Author: Freakonomics Radio

  • Highway Signs and Prison Labor

    AI transcript
    0:00:07 Hey there, it’s Stephen Duffner and today we’ve got a bonus episode for you.
    0:00:09 It is an episode of another show in our network.
    0:00:14 It’s called The Economics of Everyday Things, which is hosted by Zachary Crockett.
    0:00:20 In the past, Zachary and his team have made episodes about Michelin stars, snake venom,
    0:00:22 prosthetic limbs.
    0:00:26 Today, they bring us their reporting on highway signs and prison labor.
    0:00:30 If you like this episode, be sure to follow the show on your podcast app.
    0:00:35 Again, it’s called The Economics of Everyday Things and let us know what you think.
    0:00:47 Our email is radio@freakonomics.com Okay, here is Zachary Crockett.
    0:00:52 The town of Bun, North Carolina, is easy to miss.
    0:00:59 It occupies a total area of just half a square mile and it’s home to fewer than 330 people.
    0:01:03 Most of the surrounding land is used to grow tobacco and soybeans.
    0:01:09 But off the main road, behind a series of chain link fences and secure gates, is the
    0:01:15 state’s primary manufacturer of highway signs.
    0:01:21 Inside the plant, workers are busy shearing giant aluminum panels, cutting sheets of green
    0:01:25 adhesive, and measuring out the spacing between letters.
    0:01:30 And outside, in the shipping yard, the plant’s general manager, Lee Blackman, is admiring
    0:01:33 a row of completed products.
    0:01:35 This sign right here is 12 foot tall.
    0:01:40 This is going somewhere on Interstate 95 in North Carolina.
    0:01:47 This facility makes all kinds of road signs, stop signs, yield signs, construction signs.
    0:01:53 But its biggest products, both by size and revenue, are those huge green signs that loom
    0:01:55 over you on the highway.
    0:02:00 That’s going to give you information about what road you’re on right now, the intersections
    0:02:06 that are coming up, what is the next town coming up, the exit, and so forth.
    0:02:10 Signs like this are all over American highways and freeways.
    0:02:15 There are literally millions of them, and they’re so familiar that many of us don’t
    0:02:21 stop to think about where they come from or why they look the way they do.
    0:02:29 Behind every highway sign, there’s a long and winding road of economic decision making.
    0:02:33 We want to make sure that we get a good quality product because we want it out there for 20
    0:02:34 years.
    0:02:38 We’ve got to be good stewards of the taxpayers’ money.
    0:02:42 For the Freakonomics Radio Network, this is the Economics of Everyday Things.
    0:02:44 I’m Zachary Crockett.
    0:02:47 Today, highway signs.
    0:02:56 Back in the early days of the automobile, driving on American roadways was a free-for-all.
    0:03:03 There was no coordinated effort to manage the movement of vehicles, whether it be through
    0:03:11 road construction, a connected network of roadways, highways, traffic control devices.
    0:03:13 That’s Gene Hawkins.
    0:03:17 He works for the forensic engineering firm Kittleson, and he’s a professor emeritus
    0:03:21 in the Department of Civil Engineering at Texas A&M University.
    0:03:28 He’s one of the foremost experts on the history, design, and installation of traffic signs.
    0:03:33 The vehicles back then would not be used to travel long distances anyway.
    0:03:39 As the ability to travel longer distances increased, they created these trail systems,
    0:03:44 which were typically run by trail associations.
    0:03:49 These informal networks of roads were a predecessor to the highway system in America.
    0:03:54 And along these roads, there were very rudimentary ways of telling drivers where they were and
    0:03:56 what was up ahead.
    0:03:58 Most of these signs were hand-painted.
    0:04:01 Some had words, others had symbols.
    0:04:05 They were made from an assortment of materials in all different sizes and shapes, and the
    0:04:08 signs were different from place to place.
    0:04:13 I’ve seen pictures of stop signs that looked like coffins.
    0:04:15 Signs with skull and crossbones on them.
    0:04:20 As people started driving further and crossing state lines, they didn’t know how to interpret
    0:04:22 all the markers they saw.
    0:04:29 The state highway department people recognized we need to do a better job of providing a consistent
    0:04:33 uniform system of traffic control devices.
    0:04:41 In the 1930s, these efforts culminated in the Manual on Uniform Traffic Control Devices,
    0:04:44 or MUTCD for short.
    0:04:48 It provided a set of standards for traffic control devices across America’s growing
    0:04:50 system of roads.
    0:04:58 Today, it’s run by the Federal Highway Administration, and every state in the US adheres to its guidelines.
    0:05:04 It’s nearly 1,200 pages long, and it lays out the ground rules for more than 500 signs,
    0:05:09 markings, and signals, everything from the octagon shape of stop signs to the precise
    0:05:13 size of an exit sign on the freeway.
    0:05:18 These rules are determined by the National Committee on Uniform Traffic Control Devices.
    0:05:21 Hawkins serves as the committee’s chair.
    0:05:27 MUTCD gets into issues such as the design of the signs.
    0:05:33 Typically will give some indication on when or how to use the device.
    0:05:38 Technically, highway sign refers to any type of sign that communicates something to drivers
    0:05:44 on the road, and the MUTCD breaks these signs down into three categories.
    0:05:49 There’s regulatory signs which tell you what to do.
    0:05:53 That expresses the law, like a stop sign or speed limit.
    0:05:59 There are warning signs, and those are yellow diamond signs, which warn you of a potential
    0:06:05 hazard, like a curve in the road or a pedestrian crossing, and then there are guide signs which
    0:06:07 give directions.
    0:06:12 Guide signs are those enormous placards on the freeway that tell you which exits or intersecting
    0:06:16 highways are coming up and how far away they are.
    0:06:21 And everything you see on one of these signs is a calculated decision, starting with the
    0:06:23 font.
    0:06:29 Most signs use a special sans-serif typeface that’s unofficially called highway gothic.
    0:06:33 It’s almost exclusively designed for highway signage.
    0:06:39 The spacing between the letters in the highway alphabet is much greater than the spacing
    0:06:43 between letters on a printed page for reading.
    0:06:49 The words on these guide signs are almost always set in mixed case, with initial capitals
    0:06:51 followed by lowercase letters.
    0:06:54 There’s a good reason for that.
    0:07:02 If you know what city name or street name you’re looking for, you could recognize that
    0:07:07 it was on a sign even before you could read it when it’s mixed case.
    0:07:13 For example, my name Hawkins, the H sticks up and the K sticks up.
    0:07:20 The word English, the E sticks up, the G descends, and the L sticks up.
    0:07:28 So if you’re looking for the city Hawkins or the road English, you have a shape that
    0:07:33 you’re expecting to see and you can see that shape from further away than you can actually
    0:07:35 read the letters.
    0:07:44 And that was recognized as a real advantage when the traffic is moving at 70 miles an
    0:07:45 hour.
    0:07:50 There are also guidelines around the size of the font on highway signs.
    0:07:56 And from below, it’s hard to grasp just how big the characters are.
    0:08:00 If it’s an overhead sign, it’s 20 inches for a capital letter.
    0:08:04 So the letter is almost two feet tall.
    0:08:09 And the general rule is that the space between lines of text is going to be equal to the
    0:08:12 height of the line of text.
    0:08:21 So it’s very easy to have a freeway sign that may only have three or four lines of copy
    0:08:24 that could end up being 10 feet tall.
    0:08:27 Then there’s the color of the sign.
    0:08:32 In the 1950s, the federal government looked into the legibility of black, blue, and green
    0:08:33 signs.
    0:08:39 Officials staged a test with hundreds of motorists on a road in New York and found that 58% of
    0:08:42 drivers preferred green.
    0:08:46 Turns out the color green has another benefit too.
    0:08:52 It provides the best base for retro reflectivity, basically what makes signs legible when they’re
    0:08:55 illuminated by a car’s headlights in the dark.
    0:08:59 The reflectivity of signs has come a long way.
    0:09:04 Drivers initially used something called cat’s eyes, tiny marbles embedded in each letter
    0:09:06 on the sign.
    0:09:11 These have since been replaced by reflective sheeting that covers the whole sign.
    0:09:19 Most of the sign sheeting made in the United States is what’s called micro prismatic sheeting.
    0:09:26 Essentially, if you look at a bicycle reflector, it looks like a series of ridges inside.
    0:09:34 And it is a similar structure in micro prismatic sheeting just really, really, really small.
    0:09:40 Now, not every sign on the freeway is green.
    0:09:42 Some of them are brown.
    0:09:47 Those are typically used for tourist attractions or recreation points like state parks.
    0:09:53 And every now and then, you’ll also see a blue sign full of corporate logos.
    0:09:57 Those are called service signs, and their purpose is to tell you what kinds of services
    0:10:03 and businesses are coming up, say a Chevron gas station in two miles or an Arby’s at
    0:10:05 the next exit.
    0:10:10 These are actually ads and businesses pay for the real estate.
    0:10:18 In most states, they contract that with a business who goes out and collects money from
    0:10:23 those businesses that want to put a logo, and sometimes they have to do a lottery.
    0:10:26 Sometimes it’s a bidding process.
    0:10:32 To qualify, a business usually has to fall into one of a number of categories, gas, lodging,
    0:10:36 food, camping, attraction, or pharmacy.
    0:10:38 And the fees vary from state to state.
    0:10:45 In Arizona, a placement can range from $1,100 in a less populated area to more than $6,000
    0:10:48 in a busier urban location.
    0:10:53 In other states, like North Carolina, it might only be a few hundred bucks.
    0:10:57 For state transportation departments, service signs can bring in millions of dollars in
    0:10:59 revenue.
    0:11:04 But most highway signs aren’t lucrative for the public entities responsible for them.
    0:11:08 Making them is an intensive and costly endeavor.
    0:11:13 There are dozens of companies that make the smaller ones, like stop signs or speed limit
    0:11:14 signs.
    0:11:20 But few manufacturers are capable of producing the enormous green highway guide signs.
    0:11:25 When a state transportation department needs a new one, the job goes to someone like Renee
    0:11:26 Roach.
    0:11:29 I work for the North Carolina Department of Transportation.
    0:11:35 I am the state signing and delineation engineer.
    0:11:39 Roach has a big job to go along with that big title.
    0:11:43 We maintain over 80,000 miles in North Carolina.
    0:11:46 Any signs, we lay out exactly where they need to go.
    0:11:51 What do they need to say, destinations, route markers, and things like that.
    0:11:56 Any of the payment markings that are there on the road, we also place the size, the color,
    0:11:58 the location of those.
    0:12:03 Most highway signs have a sticker on the back with the dates that it was manufactured and
    0:12:04 installed.
    0:12:09 Roach knows exactly how long every sign has been on the highway and when it probably needs
    0:12:11 to be replaced.
    0:12:16 A good sign might last anywhere from 12 to 20 years before the natural elements start
    0:12:18 to degrade it.
    0:12:22 But sometimes replacements happen far sooner.
    0:12:23 There is vandalism.
    0:12:28 You’d be surprised at how much vandalism they may get hit or destroyed.
    0:12:33 Whenever Roach needs a new highway sign, she turns to a trusted supplier.
    0:12:37 The vast majority of our signs are coming through Bunn.
    0:12:42 In North Carolina, nearly every highway sign in the state comes from the sign plant in
    0:12:44 the small town of Bunn.
    0:12:50 That’s why we took a trip out there to see the manufacturing process for ourselves.
    0:12:52 Is this whole thing we’re looking at here, one sign?
    0:12:53 Yes, it is.
    0:12:54 It’s pretty awesome.
    0:12:58 When we get out on the yard, I’ll show you some really big signs.
    0:13:03 As a general manager who oversees the plant, Lee Blackman is in charge of running day-to-day
    0:13:04 operations.
    0:13:10 I talked to him on the factory floor over the sounds of welding torches and miter saws.
    0:13:13 Our plant is actually divided into two different halves.
    0:13:18 This is what we call the project in, where we manufacture mostly your big overhead signs
    0:13:19 that you see there.
    0:13:24 The other end is what we call the maintenance sign of the plant.
    0:13:29 That’s where your smaller signs, let’s say your 30, 36 inch stop signs that you’d see
    0:13:34 in a rural setting, your standard speed limit signs are back there.
    0:13:40 The process for making a highway sign begins with a detailed blueprint sent over by Renee
    0:13:44 Roach at the North Carolina Department of Transportation.
    0:13:51 That’s got the exact specifications that DOT wants for this sign, the type of sheeting,
    0:13:57 the color of sheeting, the overlays, so this routing sheet is going to follow this sign
    0:13:59 all through the process.
    0:14:03 The first step of the fabrication process is selecting the right kind of aluminum for
    0:14:05 the job.
    0:14:09 We use four different gauges or thicknesses of the metal.
    0:14:16 Our largest sheet is 48 by 144, which is four foot wide, 12 foot long.
    0:14:21 The workers haul these huge sheets over to the shearing department where they’re cut
    0:14:22 to size.
    0:14:27 Sometimes, signs are so big that they have to be split up into as many as 14 different
    0:14:29 panels.
    0:14:34 When the contractor gets it out on the job site, they’ll put it together like a puzzle.
    0:14:39 The sheared metal is sanded down to get rid of any blemishes or rough patches.
    0:14:43 Then, it’s coated with green reflective sheeting.
    0:14:45 There’s no paint on the side.
    0:14:49 It’s all sheeting and it’s all translucent ink.
    0:14:52 This piece of wood is called a squeeze roll applicator.
    0:14:57 The machine is sent to a specific butcher and that will directly apply the sheeting
    0:15:00 through the piece of metal.
    0:15:06 Then comes one of the more technical parts of the job, putting the letters on the sign.
    0:15:11 For large highway signs, each letter is printed individually and placed by hand, according
    0:15:14 to very strict measurements.
    0:15:20 What he’s doing now is he’s pasting out the horizontal measurements for the line of copy.
    0:15:25 He knows how far from the bottom these letters are going to be, how far from the top.
    0:15:27 And he’s setting all that up.
    0:15:30 He’s going to hand lay every one of these letters individually.
    0:15:35 It tells you the exact distance from one letter to the next, from the edge of the sign coming
    0:15:36 up to the first letter.
    0:15:38 So, you know everything down to the spacing of the font?
    0:15:41 You know the spacing, the different size fonts.
    0:15:47 And that determines too, you know, bigger sign, bigger font, smaller sign, smaller font.
    0:15:50 These letters can only be off an eighth of an inch.
    0:15:52 It’s not a whole lot of leeway, yeah.
    0:15:55 It’s not a whole lot of leeway.
    0:16:00 To start to finish, it can take around 12 hours to finish a single large highway guide
    0:16:01 sign.
    0:16:05 Once the sign is done, it’s taken out into the storage yard.
    0:16:10 There, racks upon racks of enormous highway signs are lined up to get transported all
    0:16:13 over the state of North Carolina.
    0:16:19 These signs right here are ready to go, whether it’s going to a specific project on a specific
    0:16:26 road, or whether it’s what we call a division, where it’s going to go to a specific DOT division.
    0:16:31 North Carolina’s Department of Transportation pays around $42 per square foot for the sign
    0:16:33 itself.
    0:16:39 Depending on the size, that could run anywhere from $1,400 for an exit sign, up to $8,500
    0:16:41 for a large guide sign.
    0:16:44 Then, there’s installation.
    0:16:50 If the sign is ground-mounted, labor and support beams might run an additional $18,000.
    0:16:55 If the sign has to hang over the road, either on a cantilever or a structure that spans
    0:17:03 the entire highway, that cost could be as high as $200,000.
    0:17:07 But there’s a catch that saves the state a ton of money.
    0:17:14 The Bunn sign plant is located inside a prison that’s staffed by incarcerated individuals.
    0:17:19 And that allows Renee Roach to get a good deal on signs.
    0:17:26 They can generate a lot of those signs really quickly for a fairly inexpensive price.
    0:17:29 This isn’t unique to North Carolina.
    0:17:34 Most states across America use prison labor to make stuff, not necessarily highway signs,
    0:17:39 but a variety of products all around us.
    0:17:44 Coming up after the break, Zachary Crockett takes a look at prison labor.
    0:17:49 As a whole in society, we are not incredibly sympathetic towards prisoners having to do
    0:17:50 work.
    0:17:54 I think if you asked the average American, they would be like, “Good.”
    0:17:59 But if you explained exactly how it worked, they would be a little more unsettled.
    0:18:00 That’s coming up.
    0:18:04 Christian Dubner and you were listening to a bonus episode of The Economics of Everyday
    0:18:05 Things.
    0:18:14 We’ll be right back.
    0:18:19 We are back with this special episode from The Economics of Everyday Things.
    0:18:21 Here’s Zachary Crockett.
    0:18:34 Like most working people, Christopher Barnes has a daily routine.
    0:18:39 He brushes his teeth, washes his face, and at around seven in the morning, he makes
    0:18:42 the short commute to his workplace.
    0:18:49 I work in EG sheeting, I sheet the metal, and trim it, and get it ready for screening.
    0:18:52 I’ve been in that department the whole time I’ve been down here.
    0:18:56 Barnes and his colleagues make highway signs.
    0:18:58 My family, they’d be like, “What you doing the sign plant?”
    0:19:01 And I tell them, “I make the signs in the streets.”
    0:19:05 I was like, “Wow, I thought somebody else did that.”
    0:19:08 This isn’t just any sign plant.
    0:19:11 It’s located inside Franklin Correctional Center.
    0:19:15 A medium-security prison in Bunn, North Carolina.
    0:19:19 And Barnes is serving a life sentence for first-year murder.
    0:19:26 He’s one of around 800,000 incarcerated people with jobs in America’s prison system.
    0:19:32 They grow crops, repair roads, fight wildfires, and manufacture a surprising number of the
    0:19:38 products we encounter in daily life, from office furniture to reading glasses.
    0:19:43 It’s estimated that more than $11 billion worth of goods and services every year can
    0:19:48 be traced back to workers who are mostly paid pennies per hour for their labor, or even
    0:19:50 nothing at all.
    0:19:55 We wanted to learn more about how prison labor became a central part of the economy.
    0:20:02 And we found out that the story goes back to the founding of our country.
    0:20:06 Around the world, work has long been used as a form of punishment.
    0:20:10 The U.S. colonies under British rule were no exception.
    0:20:15 Britain shipped over criminals and sold them to farms in Virginia and Maryland.
    0:20:18 They worked in the fields alongside enslaved people.
    0:20:22 And together, their labor sustained our early agrarian economy.
    0:20:27 As America’s justice system evolved, we began to send convicts to prisons.
    0:20:34 You don’t really see the first prison labor until the beginning of the 19th century.
    0:20:39 Laura Appelman is a professor of law at Willamette University in Oregon.
    0:20:43 She’s researched the history and economics of prison labor.
    0:20:50 What quickly became common is something called the industrial prison.
    0:20:56 Prisoners were essentially rented out to for-profit companies for labor.
    0:20:58 They were putting together furniture.
    0:21:01 They were making clothes, making wagons.
    0:21:08 Whenever it was local, originally it was to recoup the expense of prisons.
    0:21:11 But then they realized, hey, we can make some money here.
    0:21:15 When the 13th Amendment was passed after the Civil War, banning slavery and other forms
    0:21:20 of unpaid labor, a notable exception was carved out.
    0:21:31 The 13th Amendment outlawed slavery except when you had been convicted of a crime.
    0:21:36 Across the South, thousands of emancipated slaves were locked up for petty offenses.
    0:21:40 They were forced to grow crops on penal farms.
    0:21:46 Later, they were shackled together in chain gangs that built roads for government contractors.
    0:21:52 These practices persisted for many decades, and eventually they morphed into a larger
    0:21:54 and more institutional system.
    0:22:03 Prisons didn’t really start going into the big time until the 80s, 90s, when mass incarceration
    0:22:06 really started booming.
    0:22:13 Cost skyrocketed, and prison labor is the way that government is trying to pay for it.
    0:22:19 Today, more than a million people are incarcerated in America’s federal and state prisons.
    0:22:23 Housing and feeding them is very expensive.
    0:22:28 The median cost per person is around $64,000 a year.
    0:22:33 That cost falls on the state, and ultimately, taxpayers.
    0:22:38 The government offsets these costs by putting prisoners to work as much as possible.
    0:22:43 At the majority of prisons, you’ll find them doing a lot of the internal labor.
    0:22:49 They cook the meals in the cafeteria, do laundry, clean the buildings, and maintain the grounds.
    0:22:52 But they also work in government-run prison factories.
    0:22:56 Like the sign plant at Franklin Correctional Center.
    0:22:58 Louis Southall is the prison warden.
    0:23:03 He oversees the 300 incarcerated men who live there.
    0:23:09 We’ve had offenders here from DUIs all the way up to incarcerated for taking someone’s
    0:23:10 life.
    0:23:15 Almost all of those men have a job, whether it’s sweeping floors or mowing the lawns.
    0:23:21 But according to Southall, only the best workers get to work in the sign plant.
    0:23:25 This is a million-dollar corporation, and you don’t want to have somebody down here
    0:23:29 that may have anger issues or have destructive issues.
    0:23:33 You can have one offenders destroy a whole sign, and that may cost tens of thousands
    0:23:34 of dollars.
    0:23:39 While the sign plant is on prison grounds, it’s actually run by a separate entity called
    0:23:41 Correction Enterprises.
    0:23:46 It’s a part of the North Carolina Department of Adult Correction, and it has 27 production
    0:23:51 facilities across the state, all almost entirely staffed by prisoners.
    0:23:58 Again, here’s Lee Blackman, the plant manager who we met earlier on the factory floor.
    0:23:59 I’ll sign manufacturing plant.
    0:24:02 This is just one of the many plants that we have.
    0:24:04 All of these plants are different industries.
    0:24:09 The other ones that I have a hand in are the metal plant down in Anson County, woodworking,
    0:24:11 and upholstery up at Alexander.
    0:24:14 Optical plant we have over in Nash.
    0:24:19 The other general managers have a wide variety of plants that they look after, whether it
    0:24:25 be janitorial, laundries, sewing.
    0:24:30 Correction Enterprises uses prison labor to make dozens of products.
    0:24:34 Employed prisoners sew the linens used in prison beds.
    0:24:38 They process canned peas and beef patties for prison cafeterias.
    0:24:44 They manufacture air fresheners, hand soap, motor oil, prescription glasses, picnic tables,
    0:24:47 and license plates.
    0:24:53 Last year, Correction Enterprises sold $121 million worth of goods.
    0:24:58 Almost all of those sales were to government agencies in the state of North Carolina, many
    0:25:01 of which are required to shop through the company.
    0:25:08 We also do a lot of work for any tax-supported entity within the state of North Carolina.
    0:25:13 By using prison labor, Correction Enterprises is able to offer the government prices that
    0:25:15 are well below market rate.
    0:25:22 At a typical business, labor accounts for around 25 to 35% of the cost to produce goods.
    0:25:27 At Correction Enterprises, it’s only around 2.5%.
    0:25:34 It’s less than $3 million in labor costs on $121 million in sales.
    0:25:38 Blackman says the benefits of those savings trickle down.
    0:25:42 If you pay taxes and I’m a taxpayer instead of North Carolina, I want everybody to be
    0:25:46 as frugal when my tax dollars as they can be.
    0:25:51 But that frugality is only possible because prisoners aren’t protected by most employment
    0:25:52 laws.
    0:25:57 Again, here’s law professor Laura Appelman.
    0:26:04 Prison labor is classified as, quote, “non-market work,” so you don’t have to pay them anything
    0:26:06 near the minimum wage.
    0:26:13 For incarcerated workers, pay depends on the type of job they have and where they work.
    0:26:18 Most jobs pay somewhere between $0.13 and $0.52 an hour.
    0:26:23 In some states like Kansas, prisoners are paid around $0.05 an hour.
    0:26:29 And in others like Alabama and Mississippi, prison jobs don’t pay at all.
    0:26:30 All states are in on this.
    0:26:38 That means a great source of very low-cost labor.
    0:26:44 Almost every state in America has its own version of Correction Enterprises.
    0:26:49 And prisoners often do much riskier work than building furniture and spacing out letters
    0:26:51 on highway signs.
    0:26:56 Some prison jobs are part of work-release programs that send incarcerated men and women
    0:26:58 to the outside world.
    0:27:04 At the height of the pandemic, prisoners transported dead bodies to morgues and disinfected medical
    0:27:06 supplies.
    0:27:11 After a hurricane or an oil spill, they’re dispatched to clean up the mess.
    0:27:17 And when wildfires break out, they’re airlifted into the heart of the forest.
    0:27:22 Federal prisons have their own system for taking advantage of cheap labor.
    0:27:28 The government-owned federal prison industries, or FBI, has more than 60 work facilities across
    0:27:30 the country.
    0:27:38 It manufactures around 300 products — boots, jumpsuits, tools, medical supplies, body armor,
    0:27:45 even electronic components for guided missiles, which it sells to the Department of Defense.
    0:27:47 But prisoners don’t just do work for the government.
    0:27:53 Sometimes, the state leases out their labor to companies in the private sector.
    0:27:56 The companies really want to keep it quiet.
    0:28:00 But I think they’re thrilled because it’s so much cheaper.
    0:28:06 And the state government is thrilled because they make some money.
    0:28:10 Prisoners have sowed underwear for Victoria’s Secret, worked in call centers for cell phone
    0:28:15 companies, and made cheese that was sold in Whole Foods.
    0:28:22 Forty-six states run agricultural programs within their prison systems.
    0:28:26 They raise a lot of food, and some of it’s used for the prison itself, and some of it
    0:28:28 is sold on the open market.
    0:28:34 An investigation by the Associated Press found that food produced on penal farms ends up
    0:28:41 in popular products like frosted flakes cereal, gold metal flour, and ballpark hot dogs.
    0:28:43 Companies don’t just save money on labor costs.
    0:28:48 They often earn tax credits for hiring work-release prisoners.
    0:28:54 All of this makes prison labor a great deal for taxpayers, governments, and private businesses.
    0:28:59 And the idea is that prisoners gain key skills.
    0:29:04 Up after the break, not all prison jobs teach key skills.
    0:29:10 I can remember being given some of the most tedious jobs just to keep me busy.
    0:29:11 I’m Stephen Dubner.
    0:29:15 This is Freakonomics Radio, and you’re listening to a special episode of The Economics of Everyday
    0:29:22 Things with Zachary Crockett.
    0:29:28 Brian Scott served 20 years in prison for a sex crime before being released in 2021.
    0:29:33 For most of that time, he was at the Nash Correctional Institution in North Carolina,
    0:29:38 and he was working at a printing facility run by correction enterprises.
    0:29:43 We did everything from what they call inmate stationery, which is the paper that they gave
    0:29:49 us to write on, to, you know, we did a brochure that detailed all of the wineries across the
    0:29:51 entire state.
    0:29:52 It was always something different.
    0:29:56 I read on the site that they even did report cards there for high schools and colleges.
    0:30:01 Yes, and the temporary tags that you get when you purchase a new vehicle.
    0:30:07 The printing facility was staffed by around 130 prisoners, and the day-to-day work was
    0:30:12 similar to what employees at any other printing facility would do, except in exchange for
    0:30:17 his labor, Scott was only paid 26 cents an hour.
    0:30:23 We actually started at 13 cents, and then there was a raise that you got pretty soon
    0:30:28 to 20 cents, and then, you know, the 26 cents was when you were actually operating a machine
    0:30:30 or a computer.
    0:30:34 The crazy thing is, it was actually one of the higher paying jobs.
    0:30:37 There were many people working back in the dorms, pushing brooms or whatever, and they
    0:30:47 were making, you know, anywhere from 40 cents a day to maybe a dollar a day at the most.
    0:30:53 Every Sunday, Scott’s weekly earnings, around $14, were transferred into a trust fund controlled
    0:30:58 by the prison, and he says getting full pay wasn’t guaranteed.
    0:31:04 There were some individuals who would have some of their pay taken out because they had
    0:31:09 received a lot of write-ups, or they had some court-appointed fees.
    0:31:16 A write-up was $10, but when you’re only making $15 and they take $10, it hurts.
    0:31:21 First incarcerated people use their money to buy stuff at the commissary or canteen,
    0:31:24 a store inside the prison.
    0:31:26 Ramen noodle soup was maybe 25 cents.
    0:31:30 Coca-Cola was probably, I don’t know, a dollar and a half.
    0:31:34 When you’re considering that you’re making $14 a week, you know, a dollar 50 to spend
    0:31:37 on a Coke, there’s a lot of money.
    0:31:41 A lot of people couldn’t afford that sort of thing.
    0:31:46 Scott says many people with prison jobs took on side hustles to supplement their income.
    0:31:51 I don’t know how many green peppers I bought from guys who worked in the Chow Hall.
    0:31:56 That was the way that they tried to compensate for the pennies that they were being paid.
    0:32:01 We had people who would draw a picture of your child or your spouse, and you would pay
    0:32:03 them a fee for that.
    0:32:07 Scott had an operation making incense sticks in his cell.
    0:32:13 They’d sell them for one postage stamp, which is a form of currency behind bars.
    0:32:19 The process was you would get the stick off of a broom, you would take one little square
    0:32:24 of toilet paper, which the state provided, you would wrap it around the stick, you would
    0:32:30 get it damp, and then you would roll it in the sage.
    0:32:31 That had to come out of the Chow Hall.
    0:32:37 They would sell little bottles of oil in the canteen, and I would dab it on the whole stick,
    0:32:43 let it dry, and there you go, you’ve got an incense stick.
    0:32:49 Aside from the pay, Scott says his time at the printing plant was a tolerable experience.
    0:32:53 But toward the end of his sentence, he was transferred to another correction enterprises
    0:32:57 facility where he refurbished traffic signs.
    0:33:00 And that was a different story.
    0:33:02 It really was a horrible place.
    0:33:03 Nobody liked being there.
    0:33:08 It was off-site, so you got bused to this location, bused back in, and every day when
    0:33:12 you came back, you had to go through a full strip search.
    0:33:15 Because the labor was so cheap, they would have more people than they actually needed.
    0:33:21 I can remember being given some of the most tedious jobs just to keep me busy.
    0:33:25 There was a building that we had to pressure wash during the winter.
    0:33:31 There were picnic tables outside that we had to chip all the pain off of.
    0:33:35 The people who run prison labor programs often say that working at their facilities is a
    0:33:40 choice and that if a prisoner doesn’t like a certain job, they’re free to find other
    0:33:43 work inside the prison.
    0:33:46 But this freedom often comes with a catch.
    0:33:51 The New York Times recently reported that prisoners in an Alabama facility who refuse
    0:33:56 to take on work release jobs often face disciplinary action.
    0:33:59 Again, here’s law professor Laura Appelman.
    0:34:07 Technically, it’s not forced labor, although it depends how you define forced.
    0:34:09 It’s not the chain gang.
    0:34:13 It’s not convict leasing, but the pressures are different.
    0:34:18 If you absolutely refuse to do anything, your privileges are going to be taken away.
    0:34:23 And of course, when you’re incarcerated, privileges sort of make life bearable.
    0:34:28 Appelman also says that because prisoners aren’t considered employees, they aren’t
    0:34:31 covered by employment protections.
    0:34:36 Things like workplace safety regulations and a worker’s comp in case of injury.
    0:34:41 But some incarcerated workers believe that prison labor will pay off for them down the
    0:34:42 line.
    0:34:47 Work programs are often positioned as a solution to recidivism, the tendency of convicted
    0:34:50 criminals to reoffend.
    0:34:54 The idea is that the skills you learn on the inside will help you land on your feet once
    0:34:56 you’re out.
    0:35:01 Lee Blackman of Correction Enterprises made that point during a walkthrough of the sign
    0:35:03 plant in North Carolina.
    0:35:09 We can take these men and we teach them and once they start doing the job, they’re figuring
    0:35:11 out, “Hey, I can do this.”
    0:35:13 They start believing in themselves.
    0:35:14 They got the confidence.
    0:35:16 They know they can do that job.
    0:35:24 And they can walk into a prospective employer and say, “Let me show you what I can do.”
    0:35:29 The evidence that prison labor helps incarcerated people find jobs once they’re back out in
    0:35:32 the real world is mixed.
    0:35:36 Many companies won’t even consider hiring people with felony convictions.
    0:35:42 And more than 60% of people who are released from prison are unemployed a year later.
    0:35:47 But it does work out for some people, including Brian Scott.
    0:35:53 After he was released in 2021, he quickly found a civilian job in the printing industry.
    0:35:58 Correction Enterprises connected me with the printing company in Burlington that had expressed
    0:36:02 an interest in hiring people with criminal records.
    0:36:06 I think my starting pay was $15 an hour, that first paycheck.
    0:36:13 It was more money than I would make in almost an entire year working for correction enterprises.
    0:36:18 Christopher Barnes, the incarcerated worker at the sign plant in Bunn, North Carolina,
    0:36:21 will never see that kind of paycheck.
    0:36:25 He’s in prison for life with no possibility of parole.
    0:36:29 For him, the benefit of working a job in prison isn’t the pay, the chance to learn
    0:36:33 new skills, or the promise of a brighter future.
    0:36:38 It’s the brief moment of respite he gets from the cell block each morning, before the
    0:36:43 machines fire up and the highway signs are cut to size.
    0:36:55 Quiet, quiet as goals are long way.
    0:37:02 Hey there, it’s Stephen Dubner again, and I hope you enjoyed this special episode of
    0:37:05 the economics of everyday things with Zachary Crockett.
    0:37:09 I hope you liked it enough to follow the show on your podcast app.
    0:37:14 We will be back very soon with a new episode of Freakonomics Radio, although for the new
    0:37:20 year we are switching our regular publication schedule from Wednesday night eastern time
    0:37:22 to early Friday morning.
    0:37:27 So if you are an early downloader, which I know you are, and you aren’t seeing the episode
    0:37:30 on Wednesday night, do not freak out.
    0:37:32 We’ll be there Friday morning.
    0:37:37 Until then, take care of yourself, and if you can, someone else too.
    0:37:41 Freakonomics Radio and the economics of everyday things are produced by Stitcher and Renbud
    0:37:42 Radio.
    0:37:46 This episode was produced by Zachary Crockett and Sara Lilly, with help from Daniel Moritz
    0:37:47 Rabson.
    0:37:50 It was mixed by Jeremy Johnston.
    0:37:54 The Freakonomics Radio network staff also includes Alina Kulman, Augusta Chapman, Dalvin
    0:37:59 Abouaji, Eleanor Osborne, Ellen Frankman, Elsa Hernandez, Gabriel Roth, Greg Rippon,
    0:38:04 Jasmine Klinger, Jason Gambrel, John Schnarr’s Lyric Bowditch, Morgan Levy, Mule Caruth,
    0:38:06 Theo Jacobs, and Zac Lipinski.
    0:38:09 Our theme song is Mr. Fortune by the Hitchhikers.
    0:38:11 Our composer is Luis Guerra.
    0:38:14 As always, thank you for listening.
    0:38:24 I guarantee you there are stamps floating around the system that were purchased 25 years ago.
    0:38:31 Freakonomics Radio Network, the hidden side of everything.
    0:38:34 (gentle music)
    0:38:36 you

    Incarcerated people grow crops, fight wildfires, and manufacture everything from prescription glasses to highway signs — often for pennies an hour. Zachary Crockett takes the next exit, in this special episode of The Economics of Everyday Things.

     

    • SOURCES:
      • Laura Appleman, professor of law at Willamette University.
      • Christopher Barnes, inmate at the Franklin Correctional Center.
      • Lee Blackman, general manager at Correction Enterprises.
      • Gene Hawkins, senior principal engineer at Kittelson and professor emeritus of civil engineering at Texas A&M University.
      • Renee Roach, state signing and delineation engineer for the North Carolina Department of Transportation.
      • Brian Scott, ex-inmate, former worker at the Correction Enterprises printing plant.
      • Louis Southall, warden of Franklin Correctional Center.

