David Wright: 0:00

My guest today is economist, author, podcaster venture and philanthropic sponsor Tyler Cowen. Tyler is one of my intellectual heroes. This is his third appearance on this program, we will be anchoring this discussion around his new book talent, how to identify energizers creatives and winners around the world, co authored with Daniel Gross. Tyler, welcome back.

Tyler Cowen: 0:17

Thank you for having me. Pleasure.

David Wright: 0:19

First question. So why does this book deserve to succeed? in a moral sense?

Tyler Cowen: 0:24

Talent allocation is one of the main problems in American or global society today. So if you look, say at America, since 1960, about 20, to 40% of our economic growth has come from better talent allocation, a lot of that was better use of women better use of minorities, you still see rapid changes over short periods of time. So think how many people from South Asia are now running companies starting companies, but that was much less frequently the case, say 20, or especially 30 years ago. So our mechanisms for getting the most talented people into the jobs they ought to be in operate very poorly. And there's not another really good seminal serious book on talent allocation, what we know about it, how to do it better. So Daniel, and I thought, and now it's time to write a book on talent, and thus we deserve to succeed.

David Wright: 1:17

So this is anchored in your philosophical philosophy, philosophy, which you outline and stubborn attachments are the books sitting between us here. The which is that economic growth is, well, you call it wealth plus growth of GDP plus, I think those terminology use there. And so anything that really can dramatically improve, that is something that has a lot of moral desert,

Tyler Cowen: 1:40

and people are happier when they're in the jobs, they ought to be frustrated or overwhelmed. So you could say that's part of broader GDP. Yes, people are just happier.

David Wright: 1:50

Yes. Now, one thing that kind of intrigued me about that, and please brought that up, because I was going to anyway, which is, you know, there's this. So when it comes to performance, and even talent, there's not always a, let's call it like, psychologically healthy mobilization of talent towards ends, I got to give a lot of people who are very successful, I know people like this in my life, but who aren't exactly how the success winds up being a kind of mania about the more they you know, they pursue things, they achieve things, but it's almost like things that fuel that fire aren't always good for them, might be good for society.

Tyler Cowen: 2:23

So I talked about that in my much earlier book, what price fame. But that said, a lot of those individuals are still at their happiest when they have a chance to express their talents. So I don't know Elon Musk, I've heard people say, or ask, well, how happy is he? I can't speak to that one way or the other. But you know, he can be frustrated running Tesla, or he can be frustrated as Obama on the street corner. And I think he's better off, you know, being frustrated running Tesla or trying to buy Twitter and maybe failing. So the fact that in absolute terms, not everything looks great, you still want a better matching of talents to projects.

David Wright: 3:00

One thing that intrigues me too, about this whole topic in the book anyway, there's not really a strong kind of stratification of its application to different types of, let's just think of like hierarchies and organizations, the CEO versus an entry level person you make you make some allusions to that. But for the most part, it seems like you're going after something more general here, right?

Tyler Cowen: 3:18

We're trying to teach people how to think about talent. So there's too many particular cases, too many types of jobs, too many sectors, yep, to cover them all. And if you just gave a long list, well, if you want a coconut vendor, the person should you know, be this way. If you want a graphic designer, they should be that way. No one will remember all that. So I think of it as a bit like art appreciation. There's so many types of paintings, sculptures, you know, tapestries, whatever. And rather than list the principles for each one, you give people a framework that they then can take to particular cases.

David Wright: 3:48

Okay, and what would be the kind of the most foundational, if there is one kind of concept that you're trying to get at? Is there something what is the most universal or most general aspect of talent?

Tyler Cowen: 4:00

When you're speaking with people and evaluating them for jobs or for fellowships, there's some very basic categories that you should try evaluating them in terms of, and again, the categories may value may vary somewhat with which type of job but just ask, what's the person's energy level? What's the person's durability, or persistence? Obviously, intelligence, but we show a fair amount of evidence showing intelligence matters much more for more important jobs even more than you would think. But for less important jobs that matters less than you would think. And a feature I in particular like to ask about people is how good are they at perceiving hierarchies within institutions or groups, and then figuring out which are the right hierarchies to climb? Because I've met a lot of immensely smart, talented people. They'll say, obsess over video games and playing chess and never go any further. And a lot of standard approaches to talent. Don't focus on that feature enough. So just have some starting points. That makes sense. Develop a vocabulary for talking about talent, and then try to get people out of their prep. That's maybe the single most universal lesson get people out of their prep.

David Wright: 5:10

Yeah, that is an interesting that part of it, get them out of their prep is an attack on or rather a want to draw out reel. Right authenticity through such a thing, or at least in the moment, you want them to tell you kind of real answers about who they are, as opposed to what they want you to think.

Tyler Cowen: 5:27

I don't know if there's true authenticity, okay. But if you get like the real version of their phony self, yes, it's better than getting the phony version of their phony self. But keep in mind, the subtitle of the book is how to identify energizers creatives and winners around the world. So if you're just trying to hire a cashier at Starbucks, just testing for PrEP, you know, may well be fine. Like if they come prepared, they're probably a pretty good cashier. So to ask them questions, like you know what went wrong on your last job, or what do your coworkers say about you are perfectly fine. But if you're looking for someone to run a startup, or to change the world with ideas, and you just test for PrEP, you'll just get prep. And it matters much less.

David Wright: 6:08

You know, I had this in college, my undergrad, I took a an Organizational Behavior class, and the professor talked about this story. They're hiring a profit at school. And there's a three day interview process that flew a guy up I think it was for three days. And it kind of a panel of interviews each of the days. It's kind of like a Thursday, Friday, and then a Saturday, and this Saturday was only a dinner at the end, lots of interviews. Everything was going great. And at the dinner on Saturday, he got a few drinks in him, and then just started being a total bleep hole. Yes, suddenly it came out. Who is this person got him out of prep, not amount of prep. But it took the lesson that she she tied to that story that I took was that you got to wear him down? Yes, it takes time. That's right. Right. You don't talk about that in the book, your your book is much more about. You can through artifice, or clever questions. And we'll get to questions a lot about questions in this, you can actually make that easier, faster, you can short, short circuit that short cut that process.

Tyler Cowen: 7:10

Very often you don't have time, right, there might be 10 candidates. But we do say time is the best thing you can have. So if you can go with a person to a basketball game, we give that example. If you can go with them to a dinner that is not just like any interview dinner, any quote unquote, real time you spend with them. Yeah, it's going to be much more valuable. And that does take time. But if you don't have it, well, what are the shortcuts? And that is our focus. The shortcuts.

David Wright: 7:34

Yes. The another concept, which is not in the book, but which I kept thinking about was the concept of developing talent. Now this is about selecting talent, right? But I was kind of always having this question in my head of how would you build the capacity for somebody to authentically pass this test? Or that test? Is there is there a reading in this book somewhere or maybe another book, you guys are reading about how to build these capabilities and people that you're looking for?

Tyler Cowen: 7:59

we have thought we may write a sequel book on exactly that. We haven't written it yet. It's not only not out, it's not written. But we do see that as the next topic.

