An Economist’s Guide To Big Decisions - Russ Roberts

1. 0:00 – 0:29

   Intro

   1. RRRuss Roberts0:00

      These decisions about whether to marry, who to marry, whether to have children, where to live, career, what kind of a friend to be, these are decisions that capture who we are. They're much more than just the sum of everyday pleasure and pain that accumulate through the course of living. And if I only take that perspective, I'm gonna miss out on the overarching things that I think matter, dignity, self-respect, living the way one should live, aspiring, becoming the person you want to become. I think if you only focus on the narrow pleasures and pains, you'll miss out on, on some of these bigger things.

2. 0:29 – 5:35

   How Economists Make Decisions

   1. RRRuss Roberts0:29

      (wind blows)

   2. CWChris Williamson0:29

      As an economist, how do they typically assess decision-making in humans? What's the framework that an economist looks at decisions through?

   3. RRRuss Roberts0:40

      Well, the framework is one that I've often advocated for in my youth when I was less wise, I suppose. But this, it's a pretty, uh, standard framework and it makes a lot of sense. It's that you have a finite amount of money, you have a finite amount of time, and you have infinite wants. You have all the stuff that you enjoy and you'd like more of everything, but you can't have all you want. Can't always get what you want. And that's because you don't have an infinite amount of money. So the goal of life is to get the most out of it. And the way we do that is we, we balance off the pleasure we get from this good versus the pleasure we get from that good, and we pick how much we wanna consume of these goods and services based on our limited resources. And it's a formal maximization problem. It's a calculus problem. The goal is to accumulate as much pleasure as possible. And pleasure doesn't just mean, uh, days at the beach and, and gluttonous meals. It, it includes subtle satisfactions as well in the hands of a skilled economist. Uh, but the goal in life is to, is to be happy, where happiness can have some real texture to it, uh, if we're thoughtful about it.

   4. CWChris Williamson1:46

      You said that that was something you used when you were younger. Why has that framework been eroded over time?

   5. RRRuss Roberts1:54

      Uh, it has trouble dealing with some of the things that I've come to think are quite important. It struggles... And I, I should add as a footnote before I start that there are probably a handful of economists who wouldn't struggle to include these things. I'm talking about the average economist, uh, and the average person who's, who's drunk the economist Kool-Aid and has, uh, used these techniques for, for their, for their own lives. Let's talk about what's missing from that. One of the things that's missing is other people. Now, in my earlier work as a scholarly academic, uh, I tried to build models of charity. And obviously, there are parts of charitable giving where you get pleasure from it and that fits very nicely into the economist toolkit. Uh, it, it implies things like, uh, if you make charity tax-deductible, if it... and it wasn't before, people will give more because you've lowered the price of giving money to someone else. It's a bit sterile, right? It's a bit sterile, but it can be fitted to the framework. But what about my wife? How should I think about my wife's happiness? Is my wife's happiness something that makes me happy? If I am kind to her, is that... do I do that because I enjoy being nice to her because then she'll be nice to me? Is it all about keeping score, which is sort of the economist's framework? And I'd suggest it's not. Um, a life well-lived, a marriage well-executed and, and lived is not about keeping score. Shouldn't be thinking about what's in it for me all the time. The economist model is, what's in it for me? And you can broaden it to say, "Well, one of the things that's in it for me is what's in it for you makes me happy." But again, I think that's kind of a little bit sterile. Doesn't really capture the full way we think about... most of us think about being nice to other people. And how about decisions that my wife and I make together? Um, how do I think about my happiness, her happiness, the morality of it? Do we take turns? (laughs) Um, that's not the right way most people live. Uh, and most importantly, most of the things that really bring deep and abiding satisfaction, as opposed to momentary pleasure, most of the things that bring us deep and abiding satisfaction don't fit so well into the model. Dignity, sense of self, autonomy, mattering, that people think and respect you, th- these are things that you can cram them into the economist toolkit, but not very easily. And one of the reasons is that they overlay the entire experience of life, I argue in the... in my book. They're, they're... they give texture to everyday life in a... Th- that's very different from the texture of, "Well, that was a good ice cream cone. Should I have a second one? Well, they're $5.85 a piece. No, I won't." Well, that's a rational economics decision, but the deep, deeper questions of, you know, moral dilemmas, what should I do with my life? Should I get married? Should I have children? These don't fit into the economist toolkit. It's not all about cost-benefit analysis on a day-to-day basis. And so that's where I've kind of, uh, parted company in some sense. I think most economists would recognize whether... I don't wanna be a... create a straw person that, you know, "Economists would say..." There are some, but economists would say, "Uh, you should maximize your satisfaction from your marriage and that means if you can get away without taking out the garbage or doing the dishes or you can watch the movie you want and for certain..." Eh, there are economists who do that. Most economists know that, that economics has some limitations in what it applies to. Um, and so then the question is, what's left? What, what do we do for rational decisions in these tough areas? So that's, that's kind of the starting point for, for my book.

3. 5:35 – 17:45

   Learning Happiness

   1. RRRuss Roberts5:35

   2. CWChris Williamson5:35

      Evolutionary psychology would say the reason that you want to be selfless to other people is for ultimately selfish ends, reciprocal altruism.

   3. RRRuss Roberts5:42

      Correct.

   4. CWChris Williamson5:42

      You would be pushing your own genetic fitness. They will owe you. I learned this amazing insight, which you may be familiar with or may not, about why we feel sympathy for people. So sympathy is investment advice. The reason being that someone that is unbelievably down on their luck will be disproportionately appreciative of even the smallest amount of investment that you give to them. The reason why your heartstrings are pulled when you see a homeless guy in the street who has no shoes and two pence to his name because you know that two pence to him would be so much, whereas two pence to the millionaire down the road would not. And-... it is one of the tensions that I think we'll probably talk about is this difference between knowing yourself, knowing the world, understanding the principles that things are based upon, and then transcending them. Like, uh, realizing that the principles and the artistry of life kind of have to flow together in a way where if you look at them through too much of a utilitarian rationalistic perspective, where you've got an expected value, uh, outcome proposition on the other side of it, you end up removing the joy of the decision itself. Because I think integrity and a sense of, uh, faith in your own character comes about from making decisions beyond simply a rational framework that you go through. It's something that's emergent. It applies, it, it, it comes out of you because you wanted to do it, because you have imbibed the right principles that turn you into the sort of person you want to be, as opposed to your desires clashing up against some external framework that you always needs to be funneled down.