     

     

  • Can Academic Fraud Be Stopped? (Update)

    AI transcript
    0:00:04 Hey there, it’s Stephen Dubner.
    0:00:09 This is the second and final part of a series we are revisiting from last year.
    0:00:19 Stick around for an update at the end of the episode.
    0:00:23 Last week’s episode was called Why Is There So Much Fraud in Academia.
    0:00:29 We heard about the alleged fraudsters, we heard about the whistleblowers, and then a lawsuit
    0:00:31 against the whistleblowers.
    0:00:38 My very first thoughts were like, oh my god, how’s anyone going to be able to do this again?
    0:00:43 We heard about feelings of betrayal from a co-author who was also a long-time friend
    0:00:45 of the accused.
    0:00:52 We once even got to the point of our two families making an offer to a developer on a project
    0:00:55 to have houses connected to each other.
    0:01:01 We also heard an admission from inside the house that the house is on fire.
    0:01:05 If you were just a rational agent acting in the most self-interested way possible as
    0:01:09 a researcher in academia, I think you would cheat.
    0:01:14 That episode was a little gossipy for us at least.
    0:01:20 Today we are back to wonky, but don’t worry, it is still really interesting.
    0:01:26 Today we look into the academic research industry, and believe me, it is an industry.
    0:01:30 And there is misconduct everywhere from the universities.
    0:01:36 The most likely career path for anyone who has committed misconduct is a long and fruitful
    0:01:41 career because most people, if they’re caught at all, they skate.
    0:01:46 There’s misconduct at academic journals, some of which are essentially fake.
    0:01:50 There may be something that sounds a lot less nefarious than what I just described, but
    0:01:53 that is actually what’s happening.
    0:01:59 And we’ll hear how the rest of us contribute, because after all, we love these research
    0:02:00 findings.
    0:02:04 You know, you wear red, you must be angry, or if it says that this is definitely a cure
    0:02:05 for cancer.
    0:02:09 We’ll also hear from the reformers who are trying to push back.
    0:02:13 It was a tense few months, but in the end, I was allowed to continue doing what I was
    0:02:14 doing.
    0:02:16 Can academic fraud be stopped?
    0:02:27 Let’s find out.
    0:02:32 This is Freakonomics Radio, the podcast that explores the hidden side of everything with
    0:02:44 your host, Stephen Dubner.
    0:02:50 This week, we heard about two alleged cases of data fraud from two separate researchers
    0:02:51 in one paper.
    0:02:57 The paper claimed that if you ask people to sign a form at the top before they fill out
    0:03:03 the information, you will get more truthful answers than if they sign at the bottom.
    0:03:09 After many unsuccessful attempts to replicate this finding and allegations that the data
    0:03:14 supporting it had been faked, the original paper was finally retracted.
    0:03:20 The two alleged fraudsters are Dan Ariely of Duke and Francesca Gino, who has been suspended
    0:03:22 by Harvard Business School.
    0:03:27 Gino subsequently sued Harvard, as well as the three other academic researchers who blew
    0:03:28 the whistle.
    0:03:32 The lawsuit against the researchers was dismissed.
    0:03:35 The whistleblowers maintain a blog called Data Colada.
    0:03:40 They have written that they believe there is fake data in many of the papers that Francesca
    0:03:43 Gino coauthored, perhaps dozens.
    0:03:48 Gino and Ariely, meanwhile, both maintain their innocence.
    0:03:52 They also both declined our request for an interview.
    0:03:56 On that one paper that caused all the trouble about signing at the top, there were three
    0:04:01 other coauthors, Lisa Shoe, Nina Mazar, and Max Bazerman.
    0:04:05 None of them have been accused of any wrongdoing.
    0:04:10 So let’s pick up where we left off with Max Bazerman, the most senior researcher on that
    0:04:11 paper.
    0:04:13 He also teaches at Harvard Business School.
    0:04:19 When there’s somebody who engages in bad behavior, there’s always people around who
    0:04:23 could have noticed more and acted more.
    0:04:26 Bazerman was close with Francesca Gino.
    0:04:29 He had been her advisor and he trusted her.
    0:04:34 So he has been spending a lot of time lately thinking about the mess.
    0:04:40 He recently published a book called Complicit, How We Enable the Unethical and How to Stop,
    0:04:45 and he’s working on another book about social science fraud.
    0:04:48 This has led him to consider what makes people cheat.
    0:04:54 Let’s take the case of Dieteric Stapel, a Dutch professor of social psychology, who
    0:05:02 after years of success admitted to fabricating and manipulating data in dozens of studies.
    0:05:09 Part of the path toward data fabrication occurred in part because he liked complex ideas, and
    0:05:16 academia didn’t like complex ideas as much as they liked the snappy sort of quick bait,
    0:05:22 and that moved him in that direction and also put him on the path toward fraudulent behavior.
    0:05:28 So here’s something that Stapel wrote later when he wrote a book of confession essentially
    0:05:29 about his fraud.
    0:05:35 He wrote, “I was doing fine, but then I became impatient, overambitious, reckless.
    0:05:39 I wanted to go faster and better and higher and smarter all the time.
    0:05:43 I thought it would help if I just took this one tiny little shortcut, but then I found
    0:05:46 myself more and more often in completely the wrong lane in the end.
    0:05:49 I wasn’t even on the road at all.”
    0:05:54 What struck me about that, and I think about that with Dan Ariely and Francesca Gino as
    0:05:59 well, which is that the people who have been accused of having committed academic fraud
    0:06:05 are really successful already, and I’m curious what that tells you about either the stakes
    0:06:11 or the incentives or maybe the psychology of how this happens, because honestly, it surprises
    0:06:12 me.
    0:06:18 I would say we don’t know that much about why the fraudsters do what they do.
    0:06:22 And the most interesting source you just mentioned, so Stapel wrote a book in Dutch
    0:06:29 called “Outsporing,” which means something like D-Rail, where he provides his information
    0:06:33 and he goes on from the material you talked about to describing that he became like an
    0:06:36 alcoholic or a heroin addict.
    0:06:41 And he got used to the easy successes, and he began to believe that he wasn’t doing
    0:06:42 any harm.
    0:06:48 After all, he was just making it easier to publish information that was undoubtedly true.
    0:06:55 So this aspect of sort of being lured onto the path of unethical behavior followed by
    0:07:00 addictive-like behavior becomes part of the story, and Stapel goes on to talk about lots
    0:07:06 of other aspects like the need to score, ambition, laziness, wanting power, status.
    0:07:12 So he provides this good insight, but most of the admitted fraudsters or the people who
    0:07:18 have lost their university positions based on allegations of fraud have simply disappeared
    0:07:20 and have never talked about it.
    0:07:25 One of the interesting parts is that Mark Houser, who resigned from Harvard, and Ariely
    0:07:32 and Gino, who are alleged to have committed fraud by some parties, all three of them wrote
    0:07:39 on the topic of moral behavior and specifically why people might engage in bad behavior.
    0:07:40 That’s right.
    0:07:46 A lot of the fraud and suspected fraud comes from researchers who explore fraud.
    0:07:54 In 2012, Francesca Gino and Dan Ariely collaborated on another paper called The Dark Side of Creativity.
    0:07:57 Original thinkers can be more dishonest.
    0:08:01 They wrote, “We propose that a creative personality and a creative mindset promote
    0:08:09 individuals’ ability to justify their behavior, which in turn leads to unethical behavior.”
    0:08:15 So just how much unethical behavior is there in the world of academic research?
    0:08:21 That’s a hard question to answer precisely, but let’s start with this man.
    0:08:26 I essentially spend all of my nights and weekends thinking about scientific fraud, scientific
    0:08:28 misconduct, scientific integrity for that matter.
    0:08:35 Ivan Oranski is a medical doctor and editor of a neuroscience publication called The Transmitter.
    0:08:41 He’s also a distinguished journalist in residence at NYU, and on the side, he runs a website
    0:08:43 called Retraction Watch.
    0:08:49 We hear from whistleblowers all the time people we call sleuths who are actually out there
    0:08:53 finding these problems, and often that’s pre-retraction or they’ll explain to us why
    0:08:54 retraction happened.
    0:08:57 We also do things like file public records requests.
    0:09:02 He began Retraction Watch in 2010 with Adam Marcus, another science journalist.
    0:09:08 Marcus had broken a story about a Massachusetts anesthesiologist named Scott Rubin.
    0:09:13 Rubin had received funding from several drug companies to conduct clinical trials, but
    0:09:18 instead he faked the data and published results without running the trials.
    0:09:22 I went to Adam and I said, “What if we create a blog about this?”
    0:09:26 It seems like there are all these stories that are hiding in plain sight that essentially
    0:09:30 we and other journalists are leaving on the table.
    0:09:37 When we looked at the actual retraction notices, the information was somewhere between misleading
    0:09:38 and opaque.
    0:09:40 What do you mean by that?
    0:09:46 When a paper is retracted and it’s probably worth defining that, a retraction is a signal
    0:09:51 to the scientific community or really to any readers of a particular peer-reviewed journal
    0:09:58 article that you should not rely on that anymore, that there’s something about it that means
    0:10:03 you should … You can not pretend it doesn’t exist, but you shouldn’t base any other work
    0:10:04 on it.
    0:10:09 But when you call it misleading or opaque, you’re saying the explanation for the retraction
    0:10:12 is often not transparent.
    0:10:16 When you retract a paper, you’re supposed to put a retraction notice on it the same way
    0:10:19 when you correct an article in the newspaper, you’re supposed to put a correction notice
    0:10:21 on it.
    0:10:25 When you actually read these retraction notices, and to be fair, this has changed a fair amount
    0:10:30 in the 13 years that we’ve been doing this, sometimes they include no information at all.
    0:10:34 Sometimes they include information that is woefully incomplete.
    0:10:39 Sometimes it’s some version of getting al Capone on tax evasion.
    0:10:45 They fake the data, but we’re going to say they forgot to fill out this form, which is
    0:10:50 still a reason to retract, but isn’t the whole story.
    0:10:56 Let’s say we back up and I ask you, how significant or widespread is the problem of, we’ll call
    0:10:58 it academic fraud?
    0:11:07 We think that probably 2% of papers should be retracted for something that would be considered
    0:11:10 either out and out fraud or maybe just severe bad mistake.
    0:11:18 According to our data, which we have the most retraction data of any database, about 0.1%
    0:11:23 of the world’s literature is retracted, so one in a thousand papers.
    0:11:26 We think it should be about 20 times that, about 2%.
    0:11:29 There’s a bunch of reasons, but they come down to one.
    0:11:34 There was a survey back in 2009 which has been repeated and done differently and come
    0:11:40 up with roughly the same number, actually even higher numbers recently that says 2% of researchers,
    0:11:44 if you ask them anonymously, they will say, yes, I’ve committed something that would be
    0:11:45 considered misconduct.
    0:11:48 Of course, when you ask them how many people they know who have committed misconduct, it
    0:11:52 goes much, much higher than that.
    0:11:54 That’s one line of evidence, which is admittedly indirect.
    0:11:59 The other is that when you talk to the sleuths, the people doing the real work of figuring
    0:12:04 out what’s wrong with literature and letting people know about it, they keep lists of papers
    0:12:09 they’ve flagged for publishers and for authors and journals, and routinely, most of them are
    0:12:10 not retracted.
    0:12:12 Again, we came to 2%.
    0:12:15 Is it exactly 2% and is that even the right number?
    0:12:18 No, we’re pretty sure that’s the lower bound.
    0:12:23 Others say it should be even higher.
    0:12:28 Modern watch has a searchable database that includes more than 45,000 retractions from
    0:12:32 journals in just about any academic field you can imagine.
    0:12:38 They also post a leaderboard, a ranking of the researchers with the most papers retracted.
    0:12:44 At the top of that list is another anesthesiologist, this one a German researcher named Joachim
    0:12:45 Bolt.
    0:12:49 He came up briefly in last week’s episode too.
    0:12:52 Bolt has had more than 200 papers retracted.
    0:12:57 Bolt, an anesthesiology researcher, was studying something called hetistarch, which was essentially
    0:12:58 a blood substitute.
    0:13:05 Not exactly blood, but something that when you were on a heart-lung pump, a machine during
    0:13:08 certain surgeries or you’re in the ICU or something like that, it would basically cut
    0:13:14 down on the amount of blood transfusions people would need, and that’s got obvious benefits.
    0:13:20 Now he did a lot of the important work in that area, and his work was cited in all the guidelines.
    0:13:23 It turned out that he was faking data.
    0:13:29 Bolt was caught in 2010 after an investigation by a German state medical association.
    0:13:34 The method he had been promoting was later found to be associated with a significant
    0:13:37 increased risk of mortality.
    0:13:43 So in this case, the fraud led to real danger, and what happened to Bolt?
    0:13:47 He at one point was under criminal indictment, or at least criminal investigation.
    0:13:48 That didn’t go anywhere.
    0:13:54 The hospital, the clinic also, which to be fair, had actually identified a lot of problems.
    0:14:00 They came under pretty severe scrutiny, but in terms of actual sanctions, pretty minimal.
    0:14:03 You’ve written that universities protect fraudsters.
    0:14:06 Can you give an example other than Bolt, let’s say?
    0:14:09 So universities, they protect fraudsters in a couple of different ways.
    0:14:13 One is that they are very slow to act, they’re very slow to investigate, and they keep all
    0:14:16 of those investigations hidden.
    0:14:22 The other is that because lawyers run universities, like they, frankly, run everything else, they
    0:14:25 tell people who are involved in investigations.
    0:14:31 If someone calls for a reference letter, let’s say someone leaves, and they haven’t been
    0:14:36 quite found guilty, but as a plea bargain sort of thing, they will leave, and then they’ll
    0:14:38 stop the investigation.
    0:14:42 Then when someone calls for a reference, and we actually have their receipts on this because
    0:14:49 we filed public records requests for emails between different parties, we learned that
    0:14:53 they would be routinely told not to say anything about the misconduct.
    0:14:58 Let’s just take three of the most recent high profile cases of academic fraud or accusations
    0:14:59 of academic fraud.
    0:15:04 We’ve got Francesca Geno, who was a psychology researcher at Harvard Business School, Dan
    0:15:08 Ariely, who’s a psychologist at Duke, and then Mark Tessier-Levin, who was president
    0:15:12 of Stanford Medical Researcher, three pretty different outcomes, right?
    0:15:18 Tessier-Levin was defenestrated from his presidency, Geno was suspended by HBS, and Dan Ariely,
    0:15:23 who’s had accusations lobbed at him for years now, is just kind of going on.
    0:15:26 Can you just comment on that heterogeneity?
    0:15:31 So then I would just not so much as a correction, but just to say that, yes, Mark Tessier-Levin
    0:15:33 was defenestrated as president.
    0:15:38 He remains, at least at the time of this discussion, a tenured professor at Stanford, which is
    0:15:42 a pretty nice position to be in.
    0:15:47 A Stanford report found that Tessier-Levin didn’t commit fraud or falsify any of his
    0:15:54 data, although work in his labs, quote, “fell below customary standards of scientific rigor,”
    0:16:00 and multiple members of his labs appear to have manipulated research data.
    0:16:05 Dan Ariely also remains a professor at Duke, and Duke has declined to comment publicly
    0:16:10 on whether an investigation into the allegations of data fraud even occurred.
    0:16:15 As Ivan Oransky told us, universities are run by lawyers.
    0:16:21 I’ve been quoted saying that the most likely career path or the most likely outcome for
    0:16:26 anyone who has committed misconduct is a long and fruitful career.
    0:16:30 And I mean that because it’s true, because most people, if they’re caught at all, they
    0:16:31 skate.
    0:16:36 The number of cases we write about, which grows every year, but is still a tiny fraction
    0:16:43 of what’s really going on, Dan Ariely, we interviewed Dan years ago about some questions
    0:16:45 in his research.
    0:16:49 Duke is actually, I would argue, a little bit of a singular case.
    0:16:58 Duke in 2019 settled with the US government for $112.5 million because they had repeatedly
    0:17:06 alleged to have covered up really bad significant misconduct.
    0:17:08 Duke has had particular trouble with medical research.
    0:17:14 There was one physician researcher who faked the data in his cancer research.
    0:17:20 There were allegations of federal grant money being mishandled, also failing to protect patients
    0:17:22 in some studies.
    0:17:28 At one point, the National Institutes of Health placed special sanctions on all Duke researchers.
    0:17:34 So I’ve got to be honest, and people in Durham may not like me saying this, but I think Duke
    0:17:39 has a lot of work to do to demonstrate that their investigations are complete and that
    0:17:43 they are doing the right thing by research dollars and for patients.
    0:17:48 Most of the researchers we have been talking about are already well-established in their
    0:17:49 fields.
    0:17:54 If they feel pressure to get a certain result, it’s probably the kind of pressure that comes
    0:17:59 with further burnishing your high status, but junior researchers face a different kind
    0:18:01 of pressure.
    0:18:04 They need published papers to survive.
    0:18:06 Publish or perish is the old saying.
    0:18:10 If they can’t consistently get their papers in a good journal, they probably won’t get
    0:18:17 tenure and they may not even have a career, and those journals are flooded with submissions.
    0:18:22 So the competition is fierce and it is global.
    0:18:27 This is easy to miss if you’re in the US since so many of the top universities and journals
    0:18:34 are here, but academic research is very much a global industry and it’s also huge.
    0:18:44 Even if you are a complete nerd and you could name 50 journals in your field, you know nothing.
    0:18:50 Every year, more than 4 million articles are published in somewhere between 25 and 50,000
    0:18:55 journals, depending on how you count, and that number is always growing.
    0:19:02 You have got journals called Aggressive Behavior and Frontiers in Ceramics, Neglected Tropical
    0:19:10 Diseases, and Rangefer, which covers the biology and management of reindeer and caribou.
    0:19:16 There used to be a journal of mundane behavior, but that one, sadly, is defunct.
    0:19:21 But no matter how many journals there are, there is never enough space for all the papers.
    0:19:27 And this has led to some, well, let’s call it scholarly innovation.
    0:19:30 Here again is Ivan Oransky.
    0:19:34 People are now really fixated on what are known as paper mills.
    0:19:41 So if you think about the economics of this, right, it is worthwhile if you are a researcher
    0:19:47 to actually pay, in other words, it’s an investment in your own future, to pay to publish a certain
    0:19:48 paper.
    0:19:53 What I’m talking about is literally buying a paper or buying authorship on a paper.
    0:19:58 So to give you a little bit of a sense of how this might work, you’re a researcher who
    0:20:00 is about to publish a paper.
    0:20:06 So Donner et al. have got some interesting finding that you’ve actually written up and
    0:20:08 a journal has accepted.
    0:20:10 It’s gone through peer review.
    0:20:13 And you’re like, great, and that’s good for you.
    0:20:17 But you actually also want to make a little extra money on the side.
    0:20:22 So you take that paper, that essentially it’s not a paper, it’s really still a manuscript.
    0:20:26 You put it up on a brokerage site, or you put the title up on a brokerage site.
    0:20:31 You say, I’ve got a paper where, you know, there are four authors right now.
    0:20:35 It’s going into this journal, which is a top tier or mid tier, whatever it is, et cetera.
    0:20:37 It’s in this field.
    0:20:42 If you would like to be an author, the bidding starts now, or it’s just, it’s $500 or 500
    0:20:43 euros or whatever it is.
    0:20:47 And then Ivan Moransky comes along and says, I need a paper.
    0:20:49 I need to get tenure.
    0:20:50 I need to get promoted.
    0:20:51 Oh, great.
    0:20:53 Let me click on this, you know, brokerage site.
    0:20:55 Let me give you $500.
    0:21:01 And now all of a sudden, you write to the journal, by the way, I have a new author.
    0:21:02 His name is Ivan Moransky.
    0:21:03 He’s at New York University.
    0:21:07 He just joined late, but he’s been so invaluable to the process.
    0:21:10 Now what do the other co-authors have to say about this?
    0:21:13 Often they don’t know about it, or at least they claim they don’t know about it.
    0:21:18 What about fraudulent journals, do those exist, or fraudulent publication sites that look
    0:21:22 legit enough to pass muster for somebody’s department?
    0:21:23 They do.
    0:21:28 There are all different versions of fraudulent with a lower case F publications.
    0:21:32 There are publications that are legit in the sense that they can point to doing all the
    0:21:34 things that you’re supposed to do as a journal.
    0:21:36 You have papers submitted.
    0:21:38 You do something that looks sort of like peer review.
    0:21:42 You assign it what’s known as a digital object identifier.
    0:21:44 You do all that publishing stuff.
    0:21:48 And they’re not out and out fraudulent in the sense of they don’t exist and people are
    0:21:52 just making it up, or they’re trying to, you know, use a name that isn’t really theirs.
    0:21:55 But they’re fraudulent with a lower case F in the sense that they’re not doing most
    0:21:57 of those things.
    0:22:01 Then there are actual, what we refer to, we in Anna Abelkina, who works with us on this,
    0:22:03 as hijacked journals.
    0:22:06 We have more than 200 on this list now.
    0:22:08 They were at one point legitimate journals.
    0:22:14 So it’s a real title that some university or funding agency or et cetera will actually
    0:22:15 recognize.
    0:22:22 But what happened was some version of the publisher sort of forgot to renew their domain.
    0:22:25 I mean, literally something like that.
    0:22:29 Now, they’re more nefarious versions of it, but it’s that sort of thing where, you know,
    0:22:35 these really bad players are inserting themselves and taking advantage of the vulnerabilities
    0:22:40 in the system, of which there are many, to really print money because then they can get
    0:22:44 people to pay them to publish in those journals and they even are getting indexed in the places
    0:22:45 that matter.
    0:22:53 It sounds like there are thousands of people who are willing to pay journals that are quasi
    0:22:56 real to publish their papers.
    0:22:58 At least thousands, yes.
    0:23:01 Who are the kind of authors who would publish in those journals?
    0:23:06 Are they American, not American, or their particular fields or disciplines that happen
    0:23:08 to be most common?
    0:23:12 Well, I think what it tends to correlate with is how direct or intense the publisher
    0:23:16 of Paris culture is in that particular area.
    0:23:21 And generally that varies more by country or region than anything else.
    0:23:25 If you look at, for example, the growth in China of a number of papers published, what’s
    0:23:30 calculated is the impact of those papers, which relies on things like how often they’re
    0:23:31 cited.
    0:23:37 You can trace that growth very directly from government mandates.
    0:23:43 For example, if you publish in certain journals known as a high impact factor, you actually
    0:23:48 got a cash bonus that was a sort of multiple of the number of the impact factor.
    0:23:53 And that can make a big difference in your life.
    0:23:59 Recent research by John Yenedes, Thomas Collins, and Yerun Boss has examined what they call
    0:24:02 extremely productive authors.
    0:24:07 They left out physicists since some physics projects are so massive that one paper can
    0:24:10 have more than 5,000 authors.
    0:24:14 So leaving aside the physicists, they found that over the course of one year, more than
    0:24:21 1,200 researchers around the world publish the equivalent of one paper every five days.
    0:24:28 The top countries for these extremely productive authors were China, the US, Saudi Arabia,
    0:24:30 Italy, and Germany.
    0:24:35 When there is so much research being published, you’d also expect that the vast majority of
    0:24:38 it is never read by more than a handful of people.
    0:24:43 There’s also the problem, as the economics blogger Noah Smith recently pointed out, that
    0:24:50 too much academic research is just useless, at least to anyone beyond the author.
    0:24:53 But you shouldn’t expect any of this to change.
    0:24:58 Global scholarly publishing is a $28 billion market.
    0:25:04 Everyone complains about the very high price of journal subscriptions, but universities
    0:25:07 and libraries are essentially forced to pay.
    0:25:12 There is, however, another business model in the research paper industry, and it is
    0:25:13 growing fast.
    0:25:16 It’s called Open Access Publishing.
    0:25:22 And here it’s most often the authors who pay to get into the journal.
    0:25:27 If you think that sounds problematic, well, yes.
    0:25:31 Consider Hindawi, an Egyptian publisher with more than 200 journals, including the Journal
    0:25:37 of Combustion, the International Journal of Ecology, the Journal of Advanced Transportation.
    0:25:41 Most of their journals were not at all prestigious, but that doesn’t mean they weren’t lucrative.
    0:25:47 A couple years ago, Hindawi was bought by John Wiley and Sons, the huge American academic
    0:25:50 publisher for nearly $300 million.
    0:25:55 So Hindawi’s business model was they’re an open access publisher, which usually means
    0:26:00 you charge authors to publish in your journal, and you charge them, you know, it could be
    0:26:05 anywhere from hundreds of dollars to even thousands of dollars per paper, and they’re
    0:26:09 publishing, you know, tens of thousands and sometimes even more papers per year.
    0:26:11 So you can start to do that math.
    0:26:17 What happened at Hindawi was that somehow, paper mills realized that they were vulnerable.
    0:26:19 So they started targeting them.
    0:26:24 They’ve actually started paying some of these editors to accept papers from their paper mill.
    0:26:31 And long story short, they now have had to retract something like, we’re still figuring
    0:26:34 out the exact numbers when the dust settles, but in the thousands.
    0:26:40 In 2023, Hindawi retracted more than 8,000 papers.
    0:26:45 That was more retractions than there had ever been in a year from all academic publishers
    0:26:46 combined.
    0:26:52 Wiley recently announced that they will stop using the Hindawi brand name, and they folded
    0:26:55 the remaining Hindawi journals into their portfolio.
    0:26:59 But they are not getting out of the pay to publish business.
    0:27:02 Publishers earn more from publishing more.
    0:27:03 It’s a volume play.
    0:27:07 And when you’re owned by, you know, shareholders who want growth all the time, that is the
    0:27:09 best way to grow.
    0:27:14 And these are businesses with, you know, very impressive and enviable profit margins of,
    0:27:17 you know, sometimes up to 40%.
    0:27:18 And these are not on small numbers.
    0:27:23 The profit itself is in the billions often.
    0:27:28 It’s hard to blame publishers for wanting to earn billions from an industry with such
    0:27:30 bizarre incentives.
    0:27:36 But if publishers aren’t looking out for the integrity of the research, who is?
    0:27:37 That’s coming up after the break.
    0:27:40 I’m Stephen Dubner, and this is Freakonomics Radio.
    0:27:56 We feel like when we’re in cultures that there is no way for any of us to change the culture.
    0:27:57 It’s a culture.
    0:28:00 My God, how could we change it?
    0:28:06 But we also recognize that cultures are created by the people that comprise them.
    0:28:12 And the notion that we collectively can actually do something to shift the research culture
    0:28:19 I think has spread, and that spreading has actually accelerated the change of the research
    0:28:21 culture for the better.
    0:28:23 That is Brian Nosek.
    0:28:27 He’s a psychology professor at the University of Virginia, and he runs the Center for Open
    0:28:29 Science.
    0:28:34 For more than a decade, his center has been trying to get more transparency in academic
    0:28:35 research.
    0:28:41 You might think there would already be transparency in academic research, at least I did.
    0:28:45 But here’s what Nosek said in part one of the series, when we were talking about how
    0:28:49 researchers tend to hoard their data rather than share it.
    0:28:54 Yeah, it’s based on the academic reward system.
    0:28:56 Publication is the currency of advancement.
    0:29:02 I need publications to have a career, to advance my career, to get promoted.
    0:29:08 And so the work that I do that leads to publication, I have a very strong sense of, “Oh my gosh,
    0:29:15 if others now have control over this, my ideas, my data, my designs, my solutions, then I
    0:29:18 will disadvantage my career.”
    0:29:22 I asked Nosek how he thinks this culture can be changed.
    0:29:27 So for example, we have to make it easy for researchers to be more transparent with their
    0:29:28 work.
    0:29:32 If it’s really hard to share your data, then adding on that extra work is going to slow
    0:29:34 down my progress.
    0:29:37 We have to make it normative.
    0:29:41 People have to be able to see that others in their community are doing this.
    0:29:42 They’re being more transparent.
    0:29:46 They’re being more rigorous so that we, instead of saying, “Oh, that’s great ideas and nobody
    0:29:49 does it,” you say, “Oh, there’s somebody over there that’s doing it.
    0:29:51 Oh, maybe I could do it too.”
    0:29:53 We have to deal with the incentives.
    0:29:58 Is it actually relevant for my advancement in my career to be transparent, to be rigorous,
    0:30:00 to be reproducible?
    0:30:03 And then we have to address the policy framework.
    0:30:09 If it’s not embedded in how it is that funders decide who to fund, institutions decide who
    0:30:15 to hire, and journals to decide what to publish, then it’s not going to be internally and completely
    0:30:17 embedded in the system.
    0:30:18 Okay.
    0:30:20 So that is a lot of change.
    0:30:24 Here’s one problem NOSC and his team are trying to address.
    0:30:30 Some researchers will cherry-pick or otherwise manipulate their data or find ways to goose
    0:30:34 their results to make sure they come up with a finding that will capture the attention
    0:30:36 of journal editors.
    0:30:42 So NOSC’s team created a software platform called the Open Science Framework where researchers
    0:30:49 can pre-register their project and their hypothesis before they start collecting data.
    0:30:50 Yeah.
    0:30:56 So the idea is you register your designs and you’ve made that commitment in advance.
    0:30:59 And then as you’re carrying out the research, if things change along the way, which happens
    0:31:02 all the time, you can update that registration.
    0:31:04 You could say, “Here’s what’s changing.”
    0:31:08 We didn’t anticipate that going into this community was going to be so hard and here’s
    0:31:10 how we had to adapt.
    0:31:11 That’s fine.
    0:31:12 You should be able to change.
    0:31:17 You just have to be transparent about those changes so that the reader can evaluate.
    0:31:20 And then those data are time-stamped together.
    0:31:21 Exactly.
    0:31:22 Yeah.
    0:31:23 You put your data and your materials.
    0:31:25 If you did a survey, you add the surveys.
    0:31:28 If you did behavioral tasks, you can add those.
    0:31:33 So all of that stuff can be attached then to the registration so that you have a more
    0:31:36 comprehensive record of what it is you did.
    0:31:41 It sounds like you’re basically raising the cost of sloppiness or fraud, yes?
    0:31:44 It makes fraud more inconvenient.
    0:31:46 And that’s actually a reasonable intervention.
    0:31:52 I don’t think any intervention that we could design could prevent fraud in a way that doesn’t
    0:31:55 stifle actual legitimate research.
    0:32:00 We just want to make visible all the things that legitimate researchers are doing so that
    0:32:04 someone that doesn’t want to do that extra work has a harder time.
    0:32:08 And eventually, if everything is exposed, then the person who would be motivated to
    0:32:12 do fraud might say, “Well, it’s just as easy to do the research the real way.
    0:32:16 So I guess I’ll do that.”
    0:32:19 The idea of pre-registration isn’t new.
    0:32:22 It goes back to at least the late 19th century.
    0:32:25 But there is a big appetite for it now.
    0:32:28 The Data Collada team came up with their own version.
    0:32:33 Here is Yuri Simonson from the Asade Business School in Barcelona.
    0:32:35 It’s a platform that we launched.
    0:32:37 It’s called Aspredicted.
    0:32:39 And it’s basically eight questions that people write.
    0:32:43 People call author, sign on it, it’s time stamped, people, you can show the PDF.
    0:32:47 And when we launched it, we thought, “Okay, when do we call this a failure?”
    0:32:49 You know, thinking ahead, “When do you shut down the website?”
    0:32:54 But all right, if we don’t get 100 a year, we’re going to call that failure.
    0:32:56 And we’re getting about 140 a day now.
    0:33:02 Brian Nosik says, “The registered report model can be especially helpful to the journals.”
    0:33:07 So in the standard publishing model, I do all of my research, I get my findings, I write
    0:33:09 it up in a paper and I send it to the journal.
    0:33:12 In that model, the reward system is about the findings.
    0:33:17 I need to get those findings to be as positive, novel, and tidy as I can so that you, the
    0:33:20 reviewer, say, “Okay, okay, you can publish it.”
    0:33:25 That’s dysfunctional and it leads to all of those practices that might lead the claims
    0:33:28 to be more exaggerated than the evidence.
    0:33:35 The registered report model says, “To the journal, you are going to submit, Brian, the
    0:33:39 methodology that you’re thinking about doing and why you’re asking that question and
    0:33:43 the background research supporting that question being important and that methodology being
    0:33:45 effective methodology.
    0:33:46 We’ll review that.
    0:33:49 We don’t know what the results are, you don’t know what the results are, but we’re going
    0:33:52 to review based on, do you have an important question?”
    0:33:56 So this is almost like before you build a house, you’re going to show us your plan and
    0:34:00 we’re the building department and we’re going to come and say, “Yeah, that looks legit.
    0:34:03 It’s not going to collapse, it’s not going to infringe on your neighbor,” and so on.
    0:34:04 Is that the idea?
    0:34:05 Exactly.
    0:34:12 The key part is that the reward, me getting that publication, is based on you agreeing
    0:34:15 that I’m asking an important question and I’ve designed an effective method to test
    0:34:16 it.
    0:34:17 It’s no longer about the results.
    0:34:19 None of us know what the results are.
    0:34:26 And so even if the results are uninteresting, not new, et cetera, we’ll know they’re legitimate,
    0:34:30 but there would seem to be a conflict of incentive there, which is that, “Oh, now do I need to
    0:34:33 publish this uninteresting, not new result?
    0:34:34 What do you do about that?”
    0:34:39 Yeah, so the commitment that the journal makes is we’re going to publish it regardless