David Wright: 8:07

Because one other kind of angle on that to thinking is some of these deficiencies are easier to make up for than others. Now, you don't explicitly endorse any trade offs, or kind of methods of aggregating to a score of any kind, right? I'm interested in your thought on how possible that might be. But there's gonna be some parts of this, which are more important than others. And you could do you know, let's say you scored a five on, on, I don't know, perseverance or hardiness or something, but a one on something else, then you're okay. And we can probably help you along with this or that

Tyler Cowen: 8:37

I think the hardest for people to learn if they don't have it already is openness. It's very difficult to take a dogmatic person and teach them how to be open. It's possible that failing in life will teach them so I've seen that happen. But simple instruction doesn't do it. I think teaching people extraversion is very doable. I even have the favorite saying introverts make the best extroverts. Yeah. Yeah. Because in a sense, you can teach it to them, like playing a role. Yes. And you see this with Elon Musk, who says he was an introvert, but he's able to be out there on the public stage. And it's maybe an authentic role, but it's a kind of role. And extroverts, when they put themselves out there. They feel every arrow very deeply, the introvert is actually more likely to be protected against that, because what they're projecting is a bit removed from their authentic self. So extraversion you can teach openness, very hard to teach. Intelligence. I think it's overrated as a general quality, but just teaching raw intelligence is not very easy to do.

David Wright: 9:42

If the word talent to me Did, did suggest kind of a fixed mindset sort of approach to this because talent to me, I associate with an innate quality, right, that's more nature than nurture in my kind of lay interpretation of it. But a lot of what you're saying there for cert for sure, and I think of what I read as your general view One things is not like that at all pretty much about developmental capabilities. Sure why the words out?

Tyler Cowen: 10:05

Look at the NBA where you can measure performance, right? So it used to be seven footers could hardly ever shoot three point shots. Well, sure. And now today, they're very good three point shooters, not all of them, but much more than before. And that's training and talent. So again, that's super important, but we're gonna write more on this topic.

David Wright: 10:22

Okay, great. You mentioned there a few of the Big Five personality characteristics, which, to me, there's a very light touch of academic literature in this book. It's quite a lot about I mean, I think the the monster I mean, you straddle both worlds of talent evaluation, both as an academic and as a researcher, I would think, but also as a manager, as a as a venture sponsor. But Daniel Gross is very much on the venture side, right. So that to me, that's like, the main mediation of the message here is through your, your roles as or your you know, study real life, not as an academic read psychology research or something, but something very different.

Tyler Cowen: 11:00

I've spent a lot of time with the relevant academic literature's, I don't think most of it is all that useful. Okay, it may be useful for other research purposes. But if you're out there in the field, trying to spot talent, here are a few quite academic results that I do think are useful. If you look at five factor personality psychology, which is a theory of human personality. That explains at the most, you know, 0.3, of earnings, which is something, but when you speak to a lot of people, they think personality is all important. And it's not that maybe we're measuring personality wrong. But to me, that's a fairly modest contribution to earnings. The importance of IQ, overestimated greatly by smart people, maybe underestimated by less smart people. But just a simple fact, there was a study of CEOs of large Swedish corporations. And relative to the general Swedish population, they're at the 83rd percentile for smart, which is pretty good, better at third than 43rd. But prior to doing all this work, I thought it would be like 95th or higher, right, and it's not the case. So I think with smarts, top hires need to be above a certain level, but after that, the correlation is not very strong, or sometimes even negative. So those are academic results, broadly replicated in other articles, rather than just a single piece of work. The best academic results in this area are negative, like IQ only matters so much. Personality only matters so much. What actually does matter much more intuitive experience based. And that's what a lot of the book tries to do.

David Wright: 12:38

How about the literature on motivation, is one of the things that I've been, I happen to have been reading about a lot, recently is a couple of kind of pretty big theories. And the citation counts that seem to get on Google Scholar are bigger than with a five factor personality gets something Albert Bandura is work on self efficacy. There's this group that do self determination theory, this is deci and Ryan, and that that seems to be much more about where the source of motivation comes from, and how it's applied. I mean, have you did you consider any of that? Or you look at that, what do you think about that body of work?

Tyler Cowen: 13:09

Daniel, and I have a favorite saying, personality is revealed on weekends. And we have a favorite question, what are your open browser tabs right now? And that reveals the person's motivation. But do I think the academic literature's add so much for a practitioner? I think it's enough to have a common sense understanding of motivation.

David Wright: 13:30

Yep. I have this thing that just baffles me, which it seems to me that there is a huge gulf, in the degree of motivation for some people to what I would say are arbitrary goals. In the self determination literature, they talk about to a few different types of, of ways of adopting goals of internalizing goals, or they call it, they call interjected and there's one that's internalized. So one of you're kind of doing it, but you don't really believe in it. Another one, you take somebody else's goal, and you really buy in, right. And there's other things you come up with on your own. That's different kind of thing. But to me, like the ability to take a goal that's not yours, and make it yours, and go for it. I remember. So I was in college and a program where some people would just, they would work so hard at things that just seems so irrelevant to me, I had a very hard time buying Yes, and they are going crazy for it. And they were very successful. And I was, I was jealous of their success. But I just could not bring myself to do it. But they had this ability to just internalize these goals way more easily than me. And that seemed like a superpower.

Tyler Cowen: 14:30

There's such a thing as a person who is not really so motivated at all by his or her own goals, but is willing to work quite hard. And those people can be extremely useful for particular kinds of jobs, but train wrecks and others being able to recognize them is important. It's a minority feature in human beings. But when you find it, it can be gold. Yeah. And we talk about a somewhat broader concept in the book that I read quite highly is a person's ability to look at a cooperative team and feed We're at where he or she can most add value or fit in. And that's different from personality or IQ or hard work, per se, but extremely important. And it's one of the top things I look for in many different roles.

David Wright: 15:13

That's where I see like the a lot of the psychology, maybe even just a whole strategy behind the field of psychology is being an off base. Because the experience I always had was your students, you're working by yourself for yourself, well, for whatever the teacher tells you. And then once you start working in groups, in particular organizations, you're on a team, like you can't succeed individually. Really, right, right. Hardly had anything, but it seems like it's I don't know where I was there any literature on that on that transition, even though even the this studies, you're studying there about income correlation, which I guess gets at the idea, but that's still like something that I'm making for myself, that's not the same is is the team you're on more successful? It says whether I'm paying you more, which is not exactly an exact match for what we're looking for, right?

Tyler Cowen: 15:55

There is plenty in the literature on what makes for good teams. But I find there are too many results. Okay, right. Yes. Okay. So there's plenty to say, oh, good teams ought to be diverse. But that's mean something different by diversity. That's also good teams are not so diverse. Yep. The early Pay Pal founders, in broad terms, had a lot in common, helped to hold paper out together to the extent that held together. So again, you have to ask yourself, what is useful as a practitioner? And I think, again, here the analogy with art history, I find useful. There's a big body of formal criticism of artworks and art theory with post modernism, critical theory and so on. And maybe it's interesting, but if you actually hear how, say, people at Sotheby's or Christie's talk about paintings, that has very little to do with those theoretical works, and they're the one assessing the paintings, well, you know, what should this be priced at? What's the proper auction range? Do we want to sell this in our auction at all? And you need both. But this is not a book, like say, you know, critical theory is applied to paintings, it's the kind of conversation someone at Christie's or Sotheby's would have when they're talking about a painting. And that's highly informal, based on a lot of experience, somewhat informed by the broader literature out there, but hardly bound by it.