   5. RRRuss Roberts7:20

      I, I, I would say a little differently. I, I, I would say that happiness is one of those things that's best pursued in a roundabout way, right? If you're gonna have a vacation and you say, "Well, I gotta get the most out of my vacation," or, um, "What am I gonna do not to make myself really happy?" And of course, some of those things you have to discover, and they're not things you're gonna plan. That's the part that you're saying that I agree with very much, this idea of emergence. Um, it- it's, it's the irony that some goals are best achieved by not thinking about the goals. And the, the other part, though, is that economists, because of their ... if they're not careful (laughs) because of their, their, um, commitment to the model, the model is only an idea for trying to understand the complexity of human life. But if you take it a little too seriously, you can put yourself in the following situation. It's an example. It's not in the book. Um, but I think it illustrates it nicely. So you invite me over for dinner, and I think, "You know, that was really nice of Chris to have us. Let ... We should, we should bring something." Uh, now you might ask the question of why we would even think of doing that, right? You're b- you're having us over for dinner. Why would I, why would I think of bringing something? I mean, you're giving me a gift. I, this, in a way, negates the gift. But there's this cultural norm. Okay. So I, my wife says, "Let's bring a bottle of wine," and I think, you know, I think we're having ... it's dinner. It'll probably be s- red wine will probably be appropriate. So she suggests a bottle of red wine, and I, being the foolish economist, say, "You know, you might not like wine as much as we do. And instead of bringing the bottle of wine, I think he's prob- ... I'm sure he's got wine prepared for the dinner. He's not counting on us. Let's just bring him a $20 bill. So that way, he can get the most out of it, because the $20 bill can buy the $20 ... let's say it's a $20 bottle of wine. He can buy a $20 bottle of wine with if he wants. But if he likes something more than the $20 bill ... than the wine," excuse me, "if he likes something more than the wine, he could buy that instead. So to give him the, the wine is inefficient. We could produce more happiness for the world by giving him the $20 bill." And most wives, unless they've been married to economists for a long time, go, "What the heck are you talking about? What's wro- ... Aren't you a human being? There's a norm that you don't bring money to somebody's house." And I'll say as the stupid economist, "Yeah, but the wine is like money. Even if I do bring the wine, I'm still paying him back something. So at least let's pay him back with something he can, it'll get the most out of." But most people would go like, "Well, that's stupid. Why would you do that? 'Cause it, it's not gracious." So you might ask a deeper question. "Why isn't it gracious? What's the economist missing there?" And, and one ... Uh, we could talk about that for the whole rest of the time, but one of the things the economist is missing is that there's certain expectations that have been set up for social experience. You know, it'd be like me saying, "Well, you know, I ... in my experience at dinner parties, they work best when people take turns talking, and nobody really talks more than, say, 53% of the time. So I just kinda let you know that while you're talking at dinner, I'll be keeping a, a stopwatch to make sure that you don't take more than your fair share. And, and because I'm a good person, I'll be doing that for myself as well." (laughs) Uh, th- these are bad ideas, but they're the reductio ad absurdum of where you end up if you take too seriously this notion of getting the most out of every opportunity. And the economist toolkit's quite useful in many settings. I think in the kind of settings we're talking about, it leads to, um, social faux pas.

   6. CWChris Williamson11:00

      And then scaling these problems up to the bigger ones about where to live, about whether or not to marry, how many children to have, how self-centered to be, these are what you've termed as wild problems, which have bigger externalities and last for longer and are more serious. But they kind of run along similar lines that trying to do the expected value calculator for them is going to end up in a, a challenging place.

   7. RRRuss Roberts11:26

      I give a lot of examples of why that's the case, you know. Uh, but to take your first point, the subtitle of the book is A Guide to The Decisions That Define Us. These decisions about whether to marry, who to marry, whether to have children, where to live, career, what kind of a friend to be, these are decisions that capture who we are. They're much more than just the sum of everyday pleasure and pain that I accumulate through the course of living. And if I only take that perspective, I'm gonna miss out on the, the overarching things I mentioned earlier that I think matter, dignity, self-respect, um, a feeling of, of, of being, living the way one should live, aspiring, becoming the person you want to become. I think if you only focus on the narrow pleasures and pains the way the economist toolkit tends, really pushes you, you'll miss out on, on some of these bigger things. But of course, the other point is, is that ...... can't really do a rational calculation on becoming a parent when you realize that becoming a parent changes what you care about. So who should you take into account? The you before you have kids or the you after you have kids? And so that's, um, that's another piece of it.

   8. CWChris Williamson12:31

      What should people rely on if they're not using more data in that case? What- what else is there?