    0:34:43 of outcome and the authors are making that commitment too.
    0:34:47 We’re going to carry this out as we said we would and we’ll report what happens.
    0:34:52 Now an interesting thing happens in the change of the culture here in evaluating research
    0:34:57 because you said, “Well, if it’s an uninteresting finding, do we still have to publish it?”
    0:35:01 It turns out that when you have to make a decision of whether to publish or not before
    0:35:06 knowing that the results are, the orientation that the reviewers bring, that the authors
    0:35:10 bring is, “Do we need to know the answer to this?”
    0:35:13 Regardless of what happens, do we need to know the answer?
    0:35:16 Is the question important in other words?
    0:35:17 Exactly.
    0:35:22 Is the question important enough that we need evidence regardless of what the evidence is?
    0:35:25 And it dramatically shifts what ends up being published.
    0:35:30 So in the early evidence with register reports, more than half of the hypotheses that are
    0:35:35 proposed end up not being supported in the final paper.
    0:35:43 In the standard literature, comparable type of domains, more than 95% of the hypotheses
    0:35:45 are supported in the paper.
    0:35:48 You wonder in the standard literature, “If we’re always right, why do we bother doing
    0:35:49 the research?”
    0:35:50 Right?
    0:35:52 Our hypotheses are always right.
    0:35:57 And of course, it’s laughable because we know that’s not what’s actually happening.
    0:36:01 We know that all that failed stuff is getting left out and we’re not seeing it.
    0:36:08 And the actual literature is an exaggeration of what the real literature is.
    0:36:12 I think we should say a couple of things here about academia.
    0:36:17 The best academics are driven by a real scientific impulse.
    0:36:22 They may know a lot, but they’re not afraid to admit how much we still don’t know.
    0:36:28 But they’re driven by an urge to investigate, and not necessarily at least, an urge to produce
    0:36:33 a result that will increase their own status.
    0:36:39 But academia is also an extraordinarily status conscious place.
    0:36:41 I’m not saying there’s anything wrong with that.
    0:36:47 If status is the reward that encourages a certain type of smart disciplined person to
    0:36:51 do research for the sake of research, rather than taking their talents to an industry that
    0:36:56 might pay them much more, that is fantastic.
    0:37:02 But if the pursuit of status for status is sake leads an academic researcher to cheat,
    0:37:04 well, yeah, that’s bad.
    0:37:07 I mean, the incentives are part of the problem, but I don’t think it’s a part of the problem
    0:37:09 that we have to fix.
    0:37:12 That again is Yuri Simonson from Data Colada.
    0:37:17 I think the incentives, it’s like going to be little rub banks because their incentives
    0:37:20 are there, but it doesn’t mean that we should stop, you know, rewarding cash.
    0:37:26 It just, we should, you know, make our saves safer because it’s good for cash to buy things,
    0:37:30 and it’s good for people who publish interesting findings to get recognition.
    0:37:36 Brian Nosek says that more than 300 journals are now using the registered reports model.
    0:37:43 I think there is broad buy-in on the need to change, and it has already hit the mainstream
    0:37:50 of many of the changes that we promote, sharing data materials code, pre-registering research,
    0:37:52 reporting all outcomes.
    0:37:59 So we’re in the scaling phase for those activities, and what I am optimistic about is that there
    0:38:05 is this meta science community that is interrogating whether these solutions are actually having
    0:38:07 the desired impact.
    0:38:12 And so this is the most exciting part of the movement as I’m looking to the future is this
    0:38:16 dialogue between activism and reform.
    0:38:17 We can do these things.
    0:38:21 Let’s make these changes, and meta science and evaluation.
    0:38:22 Is this working?
    0:38:24 Did you do what you said it was going to do and et cetera?
    0:38:29 And I hope that the tightness of that loop will stay tight because that I think will
    0:38:34 make for a very healthy discipline that is constantly skeptical of itself and constantly
    0:38:39 looking to do better.
    0:38:43 Is Brian Nosek too optimistic?
    0:38:44 Maybe.
    0:38:51 100 journals is a great start, but that represents maybe 1% of all journals.
    0:38:58 For journals and authors, the existing publishing incentives are very strong.
    0:39:01 So I think journals have really complicated incentives.
    0:39:06 That is Samin Vizier, a psychology professor at the University of Melbourne.
    0:39:09 Of course, they want to publish good work to begin with, so there’s some incentive to
    0:39:12 do some quality check and cover their ass there.
    0:39:16 But once they publish something, there’s a strong incentive for them to defend it or
    0:39:19 at least to not publicize any errors.
    0:39:27 And here’s a reason to think that Brian Nosek is right to be optimistic about research reform.
    0:39:32 Some of his fellow reformers, including Samin Vizier, have been promoted into prestigious
    0:39:34 positions in their field.
    0:39:40 Vizier spent some time as editor-in-chief of the journal Social Psychological and Personality
    0:39:41 Science.
    0:39:44 So one of the things the editor-in-chief does is when a manuscript is submitted, I would
    0:39:48 read it and decide whether it should continue through the peer review process or I could
    0:39:51 reject it there, and that’s called desk rejection.
    0:39:54 One thing I started doing at the journal that wasn’t official policy, it was just a practice
    0:39:58 I decided to adopt, was that when a manuscript was submitted, I would hide the author’s
    0:39:59 names for myself.
    0:40:03 So I was rejecting things without looking at who the authors were.
    0:40:06 So the publication committee started a conversation with me, which is totally reasonable, about
    0:40:10 the overall desk rejection rate, am I rejecting too many things, et cetera.
    0:40:14 There was some conversation about whether I was desrejecting the wrong people.
    0:40:18 So if I was stepping on important people’s toes, and an email was forwarded to me from
    0:40:24 a quote-unquote award-winning social psychologist, Samin desrejected my paper, I found this extremely
    0:40:27 distasteful and I won’t be submitting there again.
    0:40:31 And when I would try to engage about the substance of my decisions, the scientific basis for
    0:40:34 them, that wasn’t what the conversation was about.
    0:40:37 So it was basically like, do you know who I am?
    0:40:38 Yeah.
    0:40:39 Yeah.
    0:40:41 I’ll send a question to you and that journal then.
    0:40:46 It was a tense few months, but in the end, I was allowed to continue doing what I was
    0:40:47 doing.
    0:40:52 Vizier recently took on the editor-in-chief job at a different journal, Psychological
    0:40:53 Science.
    0:40:57 It is one of the premier journals in the field.
    0:41:03 It’s also the journal where Francesca Gino published two of her allegedly fraudulent papers.
    0:41:08 So I asked Vizier what changes she is hoping to make.
    0:41:10 We’re expanding a team that used to have a different name.
    0:41:15 We’re going to call them the statistics, transparency and rigor editors, the star editors.
    0:41:20 And so that team will be supplementing the handling editors, the editors who actually
    0:41:24 organize the peer review and make the decisions on submissions.
    0:41:28 Like if a handling editor has a question about the data integrity or about details of the
    0:41:32 methods or things like that, the star editor team will provide their expertise and help
    0:41:33 fill in those gaps.
    0:41:37 We’re also, I’m not sure exactly what form this will take, but try to incentivize more
    0:41:41 accurate and calibrated claims and less hype and exaggeration.
    0:41:45 This is something that I think is particularly challenging with short articles like Psychological
    0:41:49 Science publishes and especially a journal that has really high rejection rate where
    0:41:51 the vast majority of submissions are rejected.
    0:41:55 Authors are competing for those few spots and so it feels like they have to make a really
    0:41:57 bold claim.
    0:42:00 And so it’s going to be very difficult to play this like back and forth where authors are
    0:42:02 responding to the perception of what the incentives are.
    0:42:06 So we need to convey to them that actually if you go too far, make two bold of claims
    0:42:10 that aren’t warranted, you will be more likely to get rejected.
    0:42:12 But I’m not sure if authors will believe that just because we say that.
    0:42:16 They’re still competing for a very selective number of spots.
    0:42:21 So as a journal editor, how do you think about the upside risk of publishing something
    0:42:25 new and exciting against the downside risk of being wrong?
    0:42:27 Oh, I don’t mind being wrong.
    0:42:29 I think journalists should publish things that turn out to be wrong.
    0:42:32 It would be a bad thing to approach journal editing by saying we’re only going to publish
    0:42:35 true things or things that we’re 100% sure are true.
    0:42:39 The important thing is that the things that are more likely to be wrong are presented
    0:42:42 in a more uncertain way and sometimes we’ll make mistakes even there.
    0:42:45 Sometimes we’ll present things with certainty that we shouldn’t have.
    0:42:49 What I would like to be involved in and what I plan to do is to encourage more post publication
    0:42:55 critique and correction, reward the whistleblowers who identify errors that are valid and that
    0:43:01 need to be acted upon and create more incentives for people to do that and do that well.
    0:43:04 How would you reward whistleblowers?
    0:43:05 I don’t know.
    0:43:10 Do you have any ideas?
    0:43:15 Right now, the rewards for whistleblowers in academia may seem backwards.
    0:43:20 Remember, the data collado whistleblowers were sued by Francesca Gino, one of the people
    0:43:21 they blew the whistle on.
    0:43:25 They needed a go fund me campaign for their legal defense.
    0:43:31 So no, the whistleblowers aren’t collecting any bounties, nor do they cover themselves
    0:43:33 in any kind of glory.
    0:43:38 Stephen, I’m the person that walks into these academic conferences and everyone is like,
    0:43:40 here comes Debbie Downer.
    0:43:43 That’s Leif Nelson, another member of Data Collada.
    0:43:47 He’s a professor of business administration at UC Berkeley.
    0:43:53 In a recent New Yorker piece by Gideon Lewis Krause about these fraud scandals, Nelson
    0:43:58 and his Data Collada partners were described as having a, quote, “basic willingness to
    0:44:03 call bullshit.”
    0:44:09 So now that you’ve become part of this group that are collectively, I would think of as
    0:44:15 the primary whistleblower or police or steward, whatever word we want to use, against fraudulent
    0:44:20 research in the social sciences, what does that feel like?
    0:44:24 I’m guessing on one level, it feels like an accomplishment.
    0:44:28 On the other hand, it makes me think of a police force where there’s the Internal Affairs
    0:44:36 Bureau where detectives are put to find the bad apples and even though everybody’s in
    0:44:41 favor of rooting out the bad apples, everybody kind of hates the IAB guys.
    0:44:48 And I’m curious what the emotional toll or cost has been to you.
    0:44:50 Wow.
    0:44:51 Bad question?
    0:44:52 No.
    0:44:55 Like, it reminds me of how stressful it all is.
    0:44:59 We struggle a little bit with thinking about analogies for what we do.
    0:45:01 We’re definitely not police.
    0:45:03 Police, amongst other things, have institutional power.
    0:45:06 They have badges, whatever.
    0:45:07 We don’t have any of that.
    0:45:09 We’re not enforcers in any way.
    0:45:15 The Internal Affairs thing hurts a little bit, but I get it because that’s saying, “Hey,
    0:45:18 within the behavioral science community, we’re the people that are watching the behavioral
    0:45:20 scientists.”
    0:45:22 And you’re right, no one likes internal affairs.
    0:45:27 Most of our thinking is that we want to be journalists, that it’s fun to investigate.
    0:45:28 That’s true for everybody in the field, right?
    0:45:31 They’re all curious about whatever it is they’re studying.
    0:45:33 And so we’re curious about this.
    0:45:37 And then when we find things that we think are interesting, we also want to talk about
    0:45:40 it, not just with each other, but with the outside world.
    0:45:45 But I don’t identify as much with being a police officer or even a detective, though
    0:45:49 every now and then people will compare us to something like Sherlock Holmes and that
    0:45:51 feels more fun.
    0:45:55 But in truth, the reason I sort of wins at the question is that the vast majority of
    0:46:00 the time, it comes with far more burden than it does pleasure.
    0:46:02 Even before the lawsuit?
    0:46:10 Yeah, the lawsuit makes all of the psychological burden into a concrete observable thing.
    0:46:16 But the prior to that is that every time we report on anything that’s going to be like,
    0:46:23 “Look, we think something bad happened here, someone is going to be mad at us and probably
    0:46:27 more people are going to be, and I don’t want people to be mad at me.”
    0:46:32 And I think about some of the people involved and it’s hard because I know a lot of these
    0:46:36 people and I know they’re friends and I know the friends of the friends and that carries
    0:46:40 real, real stress for I think all three of us.
    0:46:45 In the New Yorker piece, there are still people who call you pretty harsh names.
    0:46:47 You’ve been compared to the Stasi, for instance.
    0:46:49 Yeah, that’s real bad.
    0:46:53 I’m not happy with being compared to the Stasi.
    0:46:56 The optimistic take is that there’s less of that than there used to be.
    0:47:02 When any of the three of us go and visit universities, for example, and we talk to doctoral students
    0:47:06 and we talk to assistant professors and we talk to associate professors, we talk to senior
    0:47:11 professors, the students basically all behave as though they don’t understand why anyone
    0:47:13 would ever be against what we’re saying.
    0:47:18 They wouldn’t understand the Stasi thing, but they also wouldn’t even understand why
    0:47:21 they almost are at the level, “I don’t understand why we’re having you come for a talk.
    0:47:23 Doesn’t everyone already believe this?”
    0:47:26 But when I talk to people that are closer to retirement than they are to being a grad
    0:47:32 student, they’re more like, “You’re making waves where you don’t need to, you’re pushing
    0:47:34 back against something that’s not there.
    0:47:36 We’ve been doing this for decades.
    0:47:38 Why fix what isn’t broken?”
    0:47:39 That sort of thing.
    0:47:42 If they were to say that to you directly, “Why fix what isn’t broken?”
    0:47:43 What would you say?
    0:47:46 I would say, “But it is broken.”
    0:47:48 And your evidence for that would be?
    0:47:53 The evidence for that is a multi-fold.
    0:47:57 After the break, multi-fold we shall.
    0:47:58 I’m Stephen Dubner.
    0:47:59 This is Freakonomics Radio.
    0:48:08 We’ll be right back.
    0:48:11 Can academic fraud be eliminated?
    0:48:12 Certainly not.
    0:48:15 The incentives are too strong.
    0:48:21 Also, to be reductive, cheaters are going to cheat, and I doubt there is one field of
    0:48:27 human endeavor, no matter how noble or righteous or honest it claims to be, where some cheating
    0:48:29 doesn’t happen.
    0:48:34 But can academic fraud at least be greatly reduced?
    0:48:35 Perhaps.
    0:48:42 But that would likely require some big changes, including a new type of gatekeeper.
    0:48:48 Samin Vizier, the journal editor we heard from earlier, is one kind of gatekeeper.
    0:48:50 Sometimes, for example, we’ll get a submission where the research is really solid, but the
    0:48:54 conclusion is too strong, and I’ll sometimes tell authors, “Hey, look, I’ll publish your
    0:48:57 paper if you tone down the conclusion,” or even sometimes change the conclusion from
    0:49:01 saying there is evidence for my hypothesis to there’s no evidence when we are the other,
    0:49:05 but it’s still interesting data, and authors are not always willing to do that, even if
    0:49:07 it means getting a publication in this journal.
    0:49:11 So I do think that’s a sign that maybe it’s a sign that they genuinely believe what they’re
    0:49:15 saying, which is maybe to their credit, I don’t know if that’s good news or bad news.
    0:49:20 I think often when we’re kind of overselling something, we probably believe what we’re
    0:49:21 saying.
    0:49:24 And there’s another important gatekeeper in academic journals, one that we’ve barely
    0:49:29 talked about, the referees who assess journal submissions.
    0:49:35 Peer review is a bedrock component of what makes academic publishing so credible, at
    0:49:40 least in theory, but as we’ve been hearing about every part of this industry, the incentives
    0:49:44 for peer reviewers are also off.
    0:49:48 Here again is Ivan Oransky from Retraction Watch.
    0:49:53 If you add up the number of papers published every year, and then you multiply that times
    0:49:59 the two or three peer reviewers who are typically supposed to review those papers, and sometimes
    0:50:04 they go through multiple rounds, it’s easily in the tens of millions of peer reviews as
    0:50:05 a unit.
    0:50:10 And if each of those takes anywhere from four hours to eight hours of your life as an expert,
    0:50:14 which you don’t really have ’cause you gotta be teaching, you gotta be doing your own research,
    0:50:18 you come up with a number that cannot possibly be met by qualified people.
    0:50:19 Really, it can’t.
    0:50:21 I mean, the match just doesn’t work.
    0:50:23 And none of them are paid.
    0:50:27 You are sort of expected to do this because somebody will peer review your paper at some
    0:50:30 other point, which sort of makes sense until you really pick it apart.
    0:50:35 Now peer reviewers, so even the best of them, and by best I mean people who really sit and
    0:50:40 take the time and probe what’s going on in the paper and look at all the data.
    0:50:41 But you can’t always look at the data.
    0:50:45 In fact, most of the time you can’t look at the raw data, even if you had time because
    0:50:47 the authors don’t make it available.
    0:50:53 So peer review, it’s become really peer review light and maybe not even that at the vast
    0:50:54 majority of journals.
    0:50:59 So it’s no longer surprising that so much gets through the system that shouldn’t.
    0:51:02 This is a very hot topic.
    0:51:07 And that again is Leif Nelson from UC Berkeley and Data Colada.
    0:51:13 Editors largely in my field are uncompensated for their job, and reviewers are almost purely
    0:51:15 uncompensated for their job.
    0:51:19 And so they’re all doing it for the love of the field.
    0:51:21 And those jobs are hard.
    0:51:24 I’m an occasional reviewer and an occasional editor.
    0:51:27 And every time I do it, it’s basically a taxing.
    0:51:34 The first part of the job was reading a whole paper and deciding whether the topic was interesting.
    0:51:38 Whether it was contextualized well enough that people would understand what it was about.
    0:51:44 Whether the study as designed was good at testing the hypothesis as articulated.
    0:51:48 And only after you get past all of those levels would you say, okay, and now do they have
    0:51:50 evidence in favor of the hypothesis.
    0:51:58 By the way, we have mostly been talking about the production side of academic research this
    0:52:00 whole time.
    0:52:02 What about the consumer side?
    0:52:07 All of us are also looking for the most interesting and useful studies.
    0:52:13 All of us in industry, in government, in the media, especially the media.
    0:52:15 Here’s Ivan Oransky again.
    0:52:17 We have been conditioned.
    0:52:20 And in fact, because of our own attention economy.
    0:52:25 We end up covering studies overall else when it comes to science and medicine.
    0:52:26 I like to think that’s changing a little bit.
    0:52:28 I hope it is.
    0:52:33 But we cover individual studies and we cover the studies that sound the most interesting
    0:52:36 or that have the biggest effect size and things like that.
    0:52:42 You wear red, you must be angry or if it says that this is definitely a cure for cancer.
    0:52:43 And journalists love that stuff.
    0:52:44 They lap it up.
    0:52:48 Like signing a document at the top will make you more likely to be honest on the forum.
    0:53:00 And on that note, I went back to Max Baserman, one of the co-authors of that paper, which
    0:53:03 inspired this series.
    0:53:09 For Baserman, the experience of getting caught up in fraud accusations was particularly bewildering
    0:53:14 because the accusations were against a collaborator and friend that he fully trusted, Francesca
    0:53:15 Gina.
    0:53:22 So, you know, when we think about Ponzi schemes, it’s named after a guy named Ponzi who was
    0:53:26 an Italian-American who preyed on the Italian-American community.
    0:53:32 And if we think about Bernie Madoff, he preyed on lots of people, but particularly many very
    0:53:36 wealthy Jewish individuals and organizations.
    0:53:40 One of the interesting things about trust is that it creates so many wonderful opportunities.
    0:53:45 So in the academic world, the fact that I can trust my colleagues means that we can diffuse
    0:53:48 the work to the person who can handle it best.
    0:53:51 So there’s lots of enormous benefits from trust.
    0:53:56 But it’s also true that if there’s somebody out there who’s going to commit a fraud of
    0:54:04 any type, those of us who are trusting that individual are perhaps in the worst position
    0:54:07 to notice that something’s wrong.
    0:54:12 And quite honestly, Steven, you know, I’ve been working with junior colleagues who are
    0:54:18 smarter than me and know how to do a variety of tasks better than me for such a long time.
    0:54:22 I’ve always trusted them, certainly for junior colleagues.
    0:54:27 For the most new doctoral students, I may not have trusted their competence because they
    0:54:28 were still learning.
    0:54:34 But in terms of using the word trust in an ethical sense, I’ve never questioned the ethics
    0:54:35 of my colleagues.
    0:54:39 So this current episode has really hit me pretty, pretty heavily.
    0:54:44 Can I tell you, Max, that is what upsets me about this scandal, even though I’m not an
    0:54:48 academic, but I’ve been writing about and interacting with academics for quite a while
    0:54:49 now.
    0:54:53 And the problem is that I maybe gave them overall too much credit.
    0:54:59 I considered academia one of the last bastions of, I mean, I do sound like a fool now when
    0:55:06 I say it, but one of the last bastions of honest, transparent, empirical behavior where
    0:55:11 you’re bound by a sort of code that only very rarely would someone think about intentionally
    0:55:12 violating.
    0:55:19 I’m curious if you felt that way as well, that you were sort of played or were naive
    0:55:20 in retrospect.
    0:55:22 Undoubtedly, I was naive.
    0:55:27 You know, not only did I trust my colleagues on the signing first paper, but I think I’ve
    0:55:30 trusted my colleagues for decades.
    0:55:36 And hopefully with a good basis for trusting them, I do want to highlight that there’s
    0:55:38 so many benefits of trust.
    0:55:44 So the world has done a lot better because we trust science.
    0:55:49 And the fact that there’s an occasional scientist who we shouldn’t trust should not keep us
    0:55:52 from gaining the benefit that science creates.
    0:56:00 And so one of the harms created by the fraudsters is that they give credibility to the science
    0:56:09 deniers who are so often keeping us from making progress in society.
    0:56:14 It’s worth pointing out that scientific research findings have been refuted and overturned
    0:56:17 since the beginning of scientific research.
    0:56:20 That’s part of the process.
    0:56:26 But what’s happening at this moment, especially in some fields like social psychology, it can
    0:56:28 be disheartening.
    0:56:33 It’s not just a replication crisis or a data crisis.
    0:56:36 It’s a believability crisis.
    0:56:39 Samine Vizier acknowledges this.
    0:56:42 There were a lot of societal phenomena that we really wanted explanations for.
    0:56:47 And then social psych offered these kind of easy explanations or maybe not so easy, but
    0:56:50 these relatively simple explanations that people wanted to believe just to have an answer
    0:56:51 and an explanation.
    0:56:56 So just how bad is the believability crisis?
    0:57:01 Danny Kahneman, who died last year, was perhaps the biggest name in academic psychology in
    0:57:05 a couple generations, so big that he once won a Nobel Prize in economics.
    0:57:10 His work has been enormously influential in many fields and industries.
    0:57:15 But in a New York Times article about the Francesca Gino and Dan Ariely scandals, he
    0:57:21 said, “When I see a surprising finding, my default is not to believe it.
    0:57:26 12 years ago, my default was to believe anything that was surprising.”
    0:57:30 Here again is Max Baserman, who was a colleague and friend of Kahneman’s.
    0:57:36 I think that my generation fought against the open science movement for far too long,
    0:57:40 and it’s time that we get on the bandwagon and realize that we need some pretty massive
    0:57:46 reform of how social science is done, not only to improve the quality of social science,
    0:57:49 but also to make us more credible with the world.
    0:57:54 So many of us are attracted to social science because we think we can make the world better,
    0:57:58 and we can’t make the world better if the world doesn’t believe our results anymore.
    0:58:03 So I think that we have a fundamental challenge to figure out how do we go about doing that.
    0:58:08 In terms of training, I think that for a long time, if we think about training and research
    0:58:13 methods and statistics, that was more like the medicine that you have to take as part
    0:58:15 of becoming a social scientist.
    0:58:21 And I think we need to realize that it’s a much more central and important topic.
    0:58:27 If we’re going to be creating reproducible, credible social science, we need to deal with
    0:58:31 lots of the issues that the open science movement is telling us about.
    0:58:34 And we’ve taken too long to listen to their advice.
    0:58:41 So if we go from data collada, talking about p-hacking in 2011, you know, there were lots
    0:58:44 of hints that it was time to start moving.
    0:58:49 And the field obviously has moved in the direction that data collada and brianosic have moved
    0:58:50 us.
    0:58:56 And finally, we have samine vasir as a new incoming editor of psych science, which is
    0:58:58 sort of a fascinating development as well.
    0:59:00 So we’re moving in the right direction.
    0:59:06 It’s taken us too long to pay attention to the wise advice that the open science movement
    0:59:10 has outlined for us.
    0:59:23 I do think there needs to be a reckoning.
    0:59:29 I think that people need to wake up and realize that the foundation of at least a sizable
    0:59:34 chunk of our field is built on something that’s not true.
    0:59:39 And if a foundation of your field is not true, what does a good scientist do to break into
    0:59:41 that field?
    0:59:45 Like imagine you have a whole literature that is largely false.
    0:59:49 And imagine that when you publish a paper, you need to acknowledge that literature.
    0:59:53 And that if you contradict that literature, your probability of publishing really goes
    0:59:54 down.
    0:59:56 What do you do?
    0:59:59 So what it does is it winds up weeding out the careful people who are doing true stuff.
    1:00:04 And it winds up rewarding the people who are cutting corners or even worse.
    1:00:12 So it basically becomes a field that reinforces rewards, bad science and punishes good science
    1:00:14 and good scientist.
    1:00:21 Like this is about an incentive system and the incentive system is completely broken.
    1:00:23 And we need to get a new one.
    1:00:27 And the people in power who are reinforcing this incentive system, they need to not be
    1:00:28 in power anymore.
    1:00:32 You know, this is illustrating that there’s sort of a rot at the core of some of the stuff
    1:00:34 that we’re doing.
    1:00:41 And we need to put the right people who have the right values, who care about the details,
    1:00:45 who understand that the materials and the data, they are the evidence.
    1:00:48 We need those people to be in charge.
    1:00:53 Like there can’t be this idea that these are one-off cases, they’re not.
    1:00:55 They are not one-off cases.
    1:00:56 So it’s broken.
    1:01:00 You have to fix it.
    1:01:02 That again was Joe Simmons.
    1:01:06 Once we published this series last year, there have been reports of fraud in many fields.
    1:01:11 Not just the behavioral sciences, but in botany, physics, neuroscience and more.
    1:01:16 So we went back to Brian Nosik, who runs the Center for Open Science.
    1:01:23 There really is accelerating movement in the sense that some of the base principles of
    1:01:28 we need to be more transparent, we need to improve data sharing, we need to facilitate
    1:01:33 the processes of self-correction are not just head nods.
    1:01:39 Yeah, that’s an important thing, but have really moved into, yeah, how are we going
    1:01:40 to do that?
    1:01:45 And so I guess that’s been the theme of 2024 is how can we help people do it well?
    1:01:48 At his center, Nosik is trying out a new plan.
    1:01:53 One of the more exciting things that we’ve been working on is a new initiative that we’re
    1:01:56 calling Lifecycle Journal.
    1:02:03 And the basic idea is to reimagine scholarly publishing without the original constraints
    1:02:04 of paper.
    1:02:11 A lot of how the peer review process and publishing occurs today was done because of their limits
    1:02:13 of paper.
    1:02:17 But in a world where we can actually communicate digitally, there’s no reason that we need
    1:02:22 to wait till the research is done to provide some evaluation.
    1:02:27 There’s no reason to consider it final when it could be easily revised and updated.
    1:02:33 There’s no reason to think of review as a singular one set of activities by three people
    1:02:35 who judge the entire thing.
    1:02:40 And so we will have a full marketplace of evaluation services that are each evaluating
    1:02:42 the research in different ways.
    1:02:46 It’ll happen across the research lifecycle from planning through completion.
    1:02:51 And researchers will always be able to update and revise when errors or corrections are
    1:02:52 needed.
    1:02:57 But the need for corrections can move in mysterious ways.
    1:03:04 Brian Nosik himself and collaborators including Leif Nelson of Data Colada had to retract
    1:03:09 a recent article about the benefits of pre-registration after other researchers pointed out that their
    1:03:15 article hadn’t properly pre-registered all their hypotheses.
    1:03:16 Nosik was embarrassed.
    1:03:22 My whole life is about trying to promote transparent research practices, greater openness, trying
    1:03:24 to improve rigor and reproducibility.
    1:03:28 I am just as vulnerable to error as anybody else.
    1:03:36 And so one of the real lessons, I think, is that without transparency, these errors will
    1:03:39 go unexposed.
    1:03:44 It would have been very hard for the critics to identify that we had screwed this up without
    1:03:50 being able to access the portions of the materials that we were able to make public.
    1:03:57 And as people are engaged with critique and pursuing transparency, and transparency is
    1:04:04 becoming more normal, we might for a while see an ironic effect, which is transparency
    1:04:11 seems to be associated with poorer research because more errors are identified.
    1:04:15 And that ought to happen because errors are occurring.
    1:04:18 Without transparency, you can’t possibly catch them.
    1:04:26 But what might emerge over time as our verification processes improve as we have a sense of accountability
    1:04:33 to our transparency, then the fact that transparency is there may decrease error over time, but
    1:04:34 not the need to check.
    1:04:36 And that’s the key.
    1:04:40 Still, trust in science in the US has been declining.
    1:04:45 So we asked Nosik if he is worried that this new transparency, which will likely uncover
    1:04:49 more errors, might hurt his cause.
    1:04:54 This is a real challenge that we wrestle with and have wrestled with since the origins of
    1:05:03 the center is how do we promote this culture of critique and self-criticism about our field
    1:05:10 and simultaneously have that be understood as the strength of research rather than its
    1:05:12 weakness.
    1:05:16 One of the phrases that I’ve liked to use in this is that the reason to trust science
    1:05:19 is because it doesn’t trust itself.
    1:05:25 That part of what makes science great as a social system is its constant self-scrutiny
    1:05:31 and willingness to try to find and expose its errors so that the evidence that comes
    1:05:37 out at the end is the most robust, reliable, valid evidences could be.
    1:05:43 And that continuous process is the best process in the world that we’ve ever invented for
    1:05:46 knowledge production.
    1:05:47 We can do better.
    1:05:55 I think our mistake in some prior efforts of promoting science is to appeal to authority,
    1:05:57 saying you should trust science because scientists know what they’re doing.
    1:06:04 I don’t think that’s the way to gain trust in science because anyone can make that claim.
    1:06:06 Appeals to authority are very weak arguments.
    1:06:13 I think our opportunity as a field to address the skepticism of institutions generally and
    1:06:21 science specifically is to show our work, is by being transparent, by allowing the criticism
    1:06:28 to occur, by in fact encouraging and promoting critical engagement with our evidence.
    1:06:33 That is the playing field I’d much rather be on with people who are the so-called enemies
    1:06:39 of science than in competing appeals to authority.
    1:06:43 Because if they need to wrestle with the evidence and an observer says, “Wow, one group is totally
    1:06:49 avoiding the evidence and the other group is actually showing their work,” I think people
    1:06:51 will know who to trust.
    1:06:53 It’s easy to say it’s very hard to do.
    1:06:58 These are hard problems.
    1:06:59 I agree.
    1:07:00 These are hard problems.
    1:07:05 To be fair, easy problems get solved or they simply evaporate.
    1:07:11 It’s the hard problems that keep us all digging and we at Freakonomics Radio will keep digging
    1:07:13 in this new year.
    1:07:15 Thanks to Brian Nosick for the update.
    1:07:18 Thanks especially to you for listening.
    1:07:20 Coming up next time on the show.
    1:07:22 The sun right here is 12 foot tall.
    1:07:30 The economics of highway signs and after that, some 30 million Americans think that they
    1:07:36 are allergic to the penicillin family of drugs and the vast majority of them are not.
    1:07:37 Why does this matter?
    1:07:43 Nothing kills bacteria better than these drugs.
    1:07:46 We go inside the bizarro world of allergies.
    1:07:47 Thanks.
    1:07:48 Coming up soon.
    1:07:54 Until then, take care of yourself and if you can, someone else too.
    1:07:56 Freakonomics Radio is produced by Stitcher and Renbud Radio.
    1:08:02 You can find our entire archive on any podcast app also at Freakonomics.com where we publish
    1:08:04 transcripts and show notes.
    1:08:07 This episode was produced by Alina Kullman.
    1:08:12 Our staff also includes Augusta Chapman, Dalvin Abouaji, Elinor Osborn, Ellen Frankman, Elsa
    1:08:17 Hernandez, Gabriel Roth, Greg Rippen, Jasmine Klinger, Jason Gambrell, Jeremy Johnston,
    1:08:21 John Schnarrs, Lyric Bowditch, Morgan Levy, Neil Coruth, Sarah Lilly, Theo Jacobs and
    1:08:23 Zac Lipinski.
    1:08:26 Our theme song is Mr. Fortune by the Hitchhikers.
    1:08:28 Our composer is Luis Guerra.
    1:08:33 As always, thanks for listening.
    1:08:36 We are a carrot based organization because we don’t have sticks.
    1:08:38 I mean, would you like me to loan you a stick just once in a while?
    1:08:39 Yeah, that would be fun.
    1:08:53 The Freakonomics Radio Network, the hidden side of everything.
    1:08:56 [MUSIC PLAYING]