David Wright: 17:13

So I little earlier than I wanted to, but I'll hit you with my first Straussian Reading. So it's here, here we go again. So this is more about Tyler than it is about the book. But I kind of think I'm observing an arc of your career is moving a little bit away from academia. And I see this book as a step in that direction. So And well, I mean, it's pretty obvious. But like, to me, you were still are a professor of economics. And maybe right, maybe it's not Straussian, if I may say as well, that in our last interview, I listened to it in advance of this, all my Straussian readings you claimed non- Straussian. So maybe I'm just not very good at it. I'm simply somebody who's reading what is on the wall. But let me do it anyway. Which is that, you know, I think that there is a lot of a lot of wisdom, obviously, in academic work, but in some sense, and you dedicate your life to it. Right. And then now you're kind of tiptoeing away from it a little bit. I mean, this book is co authored with a venture capitalist. And it's really is integrating a lot of personal experience, right? There's you're I think attacking generalized insights, but you're not really doing a from study, you're not doing studies of things, right. You're sort of just saying what you think, in the book, and so on, right, I guess you're moving away from academia. What's what's next for Mercatus? Five years from now this is all gonna be venture capital fund.

Tyler Cowen: 18:29

Well, I would put it this way, the earlier Tyler Cowen was maybe less rooted in purely academic modes of reasoning that it may have seemed interesting time. So keep that in mind. In that sense, the delta is smaller. Daniel, my co author spends a lot of his time on scholar.google.com. Yeah, he thinks it's much better than Google, per se, you get better content. He reads those papers, we talk about them. But he himself has never been to college, or if he has, he's kept it a secret for me. I don't even know if he'd ever dropped out of anything. But he's not formally educated, one of the smartest people I know. He knows different talent, literature's can discuss them at a very high level. But I would say the true academic learning about many things, is that the market test is what matters. It's an academic insight that academics themselves want to forget. And the market test is the most success at spotting talent has been made by venture capitalists, angel investors, Daniel included in both categories. So I would say this is super academic, it takes seriously the academic point, that the market test is better than a lot of the research literature.

David Wright: 19:40

It does it you do emphasize the concept of art here though, and I think there's a depressing reading inside of that for me, which is that I don't know that a lot of the concepts you have in there really kind of can be encoded or compounded. You know, Can we can we really like continuously get better at this function? Or is this something you have to go to an apprenticeship and maybe there's a little bit of a con pounding in there and that you pass down through the, you know, through your coaching tree as a venture capitalist, but like, I feel like this needs to be experienced and use and tried and that kind of thing as an individual. And you can't really transmit this through a paper or a book really properly.

Tyler Cowen: 20:13

Well, that's like most things, right? So doing, doing economics, forget about talent, just normal economics, you learn most of it, by trying to do it and trying to teach it, you still go to something like graduate school and take classes, but the two have to come together. So there's not really a graduate school for venture capitalists, but doing a startup yourself is one way you might go down that path, right? As Daniel has done, and that the two come together, again, is extremely common. And for normal academic research, it's a lot of learn by learning by doing and teaching.

David Wright: 20:49

Yep, my, my sense of, I know, the aspiration that I have for academia anyway, is that you develop these frameworks, which you systematize and integrate with each other or disintegrate, I suppose, if you don't like them, and there's kind of like, I don't know, a way to formally proceed through developing ideas that will win or lose, and they'll adapt through a through kind of a, you know, through a trail of literature anyway, which citation, well, you can go back and I spent a lot to my Google Scholar to so I'm with Daniel 100% on this, you can follow a trail of an idea, sometimes they'll give you a summary or something in a paper, but you can also look at the old papers, you know, Google goes all the way back, I don't know how far goes back a little ways. And I like that, but I feel like that's less, you know, I don't know, maybe maybe I'm just kidding myself. And that's, that's, that's all kind of a play acting. And really what's going on is inside the inside the faculty rooms or at lunch. And that's where they're really doing their learning. They're not actually studying all these papers. But that's what I would hope for, am I right?

Tyler Cowen: 21:45

I think learning has always been more experiential. There are a lot of academics who don't have enough real world experience or trying out their ideas. But even if you look, say at the ones who do consulting, which I don't do at all, they have a so much deeper understanding of a lot of economic issues than the ones who only do research, right, or simple things like going on World Bank missions, which I've done a fair amount not lately, but I've been, you know, to Yemen and Bolivia, other places. Not doing research, but you learn such a great deal about economic development by just going places seeing looking around talking to people. So I think it's still underrated. In essence, we're testing people for a pretty one dimensional test, like can you get this through referees? Yeah. But the test of relevance, the people who are relevant, whether or not you agree with everything they say, like a Larry Summers or a Jeff Sachs, they have immense real world experience.

David Wright: 22:41

Yeah, and I would I compare this to, I suppose the ideal that I have for, like, I would say, maybe a truly compounding art artifact would be something like software or building codes or something, which didn't go off on the wrong path as well. But there's so much wisdom encoded in these things, just talking to my father in law yesterday about this, where we're talking about how, you know, they're all these little details of a house, we're doing a little bit of minor renovation in the house. And there's little things that aren't there, my house was built in the 70s, that isn't the building code now that it would just be there. And we wouldn't have to kind of retrofit all this. And we don't really know why it's all there. When you're doing it necessarily don't you need to, you just have to, you know, fill the checklist off, because there's like, there's wisdom embedded in that, that not everybody has to know, but is transferred down kind of through generations, maybe, right. But this seems to be very different. Social Science is very different, right? From a rebuild of software in my day job building software, where once you build something it's built, and it keeps working. And you can build more things on top of it. And this was kind of always there, you have to maintain the little bit of it's not the same as kind of rebuilding it again, right? There's this concept of progress in these physical things, which doesn't really seem to exist as much in this kind of social processes.

Tyler Cowen: 23:45

Well, sometimes progress is about opening up or reopening a national dialogue. We got to take the book Freakonomics, the main point was incentives matter, right, which we've known for a long time. But it got people thinking about how incentives matter, in a way, whether or not it was new, it was highly successful. So it seems to both Daniel and myself that right now, we don't quite have a national dialogue about talent. Okay, you hear the phrase, inequality, income inequality all the time, that we're bad at allocating talent, it's just the flip side of the exact same thing. It's a very different way of framing it, you frame it as a problem to be solved. And not just to be solved by attempted redistribution, but to be solved by finding and allocating talent better. So our key goal here is to jumpstart a national international dialogue about talent as a key issue and mobilize that decentralized knowledge about talent out there and bring it together in more of an iterative process. This is not a we have all the answers book because we studied every sector in an economy, right? No one can do that. But is there a need for someone to create this national dialogue about talent? We're convinced there is

David Wright: 24:55

Interesting. I want to try and defend for a sec bureaucracy.

Tyler Cowen: 24:59

Sure.

David Wright: 25:00

If I Can

Tyler Cowen: 25:00

I belong to one. A State University.

David Wright: 25:04

But this is about specifically how good I think good, well functioning bureaucracies evaluate talent. One of my favorite podcasts is called Manager Tools. There's these two authors that are consultants that are management consultants, but specifically management management consultants on the process and practice of management. Right now the strategy kind of folks. And it's an amazing, it's an amazing body of knowledge in this like 1000s something episodes of this podcast, I've learned so much about a manager, it is a challenging body of work for myself personally as a to grow as a human. That's incredible stuff. The one of the ways that they defend a structured evaluation process, and you specifically call out in the book, the list of questions that everybody asks, and the thing that the defense of that kind of approach is that it eliminates bias. And it seems to me that the method of kind of feeling your way though, the art side of an interview, is one that actually has quite a lot of could have quite a lot of bias in it. And it's hard to control that bias by having a conversation with other people where your biases are revealed. And you can correct for them, right. So if you all ask different questions, you all can have opinions. How do you integrate that right and remove bias from the process? Or do you care?

