightly reduced accountability to the voting public, and in effect turned up the dial on elite influence. Finally, Vincent was joined by Kieran Maguire from priceoffootball.com and Lecturer in Football Finance at the University of Liverpool to discuss the obstacles involved in getting the English Premier League and Championship up and running again, and look at the possible financial cost it could have on clubs in the lower leagues as well as in the top flight. Taking Stock is brought to you in association with PwC Ireland. Listen and subscribe to Taking Stock with Vincent Wall on Apple Podcasts, Google Podcasts and Spotify.      Download, listen and subscribe on the Newstalk App.     You can also listen to Newstalk live on newstalk.com or on Alexa, by adding the Newstalk skill and asking: 'Alexa, play Newstalk'.

In this week's Political Economy, Garett Jones discusses his new book, 10% Less Democracy, and explains how more policymaking should be entrusted to independent experts rather than voters. The post https://www.aei.org/multimedia/garett-jones-the-case-for-10-percent-less-democracy/ (Garett Jones: The case for ‘10 percent less democracy') appeared first on https://www.aei.org (American Enterprise Institute - AEI).

Garett Jones returns to the podcast to discuss his book, 10% Less Democracy: Why You Should Trust Elites a Little More and the Masses a Little Less. During the 2016 presidential election, both Donald Trump and Bernie Sanders argued that elites were hurting the economy. But, drawing together evidence and theory from across economics, political science, and even finance, Garett Jones says otherwise. In 10% Less Democracy, he makes the case that the richest, most democratic nations would be better off if they slightly reduced accountability to the voting public, turning up the dial on elite influence. To do this, Jones builds on three foundational lines of evidence in areas where he has personal experience. First, as a former staffer in the U.S. Senate, he saw how senators voted differently as elections grew closer. Second, as a macroeconomist, Jones knows the merits of “independent” central banks, which sit apart from the political process and are controlled by powerful insiders. The consensus of the field is that this detached, technocratic approach has worked far better than more political and democratic banking systems. Third, his previous research on the effects of cognitive skills on political, social, and economic systems revealed many ways in which well-informed voters improve government. Discerning repeated patterns, Jones draws out practical suggestions for fine-tuning, focusing on the length of political terms, the independence of government agencies, the weight that voting systems give to the more-educated, and the value of listening more closely to a group of farsighted stakeholders with real skin in the game—a nation’s sovereign bondholders. Accessible to political news junkies while firmly rooted and rigorous, 10% Less Democracy will fuel the national conversation about what optimal government looks like.

Do politicians behave worse when they’re up for re-election? How effective and accountable can non-elected policymakers be? And has the government’s response to COVID-19 bolstered or weakened the case for democracy? I explore these questions, and many more, with Garett Jones. Garett is an associate professor of economics and the BB&T Professor for the Study […]Join the conversation and comment on this podcast episode: https://ricochet.com/podcast/political-economy-james-pethokoukis/garett-jones-the-case-for-10-percent-less-democracy/.Now become a Ricochet member for only $5.00 a month! Join and see what you’ve been missing: https://ricochet.com/membership/.Subscribe to Political Economy with James Pethokoukis in Apple Podcasts (and leave a 5-star review, please!), or by RSS feed. For all our podcasts in one place, subscribe to the Ricochet Audio Network Superfeed in Apple Podcasts or by RSS feed.

Garett Jones returns to the podcast to discuss his book, 10% Less Democracy: Why You Should Trust Elites a Little More and the Masses a Little Less. During the 2016 presidential election, both Donald Trump and Bernie Sanders argued that elites were hurting the economy. But, drawing together evidence and theory from across economics, political science, and even finance, Garett Jones says otherwise. In 10% Less Democracy, he makes the case that the richest, most democratic nations would be better off if they slightly reduced accountability to the voting public, turning up the dial on elite influence. To do this, Jones builds on three foundational lines of evidence in areas where he has personal experience. First, as a former staffer in the U.S. Senate, he saw how senators voted differently as elections grew closer. Second, as a macroeconomist, Jones knows the merits of "independent" central banks, which sit apart from the political process and are controlled by powerful insiders. The consensus of the field is that this detached, technocratic approach has worked far better than more political and democratic banking systems. Third, his previous research on the effects of cognitive skills on political, social, and economic systems revealed many ways in which well-informed voters improve government. Discerning repeated patterns, Jones draws out practical suggestions for fine-tuning, focusing on the length of political terms, the independence of government agencies, the weight that voting systems give to the more-educated, and the value of listening more closely to a group of farsighted stakeholders with real skin in the game—a nation's sovereign bondholders. Accessible to political news junkies while firmly rooted and rigorous, 10% Less Democracy will fuel the national conversation about what optimal government looks like.