   9. RRRuss Roberts12:39

      S- so I s- Th- you know, the narrow definition I give of these wow problems, so these are problems where it's not just you can't do a cost-benefit analysis, uh, you don't have the kind of information you need to make a rational decision. You can't really imagine remotely what it's like to be a parent or a- a spouse. A little bit with a spouse, but a parent, you really can't. Uh, what it's like to live in a foreign country, uh, what it's like to live an ethical life. These are things that you learn about as you experience them. You make, uh, sacrifices, for example, of day-to-day pleasure and get something else. Uh, so now what? You know, that's- that's great. Okay, so you've ruined my day. You know, you- I can't make a rational decision. I don't- I can't use an algorithm. I don't have an app on my phone. Uh, what do I do? And the an- you know, I suggest that since these are the decisions that define us, you might wanna think about who you want to be, you know. If they define who you are, y- to answer that question, you have to think about who you wanna be. To figure out who you wanna be, you have to give some thought to what you care about and what you might care about if you were different, what you might care about if you grew, what you might care about if you reach beyond who you are now to be something maybe better, greater. Could be more ambitious, but it could be more ethical. It could be more meaningful or more purposeful. It could be you accomplish something you would otherwise neglect or miss if you focused on the- only on the day-to-day. Uh, in the book, I- I spent, I think, a whole paragraph (laughs) only a paragraph, on the different ways that you might explore those questions. Obviously, uh, many, many books of many, many volumes have been written on who you might want to become. The standard roots for getting there, the paragraph version is, well, you could go into therapy because you have trouble actually seeing who you are. You could try religion, which forces you to transcend yourself. You could meditate, which although it seems self-centered, I think often leads us to s- be able to stand outside ourselves and observe what, uh, triggers us, pushes us. Uh, and you can read great literature, which I think helps us understand the human heart. So those are the routes to go, but my book's not about that. The question then is, okay, so I have to give some thought to where I wanna go, but how do I cope with the fact that I can't use my tools? I can't use my cross-benefit analysis. I can't make my pro/con list. And so most, uh, second half of the book is- is trying to give people, uh, these various ideas for how to frame these decisions, you know, to- to recognize that there's no right decision. I- many people find that comforting. We're so obsessed. I gotta find not just the right decision, the best decision. I gotta find the best outcome. Gotta maximize, optimize. Where are the life hacks? Give me- give me the ten best ways to find a spouse, the ten best ways to decide whether to have a child. And they aren't there, so n- you have to think about what it would be like to live in a world where you're unmoored from the techniques and tools that you've become accustomed to using. And so some of the book is trying to give you, um, ease and- and solace over the what I think is a reality, that you will make many what are, will be called mistakes if you're not careful, but are actually just part of the natural process of living because you can't see the future. So why would you feel guilty that you couldn't make the best decision when you didn't have any data? I mean, that's not a mistake. (laughs) That's life.

   10. CWChris Williamson16:02

       I fell in love with a concept called Release the Tiller, which is from-

   11. RRRuss Roberts16:06

       Mm-hmm.

   12. CWChris Williamson16:06

       ... Jed, Jed McKenna, and the tiller is the thing that's attached to the rudder on the back of a boat. And his argument is that a lot of the time while people try to control their life, they grip the tiller harder and harder.

   13. RRRuss Roberts16:16

       (laughs)

   14. CWChris Williamson16:16

       Yeah. They- they- they grip it with fury, and he says that one of the best ways is to just release the tiller, to just allow yourself to have ease. And I ended up realizing a bunch of situations that people get themselves into, myself first and foremost, one of them being that the more that I try and apply cognitive horsepower to the decisions that I need to make, a lot of the time, the less effective the decisions are, the more painful they are to go through because-

   15. RRRuss Roberts16:43

       Mm-hmm.

   16. CWChris Williamson16:43

       ... I- I put all of the onus, uh, somewhere... It's kind of like the paradox of choice. If only, if only, if only I'd had a better model, more- more time, more whatever to do the thing. As opposed to realizing that every single person that's listening to this podcast right now, no matter what the challenges are that they came up against, the neuroses, the overthinking, the complete- the- the- the sleepless nights of not being able to believe that they could get through this thing. If they're listening to this podcast right now, by that fact, it means that they've got through whatever the challenges are. You have however many years or decades that you've been alive of proof that every single challenge that you thought would destroy you or take you to the- the edge of dis- destruction and despair has not managed to do it. Right? You have, you are the survival of all of those challenges, and yet because of negativity bias and loss aversion and all of that sort of stuff, we look to the future still with the same degree of fragility.

   17. RRRuss Roberts17:39

       Mm-hmm.

   18. CWChris Williamson17:39

       And I think that, uh, I- I think that the fact that we've got through all of that is super important. Uh,

4. 17:45 – 25:56

   The Story of Darwin’s Marriage

   1. CWChris Williamson17:45

      you used as a- an illustrative example one of my favorite stories from history, which is Darwin's marriage and how he-

   2. RRRuss Roberts17:53

      Mm-hmm.

   3. CWChris Williamson17:54

      ... how he went through that. And I've got a little description that I took out of the first book I ever learned about it in, which was The Moral Animal by Robert Wright from 1993.

   4. RRRuss Roberts18:02

      Hmm. Okay.

   5. CWChris Williamson18:02

      So in the decade of Darwin's marriage, the 1830s, the number of British couples filing for divorce averaged four per year.

   6. RRRuss Roberts18:13

      (laughs)

   7. CWChris Williamson18:15

      (laughs) Uh, so Darwin-

   8. RRRuss Roberts18:19

      That's not- that's not in thousands. That's just four.

   9. CWChris Williamson18:21

      Four.

   10. RRRuss Roberts18:21

       (laughs)

   11. CWChris Williamson18:22

       Four. I mean, the population will be a bit lower, but it's not... It's the-

   12. RRRuss Roberts18:26

       Yeah.

   13. CWChris Williamson18:26

       Marriage is significantly lower than the population is low. So, uh, Darwin, the, uh, ever the rationalist and the self-assessor, he was a- a man that seemed to be quite, um, troubled with, uh, his own motivations. I think he- his degree of analysis and attention and assessment of other creatures also got turned inward on himself too. Uh, and he journaled, he journaled very frequently. So it meant that he has this journal, which we now have access to, and he is trying to make this decision about whether to marry or not. The document has two columns, one labeled marry, one labeled not marry, and above them circled are the words, "This is the question." On the pro-marriage side of the equation were, "Children, if it please God, constant companion and friend in old age, who will feel interested in one, object to be beloved and played with." After reflection of an unknown length, he modified the foregoing sentence with, "Better than a dog anyhow."