    Probably not — the incentives are too strong. But a few reformers are trying. We check in on their progress, in an update to an episode originally published last year. (Part 2 of 2)

     

    • SOURCES:
      • Max Bazerman, professor of business administration at Harvard Business School.
      • Leif Nelson, professor of business administration at the University of California, Berkeley Haas School of Business.
      • Brian Nosek, professor of psychology at the University of Virginia and executive director at the Center for Open Science.
      • Ivan Oransky, distinguished journalist-in-residence at New York University, editor-in-chief of The Transmitter, and co-founder of Retraction Watch.
      • Joseph Simmons, professor of applied statistics and operations, information, and decisions at the Wharton School at the University of Pennsylvania.
      • Uri Simonsohn, professor of behavioral science at Esade Business School.
      • Simine Vazire, professor of psychology at the University of Melbourne and editor-in-chief of Psychological Science.

     

     

  • Why Is There So Much Fraud in Academia? (Update)

    Some of the biggest names in behavioral science stand accused of faking their results. Last year, an astonishing 10,000 research papers were retracted. In a series originally published in early 2024, we talk to whistleblowers, reformers, and a co-author who got caught up in the chaos. (Part 1 of 2)

     

    • SOURCES:
      • Max Bazerman, professor of business administration at Harvard Business School.
      • Leif Nelson, professor of business administration at the University of California, Berkeley Haas School of Business.
      • Brian Nosek, professor of psychology at the University of Virginia and executive director at the Center for Open Science.
      • Joseph Simmons, professor of applied statistics and operations, information, and decisions at the Wharton School at the University of Pennsylvania.
      • Uri Simonsohn, professor of behavioral science at Esade Business School.
      • Simine Vazire, professor of psychology at the University of Melbourne and editor-in-chief of Psychological Science.

     

     