Tyler Cowen: 26:14

Citing bias. I would say is begging the question, right? One person's bias might be another person's discovery. But I would say this, if you are hiring a large number of people going through a large number of resumes, for jobs that are quite well defined and have been in place for some while almost certainly, you need a structured interview process. And you should follow the kinds of advice that you're referring to, probably are embedded in that podcast. But a great deal of Talent search is not about that. So most of our book, as we say, is about the unstructured process. If you're a venture capitalist, and you're judging, should you find someone with a startup, or I just had someone submit a proposal to my emergent ventures, they want to spend their next few years developing their own podcast, you are making an individualized judgment, whether you care to admit it or not. It would be very ill advised to ask all of those people the same questions, they're doing different things have different backgrounds. They are putting themselves forward as unique, which they may or may not be, but if your response to their possible uniqueness is to jam them all in a box and ask them the same questions, you will not find the unique ones. Yeah. So structured interviews are extremely important for a lot of jobs. There is no real alternative. But most of our book is about the less structured approach.

David Wright: 27:37

Yes, yes. And I think of part of this as it really embracing bias. And you mentioned the point and second it goes by it's really that bad.

Tyler Cowen: 27:45

And I would rephrase it, you know, what people want to call something bias when they don't like the outcome? Sure, if you're doing, say venture capital, the real problem is one of omission. Right, that you don't find the big winner? So you have to be extremely open. you're less likely to be biased than a person looking for talent and some other way not more likely.

David Wright: 28:07

Yeah, the failure mode. And listen, I've lived through this failure mode, where you fall in love with the candidate because of this is bias in the bad sense. It just sort of happened to click with the person and the personalities basis. And you don't, you don't have a way of correcting that. Other people disagree with your assessment. But I was the manager. So I hired the person anyway. And it was a bad idea. I mean, I was blinded by my bias. And I failed, I have failed personally at that more than once. And so I came away from that experience being a convert to the concept of having standardized questions to an extent at least, so that we might, or at least have a standardized evaluation rubric. And you do make a point of this in the book here, which is you kind of should have a shared understanding for the sorts of things you're looking for. Right? And at least you can structure the conversation a little bit on that, but you are pretty loose on kind of what those that list should be. Right? I mean, you had find your own path, Mr. Organization.

Tyler Cowen: 28:59

If we take, say philanthropy, I definitely see too much decision making by committee, too much of a consensus approach, too little risk taking too many decision processes that take too long, and have excessively long and tiresome and energy consuming applications. Yeah. And I think we need more evaluators who are willing to innovate with fewer veto points. So I'm a big advocate of that. I've done that with my own philanthropic projects. And at the margin, I've actually seen a lot of groups and individuals copying that approach, it seems to be working better.

David Wright: 29:32

It's very much one of the intellectual contributions, I think of venture capital, which is make a lot of bets expose yourself to variants. And and the hope and the well the realized outcome. And a lot of instances is the variance is mostly positive, you get the right tail variance, which you like. And that's that's of sufficient value to make up for the misses.

Tyler Cowen: 29:53

And keep in mind, there's a difference between hiring people who will be with you every day, and venture capital or philanthropy where You're funding someone at a distance, the cost of a bad decision can be higher when they're always with you. Whereas venture capital, you're out the money, if they're no good, you might lose something reputationally. But it's a very different situation you want more risk taking, because you are more insulated from the downside of a particular kind of bad decision. Oh, my God, this person is toxic. Well, you stopped funding them, you cut them off, you know, you don't talk them up to your partners. And probably that's manageable, much harder when the toxic person is in your midst.

David Wright: 30:32

Do you have any advice for how to generate consensus with this? I mean, there's or is there because I think of consensus as being one of these optional parameters. I mean, you may, you've made the point about emergent ventures specifically, where there there is no consensus there is pretty easy to happen to you like it or not, right? There's an autocracy there. And that's easy, I suppose. But in most organizations, that's not really the way it is, or maybe the way it should be. How do you get together and have a conversation with more than one interviewer in polite applying a style that you advocate for?

Tyler Cowen: 31:03

I'm not sure I follow exactly what you're asking me. So if someone wants to be hired as a Senior Scholar at Mercatus, and be physically present here, which is what the job typically would entail, they will meet with the other senior scholars. Yep. And likely myself, and there will be a collective judgment. Yep. And the other opinions absolutely will be respected. And if the other people don't think that person is any good, probably they'll end up going somewhere else.

David Wright: 31:28

How do you integrate the perspectives, though? So you're obviously as the as the as the your title is the seat to seat the faculty director, director, right. So the person in charge, you have to find a word.

Tyler Cowen: 31:39

Right, right. But I don't exercise it in that setting. I really don't.

David Wright: 31:42

Can you not? Is there is there is it possible for you to not exercise it, you know, for the, you know, for the politics, the you know, the body language in the room? What's Tyler really think?

Tyler Cowen: 31:50

Think of it as a barbell strategy. So there's emergent ventures, where I am the decision maker. Yep. And then there's what you would call normal hiring, where there's more of a consensus approach. And if there's someone brilliant, who is failing, in the consensus approach, you steer them to emergent ventures, and the thing can still happen. Interesting, but with more insulation from the costs of a potentially bad decision, right? Well, I'm a big fan of barbells approaches, in many ways. So the fact that you have both methods, I think makes makes each one stronger?

David Wright: 32:20

Yeah. Interesting. So kind of so back to the question, then for in most, in most organizations, they don't have such you know, it's, there was no option like that you're the hire somebody or no, you don't. And you have to have a way, the Manager Tools approach,

Tyler Cowen: 32:33

But increasingly, we do have these options. So there's work from a distance. It's not the same as funding from a distance. But it's very different than having someone on site. You're more insulated. And I think it's not the main reason why companies have moved to work from a distance, but it's a big reason. And a big benefit of that. You have more options in your portfolio. Where do we put this person? Oh, you know, let them live in Indiana, whatever.

David Wright: 32:57

Yeah, that's pretty interesting. But I'll get you back to the Manager Tools approach, which is everybody gets a veto. And if you don't want the person to have a veto, don't let him in the process. Right. And so there's a trust element to break through to the hiring committee decision, right. And once you're on that team, everybody gets a chance to say no, but they don't really talk too much, or they don't quite length, but I can't summarize it is easily about how to structure the conference, and they talk about structure questions, you have a list of questions, nobody talks about the answer to that question, right? And you go through the list and you say, Everybody compares notes. And if somebody doesn't like an answer, next candidate,

Tyler Cowen: 33:30

I don't believe in vetoes that strong. Keep in mind, I, Mercatus, George Mason, we operate in the world of ideas, the world of ideas, in large part is ruled by a power law. That is most ideas don't matter. Yeah, some ideas matter a huge amount. So you need to be taking a fair number of risks, even in your most basic consensus driven operations. So if there's extreme enthusiasm from some people, that counts for a lot, I would say as a general rule, and this is stated in the book, if the person as a person is toxic, even if they're very talented, just don't do it. Yeah. It's just not going to be a good idea. It's as close to a universal rule as you can get. It's not original with Daniel and me at all. But we do say that, but subject to that caveat, if there's a split opinion on, say, the intellectual merits, but the positives are strong, typically, you should do it.