   14. RRRuss Roberts19:17

       (laughs)

   15. CWChris Williamson19:17

       He continued, "Home and someone to take care of the house, charms of music and female chitchat, these things good for one's health, but terrible loss of time." Without warning, Darwin had from the pro-marriage column, swerved uncontrollably into major-

   16. RRRuss Roberts19:31

       (laughs)

   17. CWChris Williamson19:32

       ... anti-marriage factors, so major that he underlined it. This issue, the infringement of marriage on his time, especially his work time, was addressed at greater length in the appropriate not marry column. Not marrying, he wrote, would preserve freedom to go where one likes, choice of society, and little of it, conversation of clever men at clubs, not forced to visit relatives and to bend (laughs) in every trifle, to have the expense and anxiety of children, perhaps quarreling, loss of time, cannot read in the evening, fatness and idleness, anxiety and responsibility, less money for books, and if many children forced to gain one's bread. What an unbelievable example of somebody trying to use those frameworks-

   18. RRRuss Roberts20:18

       (laughs)

   19. CWChris Williamson20:18

       ... in order (laughs) to come up with a big life decision.

   20. RRRuss Roberts20:23

       Yeah. Uh, what- what I suggest... Uh, uh, first point, of course, as- as I argue, is that if you look at those two columns, it's pretty clear what the right choice is. Um, not enough time to read, do your work, and missing the clever ch- conversation in clubs with- with men, uh, and what do you get in return? Female chitchat and something that's better than a dog anyhow. It's thin soup. Uh, it's pretty clear that the right choice for Darwin is not to marry, and underlying, of course, all that loss of time, I think is his worry that he will not achieve his scientific legacy. Kafka, by the way, as- as I recount in the book, makes a similar list, and he decides not to marry, which is pretty rational on, based on his list. But Darwin, despite his list, marries, and at the end of- of having made those two columns, he then writes this stream of consciousness paragraph, which is basically, "Oh my God, I'll be alone in my old age, coming back to a dingy apartment. Marry, marry, marry." And he marries, and he marries, I think about six months later, marries his cousin. Uh, and he, um... I don't think she was planned as the person in the back of his mind. I think he just went out and found her. Uh, footnote, fascinating, um, she would read to him every night and he actually liked it. So even though he wasn't doing his own reading at night, he did get, uh, he did come to like the alternative that he was able to have through marriage. But the question is, what was he thinking there? I mean, in the calm, sober light of day, he tots up the costs and the benefits and it's pretty clear, marriage is a loser, but he marries anyway. And I think, you know, there's a lot of things you could say about that decision. You know, you could argue social norms kind of pushed him in that direction. I'm sure they did. But I like to think, and this is what- what I expanded on in the book, I like to think that he understood there was more at stake than the day-to-day pleasures of, and pains of- of married life. Um, there was meaning and there was satisfactions he could only imagine. And he really couldn't imagine because he had no access to them. He surely knew no one articulate about marriage who could explain it to him. He might've read a great novel, he could have read Jane Austen, and maybe if he did... I don't know if he read Austen, but and I think she'd already written Sen- Sensibility, say, or other books by that time, but he didn't really have... Who's gonna explain? And think about your own... for those of you out there who are married, how do you explain to someone what's good and bad about marriage? Uh, the bad's pretty clear. Most people, I think, could list what's bad about marriage. Like- like Darwin was worried about the downside. He had really no access to the upside. And the same would be true with children. From the outside, children looks like a pretty bad decision. I mean, really? All the expense and the time and the nuisance and they get sick and people being worried about this, they would die and- and they did. Um, it's hard. And yet most people have children. What... Is that- is that irrational or is there something else going on there? And I think the... Certainly the... Until you've had children, your access to the inner life of parenthood is limited. Uh, it's not for everybody. It's not like it's a day at the park. It's not. Uh, but it adds a texture to your life that is unattainable in other... very difficult to attain, I'd say, in other ways. It adds a meaningfulness and a purposiveness to life. And I think Darwin probably understood that somewhere, but they didn't write it down. Maybe not. I don't know.

   21. CWChris Williamson23:48

       How is that similar to the choice about whether or not to become a vampire?

   22. RRRuss Roberts23:52

       So the vampire idea comes from the philosopher L.A. Paul of Yale University in our book Transformative Experiences that I riff on in my book. Uh, you know, a vampire, if you talk to vampires, they're really happy. They like flitting about at night and drinking blood and sleeping in a coffin. And those... us mere mortals, we look at that and go like, "That sounds kind of creepy. I don't think I'd like that." And yet everyone, almost everyone, maybe, maybe all of them think it's-... great way to live, and they look back on their feeble and thin lives as humans with disgust and disdain. So now what do you do? Do you take the leap? If you do, there's no going back, right? And some decisions in life are literally like that. There's no going back. It's very hard to go back from being a parent. It's very hard to... it's costly to go back from being married. But you can go back and get a divorce. If you move to a place you turn out you don't like, you can go back. But Thomas Wolfe said, "You can't go home again," and he was, I think, onto something, right? It's easy to say you can go back, but it's actually quite emotionally complicated. Uh, many decisions in life, and we're talking about a handful of decisions, marriage, children, career, what kind of friend to be is a little bit different. But, um, any of these decisions, they have a, uh, irreversibility about them. They're a bit of a one-way leap. It's harder to leap back. You can sometimes, and you can do it sometimes at a cost. Uh, and I argue later that if, you know, if the cost is relatively small, you should do more leaping. Uh, you can go back, it's okay. Nothing to be ashamed of. I think a lot of times, there's a moral- this worry that, "Oh, I'll look foolish. I, uh, I changed my mind." Why is that (laughs) why is that embarrassing? It's not. It's okay. You know, it's like saying, "I bought a bad... I bought the wrong stereo" in the old days, or, "Well, I, I bought a bad car," or, "I picked a bad college," or whatever it is. And it's okay to transfer. It's okay, right? Nothing shameful there, but a lot of times, I think we're emotionally very... It's very awkward because we don't want to reveal to other people that, quote, "We made a mistake." And, uh, you know, I suggest in the book, it's okay. It's not a mistake really.