  • Your Brain Doesn’t Work the Way You Think

    AI transcript
    0:00:02 (dramatic music)
    0:00:05 – Hey there, it’s Stephen Dubner.
    0:00:08 Today, a holiday treat, a bonus episode
    0:00:10 from people I mostly admire.
    0:00:12 One of the other shows we make here
    0:00:13 at the Freakonomics Radio Network.
    0:00:16 It is an interview show hosted by Steve Levitt,
    0:00:18 my Freakonomics friend and co-author,
    0:00:21 who is an economics professor emeritus now
    0:00:23 at the University of Chicago.
    0:00:26 On this episode, Levitt interviews David Eagleman,
    0:00:28 a neuroscientist, entrepreneur,
    0:00:31 and author of several books, including LiveWired,
    0:00:34 the inside story of the ever-changing brain.
    0:00:36 It is a fascinating conversation.
    0:00:37 You are going to love it.
    0:00:40 To hear more conversations like this,
    0:00:44 follow people I mostly admire in your podcast app.
    0:00:45 Okay, that’s it for me.
    0:00:47 Here is Steve Levitt.
    0:00:49 (dramatic music)
    0:01:01 – I love podcast guests who change the way
    0:01:04 I think about some important aspect of the world.
    0:01:07 A great example is my guest today, David Eagleman.
    0:01:09 He’s a Stanford neuroscientist whose work
    0:01:13 on brain plasticity has completely transformed
    0:01:18 my understanding of the human brain and its possibilities.
    0:01:20 The human brain is about three pounds.
    0:01:22 It’s locked in silence and darkness.
    0:01:25 It has no idea where the information is coming from
    0:01:28 because everything is just electrical spikes
    0:01:30 and also chemical releases as a result of those spikes.
    0:01:34 And so what you have in there is this giant symphony
    0:01:36 of electrical activity going on
    0:01:40 and its job is to create a model of the outside world.
    0:01:47 – Welcome to people I mostly admire with Steve Levitt.
    0:01:50 – According to Eagleman,
    0:01:52 the brain is constantly trying
    0:01:54 to predict the world around it.
    0:01:56 But of course, the world is unpredictable and surprising.
    0:02:00 So the brain is constantly updating its model.
    0:02:02 The capacity of our brains to be ever-changing
    0:02:05 is usually referred to as plasticity,
    0:02:08 but Eagleman offers another term, live wired.
    0:02:10 That’s where conversation begins.
    0:02:18 Plasticity is the term used in the field
    0:02:21 because the great neuroscientist
    0:02:24 or psychologist actually, William James,
    0:02:25 coined the term because he was impressed
    0:02:28 with the way that plastic gets manufactured,
    0:02:31 where you mold it into a shape and it holds onto that shape.
    0:02:34 And he thought that’s kind of like what the brain does.
    0:02:37 The great trick that mother nature figured out
    0:02:39 was to drop us into the world half-baked.
    0:02:42 If you look at the way an alligator drops into the world,
    0:02:44 it essentially is pre-programmed.
    0:02:47 It eats, mates, sleeps, does whatever it’s doing.
    0:02:49 But we spent our first several years
    0:02:52 absorbing the world around us based on our neighborhood
    0:02:54 and our moment in time and our culture
    0:02:56 and our friends and our universities.
    0:03:00 We absorb all of that such that we can then springboard
    0:03:03 off of that and create our own things.
    0:03:05 There are many things that are essentially
    0:03:09 pre-programmed in us, but we are incredibly flexible
    0:03:11 and that is the key about live wiring.
    0:03:13 When I ask you to think of the name
    0:03:14 of your fifth grade teacher,
    0:03:16 you might be able to pull it up,
    0:03:18 even though it’s been years since you saw
    0:03:19 that fifth grade teacher,
    0:03:23 but somehow there was a change made in your brain
    0:03:25 and that stayed in place.
    0:03:27 You’ve got 86 billion neurons.
    0:03:30 Each neuron is as complicated as a city.
    0:03:33 This entire forest of neurons,
    0:03:35 every moment of your life is changing.
    0:03:38 It’s reconfiguring, it’s strengthening connections
    0:03:41 here and there, it’s actually unplugging over here
    0:03:42 and replugging over there.
    0:03:45 And so that’s why I’ve started to feel
    0:03:48 that the term plasticity is maybe underreporting
    0:03:49 what’s going on.
    0:03:51 And so that’s why I made up the term live wiring.
    0:03:53 When I went to school, I feel like they taught me
    0:03:56 the brain was organized around things like senses
    0:03:58 and emotions, that there were these different parts
    0:04:01 of the brain that were good for those things.
    0:04:04 But you make the case that there’s a very different
    0:04:06 organization of the brain.
    0:04:08 – It is organized around the senses,
    0:04:10 but the interesting thing is that the cortex,
    0:04:13 this wrinkly outer bit, is actually a one-trick pony.
    0:04:14 It doesn’t matter what you plug in.
    0:04:17 It’ll say, okay, got it, I’ll just wrap myself
    0:04:21 around that data and figure out what to do with that data.
    0:04:25 It turns out that in almost everybody you have functioning
    0:04:27 eyeballs that plug into the back of the head.
    0:04:29 And so we end up calling the back part of the brain
    0:04:30 the visual cortex.
    0:04:32 We call this part the auditory cortex.
    0:04:35 And this is the somatosensory cortex that takes
    0:04:37 in information from the body and so on.
    0:04:40 So what you learned back in high school or college
    0:04:42 is correct most of the time.
    0:04:45 But what it overlooks is the fact that the brain
    0:04:46 is so flexible.
    0:04:49 If a person goes blind or is born blind,
    0:04:51 that part of the brain that we’re calling
    0:04:53 the visual cortex, that gets taken over by hearing,
    0:04:54 by touch, by other things.
    0:04:56 And so it’s no longer visual cortex.
    0:04:59 The same neurons that are there are now doing
    0:05:01 a totally different job.
    0:05:04 – So let me pose a question to listeners.
    0:05:08 Imagine you have a newborn baby and he or she looks
    0:05:10 absolutely flawless on the outside.
    0:05:14 But then upon examination, the doctors discover
    0:05:17 that half of his or her brain is just missing.
    0:05:20 A complete hemisphere of the brain, it’s never developed.
    0:05:22 It’s just empty space.
    0:05:24 I would expect that would be a fatal defect
    0:05:28 or best the child would be growing up profoundly
    0:05:30 mentally disabled.
    0:05:32 – Turns out the kid will be just fine.
    0:05:34 You can be born without half the brain
    0:05:36 or you can do what’s called a hemispherectomy,
    0:05:39 which happens to children who have something called
    0:05:42 rasmusans encephalitis, which is a form of epilepsy
    0:05:45 that spreads from one hemisphere to the other.
    0:05:47 The surgical intervention for that is to remove
    0:05:49 half the brain.
    0:05:51 You can just imagine as a parent, the horror you would feel
    0:05:53 if your child had to go in for something like that.
    0:05:55 But you know what, kid’s just fine.
    0:05:59 I can’t take my laptop and rip out half the motherboard
    0:06:01 and expect it to still function.
    0:06:04 But with the brain, with a live wired system, it’ll work.
    0:06:07 – So I first came to work because I was so blown away
    0:06:10 by the idea of human echolocation.
    0:06:13 Only to discover that echolocation is only
    0:06:14 the tip of the iceberg.
    0:06:17 But could you talk just a bit about echolocation,
    0:06:19 how quickly with training it can start
    0:06:21 to substitute for sight?
    0:06:23 – So it turns out that blind people can make
    0:06:27 all kinds of sounds either with their mouth like clicking
    0:06:29 or the tip of their cane or snapping their fingers,
    0:06:30 anything like this.
    0:06:33 And they can get really good at determining
    0:06:36 what is coming back as echoes and figure out,
    0:06:38 oh, okay, this is an open space in front of me.
    0:06:39 Here, there’s something in front of me.
    0:06:41 It’s probably a parked car.
    0:06:43 And oh, there’s a little gap between two parked cars here.
    0:06:44 So I can go in here.
    0:06:48 The key is the visual part of the brain is no longer
    0:06:50 being used because for whatever reason,
    0:06:52 there’s no information coming down those pipelines anymore.
    0:06:55 So that part of the brain is taken over by audition,
    0:06:58 by hearing and by touch and other things.
    0:07:01 What happens is that the blind person becomes really good
    0:07:04 at these other things because they’ve just devoted
    0:07:06 more real estate to it.
    0:07:09 And as a result, they can pick up on all kinds of cues
    0:07:11 that would be very difficult for me and you
    0:07:14 because our hearing just isn’t that good.
    0:07:16 – And then in these studies,
    0:07:20 you put a blindfold on a person for two or three days
    0:07:22 and you try to teach them echolocation.
    0:07:25 If I understand correctly, even over that timescale,
    0:07:28 the echolocation starts taking over
    0:07:29 the visual part of the brain.
    0:07:31 Is that a fair assessment?
    0:07:32 – That is exactly right.
    0:07:34 This was my colleagues at Harvard.
    0:07:36 They did this over the course of five days.
    0:07:39 They demonstrated that people could get really good at,
    0:07:41 they’re actually a number of studies like this.
    0:07:42 They can get really good at reading Braille.
    0:07:44 They can do things like echolocation.
    0:07:48 And the speed of it was sort of the surprise.
    0:07:50 But the real surprise for me came along
    0:07:52 when they blindfolded people tightly
    0:07:54 and put them in the brain scanner
    0:07:59 and they were making sounds or touching the hand.
    0:08:01 And they were starting to see activity
    0:08:06 in the visual cortex after 60 minutes of being blind.
    0:08:09 – So in your book, you talk about REM sleep.
    0:08:11 And honestly, if I had sat down
    0:08:14 and tried to come up with an explanation of REM sleep,
    0:08:17 I could have listened to a thousand ideas.
    0:08:20 Your pet theory would not be one of them.
    0:08:22 So explain what REM sleep is
    0:08:24 and then tell me why you think we do it.
    0:08:26 – REM sleep is rapid eye movement sleep.
    0:08:28 We have this every night, about every 90 minutes.
    0:08:30 And that’s when you dream.
    0:08:31 So if you wake someone up
    0:08:33 when their eyes are moving rapidly
    0:08:34 and you say, “Hey, what are you thinking about?”
    0:08:37 they’ll say, “Whoa, I was just riding a camel across a meadow.”
    0:08:39 But if you wake them up at other parts of their sleep,
    0:08:42 they typically won’t have anything going on.
    0:08:44 So that’s how we know we dream during REM sleep.
    0:08:45 But here’s the key.
    0:08:48 My student and I realized that at nighttime,
    0:08:50 when the planet rotates,
    0:08:52 we spend half our time in darkness.
    0:08:55 And obviously we’re very used to this electricity blessed world.
    0:08:57 But think about this in historical time
    0:08:59 over the course of hundreds of millions of years.
    0:09:00 It’s really dark.
    0:09:03 I mean, half the time you are in blackness.
    0:09:05 Now you can still hear and touch and taste
    0:09:07 and smell in the dark.
    0:09:10 But the visual system is at a disadvantage
    0:09:12 whenever the planet rotates into darkness.
    0:09:16 And so given the rapidity with which other systems
    0:09:18 can encroach on that,
    0:09:21 what we realized is it needs a way of defending itself
    0:09:23 against takeover every single night.
    0:09:25 And that’s what dreams are about.
    0:09:28 So what happens is you have these midbrain mechanisms
    0:09:31 that simply blast random activity
    0:09:34 into the visual cortex every 90 minutes during the night.
    0:09:37 And when you get activity in the visual cortex,
    0:09:39 you say, “Oh, I’m seeing things.”
    0:09:41 And because the brain is a storyteller,
    0:09:43 you can’t activate all the stuff
    0:09:47 without feeling like there’s a whole story going on there.
    0:09:48 But the fascinating thing is when you look
    0:09:51 at the circuitry carefully, it’s super specific,
    0:09:53 much more specific than almost anything else in the brain.
    0:09:57 It’s only hitting the primary visual cortex and nothing else.
    0:10:02 And so that led us to a completely new theory about dreams.
    0:10:05 We studied 25 different species of primates
    0:10:07 and we looked at the amount of REM sleep
    0:10:08 they have every night.
    0:10:12 And we also looked at how plastic they are as a species.
    0:10:14 It turns out that the amount of dream sleep
    0:10:18 that a creature has exactly correlates
    0:10:20 with how plastic they are, which is to say,
    0:10:23 if your visual system is in danger of getting taken over
    0:10:25 because your brain is very flexible,
    0:10:27 then you have to have more dream sleep.
    0:10:29 And by the way, when you look at human infants,
    0:10:32 they have tons of dream sleep at the beginning
    0:10:34 when their brains are very plastic.
    0:10:37 And as they age, the amount of dream sleep goes down.
    0:10:40 – Have you convinced the sleep scientists this is true
    0:10:43 or is this just you believing it right now?
    0:10:44 – At the moment, there are 19 papers
    0:10:46 that have cited this and discussed this.
    0:10:48 And I think it’s right.
    0:10:49 I mean, look, everything can be wrong.
    0:10:50 Everything is provisional,
    0:10:54 but it’s the single theory that is quantitative.
    0:10:56 It’s the single theory about dreams
    0:11:00 that says not only here is a idea for why we dream,
    0:11:01 but we can compare across species
    0:11:04 and the predictions match exactly.
    0:11:07 No one would have suspected that you’d see a relationship
    0:11:11 between how long it takes you to walk or reach adolescence
    0:11:12 and how much dream sleep you have.
    0:11:14 But it turns out that is spun on.
    0:11:23 – So we talked about echolocation,
    0:11:26 which uses sound to accomplish tests
    0:11:29 that are usually done by vision.
    0:11:31 And you’ve started a company called NeoSensory,
    0:11:35 which uses touch to accomplish tasks
    0:11:37 that are usually done with hearing.
    0:11:38 Can you explain the science behind that?
    0:11:41 Given that all the data running around in the brain
    0:11:44 is just data and the brain doesn’t know where it came from.
    0:11:47 All it knows is, oh, here are electrical spikes
    0:11:48 and it tries to figure out what to do with it.
    0:11:51 I got really interested in this idea of sensory substitution,
    0:11:53 which is can you push information into the brain
    0:11:56 via an unusual channel?
    0:11:58 Originally we built a vest
    0:12:00 that was covered with vibratory motors
    0:12:03 and we captured sound for people who are deaf.
    0:12:05 So the vest captures sound,
    0:12:07 breaks it up from high to low frequency
    0:12:10 and you’re feeling the sound on your torso.
    0:12:12 By the way, this is exactly what the inner ear does.
    0:12:14 It breaks up sound from high to low frequency
    0:12:16 and ships that off to the brain.
    0:12:18 So we’re just transferring the inner ear
    0:12:20 to the skin of the torso.
    0:12:22 And it worked, people who are deaf
    0:12:25 could come to hear the world that way.
    0:12:28 So I spun this out of my lab as a company, Neosensory,
    0:12:32 and we shrunk the vest down to a wristband
    0:12:34 and we’re on wrist of deaf people all over the world.
    0:12:37 The other alternative for somebody who’s deaf
    0:12:39 is a cochlear implant, an invasive surgery.
    0:12:44 This is much cheaper and does as good a job.
    0:12:45 Just to make sure I understand it.
    0:12:50 Sounds happen and this wristband hears the sounds
    0:12:54 and then shoots electrical impulses into your wrist
    0:12:56 that correspond to the high and low frequency.
    0:12:58 It’s actually just vibratory motors.
    0:13:00 So it’s just like the buzzer on your cell phone
    0:13:03 but we have a string of these buzzers all along your wrist
    0:13:06 and we’re actually taking advantage of an illusion
    0:13:09 which is if I have two motors next to each other
    0:13:11 and I stimulate them both,
    0:13:14 you will feel one virtual point right in between.
    0:13:16 And as I change the strength of those two motors
    0:13:20 relative to each other, I can move that point around.
    0:13:23 So we’re actually stimulating 128 virtual points
    0:13:24 along the wrist.
    0:13:27 – Do people train you give them very direct feedback
    0:13:29 or is it more organic?
    0:13:30 – Great question.
    0:13:32 It started off where we were doing a lot of training
    0:13:35 on people and what we realized is it’s all the same
    0:13:36 if we just let it be organic.
    0:13:39 The key is we just encourage people be in the world
    0:13:40 and that’s it.
    0:13:42 You see the dog’s mouth moving
    0:13:45 and you feel the barking on your wrist
    0:13:47 or you close the door and you feel that on your wrist
    0:13:49 or you say something, you know,
    0:13:50 most deaf people can speak
    0:13:53 and they know what their motor output is
    0:13:55 and they’re feeling the input.
    0:13:58 – Okay, so hearing their own voice for the first time
    0:13:59 through this. – Exactly.
    0:14:01 – Oh God, yeah, that’s interesting.
    0:14:01 – And by the way,
    0:14:03 that’s how you learned how to use your ears too.
    0:14:05 You know, when you’re a baby,
    0:14:06 you’re watching your mother’s mouth move
    0:14:08 and you’re hearing data coming in your ears
    0:14:10 and you clapped your hands together
    0:14:12 and you hear something in your ears.
    0:14:13 It’s the same idea.
    0:14:15 You’re just training up correlations in the brain
    0:14:18 about, oh, this visual thing seems to always go
    0:14:20 with that auditory stimulus.
    0:14:23 – So then it seems like if I’m deaf
    0:14:25 and I see the dog’s mouth moving
    0:14:27 and I now associate that with the sound,
    0:14:31 do the people say that they hear the sound where the dog is
    0:14:33 or is the sound coming from the wrist?
    0:14:34 – For the first few months,
    0:14:36 you’re hearing it on your wrist,
    0:14:38 you can get pretty good at these correlations
    0:14:40 but then after about six months,
    0:14:43 if I ask somebody when the dog barks,
    0:14:44 do you feel something on your wrist?
    0:14:45 And you think, okay, what was that on?
    0:14:46 That must have been a dog bark
    0:14:47 and then you look for the dog.
    0:14:51 And they say, no, I just hear the dog out there.
    0:14:52 – Hmm.
    0:14:53 – And that sounds so crazy.
    0:14:55 But remember, that’s what your ears are doing.
    0:14:58 Your ears are capturing vibrations at the eardrum
    0:15:00 that moves through the middle ear to the inner ear,
    0:15:01 breaks up to different frequencies,
    0:15:04 goes off to your brain, goes to your auditory cord.
    0:15:06 It’s this giant pathway of things.
    0:15:09 And yet, even though you’re hearing my voice right now
    0:15:13 inside your head, you think I’m somewhere else.
    0:15:14 And that’s exactly what happens,
    0:15:18 irrespective of how you feed the data in.
    0:15:22 So you also have a product that helps with tinnitus.
    0:15:23 Could you explain both what that is
    0:15:25 and how your product helps?
    0:15:27 So tinnitus is a ringing in the ears.
    0:15:31 It’s like beep and about 15% of the population has this.
    0:15:33 And for some people, it’s really, really bad.
    0:15:38 It turns out there is a mechanism for helping with tinnitus
    0:15:41 which has to do with playing tones
    0:15:45 and then matching that with stimulation on the skin.
    0:15:47 People wear the wristband, it’s exactly the same wristband,
    0:15:51 but we have the phone play tones, boop, boop, boop, boop, boop.
    0:15:53 And you’re feeling that all over your wrist.
    0:15:54 And you just do that for 10 minutes a day.
    0:15:56 And it drives down the tinnitus.
    0:15:58 Now, why does that work?
    0:16:00 There are various theories on this,
    0:16:02 but I think the simplest version
    0:16:05 is that your brain is figuring out,
    0:16:09 okay, real sounds always cause this
    0:16:11 correlating vibration on my wrist,
    0:16:15 but a fake sound, beep, you know, this thing in my head,
    0:16:17 that doesn’t have any verification on the wrist.
    0:16:20 And so that must not be a real sound.
    0:16:23 So because of issues of brain plasticity,
    0:16:26 the brain just reduces the strength of the tinnitus
    0:16:28 because it learns that it’s not getting any confirmation
    0:16:30 that that’s a real world sound.
    0:16:32 Now, how did you figure out
    0:16:34 that this bracelet could be used for this?
    0:16:36 This was discovered by a woman named Susan Shore,
    0:16:39 who’s a researcher who discovered this about a decade ago.
    0:16:42 She was using electrical shocks on the tongue.
    0:16:43 And there’s actually another company
    0:16:44 that’s spun out called Lanier
    0:16:46 that does this with sounds in the ear
    0:16:47 and shocks on the tongue.
    0:16:49 They had an argument that they think
    0:16:52 it had to be touched from the head and the neck.
    0:16:53 And I didn’t buy that at all.
    0:16:54 And that’s why I tried that with the wristband.
    0:16:57 So this was not an original idea for us
    0:17:01 except to try this on the wrist and it works equally as well.
    0:17:06 So what we’re talking about is substituting between senses.
    0:17:08 Are there other forms of this products
    0:17:10 that are currently available to consumers
    0:17:13 or likely to become available soon in the space?
    0:17:16 For people who are blind, for example,
    0:17:19 there are a few different approaches to this.
    0:17:21 One is called the brain port and that’s where,
    0:17:24 for a blind person, they have a little camera on their glasses
    0:17:29 and that gets turned into little electrical stimulation
    0:17:30 on the tongue.
    0:17:33 So you’re wearing this little electro-tactile grid
    0:17:36 on your tongue and it tastes like pop rocks
    0:17:37 sort of in your mouth.
    0:17:39 Blind people can get pretty good at this.
    0:17:42 They can navigate complex obstacle courses
    0:17:45 or throw a ball into a basket at a distance
    0:17:48 because they can come to see the world through their tongue,
    0:17:50 which if that sounds crazy,
    0:17:52 it’s the same thing as seeing it through these two spheres
    0:17:54 that are embedded in your skull.
    0:17:57 It’s just capturing photons and information about them,
    0:17:58 figuring out where the edges are
    0:17:59 and then shipping that back to the brain.
    0:18:01 And the brain can figure that out.
    0:18:03 There’s also a colleague of mine
    0:18:05 that makes an app called Voice.
    0:18:07 It uses the phone’s camera
    0:18:10 and it turns that into soundscape.
    0:18:13 So if you’re moving the camera around,
    0:18:15 you’re hearing (mimics sounds)
    0:18:18 you know, it sounds like a strange cacophony,
    0:18:19 but it doesn’t take long,
    0:18:21 even for you as a sighted person,
    0:18:23 to get used to this and say,
    0:18:27 oh, okay, I’m turning the visual world into sound
    0:18:28 and it’s starting to make sense.
    0:18:30 When I pass over an edge
    0:18:32 or when I zoom into something,
    0:18:34 the pitch changes, the volume changes,
    0:18:37 there’s all kinds of changes in the sound quality
    0:18:39 that tells you, oh, yeah, now I’m getting close to something,
    0:18:40 now I’m getting far,
    0:18:43 and here’s what the world looks like in sound.
    0:18:48 – Coming up after the break,
    0:18:51 there’s really no shortage of theoretical ideas
    0:18:52 in neuroscience,
    0:18:56 but fundamentally, we don’t have enough data.
    0:18:59 More of Steve Leavitt’s conversation with David Eagleman
    0:19:02 in this special episode of “People I Mostly Admire.”
    0:19:18 Okay, back now to this special episode of “People I Mostly Admire.”
    0:19:20 This is my Freakonomics friend and co-author Steve Leavitt
    0:19:24 in conversation with the neuroscientist David Eagleman.
    0:19:27 (eerie music)
    0:19:30 – Elon Musk’s company, Neuralink,
    0:19:32 has gotten a ton of attention lately.
    0:19:33 Could you explain what they’re trying to do
    0:19:37 and whether you think that’s a promising avenue to explore?
    0:19:38 – What they’re doing is they’re putting electrodes
    0:19:43 into the brain to read from and talk to the neurons there.
    0:19:45 So what we’ve been talking about so far
    0:19:47 has been sending signals to the brain,
    0:19:48 but what Neuralink is trying to do
    0:19:51 is take signals out of the brain, is that right?
    0:19:51 – That is correct.
    0:19:53 Everything we’ve been talking about so far
    0:19:54 with sensory substitution,
    0:19:57 that’s a way of pushing information in and non-invasive.
    0:20:00 And what Neuralink is, you have to drill a hole in the head
    0:20:02 to get to the brain itself,
    0:20:04 but then you can do reading and writing invasively.
    0:20:09 That actually has been going on for 60 years.
    0:20:11 The language of the brain is electrical stimulation.
    0:20:14 And so with a little tiny wire, essentially,
    0:20:17 you can zap a neuron and make it pop off
    0:20:21 or you can listen to when it’s chattering along,
    0:20:23 going pa-pa-pa-pa-pa-pa-pa-pa.
    0:20:25 There’s nothing actually new about what Neuralink is doing,
    0:20:28 except that they’re making a one ton robot
    0:20:32 that sews the electrodes into the brain
    0:20:34 so it can do it smaller and tighter and faster
    0:20:36 than a neurosurgeon can.
    0:20:38 And by the way, there are a lot of great companies
    0:20:41 doing this sort of thing with electrodes.
    0:20:44 As people get access to the brain,
    0:20:46 we’re finally getting to a point, we’re not there yet,
    0:20:48 but we’re getting to a point
    0:20:52 where we’ll finally be able to push theory forward.
    0:20:55 There’s really no shortage of theoretical ideas
    0:20:58 in neuroscience, but fundamentally,
    0:21:01 we don’t have enough data because, as I mentioned,
    0:21:04 you’ve got these 86 billion neurons all doing their thing,
    0:21:09 and we have never measured what all these things
    0:21:10 are doing at the same time.
    0:21:11 So we have technologies
    0:21:15 like functional magnetic resonance imaging, FMRI,
    0:21:19 which measures big blobby volumes of,
    0:21:21 oh, there was some activity there and some activity there,
    0:21:22 but that doesn’t tell us what’s happening
    0:21:24 at the level of individual neurons.
    0:21:26 We can currently measure some individual neurons,
    0:21:28 but not many of them.
    0:21:32 Be like if an alien asked one person in New York City,
    0:21:33 hey, what’s going on here?
    0:21:36 And then tried to extrapolate to understand
    0:21:37 the entire economy of New York City
    0:21:38 and how that’s all working.
    0:21:43 So I think we’re finally getting closer to the point
    0:21:45 where we’ll have real data about,
    0:21:47 wow, this is what thousands or eventually hundreds
    0:21:49 of thousands or millions of neurons
    0:21:52 are actually doing in real time at the same moment,
    0:21:55 and then we’ll be able to really get progress.
    0:21:57 I actually think the future is not in things like Neuralink,
    0:22:02 but the next level past that, which is nanorobotics.
    0:22:04 This is all theoretical right now,
    0:22:07 but I don’t think this is more than 20, 30 years off,
    0:22:10 where you do three-dimensional printing,
    0:22:14 atomically precise, you make molecular robots,
    0:22:15 hundreds of millions of these,
    0:22:17 and then you put them in a capsule
    0:22:18 and you swallow the capsule,
    0:22:19 and these little robots swim around
    0:22:23 and they go into your neurons, these cells in your brain.
    0:22:27 And from there, they can send out little signals saying,
    0:22:29 hey, this neuron just fired.
    0:22:30 And once we have that sort of thing,
    0:22:32 then we can say non-invasively,
    0:22:35 here’s what all these neurons are doing at the same time,
    0:22:38 and then we’ll really understand the brain.
    0:22:41 – I’ve worn a continuous glucose monitor a few times,
    0:22:43 so you stick this thing in your arm
    0:22:44 and you leave it there for 10 days,
    0:22:46 and every five minutes,
    0:22:49 it gives you a reading of your blood glucose level.
    0:22:51 It gives you direct feedback
    0:22:53 on how your body responds to the foods you eat,
    0:22:55 also to stress or lack of sleep,
    0:22:57 that you simply don’t get otherwise.
    0:23:01 I learned more about my metabolism in 10 days
    0:23:04 than I had over the entire rest of my life combined.
    0:23:06 What you’re talking about with these nanorobots
    0:23:07 is obviously in the future,
    0:23:12 but is there anything now that I can buy
    0:23:13 and I can strap on my head?
    0:23:15 And I know it’s not gonna be individual neurons,
    0:23:17 but that would allow me to get feedback
    0:23:21 about my brainwaves and be able to learn
    0:23:23 in that same way I do with the glucose monitor?
    0:23:27 – What we have now is EEG, Electroencephalography,
    0:23:30 and there are several really good companies
    0:23:34 like MUSE and Emotive that have come out with at-home methods.
    0:23:36 You just strap this thing on your head
    0:23:39 and you can measure what’s going on with your brainwaves.
    0:23:43 The problem is that brainwaves are still pretty distant
    0:23:46 from the activity of 86 billion chattering neurons.
    0:23:49 An analogy would be if you went
    0:23:50 to your favorite baseball stadium
    0:23:53 and you attached a few microphones
    0:23:55 to the outside of the stadium
    0:23:58 and you listened to a baseball game,
    0:24:00 but all you could hear with these microphones
    0:24:02 is occasionally the crack of the bat
    0:24:03 and the roar of the crowd.
    0:24:07 And then your job is to reconstruct what baseball is
    0:24:10 just some of these few little signals you’re getting.
    0:24:14 So I’m afraid it’s still a pretty crude technology.
    0:24:17 – I could imagine that I would put one of these EEGs on
    0:24:20 and I would just find some feeling I liked,
    0:24:23 bliss or peace or maybe it’s a feeling
    0:24:26 induced by drugs and alcohol.
    0:24:30 And I would be able to see what my brain patterns
    0:24:32 looked like in those states.
    0:24:35 Then I could sit around and try to work towards
    0:24:37 reproducing those same patterns.
    0:24:39 – No, it might not actually lead to anything good.
    0:24:41 But in your professional opinion,
    0:24:44 total waste of time, you trying to do that?
    0:24:47 – The fact is if you felt good at some moment in your life
    0:24:49 and you sat around and tried to reproduce that,
    0:24:52 I think you’d do just as well thinking about that moment,
    0:24:55 trying to put yourself in that state,
    0:24:57 rather than try to match a squiggly line.
    0:24:59 – You know, I’m a big believer in data though
    0:25:03 and it seems like somebody should be building AI systems
    0:25:06 that are able to look at those squiggles
    0:25:07 and give me feedback.
    0:25:10 The thing that I’d so hard about the brain
    0:25:14 is that we don’t get direct feedback about what’s going on,
    0:25:17 which is how the brain is so good at what it does.
    0:25:18 If the brain didn’t get feedback from the world
    0:25:20 about what it was doing,
    0:25:21 it wouldn’t be any good at predicting things.
    0:25:24 So I’m trying to find a way that I can get feedback,
    0:25:25 but it sounds like you’re saying I gotta live
    0:25:28 for 20 more years if I wanna hope to do that.
    0:25:29 – I think that’s right.
    0:25:31 I mean, there’s also this very deep question about
    0:25:34 what kind of feedback is useful for you.
    0:25:37 Most of the action in your brain is happening unconsciously.
    0:25:39 It’s happening well below the surface of your awareness
    0:25:41 or your ability to access it.
    0:25:45 And the fact is that your brain works much better that way.
    0:25:47 Do you play tennis, for example?
    0:25:47 – Not well.
    0:25:48 – Or golf?
    0:25:49 – Golf I play.
    0:25:50 – Okay, good.
    0:25:51 So if I ask you, hey Stephen,
    0:25:54 tell me exactly how you swing that golf club.
    0:25:55 The more you start thinking about it,
    0:25:56 the worse you’re gonna be at it.
    0:25:59 Because consciousness, when it starts poking around
    0:26:00 in areas that it doesn’t belong,
    0:26:02 it’s only gonna make things worse.
    0:26:04 And so it is an interesting question
    0:26:06 about the kind of things
    0:26:07 that we want to be more conscious of.
    0:26:09 I’m trying some of these experiments now,
    0:26:11 actually using my wristband,
    0:26:16 wearing EEG and getting a summarized feedback on the wrist.
    0:26:17 So I don’t have to stare at a screen,
    0:26:19 but as I’m walking around during the day,
    0:26:22 I have a sense of what’s going on with this.
    0:26:23 Or with the smart watch,
    0:26:26 having a sense of what’s going on with my physiology.
    0:26:28 I’m not sure yet whether it’s useful
    0:26:30 or whether those things are unconscious
    0:26:33 because mother nature figured out a long time ago
    0:26:36 that it’s just as well if it remains unconscious.
    0:26:37 One thing I’m doing,
    0:26:40 which is just a wacky experiment is to try it.
    0:26:42 The smart watch is measuring all these things.
    0:26:43 We have that data going out,
    0:26:47 but the key is you have someone else wear the wristband.
    0:26:48 Like your spouse wear the smart watch
    0:26:51 and you’re feeling her physiology.
    0:26:52 And I’m trying to figure out,
    0:26:55 is this useful to be tapped into someone else’s physiology?
    0:26:57 I don’t know if this is good or bad for marriages,
    0:26:58 but what a nightmare.
    0:27:01 But I’m just trying to really get at this question
    0:27:03 of these unconscious signals that we experience.
    0:27:05 Is it better if they’re exposed
    0:27:07 or better to not expose them?
    0:27:09 – What have you found empirically?
    0:27:10 – Empirically what I found is that married couples
    0:27:11 don’t want to wear it.
    0:27:13 (laughs)
    0:27:21 – So in my lived experience,
    0:27:26 I walk around and there’s almost nonstop chatter in my head.
    0:27:29 It’s like there’s a narrator who’s commenting
    0:27:31 on what I’m observing in the world.
    0:27:34 My particular voice does a lot of rehearsing
    0:27:36 of what I’m gonna say out loud in the future
    0:27:39 and a lot of rehashing of past social interactions.
    0:27:40 Other people have voices in their head
    0:27:44 that are constantly criticizing and belittling them.
    0:27:47 But either way, there’s both a voice that’s talking
    0:27:50 and there’s also some other entity in my head
    0:27:52 that’s listening to that voice and reacting.
    0:27:56 Does neuroscience have an explanation for this sort of thing?
    0:27:59 On my book Incognito, the way I cast the whole thing
    0:28:01 is that the right way to think about the brain
    0:28:04 is like a team of rivals.
    0:28:06 Lincoln, when he set up his presidential cabinet,
    0:28:08 he set up several rivals in it
    0:28:10 and they were all functioning as a team.
    0:28:13 That’s really what’s going on under the hood in your head
    0:28:15 is you’ve got all these drives
    0:28:16 that want different things all the time.
    0:28:19 So if I put a slice of chocolate cake in front of you,
    0:28:21 Steven, part of your brain says,
    0:28:23 “Ooh, that’s a good energy source, let’s eat it.”
    0:28:25 Part of your brain says, “No, don’t eat it.
    0:28:26 It’ll make me overweight.”
    0:28:27 Part of your brain says, “Okay, I’ll eat it,
    0:28:29 but I’ll go to the gym tonight.”
    0:28:31 And the question is, who is talking with whom here?
    0:28:35 It’s all you, but it’s different parts of you.
    0:28:38 All these drives are constantly arguing it out.
    0:28:40 It’s by the way, generating activity
    0:28:43 in the same parts of the brain as listening and speaking
    0:28:44 that you would normally do.
    0:28:48 It’s just internal before anything comes out.
    0:28:53 – Language is such an effective form of communicating
    0:28:55 and of summarizing information
    0:28:57 that at least my impression inside my head
    0:29:02 is that a lot of this is being mediated through language.
    0:29:03 But I also have this impression
    0:29:06 that there are parts of my brain
    0:29:07 that are not very good with language.
    0:29:11 Maybe I’m crazy, but I have this working theory
    0:29:13 that the language parts of my brain
    0:29:16 have really co-opted power.
    0:29:18 The non-speaking parts of my brain,
    0:29:20 they actually feel to me like the good parts of me,
    0:29:22 the interesting parts of me,
    0:29:24 but I feel like they’re essentially held hostage
    0:29:26 by the language parts.
    0:29:27 Does that make any sense?
    0:29:28 – Well, this might be a good reason
    0:29:31 for you to keep pursuing possible ways
    0:29:33 to tap into your brain data.
    0:29:37 And by the way, it turns out that the internal voice
    0:29:39 is on a big spectrum across the population,
    0:29:41 which is to say some people like you
    0:29:43 have a very loud internal radio.
    0:29:45 I happen to be at the other end of the spectrum
    0:29:48 where I have no internal radio at all.
    0:29:49 I never hear anything in my head.
    0:29:51 That’s called an endophagia.
    0:29:55 But everyone is somewhere along this spectrum.
    0:29:58 One of the points that I’ve always really concentrated
    0:30:00 on neuroscience is what are the actual differences
    0:30:03 between people traditionally that’s been looked at
    0:30:05 in terms of disease states.
    0:30:07 But the question is from person to person
    0:30:09 who are in the normal part of the distribution,
    0:30:10 what are the differences between us?
    0:30:12 In terms of those are manifold.
    0:30:15 So take something like how clearly you visualize
    0:30:16 when you imagine something.
    0:30:20 So if I ask you to imagine a dog running across
    0:30:24 the flowery meadow towards a cat,
    0:30:26 you might have something like a movie in your head.
    0:30:28 Other people have no image at all.
    0:30:29 They understand it conceptually,
    0:30:31 but they don’t have any image in their head.
    0:30:34 And it turns out when you carefully study this,
    0:30:37 the whole population is smeared across the spectrum.
    0:30:39 So our internal lives from person to person
    0:30:40 can be quite different.
    0:30:42 – So when you talk about the spectrum,
    0:30:46 it makes me think of synesthesia.
    0:30:49 Could you explain what that is and how that works?
    0:30:52 – So I’ve spent about 25 years now studying synesthesia
    0:30:55 and that has to do with some percentage of the population
    0:30:57 has a mixture of the senses.
    0:30:59 They might look at letters on a page
    0:31:01 and that triggers a color experience for them
    0:31:05 where they hear music and that causes them to see some visual
    0:31:07 or they put some taste in their mouth
    0:31:10 and it causes them to have a feeling on their fingertips.
    0:31:13 There are dozens and dozens of forms of synesthesia,
    0:31:16 but what they all have to do with is a cross blending
    0:31:18 of things that are normally separate
    0:31:20 in the rest of the population.
    0:31:23 – And what share of the population has these patterns?
    0:31:27 – So it’s about 3% of the population that has colored letters
    0:31:29 or colored weekdays or months or numbers.
    0:31:31 – It was big, it’s interesting.
    0:31:32 I wouldn’t have thought it was so big.
    0:31:35 – The crazy part is that if you have synesthesia,
    0:31:37 it probably has never struck you
    0:31:40 that 97% of the population does not see the world
    0:31:41 the way that you see it.
    0:31:44 Everyone’s got their own story going on inside
    0:31:48 and it’s rare that we stop to consider the possibility
    0:31:52 that other people do not have the same reality that we do.
    0:31:54 – And what’s going on in the brain?
    0:31:55 – In the case of synesthesia,
    0:31:58 it’s just a little bit of crosstalk between two areas
    0:32:01 that in the rest of the population tend to be separate
    0:32:02 but neighboring.
    0:32:04 So it’s like porous borders between two countries.
    0:32:06 They just get a little bit of data leakage
    0:32:10 and that causes them to have a joint sensation of something.
    0:32:11 – People make a big deal out of it
    0:32:15 when they talk about musicians having this
    0:32:17 and they imply that it’s helpful,
    0:32:19 that it makes them better musicians.
    0:32:20 Do you think there’s truth to that
    0:32:23 or is it just that if 3% of the population has this,
    0:32:25 then they’re gonna be some great musicians among them?
    0:32:26 – I suspect it’s the latter,
    0:32:28 which is to say everyone loves
    0:32:30 pointing out synesthetic musicians
    0:32:34 but no one has done a study on how many deep sea divers
    0:32:37 have synesthesia or how many accountants have synesthesia.
    0:32:38 And so we don’t really know
    0:32:41 if it’s disproportionate among musicians.
    0:32:43 So you’ve created this database of people
    0:32:47 who have the condition and you find a pattern
    0:32:50 that is completely and totally bizarre.
    0:32:53 And that’s that there’s a big bunch of people
    0:32:57 who associate the letter A with red, B with orange,
    0:32:59 C with yellow, it goes on and on
    0:33:01 and then they start repeating it G.
    0:33:03 In general though, you don’t see any patterns at all.
    0:33:07 Like people can connect these colors and letters in any way.
    0:33:09 Do you remember when you first found this pattern
    0:33:10 and what your thought was?
    0:33:13 So typically, as he said, it’s totally idiosyncratic.
    0:33:17 Each synesthete has his or her own colors for letters.
    0:33:20 So my A might be yellow, your A is purple and so on.
    0:33:22 And then what happened is
    0:33:24 with two colleagues of mine at Stanford,
    0:33:27 we found in this database of tens of thousands of synesthetes
    0:33:28 that I’ve collected over the years,
    0:33:31 we found that starting in the late 60s,
    0:33:33 there was some percentage of synesthetes
    0:33:36 who happened to share exactly the same colors.
    0:33:38 These synesthetes were in different locations
    0:33:39 but they all had the same thing.
    0:33:44 And then that percentage rose to about 15% in the mid 70s.
    0:33:45 – So when you saw this,
    0:33:47 you must’ve been thinking, my God, this is important, right?
    0:33:48 – Exactly right.
    0:33:49 The question is,
    0:33:51 how could these people be sharing the same pattern?
    0:33:53 What we had always suspected is that
    0:33:56 maybe there was some imprinting that happens,
    0:33:58 which is to say there’s a quilt in your grandmother’s house
    0:34:03 that has a red A and a yellow B and a purple C and so on.
    0:34:05 But everyone has different things
    0:34:07 that they grew up with as little kids.
    0:34:11 And so it was strange that this was going on.
    0:34:13 The punchline is that we realized
    0:34:16 that this is the colors of the Fisher Price Magnet set
    0:34:19 on the refrigerators that were popular
    0:34:22 during the 70s and 80s and then essentially died out.
    0:34:23 And so it turns out that when I look across
    0:34:25 all these tens of thousands of synesthetes,
    0:34:28 it’s just those people who were kids
    0:34:30 in the late 60s and 70s and 80s
    0:34:32 that imprinted on the Fisher Price Magnet set.
    0:34:34 And that’s their synesthesia.
    0:34:36 And then as its popularity died out,
    0:34:39 there aren’t anymore who have that particular pattern.
    0:34:49 – Now I have to imagine that the way we teach
    0:34:52 in traditional classrooms with a teacher or professor
    0:34:54 at a Blackboard lecturing to a huge group
    0:34:57 of passive students, as a neuroscientist,
    0:34:59 that must make a cringe, right?
    0:35:01 – It does, increasingly, yes.
    0:35:02 – How should we teach?
    0:35:04 I think the next generation is going to be smarter
    0:35:07 than we are simply because of the broadness
    0:35:09 of the diet that they can consume.
    0:35:10 Whenever they’re curious about something,
    0:35:13 they jump on the internet, they get the answer straight away
    0:35:16 or from Alexa or from ChatGPT, they just get the answers
    0:35:20 and that is massively useful for a few reasons.
    0:35:23 One is that when you are curious about something,
    0:35:26 you have the right cocktail of neurotransmitters present
    0:35:28 to make that information stick.
    0:35:31 So if you get the answer to something
    0:35:32 in the context of your curiosity,
    0:35:34 then it’s going to stay with you.
    0:35:36 Whereas you and I grew up in an era
    0:35:39 where we had lots of just-in-case information.
    0:35:40 – What do you mean by that?
    0:35:42 – Oh, you know, like just in case you ever need to know
    0:35:45 that the Battle of Hastings happened in 1066, here you go.
    0:35:46 – And you want to contrast that
    0:35:47 with just-in-time information.
    0:35:48 – Exactly.
    0:35:51 – I need to know how to fix my car
    0:35:52 and so the internet tells me
    0:35:55 and then I can really remember it ’cause I need it.
    0:35:56 – That’s exactly it.
    0:35:58 And so, look, you know, for all of us with kids,
    0:36:00 I know you’ve got kids, I’ve got kids and we feel like,
    0:36:03 oh, my kid’s on YouTube and wasting time.
    0:36:06 There’s a lot of amazing resources
    0:36:08 and things that they learn on YouTube
    0:36:10 or even on TikTok, anywhere.
    0:36:12 There’s lots of garbage, of course,
    0:36:14 but it’s better than what we grew up with.
    0:36:16 When you and I wanted to know something,
    0:36:20 we would ask our mothers to drive us down to the library
    0:36:22 and we would thumb through the card catalog
    0:36:23 and hope there was something on it there
    0:36:25 that wasn’t too outdated.
    0:36:27 – You were more ambitious than me.
    0:36:28 I would just ask my mother
    0:36:30 and I have since learned that every single thing
    0:36:33 my mother taught me was completely wrong,
    0:36:34 but I still believe them.
    0:36:36 Because of this part of the brain
    0:36:38 that locks in things that you learn long ago,
    0:36:40 I still have to fight every day
    0:36:42 against the false sorts my mother taught me.
    0:36:45 I wish I had told her to take me to the library.
    0:36:47 – My mother was a biology teacher
    0:36:48 and my father was a psychiatrist
    0:36:51 and so they had all kinds of good information.
    0:36:55 I’m just super optimistic about the next generation of kids.
    0:36:57 Now, as far as how we teach,
    0:37:00 things got complicated with the advent of Google
    0:37:03 and now it’s twice as complicated with chat GPT.
    0:37:06 Happily, we already learned these lessons 20 years ago.
    0:37:08 What we need to do is just change the way
    0:37:10 that we ask questions of students.
    0:37:13 We can no longer just assume that fill in the blank
    0:37:15 or even just writing a paper on something
    0:37:18 is the optimal way to have them learn something,
    0:37:20 but instead they need to do interactive projects
    0:37:22 like run little experiments with each other
    0:37:26 and the kind of thing that you and I both love to do
    0:37:29 in our careers which is, okay, go out and find this data
    0:37:32 and run this experiment and see what happens here.
    0:37:35 That’s the kind of opportunities that kids will have now.
    0:37:40 – You were listening to a special bonus episode
    0:37:43 of People I Mostly Admire with Steve Levitt
    0:37:45 and the neuroscientist David Eagleman.
    0:37:49 After the break, what are large language models missing?
    0:37:51 – It has no theory of mind.
    0:37:55 It has no physical model of the world the way that we do.
    0:37:56 That’s coming up after the break.
    0:38:08 (gentle music)
    0:38:13 – David Eagleman is a professor, a CEO,
    0:38:16 leader of a nonprofit called the Center for Science and Law,
    0:38:19 host of TV shows on PBS and Netflix
    0:38:21 and the founder of Possibillionism.
    0:38:27 Like every curious person trying to figure out
    0:38:29 what we’re doing here, what’s going on,
    0:38:32 it just feels like there are two stories.
    0:38:35 Either there’s some religion story
    0:38:38 or there’s the story of strict atheism,
    0:38:39 which I tend to agree with,
    0:38:41 but it tends to come with this thing of,
    0:38:42 look, we’ve got it all figured out,
    0:38:44 there’s nothing more to ask here.
    0:38:45 There is a middle position
    0:38:46 which people call agnosticism,
    0:38:48 but usually that means, I don’t know,
    0:38:50 I’m not committing to one thing or the other.
    0:38:52 I got interested in defining this new thing
    0:38:54 that I call Possibillionism,
    0:38:56 which is to try to go out there
    0:38:58 and do what a scientist does,
    0:39:01 which is an active exploration of the possibility space.
    0:39:03 What the heck is going on here?
    0:39:06 We live in such a big and mysterious cosmos.
    0:39:09 Everything about our existence is sort of weird.
    0:39:11 Obviously the whole Judeo-Christian tradition,
    0:39:14 that’s one little point in that possibility space
    0:39:17 or the possibility that there’s absolutely nothing
    0:39:18 or we’re just atoms when we die,
    0:39:20 but there’s lots of other possibilities.
    0:39:24 And so I’m not willing to commit to one team or the other
    0:39:26 without having sufficient evidence.
    0:39:28 So that’s why I call myself a Possibillion.
    0:39:32 – And so in support of Possibillionism,
    0:39:34 maybe a better name could be in order,
    0:39:37 you wrote a book called SUM, that’s S-U-M.
    0:39:41 So it’s SUM, 40 Tales from the Afterlives.
    0:39:44 How do you describe the book to people?
    0:39:45 – I call it literary fiction.
    0:39:48 It’s 40 short stories that are all mutually exclusive.
    0:39:51 They’re all pretty funny, I would like to think,
    0:39:53 but they’re also kind of gut-wrenching.
    0:39:55 And what I’m doing is shining the flashlight
    0:39:57 around the possibility space.
    0:39:59 None of them are meant to be taken seriously.
    0:40:02 But what the exercise of having 40
    0:40:07 completely different stories gives us is a sense of,
    0:40:10 wow, actually there’s a lot that we don’t know here.
    0:40:12 In some of the stories, God is a female.
    0:40:14 In some stories, God is a married couple.
    0:40:19 In some stories, God is a species of dim-witted creatures.
    0:40:22 In one story, God is actually the size of a bacterium
    0:40:24 and doesn’t know that we exist.
    0:40:27 And in lots of stories, there’s no God at all.
    0:40:29 That book is something I wrote over the course of seven years
    0:40:32 and became an international bestseller.
    0:40:34 It’s really had a life to it
    0:40:36 that I wouldn’t have ever guessed.
    0:40:38 – When I heard about the book,
    0:40:40 I saw the subtitle and I thought,
    0:40:44 I have zero interest in reading a book about the afterlife.
    0:40:47 I totally misunderstood what the book was about.
    0:40:51 And then I certainly didn’t understand that some was Latin.
    0:40:54 – Some actually I chose because among other things,
    0:40:56 that’s the title story.
    0:40:58 In the afterlife, you relive your life,
    0:41:02 but all the moments that share a quality are grouped together.
    0:41:05 So you spend three months waiting in line
    0:41:08 and you spend 900 hours sitting on the toilet
    0:41:10 and you spend 30 years sleeping.
    0:41:11 – All in a row.
    0:41:13 – Exactly, and this amount of time looking for lost items
    0:41:14 in this amount of time,
    0:41:16 realizing you’ve forgotten someone’s name
    0:41:19 and this amount of time falling and so on.
    0:41:20 Part of why I used the title sum
    0:41:24 is because of the sum of events in your life like that.
    0:41:26 Part of it was because Kojito or Gosume.
    0:41:29 So it ended up just being the perfect title for me,
    0:41:31 even if it did lose a couple of readers there.
    0:41:41 – People are super excited right now
    0:41:44 about these generative AI models,
    0:41:45 the large language models.
    0:41:47 What’s your take on it?
    0:41:49 – Essentially these artificial neural networks
    0:41:53 took off from a very simplified version of the brain,
    0:41:55 which is, hey, look, you’ve got units and they’re connected
    0:41:56 and what if we can change the strength
    0:41:58 between these connections?
    0:42:00 And in a very short time,
    0:42:02 that has now become this thing
    0:42:05 that has read everything ever written on the planet
    0:42:07 and can give extraordinary answers.
    0:42:10 But it’s not yet the brain or anything like it.
    0:42:12 It’s just taking the very first idea
    0:42:14 about the brain and running with it.
    0:42:16 What a large language model does not have
    0:42:19 is an internal model of the world.
    0:42:21 It’s just acting as a statistical parrot.
    0:42:23 It’s saying, okay, given these words,
    0:42:25 what is the next word most likely to be
    0:42:27 given everything that I’ve ever read on the planet?
    0:42:29 And so it’s really good at that,
    0:42:33 but it has no model of the world, no physical model.
    0:42:38 And so things that a six-year-old can answer, it is stuck on.
    0:42:39 Now, this is not a criticism of it
    0:42:42 in the sense that it can do all kinds of amazing stuff
    0:42:43 and it’s gonna change the world,
    0:42:45 but it’s not the brain yet
    0:42:46 and there’s still plenty of work to be done
    0:42:49 to get something that actually acts like the brain.
    0:42:52 – Do you think that it is a solvable problem
    0:42:55 to give these models a theory of mind, a model of the world?
    0:42:58 – I suspect so because there are 8.2 billion of us
    0:43:00 who have this functioning in our brains
    0:43:04 and as far as we can tell, we’re just made of physical stuff.
    0:43:06 We’re just very sophisticated algorithms
    0:43:09 and it’s just a matter of cracking what that algorithm is.
    0:43:12 – If we were to come back in 100 years,
    0:43:13 what do you think would be most different?
    0:43:14 I know that’s a hard prediction to make,
    0:43:17 but what do you see is transforming most
    0:43:19 in the areas you work in?
    0:43:21 – The big textbook that we have in our field
    0:43:22 is called Principles of Neuroscience
    0:43:27 and it’s about 900 pages and it’s not actually principles,
    0:43:30 it’s just a data dump of all this crazy stuff we know.
    0:43:34 And in 100 years, I expect it’ll be like 90 pages.
    0:43:37 We’ll have things where we put big theoretical frameworks
    0:43:39 together and we say, ah, okay, look, all this other stuff,
    0:43:42 these are just expressions of this basic principle
    0:43:43 that we have now figured out.
    0:43:46 – Do you pay much attention to behavioral economics?
    0:43:46 – Yes, I do.
    0:43:48 – And what do you think of it?
    0:43:49 – Oh, it’s great and that’s probably the direction
    0:43:52 that a lot of fields will go is,
    0:43:54 how do humans actually behave?
    0:43:56 One of the big things that I find most interesting
    0:43:59 about behavioral economics comes back to this issue
    0:44:01 about the team of rivals.
    0:44:04 When people measure in the brain
    0:44:06 how we actually make decisions about whatever,
    0:44:09 there are totally separable networks going on.
    0:44:12 Some networks care about the valuation of something,
    0:44:13 the price point.
    0:44:14 You have totally other networks
    0:44:17 that care about the anticipated emotional experience
    0:44:18 about something.
    0:44:22 You have other networks that care about the social context.
    0:44:25 Like, what do my friends think about this?
    0:44:28 You have mechanisms that care about short-term gratification.
    0:44:29 You have other mechanisms that are thinking about
    0:44:32 the long-term, what kind of person do I want to be?
    0:44:34 All these things are battling it out under the hood.
    0:44:37 It’s like the three stooches sticking each other in the eye
    0:44:39 and wrestling each other’s arms and stuff.
    0:44:41 But what’s fascinating is when you’re standing
    0:44:44 in the grocery store aisle trying to decide
    0:44:47 which flavor of ice cream you’re gonna buy,
    0:44:48 you don’t know about these raging battles
    0:44:50 happening under the hood.
    0:44:52 You just stand there for a while and then you say,
    0:44:54 “Okay, I’ll grab this one over here.”
    0:44:56 – There was a point in time among economists
    0:44:57 that there was a lot of optimism
    0:45:00 that we could really nail macroeconomics,
    0:45:04 inflation and interest rates and whatnot.
    0:45:06 And we could really understand how the system worked.
    0:45:10 And I think there’s been a real step back from that.
    0:45:12 The view now is, look, it’s enormous complex system.
    0:45:16 And we’ve really, I guess, given up in the short run.
    0:45:18 Are you at all worried that’s where we’re going
    0:45:19 with the brain?
    0:45:20 – Oh gosh, no.
    0:45:23 And the reason is because we’ve got
    0:45:24 all these billions of brains running around.
    0:45:27 What that tells us is it has to be pretty simple
    0:45:28 and principal.
    0:45:30 You got 19,000 genes, that’s all you’ve got.
    0:45:32 Something about it has to be as simple
    0:45:37 as falling off a log for it to work out very well
    0:45:39 so often, billions of times.
    0:45:44 – They say as you get older,
    0:45:46 it’s important to keep challenging your brain
    0:45:49 by learning new things like a foreign language.
    0:45:51 I can’t say I found learning German
    0:45:52 to be all that much fun.
    0:45:55 And I definitely have not turned out to be very good at it.
    0:45:57 So I’ve been looking for a new brain challenge
    0:46:02 and I have to say, I find echolocation very intriguing.
    0:46:06 How cool would it be to be able to see via sound?
    0:46:09 I suspect though that my aptitude for echolocation
    0:46:12 will be on power with my aptitude for German.
    0:46:15 So if you see me covered in bruises, you’ll know why.
    0:46:18 If you wanna learn more about David Egelman’s ideas,
    0:46:20 I really enjoyed a couple of his mini books
    0:46:23 like LiveWired, which talks about his brain research,
    0:46:26 and some four details from the afterlife,
    0:46:28 his book of speculative fiction.
    0:46:32 – Hey there, it’s Stephen Dubner.
    0:46:34 Again, I hope you enjoyed this special episode
    0:46:36 of People I Mostly Admire.
    0:46:37 I loved it.
    0:46:41 And I would suggest you go right now to your podcast app
    0:46:43 and follow the show, People I Mostly Admire.
    0:46:46 We will be back very soon with more Freakonomics Radio.
    0:46:49 Until then, take care of yourself.
    0:46:51 And if you can, someone else too.
    0:46:55 Freakonomics Radio and People I Mostly Admire
    0:46:58 are produced by Stitcher and Renbud Radio.
    0:47:00 This episode was produced by Morgan Levy
    0:47:02 with help from Lyric Boutich and Daniel Moritz-Rabson.
    0:47:04 It was mixed by Jasmine Klinger.
    0:47:07 Our staff also includes Alina Kulman, Augusta Chapman,
    0:47:09 Dalvin Abouaji, Eleanor Osborne,
    0:47:12 Ellen Frankman, Elsa Hernandez, Gabriel Roth, Greg Rippen,
    0:47:15 Jason Gambrell, Jeremy Johnston, John Schnars,
    0:47:17 Neil Coruth, Rebecca Lee Douglas,
    0:47:20 Sarah Lilly, Theo Jacobs, and Zach Lipinski.
    0:47:22 Our composer is Luis Guerra.
    0:47:24 As always, thank you for listening.
    0:47:33 – David, you got your quick time going?
    0:47:35 – I do now.
    0:47:42 – The Freakonomics Radio Network,
    0:47:44 the hidden side of everything.
    0:47:49 – Stitcher.
    0:47:51 (upbeat music)
    0:47:53 you