Why is Garett Jones willing to write books about risky topics like the case for reducing democratic accountability? Is it the iconoclastic Mason econ culture? Supportive colleagues like Tyler? Those help, but what ultimately gives Garett peace of mind is that he’ll never have to go hungry because he has a broad and deep knowledge of econometric tools. It’s a skillset he recommends to all research economists precisely so they can take bigger risks in their careers—or at least be well-prepared to shape policy in an unelected position at a central bank.  Garett joined Tyler to discuss his book 10% Less Democracy, including why America shouldn’t be run by bondholders, what single reform would most effectively achieve more limited democracy, how markets shape cognitive skills, the three important P’s of the repeated prisoner’s dilemma, why French cuisine is still underrated, Buchanan vs. Tullock, Larry David vs. Seinfeld, the biggest mistake in Twitter macroeconomics, the biggest challenges facing the Mormon church, what studying to be a sommelier taught him about economics, the Garett Jones vision of America, and more. Follow us on Twitter and IG: @cowenconvos Email: cowenconvos@mercatus.gmu.edu Follow Garett on Twitter Follow Tyler on Twitter Facebook Newsletter

Fresh from Washington, former International Trade Secretary, Liam Fox brings an update on the state of the UK’s trade negotiations with the United States and tells Christopher Hope why the EU’s trading model is flawed.Also joining Chopper in the Red Lion pub: economist and author, Garett Jones reveals what democracy has in common with spaghetti, and West Midlands Mayor, Andy Street on his attempt to make Conservative history.Listen to The Briefing at www.playpodca.st/thebriefing | or ask your smart speaker for “The Telegraph Briefing”.Get 30 days' free access to The Telegraph: https://telegraph.co.uk/chopper |Email: choppersbrexitpodcast@telegraph.co.ukTwitter: @chopperspodcast

Author Garett Jones returns to the program to discuss his new book "Ten Percent Less Democracy." Stick around for Jones' take on "Open Borders" the latest book from our recent guest, Bryan Caplan. Co-hosted by Josiah Neeley of R Street Institute and Doug McCullough of Lone Star Policy Institute. Produced by Braden McCullough.

------------------Support the channel------------ Patreon: https://www.patreon.com/thedissenter PayPal: paypal.me/thedissenter ------------------Follow me on--------------------- Facebook: https://www.facebook.com/thedissenteryt/ Twitter: https://twitter.com/TheDissenterYT Dr. Garett Jones is Associate Professor of Economics and BB&T Professor for the Study of Capitalism at the Mercatus Center, at George Mason University. His research interests include macroeconomics, monetary economics, and the microfoundations of economic growth. His work has appeared in journals such as the Journal of Monetary Economics, the Journal of Economic Growth, and Critical Review. His first book, published in 2015 by Stanford University Press, is entitled Hive Mind: How Your Nation's IQ Matters So Much More Than Your Own. In this episode, we focus on Dr. Jones' book, Hive Mind. Topics include: the individual and collective benefits of higher national IQs; how IQ correlates with emotional and social skills; its effects in the political realm; how it relates to current immigration issues; and possible solutions to improve IQ in the countries that lack it the most. Time Links: 01:04 Why your nation's IQ matter 04:29 Benefits at the collective level 05:57 Individual IQ is not as important 08:25 Benefits for people on the low-end of the IQ scale 12:25 Other tests to evaluate academic skills 15:38 IQ correlates with emotional and social skills 18:40 More than genetics 20:56 IQ effects on politics 29:28 How are average national IQs relevant to immigration policy? 42:29 Possible solutions to improve IQ in the least resourceful nations 46:16 Where to follow Dr. Jones' work -- Follow Dr. Jones's work: Faculty page: https://economics.gmu.edu/people/gjonesb Hive Mind: https://tinyurl.com/y9w2rdea Twitter handle: @GarettJones -- A HUGE THANK YOU TO MY PATRONS: KARIN LIETZCKE, ANN BLANCHETTE, JUNOS, SCIMED, PER HELGE HAAKSTD LARSEN, LAU GUERREIRO, RUI BELEZA, MIGUEL ESTRADA, ANTÓNIO CUNHA, CHANTEL GELINAS, JIM FRANK, JERRY MULLER, FRANCIS FORD, AND HANS FREDRIK SUNDE! I also leave you with the link to a recent montage video I did with the interviews I have released until the end of June 2018: https://youtu.be/efdb18WdZUo And check out my playlists on: PSYCHOLOGY: https://tinyurl.com/ybalf8km PHILOSOPHY: https://tinyurl.com/yb6a7d3p ANTHROPOLOGY: https://tinyurl.com/y8b42r7g