5. 25:56 – 33:55

   Anxiety Cost of ‘What Ifs’

   1. RRRuss Roberts25:56

   2. CWChris Williamson25:56

      There's a topic that I have fallen in love with called anxiety cost. So you'll be familiar with opportunity cost, right? Which is by doing a thing, you can't do another thing. Anxiety cost is the mental effort that is taken up considering the thing that you are yet to do, which could have been gotten rid of by simply doing the thing.

   3. RRRuss Roberts26:13

      (laughs)

   4. CWChris Williamson26:13

      So every morning when you wake up, your daily routine starts and you have to meditate and walk the dog and, and do whatever else it is that you do. And the longer that you wait during the day to do that, the more time you spend thinking about having to do it. Whereas had you have done it earlier, you reduce what I've termed anxiety cost.

   5. RRRuss Roberts26:29

      Nice.

   6. CWChris Williamson26:29

      Bro science economist over here. Uh-

   7. RRRuss Roberts26:31

      I love that.

   8. CWChris Williamson26:32

      What I realized with regards to the anxiety cost is that closing the loop, right, getting rid of that Zeigarnik effect wherever you can, is a good opportunity. On average, it seems like people that make decisions end up being happier. People enjoy just making decisions and having change. So if you are faced with two relatively similar options, especially one which is reversible, and moving... This is one that I've been playing with for a long time because I recently moved to America and I got this visa and it was a big thing, and I'm in a country on my own doing this podcast thing, and God knows how that's gonna go. And yet, I ended up going and doing it and I adored it. I, I adored the decision. I absolutely loved it. I know that you recently made the jump to, uh, go to Israel, I think.

   9. RRRuss Roberts27:17

      Yep. Yep.

   10. CWChris Williamson27:17

       Uh, and I, I... Everything is, everything's exciting and new, and if I wanna move back, and even if I'd messed up, even if I'd messed up and I came back with egg on my face, I genuinely think, getting back into the economist's thought process, that the discomfort of having to admit publicly that, "I, I, I made a go of this and it didn't work out," would be less painful than living with the anxiety cost of the what if, had I not done it.

   11. RRRuss Roberts27:48

       Uh, I don't totally agree with that. I like the anxiety cost idea. Uh, I think I would have been totally happy if I'd not moved to Israel and doing whatever... what I was doing before, which was very pleasant. Uh, it's true I would have had that what if, but I would have forgotten about it. I would have pushed it down and, and tried not to dwell on it 'cause it's, it's in the past. Um, you also move to a country where they speak, more or less, the same language. (laughs) Uh, Israel's a lot harder. They speak Hebrew here. There, there are a number of people who speak English, but, uh, cultural transition, I think, between the United States and Israel, uh, and England and the United States is, is trickier. Um, I took what you were saying differently, and tell me if I'm r- I got this wrong. I like this anxiety cost idea because it says, "You, you need surgery, and you can have it now or you can have it in, in six weeks. What do you want?"

   12. CWChris Williamson28:42

       Have it now.

   13. RRRuss Roberts28:42

       A lot of people would say, "Uh, I don't want it now. I'll do it in six weeks," and then you have six weeks of torment. Pull the Band-Aid off.

   14. CWChris Williamson28:49

       Yep.

   15. RRRuss Roberts28:49

       Do it now. Get it done now. It's true, you could die. That'd be a negative, and then you could have had the six weeks of life in between before the surgery. So there, there... it's a little bit, uh, more complicated. But the idea that procrastination is a, uh, a, a, a malaise, a, a, um, an unhealthy thing, and we justify it by saying, "Oh, I'll just get more information," or in the case of the surgery, "Maybe I'll recover before the surgery. I won't need it at all," right? We have all these stories we, we might tell ourselves to avoid short-term pain. Uh, I have a different trick. Uh, see what you think of this one. Uh, I believe, armchair psychologist, that pleasure remains much longer in our memories than pain. So if you go on a great vacation, you're gonna savor it. Uh, and you'll be able to enjoy it for years because you'll be able to look back on it and say, "Remember that? Oh, that was so much fun and we did this," and, and you have the photographs. Whereas the root canal, it's over. I don't think about it. I... You can say, "How bad was that root canal?" "Oh my gosh, it was horrible." I had a bad one. I've had good ones since, by the way, which I dreaded, but they turned out to be fine. I was wrong to dread them. But I shouldn't have dreaded them for the reason I'm saying now, which is like, really do, do, do you look back on it and say, "Oh, it was horrible"? No, you don't. You don't even think about it. Uh, and so get through it. Do it now. Do the painful thing now, and, and enjoy more of the pleasurable thing. Because the algorithm... You know, the, the I'll, I'll get more information about whether I really need the operation, that's a bad trick. That's a, that's a false trick. It's not good for you.... it's your brain playing a bad, (laughs) a bad life hack.

   16. CWChris Williamson30:31

       The opposite of the anxiety cost, which you can leverage to have more enjoyment in life, is the anticipation effect.

   17. RRRuss Roberts30:39

       There you go.

   18. CWChris Williamson30:39

       So, you ... Tim Ferriss does this and I, I love doing this as well, have holidays booked two years, three years in advance, right? Because a b- a big chunk of the enjoyment of the holiday, before you get the sand between your toes and the-

   19. RRRuss Roberts30:51

       Yeah.

   20. CWChris Williamson30:51

       ... the ... you got the cocktail that was blended not, not on the rocks-

   21. RRRuss Roberts30:53

       (laughs) .

   22. CWChris Williamson30:53

       ... and it's a bit hotter than you expected, is the anticipation of it. So you can reverse the anxiety cost with the anticipation effect. And what you just said there, I think, is an example of fading affect bias.

   23. RRRuss Roberts31:05

       Mm.

   24. CWChris Williamson31:05

       The goodness and badness of memories fade over time, but the badness fades faster.

   25. RRRuss Roberts31:09

       Yeah.