    David Eagleman upends myths and describes the vast possibilities of a brainscape that even neuroscientists are only beginning to understand. Steve Levitt interviews him in this special episode of People I (Mostly) Admire.

     

    • SOURCES:
      • David Eagleman, professor of cognitive neuroscience at Stanford University and C.E.O. of Neosensory.

     

     

  • 616. How to Make Something from Nothing

    AI transcript
    0:00:08 Hey there, it’s Steven Dubner, and I would like to remind you about two live shows that
    0:00:09 we are putting on soon.
    0:00:12 The first one is on January 3rd in San Francisco.
    0:00:15 The second is in Los Angeles on February 13th.
    0:00:20 We have got some excellent guests for both shows, so please come hang out with us.
    0:00:27 Tickets are at Freakonomics.com/LiveShows, one word, again January 3rd and February 14th,
    0:00:28 San Francisco and LA.
    0:00:34 Meanwhile, today on the show, a conversation with someone I know quite well, or at least
    0:00:41 used to, someone who is smart, shrewd, very good at his work, and someone who taught me
    0:00:47 a lot, even if not always on purpose.
    0:00:49 Why don’t you just say your name and what you do?
    0:00:50 My name is Adam Moss.
    0:00:51 That’s easy enough.
    0:01:00 I am an editor by lifelong profession and recently an author and sometimes a painter.
    0:01:05 For a long time, Adam Moss was widely considered the best magazine editor around.
    0:01:11 He was the founding editor of Seven Days Magazine, a clever and slightly transgressive
    0:01:12 arts and culture weekly.
    0:01:17 From there, he went to the New York Times Magazine, and after many years there, he took
    0:01:21 over New York Magazine, which he radically remade for the digital era.
    0:01:25 He won all the awards an editor can win.
    0:01:29 He directly shaped the careers of hundreds of writers and editors.
    0:01:32 Indirectly, he did the same for millions of readers.
    0:01:38 He left New York Magazine in 2019, still on top but feeling a bit too old for the game,
    0:01:42 a bit burned out and ready for something new.
    0:01:49 The something new eventually took the form of a book called The Work of Art, How Something
    0:01:51 Comes from Nothing.
    0:01:58 The book is 43 cases of building something from first notion to finished product with
    0:02:00 all that kind of toward firm between.
    0:02:04 Many people who know Adam Moss were surprised that he wrote a book.
    0:02:08 He was one of the few magazine editors who didn’t either start out as a writer or want
    0:02:12 to be a writer or think of themselves as a writer.
    0:02:14 He was a full-fledged editor.
    0:02:17 An editor is mostly backstage.
    0:02:20 There’s a lot of power and a bit of risk.
    0:02:25 A writer, meanwhile, is out front, directly in the line of fire.
    0:02:29 You work on a thing for months or years, and then it goes out into the world with your
    0:02:33 name on it, so if people hate it, they know where to find you.
    0:02:37 That’s why it was so intriguing that Adam Moss would write a book.
    0:02:40 So we will talk about that today, but some other things too.
    0:02:46 Mostly his tenure at the New York Times Magazine, where he happened to be my boss.
    0:02:47 This was in the late 1990s.
    0:02:52 I was what’s called a story editor, which meant I came up with ideas, assigned them
    0:02:58 to writers, and then shepherded those pieces through the editorial and publishing processes.
    0:03:03 The Times Magazine was considered a great magazine during this era, and it was a thrill
    0:03:04 to be inside of that.
    0:03:11 So terrifying sometimes, but mostly a thrill, and mostly because our boss was really good
    0:03:15 at his job, and we all got to watch and learn.
    0:03:18 That said, I quit The Times after about five years.
    0:03:23 It used to be that when someone left that place voluntarily and was relatively young,
    0:03:27 I was in my thirties, that people would think you’re crazy.
    0:03:30 I was doing well as an editor and an occasional writer.
    0:03:34 The boss has told me I might be a boss before long.
    0:03:35 That was the last straw.
    0:03:38 I didn’t want to be an editor or a boss.
    0:03:44 I just wanted to be a writer, and I wanted to work on my own, not within a hierarchy.
    0:03:50 So I quit and I went off to write books, which is how I ended up here, talking to you.
    0:03:55 When Adam Moss’s book came out in early 2024, I read it right away.
    0:04:00 For me and many others who worked for him, it was a bit like discovering his journal.
    0:04:05 Something that made him tick as an editor, as a boss, was right there on the page.
    0:04:09 At the time, I was trying to make a podcast series about mentorship.
    0:04:15 The idea was that mentorship is this standard and successful practice in many realms, in
    0:04:21 education and sports, the military, in the medical and legal professions, and yet in
    0:04:24 other realms, there’s no standard mentorship at all.
    0:04:29 I wanted to know why not and whether something should be done about that.
    0:04:31 But the mentorship series just never came together.
    0:04:35 We couldn’t find a center of gravity, and eventually we gave up, which is fine.
    0:04:38 That happens all the time in this kind of work.
    0:04:44 But there was one interview we did for the series that I was not willing to ditch.
    0:04:47 This one, the one with Adam Moss.
    0:04:53 Was he in fact a mentor to me, or maybe more like the master who teaches an apprentice,
    0:04:58 or was he just an old-fashioned boss trying to extract labor?
    0:05:00 That’s what today’s conversation is about.
    0:05:05 It’s the latest in our series of one-on-one conversations to end the year, even if you
    0:05:08 are not a big fan of magazines.
    0:05:13 Even if you have never held a paper magazine in your hands, I suspect that you will benefit
    0:05:20 from hearing Adam Moss’s perspective, because all of us at some point try to make something
    0:05:21 from nothing.
    0:05:36 So you might as well learn from a good teacher, like I did.
    0:05:42 This is Freakonomics Radio, the podcast that explores the hidden side of everything with
    0:05:52 your host, Stephen Dubner.
    0:05:57 The title of Adam Moss’s book, The Work of Art, is of course a double entendre.
    0:06:02 He is the kind of person for whom entendres rarely come singly.
    0:06:07 There is a layer, and then another layer, and usually a few more.
    0:06:12 This book is ostensibly a set of interviews with a variety of makers.
    0:06:19 Stephen Sondheim, Twyla Tharp, David Simon, Samin Nasrat, Will Shortz, and their stories
    0:06:25 unfold on pages that are packed with sketches and graphics, sidebars, footnotes.
    0:06:31 It is very much a magazine in book form, which makes sense considering that Adam spent nearly
    0:06:35 40 years making magazines, and this is his first book.
    0:06:39 Some people end up in magazines by accident, like me.
    0:06:42 I just wanted to write, and that’s where the writing jobs were.
    0:06:43 Adam was different.
    0:06:46 He was in love with the magazine form.
    0:06:50 So I asked what first drew him in?
    0:06:51 So many things.
    0:06:55 First of all, when I came to love magazines, it was the late 60s, early 70s.
    0:07:01 It was a heyday of the magazine form, but also it was a really interesting time.
    0:07:07 The world was blowing up in some ways that to a young kid, which is very attractive.
    0:07:12 The magazines that I loved, like The New Yorks and S-Wars, etc., they’re a little smart
    0:07:13 ass.
    0:07:14 They were funny.
    0:07:16 I mean, my first magazine I read was Mad Magazine.
    0:07:21 So it had this kind of fabulous, fractured idea of what the world was that really appealed
    0:07:22 to my adolescent brain.
    0:07:28 And there was the feeling that the whole thing was created by someone or something that felt
    0:07:30 very distinct.
    0:07:32 It had a personality.
    0:07:37 And that personality, if it appealed to you, it was very powerful.
    0:07:38 It felt very personal.
    0:07:42 So this was the medium that you loved, and then you sought it out?
    0:07:43 Yes.
    0:07:44 And then who?
    0:07:45 Okay.
    0:07:47 So I had all of this stuff in my head, but it was unformed.
    0:07:49 And I went to work at Esquire, and I was very young.
    0:07:52 I was a very unformed person at that point.
    0:07:54 What were you good at?
    0:07:57 I was probably fairly intuitive.
    0:08:02 I certainly was eager, and I’d read a lot of magazines.
    0:08:07 I had a lot of data in my head based on my own fan taste.
    0:08:12 And this guy named Lee Eisenberg, he just, for whatever reason, took an interest in me.
    0:08:15 It could have been that he just wanted me to do his work for him, because he recognized
    0:08:21 that my enthusiasm was potentially valuable to him.
    0:08:25 But he also saw that my brain worked a certain way, and he wanted to encourage it.
    0:08:27 It was an act of kindness.
    0:08:30 Name some things that you would do there on a given day?
    0:08:33 We started a section on the entertainment industry.
    0:08:39 And one of Lee’s ideas was that he would put a movie star with a big literary person.
    0:08:43 I remember William Styron and Candace Bergen.
    0:08:49 My job was to go to the thing and set up the tape recorder, and then make sure everybody
    0:08:51 was happy.
    0:08:54 But then he would give me the transcript, and he would say, “What do you find interesting
    0:08:55 in this?”
    0:09:00 Slowly, but surely, I would see what he thought was interesting in it, and then I would watch
    0:09:05 him as he constructed this thing into an exciting little bit of conversation that worked in
    0:09:07 a printed form.
    0:09:09 He was extremely good.
    0:09:15 So just being able to watch him took all of that data in my head and started to organize
    0:09:16 it.
    0:09:17 That was invaluable.
    0:09:22 One of the things that I hear a lot from younger editors is that they really resent doing the
    0:09:28 older editor’s job for them because they feel it’s exploitive, and it is.
    0:09:31 However, it’s an incredible way to learn.
    0:09:32 I mean, it’s apprenticeship.
    0:09:33 Yes.
    0:09:41 And you talk it through, and in there is sharing of ideas, but also a kind of teaching.
    0:09:42 And sometimes the teaching goes both ways.
    0:09:45 This is really, I think, actually crucial.
    0:09:50 In almost every case where there is a mentor, mentee kind of thing, it goes both ways.
    0:09:55 Give an example of you as a young editor, as a mentee, let’s call it.
    0:09:58 What do you think Lee Eisenberg got from you?
    0:10:02 There was a generational difference, not a huge one, but I brought a bunch of generational
    0:10:05 assumptions to the table that he didn’t have.
    0:10:08 I think there is that element of- New eyes, fresh eyes.
    0:10:09 Yes, fresh eyes.
    0:10:14 And as you get older, you begin to dismiss certain things that aren’t fully dismissible.
    0:10:18 So you were the editor of a few different magazines for a long time.
    0:10:22 Can you explain the role, just briefly, of what it means to be the editor and chief of
    0:10:23 the magazine?
    0:10:27 I think a lot of people who aren’t writers or editors don’t really understand that.
    0:10:31 It’s chiefly the person who decides where the magazine is going to go, what the magazine
    0:10:37 covers and doesn’t, shaping the magazine’s identity and its relationship to its readers.
    0:10:39 It’s a manager job.
    0:10:41 The magazine is very, very much a group enterprise.
    0:10:44 That’s one of the most wonderful things about it.
    0:10:51 And it involves getting a whole bunch of people, story editors like you were, visual people,
    0:10:56 copy editors, production people, all sorts of different kinds of people to work together
    0:10:57 as one.
    0:10:59 So in that sense, it’s like a conductor of an orchestra.
    0:11:05 It’s very rarely what people think of as editors, which is the person who fixes sentences.
    0:11:06 Although you did your share of that.
    0:11:09 I did my share of that, but that’s not the chief job description.
    0:11:14 The chief job description is the overall direction of the thing.
    0:11:17 So you as a magazine editor are renowned.
    0:11:21 In the field of magazine making, Adam Moss is considered a great editor.
    0:11:23 And I certainly agree.
    0:11:27 And one of the many things that I and a lot of people think you did well was that you
    0:11:32 were very, the word that people like to use is exacting.
    0:11:37 There’s a standard that is extremely high, but also a little bit elusive and ethereal.
    0:11:38 You don’t quite know what it is.
    0:11:40 But you know, you want to get there.
    0:11:42 Let’s say you agree that you’re exacting.
    0:11:43 I agree that I’m exacting.
    0:11:48 I would like to think that I was a little bit more clear about what it was that I was
    0:11:49 looking for.
    0:11:52 But I recognize that that’s probably completely not true.
    0:11:55 And what I was doing was a kind of maddening mind control.
    0:11:58 It’s a spectrum, but let’s agree that you’re exacting.
    0:12:02 My question would be when you are an exacting person.
    0:12:07 And I’m sure many people listening to this conversation either are or want to be that.
    0:12:10 But you also can’t control every single thing.
    0:12:14 In fact, the process is set up so that you’re not controlled.
    0:12:15 You’re not writing the articles.
    0:12:17 You’re not editing the articles heavily.
    0:12:20 So how do you live with that paradox?
    0:12:25 Being an editor, it’s both an act of grandiosity and humility at the same time.
    0:12:30 So it’s like, you have to think big, but you have to understand that it really is a group
    0:12:32 project.
    0:12:38 And for any group project to work, everybody has to feel like there’s some of them in it
    0:12:41 and they have to feel invested in it and they have to feel proud of it.
    0:12:45 They have to want to make it just as badly as you want to make it.
    0:12:52 And so part of the exacting hood was not just getting people to a certain standard that
    0:13:00 I thought was appropriate, but also getting people to care as much as I did.
    0:13:02 How much of that was in the hiring though?
    0:13:06 A lot of it’s in the hiring, but a lot of it’s also in the sort of day to day way that
    0:13:09 you all get together as a group.
    0:13:16 A lot of it is just familial as opposed to directed towards a particular task.
    0:13:21 A lot of it is helping people find their own independence as thinkers, but also obviously
    0:13:26 think the way you want them to for the purposes of this project.
    0:13:33 Like a parent, I suppose, I would always relish the first moment that a story editor was willing
    0:13:37 to fight with me because I just felt okay, they’ve got it now.
    0:13:43 They have their strong point of view, getting people to feel independent within an environment
    0:13:45 that they weren’t entirely independent.
    0:13:49 It’s a kind of weird little equilibrium, but that was what I was after.
    0:13:55 I was very happy that you landed on the parenting analogy because as you were speaking, that’s
    0:13:58 what it sounded like for sure.
    0:14:01 So parentish, I think, applies.
    0:14:03 What about mentor?
    0:14:06 Do you think of yourself as a mentor or is that not a word that fits?
    0:14:09 I recognize that there’s mentorship going on.
    0:14:14 It sounds pretentious to call yourself a mentor unless it’s like an actual title.
    0:14:19 One’s a little bit squeamish about using language like that, but the act of teaching someone
    0:14:26 I do recognize is crucial to being, definitely to leading, but also just you’re learning
    0:14:27 all the time.
    0:14:31 There’s a kind of mentor and mentorship that happens in every dimension of life.
    0:14:33 How do you choose, though, as a teacher?
    0:14:36 How do you choose who to spend time with?
    0:14:41 Because you were supervising a lot of people at a place like The Times Magazine.
    0:14:45 I don’t know how many story editors there were, maybe 8, 10, 12.
    0:14:47 You had very different relationships with each one.
    0:14:49 How does that work for you?
    0:14:50 Is it a choice?
    0:14:52 I don’t think it’s a choice exactly.
    0:14:56 You hope that everybody feels that they are the favorite child.
    0:14:57 That’s what you’re trying to do.
    0:15:04 But everybody responds to different kinds of help, prodding, embracing, all the various
    0:15:06 things that make for mentorships.
    0:15:11 Just back to the family thing, you have a different relationship with each of your children.
    0:15:16 That’s not to say that somewhere in there, you don’t have people that you think have
    0:15:17 more potential.
    0:15:21 Generally, they’re people who show that they’re eager to learn.
    0:15:27 They kind of put their hand up and say, “Teach me,” and there’s no teacher who isn’t moved
    0:15:28 by that.
    0:15:34 Do you have advice for people who are not naturally … I do believe there’s an astonishing
    0:15:41 amount of human capital in the world that is untapped because the possessor of it doesn’t
    0:15:45 know how to export it, and others don’t know how to import it.
    0:15:46 Import it.
    0:15:47 Yeah, that’s nice.
    0:15:52 I don’t have advice except to recognize that it’s an essential part of learning, to be
    0:15:56 open to learning and to teach, then maybe you have to make a slightly more active effort
    0:15:57 at it.
    0:15:58 You certainly have to be open to it.
    0:16:06 You certainly have to know what you don’t know and find ways to ask, maybe not out loud,
    0:16:10 but to signal your openness to being taught.
    0:16:15 I mean, it’s an interesting period because what I witness in younger people these days
    0:16:18 is that they love their parents, and they have their very …
    0:16:21 And very different relationships with their parents.
    0:16:25 Yes, very, very different, and also they’re very comfortable with adults in a way that
    0:16:27 was different from when I was young.
    0:16:32 But there are certain things they resent, and there’s a kind of parenting as it exists
    0:16:37 in a workplace that they would bristle at, which I found very valuable growing up.
    0:16:41 It’s a sort of famous thing at Esquire when I was there, there would be these story meetings,
    0:16:46 and people would cry at the end of the meeting.
    0:16:54 They would leave and cry because the editors in charge were kind of unstinting in their
    0:16:55 withering comments.
    0:17:00 Now, you say this as if people didn’t leave and cry at the end of a New York Times magazine
    0:17:01 meeting when you were …
    0:17:02 Well, I …
    0:17:03 You just didn’t see it.
    0:17:08 The point is that I learned from my own mentors that this was the way you conducted a meeting.
    0:17:12 It was much more efficient to be brutally honest.
    0:17:15 That’s an idea that doesn’t work because blah, blah, blah, blah.
    0:17:17 One thought of that as teaching.
    0:17:21 I tried to bring some of that stricter method, and people were gassed.
    0:17:26 And I would say, “Look, when I was growing up, you used to cry at the end of these meetings.”
    0:17:30 And they said, “I don’t want to cry at the end of the meetings, and it’s not going to
    0:17:31 work.”
    0:17:32 And they were right.
    0:17:36 It was necessarily the better way to do it, but because it was the way that I learned
    0:17:42 how to sharpen my mind as an editor, I had an expectation that I should do the same with
    0:17:46 those people I was trying to get to do the work a certain way.
    0:17:47 In that case, yeah.
    0:17:48 They taught me.
    0:17:50 Meaning, the younger people taught you, like, “This doesn’t feel good.”
    0:17:51 This doesn’t feel good.
    0:17:52 But did you stop?
    0:17:53 And this doesn’t …
    0:17:54 Well, I found workarounds.
    0:17:57 I found other ways to try to accomplish the same thing.
    0:18:00 For instance, just different language.
    0:18:04 Basically I learned to praise and then to withhold.
    0:18:05 So that was a strategy?
    0:18:06 Come over.
    0:18:09 It wasn’t a conscious strategy, but I realized that’s what I was doing.
    0:18:13 I was certainly told at enough times that I came to realize that, “Oh, yeah, this is
    0:18:14 what I do.”
    0:18:21 I did speak with five, six, seven former employees of yours, some of whom I overlapped with at
    0:18:24 The Times Magazine, some of whom I didn’t.
    0:18:29 If we were making a word cloud, I think withholding was probably the big word.
    0:18:36 But let me just say that on balance, the overall experience was overwhelmingly positive because
    0:18:43 what I got from working with you and what they all got was just a deep, deep satisfaction
    0:18:50 of accomplishment and a recognition that you don’t get that satisfaction without having
    0:18:54 a lot of failure and bumps along the way.
    0:18:58 Not humiliation, and you didn’t humiliate people ever, as far as I know, I don’t know.
    0:19:01 I don’t think so, I hope not.
    0:19:05 So when I left The Times Magazine working for you, I left because I just wanted to be
    0:19:06 a writer.
    0:19:08 I loved being an editor.
    0:19:13 Editing was the best training for me to be a writer, in part because I saw how many big-time
    0:19:19 writers when they would turn in their manuscripts, they were terrible, and I thought, “Holy cow.”
    0:19:22 If they can turn in stuff like that, I can do this.
    0:19:23 Yes, Pulitzer Prize winners.
    0:19:27 I was shocked, but it was also just amazing experience and fun.
    0:19:33 It’s really fun to do the work, but then you gave me a six-month leave to go start working
    0:19:37 on my first book, and I remember coming back and saying, “This is the life I want.
    0:19:39 I like alone.”
    0:19:44 And then I remember, at least my recollection is that I said, “I’m really appreciative of
    0:19:48 the leave you gave me, and I love this place, I love this work,” but that’s what I want
    0:19:54 to do long-term, and so I’d like to stay here for another year, that’s the deal that I remember
    0:19:55 crafting.
    0:19:59 And then I remember our relationship changed because I was a lame duck.
    0:20:00 So what?
    0:20:06 Did I just not care about you anymore because you were not going to be a long-term asset
    0:20:07 for me?
    0:20:08 Was I that calculated?
    0:20:09 I wouldn’t say it was that.
    0:20:12 I think it was more like plow horse idea.
    0:20:14 Get as much out of you as I could.
    0:20:15 It wasn’t bad.
    0:20:20 The work was still really exciting, but another reason I left was that I recognized when you
    0:20:27 succeed in a place like that, this happens in many occupations, when you succeed in some
    0:20:32 kind of maker role, you end up getting promoted into a manager role, a boss, and I did not
    0:20:37 want to be a boss, so leaving the times to write meant I would never have to be a boss
    0:20:43 of anyone other than myself, but then I wrote books, and then the books turned into this
    0:20:46 thing that we’re doing now at your company.
    0:20:52 We have 20 people, and I think the boss that I became is very much like the boss that you
    0:20:53 were.
    0:20:54 Oh, really?
    0:20:55 Oh, my God.
    0:21:00 Now, is that just natural, or do you think that you learned certain attributes of a boss
    0:21:02 person from me?
    0:21:03 Not natural.
    0:21:04 I’ll learn.
    0:21:05 That’s what I’m saying.
    0:21:08 That’s why I would call you a mentor, even if an unintentional or accidental mentor.
    0:21:09 Oh, how interesting.
    0:21:11 God, that’s scary.
    0:21:12 I’m a writer.
    0:21:14 You know, writers are writers.
    0:21:18 You have a way of seeing the world, you have a way of, and a lot of this is what I learned
    0:21:19 from you.
    0:21:22 You have a way of assessing, is this idea worth doing?
    0:21:23 Definitely.
    0:21:25 That’s a big part of it.
    0:21:28 Execution is important, but I always think of it a little bit like pro athletes.
    0:21:32 You wouldn’t be here if you didn’t have the talent, and then you realize that what you’re
    0:21:40 really after is developing your taste or your sense of what’s interesting, what’s important,
    0:21:43 what’s fun, what’s new.
    0:21:45 Those are all things I learned from you.
    0:21:49 You may have learned some methods from me, but your taste and sensibility was not something
    0:21:53 I had much influence over at all, because it’s just who you are.
    0:21:59 Maybe to some degree, but I think anybody who’s learning, who takes their thing seriously,
    0:22:04 it’s thrilling when you encounter someone who sets a standard high.
    0:22:10 But the problem is, when you go from being a writer to then being a boss, my first producing
    0:22:16 partners, the word that got attached to me was like, “Dubbner’s too exacting.”
    0:22:19 And I was pissed because I thought, “What’s wrong with that?
    0:22:22 I learned from Adam Moss.”
    0:22:24 Even hearing it back to me, I don’t think that’s a bad thing.
    0:22:28 I think that’s something that you should wear proudly.
    0:22:34 I’m very glad to hear that what you felt as a person working with me, for me, whatever.
    0:22:35 You can say “for you.”
    0:22:36 It’s okay.
    0:22:40 Because that you found delight in making something great.
    0:22:43 That’s the main thing that I was trying to teach.
    0:22:49 Even though it’s painful in the moment, you’re going to feel so good at having made something
    0:22:53 that you put everything into and that you can be proud of at the end.
    0:22:58 I hope that I conveyed that and that I worked with the kind of people who would feel that
    0:23:02 and who would be willing to work pretty hard because they wanted to make something they
    0:23:03 felt really, really good about.
    0:23:08 It’s not everybody, but that is a certain kind of person and you’re that kind of person
    0:23:12 and I’m that kind of person and there’s a reason we ended up in the same place.
    0:23:18 I think the thing that’s most important or attractive about what you just said, but also
    0:23:23 very much animates your book, is that it’s not just a thrill of accomplishing because
    0:23:25 something is good.
    0:23:26 It’s doing something different.
    0:23:27 Yeah.
    0:23:32 One other aspect of this whole business is that artists or any of when we’re talking
    0:23:35 creative people, they need to not be bored.
    0:23:39 It is incredibly difficult to make something and you have to have reasons to go on and
    0:23:42 one of those reasons is simple interest.
    0:23:47 You have to feel stimulated and if you do the same thing over and over and over and over
    0:23:51 again, you’re just going to bore yourself to tears.
    0:23:55 The artistic person, creative person, I don’t know what you want to call them, person who
    0:24:01 wants to make something will constantly find new ways to do it because they’re trying to
    0:24:04 keep themselves engaged.
    0:24:09 In my book, I mean everybody remembers their childhood as lonely of course, but it is definitely
    0:24:18 true that one after another, they describe childhoods of isolation and of need and then
    0:24:21 something came along to fill that need.
    0:24:24 Among other things, they learn to talk to themselves.
    0:24:25 This is a big theme of my book.
    0:24:31 I think of all of this as ways of talking to yourself, as ways of translating what your
    0:24:33 imagination produces.
    0:24:38 And what happened when Adam Moss’s imagination started producing something new?
    0:24:44 Whatever lessons I might have gotten from my own magazine life that might apply to my
    0:24:46 painting life, I didn’t.
    0:24:47 I’m Stephen Dubner.
    0:24:49 This is Freakonomics Radio, we’ll be right back.
    0:25:06 In 2019, Adam Moss stepped down as Editor-in-Chief of New York Magazine.
    0:25:11 Here’s what he said at the time, “I’ve been going full throttle for 40 years.
    0:25:14 I want to see what my life is like with less ambition.
    0:25:16 I’m older than the staff.
    0:25:17 I’m older than the readers.
    0:25:20 I just want to do something new.”
    0:25:23 That new thing, at least for a while, was painting.
    0:25:28 When I thought I wanted to paint, I was up in Cape Cod where I have a place and without
    0:25:34 any schooling whatsoever, I didn’t know how to do a thing.
    0:25:40 My schooling was really when I went to buy paints, I’d talk to the salesperson and ask
    0:25:45 them to have this work, like I didn’t understand what a medium was, I didn’t understand anything.
    0:25:50 Nevertheless, I had this idea that I would do a painting a day, and that’s what I did.
    0:25:54 One day I’d do a flower and then the other day I’d do some crazy stupid abstract and
    0:25:58 then I would just make an effort at doing a person or something.
    0:26:02 The whole idea was that at the end of the day, painting would be finished and thrown
    0:26:05 away and start it over, it was fun.
    0:26:09 Came back and I thought that was the end of it, I thought it was just a sort of fun little
    0:26:14 summer thing, and a friend of mine said, “Well, you really seem to have liked it.
    0:26:16 You really should get some training.”
    0:26:24 She then connected me up with the head of painting, I think, at the Yale School of Art.
    0:26:28 I can hear many listeners’ heads exploding, first teacher, head of painting at Yale School
    0:26:29 of Art.
    0:26:30 Well, no, she wasn’t my teacher.
    0:26:35 She had a student who had just graduated who she thought was really good.
    0:26:38 Her name was Maria De La Sandalus and she’s in the book.
    0:26:42 She is a beautiful artist, but also a really lovely person.
    0:26:44 She would just come over my house.
    0:26:49 She taught me how to draw and she taught me how to paint at the beginning.
    0:26:54 It wasn’t a particularly structured learning process, but she was my friend, my painting
    0:26:55 friend.
    0:26:59 Was it built around ideas or mostly execution technique, et cetera?
    0:27:01 There was a certain amount of technique.
    0:27:08 There was a lot of just helping me find my confidence as a painter and there was just
    0:27:14 a certain kindness that I found empowering and a sense that she had that I had something
    0:27:16 to make.
    0:27:21 Was kindness in a mentor/teacher important to you?
    0:27:22 It’s important to me.
    0:27:23 It may not be important to other people.
    0:27:28 If you look through history at creators of all types and people of all types, people
    0:27:35 who have mentors, if you had to guess, would you say that on average, kindness is a benefit
    0:27:41 or an attribute at least because when I think of a lot of what people claim at least to
    0:27:45 be successful mentorships, there’s often, I don’t know about an absence of kindness,
    0:27:49 but a presence of something else.
    0:27:54 Certainly there is an expectation that this person can do better and I guess that can
    0:27:59 be experienced in a lot of ways as being stern and forbidding and all of that kind of thing
    0:28:03 and I’ve had mentor types like that, but I personally respond to kindness.
    0:28:06 I need to feel a little loved.
    0:28:12 If you were to generalize what a successful mentor is, would you use that as a template
    0:28:13 or do you think that’s just for you?
    0:28:20 I think there has to be a bedrock of they have a belief in you and you have to feel
    0:28:21 it.
    0:28:23 Otherwise the mentorship doesn’t work.
    0:28:27 You have to believe that they are rooting for you.
    0:28:30 I have never seen one of Adam Moss’s paintings.
    0:28:32 That’s quite on purpose, yes.
    0:28:35 He insists that he is just not a very good painter.
    0:28:37 I’m more mediocre than Ben.
    0:28:39 I’m okay, but that’s not good enough for me.
    0:28:44 When someone is exacting, which we have already established Adam Moss is, then mediocrity
    0:28:46 can feel worse than death.
    0:28:50 So he needed to find something else to make, something that he would be good at and that’s
    0:28:56 how he came to write The Work of Art, a book about how other creative people make something
    0:28:58 from nothing.
    0:29:01 It’s a book about the process of making.
    0:29:07 I’ve always loved process because essentially I love narrative and the act of how something
    0:29:12 comes to be is just a perfect story.
    0:29:14 Starts with nothing and then ends up something.
    0:29:18 But there’s a whole other part of this book that’s trying to understand the personality
    0:29:22 attributes that make someone successful as an artist.
    0:29:27 It’s about half visual and it works almost like a giant diagram where the text itself
    0:29:29 winds around the images.
    0:29:31 Some mucic, but also magazines.
    0:29:35 And then it has all this footnote material, which is the me in the book for the most part.
    0:29:36 Although you’re in the…
    0:29:37 I’m in the introductions too.
    0:29:42 Yeah, but also chapters differ because in some chapters they’re through written by you
    0:29:43 with quotes.
    0:29:44 Right.
    0:29:45 In other chapters it’s more oral history.
    0:29:46 Yes.
    0:29:47 Right.
    0:29:49 And in that way it’s very much like a big, big, big magazine.
    0:29:50 Absolutely.
    0:29:51 But it was a new pursuit.
    0:29:56 It was new and yet I hope it had the benefit of a lifetime’s experience as a magazine maker.
    0:30:00 I had never written a book before and I was really scared of writing.
    0:30:01 It’s harder than it looks.
    0:30:03 It’s so hard.
    0:30:04 Unlike you, I never wanted to be a writer.
    0:30:08 I would never have left magazines for writing, but I did leave magazines at a certain point
    0:30:13 because I just felt that I didn’t want to be a boss anymore.
    0:30:18 I started to write this book and I was just a terrible, terrible, terrible writer, really.
    0:30:19 And I had to teach myself.
    0:30:24 I had to use my editor head and at first my editor had recognized that it was terrible,
    0:30:28 but didn’t have any solutions in mind.
    0:30:35 And then over time I just began to strip it of its ridiculous ornamentation.
    0:30:37 Was that all by yourself though or did you go to people for it?
    0:30:39 No, I did that most of myself.
    0:30:45 And then eventually, okay, I got to a place where I was happier as a writer and also the
    0:30:46 work itself was better.
    0:30:51 Let me just point out the difference between being an editor and being a writer might seem
    0:30:52 not that large.
    0:30:54 It’s huge.
    0:30:56 It’s like marathon versus sprint.
    0:31:01 They’re both running, but I wouldn’t think it could have felt so similar to what you’d
    0:31:02 spent your life doing.
    0:31:03 Well, okay, let me…
    0:31:09 I created the book in the way that I created the book in order to assemble a community.
    0:31:15 I wanted the group thing, which I always loved in magazines, and I wanted a sense of a lot
    0:31:17 of people doing something together.
    0:31:24 And so I kind of invented one, and that invention was a whole part one, which was to engage
    0:31:26 all these artists in my project.
    0:31:32 Okay, Amy Silman, show me how you made a painting, and we’ll go from beginning to end.
    0:31:37 Okay, George Saunders, let’s talk about how you wrote “Lincoln and the Bardo,” and
    0:31:41 David Mandel, how you wrote “A Joke,” or Kara Walker, how you built this magnificent
    0:31:45 sculpture, or Stephen Sondheim, how you wrote a song.
    0:31:53 And that process was essentially me recreating a context of group creation, because I thought
    0:31:55 of them as my collaborators, not as my subjects.
    0:31:57 So that was part one.
    0:32:00 Part two was writing, I described already what a hell that was.
    0:32:03 And was it hell because the collaborator was no longer there?
    0:32:05 I’m just alone in the room again.
    0:32:09 It’s the aloneness, it’s the dialogue in your head that was driving me completely crazy,
    0:32:11 and it’s why I never was a writer in the first place.
    0:32:16 I just found it unbearably lonely, and also I didn’t know how to act all the parts in
    0:32:21 my head, where I could talk to myself and make myself better, which I didn’t know how
    0:32:25 to do when it’s different people, but I didn’t know how to do in my own head.
    0:32:30 So for some of the creators in your book, the people who influenced them were often people
    0:32:32 that they never interacted with.
    0:32:37 Yeah, possibly never met, you know, Gregory Crudson, who talked about his work as almost
    0:32:44 a mathematical formula from like William Eggleston to Ray Carver short stories to David Lynch
    0:32:50 and Blue Velvet, some combination of people with sensibility that in his own mind came
    0:32:51 together.
    0:32:53 Describe what a Crudson photo looks like.
    0:33:02 A Crudson photo is a gigantic photograph that resembles a movie still, lit like a movie,
    0:33:08 with enough narrative portent, but with no before or after.
    0:33:15 So the viewer is meant to supply the narrative by looking at this picture and putting it
    0:33:18 into a context of his or her own imagination.
    0:33:22 So Eggleston and David Lynch and all those make a lot of sense.
    0:33:26 Yeah, I in general don’t much care about the strict definitions of anything.
    0:33:31 This book is a book about artists, but really I’ve bent the term “artist” pretty much
    0:33:32 as far as it can go.
    0:33:36 But I also believe that about mentorship, which in the end it doesn’t matter.
    0:33:41 I guess the big distinguishing factor for me would be an influence can be distant and
    0:33:47 unaware of you, whereas a mentor, there’s necessarily some kind of estuarial exchange.
    0:33:48 Yeah.
    0:33:53 Well, one interesting thing about the book was I kept looking for who is the person who
    0:33:55 encouraged you when you were young.
    0:34:01 There weren’t necessarily the person who was by your side when you were an adult, but
    0:34:06 there had to be somebody, could be a parent, could be an art teacher, could be anybody
    0:34:09 who basically saw something in them.
    0:34:16 And that seeing was crucial to the development of their confidence that they could make the
    0:34:20 thing, which of course confidence and what I in the book call faith, the faith that they
    0:34:25 are actually able to make the thing that’s in their head, which they can’t, but you have
    0:34:28 to believe you can in order to go forward.
    0:34:33 I think the book is a bit of a, not a smoke and mirror, but a bit of sleight of hand in
    0:34:36 that it’s called the work of art.
    0:34:41 And it’s plainly about the process of making creative things.
    0:34:46 And it’s plainly about what it took for those creators to even get to the point where they
    0:34:47 were able to create something.
    0:34:49 I know you love process.
    0:34:52 That was a word that you said probably 30 times a day.
    0:34:54 And it’s a word that I just have come to despise.
    0:34:55 Oh, seriously?
    0:34:57 Well, just the words sound so ugly.
    0:35:02 It’s so beautiful, the thing that it’s describing and the word itself is so crude really.
    0:35:08 I feel like as a magazine editor, some of your favorite stories or at least my conception
    0:35:12 of some of your favorite stories were when there was a process of something being described
    0:35:13 over time.
    0:35:14 Absolutely.
    0:35:18 And written texts, not that documentary film can’t do a lot of things can do it, but text
    0:35:24 is great at that because it can move in and out of time and it can magnify and shrink.
    0:35:29 So as much as you say that this book is about process and artifacts and so on, it was a
    0:35:32 thrill to read because I love your work and I loved working with you.
    0:35:35 But you never talked that much.
    0:35:38 You dropped hints about what made something great or not.
    0:35:41 We all learned the language of Adam Moss.
    0:35:45 But it was often fragments, rarely sentences, never paragraphs.
    0:35:48 I sound maddening from your description.
    0:35:52 I sound like I must have been just a horrible person to work for, but okay.
    0:35:53 Maddening maybe a little bit.
    0:35:54 Well, definitely not.
    0:35:55 Definitely not.
    0:35:57 But maddening among nine other things.
    0:36:01 But what struck me the book was really about was something separate than the process of
    0:36:08 creation, really more about what it takes to become the kind of person who can create
    0:36:10 things from whole cloth.
    0:36:13 That’s really hard to do and I don’t think people understand the bravery it takes to
    0:36:14 do that.
    0:36:15 Yeah.
    0:36:16 The book is not self-help.
    0:36:20 So I’m not sure a lot of these things can be learned.
    0:36:24 I mean, you can get better at everything, but you’re either a person who can focus or you
    0:36:25 can’t.
    0:36:28 You’re either obsessional or you’re not.
    0:36:31 You have a high tolerance for tedium, which you need to to be an artist.
    0:36:32 Or you don’t.
    0:36:35 You have drive or you don’t.
    0:36:36 What about taste?
    0:36:38 You have taste or you don’t.
    0:36:41 Or you have a certain sensibility or you have a certain sense of humor.
    0:36:46 These are all things that you acquire for all sorts of mysterious reasons that you and
    0:36:47 I don’t understand.
    0:36:50 No one has ever understood how personality is formed.
    0:36:56 And that all said, the book is, I hope, very encouraging to artists because I think most
    0:37:02 people who are trying to make things don’t need to be James Joyce or Pablo Picasso or
    0:37:04 Louise Glock even.
    0:37:10 They can be themselves and they can find immense joy and satisfaction in making art.
    0:37:13 They improve their ability to focus.
    0:37:18 They improve their ability to persevere, to not give up when things get hard.
    0:37:24 A lot of art making comes down to something as rudimentary as being able to learn to
    0:37:25 fail.
    0:37:33 Again, like parenting, it’s a little bit like a child learns to walk because they understand
    0:37:34 how they can get up from falling.
    0:37:36 They have to fall.
    0:37:39 Your book nods at failure.
    0:37:41 I think it’s a lot about failure.
    0:37:42 Okay.
    0:37:43 But ultimately.
    0:37:44 Everybody succeeds.
    0:37:45 Everybody succeeds.
    0:37:46 Yeah.
    0:37:53 And I’m thinking, yeah, this failure is instructive and real and useful to hear about, but it’s
    0:37:56 an exercise in what some people call survivorship bias, right?
    0:37:58 We read about the winners.
    0:37:59 Sure, of course.
    0:38:03 And I was very well aware of that, that this is a retrospective history of success.
    0:38:06 And so everything has to be viewed through that lens.
    0:38:10 I’ve always had this theory that I think is wrong, but as a writer or if you’re a creative
    0:38:16 person of any type, an editor or an entrepreneur or whatever, I think it’s natural to try
    0:38:17 to mimic success.
    0:38:18 Yeah.
    0:38:21 But I think that most successes are pretty singular.
    0:38:23 I completely agree with you.
    0:38:27 And so I felt that learning from failure was really the way to go.
    0:38:33 I wanted very much to give people permission to fail because failure is, if you go through
    0:38:36 the narratives in the book, there’s just failure right and left.
    0:38:40 When you’re trying to create something, your brain is trying to subvert you in so many ways.
    0:38:45 There are so many obstacles, and there is this kind of animus you need to have in order
    0:38:47 to barrel ahead.
    0:38:49 An animus toward what?
    0:38:50 Animus is the wrong word.
    0:38:54 You have to have a fighting spirit, I guess I would say, where you’re just not going
    0:38:59 to be daunted, which as I was going through this, I found very reassuring because of course
    0:39:05 the reason I did the book was because I had recently taken a painting and felt enormous
    0:39:13 frustration and a sense of failure in that and truly what I didn’t understand is in
    0:39:18 a group, there is a conversation that happens that’s external.
    0:39:22 You and I, if we’re working together making a magazine, we talk about something, there’s
    0:39:26 a phrase that came up in the David Simon chapter called The Bounce.
    0:39:29 Our method of making something better is by bouncing.
    0:39:34 I say something to you, you say something to me, bang, bang, bang, in the end something
    0:39:37 happens which is better than it was when we started.
    0:39:43 In most artists’ lives, that conversation has to happen in their own head.
    0:39:47 I became very confused, how does someone have this kind of inner dialogue, and that’s what
    0:39:50 I was trying to understand.
    0:39:54 David Simon was a police reporter for the Baltimore Sun before he started writing books
    0:39:56 and making TV shows.
    0:40:00 One of those shows was The Wire, which many people consider one of the best TV shows ever
    0:40:01 made.
    0:40:05 If you would like to hear an interview with him, check out the People I Mostly Admire
    0:40:09 podcast, another show in the Freakonomics Radio network.
    0:40:13 It’s episode 109 called David Simon is on strike.
    0:40:14 Here’s why.
    0:40:17 We’ll hear more from Adam Moss in a minute.
    0:40:37 I am Stephen Dubner and this is Freakonomics Radio.
    0:40:41 So would this book exist had you been a better painter?
    0:40:42 Probably not.
    0:40:46 I would not have had The Drive, which was born of my own frustration.
    0:40:51 So I would have been satisfied painting all day because I would, I hope, have taken a
    0:40:55 certain kind of satisfaction from the painting itself that, you know, why do you want to
    0:40:56 do anything else?
    0:41:01 I just want to do this all day long, which now I feel actually not because I’ve gotten
    0:41:05 to be a better painter, but because I understand something about my relationship to painting
    0:41:06 that I learned from the book.
    0:41:08 Which is what?
    0:41:12 When you say this in this context, it sounds so banal, but here I’ll say it’s a hobby.
    0:41:15 Now, well, there’s a way in which that’s a description.
    0:41:19 But what I would really say is that I was trying to create narratives and so for the
    0:41:21 narrative to work, I wanted happy ending.
    0:41:23 I wanted an exaltation.
    0:41:28 I wanted that moment in the rom-com with the big kiss at the end where everyone lives happily
    0:41:30 ever after.
    0:41:36 And the artists themselves, when they would get to that point in their own storytelling
    0:41:39 of their own work, refused to give me that.
    0:41:45 They would express a certain amount of relief that the thing was over.
    0:41:47 Maybe they would say, “Yeah, it was nice.
    0:41:51 I was glad other people got to see it and I heard some nice things about it.”
    0:41:54 But you’d never got the big firework.
    0:42:00 And I found that as a writer of the book, somewhat frustrating, I kind of needed it for closure.
    0:42:05 I needed it for my own purposes, but I also needed to feel that they made something great.
    0:42:06 I was rooting for them.
    0:42:12 There was a great deal of transference involved in this book, and I fell in love with all
    0:42:19 of my subjects, so I wanted something spectacular for them in the end, and it never came.
    0:42:22 When I would talk to them about that, I said, “Well, you don’t sound like that.
    0:42:24 That was very important.”
    0:42:27 And they said, “It’s not about the thing I’m making, it is really about the work.
    0:42:33 I just get up every day because I like or I need more than I like to work in this way.”
    0:42:37 And the endpoint is not that relevant to me.
    0:42:42 And I just thought this was bullshit, and I thought it was bullshit over a long period
    0:42:43 of time.
    0:42:48 And then I was just worn down, and I came to kind of grok the truth of it.
    0:42:52 I absorbed that, and suddenly my relationship to my own work changed.
    0:42:53 How so?
    0:42:58 I got enormous pleasure from what I like to think of as the verb of it rather than the
    0:43:04 noun of it making one mark as a painter, just like one little chew that pleased me for whatever
    0:43:11 reason released me from this incredibly punishing attitude I had toward the work itself.
    0:43:15 I do care about the work itself, I really still want to be a good painter, but I can
    0:43:17 get pleasure out of the making.
    0:43:22 It’s interesting as you’re describing you coming to accept what these people were telling
    0:43:27 you about their perpetual dissatisfaction because you make it sound so foreign.
    0:43:33 But that’s exactly the way that I and everybody else who ever worked with you described you.
    0:43:39 When you were happy with the work that I or anyone else did, everyone described it as
    0:43:42 this like great thrill, it was like a high.
    0:43:46 Getting your approval or praise was incredibly powerful.
    0:43:51 Then there’s the corollary, getting your dissatisfaction could be demoralizing for many people.
    0:43:52 You had to kind of fight through that.
    0:43:59 But the steady state was more like, yeah, it was a really good issue this week.
    0:44:00 That was it.
    0:44:01 That implies many other things.
    0:44:07 It wasn’t a great issue and more important, there’s next week also.
    0:44:09 That’s one of the things that’s fantastic about magazines.
    0:44:14 You always have next week or in a digital world, you always have five minutes from now.
    0:44:19 That’s why I was particularly suited to magazines, but none of us know ourselves very well.
    0:44:25 Over lessons I might have gotten from my own magazine life that might apply to my painting
    0:44:27 life, I didn’t.
    0:44:33 To the degree that it’s hard to know oneself, let’s call it the internal versus the external
    0:44:37 on a scale of zero to five, how bad or good do you think you are?
    0:44:39 Well certainly not zero and certainly not five.
    0:44:42 So somewhere in that two to four range.
    0:44:45 Did you become more self-aware over time and experience as an editor?
    0:44:47 Yeah, I think so.
    0:44:48 Maybe to a fault.
    0:44:49 What do you mean by that?
    0:44:52 Sometimes experience can be a hindrance.
    0:44:55 You stop yourself from making something.
    0:45:00 The Simeon chapter, the Simeon Nosrat chapter, the title of the chapter is With Beginner’s
    0:45:08 Eyes because she makes this observation about Sulfat acid heat that when she, very excitedly
    0:45:12 at the beginning of her cooking life, tells a fellow chef, the fellow chef says well everybody
    0:45:13 knows that.
    0:45:15 She says no they don’t.
    0:45:16 They don’t know that.
    0:45:22 In any way I’ve never seen that anywhere and I think people need to hear this, that this
    0:45:24 is really how you should think about cooking.
    0:45:29 And she goes on and builds this fabulous book and then a little empire off of it.
    0:45:33 Sometimes experience stops you from doing something because you know it has failed too
    0:45:38 often and you don’t want to go through that failure again.
    0:45:41 You have to believe you can in order to go forward.
    0:45:52 That was Adam Moss, the most influential boss I ever had by a mile, who did me the great
    0:45:57 favor of showing me that I didn’t want to be boss, that I just wanted to make things,
    0:46:01 but who also taught me how to be better at making things.
    0:46:02 So thanks, Adam.
    0:46:07 His book is called The Work of Art, although it might just as easily have been called The
    0:46:09 Art of Work.
    0:46:14 And the other book he just mentioned, Salt, Fat, Acid, Heat, is also well worth reading
    0:46:19 and you can hear its author, Samin Nasrat on a couple of Freakonomics Radio episodes
    0:46:20 from 2023.
    0:46:25 One is called What’s Wrong with Being a One Hit Wonder and the other is Samin Nasrat
    0:46:27 Always Wanted to Be Famous.
    0:46:34 Coming up next time on the show, we ask why is there so much fraud in academia?
    0:46:38 If you were just a rational agent acting in the most self-interested way possible as
    0:46:40 a researcher in academia, I think you would cheat.
    0:46:46 The most likely career path for anyone who has committed misconduct is a long and fruitful
    0:46:51 career because most people, if they’re caught at all, they skate.
    0:46:58 She was at the center of everything, being a prestigious faculty member at Harvard and
    0:47:01 all of her public speaking and her books.
    0:47:02 That’s next time.
    0:47:06 Until then, take care of yourself and if you can, someone else too.
    0:47:09 Freakonomics Radio is produced by Stitcher and Renbud Radio.
    0:47:15 You can find our entire archive on any podcast app also at Freakonomics.com where we publish
    0:47:17 transcripts and show notes.
    0:47:21 This episode was produced by Morgan Levy and Zach Lipinski.
    0:47:25 The Freakonomics Radio network staff also includes Alina Kullman, Augusta Chapman, Dalvin
    0:47:31 Abouaji, Eleanor Osborn, Ellen Frankman, Elsa Hernandez, Gabriel Roth, Greg Rippin, Jasmine
    0:47:35 Klinger, Jason Gambrell, Jeremy Johnson, John Schnars, Lyric Bowditch, Neil Coruth,
    0:47:38 Rebecca Lee Douglas, Sarah Lilly, and Theo Jacobs.
    0:47:41 Our theme song is Mr. Fortune by the Hitchhikers.
    0:47:44 Our composer is Luis Guerra.
    0:47:50 As always, thank you for listening.
    0:47:51 I’m going to shut up.
    0:47:52 Can you just say that again?
    0:47:53 Gigantic.
    0:47:54 No, say it the way you did.
    0:47:55 Gigantic.
    0:48:07 The Freakonomics Radio network, the hidden side of everything.
    0:48:08 Stitcher.
    0:48:11 [MUSIC PLAYING]
    translate-vi content
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    Adam Moss was the best magazine editor of his generation. When he retired, he took up painting. But he wasn’t very good, and that made him sad. So he wrote a book about how creative people work— and, in the process, he made himself happy again.