Interview of Garett Jones, author of Hive Mind: How Your Nation’s IQ Matters So Much More Than Your Own. https://www.amazon.com/dp/B015PS7DBK/

Garett Jones returns to the podcast to discuss the issue of ethnic diversity. There is a wide body of research showing that ethnic diversity can reduce the productivity of teams, firms, and even whole countries. Williams and O'Reilly (1996) review dozens of studies showing that ethnic diversity has a negative impact on group performance. In the two decades since, more research has reinforced that result. Alesina and La Ferrara (2005) find that increasing ethnic diversity from 0 (only one ethnic group) to 1 (each individual is a different ethnicity) would reduce a country's annual growth by 2 percent. Multiple studies (La Porta et al., 1999; Alesina et al., 2003; Habyarimana et al., 2007) have shown that ethnic diversity negatively affects public good provision. Stazyk et al. (2012) find that ethnic diversity reduces job satisfaction among government workers. Parrotta et al. (2014a) find that ethnic diversity is significantly and negatively correlated with firm productivity. This may seem strange to you. If you're like me, you probably enjoy diversity. You probably don't observe the problems of low morale and high marginal costs that researchers have found in ethnically diverse workplaces. If that's the case then you, like me, live in a bubble. An apparent exception to the rule that ethnic diversity lowers productivity comes in high-human-capital groups. I say "apparent" because there hasn't been much in the way of direct study of this particular issue. However, some results are suggestive. For instance, the same researchers who found that ethnic diversity reduces firm productivity in general found that it increases firms' level of innovation as measured by patents (Parrotta et al., 2014b). Most of the people I know fall into this category of highly skilled, highly educated individuals, so it shouldn't be surprising that my experience (and maybe yours) is not the norm. Given that diversity is so costly for organizations, there is a huge industry dedicated to diversity training to mitigate these effects. However, a recent issue of the Harvard Business Review argues that diversity training seems to be a general failure. To the extent that diversity is a plus for firm profitability, firms will tend to seize this opportunity without the need for legal intervention. And indeed, there are some types of diversity that seem to have positive impacts on firm profit. For instance, a recent study by Alesina, Harnoss, and Rapoport (2016) indicates that birthplace diversity improves productivity. This is different from (and in this sample, uncorrelated with) ethnic diversity. People might all share the same ethnicity, but the evidence indicates that if they come from different places they tend to have complimentary skills that make them better at working together. As Garett points out, this is roughly the plot of every movie and TV show ever made by Joss Whedon. The causes of all these effects have been studied by experimental economists. (For an overview of the history of experimental economics, listen to my interview with Erik Kimbrough.) One way to test this is to look at how ethnically diverse groups play various games. In a study looking at the different ethnicities in Israel, Fershtman and Gneezy (2001) found that people did not discriminate against Sephardic Jews in the dictator game but they did discriminate in the trust game, indicating that discrimination was driven by a (mistaken) lack of trust in the minority ethnicity. Surprisingly, even members of the minority tended to discriminate in this way. Glaeser et al. (2000) found that pairs are less trustworthy when they have different ethnicities or nationalities. The really shocking thing about this is that this study was performed on Harvard undergraduates, who we might think of as the people least likely to discriminate in this way. Easterly, Ritzen, and Woolcock (2006) show that ethnolinguistic fractionalization has a negative impact on the rule of law: The basic story that Easterly, Ritzen, and Woolcock tell is that ethnic conflict makes it difficult to achieve a consensus on how the government should be run, thus leading to worse government. Works Cited Alesina, A., Devleeschauwer, A., Easterly, W., Kurlat, S., & Wacziarg, R. (2003). Fractionalization. Journal of Economic growth, 8(2), 155-194. Alesina, A., & Ferrara, E. L. (2005). Ethnic diversity and economic performance. Journal of economic literature, 43(3), 762-800. Alesina, A., Harnoss, J., & Rapoport, H. (2016). Birthplace diversity and economic prosperity. Journal of Economic Growth, 21(2), 101-138. Easterly, W., Ritzen, J., & Woolcock, M. (2006). Social cohesion, institutions, and growth. Economics & Politics, 18(2), 103-120. Fershtman, C., & Gneezy, U. (2001). Discrimination in a segmented society: An experimental approach. Quarterly Journal of Economics, 351-377. Glaeser, E. L., Laibson, D. I., Scheinkman, J. A., & Soutter, C. L. (2000). Measuring trust. Quarterly Journal of Economics, 811-846. Habyarimana, J., Humphreys, M., Posner, D. N., & Weinstein, J. M. (2007). Why does ethnic diversity undermine public goods provision?. American Political Science Review, 101(04), 709-725. La Porta, R., Lopez-de-Silanes, F., Shleifer, A., & Vishny, R. (1999). The quality of government. Journal of Law, Economics, and organization, 15(1), 222-279. Parrotta, P., Pozzoli, D., & Pytlikova, M. (2014a). Labor diversity and firm productivity. European Economic Review, 66, 144-179. Parrotta, P., Pozzoli, D., & Pytlikova, M. (2014b). The nexus between labor diversity and firm’s innovation. Journal of Population Economics, 27(2), 303-364. Stazyk, E. C., Davis, R., & Liang, J. (2012). Examining the Links between Workforce Diversity, Organizational Goal Clarity, and Job Satisfaction. In APSA 2012 Annual Meeting Paper. Williams, K. Y., & O’Reilly III, C. A. (1998). A review of 40 years of research. Res Organ Behav, 20, 77-140. Other Links: Pseudoerasmus on Hive Mind. Sam Bowman on Brexit. Tyler Cowen on backlash against immigration. Slate on the original "welfare queen." A smart solution to the diversity dilemma.