   26. CWChris Williamson31:09

       Some bad memories even become good memories, while good memories rarely become bad ones. It makes sense that both joy and pain fade with time. Stuff just feels less intense when it's farther away. But why does pain fade faster? It's because when bad stuff happens to us, our psychological immune systems turn on. We start to rationalize. "Why would I want to be with someone who doesn't want to be with me?" We downplay. "Breakups happen all the time in high school, it's no big deal." We distance. "I never liked her that much anyway." And we distract. "I'm gonna go and play video games." These mental processes function like emotional antibodies, taking the sting out of bad memories. We don't use them on good memories, so good memories keep their luster longer. Everything is temporary, bad stuff especially. Tragedy plus time equals comedy is the closest thing psychology has to a chemical equation.

   27. RRRuss Roberts31:55

       Who wrote that?

   28. CWChris Williamson31:56

       Adam Mastriani.

   29. RRRuss Roberts31:58

       In?

   30. CWChris Williamson31:59

       Substack.
6. 33:55 – 48:26

   How to Have a Life Well Lived

   1. RRRuss Roberts33:55

   2. CWChris Williamson33:55

      What about John Stuart Mill? What did you learn about a life well-lived from him?

   3. RRRuss Roberts34:00

      So, um, this comes from, uh, Dan Gilbert, the great, uh, Harvard psychologist. He and I don't agree about this, but I, I love the example, so I use it in the book. So Mill said, "It's better to be a philosopher unsatisfied than a pig satisfied." And that's a deep question. Is that true? Is that a true statement?

   4. CWChris Williamson34:24

      Is ignorance bliss?

   5. RRRuss Roberts34:25

      Yeah. Is the unexamined knife- life really not worth living? As a colleague of mine here at Shalem said once to me, "I don't know. I've known a lot of people with an unexamined life. They seem pretty happy." (laughs) In fact, you could argue the opposite, you know? Philosophers are kind of morbid and depressed and, and so on. Uh, and Dan Gilbert's insight, which I don't agree with but it's an interesting claim, is that, uh, Mill was wrong, he says. The only thing that matters is how much pleasure you have in life. And if you swim in a pool of placid water for 23 hours a day, and for one hour a day you step out of the pool and go like, "That's my whole life, all I'm doing is swimming. I should be ashamed of myself," it's okay. For an hour you're unhappy, but for 23 hours you're happy. And the 23 hours that you're happy, you're not thinking about the, the philosopher saying, "That's it. That's all there is to life." And for the one hour you're the philosopher, you're neglecting the pleasure you get from swimming so all you've got is, is how many hours there are. And if there's more hours of swimming than guilt, swim. I think that's wrong. I don't agree. I think, um, when you're in the pool, after a while some of the thrill is gone because you think, "This is my whole life is swimming, is just enjoying myself merely." And so I think there's a lot more to say about it, as I say in the book, but the, um... it's a very interesting way to think about framing how we think about where we want ourselves to be. Just wanna have fun. Nothing ... Can't really say anything wrong with that. Um, you know, is it really true that a more meaningful life is a better life? I don't know. P- people seem to think so. Uh, a lot of smart people seem to argue so.

   6. CWChris Williamson36:01

      A lot of signaling going on there.

   7. RRRuss Roberts36:02

      Pe- Yeah, uh, could be. Yeah, it's true. Hard to know, but it's worth thinking about.

   8. CWChris Williamson36:09

      I first heard this as, uh, posited as a, a debate between the two great Dans of psychology, Kahneman and Gilbert-

   9. RRRuss Roberts36:18

      Yeah.

   10. CWChris Williamson36:18

       ... because they stand on opposite sides of the fence with regards to this. I've come to believe that this is temperament dependent. I have some friends who-

   11. RRRuss Roberts36:26

       Yeah.

   12. CWChris Williamson36:26

       ... live in the now, who are much more hedonic than I am, who are much less introspective. They ruminate less, and they would be, I don't know whether they would be completely, but they would be more likely to be the person that's happy having the cocktail on the liilo in the pool, right?... for me, because of the amount of time that I tend to spend reflecting, introspecting, ruminating, I know that to me, a life well lived is one, which in retrospect, I'm glad that I lived. I very much am assessing, reassessing the things that I did, and then my current degree of self-worth is based off the back of that reflection. Whereas somebody else very much may be able to... and this is the question, right? Is ignorance bliss? Now you also get into something similar. I'm... Very interesting. I'm going to see Jordan Peterson tonight in Manchester. He's a good friend. The first time I ever saw him was five years ago in Manchester at the same venue, and someone asked him a question that... he, he used to take questions from Twitter. He does a Q&A at the end. He may- he still may do. And, um, someone asked him basically, "The depth of my consciousness causes me to suffer. Is ignorance bliss? I wish that I could regress back from this." And Jordan's answer basically was, "Once you have opened that box, once you have seen what is inside, you've peered into the red pill, you've begun to examine the life, there is no going back." And his argument was that the only way out is through. He used this analogy of taking more of the thing that poisons you until you turn it into a tonic that allows you to girdle the world around you. I mean, it's in, uh, typically apocalyptic Jordan Peterson-

   13. RRRuss Roberts37:56

       Yeah. And dramatic. (laughs)

   14. CWChris Williamson37:56

       ... patriarchal finger, finger-wagging tone, but I real- and I've, I've kept that with... That's a five-year-old w- two-minute monologue that I've kept with me, because it's a question I ask myself a lot about, you know, this sort of, "Bloody hell, would life not be simpler if it was just simpler?" Uh, and then on the reverse of that, you think, "Well, if you can learn to love the process of analysis, there is such deep pleasure that can be got from working out how things link together and knowing that there is a, a bit of a heavy weight to bear here." Like, I had to do a b- good bit of a lift to get myself around my own encumbered nature. And yet on the other side of it, it's so s- it's really, really satisfying. And I thought that, that linked in a little bit with Adam, Adam Smith's, uh, example.