     

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  • 615. Is Ozempic as Magical as It Sounds?

    AI transcript
    0:00:07 The United States is one of just two countries that allow pharmaceutical firms to freely
    0:00:11 advertise their products directly to consumers.
    0:00:12 The other is New Zealand.
    0:00:19 So if you ever watch TV in the US, you have likely seen many ads for prescription drugs.
    0:00:22 But advertising doesn’t guarantee success.
    0:00:26 The research and development of these drugs is very expensive, and most of them never
    0:00:28 earn back their investment.
    0:00:34 The pharmaceutical industry, therefore, relies on the occasional blockbuster drug.
    0:00:38 A blockbuster defined as doing more than a billion dollars a year in sales.
    0:00:44 If I asked you to name a blockbuster drug from the past, you might say Lipitor, a statin
    0:00:51 originally from Park Davis, or Humera, an anti-inflammatory now sold by ABV, and can
    0:00:54 you name a current blockbuster?
    0:01:01 The first drug that comes to mind might be this one.
    0:01:05 If you watch even a tiny bit of TV, you have probably seen an ad for Osempic.
    0:01:11 Their jingle is sung to the tune of the 1974 pop hit Magic by a band called Pilot, which
    0:01:16 had exactly one US hit.
    0:01:22 Osempic, which is sold by the Danish multinational Novo Nordisk, is not a one-hit wonder.
    0:01:29 It is one of a group of drugs known as GLP-1s, and many Americans would agree that they are
    0:01:31 magic.
    0:01:39 GLP stands for glucagon-like peptide, which is a hormone produced in the human gut, and
    0:01:42 these drugs mimic the activity of that hormone.
    0:01:48 Osempic was developed to treat type 2 diabetes, which used to be called adult onset diabetes
    0:01:52 to distinguish it from the more serious type 1 diabetes, which most often occurs in young
    0:01:54 people.
    0:01:58 But those lines have blurred, as many more people around the world, including a lot of
    0:02:02 young people, are now getting type 2 diabetes.
    0:02:06 Diabetes is a condition whereby the pancreas can’t produce enough insulin to modulate
    0:02:09 your level of glucose, or blood sugar.
    0:02:15 Over the long term, high blood sugar can lead to all kinds of problems, so any drug that
    0:02:20 could help the body produce more insulin would be a blockbuster.
    0:02:22 Enter osempic.
    0:02:24 But wait, there’s more.
    0:02:28 Osempic and other GLP-1s don’t just lower blood sugar.
    0:02:36 They also help patients lose weight, primarily by slowing digestion and decreasing appetite.
    0:02:42 This secondary discovery, weight loss, was a big deal, especially in the US, where more
    0:02:47 than 40% of the adult population is obese.
    0:02:52 Even though researchers don’t know much about the long-term effects of GLPs, whether they
    0:02:58 remain effective over time, whether they have serious side effects, the take-up has been
    0:03:00 enthusiastic.
    0:03:05 Osempic and Wagovie, another GLP drug made by Novo Nordisk, and which is authorized to
    0:03:12 treat obesity, will do a combined $65 billion in global sales this year.
    0:03:17 Novo Nordisk is now worth more than the GDP of Denmark.
    0:03:21 And Novo Nordisk isn’t the only company making blockbuster GLPs.
    0:03:27 Another big one is Moundjaro, which was brought to market in 2022 by the American pharmaceutical
    0:03:28 firm Eli Lilly.
    0:03:35 Moundjaro works by mimicking two digestive proteins, GLP-1 and GIP.
    0:03:40 Most of these new drugs are, for now, injectables, although that will change and some are already
    0:03:42 in pill form.
    0:03:45 And these drugs aren’t cheap, at least not yet.
    0:03:50 In the US, they can cost more than $1,000 a month, and as we will hear today, insurance
    0:03:52 coverage varies widely.
    0:04:01 Still, more than 15 million Americans are already using these drugs, so is the magic real or
    0:04:03 maybe too good to be true?
    0:04:08 I think your skepticism is well-placed, and that’s why we do trials to find out.
    0:04:14 Today, on Freakin’omics Radio, we continue our December of one-on-one conversations with
    0:04:20 Ezekiel Emanuel, who is pretty excited about these GLP-1 drugs.
    0:04:25 This is why people do science, because you discover something and then lots of unexpected
    0:04:26 effects happen.
    0:04:33 Emanuel is an oncologist, a medical ethicist, a professor, and a healthcare policymaker.
    0:04:36 He helped design the Affordable Care Act, better known as Obamacare.
    0:04:40 He also worked on healthcare policy in the Trump White House.
    0:04:46 In today’s conversation, we talk about why many insurers don’t want to cover the GLP
    0:04:47 drugs.
    0:04:53 We’ve created a system that perfectly disincentivizes long-term investments.
    0:05:00 We talk about progress in cancer treatment, mysteries in the gut microbiome, and flaws
    0:05:02 in the US healthcare system.
    0:05:03 Don’t get me started.
    0:05:06 We got to have a whole ‘nother conversation about that issue.
    0:05:11 And we talk about what healthcare policy looks like in a second Trump term.
    0:05:14 Even Republicans want everyone to have health insurance.
    0:05:16 We’re not repealing the Affordable Care Act.
    0:05:32 All that and quite a bit more with Ezekiel Emanuel starting now.
    0:05:38 This is Freakonomics Radio, the podcast that explores the hidden side of everything with
    0:05:49 your host Stephen Dubner.
    0:05:54 If the last name Emanuel sounds familiar, it may be because Zeke Emanuel has a couple
    0:05:59 of brothers who, over the years, have also appeared on this show.
    0:06:04 There’s Ram Emanuel, former Obama Chief of Staff in Chicago Mayor, who was serving as
    0:06:09 US Ambassador to Japan when we spoke with him in 2023.
    0:06:18 Ram is known to be smart, tough, and reliably combative.
    0:06:23 That episode was called the Suddenly Diplomatic Ram Emanuel.
    0:06:28 When there is Arielle Emanuel, who runs the entertainment and sports firms Endeavor and
    0:06:34 TKO, his business is high profile, but for himself he tends to keep a lower profile.
    0:06:40 This may date back to his childhood as the youngest brother in a very competitive household.
    0:06:43 Ari thought of himself as the dumb one.
    0:06:47 You know, the grades would come up with poor cards on the fridge.
    0:06:49 I was competing with Zeke.
    0:06:50 There was no chance.
    0:06:54 He was the debater, shut up.
    0:06:58 That episode was called Ari Emanuel is Never Indifferent.
    0:07:03 Zeke Emanuel is the oldest brother, the one who took the trouble to write a family memoir
    0:07:05 called The Brothers Emanuel.
    0:07:09 He leans more toward collaborative than combative.
    0:07:14 He has also been on Freakonomics Radio before, most recently in an episode called Who Gets
    0:07:18 the Ventilator, which we published early in the COVID pandemic, when ventilators were
    0:07:22 thought to be an effective frontline treatment.
    0:07:23 Here’s a clip from that episode.
    0:07:29 If it sounds like it was recorded in a closet because of COVID, it probably was.
    0:07:36 First comfort serve is the absolute worst principle you can think of in this situation.
    0:07:41 That was a really interesting conversation about how medical resources should be allocated
    0:07:42 in times of scarcity.
    0:07:48 In the case of ventilators, scarcity was caused by lack of physical supply.
    0:07:53 In the case of this new generation of GLP-1 drugs, there has been some supply shortage,
    0:07:59 but the scarcity for many would-be patients is caused by their high prices.
    0:08:04 High prices and inadequate coverage in the healthcare industry are always a topic of
    0:08:10 great concern as we’ve seen lately in the fallout from the murder of Brian Thompson,
    0:08:15 the CEO of the insurance firm United Healthcare.
    0:08:22 I knew that Zeke Emanuel could give us a 360-degree view of the GLP revolution, so I began by
    0:08:28 asking him when he first became aware of these drugs, maybe in medical school?
    0:08:29 No.
    0:08:32 I did not come across him in medical school, even though I went to Harvard Medical School
    0:08:37 and a lot of the early work was done at the Massachusetts General Hospital.
    0:08:39 Which is a Harvard-affiliated hospital?
    0:08:40 Exactly.
    0:08:42 Just down the block.
    0:08:48 One of the groups at the Mass General Hospital was taking pancreases out of fish and then
    0:08:53 testing how they affect glucose in other models.
    0:08:58 And they ran across what’s called the proglucogon, a very long protein that makes glucagon, but
    0:09:07 it also makes the GLP-1 agent that affects the glucose levels in the blood.
    0:09:12 It was the 1990s when they showed that GLP-1s normalized blood sugars.
    0:09:14 That was really important.
    0:09:23 And then in 1996, researchers in Britain identified that the GLP-1s caused a loss of appetite.
    0:09:29 Jens Holst in Copenhagen worked with Novo Nordisk, which is one of the big pharma companies
    0:09:37 that has produced insulin and was very active in the diabetes field, to make the first GLP-1
    0:09:40 drug for diabetes.
    0:09:43 That was done by a woman named Latti Knudsen.
    0:09:47 In 2010, they created that first drug.
    0:09:53 And then in 2014, the indication was expanded to obesity because they saw that, you know,
    0:09:56 diabetics also lost weight.
    0:10:04 The GLP-1s from Novo Nordisk, Wagovia or Osempic, they are really impactful both in terms of
    0:10:05 decreasing weight.
    0:10:11 With Wagovia, you get about 15%, 16% weight reduction, but also very good at bringing
    0:10:14 down blood sugars for diabetics.
    0:10:20 And then when you add the other component, the GIP, Monjero, that’s the lily drug, you
    0:10:24 get even more weight drop, 21%.
    0:10:29 And we know that Wagovia, the GLP-1, has a lot of other effects.
    0:10:30 It protects the heart.
    0:10:37 A 20% drop in severe cardiac death from heart attacks, number of heart attacks, strokes,
    0:10:40 goes down 20%, which is pretty amazing.
    0:10:43 It protects from severe kidney disease.
    0:10:45 It protects from cirrhosis.
    0:10:49 And we’ve got hints that there are lots of other effects, psychiatric effects.
    0:10:51 Addiction, you’ve mentioned.
    0:10:55 Depression, I was going to say addiction, you beat me to it.
    0:11:00 Or even because obesity and diabetes are associated with increased risk of cancer.
    0:11:06 Honestly, as you described that, Zeke, it sounds like this class of drugs is too good
    0:11:07 to be true.
    0:11:13 You’ve called them a miraculous set of drugs before we get further into the upsides.
    0:11:16 What about downsides and/or side effects?
    0:11:19 As I like to say, even a blood test has side effects.
    0:11:24 The major side effects tend to be with the gastrointestinal tract, as you might expect.
    0:11:30 As he tends to be at the top of the list, diarrhea, constipation, some fullness because
    0:11:34 it slows emptying of the stomach.
    0:11:40 About a quarter of people have these side effects and it’s variable in how much people
    0:11:41 experience it.
    0:11:44 I’ve talked to people on these drugs and they have it minimal.
    0:11:49 I’ve talked to other people and they have quit the drugs because they really found it
    0:11:50 intolerable.
    0:11:56 As you’re describing the multiple uses, treatment, but also prophylactic for all these different
    0:12:01 conditions, it sounds almost as if you would recommend that these drugs go in the water
    0:12:02 supply.
    0:12:08 No, I am very enthusiastic, but there are some more serious side effects.
    0:12:10 One of the most serious is pancreatitis.
    0:12:17 That is inflammation of the pancreas can cause severe abdominal pain and other problems.
    0:12:20 It’s pretty rare, but it’s not unheard of.
    0:12:24 There’s also some cosmetic side effects when you lose the fat out of your face.
    0:12:29 You can get this hollow cheek look and a lot of wrinkles.
    0:12:35 I do think these could be more widely used, especially for people with obesity, but unlike
    0:12:39 some other drugs that I do think probably need to be in the water supply, these need
    0:12:41 to be used a little more selectively.
    0:12:47 I’m curious how you and others foresaw how useful they’d be, not only for weight loss
    0:12:50 and diabetes, but potentially all these other treatments.
    0:12:55 I’m curious what your view of them was like, what the skepticism was like, and who’s skeptical
    0:12:56 now maybe.
    0:13:01 First of all, I was not fully focused on how beneficial they could be.
    0:13:07 I have to give credit to Novo Nordisk and Lilly for doing trials that didn’t just look
    0:13:12 at diabetes or didn’t just look at obesity, but looked at more outcomes.
    0:13:17 For the clinicians who identified, “Wow, we’re seeing these other positive effects.”
    0:13:21 People eating less, the addictions to alcohol and drugs going down.
    0:13:25 I’m sorry to interrupt, Zeke, but on something like that, when you’re talking about clinical
    0:13:29 treatment, doctor treatments, and they’re saying they’re observing that their patients
    0:13:35 are having fewer problems in these other realms, whether drinking, eating, I mean, how empirical
    0:13:36 is that?
    0:13:40 Because I could imagine that someone who feels like they are improving on one dimension of
    0:13:46 their life maybe changes their behavior in response to positive feeling, a kind of not
    0:13:51 quite placebo, but something that was spurred on by one positive effect that has these other
    0:13:56 positive knock-on effects as opposed to actually treating addiction and so on.
    0:14:01 I think your skepticism is well-placed, and that’s why we do trials, to find out we’re
    0:14:03 in a huge number of trials.
    0:14:07 On the other hand, there are some things like looking at livers.
    0:14:10 How does the liver change with these drugs?
    0:14:12 That’s not going to be a placebo effect.
    0:14:14 That is actually going to be a drug effect.
    0:14:18 And something like addiction, especially things like alcohol and drugs, where we know it’s
    0:14:25 so hard to stop, when you do see lots of people on these drugs stopping and reporting that
    0:14:28 they don’t have the craving, you have to take that seriously.
    0:14:33 That doesn’t mean it can’t be a placebo effect, but it affects the gut, it affects the pancreas
    0:14:38 to increase insulin, and it obviously has to affect the brain if it’s going to affect
    0:14:41 these addictions and psychiatric situations.
    0:14:48 And that’s what is probably the most remarkable and unexpected finding here, that this big
    0:14:53 protein somehow is getting across the blood-brain barrier or somehow is being released there,
    0:14:58 and being able to affect people’s mental situation.
    0:15:01 On all the reading I did on this, and I have to admit a lot of the science is really hard
    0:15:06 for me, at least, and maybe many lay people to understand, but it sounds as though there
    0:15:12 are a couple different mechanisms, or maybe different drug classes work in different mechanisms,
    0:15:18 but it sounds as though there is a body effect, a kind of cellular body effect, and a brain
    0:15:19 effect.
    0:15:23 Is one drug causing both of those, or are they different drugs that do that?
    0:15:31 Well, we don’t know for sure, but probably the same drug or some way that it’s causing
    0:15:33 a pathway effect.
    0:15:36 But that’s not understood yet, you’re saying, fully.
    0:15:38 Probably the brain effect.
    0:15:42 Sometimes great things happen that have multiple applications.
    0:15:47 Since the end of the genome project in roughly 2000, we’ve had five big breakthroughs in
    0:15:49 healthcare.
    0:15:51 We’ve had CRISPR, where you can edit genes.
    0:15:57 We’ve had gene therapy, where I use this term, the researchers are a little more cautious.
    0:15:58 Really cure blindness.
    0:16:03 We’ve had CAR T therapy, where again the researchers are a little more cautious, but you cure people
    0:16:06 of cancer who are on their death bed.
    0:16:12 We’ve had the mRNAs, and now we’re multiple uses for mRNA items, not just vaccines, but
    0:16:14 in many, many other ways.
    0:16:16 And you’ve had these GLP ones.
    0:16:21 Each of these have way more ramifications than we ever thought possible.
    0:16:26 Let’s take a step back on that front and talk about where research funding and research
    0:16:28 incentives are coming from these days.
    0:16:34 The five treatments that you’ve just named are evidence of how things are working in
    0:16:36 medical science.
    0:16:38 As we all know, a lot of these routes are very meandering.
    0:16:39 They take a long time.
    0:16:44 There are all kinds of failures and dead ends when you’re doing this kind of research.
    0:16:49 How do you feel about the current state of moonshot medical advances?
    0:16:54 And I’m especially curious to know how you would assess the private public collaboration
    0:16:55 there.
    0:17:00 Well, let me say we need public and private collaboration, because each part does different
    0:17:01 things.
    0:17:08 Mainly, the government invests a lot in basic research and tries to create understanding
    0:17:10 of how these pathways work.
    0:17:15 And let’s be honest, deciding what you’re going to fund is based upon judgment of the
    0:17:19 community, and the community, like any community, has prejudices.
    0:17:24 It’s pursuing one avenue rather than all the avenues.
    0:17:30 And we know that sometimes has been an inhibition to good and high-risk research.
    0:17:34 The government often doesn’t like to have failures on research.
    0:17:40 One of the criticisms I have is the government has more or less ceded most of the clinical
    0:17:42 research to drug companies.
    0:17:48 Now, drug companies obviously have a big investment, but they have a particular kind of investment
    0:17:55 comparing different drugs in the same class or comparing one drug, like GLP-1s, with another
    0:18:01 drug like the SGLT-2s that might be used for diabetes.
    0:18:05 That’s not so much in their interest unless they think they’re going to easily win that
    0:18:06 race.
    0:18:09 But the government should be doing a lot of that comparative assessment.
    0:18:14 And yet the NIH has gotten — it’s not out of clinical research, but it’s reduced its
    0:18:17 footprint in clinical research a lot.
    0:18:20 And that, I think, is a bad thing.
    0:18:22 You know, we need drug companies.
    0:18:27 They can fund these big trials, but we have to recognize they have their own interests
    0:18:33 at heart, which don’t necessarily correspond to the national public health interest.
    0:18:37 We’ve got to have them because they know how to scale, they know how to market the drugs,
    0:18:43 they know how to chemically adjust the drugs to increase how long they last in the body.
    0:18:48 We can’t underestimate convenience is really important because for a chronic illness you
    0:18:51 have to stay on the drug often forever.
    0:18:57 I’ve heard you say that one big problem with medicine today is that 86% of all spending
    0:18:59 goes to chronic conditions.
    0:19:05 In the case of the GLP-1 drugs, widespread adoption would, I assume, over time bring
    0:19:07 down those costs dramatically.
    0:19:11 I know we’re talking about high costs in the short term, but I assume in the long term
    0:19:13 the costs would fall a lot.
    0:19:16 First of all, tell me if that’s indeed the case.
    0:19:21 And second, if you look really big picture, how you think about all that money potentially
    0:19:27 being reallocated to research, treatment, prevention, cure, et cetera.
    0:19:32 Well, Stephen, let’s be clear with the listener.
    0:19:36 We have to separate out something that is cost-saving.
    0:19:41 We pay for it now, but it’ll save money over time from something that is cost-effective,
    0:19:47 which means the total amount we pay is still worth it, but it doesn’t save money.
    0:19:52 So far on the GLP-1, the cost analysis does not show us saving money.
    0:19:54 But I think you’re right.
    0:20:01 We’ve got 42% of the adult population obese, 20% of U.S. children obese, 10% of the U.S.
    0:20:04 adult population has type 2 diabetes.
    0:20:10 If we can treat those illnesses, reduce things like hospital admissions, hypertension, cardiac
    0:20:14 disease, kidney disease, the liver disease that goes with them, maybe we will be able
    0:20:16 to save money.
    0:20:17 Here’s the problem.
    0:20:22 Even if we could show that over a 10-year time horizon, they were cost-saving, that society
    0:20:29 would get back more money than we paid for the drug by saving other medical costs, hospitalizations,
    0:20:34 other drugs, replacement of hips and things like that, we’ve created a healthcare system
    0:20:38 where it’s not in the system’s interest to make those long-term cost-savings.
    0:20:39 What do you mean by that?
    0:20:42 Are you talking about the incentives of the insurance companies?
    0:20:47 Say you’re sitting at United or Humana or a Blue Cross and Blue Shield.
    0:20:53 You have a person called them 30 years old who you’re insuring, you’re going to spend
    0:20:58 money today for them, and the payoffs going to dribble out in five, six, seven years when
    0:21:03 they’ve gone for a long time with their diabetes under control or they’ve gone for a long time
    0:21:05 ceasing to be obese.
    0:21:11 The problem is, by the time those positive benefits come and the cost-savings come, they’re
    0:21:13 no longer being insured by you.
    0:21:17 We call this in the medical health policy world churn.
    0:21:24 The churn is so much in the insurance market that that investment horizon for companies
    0:21:27 is not five, six, seven years.
    0:21:30 It tends to be one year and maximum two years.
    0:21:34 Is that primarily because health insurance is tied to employment in this country?
    0:21:36 It’s a large reason for it.
    0:21:40 People change jobs, lose jobs, move.
    0:21:45 They get married and they switch from their insurance to their spouse’s insurance.
    0:21:51 We’ve created a system that perfectly disincentivizes long-term investments, and that’s bad when
    0:21:55 chronic illness is the main source of costs.
    0:22:01 So we’re going to have to change how we structure the insurance marketplace, and no one’s talking
    0:22:04 about that at the moment.
    0:22:07 Okay, let’s us talk about it.
    0:22:10 My conversation with Zeke Emanuel continues after the break.
    0:22:15 I’m Stephen Dubner, and I’d like to thank you for listening to Freakonomics Radio, not
    0:22:17 just today, but always.
    0:22:27 We’ll be right back.
    0:22:32 We’ve been talking with the oncologist and healthcare policymaker, Zeke Emanuel, about
    0:22:38 the large and sudden uptake of GLP-1 drugs, which were designed to treat diabetes, but
    0:22:41 have also been found to have other effects.
    0:22:46 They help people lose weight, drink less, even have more sex drive.
    0:22:53 This GLP revolution will no doubt produce a variety of downstream effects, not just physiological
    0:22:56 and psychological, but political and economic effects.
    0:23:00 There will be behavior change and social change.
    0:23:03 What will all these changes look like?
    0:23:04 I have no idea.
    0:23:06 And no one else does, either.
    0:23:09 If they say they do, you should start walking in the other direction.
    0:23:16 Predicting the future is hard, uncertainty is real, and as we often preach on this show,
    0:23:19 unintended consequences can be powerful.
    0:23:24 So let’s plan on following those long-term effects as they unspool, but for now, let’s
    0:23:28 get back to the near-term effects of these drugs.
    0:23:32 One big problem with GLP-1s is that they are expensive.
    0:23:35 So a big question is, who pays for them?
    0:23:41 What is the responsibility of health insurers, whether we’re talking private firms or government
    0:23:42 plans?
    0:23:46 How much should any government directly subsidize these drugs?
    0:23:50 And how much are these drugs worth to society?
    0:23:54 These are some of the questions that Zeke Emanuel and several colleagues tried to answer
    0:23:59 in a recent article published in The Lancet, a prominent English medical journal.
    0:24:06 They offer, as their subtitle says, “a review and ethical analysis of discordant approaches.”
    0:24:10 I asked Emanuel why he took on this project.
    0:24:14 The prior article we published in the New England Journal was about how to ethically
    0:24:21 allocate the resources of the GLP-1 drugs, and we establish a framework that puts younger
    0:24:26 obese patients at the top, along with diabetic patients who aren’t responding to other treatments.
    0:24:30 And so we had the natural question, what are other countries doing?
    0:24:34 We always look to other countries who think they’ve got to have a better system.
    0:24:38 And one of the things you learn is, well, the Germans, they got the same allocation
    0:24:40 as we do in Medicare.
    0:24:43 They don’t cover any of these weight loss drugs.
    0:24:47 Then you stumble upon other countries, like Australia and Denmark, and they say, oh, these
    0:24:52 drugs aren’t cost-effective, but in fact, they use long outdated cost-effectiveness before
    0:24:55 all the benefits for heart disease and liver disease.
    0:24:59 Long outdated, you mean just like 2022, two years ago.
    0:25:00 Exactly.
    0:25:05 But in a rapidly changing field, you have to be nimble, and you have to use the absolute
    0:25:06 latest data.
    0:25:11 And then we see a whole series of countries where they’re worried about the total cost,
    0:25:15 and they’re just saying we’re not covering it, which is the wrong policy.
    0:25:19 Drug prices might be high, but there are some people who need the drugs more than other
    0:25:21 people where the benefits are going to be greater.
    0:25:24 You should cover it for those people.
    0:25:28 And let’s remember, these aren’t the only expensive drugs in the marketplace.
    0:25:29 I’m an oncologist.
    0:25:34 Every oncology drug is super expensive, none are cheap unless they’re generic.
    0:25:40 We cover those, and their benefits are probably way less than Osempic or Wagovia or Mungero.
    0:25:44 Because with cancer drugs, you’re sometimes talking about a life extension of just weeks
    0:25:48 or months versus potentially many years with these GLP-1s.
    0:26:00 The life extension for a severely obese patient could be five to ten years, and that’s real.
    0:26:03 Here are some key statistics from the Lancet paper.
    0:26:09 Emanuel and his colleagues analyzed GLP-1 policy in 13 high-income countries, including
    0:26:15 the U.S. and the U.K. All 13 of them cover the cost of GLP-1s for at least some people
    0:26:21 with type 2 diabetes, but nine of the 13 countries deny reimbursement for weight management.
    0:26:27 The U.S. is perhaps the most hodgepodgey of these 13 countries, given its mix of federal,
    0:26:29 state, and private health care coverage.
    0:26:34 I asked Emanuel to start from the beginning and describe just how much variance there is
    0:26:36 from place to place.
    0:26:43 Well, almost every country covers it for diabetes, but we’ve got a lot of countries that don’t
    0:26:45 cover it at all for weight loss.
    0:26:53 Australia, Belgium, Denmark, Finland, Germany, Italy, Israel, okay?
    0:26:54 Don’t cover it.
    0:26:59 Canada also doesn’t have a national policy, so it’s a little more variable.
    0:27:09 The 13 countries for France, Iceland, Japan, and then the U.K. under some conditions cover
    0:27:13 ozempic, wagovi, manjaro, and the conditions vary.
    0:27:19 So France, you have to have a high BMI or if a slightly lower BMI and severe comorbidities
    0:27:21 from obesity.
    0:27:25 The U.K., you also have to change your diet and exercise.
    0:27:30 And then there’s Iceland which says, “Look, we’ll cover it, but you’re going to have to
    0:27:33 have serious weight loss if you’re not actually losing weight.
    0:27:34 We’re going to not cover it.”
    0:27:38 So you can get started on it, but if you haven’t lost weight within a certain time, your coverage
    0:27:40 will be pulled, essentially?
    0:27:41 Exactly.
    0:27:46 And, you know, if I had to pick one, I would say I like what France is doing and I like
    0:27:52 what the U.K. does in terms of it’s not just about drugs, it’s about a whole lifestyle,
    0:27:54 change, and give people help with doing that.
    0:27:57 I think those are the right directions to go.
    0:28:01 Since you and I and much of our audience are American and since Americans are particularly
    0:28:07 solipsistic, let’s talk about the American circumstance with coverage, but also price.
    0:28:12 So one thing I learned from your papers that the price is charged for GLPs in different
    0:28:14 countries very massively.
    0:28:21 I believe it’s around 280 some dollars in Japan to $1350 in the U.S.
    0:28:25 Most of all, it shows you that there’s price flexibility, that these drug companies are
    0:28:29 willing to change the price depending upon what governments or others require.
    0:28:33 Was that your brother who negotiated the 283 in Japan, you think?
    0:28:34 He is a good negotiator.
    0:28:35 I’ll say that.
    0:28:36 He’s also a cheapskate.
    0:28:38 I’ll say that too.
    0:28:41 So I think that’s actually a positive.
    0:28:43 That makes me optimistic.
    0:28:49 And if I were in charge, if I were the health czar in the United States, I would go to these
    0:28:53 drug companies and I would say, “Listen, let’s get a subscription model.
    0:28:56 We’re going to give you a flat fee so you make money and you’re going to give us an
    0:29:01 unlimited amount of these drugs because actually to produce these drugs is not that expensive.
    0:29:07 And we’re going to try to get everyone we can who qualifies on these drugs.”
    0:29:10 That’s a deal I think everyone could be happy with.
    0:29:15 The drug company will make a lot of money and the country will be able to treat more
    0:29:18 people and will be better off.
    0:29:23 It won’t also be just to first come, first serve if you’ve got a lot of money.
    0:29:27 What is a budget that would be reasonable to spend on people with obesity and diabetes?
    0:29:32 That’s our limit for spending and it’s probably going to be pretty good given, I think it’s
    0:29:39 less, I looked, $173 billion we spend on obesity-related healthcare.
    0:29:42 So we have tens of billions, you might say we could spend.
    0:29:47 So we could make it enticing for a drug company but also good for public health.
    0:29:51 Economists, as I’m sure you know, like to talk about what they call moral hazard, which
    0:29:59 is if you make some behavior less costly by ensuring it or protecting against it somehow,
    0:30:01 then people are freer to do it.
    0:30:10 So I’m thinking, “Well, if I can now have my GLP-1 that is going to keep my weight down,
    0:30:16 prevent diabetes and prevent all these other potential complications, heck, I can eat whatever
    0:30:19 I want whenever I want because medicine has helped me out.”
    0:30:24 But there’s also the idea that food is medicine, right, that nutrition is important well beyond
    0:30:25 the weight component.
    0:30:32 So having permission to eat garbage calories would be at best a partial victory.
    0:30:34 So how do you think about that balance?
    0:30:36 Here’s a positive.
    0:30:43 We have focused more on obesity and we’ve also understood better that it is not simply
    0:30:45 a lifestyle choice.
    0:30:50 It has to do both with the body and therefore it’s very biologic and it has to do with
    0:30:52 our social environment, the food.
    0:30:58 You know, today we have 20% of our children are defined as obese and 16% is overweight
    0:31:03 and within that obese category, 6% are severely obese.
    0:31:05 That is a terrible place to be.
    0:31:08 We’ve got type 2 diabetes in young kids, hypertension in young kids.
    0:31:14 We have to reverse that and that isn’t going to be a Monjiro or Wadovi or Ozempic solution.
    0:31:19 That has to be a solution of changing their diets and getting them more exercise.
    0:31:22 There’s just no alternative to that.
    0:31:28 We need to invest more in the public health of our children and encouraging their parents
    0:31:35 to change their diet and maybe more than encouraging using things like taxes and other mechanisms,
    0:31:38 school lunches, school breakfast to change that behavior.
    0:31:44 I mean, this is a song I’ve been hearing for probably 20 or 30 years now.
    0:31:45 Absolutely.
    0:31:49 But, Steve, because so much attention has been focused on obesity now because of these
    0:31:54 drugs and because we can realize, “Oh, you can change that by giving a drug that must
    0:31:56 be a biological thing.
    0:31:59 It’s not simply a weakness of will that you’re eating more.”
    0:32:03 I’m hoping that changes our culture around obesity.
    0:32:08 And look, when I started thinking, “Well, we’ve got a limited amount of these GLP drugs.
    0:32:10 Who should get the GLP drugs?”
    0:32:15 When I started doing that research, my thinking was, “It’s got to be the diabetic patients.
    0:32:16 They’re going to benefit the most.”
    0:32:19 And then I get into this and I begin thinking, “All right.
    0:32:20 What are we trying to do?
    0:32:22 We’re trying to save the most lives.”
    0:32:25 And then I said, “Well, who loses the most years of life?”
    0:32:28 It turns out it’s the people with obesity.
    0:32:34 My own analysis changed my ethical judgment here when you look at these data.
    0:32:38 The people who are really suffering are people with obesity.
    0:32:41 They’re the people who are going to benefit the most from these drugs.
    0:32:45 Most insurance companies don’t want to cover it because it’s a big expense.
    0:32:46 Medicaid is all over the place.
    0:32:47 Some states are covering it.
    0:32:49 Most states are not.
    0:32:52 The consequence is, you know, who’s getting GLP ones?
    0:32:53 Rich people.
    0:32:59 That is the totally unethical, unjust way of allocating these very important pathbreaking
    0:33:00 drugs.
    0:33:08 We have to change our system so that we actually do the ethical thing, and that so far is not
    0:33:11 where we’re headed.
    0:33:15 We recorded this conversation with Zeke Emanuel back in September before the presidential
    0:33:16 election.
    0:33:22 Since we spoke, the Biden administration proposed a new plan to have Medicare and Medicaid
    0:33:26 cover GLP-1 drugs like Osempic and Mound jarrow.
    0:33:31 As of now, Medicaid coverage varies from state to state, as we just heard.
    0:33:36 And Medicare doesn’t reimburse for these drugs at all because of a law prohibiting the coverage
    0:33:38 of weight loss products.
    0:33:45 This proposed new coverage would cost an estimated $35 billion over a decade, or $3.5 billion
    0:33:50 a year, which sounds like a lot until you put it up against what Emanuel told us the
    0:33:58 U.S. spends each year on obesity-related healthcare, around $175 billion.
    0:34:03 It’s too early to say what will happen to the Biden administration’s GLP-1 proposal
    0:34:05 under the Trump administration.
    0:34:10 Trump’s pick for director of health and human services, Robert F. Kennedy Jr., has criticized
    0:34:16 GLP-1s, but Mehmet Oz, Trump’s pick to run the Centers for Medicare and Medicaid Services,
    0:34:18 has expressed support.
    0:34:24 I did ask Zika Manuel during our interview how big of a shift he would envision in U.S.
    0:34:27 healthcare policy if Trump won the election.
    0:34:34 If I were a betting man, having worked with Donald Trump, this isn’t going to be a priority
    0:34:35 of his.
    0:34:40 He may make another run at repealing the Affordable Care Act, but that’s a joke.
    0:34:41 It’s not going to happen.
    0:34:43 It’s a joke because it’s ensconced.
    0:34:45 It’s just not going to happen.
    0:34:49 John Republicans in Congress, I talked to him right after John McCain did his thumbs
    0:34:53 down and killed the repeal, and he said, “Oh, I’m very close.
    0:34:54 I’m going to do it again.
    0:34:55 We’re going to get it this time.”
    0:35:01 I said, “Mr. President, what you don’t realize is that behind John McCain, if he hadn’t
    0:35:06 done that, there were 10 other senators who would have rejected it because it would have
    0:35:09 upset things too much in their state.
    0:35:14 Every single state that has tried to expand Medicaid where the voters had to say, the
    0:35:19 voters said, “Expand Medicaid,” and we’re talking about deep, deep red states, places
    0:35:23 like Oklahoma, places like South Dakota.
    0:35:26 Even Republicans want everyone to have health insurance.
    0:35:28 We’re not repealing the Affordable Care Act.
    0:35:32 You’re well-known for your involvement in the Affordable Care Act.
    0:35:35 You’re also well-known for having written several books.
    0:35:40 One of them published, I believe it was 2014, was called Reinventing American Health Care,
    0:35:46 how the Affordable Care Act will improve our terribly complex, blatantly unjust, outrageously
    0:35:50 expensive, grossly inefficient, error-prone system.
    0:35:52 That’s a lot of promise for one subtitle.
    0:35:55 How well do you think that promise has been met?
    0:35:59 So far, I think it’s been met reasonably well.
    0:36:01 Here’s how I would put it.
    0:36:04 It’s dramatically increased coverage.
    0:36:08 Tens of millions of people have gotten health insurance and gotten the benefits of health
    0:36:13 insurance, including less mortality, less stress, less anxiety.
    0:36:20 Secondly, it’s actually led to a plateau in healthcare spending as a percentage of GDP.
    0:36:26 We were at 17.5% of GDP spent on healthcare when we started with the Affordable Care Act,
    0:36:27 and guess what?
    0:36:29 We’re at the exact same place.
    0:36:31 That’s trillions of dollars of savings.
    0:36:36 To be fair, that’s a larger share of GDP than any other country in the world by a long shot.
    0:36:37 Don’t get me started.
    0:36:39 You’ve got to have a whole nother conversation about that issue.
    0:36:44 I could go on and on about it, but yes, we spend — I think Switzerland’s the next highest
    0:36:47 country in terms of spending about 8,000 per person.
    0:36:51 We’re close to 13,000 or maybe even over 13,000 per person.
    0:36:54 So yes, we’re burning lots of money that we shouldn’t be burning.
    0:36:59 In any case, those are two big accomplishments of the Affordable Care Act.
    0:37:03 It’s also, by getting more people insured, led to some cost savings.
    0:37:10 On the quality side, I would say much more uneven, not consistently beneficial.
    0:37:12 And for me, it’s been a disappointment.
    0:37:16 We still have high levels of hypertension, high levels of diabetes, worsening mental
    0:37:18 health crises.
    0:37:23 On the issue of equity, lots of people are concerned about minorities and others not
    0:37:24 getting as much.
    0:37:29 The fact is, we have narrowed the uninsured rate between minorities and whites.
    0:37:32 So we’ve done okay there, I would say.
    0:37:36 We haven’t evened everything out, but I think we’ve done okay.
    0:37:42 I’d say the one big place where it’s gone awry is the dissatisfaction with the health
    0:37:49 care system is higher, a lot more barriers and hurdles, more prior authorization, both
    0:37:55 for patients and doctors, harder to find doctors for your particular condition.
    0:38:00 And also, even though we have the same GDP spending, the out-of-pocket spending’s gone
    0:38:05 up, employers are shifting more costs to individuals through higher deductibles and
    0:38:08 things like that, that leads to frustration and stress.
    0:38:13 So I do think the Affordable Care Act has achieved a lot, but the underlying defects
    0:38:20 of the system prevent us from achieving all the goals we need to achieve with health care.
    0:38:23 And how can those goals be achieved?
    0:38:25 This is a problem in our country.
    0:38:27 We have to move with the times.
    0:38:29 We have to be more innovative.
    0:38:33 Next coming up, after the break, I’m Stephen Dovner, speaking with Ezekiel Emanuel on
    0:38:34 Freakonomics Radio.
    0:38:43 We will be right back.
    0:38:47 Let’s talk about the future of medicine generally, but especially I’m curious to know what you
    0:38:53 think AI and machine learning and so on will do to, you know, accelerate discovery, treatment,
    0:38:54 et cetera, et cetera.
    0:38:59 I want to frame this with an observation I heard from Mustafa Suleiman, who’s an AI
    0:39:02 entrepreneur, I guess you’d call him now at Microsoft.
    0:39:09 I heard him say that if AI proceeds as he sees it, that the cost of medical diagnosis
    0:39:11 will eventually drop to zero.
    0:39:14 Now let’s say he’s only 30% right.
    0:39:19 There’s a 30% cost savings on diagnosis, but that’s massive.
    0:39:25 I’m curious how you think in a world where that’s true, how that money gets reallocated?
    0:39:31 Well, first of all, Stephen, I was just at a meeting that my brother put on and every
    0:39:34 panel talked about AI and the promise of AI.
    0:39:36 And I do think there’s a lot of promise there.
    0:39:38 Don’t get me wrong.
    0:39:44 But I also think that it’s going to take longer to make it into the healthcare system, because
    0:39:49 first of all, you got to spread it out over 330 million people, which means not that it’s
    0:39:55 hard to scale AI, but you have to make sure it doesn’t bias you against certain populations
    0:39:58 or ignore problems in certain populations.
    0:40:02 And to some extent, the training systems are not good at that.
    0:40:06 I also think there’s some hesitation in using it.
    0:40:09 I do think the biggest advantage is going to be in access.
    0:40:14 People who can’t get to the doctor, that’s actually going to turn out to be a huge benefit.
    0:40:15 I should say conflict adventures.
    0:40:18 I’m involved in several companies looking at that.
    0:40:21 There are other huge advantages.
    0:40:25 One of them is diagnoses, identifying people who are likely to have complications.
    0:40:29 So you can intervene now and prevent a hospitalization and save money.
    0:40:34 So I am optimistic over a slightly longer time horizon.
    0:40:39 If I were reallocating that 30%, here’s my top priorities.
    0:40:45 Priority number one, invest in children and as early as possible.
    0:40:48 Even before they’re out of the womb, you got to invest in them.
    0:40:53 We know early interventions produce the biggest social benefit.
    0:41:00 So right when they’re born, have nurse family partnerships so that families are supported.
    0:41:01 We have to have daycare.
    0:41:04 That’s cheaper so people can afford it.
    0:41:07 Mandatory, pre-K, open to everyone.
    0:41:10 I would also bring down the total healthcare costs for people.
    0:41:15 One of the major things is we need to put a cap on out-of-pocket expenditures, deductibles
    0:41:19 and copays so people don’t go bankrupt and aren’t stressed by the cost.
    0:41:27 I think a maximum of $1,000 for a family is probably a place I would like to get to.
    0:41:29 You also need to spend that money and other things.
    0:41:30 It’s not just healthcare.
    0:41:35 We need to spend it on infrastructure so that we can have housing and people can commute
    0:41:38 without having to drive hours and hours.
    0:41:44 So the COVID pandemic taught pretty much everyone how to use Zoom or some equivalent.
    0:41:49 And this was plainly vital for medicine at the time, what we now call telemed or telehealth.
    0:41:56 I’m curious what you see as the lasting effects of that telehealth surge during COVID, pros
    0:42:00 and cons of, let’s say, continuing to lean on virtual medicine.
    0:42:03 I think in general, it’s positive.
    0:42:08 We had a big blip up almost half of the physician engagement’s got to telemedicine and then
    0:42:12 it’s come way down, not to pre-COVID levels, but way down.
    0:42:17 A lot of this goes to how we pay for it and the fact that a lot of systems, doctors who
    0:42:22 do it get paid half as opposed to seeing the patient in their office.
    0:42:26 But we’ve also realized that we can do a lot of things out of the hospital.
    0:42:29 So you’re seeing a lot of surgeries migrate out of the hospital.
    0:42:34 You’re seeing more home care out of the hospital.
    0:42:37 At the University of Pennsylvania, one of the things we ended up doing during COVID was
    0:42:41 to go to patients’ houses and administer chemotherapy.
    0:42:46 When I was training low these many years ago in the early 1990s, if you had told me, “We’re
    0:42:50 going to give this chemotherapy that caused a lot of nausea and vomiting, we’re going
    0:42:53 to give it at the patient’s home,” I would have said, “The psychiatric hospital, that’s
    0:42:54 not far away.
    0:42:56 Let’s take you over there.”
    0:42:57 But that’s what we’ve been able to do.
    0:43:02 Now, partly that’s because we have better drugs for nausea and vomiting, partially it’s because
    0:43:08 we really understand how to do this and that’s a big, big advance.
    0:43:12 Here’s why I’m really positive about telemedicine.
    0:43:16 Twenty percent of our population lives in rural areas.
    0:43:18 We’ve seen hospitals close there.
    0:43:23 We’re going to have to get them access, not just to a primary care doc, but to specialists
    0:43:26 that aren’t living nearby.
    0:43:28 And telemedicine is going to be important.
    0:43:34 Here again is another legacy of history that people don’t pay attention to.
    0:43:38 Medical licensure and regulation is state-based.
    0:43:41 That makes no sense in the modern era.
    0:43:47 With Zoom, if you’re in South Dakota and you can get your treatment from Chicago or Pennsylvania
    0:43:51 or New York, why should we have the licensure only in South Dakota?
    0:43:56 We really need to get to the next level national licensure.
    0:43:58 But states are jealous of their prerogatives.
    0:44:01 They’re not going to give it up easily.
    0:44:02 This is a problem in our country.
    0:44:05 We have to move with the times.
    0:44:06 We have to be more innovative.
    0:44:12 Let me go back to administering chemo at home during COVID, which is really interesting.
    0:44:16 Let me hear you speak a little bit about how cancer care and especially chemo have changed
    0:44:18 over the past couple of decades.
    0:44:23 But I want to frame that within a bigger question or maybe it’s just an observation, which is
    0:44:24 the following.
    0:44:26 There was an economics paper years ago.
    0:44:29 I don’t know if you ever read it, and I’m curious to know what you think of the idea,
    0:44:35 which is that the so-called war on cancer, which was begun, gosh, over 50 years ago now.
    0:44:39 Some people claim it’s been nowhere near as successful as one might hope.
    0:44:46 The paper argued that that argument is masking a big different trend, which is cardiovascular
    0:44:53 care has become so much better that many, many, many people are not dying of the cardiovascular
    0:44:57 diseases that would have killed them in an earlier generation and are living long enough
    0:44:58 to get cancer.
    0:45:01 I’m curious to know what you think of that framework, but I’d love you to just give us
    0:45:05 the state of cancer care and especially chemo now.
    0:45:09 Well, at one time, I might have been skeptical.
    0:45:15 Yes, we began this under Richard Nixon in the early 1970s, and it’s now more than 50
    0:45:16 years.
    0:45:22 All of the progress we’ve made over the last decade or two really go back to the research
    0:45:28 that was started of the war on cancer and accelerated by the human genome project and
    0:45:35 figuring out where the defects are in the DNA that lead to cancer, being able now to
    0:45:38 target those specific defects.
    0:45:41 All of that took a long time.
    0:45:45 We’ve done a marvelous job at cutting cancer death rate.
    0:45:50 That means that for everyone who gets cancer, fewer people die, but I do think we’ve had
    0:45:58 a huge improvement in cardiac disease, multiple factors, a lot of lifestyle factors, humongous
    0:46:05 drop in smoking, changes in diet, so we are more aware of cholesterol, people on statins,
    0:46:11 incredible breakthrough, drug, not to mention all the other intervention stents and things
    0:46:12 like that.
    0:46:16 So, we have had huge progress in cardiovascular disease.
    0:46:22 Now, having said all of that, we’re seeing a big increase in younger people getting cancers
    0:46:25 which we thought they never should get, like colon cancer.
    0:46:32 I had a very dear friend die in her early 40s from a humongous colon cancer.
    0:46:38 When I was training in the 1990s, we never would have seen that, never.
    0:46:39 What do you think is going on?
    0:46:40 No one knows for sure.
    0:46:42 Here are some possibilities.
    0:46:49 We’ve changed the human microbiome in the gut, the bacteria by eating the wrong things.
    0:46:56 For processed foods that causes obesity, it also causes a decrease in the variety of bacteria
    0:47:00 we have and a decrease in the good bacteria.
    0:47:05 That micro environment that affects cells created by the bacteria in our gut is probably
    0:47:07 critically important.
    0:47:15 If you don’t eat fermented foods like yogurt, kimchi, if you don’t eat a lot of fiber that
    0:47:21 comes with fruits and vegetables, you’re dramatically changing that micro-biome.
    0:47:22 That’s a hypothesis.
    0:47:26 Let’s be clear with your audience, it’s a hypothesis.
    0:47:33 So, Zeke, I understand you had a birthday recently, yes, 67 years old, is that true?
    0:47:34 Oh boy.
    0:47:39 Your spies, you worked for the CIA recently?
    0:47:41 Can you confirm, though, you’re 67 years old.
    0:47:44 I can confirm I’m 67 years old.
    0:47:50 I know that every year you set for yourself something new, radically new to do.
    0:47:54 You’ve become a chocolate maker, you’ve become a serious cyclist.
    0:47:57 Tell me one thing that’s on your list for the future.
    0:47:58 I’ll tell you a trivial thing.
    0:47:59 I want to make honey.
    0:48:01 I thought bees did that.
    0:48:03 We’ve just planted a lot of trees.
    0:48:06 We have a lot of bees that love our lavender plants.
    0:48:07 So that’s a sort of hobby.
    0:48:12 But I would say, seriously, one of my life goals is, I’m a first-born and I think one
    0:48:20 of my deficits, if I had to put it this way, is I can be slightly not sufficiently empathetic.
    0:48:22 I can be a little too dismissive.
    0:48:25 And I would like to improve those.
    0:48:30 I’d like to be more empathetic to the people around me and decrease the sarcasm in my
    0:48:31 responses.
    0:48:35 Now, why do you care about that at this stage in life?
    0:48:37 I think it makes a difference to people.
    0:48:43 I’ve become more interested in how people get to where they are and also more interested
    0:48:48 in what changes they’ve made, what challenges they’ve confronted, how they’ve overcome
    0:48:49 their challenges.
    0:48:51 And I’d like to do more of that.
    0:48:57 My father-in-law makes me bookmarks, the most recent bookmark for my 67th birthday he wrote
    0:49:00 on the bookmark, allergic to idiots.
    0:49:05 I am allergic to idiots, but I had in the past confused that with not taking an interest
    0:49:10 in people and that was probably a result of being first-born, having my brothers constantly
    0:49:11 attack me, whatever.
    0:49:15 Can I say all of you brothers complain about each other in exactly the same way as if birth
    0:49:18 order was irrelevant?
    0:49:23 But I would say being curious about the lives of other people, it’s led me to read a lot
    0:49:27 of biographies and understand the challenges people have overcome.
    0:49:32 I’ve read a recent biography of Hubert Humphrey and the kinds of challenges he confronted,
    0:49:34 but the fact that everyone liked him.
    0:49:39 That’s an interesting and very important quality, that you could be open to people, you could
    0:49:44 be empathetic of people, even people who you disagreed with so much that they actually
    0:49:47 liked you, we don’t have enough of that in our society.
    0:49:52 And so one of the things you ask me, you know, I’m Jewish and the new year is coming up,
    0:49:58 that I’m committing myself to is more empathy and less sarcasm in my voice, but also making
    0:50:02 honey, making life sweet.
    0:50:04 The late in life empathist, I love it.
    0:50:07 And now I’m sure you get asked about this all the time and I’m sorry if it’s a pain
    0:50:12 in the neck, but you did publish a piece in the Atlantic back in 2014, which got a lot
    0:50:13 of attention.
    0:50:17 Headline was why I hope to die at 75.
    0:50:19 First of all, just rehearse the argument.
    0:50:21 What was the point you were trying to make?
    0:50:22 I believe it was a bit misunderstood.
    0:50:25 Yeah, it’s not like I’m going to die at 75.
    0:50:32 It’s that I would not take life prolonging treatments at 75, like cancer chemotherapies
    0:50:34 or renal dialysis if my kidneys fail.
    0:50:37 But you also said no more flu shots, for instance.
    0:50:38 Right.
    0:50:40 There are two things that have gotten under people’s skin.
    0:50:47 One is vaccinations and the other is antibiotics that would readily cure a condition.
    0:50:55 Now on the vaccines, I think COVID has somewhat changed my attitude on that because, you know,
    0:50:59 you can get a shot and it would make a very big difference.
    0:51:02 Why did you need the COVID vaccine to persuade you of that?
    0:51:06 Wouldn’t what you just said describe just about all the vaccines that are commonly used?
    0:51:10 Well, measles is not my big problem, you know, and diphtheria is not my big problem.
    0:51:12 Thank you very much, Stephen.
    0:51:16 If I somehow broke my hip, I would get that repaired.
    0:51:18 I’m not force-wearing all medical care.
    0:51:23 It was really about life saving, you know, people, oh, the golden years, all the advertisements
    0:51:29 out there for Medicare Advantage health plans make the golden years look like I’m hiking
    0:51:32 in Montana and beautiful vistas and all that.
    0:51:33 That’s not what they’re like.
    0:51:37 What happens for most people is they end up watching a lot more TV.
    0:51:39 They tend to be homebound.
    0:51:43 They get a lot of disabilities over time.
    0:51:49 They’re not filled with the joys that everyone imagines if they’re going to get 10 more years.
    0:51:53 The other thing is they’re also filled with a lot of cognitive decline.
    0:51:55 Yes, it is true.
    0:51:59 The rate of Alzheimer’s disease has actually gone down, but the total number of people
    0:52:03 with Alzheimer’s gone up, I think the number is, and I haven’t checked this recently, by
    0:52:07 80 years old, about 30% of people have some cognitive decline.
    0:52:09 That’s a huge number.
    0:52:10 So you want to get out while the getting’s good?
    0:52:18 I see no reason in prolonging that if I’m not being creative, I’m not interacting.
    0:52:23 I don’t watch TV, so I wouldn’t want to be spending my time watching TV, even good movies.
    0:52:25 That seems like a very passive life.
    0:52:29 I’m not a passive person, and I don’t think anyone wants or should want to be a passive
    0:52:30 person.
    0:52:36 But for all your optimism about intellect and technology generally, whether it’s AI, machine
    0:52:42 learning, or just the way the brain can come up with things, who’s to say that all the
    0:52:48 downsides that you see of aging won’t be mitigated to some degree by various technologies
    0:52:52 and that maybe, heck, you could at 100 be doing things.
    0:52:57 Now maybe you’d be doing them quasi-virtually, but do you entertain those kind of thoughts?
    0:53:02 I entertain those thoughts, but I haven’t seen that actually be a reality.
    0:53:09 I think people are delusional when they imagine, “I’ll be like I am now when I’m 90,” probably
    0:53:10 not.
    0:53:14 Maybe AI, regenerative medicine, maybe those things will happen, then I’ll reassess.
    0:53:15 But they’re not happening now.
    0:53:20 We’re seeing greater disabilities and people having a lot of cognitive decline.
    0:53:23 I am not wild about that kind of life.
    0:53:26 You have to ask yourself, “What is the purpose of my life?
    0:53:27 Why am I living?
    0:53:29 And how does that relate to age?”
    0:53:33 Most people will say, if you just ask them, “Oh, I want quality over quantity,” but then
    0:53:38 when they actually behave, they are taking quantity even when the quality of their life
    0:53:40 is not what they actually want.
    0:53:42 Of course I think my view is the right view.
    0:53:45 I’ve spent a lot of time thinking about this, but I will tell you, Stephen, it’s a decade
    0:53:48 of people writing to me.
    0:53:51 About a third of people say, “Dr. Emmanuel, you’re 100 percent right.”
    0:53:54 A third of people say, “Well, you’ve made me rethink.”
    0:53:56 They don’t necessarily endorse my view.
    0:54:01 If I’ve just made you rethink how you’re going to live your life and examine what you’re
    0:54:03 living for, that’s a really good thing.
    0:54:06 And a third of people think, “I’m off my rocker,” and maybe I am.
    0:54:10 It’s quite a legacy, though, that you’ve made so many people rethink something as fundamental
    0:54:11 as the end of their life.
    0:54:16 I don’t want to pat myself on the back, but I don’t mind being what Socrates called
    0:54:17 the Gadfly.
    0:54:22 Part of what I do as a professor is challenge people about their views, and I want them
    0:54:24 to rethink their views.
    0:54:27 They might embrace their views wholeheartedly.
    0:54:28 That’s fine.
    0:54:30 As long as it’s, as Socrates says, an examined life.
    0:54:35 As long as you can defend and justify where you’ve come down, that’s the place people
    0:54:36 need to be.
    0:54:38 And I hope everyone gets there.
    0:54:40 I hope they think through, “What am I living for?
    0:54:42 What good am I doing in this world?
    0:54:45 Whose lives am I making better?”
    0:54:49 In the end, that’s why we’re here.
    0:54:54 My thanks to Zika Manual for a conversation that I found informative, challenging, occasionally
    0:54:55 inspiring.
    0:54:58 I’m curious to know how you felt.
    0:54:59 Let me know.
    0:55:02 Our email is radio@freakonomics.com.
    0:55:08 Coming up next time on the show, another one-on-one conversation, this one with Adam Moss, who
    0:55:12 is widely considered the best magazine editor of his generation.
    0:55:17 He also happens to be my former editor and boss.
    0:55:22 I learned a lot from Adam, especially how to be direct.
    0:55:28 I just thought this was bullshit, and I thought it was bullshit over a long period of time.
    0:55:30 That’s next time on the show.
    0:55:35 Until then, take care of yourself and, if you can, someone else too.
    0:55:37 Freakonomics Radio is produced by Stitcher and Renbud Radio.
    0:55:43 You can find our entire archive on any podcast app also at Freakonomics.com, where we publish
    0:55:46 transcripts and show notes.
    0:55:48 This episode was produced by Zach Lipinski.
    0:55:53 The Freakonomics Radio network staff also includes Alina Kulman, Augusta Chapman, Dalvin
    0:55:58 Abouaji, Eleanor Osborne, Ellen Frankman, Elsa Hernandez, Gabriel Roth, Greg Rippen,
    0:56:03 Jasmine Klinger, Jason Gambrell, Jeremy Johnston, John Schnarrs, Lyric Bowditch, Morgan Levy,
    0:56:07 Neil Coruth, Rebecca Lee Douglas, Sarah Lilly, and Theo Jacobs.
    0:56:13 Our theme song is Mr. Fortune by the Hitchhikers, and our composer is Luis Guerra.
    0:56:14 As always, thank you for listening.
    0:56:25 I know we have approximately 75 minutes I want to use every day on one of them, so we’ll
    0:56:26 just get going.
    0:56:29 Oh my god, I’m not sure I can talk that long.
    0:56:31 Yeah, you can.
    0:56:32 You caught me.
    0:56:33 Alright.
    0:56:45 The Freakonomics Radio network, the hidden side of everything.
    0:56:48 (bright music)
    0:56:50 you

    In a wide-ranging conversation with Ezekiel Emanuel, the policymaking physician and medical gadfly, we discuss the massive effects of GLP-1 drugs like Ozempic, Wegovy, and Mounjaro. We also talk about the state of cancer care, mysteries in the gut microbiome, flaws in the U.S. healthcare system — and what a second Trump term means for healthcare policy.