Garett Jones is Associate Professor of Economics and BB&T Professor for the Study of Capitalism at the Mercatus Center, George Mason University. His book, Hive Mind: How Your Nation's IQ Matters so Much More than Your Own is the subject of this episode. The book deals with an empirical puzzle: IQ is a weak predictor for earnings. We all know high-IQ people who live paycheque to paycheque, and lower IQ people who succeed brilliantly. And yet, when we look at the relationship between nations' average IQ scores and their incomes, the relationship is strong. Nations with the highest average IQ scores are eight times wealthier than nations with the lowest IQ scores. How can we resolve this apparent contradiction? Garett documents five main channels for the spillover effects of IQ: 1. Smarter people are more patient, they save more and build up more capital. When economists test people's patience, high-IQ people tend to be more willing to wait for a larger amount of money in the future rather than taking a smaller sum now. This is important at the national level because savings tend to stay within a country* and fund investments within that country. That means living in a higher IQ nation generally means having more capital available to compliment your labour. 2. Smarter groups are more cooperative. Economists use the iterated prisoner's dilemma as an idealized scenario where cooperation is at odds with people's individual, short-term incentives. Jones looked at the many times economists have studied this in experiments and correlated the cooperation rate in these experiments with the SAT scores of the schools the study participants were drawn from. He found that higher SAT schools produced more cooperation in the iterated prisoner's dilemma. In later research, Al-Ubaydli, Jones, and Weel (2014) found that higher IQ groups were more cooperative, but higher IQ individuals were not. A high-IQ person in a low-IQ group would not foolishly cooperate when everyone else was defecting, but high-IQ groups could coordinate on a cooperative solution despite not knowing that they were in a high-IQ group. 3. Smarter people are more informed voters and are more likely to support market-oriented policies. Caplan and Miller (2010) document the tendency for high-IQ people to think like economists. 4. Smarter groups make more productive team members. Jones uses "O-ring" technologies (drawing on an idea from Kremer (1993)), in reference to the fatal part that cause the Challenger disaster, to show how high-IQ workers can be indispensable in many sectors of a modern economy. While many economic models assume substitutability between high- and low-skilled labour (e.g. three low-skilled workers can do the work of one high-skilled worker), O-ring sectors don't have this feature. When one mistake can completely destroy a project, low-skilled workers can have effectively negative marginal products. 5. Peer effects cause those with high-IQ peers take on the behaviours of high-IQ people, implying that low-IQ people in high-IQ countries will be more patient, cooperative, informed, and productive than low-IQ people in low-IQ countries. It's well documented in the social science literature that people take on the behaviours of their peers. This effectively multiplies the positive effects of the first four channels by making low-IQ people behave like high-IQ people. Jones sees a virtuous cycle between IQ and development. Higher IQs lead to better economic outcomes, and better economic outcomes lead to better health outcomes and higher IQs. But despite the great importance of this subject, people have been extremely reluctant to research differences in IQ between groups for fear of finding an unpalatable result. One of Jones' aims in writing this book is to make it more acceptable for people to do research in this area. We also discuss Jones' recent debate with Bryan Caplan on the subject of open borders. Jones' work on IQ spillover effects give us reason to use caution in supporting open borders.   *This is actually another economic "paradox" that economists don't fully understand. One would expect savings to be invested where they face the highest returns, regardless of national boundaries, but that seems not to be the case. REFRENCES Al-Ubaydli, O., Jones, G., & Weel, J. (2014). Average player traits as predictors of cooperation in a repeated prisoner's dilemma. Caplan, B., & Miller, S. C. (2010). Intelligence makes people think like economists: Evidence from the General Social Survey. Intelligence, 38(6), 636-647. Jones, G. (2008). Are smarter groups more cooperative? Evidence from prisoner's dilemma experiments, 1959–2003. Journal of Economic Behavior & Organization, 68(3), 489-497. Kremer, M. (1993). The O-ring theory of economic development. The Quarterly Journal of Economics, 551-575.