   15. RRRuss Roberts38:39

       Yeah. Well, when you're talking about your friends who are a little more hedonistic than you are, I was thinking, "Oh yeah, they're... each one of them is as happy as a clam." An expression that we use. It's a very strange expression when you think about it. Can't imagine a clam is that happy, but I think what it means is, it's easy to please a clam, just pleasant, in water, you're good. (laughs) And, um, I don't know whe- whether it's because I'm a religious person or my cultural upbringing, but I kind of aspire to be more than a clam. And I think many do. Nothing wrong with, you know, not, not judging.

   16. CWChris Williamson39:18

       Calm life.

   17. RRRuss Roberts39:18

       Yeah. Clam life is great for clams. Uh, and cer- as you say, I think it is a temperament, it's partly a temperament issue. Um, uh, your example of, of, um, doing the hard work, I think, I think most people who do hard work and find a reward at the end, uh, find that meaningful. Um, I think it depends what the reward is. Sometimes it's self-actualization, sometimes it's the sense of command, sometimes it's helping others by something you've created with a group of people through a set of sacrifices and hard work. Um, but, you know, when I list the things that are deeply meaningful to me, um, most of them aren't in the clam area. You know, I've, I've had a lot of fun in my life. I don't... Look, I'm not a... you know, H. L. Mencken, it's not an exact quote, but the gist of it is, Mencken said that, you know, "Puritanism is the haunting fear that someone, somewhere is having a good time."

   18. CWChris Williamson40:17

       (laughs)

   19. RRRuss Roberts40:17

       I love a good time. Um, all kinds of good times. There's many different ones, some with a group of people, some with close friends, some with your family. Um, they're all good. They're great. They're part of the important texture of day-to-day life, and they're not to be looked down on or sneered at. And many of them are, are, are transcendent through the sublimity of them. But at the same time, there are many other things that are part of life that, that extend past just the moment. You, you alluded to them earlier, m- a minute ago. And, um, you know, as I, I write in the book that as you get older, bittersweet chocolate is better than sweet chocolate. You know, when you're a child, sweet's all you want, and when you're an adult, things that are bittersweet, they're a little more painful, that come with sacrifice, um, they are the things that I think we value more steeply often.

   20. CWChris Williamson41:12

       There's a very interesting point to be raised here around age, I think, and wisdom.

   21. RRRuss Roberts41:16

       Yeah.

   22. CWChris Williamson41:16

       And, um, there is a, an element of this that Confucius talks about. So he says, uh, "In the early stages of training, an aspiring Confucian gentleman needs to memorize entire shelves of archaic texts, learn the precise angle at which to bow, and learn the lengths of the steps with which he is to enter a room. His sitting mat must always be perfectly straight. All of this rigor and restraint, however, is ultimately aimed at producing a cultivated, but nonetheless genuine form of spontaneity. Indeed, the process of training is not considered complete until the individual has passed completely beyond the need for thought or effort." One of the problems that we encounter is that when most people begin any sort of pursuit t- that are reflective and probably the sort of people that are listening to this podcast, they will rely on cognitive horsepower to get them through these challenges. They will have frameworks, they will have principles and so, so on and so forth, that they apply to these situations. Now, over time, what you realize is that your subconscious embodied experience, whatever it is that you want to call it, is able to aggregate all of your experiences in a much more effective way than rationally trying to go. So what got you here won't get you there, but because we use, uh, like memetic evolution to work out, "Well, this in the past worked, therefore I should continue to do it," it's very difficult to let go of that.

   23. RRRuss Roberts42:35

       Yep.

   24. CWChris Williamson42:35

       And the, the ruling that I'm thinking about here is that when you are younger, relying on frameworks seems like a smarter idea because you don't have as much experience, right?

   25. RRRuss Roberts42:44

       Yeah.

   26. CWChris Williamson42:44

       What are you... what are you drawing on? And also, uh, uh, another element to consider here is, I always thought when I was younger, and I still do now, my, my ability to do sort of, um, hyperbolic discounting or to, to basically just have such a small sphere of understanding around the tactics I'm using now are going to be the ones that I'll use forever.... they're not. You periodize your life. You go through a period... Everyone that I know went through a period of being obsessed about productivity and, and having the note-taking external brain app, and they were Pomodoro-ing 25 minutes on and five minutes off-

   27. RRRuss Roberts43:15

       Getting things done.

   28. CWChris Williamson43:16

       Yes.

   29. RRRuss Roberts43:17

       (laughs)

   30. CWChris Williamson43:17

       Yeah, they were David Allen-ing their way through the world, and then they transcend that after a while. But I remember when I was doing that, that this is going to be my pursuit for the rest of time. I'm going to be completely just dedicated to productivity. And then now, I, I just have like a minimum viable system. I'm like, look, could it be better? Yeah. But is it enough? Yeah. And now I move on to the next thing, and you aggregate through all of these different bits. My point being, in the beginning, relying on principles, you know, the stuff that you guys talk about on your show, and learning the more rational utilitarian foundations, this is how things get underpinned, and then allowing yourself to ameliorate that. How does it just get mixed in with the soup of everything else that I do and the good shit sticks? The stuff that I like will stick about, and the stuff that I don't use will just fade away, and that's fine. And I think it also gets onto what you said earlier on about relieving some of the pressure. It's like, look, yep, you're gonna let some stuff go. Maybe you're not going to be able to recall all of the different elements of David Allen's GTD method as effectively as you could 20 years ago, but it doesn't matter because you are now onto bigger and better things. And I think that that balance between young procedural, old, uh, spontaneous wisdom embodied, whatever you want to call it, I think that that's a dynamic that increasingly I think people should be aware of.
7. 48:26 – 59:54

   Principles for Big Decisions

   1. RRRuss Roberts48:26

   2. CWChris Williamson48:26

      What about having... Well, I, I have to presume that having robust principles and, and hard rules that scale across multiple situations must be one of the solutions that people can have here. Not having to approach each individual challenge with the expected value calculator of this one-

   3. RRRuss Roberts48:44

      Mm-hmm.

   4. CWChris Williamson48:44

      ... something... a firmer place for people to stand must be a good way to, uh, expedite this.