David Wright: 34:21

Yeah. And that is a common, a common characteristic with venture capital as well. Right. I mean, I hear

Tyler Cowen: 34:27

sometimes one person being a strong advocate can be enough. Yeah. So I focus more on the upside than the downside, their status quo bias and most processes. Not everything in the world is ruled by a power law dentist, right. It's not as far as I know. But the the sectors I've worked in typically have been ruled by power laws. Yeah. So one way to approach a lot of issues and talent is just ask, is this a power law sector or not? And if it's dentistry, you want to avoid people are going to screw up people's teeth and torture them on the chair? Yes. But if it's the world of ideas, again, subject to the person not being toxic, you absolutely absolutely should be taking more chances.

David Wright: 35:03

And so back to kind of your prior book and big business, how much of big business is power law is described by power laws in this sort of sense. Do you think?

Tyler Cowen: 35:12

Well, big business itself is a kind of power law? So some businesses become, you know, the Googles, the mat is, yep. Formerly General Motors, General Electric, whatever the winners of some era were. And most do not, I think there's a figure, like 2% of most of the returns in the s&p 500, or the total returns are driven mainly by 2% of the firms in it. And the others are, like, some of them hang around, do okay. But you're looking for that 2% of winners. And that's been the case since the beginning for big business. So that is mostly power law, in most sectors,

David Wright: 35:45

specific jobs within those companies. Probably not, though, would you think?

Tyler Cowen: 35:48

Correct. Like, a business might hire a dentist say, Yes, sure. You're hiring someone for your dental practice. It's really not have power law, the best dentist can cover maybe somewhat more patients than Alaska dentists, but not much. And you want to limit the potential for torture and screw ups.

David Wright: 36:03

It makes me think that we should be trying to create more power law rules within those organizations when you think because it's such a, I think of the the need for consensus within an organization in hiring is important for most jobs. In my opinion. That's because the need for consensus after they're hired is really input they have to get along with the people around them. Sure, right. They have people to get done what they want to get done, you don't get only happens if you have good relationships with people. And if you aren't good enough to get good relationships in the interview process, you probably ain't good enough to get him after the interview process. Right?

Tyler Cowen: 36:32

But don't generalize that too much. Like look at the early days of Pay Pal. There's this new book out about pay, pal, it's very good. And there was plenty of chaos in the early days of Pay Pal but a Pay Pal is still with us. Yeah, entirely successful has a high valuation, and the people connected with it. Elon Musk, Reed Hoffman, Peter Thiel, that was their training ground for doing other just amazing things. And they were not optimizing for coherence, as far as I can tell, not for cooperativeness. So in that case, that was the correct decision. And I think too many people from like, the normal world, again, there overvaluing consensus. Yeah, scientific discovery, for instance, has a lot of chaos in it.

David Wright: 37:13

Yeah, I think it's very hard for organizations that maybe already were are overly overvalue in consensus to make that shift. You know, it's it's so often the problem to ineffective results, let's, let's call it poor results is to get ready to go to the room, and let's work out together what's happening, right? That's just like a neat, I've seen it so many times. And that becomes, it could probably argue, it be as a process to try and generate a consensus and nothing else. Right? Because you don't do anything, you're gonna make you feel feel better. But what about what happened? I'm not sure where you get to, but that's where they go. They don't go farther away from consensus. Let's try some crazy stuff to go deeper in. Right. So that's our instinct is to generate more consensus. I think as people, I think that's like a fundamental, absolutely, we want more consensus.

Tyler Cowen: 37:58

It could be once you're on the consensus track, that's all you can do, and your eyes will go down it. But insofar as you can see or your future capabilities, I strongly suspect again, we're over investing in consensus, and under investing in a kind of dynamism.

David Wright: 38:12

It coming back touching quickly on the literature I mentioned earlier, self determination theory is deci. And Ryan, one of the they say there are three fundamental human needs. One of them is autonomy, one of them is competence. And the last one is relation. And that's this concept of when we are relating to the people in a positive manner. We like that that's like one of these things that really makes us feel good gives us a sense of meaning in our life and all the rest of this, I buy that? You know, I do. And I feel like the type of person that can be truly contrarian is real hard to contribute in effective, because you have to be contrarian, but in order to get anything done, you have to really go along with some people, right? That seems to me to be like a real tough combo. To find.

Tyler Cowen: 38:48

If we look internationally, we do see cross sectional variants. So companies say in Denmark, where I was visiting lately, they build greater consensus or have greater consensus to begin with, and they typically would in America. Now Denmark is doing fine Danish companies. It's a great country, like the top four or five Danish companies, they all date from the 1920s. What does that tell you? Well, it tells you they're pretty effective at staying top. But the end of the day, it is not a better business culture than in America. So there's room for both. And you need to figure out when and where you need, which. But we observe the universe or companies in Germany that confer much more with labor. Germany is doing fine, not a complaint. But I don't wake up in the morning and think, Well, America needs to be much more like Germany, in the corporate culture, if anything, I think the opposite.

David Wright: 39:34

Coming back to the kind of some ideas in the book, which I want to make sure I touch on, what's interesting to me about there's a little bit of a history of progression you mentioned on the questions. And I noticed just as a kind of an observation we'll come to a Straussian reading in a second here. But the most fun chapters, I suspect they're the most fun to write is the one on questions and then a second one on psychology where you guys get to play a little bit with some of the ideas And, and to me like the idea you have questions as being something that you always have to evolve. This is the art side of it, right? Because people read them, they can prepare for them. And now they're ready for you and you have to come up with something else. And so this is a continuous process of change that's embedded in this system of, of, you know, learning how to do something, and people adapt, and you get to learn again.

Tyler Cowen: 40:20

this book itself will spoil or ruin many of our best questions. People will come prepared for them. So I like to ask people, how ambitious are you? Just flat out with no explanation. And as I say, in the book, I had recently an academic candidate, say to me, I would like to publish some papers and get tenure. And that, to me is a horror. Like, that's it? If it were, well, I want to revolutionize how people think about collusion, well, maybe. you're at least in the ballpark. Or I want to revolutionize how people think about agricultural productivity. So it's very hard to fake a good answer. Especially if you're not prepared. But over time, people will prepare. And the famous question, well, what is it you know, you believe that your intelligent peers think you're crazy for believing. It's a very good question. But too many people are prepared for it, at least in Silicon Valley. It's been used a lot of times. It's one of the classic, great questions, but it doesn't work with everyone.

David Wright: 41:20

Yep. So here's, here's a Straussian reading of the book, which is that this is, this is actually not a book about talent. This is a gaming book. This is about the game of talking to people. And if there's one section in there, there, I think it's Daniel's voice or invoking Daniel on this, where he's trying to figure out who is this person trying to impress? Right, right. That's why they're all these little games part of the game. There's a game here too, which is a game of how do you get the right question to get at the good at the kind of the real thing. And this is kind of cat and mouse interplay that's happening and, and different models you're trying and there's a very experimental kind of process. It's, it's messy, and it's fun, I think. And so this is a gaming book.

Tyler Cowen: 42:04

You know, Daniel's background is in gaming in a literal sense.

David Wright: 42:06

And you were a chess champion in New Jersey?