Garett Jones of George Mason University talks with EconTalk host Russ Roberts about the ideas of Irving Fisher on debt and deflation. In a book, Booms and Depressions and in a 1933 Econometrica article, Fisher argued that debt-fueled investment booms lead to liquidation of assets at unexpectedly low prices followed by a contraction in the money supply which leads to deflation and a contraction in the real side of the economy--a recession or a depression. Jones then discusses the relevance of Fisher's theory for the current state of the economy in the aftermath of the financial crisis.

Garett Jones of George Mason University talks with EconTalk host Russ Roberts about the ideas of Irving Fisher on debt and deflation. In a book, Booms and Depressions and in a 1933 Econometrica article, Fisher argued that debt-fueled investment booms lead to liquidation of assets at unexpectedly low prices followed by a contraction in the money supply which leads to deflation and a contraction in the real side of the economy--a recession or a depression. Jones then discusses the relevance of Fisher's theory for the current state of the economy in the aftermath of the financial crisis.

Garett Jones of George Mason University talks with EconTalk host Russ Roberts about the ideas of Irving Fisher on debt and deflation. In a book, Booms and Depressions and in a 1933 Econometrica article, Fisher argued that debt-fueled investment booms lead to liquidation of assets at unexpectedly low prices followed by a contraction in the money supply which leads to deflation and a contraction in the real side of the economy--a recession or a depression. Jones then discusses the relevance of Fisher's theory for the current state of the economy in the aftermath of the financial crisis.

Garett Jones of George Mason University talks with EconTalk host Russ Roberts about the workers who were hired with money from the 2009 American Recovery and Re-investment Act--the stimulus package. Jones (with co-author Daniel Rothschild) recently completed two studies based on surveys and interviews with firms who received stimulus funds and workers who work at those firms. They found that 42% of workers hired had been unemployed. The remainder came from other jobs or from outside the labor force such as retirement or school. Is 42% a big number or a small number? Jones argues it is small and defends his conclusion. The conversation also includes a discussion of the labor market generally and why the stimulus spending may not have been effective.

Garett Jones of George Mason University talks with EconTalk host Russ Roberts about the workers who were hired with money from the 2009 American Recovery and Re-investment Act--the stimulus package. Jones (with co-author Daniel Rothschild) recently completed two studies based on surveys and interviews with firms who received stimulus funds and workers who work at those firms. They found that 42% of workers hired had been unemployed. The remainder came from other jobs or from outside the labor force such as retirement or school. Is 42% a big number or a small number? Jones argues it is small and defends his conclusion. The conversation also includes a discussion of the labor market generally and why the stimulus spending may not have been effective.

Garett Jones of George Mason University talks with EconTalk host Russ Roberts about the art of communicating economics via puzzles and short provocative insights. They discuss Jones's Twitter strategy of posting quotes and short puzzles to provoke thinking. Jones, drawing on his experience as a Senate staffer, discusses the interaction between politics and economics in the area of tax cuts and earmarks. For example, are earmarks good or bad? Jones gives an unconventional analysis. He also discusses the economics of the new workplace and why that might mean a different path for productivity over the business cycle than in the past.

Garett Jones of George Mason University talks with EconTalk host Russ Roberts about the art of communicating economics via puzzles and short provocative insights. They discuss Jones's Twitter strategy of posting quotes and short puzzles to provoke thinking. Jones, drawing on his experience as a Senate staffer, discusses the interaction between politics and economics in the area of tax cuts and earmarks. For example, are earmarks good or bad? Jones gives an unconventional analysis. He also discusses the economics of the new workplace and why that might mean a different path for productivity over the business cycle than in the past.