   5. RRRuss Roberts48:52

      Yeah. So, you know, I have some of those in the book. Uh, and there's some nice... there's some thoughtful people on Twitter and in wisdom literature and elsewhere who have some of these rules. You know, one, one I focus on in a chapter is called Privilege or Principles, that a lot of times keeping your principles, keeping your values, living by them is gonna be costly.... and you're not going to get much pleasure from the idea that you stuck to your principles. You're just going to miss out on something you thought you could have done if you were a little less honest. And I use the example of returning a wallet where no one sees you finding it on the street. You find a wallet on the street, wouldn't it be great if you could keep it and not feel guilty? But I, you know, I suggest to, uh, it might be a good thing to aspire to be a person who would feel guilty, even if you don't feel guilty now. And these kind of ideas of, you know, ethical principles mostly I think they come up a lot at work and in situations where, you know, there's always a financial temptation to do certain things that are, you know in your heart are wrong. Um, don't compromise. You know, economics suggests, oh, the bigger the gain, the more likely you are to sell by your principles. And I suggest don't, just never sell them. Much better rule is have a rule. Don't go, "Well, in this case, it's probably worth it." Now, if your kid's life's at stake, steal the bread. Yes. Um, that's a different kind of principle than besides honesty is to keep your children alive. But in general, those conflicts don't happen. It's usually about your pleasure versus doing the right thing. You should do the right thing. You'll be, it'll, it'll be a lead a better life by, uh, not a better life, y- y- you're a fuller human being, uh, but you will have some pain. So, mi- might not be the right thing.

   6. CWChris Williamson50:20

      You see this online a lot in the online content creation world that there are people who will succumb to audience capture one piece of content at a time.

   7. RRRuss Roberts50:30

      Yeah. Yeah.

   8. CWChris Williamson50:31

      And the problem is when you sell your integrity, you can't buy it back. It is a one-way street.

   9. RRRuss Roberts50:36

      Good line. Yeah.

   10. CWChris Williamson50:38

       Yeah. It, it, it-

   11. RRRuss Roberts50:38

       It's so true.

   12. CWChris Williamson50:39

       It only goes in one direction and although you don't have the external accountability of, uh, the audience fact-checking you about whether you did give that wallet back or not, there is something, you know, whether it's the daemon, whether it's the subconscious, whether it's the whatever, right? There's something that's keeping track. And I, I remember, so I was a club promoter for a long time. I ran nightclubs, uh, in the UK. And I, I wasn't the most honest person. I wasn't stealing money. I wasn't doing anything like that, but I'd just compromise my own opinion to try and please other people. I wanted to be liked, so I would tell them what I thought they wanted to hear.

   13. RRRuss Roberts51:13

       Yeah.

   14. CWChris Williamson51:13

       And there was this-

   15. RRRuss Roberts51:14

       Yeah.

   16. CWChris Williamson51:14

       There was this ambient sort of trepidation around what, wha- how I would feel, and I think it's because I, I was always fearful that I would be found out for not being the person that I said I was. So there was-

   17. RRRuss Roberts51:25

       Yeah.

   18. CWChris Williamson51:25

       ... ambient anxiety the whole time, just-

   19. RRRuss Roberts51:27

       Yeah.

   20. CWChris Williamson51:28

       ... you know, infusing-

   21. RRRuss Roberts51:28

       Background.

   22. CWChris Williamson51:29

       ... whatever I did. Yeah. And on the other side of that now, um, you know, maybe not being the same party guy or whatever that I was that wouldn't appease people in that same sort of way, first off, I found that authenticity is much more, uh, seductive and attractive to people than whatever version of persona you think that they want to see.

   23. RRRuss Roberts51:46

       (laughs)

   24. CWChris Williamson51:46

       Because they can see through it. And secondly, your degree of self-love, self-respect, whatever you want to refer to it as really should be prioritized abo- above most other things. There are few things that I think should go above, you said, you know, steal the bread if your child's hungry and, and dying. Yeah. Cool. There's not many, there's not many situations that I think-

   25. RRRuss Roberts52:08

       Yeah.

   26. CWChris Williamson52:08

       ... that should go above that.

   27. RRRuss Roberts52:10

       Yeah. I, I, yeah, I, I agree with that. I, I do think... I, I want to just say, I, I think redemption is possible. It, it's hard to get your integrity back, but it is possible. And I do think that a lot of people who are good at deceiving others, or have to deal with that temptation of they can be inau- inauthentic and get away with it, which, um, seems like a blessing, but it's probably a curse.

   28. CWChris Williamson52:32

       It's an extra degree of difficulty on their life. Yeah.

   29. RRRuss Roberts52:34

       Yeah. Yeah.

   30. CWChris Williamson52:34

       And what about... So obviously one of the issues that we have here is that there, w- these large decisions have an anxiety of uncertainty around them. Uh, how should people avoid being crushed under the pressure of these big decisions that they need to make?
8. 59:54 – 1:00:46

   Where to Find Russ

   1. CWChris Williamson59:54

      and gentlemen. Russ, this has been great. Uh, I really-

   2. RRRuss Roberts59:56

      Bless, Chris.

   3. CWChris Williamson59:56

      ... really appreciate, I appreciate your artful form of, uh, looking at economics through the, uh, transcended sage that you've obviously now managed to (laughs) to, to get yourself close to. If people want to check out the stuff that you do online, where should they go?

   4. RRRuss Roberts1:00:10

      Uh, I'm on, uh, Twitter as Econtalker. Uh, they can go to Econtalk.org to see if they find my podcast or any place where podcasts are found, and I archive all my work at RussRoberts.info.

   5. CWChris Williamson1:00:23

      Amazing. Russ, I appreciate you. Thank you.

   6. RRRuss Roberts1:00:25

      It's a lot of fun, Chris. Talk to you soon.

   7. CWChris Williamson1:00:27

      (music) What's happening people? Thank you very much for tuning in. If you enjoyed that episode then press here for a selection of the best clips from the podcast over the last few weeks, and don't forget to subscribe. Peace.

Episode duration: 1:00:46