Tyler Cowen: 42:09

That's correct. So I would say in a sense, everything is gaming. Okay, sense, right. So there's a gamification of the world going on. You can think of any problem in gamified terms, just to some extent, Daniel, and I think of this problem of Talent Search in gamified terms throughout the book. And that's correct, but I'm not sure it's Straussian. We're pretty upfront about that.

David Wright: 42:30

I'm never gonna get a Straussian reading on you. Okay, fine. So I'm gonna come back to the something that you said a second ago, which I really want to get into you made, you said it was hard to fake a good, or it's hard to fake an answer to the question of how ambitious Are you? At least at the moment, right, that's okay. Fair enough. But to me, what's interesting about that, is that that's a pretty abstract thing. And the concept of abstraction is one that intrigues me sometimes. And I, I had I had Robin Hanson on this podcast again, somewhat recently, and he wrote some blog posts recently, one of them was, why don't we just pursue things directly? Like, why do we have to have all this sort of indirect stuff, at some point, we're going to evolve or some subset successor culture will evolve a direct desire to create more descendants. And whatever they do to get to that direct desire, create more distance, they will just by a factor of numbers, dominant culture, and the point there was, if we just go after the thing itself, as opposed to all these intermediated, intellectual games, we have to play to then back into success through some what manner would not be better. And there's a lot of abstractions in how you've designed the games or in the book, and and how we approach the evaluation of talent more generally, you know, it's not just saying here, go do the task for a couple of days and come back and show me what you got. Right? It's this, you know, sort of cat and mouse game, right?

Tyler Cowen: 43:46

When you can do that. I mean, if you can test them directly, that's wonderful. Of course. Okay, so you're looking for chess prodigies? Hey, let's play a game. That's at least the best starting point. Again, often you don't have recourse to that. But I tend to like a barbell strategy again. So ask some super direct questions like Peter Thiel loves the question, are you going to succeed? Or are you successful? Yeah, how more direct can you be? But at the same time, I and I'm not speaking for Peter here, but I, as I read him, he does it to you ask some extremely indirect questions. So I'll try to get a person talking about like, Is there things sports or movies or gaming or, you know, it could be knitting at home or whatever. Get them to talk about in a way they have not prepped for some complex topics. So if someone's a huge Star Wars fan, I'll say well, Yoda is advice. Is it good? Or who's the best talent spotter you know, in Star Wars? And just see what they say how deeply they can think about it? That's super indirect. Do a lot of that to see how well they can think about these hierarchies of talent and achievement and climbing ladders. And then some super direct like, how ambitious Are you? Yeah, and bring the two together.

David Wright: 44:59

If the he's, I think contrasts a little bit with a fun little game you kind of play in your podcast, where you the your, your description of easy and hard questions. Yes. And so you ask them, here's a really hard question. And you ask them something completely benign, like, what are you gonna have for breakfast? Or whatever it is right? And they're like, that's not a hard question. And then your one point you gave us the tell, you told us what you're doing, you said, but now you have to actually do it, don't you? Right, so questions that motivate real action, prosaic as they may be as opposed to these big, you know, oh, what's what's, you know, what's the cause of economic growth? And it's like, well, I could say almost anything. And there's not really any way of making that, you know, any more real, right?

Tyler Cowen: 45:36

If you want to strive see in reading, I'll give you one have conversations with Tyler. Okay. It's a series of talent interviews, sure, designed to test people. And they're really hard. Yeah. And the grades are not handed out. There's no high refire decision at the end. But that's one way to think about the podcast, which is not stated upfront, anytime that I can recall.

David Wright: 45:55

Yeah. And how do you is that the result of that, that process for you change how you think about the person? Do you really does it? Does it really?

Tyler Cowen: 46:03

Absolutely. Oh, it really changes how I think about people

David Wright: 46:06

and how you would read their subsequent work?

Tyler Cowen: 46:08

Yes. Or in some cases, stop reading their subsequent work?

David Wright: 46:11

Really?

Tyler Cowen: 46:12

Yes. I'm amazed what a big difference that hour with them can make. And it's not just that you digest their answers, you feel what they're like, in real time. And you're forced to focus on them for an hour, so intently, in a way that you never are, even in a normal job interview. Yes, you don't have to focus that much to pull off a job interview and have it be somewhat informative. But you're doing an hour long podcast to kind of entertain slash instruct people. And they have this large body of work, and you've been prepping for a few months. That hour, you've got to be so focused at like your highest mental abilities. You learn so much about them. Yeah. And that's the Straussian Reading. No longer straussian, right.

David Wright: 46:55

Because you can give them to me

Tyler Cowen: 46:56

So they should be terrified.

David Wright: 46:58

Right. And, you know, I feel like, you know, I think that you have a different evaluation, but I think most your guests do pretty well.

Tyler Cowen: 47:04

Oh, of course. And that's why they're chosen. One thing I've learned doing all the podcasts is sort of how few frauds there are. One way to put it.

David Wright: 47:13

Sure. Yeah. I mean, what really surprised me the positive, right?

Tyler Cowen: 47:15

Yeah, people, you may not agree with their values or their factual beliefs, but like, they got there for a reason. And it's a much more meritocratic process than most people think, in my opinion.

David Wright: 47:28

You know, before we started recording this, we were having a conversation, about why some people might not accept a podcast offer, maybe this is one of the reasons they're gonna find out. They're all gonna find out again, it's a heck of a format, the podcast format, I mean, it is a kind of grilling, when it's done properly. Because you can't be I have never really heard a seriously combative show anywhere. There must be some, there must be some.

Tyler Cowen: 47:53

I would think so.

David Wright: 47:54

Yeah. Because they try and sometimes the more mainstream news interviews, they try and get the tough questions out there. And there's a you can sense the tension through the screen in the room. That must be awful, that that kind of experience. But if people can opt out of ours, can't they say they can.

Tyler Cowen: 48:09

But once they've shown up, I've never had someone walk away. Yeah. But sooner or later, that will happen.

David Wright: 48:16

Yeah, if you're if you're doing your job, I guess my my grandmother said to me once in bridge, if you don't go down once in a while, you're not playing your hand. Okay, so here's a, here's a kind of abstract sort of question. But why aren't people more ambitious? Do you think

Tyler Cowen: 48:32

A lot of people shouldn't be more ambitious, okay. So they're not happier at a higher level of achievement. And they may not even reach the higher level of achievement, and there's more stress along the way. So in most cases, people realize this at some level, and they're doing pretty well. And the happiness income gradient or happiness, wealth gradient, above a certain point. I would just say it's complicated, wealthier people are happier on average, but it's complicated.

David Wright: 49:03

So they don't deserve to be more ambitious in a certain sense

Tyler Cowen: 49:06

well deserve is a tricky word. But yeah, they've realized it may not be better for them to be more ambitious.

David Wright: 49:13

Yeah. You know, I think that how about people who deserve to be more associated? There's, you make a point in several instances, which is trying to just encourage people to have to be more ambitious to have higher aspirations. Right. And I'm, that's what I'm wondering at are the folks who maybe should be what is the what is the barrier? What is the thing that prevents that?

Tyler Cowen: 49:34

Is there evidence that role models matter? Okay, and one thing I've learned doing this book is, that's a bigger effect than I had thought. So especially pre internet, you have all these immensely talented people throughout the world. And maybe they end up being very good at something but they don't set their sights highly enough. Or they don't make the big move to you know, Mumbai, or London or wherever they should go to. One of the best things about the internet not everyone but so many more people. We are exposed to potential role models who are doing very well. And they can think, Hey, I could do that. So, you know, if your ethnic Chinese and you read the story of Jack Ma, and he's riding on his bicycle in his 20s, and he ends up, you know, a multi billionaire, you think like, Hey, do I have a chance to do that? Maybe you don't. But the question is posed, and but getting people focused on their peers, who are the ones they should be emulating, rather than peers like, oh, maybe you have too many people trying to be professional athletes, say, very hard to win that game. And people being too local and not sufficiently global in their perception. The main problem identified by Adam Smith, interestingly, I still think it's highly relevant. You read Theory of Moral Sentiments, as I read that book, his critique of approbation incentives is people are too local, and not sufficiently global. Interested, what kinds of approval they seek?

David Wright: 51:02

That's interesting, because we're always thinking about kind of the selection of mentors, or let's call it aspirational. Work is, is a moral thing, where, you know, the interesting thing that I've been thinking about more recently, and I think that's touched on Peter Thiel is is a great example of from regenerates a lot of content and this, which is very moral in flavor, but very practical and application. So like, what weight is your morality showing through in the work you do? And it's not about helping people cross the street, this is in the work that you pursue, and your job. Right, right. And there's some there's a moral kind of like angle to some of the questioning. And, you know, when you're selecting a mentor, should you think about, I mean, if you're a kid, I don't think they have the sophistication to kind of go through a selection process like this of like, we're gonna find a moral. Or maybe they do maybe I don't know what you think about this, but and find somebody who has these criteria. And but that's what they should be doing, or somebody shouldn't do that for them.

Tyler Cowen: 51:56

But again, there's the local global issues. Say you're a kid, you're 10 years old, you're in Belfast, and it's 1971. Yeah. And you want to be a leader. Your local role models, might well be big sources of trouble. Yep. Like, even if you agree with their side, whatever that may be. Yep. We have comparable problems in America. And that's where I think fundamentally things are going askew. The internet can have a negative effect in this regard as well. But I think on that it's quite positive. And Daniel slife, like coming into contact with Silicon Valley, just seeing people. You know, Daniel will relate well, he saw and met Mark Zuckerberg. Obviously, he had already known who Mark Zuckerberg was face, then Facebook, but it made it all so much more real for him. Yeah, just to literally see Mark Zuckerberg. And there's something about vividness and cues, that if we could earlier on in people's lives, get them better cues, and at least suggest to them, you know, there are paths other than, you know, Belfast 1971, you want to, like leave the IRA unit on your block. Yeah, I think there are huge gains. It does not in material terms cost a huge amount, doesn't mean it's easy to do. But it's not something that requires the world to spend a lot more money, how do they do it. People need to reconceptualize the problem, and just try to do it. It's not a guarantee of succeeding. But as I see it now, so many parts of our society are themselves thinking locally. Yeah, they want to be like, oh, I want to garner more likes on Twitter. Yeah. And this gets back to my standard, does the person perceive all the relevant hierarchies correctly, and pursue the correct one, not like best chess player in Iowa, which is worth I don't know, zero, negative. Not leader of you know, the prison gang. But something that's really going to matter.

David Wright: 53:42

But it seems to me that so agreeing with the with the sentiment, it seems to me though, that all of the qualities you're looking for, in a global leader, right are available and local leaders. So if you get people on your block can be hardworking, and they can have all the qualities that would propel you to success in some way. But somehow, that's lacking. Is it? Is it the is it the absolute heights of success that you need to kind of see in some deeper way?

Tyler Cowen: 54:07

It depends what you want to do. So almost everyone starts with their proverbial block, but the actual energizers creatives and winners Yeah, at some point, before they're too old, see more than that and integrate the local and the global. Yeah.

David Wright: 54:22

But the the qualities, they employ some of these podcasts and you read some books and stuff, and they're not saying anything, like revolutionary, they're just kind of doing it. Right.

Tyler Cowen: 54:31

But I think it is revolutionary, okay, for it to truly be salient and vivid for people. Yeah, it has to be framed, reframed, reframed again, iterated, and it sounds like, like if I say, well, we want to have a national dialogue about talent. Yeah, it sounds so blessed. Yeah. So ordinary, like the talent. We all know the word. Everyone says it matters, but we don't actually have that. Yeah. And to see the revolutionary potential, and ideas that are very simple and sound quite familiar, I think is a big part of this advancement.

David Wright: 55:04

So, you know, the you can even argue that in historically historical books like the Bible or something will have a lot of the qualities. And I listened to fair bit of Jordan Peterson these days, and it's an entry interesting Integrating his view on a whole bunch of things. And, you know, deep reading of the Bible was kind of one of the things that he's teaching me. And there's a lot there.

Tyler Cowen: 55:23

I agree. I'm a big fan of deep reading of the Bible, and I'm not religious

David Wright: 55:27

And it's been around for a long time.

Tyler Cowen: 55:28

Correct

David Wright: 55:28

It hasn't done the job, though. Right?

Tyler Cowen: 55:30

It's the most widely read book ever, perhaps,

David Wright: 55:31

But it hasn't caused us to aspire to greater things on that

Tyler Cowen: 55:34

I think it has

David Wright: 55:35

Okay, tell me more.

Tyler Cowen: 55:37

I think most of the West has fundamentally Christian roots, even when it has secularized from Christianity, we got the idea of individual rights, the idea that you separate religion and the individual from Caesar, to some extent, the notion that an individual, Jesus who also partakes in the Divine is a victim, but his triumphant, very different from what you get and other religions to make the Rene Girard point. And that is more conducive to certain kinds of social progress, even once we have secularized. So you're not saying other religions don't have virtues of their own. But that's what I see in Christianity, Judaism, more complicated, but just the notion of law and covenants, and constitutions and compacts. Incredibly important. And I think the West has done that better than the rest of the world for that reason.

David Wright: 56:25

So you believe in social progress?

Tyler Cowen: 56:28

Well, it doesn't come automatically. I believe it's possible. Yeah. And mostly, we've seen it for the last few millennia.

David Wright: 56:34

Okay, good. Because I, several years ago, I had Mary Hirschfeld on this podcast,

Tyler Cowen: 56:39

whom I went to graduate school with.

David Wright: 56:40

Well, yeah, and we discussed your book, stubborn attachments in the podcast. And, and she doesn't believe in moral or she says he doesn't believe in moral progresses, we're all fallen. And it was, I mean, it really was something I hope I'm representing your views. You look at the show, and I'll post maybe something about it. But I don't really believe in collective aggregate moral progress as individually, we're fallen as you use the word. And we have an individual journey of moral progress, right, that we proceed through our life. But in the aggregate, we all start from the same place how far we get good luck to you. But in the aggregate, there's not really such a thing. And that doesn't mean she's a theologian. Yeah. So that's a possible reading of the Christian doctrine, or faith, which is super depressing for me. I mean, I didn't like it one bit.

Tyler Cowen: 57:24

But I don't agree. So I would agree we are all fallen. In a sense, similar to what I think she means. But look, the murder rate in medieval England was much higher than the murder rate in England today. So there's a kind of channeling that goes on. Yeah. And this is like the French reformation and enlightenment tradition, starting with basketball, and others at that time, the notion that mixed impulses, sometimes even bad impulses can be channeled, and get you to do better things. And ultimately, you become a better person surrounded by better peers. You don't stop being fallen. But you deal with the fact that like, Hey, I shouldn't you know, become a serial killer. I should start a business.

David Wright: 58:04

Yeah. And what are the institutions that kind of mediate that progress? Like, what is that? I mean, what is it? Where does it sit? Where is it encoded?

Tyler Cowen: 58:11

Well, religion is partly where it's encoded. So I think Mary herself should be more optimistic. But obviously, media, social norms, what leaders are like in a society books. So partly, this is a book, to want to inspire people to learn better how to look for talent, and there are already people I know who've taken this cue, and now are doing things with their life to help others look for talent.

David Wright: 58:35

So you want to trigger a conversation, and the conversation is a kind of, well, that's not uncoded anymore. That's just what is what is the conversation mean? What does that mean? Is that people writing blog posts is interviews on TV pot, is it you know, what is the medium of a conversation in an aggregate sense?

Tyler Cowen: 58:50

All of the above, but recognizing that most people at the end of the day will take away quite a quote unquote, stupid version? Yeah, the dye line just like oh, talent, but that's actually fine. Okay. And it will be barbell like, yeah, there'll be more people studying talent as a practical thing to do in a sophisticated way. It's amazed me, you know, some number of years ago, I would sit in on Silicon Valley conversations. And people had a very crude notion of five factor personality theory. They just thought it was so important. It was the thing you'd like, look for the person who's disagreeable like the next jerk. Maybe they should be wearing a hoodie, but they need to have the right kind of energy and nerdy background and they're just going to succeed. And those same conversations today just seem a lot more sophisticated. Like disagreeableness can be a value. The most successful people very often have some barbell like mix of disagreeableness and agreeableness. They're also good diplomats. Or they're good talking with the media or they're charismatic on Twitter like Elon Musk. So even in a small number of years, I see a lot of progress in these dialogues.

David Wright: 59:53

How is that transmitted? How does that go? How does that become to fill a place like Silicon Valley,

Tyler Cowen: 59:59

Silicon valley is a relatively small area. And a lot of the people there know each other, they also chat in person and also watch the app and in other ways, read each other on Twitter, and it's definitely being transmitted. I can see it happening in real time. And it's not that everyone now agrees like, Oh, here's how it is just asking way better questions, much better access to data. I think Jordan Peterson has been one person. I don't know that his particular ideas have stuck. But he forced everyone to think about talent much more closely. Like doesn't matter if you clean up your room. Yeah. I don't know even exactly what his view is. I've read his book. I have a very messy. Yeah. But nonetheless, I think he's been a major force getting people to think about talent more systemically.

David Wright: 1:00:48

So would you say so one of the Joe Henrich, guest on your podcast and mine talks about the transmission of culture through the mimicry of high status people more or less, and colleague of yours, Robin Hanson really thinks that the process by which we mimic status is not ideal, right? There should be better ways of transmitting cultural norms, memes, whatever you want to call them, I think, where do you stand on that? Do you think it's working? Is it something that we should be thinking about ways to tweak or improve in some way?

Tyler Cowen: 1:01:18

It would be great to improve it I suspect the variance is increasing. Okay. Part mostly because of the internet. So smart people become smarter. I don't know if it's exactly right to say stupid people become stupid, but they ended up with wackier ideas. Yeah. Now, since we have a lot of power law sectors, that might be a good bargain, right? To have the smarter people be smarter, better connected. But still, it's a dicey proposition, it's very risky to have this kind of intellectual fragmentation in your society. So many people holding some view about vaccine say that is just off. And that's what I think we're seeing. So we need to improve it.

David Wright: 1:01:55

What would that be like? Well, how could we improve something like that? And yeah,

Tyler Cowen: 1:02:00

there was a good article in The New York Times lately, super small example. But it looked at Bremen, Germany. And it's the part of Germany that has had the highest success with people getting vaccinated over 90%. And it's a low income area, Bremen used to be quite important. Now it's, you know, in the dumps, it doesn't necessarily have the features you would expect to correlate with success. But yet they did a local campaign and they messaged in the right way, people in Bremen have become highly vaccinated. Okay, so what can be done, I don't know that there's a single universal, like, people, here's how you do it. But you see a lot of variation. And you see a lot of successes. And we need more of them. And for people to focus on creating more of those successes, and in turn for people looking for talent, to be able to better identify who can do more of those.

David Wright: 1:02:47

You know, there's to kind of two thoughts on that, on that those processes. One of them is my experience in the insurance business tells me that in conditions of uncertainty, people like being told what to do. And so there's, like, embedded all over the place in society, is this desire for hierarchy? Yes, right. There's want to have the high status person either copy them, or they pass a law and put a gun to my head, one way or another, I want somebody in charge to help me through this agony of of uncertainty. And then John Haidt, also guest on your podcast. Yeah. It talks about the moral foundations of politics and more foundations theory, where there's a way of framing questions that can communicate more broadly to people. And there's a bit of literature that talks about people being more green if you kind of frame it in different kinds of ways. And so you're kind of attacking it directly. And so that would be if that's true, that's possible to actually communicate directly with people not through a status hierarchy. That would be an amazing change, I think and how we, how we process uncertain or risky or or kind of new information about decisions in Germany, did they do something like that? What was the right communication?

Tyler Cowen: 1:03:51

Or the there were local intermediaries? It's fascinating to me, you're recapitulating an earlier debate between Catholicism and some forms of Protestantism. I'm not sure there's a simple answer as to what's better. But I think part of the problem is this people like being told what to do, but not in every dimension. And if you try to tell them to whom they should listen, right, tell someone on the left. Oh, you've got to listen to Tucker Carlson on this one. Even if Tucker Carlson is correct on that issue, i's not going to work. And people don't like being told what to do when you try to tell them: "listen to this person". Tell a Rush Limbaugh fan. Oh, listen to the New York Times. It's probably going to be a backlash effect, if anything, and that's what we need to solve. And I doubt if there's a universal kind of solvent for that. It's just a tough slog.

David Wright: 1:04:35

are you incorporating any of that thinking into your phase of promotion of the ideas in your book? How might you do? How might you achieve your goals better? Through some advocacy that might be different than the usual? Is there another innovation happening maybe dollar for the conversation on talent?

Tyler Cowen: 1:04:55

We're doing a lot to promote this book, but I'm not sure anything we're doing is innovative. So I think simply being on a broad variety of podcasts, URIs is now the third I've recorded is helpful that different sets of people hear it or people here at multiple times, or they hear it through our conversation, which will be different from other conversations. They sort of hear you validating me your fans that I hope helps. And we will do a great deal on social media and in writing. But again, I don't know that we have innovative ideas for marketing the book, we thought of holding a talent conference. I've actually already done a few of those. Yeah, for talent reasons, but they weren't focused around the book. It wasn't out yet. That would be somewhat innovative. I'm not sure how effective

David Wright: 1:05:45

So in closing, where can people find the book?

Tyler Cowen: 1:05:48

The book is coming out or is out May 17. It is available on Amazon, Barnes and Noble from your independent bookseller, all the usual places in due time at used bookstores. And the title is talent how to identify energizers creatives and winners around the world by Tyler Cowen and Daniel gross.

David Wright: 1:06:10

I very much enjoyed it. My guest today is Tyler Cowen, thank you very much.

Tyler Cowen: 1:06:13

Thank you