     

    • SOURCES:
      • Ezekiel Emanuel, vice provost for Global Initiatives, co-director of the Health Transformation Institute, and professor at the University of Pennsylvania Perelman School of Medicine.

     

     

  • How the Supermarket Helped America Win the Cold War (Update)

    AI transcript
    0:00:08 Hey there, it’s Stephen Dubner with a bonus episode of Free Economics Radio.
    0:00:13 Our most recent regular episode was an interview with John Sullivan, former U.S. Ambassador
    0:00:14 to Russia.
    0:00:18 We didn’t really talk about the Cold War, but as a result of that conversation, I’ve
    0:00:21 been thinking a lot about the Cold War.
    0:00:26 And that got me thinking about an episode we made some years ago called How the Supermarket
    0:00:28 Helped America Win the Cold War.
    0:00:33 So I went back and listened to it, I really liked it, if I do say so myself, and I thought
    0:00:35 you might like to hear it again too.
    0:00:39 So here it is, we have updated facts and figures as necessary.
    0:00:45 As always, thanks for listening.
    0:00:49 When you think about propaganda campaigns, I am guessing you don’t think of this.
    0:01:07 After World War I and World War II came the Cold War between the U.S. and the USSR.
    0:01:13 It featured a space race, an arms race, and a farms race.
    0:01:18 Things like chicken breeding and hybrid corn took an outsize and somewhat surprising role
    0:01:21 in U.S. propaganda in the early 1950s.
    0:01:24 The farms race had an obvious winner.
    0:01:27 We clearly won the abundance war.
    0:01:33 But the American victory was, to some degree, a puric victory, whose after effects are still
    0:01:35 being felt.
    0:01:43 Economists who don’t do U.S. agricultural policy are horrified by what they see in terms
    0:01:45 of distorting markets.
    0:01:51 Today on Freakinomics Radio, how a sprawling system of agriculture technology, economic
    0:01:56 policy, and political will came to life in the supermarket.
    0:02:00 Tell me who could possibly afford to buy food in a place such as this?
    0:02:02 Well, this is just an ordinary food market.
    0:02:24 This is Freakinomics Radio, the podcast that explores the hidden side of everything with
    0:02:49 your host Stephen Dovner.
    0:02:50 That’s Shane Hamilton.
    0:02:54 He’s an American historian who teaches at the University of York in England.
    0:03:00 I’m the author of Supermarket USA, Food and Power in the Cold War Farms Race.
    0:03:04 Was the supermarket a purely American invention?
    0:03:06 I argue yes.
    0:03:12 The easy answer is that the first declared supermarket was built in the United States.
    0:03:19 I think the broader answer is that what makes a supermarket a supermarket is the industrial
    0:03:25 agriculture system that enables the affordability of mass-produced foods.
    0:03:29 The predecessor of the supermarket was the dry goods store.
    0:03:31 So they didn’t have fresh produce.
    0:03:36 They didn’t necessarily have milk or meat or a bakery in-house.
    0:03:40 That’s what a supermarket did, is it put all those food items and often many other things.
    0:03:42 You could get auto parts.
    0:03:44 You could get your shoes shined in the early supermarkets.
    0:03:49 It was a kind of one-stop shopping and service emporium.
    0:03:52 Another big difference, supermarkets were self-serve.
    0:03:57 In a dry goods shop, you’d ask a clerk for something and they’d fetch it in a supermarket.
    0:04:03 You could ogle the meat and produce yourself, even handle it, and then put it in your basket.
    0:04:08 The supermarket chain Pigley Wiggly is credited with having pioneered the self-service retail
    0:04:09 model.
    0:04:13 It is still operating today in 18 states.
    0:04:17 The biggest supermarket chain for much of the 20th century was A&P, the great Atlantic
    0:04:19 and Pacific Tea Company.
    0:04:27 A&P, as of the 1940s, was the world’s largest retailer by any measure, by sales volume,
    0:04:29 by number of outlets and so forth.
    0:04:36 Between 1946 and 1954 in the U.S., the share of food bought in supermarkets rose from 28
    0:04:39 percent to 48 percent.
    0:04:43 By 1963, that number risen to nearly 70 percent.
    0:04:49 A&P had so much market power that the Department of Justice went after it for anti-competitive
    0:04:51 practices.
    0:04:56 This was an interesting development, considering that the U.S. government played such a significant
    0:04:59 role in the creation of supermarkets in the first place.
    0:05:06 The original goal had been to use the supermarkets to drive down the cost of food for urban consumers.
    0:05:12 The U.S. becomes a majority urban nation by, I think, 1920.
    0:05:17 And there’s a lot of anxiety among leaders, political leaders, thought leaders about whether
    0:05:24 or not U.S. agriculture is going to be productive enough to feed this growing urban population.
    0:05:28 That is Ann Effland, a former senior economist at the USDA.
    0:05:34 The U.S. Department of Agriculture, established in 1862, had a long history of funding and
    0:05:36 conducting scientific research.
    0:05:42 You know, a lot of the seed development and livestock breeding, one good example would
    0:05:49 be the research done in the 1890s on animal disease, on bovine tuberculosis, for example,
    0:05:55 to identify the causes of those diseases and then to develop ways to treat that.
    0:06:00 There was also research on developing new kinds of machinery that would be less heavy
    0:06:04 on the ground or less damaging to crops.
    0:06:08 The USDA’s promotion of agriculture went even further than farm machinery and animal
    0:06:09 breeding.
    0:06:14 There was a need for better transportation from the farms to the cities.
    0:06:21 So USDA had a unit that did engineering research on the best road materials and road construction
    0:06:22 methods.
    0:06:27 The Rural Electrification Administration was part of the New Deal USDA.
    0:06:33 The private electrical companies didn’t see a profit in expanding out into rural areas
    0:06:36 and so that was taken on by USDA.
    0:06:42 But perhaps the biggest changes to American agriculture were mechanization and automation.
    0:06:49 If I may say so, I lived through the structural transformation of the agricultural economy.
    0:06:52 That’s Peter Timmer, an economist who used to teach at Harvard.
    0:07:00 I’m a retired professor, have worked on agriculture and food policy, poverty reduction, economic
    0:07:04 development for well over 50 years now.
    0:07:08 And before that, Timmer was a farm boy in Ohio.
    0:07:13 He worked for the Tip Top Canning Factory, which was founded by his great-grandfather,
    0:07:14 and the Factory’s Tomato Farm.
    0:07:21 I’m old enough to remember when we handpicked all of our tomatoes and we hand peeled all of
    0:07:22 our tomatoes.
    0:07:24 But that, of course, changed.
    0:07:31 When I was in grade school or junior high school, if we could pack 40 or 50,000 cases
    0:07:37 of canned tomatoes and product in a year, that was a pretty successful year.
    0:07:43 By the time I had graduated from graduate school, the company was putting out a million
    0:07:45 cases a year.
    0:07:50 This was thanks in large part to a mechanical tomato harvester, which came out of the engineering
    0:07:56 school at the University of California, Davis, with the help of federal research money.
    0:08:00 It had taken years to get the harvester right, mostly because they first had to get the tomato
    0:08:06 right, breeding a new variety that could withstand the rough treatment of the mechanical harvester.
    0:08:12 I remember when we bought our first one, it was a huge expense, and it just revolutionized
    0:08:13 our operation.
    0:08:20 I was just in a microcosm of what turned out to be very general trends in the entire US
    0:08:26 food system at the time.
    0:08:33 The general trends could best be characterized as high volume and standardized agriculture.
    0:08:38 If you would describe US agriculture policy as aggressive in earlier decades, then in
    0:08:42 the Cold War era, it was pretty much on steroids.
    0:08:47 This wasn’t just about feeding a growing US population.
    0:08:52 This had a political thrust, meant to show the Soviet Union and the rest of the world
    0:08:55 just how mighty the US was.
    0:08:56 Shane Hamilton again.
    0:09:02 I don’t mean to deny the power and the might of these weapons systems that were deployed
    0:09:08 in the space race and all that, but fundamentally, this was a contest to demonstrate that either
    0:09:13 communism or capitalism was a superior political economic system.
    0:09:17 After Sputnik, when the United States was trying to understand why it was falling behind
    0:09:21 in the space race, or why it thought it was falling behind in the space race, many of
    0:09:27 the commentators said, “The problem is we’re not funding basic research.”
    0:09:32 After 1957, the budgets of not only organizations like the National Science Foundation, but
    0:09:37 also specific government departments like the Department of Agriculture, their budgets
    0:09:41 for research increased dramatically on the theory that this is how the United States
    0:09:45 would win the Cold War by doing the best science.
    0:09:46 That is Audra Wolf.
    0:09:49 I’m a writer, editor, and historian.
    0:09:55 Wolf’s latest book is called Freedom’s Laboratory, The Cold War’s Struggle for the Soul of Science.
    0:10:01 And it really looks at the ways that science as an idea became a tool for propaganda in
    0:10:04 the Cold War, especially on the American side.
    0:10:08 There’s this idea that you can change hearts and minds, and you can establish a climate
    0:10:13 of opinion that makes people more willing to accept the American way of life as the
    0:10:14 better choice.
    0:10:19 And one of the things that made America so great, it’s agricultural system.
    0:10:25 Things like chicken breeding and hybrid corn took a outsize and somewhat surprising role
    0:10:28 in U.S. propaganda in the early 1950s.
    0:10:29 But there was a tension.
    0:10:35 The United States wanted to promote personal exchanges, scientific and technical exchanges
    0:10:37 as a way to promote American values.
    0:10:41 But at the same time, it was very, very nervous that by doing so, it would lose the advantages
    0:10:44 that it had, particularly in grain production.
    0:10:48 In 1955, the U.S. government unexpectedly had its hand forced.
    0:10:54 A newspaper editor in Iowa named Lauren Soth invited Khrushchev to the United States to
    0:10:56 see the wonders of American agriculture.
    0:11:00 That’s Nikita Khrushchev, then leader of the Soviet Union.
    0:11:03 And somewhat to everyone’s shock, Khrushchev said yes.
    0:11:07 Now, Khrushchev didn’t come himself until 1959.
    0:11:13 But in 1955, a group of 12 Soviet agricultural experts came to the United States to see the
    0:11:15 wonders of American agriculture.
    0:11:17 They saw how contour farming worked.
    0:11:19 They saw the wonders of hybrid corn.
    0:11:20 They saw the chicken breeders.
    0:11:26 And what were those chicken breeders working on?
    0:11:27 The chicken of tomorrow.
    0:11:28 That’s coming up.
    0:11:29 I’m Stephen Dubner.
    0:11:31 This is Freakonomics Radio.
    0:11:44 We’ll be right back.
    0:11:48 Chicken in the 1920s was pound for pound as expensive as lobster.
    0:11:54 By the 1960s, it was so cheap that it was quickly becoming America’s most popular meat.
    0:12:00 That again is Shane Hamilton, a historian and the author of Supermarket USA, Food and
    0:12:03 Power in the Cold War Farms Race.
    0:12:07 In the book, he tells the story of a project called the chicken of tomorrow.
    0:12:13 Really, the chicken of tomorrow is the chicken of today in that we’re all eating the kind
    0:12:17 of genetic progeny of the original chicken of tomorrow.
    0:12:23 What it was was a contest to produce the most efficient chicken using genetic techniques,
    0:12:24 basically.
    0:12:30 And it not only had to be an efficient chicken, but very heavy breasts, very light colored
    0:12:34 feathers so that when it’s plucked, it would look good under cellophane and then later
    0:12:36 plastic packaging.
    0:12:42 And the birds had to be relatively disease resistant so that they could be put in intensive
    0:12:47 rearing operations without dying too quickly.
    0:12:54 This agricultural bounty, those heavy breasted cheap chickens, those millions of cases of
    0:12:59 tomatoes, all this was a good candidate for the U.S. propaganda machine.
    0:13:01 The U.S. Information Agency.
    0:13:08 We’re searching for concrete forms of propaganda to display America’s wealth.
    0:13:13 After one of the most concrete forms of display imaginable, the supermarket.
    0:13:19 The supermarket is not just a retail box, but actually the endpoint of an industrial agriculture
    0:13:21 supply chain.
    0:13:26 A supermarket can’t exist without the inputs of mass produced foods.
    0:13:31 The Farms Race was about how do you get the food from industrially productive, technologically
    0:13:38 sophisticated farms to, you know, this display of abundance and the display was really crucial.
    0:13:43 Since the average citizen living under communism wouldn’t have access to a piggly wiggly or
    0:13:48 an A&P, the U.S. government brought the supermarket to the communists.
    0:13:54 The 1957 supermarket USA exhibit in Zagreb, Yugoslavia, which was then a communist country.
    0:13:59 It was a fully operational 10,000 square foot American supermarket filled with frozen
    0:14:02 foods and breakfast cereals and everything else.
    0:14:06 They airlifted in fresh produce from the U.S. because they didn’t think Yugoslavian produce
    0:14:08 was attractive enough.
    0:14:13 It was about this display of affordable abundance available to American consumers.
    0:14:18 For anyone who didn’t get the message, there was also a sign touting, quote, “The knowledge
    0:14:21 of science and technology available to this age.”
    0:14:26 In other words, if you like our breakfast cereal, just think how much you like the rest
    0:14:27 of our capitalism.
    0:14:31 There were quite a few people who thought that if you showed that American consumers
    0:14:38 could access affordable food, you know, strawberries in December without having to wait in line,
    0:14:41 that that might actually cause the whole communist system to collapse.
    0:14:45 The supermarket USA exhibit proved tremendously popular.
    0:14:48 More than one million Yugoslavs visited.
    0:14:51 Some received free bags of American food.
    0:14:55 Immediately after seeing it, Marshall Tito, the leader of the country at the time, ordered
    0:14:57 the whole thing to be purchased.
    0:15:01 And it was bought wholesale from the United States exhibitors and used as a model.
    0:15:06 They hired a consultant from an Atlanta supermarket firm to come over and teach them how to build
    0:15:10 their own chain of socialist supermarkets.
    0:15:15 So Yugoslavia, along with other European countries, started building American style supermarkets,
    0:15:20 which created new buyers for processed and frozen foods from America.
    0:15:26 This did not, however, lead to a wider embrace of American culture, much less the downfall
    0:15:28 of communism.
    0:15:32 But just a couple years later, the Americans took another shot this time in Moscow at the
    0:15:35 American National Exhibition.
    0:15:41 They built a split level ranch style American house, its kitchen stocked with food and the
    0:15:44 latest labor saving appliances.
    0:15:45 The message was clear.
    0:15:51 The American economy, based in free market capitalism, was capable of producing things
    0:15:56 that the Soviets command and control economy simply couldn’t.
    0:16:02 The exhibition opening was attended by Nikita Khrushchev and then U.S. Vice President Richard
    0:16:03 Nixon.
    0:16:06 They engaged in what came to be known as the kitchen debate.
    0:16:08 You must not be afraid of ideas.
    0:16:27 Richard Nixon and Nikita Khrushchev are two of the most explicit users of this Cold War
    0:16:29 Farms Race language.
    0:16:34 Khrushchev declared that by outproducing the U.S. in per capita meat and milk production
    0:16:40 that would be the Soviet equivalent of hitting American capitalism with a torpedo.
    0:16:43 Nixon retorted that if there was going to be a torpedo fired, it was going to be by America’s
    0:16:48 farmers and ranchers to which the farmers and ranchers listening to his speech applauded
    0:16:49 very mightily.
    0:16:54 A few months afterward, Khrushchev finally visited the U.S. and he got to see for himself
    0:16:57 the sprawling cornfields of Iowa.
    0:17:01 But this was of little help to the Soviet farmers back home.
    0:17:10 The fact is they were unable to modernize Soviet agriculture with the economic structure
    0:17:12 and strategy that they were following.
    0:17:15 The economist Peter Timmer again.
    0:17:18 It was not a technological problem.
    0:17:21 It was a management and marketing problem.
    0:17:27 There was a total divorce between what consumers wanted and what the managers of the big state
    0:17:29 farms were told to produce.
    0:17:34 Before it was part of a World Bank team that visited the Soviet Union, he saw for himself
    0:17:37 their agricultural system and supermarkets.
    0:17:38 Oh gosh.
    0:17:40 I mean, the shelves were empty.
    0:17:42 It was just weird.
    0:17:48 We stayed at a government hotel and there was hardly anything to eat to talk with the
    0:17:54 staff of the research agencies in places like that who would struggle just to come up with
    0:17:56 basic foods.
    0:17:58 They knew it could be better than that.
    0:18:05 Khrushchev, despite his bravado, was ultimately forced to buy imported grain from the US.
    0:18:09 Some historians would argue that this was one of the crucial factors that led to his downfall,
    0:18:14 that it was just embarrassing on the world stage for the Soviet Union, this vast country
    0:18:20 with enormous agricultural resources having to turn to its arch enemy for grain.
    0:18:25 Khrushchev’s successor, Leonid Brezhnev, continued the policy of importing food from
    0:18:28 the US to cover domestic shortfalls.
    0:18:32 If the two countries had been normal trading partners, this wouldn’t have been a big deal,
    0:18:35 but they weren’t normal trading partners.
    0:18:41 They were Cold War adversaries, the global icons of capitalism and communism.
    0:18:45 And it was becoming clear which system would prevail, at least on the food front.
    0:18:48 Peter Timmer’s final analysis.
    0:18:54 It was a fundamentally failed strategy for agriculture that brought down the Soviet Union.
    0:18:56 They didn’t grow enough and they didn’t grow the right things.
    0:19:01 And there were no price signals telling you what’s expensive and what’s cheap.
    0:19:08 They wasted a lot of what they were producing on the land and never got into the supermarkets.
    0:19:12 Timmer was actually in Moscow when the Soviet Union collapsed.
    0:19:18 The neat thing is I have a passport going in stamped Soviet Union, but my passport coming
    0:19:21 out, the exit stamp, is Russia.
    0:19:27 People were so optimistic about what was going to happen.
    0:19:32 They knew that American supermarkets were a miracle.
    0:19:36 They had seen it on television.
    0:19:42 That point had clearly gotten through at least to everybody that I talked to.
    0:19:47 And so it seems as though the mighty supermarket may indeed have played a role in America’s
    0:19:48 Cold War victory.
    0:19:49 Yeah.
    0:19:55 I mean, this is, it’s central to the kind of lie really of the supermarket as a weapon.
    0:19:57 The historian Shane Hamilton again.
    0:20:03 So when the supermarket is upheld as this, you know, effectively missile this concrete
    0:20:10 consumer weapon against the claims of communism, it’s built on this idea that supermarkets
    0:20:14 are producing this affordability just through the workings of supply and demand.
    0:20:19 But you know, it’s unfettered markets that are somehow making food so affordable for
    0:20:26 American consumers where the reality is for everything from milk to beef to grain to processed
    0:20:33 foods of all kinds, there’s massive government investment in the science and technology that
    0:20:39 enables the productivity of American farms from fertilizers to frozen food processes
    0:20:42 to distribution and so forth.
    0:20:44 And that’s all erased.
    0:20:48 The image is that it’s just the supermarket itself that is the source of abundance.
    0:20:52 So when you describe it like that, it’s certainly, I mean, you use the word lie and you talk
    0:20:56 about the hidden components and you make it certainly sound nefarious.
    0:21:01 But couldn’t you argue that, you know, the role of a government is to invest in science
    0:21:06 and technology that’ll benefit private industry and ultimately the citizenry?
    0:21:07 Yeah.
    0:21:10 I actually don’t have a problem with the U.S. government investment in science and
    0:21:14 technology and encouraging, you know, more productivity.
    0:21:20 The concern is with, you know, that being disguised as a free market when it’s not
    0:21:21 particularly free.
    0:21:25 I mean, taking that to a propaganda level and attacking another country for not having
    0:21:31 free markets, it’s just duplicitous, right?
    0:21:36 You may or may not be as disturbed as Shane Hamilton is by what he calls the duplicity
    0:21:41 of the U.S. government for promoting the supermarket as an emblem of free market capitalism.
    0:21:48 To me, the big question is this, what was the ultimate cost of this supermarket victory?
    0:21:53 What are the economic and political and health consequences of more than a hundred years
    0:22:00 of agriculture policy that encouraged industrialization, standardization and low prices?
    0:22:14 It’s coming up right after this.
    0:22:19 So the U.S. won the so-called farms race with an industrial approach to agriculture
    0:22:23 that was heavily influenced by government policy and funding.
    0:22:27 What were the long-term results of that victory?
    0:22:31 We need to go back about a hundred years to figure that out.
    0:22:35 That is on the advice of Ann Effland, the former USDA economist we’ve been hearing
    0:22:36 from.
    0:22:42 Effland thinks there’s one key event that really drove U.S. food policy.
    0:22:46 That is, production increases around World War I.
    0:22:49 Farmers expanded their production to meet wartime goals.
    0:22:53 And there were some price supports during that time that provided incentives for increased,
    0:22:57 especially wheat and pork and some of these other staple commodities.
    0:23:03 But there was no real planning for the aftermath after the increased demand and the price supports
    0:23:06 that are set up for war go away.
    0:23:11 And it left a number of farmers who had, in good faith, developed larger farms and more
    0:23:14 productive farms with very low prices.
    0:23:18 So after the war, farmers were producing more food than was necessary.
    0:23:22 Then came the Great Depression, the economist Peter Timmer.
    0:23:29 I mean, demand collapsed, but agricultural productivity did not.
    0:23:32 And what that meant was prices just collapsed.
    0:23:42 And so that so totally set the mind frame for U.S. agricultural policy.
    0:23:47 That’s when we see the beginning of real price policies for agriculture.
    0:23:52 Price policies for agriculture would take many forms over the ensuing decades, from
    0:23:55 crop insurance to loans and direct payments and many more.
    0:23:59 Now, you can understand why the government would want to make agriculture financially
    0:24:02 viable and remove some of the uncertainty.
    0:24:06 A national food supply is a pretty important thing.
    0:24:11 One key policy tool the government used was a price support system, guaranteeing farmers
    0:24:16 a certain minimum price for a specific crop at a specific time.
    0:24:20 There was an idea of something called parity, which was that the price should be such that
    0:24:25 it would give farmers the same purchasing power in comparison to workers and others
    0:24:29 in the economy that they had had before World War One.
    0:24:33 And that was the guideline for what those price support levels ought to be.
    0:24:38 But if you increase the price being paid without limiting the amount being produced,
    0:24:40 well…
    0:24:45 One of the problems with this is that it leads to a large surplus.
    0:24:50 This would leave the federal government to buy and store excess produce.
    0:24:55 In the early 1930s, when the U.S. government guaranteed farmers 80 cents per bushel of
    0:25:01 wheat, the government wound up buying and storing more than 250 million bushels.
    0:25:05 These things all take place in the context of their own times.
    0:25:10 Having policies that found a way to increase farm incomes in the 1930s, I think would be
    0:25:16 seen as a good thing, but there are also consequences of that over time as they get embedded.
    0:25:22 If you ever wonder why the USDA’s old food pyramid, the diagram of recommended servings
    0:25:28 of different foods, why the biggest category at the bottom of the pyramid was bread, cereal,
    0:25:34 rice, and pasta, well, the U.S. had an awful lot of all those foods.
    0:25:41 And if you, as the USDA instructed, there’s a good chance you put on a few pounds.
    0:25:45 You can’t think about nutrition without thinking about agriculture policy.
    0:25:50 And U.S. agriculture came to be driven by financial incentives.
    0:25:56 Incentives that, given how government funding often works, weren’t always entirely sensible.
    0:26:06 You know, economists who don’t do U.S. agricultural policy are usually horrified by what they
    0:26:15 see in terms of distorting markets, picking, okay, corn, soybeans, wheat, you guys get
    0:26:23 big subsidies, apples, grapes, fresh fruits and vegetables, you’re on your own.
    0:26:29 We incredibly regulated both federally and at the state level just a mess, just an awful
    0:26:30 mess.
    0:26:36 With price guarantees for certain crops and the resultant glut of supply, the government
    0:26:41 sometimes paid farmers to plant fewer crops, but even this wasn’t fully successful.
    0:26:46 So we have controls on how much can you plant on an acre, but not on how much your yield
    0:26:49 is on the acres you are planting.
    0:26:50 There’s a huge boom.
    0:26:55 Lots of new chemicals, fertilizers, machinery that make farms more productive.
    0:27:00 So even though we’re trying to control by reducing the acreage, there continues to be
    0:27:04 increasing production and surpluses don’t go down.
    0:27:11 But Anne Eflin says this was a problem the USDA wasn’t all that unhappy about.
    0:27:16 Problem solving on the scientific and technical and engineering side tends to run on its own
    0:27:19 track and be seen as a positive outcome.
    0:27:25 I don’t think there’s ever a point at which the policy side is saying, “Oh, stop providing
    0:27:30 good science and better agricultural practices so we don’t have these surpluses,” because
    0:27:35 when you do that, what you’re saying is then stop this economic development.
    0:27:43 Solving problems and making farming more efficient are still seen as good projects to continue.
    0:27:49 The fact that they also create these surpluses is sort of a different track of problems that
    0:27:53 the farm policy then is trying to figure out solutions to.
    0:27:59 One solution was to use surplus grain for animal feed.
    0:28:00 Shane Hamilton again.
    0:28:06 This massive surpluses of cheap corn and later soybeans encourages the rise of industrial
    0:28:14 meat production, concentrated animal production, livestock feeding operations that’s enabled
    0:28:16 by cheap grain production.
    0:28:21 Industrial meat production fueled by cheap grain meant cheap meat too, and helps explain
    0:28:26 how the U.S. became one of the world’s biggest consumers of meat per capita.
    0:28:34 Today, more than 30% of corn, more than 50% of soybeans grown in the U.S. goes toward
    0:28:36 feeding cattle and other livestock.
    0:28:39 But even that left a lot of surplus production.
    0:28:41 So, what happened?
    0:28:49 High fructose corn syrup, yep, you’ve got surplus corn and you’ve got a demand for easy
    0:28:55 convenient sweetener in the food sector, and that was just a perfect storm.
    0:29:01 That syrup revolutionizes food processing because instead of a powdery sweet thing,
    0:29:06 it’s a liquid, and liquids are way easier to handle in food processing.
    0:29:12 If I had only one thing to say about the impact of our agricultural programs on what you see
    0:29:18 in the supermarket and subsequent health issues out of the diet, I would have said the fact
    0:29:24 that we use so much high fructose corn syrup, that’s the example of how things can go badly
    0:29:26 wrong even if well intended.
    0:29:33 I mean, don’t get me started on ethanol, because that’s the next step in reducing
    0:29:39 the surplus, but I don’t want to go there.
    0:29:45 The rise in agricultural productivity tended to favor larger, more industrial farms.
    0:29:50 It didn’t hurt that they often received the government price supports designed for smaller
    0:29:51 family farms.
    0:29:56 As you can imagine, this began to put a lot of small farms out of business.
    0:30:04 We didn’t manage that process very well, but I think just basic economic forces would
    0:30:06 have pushed us in that direction.
    0:30:08 It just wouldn’t have pushed us as far.
    0:30:13 Peter Timmer, you will recall, grew up working on the tomato farm and cannery founded by
    0:30:15 his great-grandfather.
    0:30:19 You’ll also recall when the Tip Top Canning Company got their first mechanical tomato
    0:30:21 harvester.
    0:30:24 It just revolutionized our operation.
    0:30:29 When the mechanical harvester was introduced, there were around 5,000 tomato growers in
    0:30:30 the US.
    0:30:35 Within five years, 4,400 had gone out of business.
    0:30:40 The Timmer family farm and canning factory made the cut, and they lasted for decades.
    0:30:49 But between 1940 and 1969, 3.4 million American farmers and their families stopped farming.
    0:30:56 Right a few historians suggest that this all-out push to productivity killed the family farm,
    0:30:57 effectively.
    0:30:59 Shane Hamilton again.
    0:31:01 It’s hard to deny that.
    0:31:07 On the other hand, we don’t apply the same kind of metrics to industrial manufacturing,
    0:31:11 where similarly there’s been massive US government investment in science and technology to support
    0:31:14 economic growth and productivity.
    0:31:19 I’m sympathetic to those who see it as overall in that positive gain.
    0:31:23 However, the pain is real.
    0:31:28 Peter Timmer says this massive consolidation on the production side was driven by what
    0:31:34 was happening on the consumption side, the growth of supermarket chains.
    0:31:39 Supermarkets were able to manage the supply chains all the way back to farmers, but they
    0:31:41 didn’t want little tiny farmers.
    0:31:43 Just one supplier please.
    0:31:47 It’s just way too complicated to contract with 50 or 100.
    0:31:54 That has changed then the nature of production, right down at the level of Tip Top Canning
    0:32:02 Company and how we would be able to provide the kind of regular quality and supply and
    0:32:07 low price that a Walmart or a Kroger or a Publix would need.
    0:32:12 I mean, Walmart really came in and looked at the landscape of American supermarkets and
    0:32:15 saw inefficiencies everywhere.
    0:32:21 What Walmart did was build on its successful model of general merchandise sales with hyper-efficient
    0:32:26 logistics and distribution, brought that into the supermarket industry and really shook
    0:32:27 things up.
    0:32:34 I used to ask my class, I’m talking 1985, where is the world’s largest supercomputer?
    0:32:37 And the correct answer was, it’s at the Pentagon.
    0:32:42 Okay, where is the world’s second largest supercomputer?
    0:32:51 Bentonville, Arkansas, home of Walmart, they used that computer to track every single item
    0:32:55 on every single Walmart shelf.
    0:33:04 That information technology is what revolutionized food marketing and it was pretty much invented
    0:33:06 by Walmart.
    0:33:12 This technology would spread across the world, affecting not just the demand side, supermarkets,
    0:33:14 but the agriculture supply side.
    0:33:21 So the U.S. experience is formative and it’s formative for two reasons.
    0:33:31 One, U.S. universities train so many ag economists, food scientists, food policy people to go back
    0:33:37 to other countries that the U.S. model is pretty well ingrained intellectually.
    0:33:47 But the other thing, of course, is the biological and mechanical technologies mostly came out
    0:33:49 of the United States.
    0:33:53 Another consequence of the scaling up of American agriculture?
    0:33:55 More standardization and less variety.
    0:34:01 So apples, in the early 20th century, consumers in say New York state would have access to
    0:34:05 literally hundreds of varieties.
    0:34:10 Even in mass retail markets, by the mid 20th century, it’s down to just a handful and red
    0:34:13 delicious really dominates the whole market.
    0:34:18 And apples became remarkably tasteless by the mid 20th century.
    0:34:24 So certain qualities were given up in order to gain that advantage of price and abundance.
    0:34:31 We clearly won the food wars in terms of supply and abundance.
    0:34:34 We won the abundance war.
    0:34:44 What we may be in the process of losing is the health and quality dimensions going forward.
    0:34:50 I think today we’re certainly witnessing, perhaps especially among millennials, an attempt
    0:34:54 to kind of reconfigure values.
    0:34:58 What are you actually looking for when you go to a supermarket?
    0:34:59 It’s not just price.
    0:35:06 Price does not contain all relevant information for many shoppers in a contemporary supermarket.
    0:35:12 So the costs of pollution, of degraded animal welfare that are currently not being borne
    0:35:17 by either producers or consumers of food would have to be borne.
    0:35:25 If we had worried much, much more about the quality of farmland, of sustainability, about
    0:35:31 environmental side effects from heavy fertilization on corn, we got a dead zone in the Gulf of
    0:35:37 Mexico that is directly attributable to putting fertilizer on corn up in the Midwest.
    0:35:42 I accused my brothers of poisoning the Gulf of Mexico, and they said, “Well, what are
    0:35:43 we going to do?
    0:35:45 We have to get high yields.”
    0:35:52 There was this sense of everybody being trapped in an old paradigm, and now how do we break
    0:35:53 out of that?
    0:35:57 I hate to say it, but the current government seems to be trying to take us back to the
    0:36:03 old paradigm rather than a more sustainable, environmentally friendly, let’s make agriculture
    0:36:05 do more on organic and natural processes.
    0:36:10 That doesn’t seem to be the political driver right now, but it has to come back.
    0:36:20 We have to make agriculture green, which is a strange thing to say.
    0:36:25 Peter Timmer has seen a lot of change in the farming business over his lifetime, and who
    0:36:29 knows, maybe he’ll see the change he’s hoping for now.
    0:36:34 But it’s going to be hard to break the status quo, at least in terms of how financial incentives
    0:36:36 drive food production.
    0:36:40 For instance, when the first Trump administration placed billions of dollars of tariffs on
    0:36:46 Chinese imports starting in 2018, China responded with their own tariffs on imported American
    0:36:50 crops like soybeans, alfalfa, and hay.
    0:36:56 American crop exports to China fell dramatically, as did, of course, farmers’ revenues.
    0:37:02 In response, the U.S. government announced a $16 billion welfare package to U.S. farmers.
    0:37:07 That was followed by more farm aid tied to the COVID-19 pandemic.
    0:37:13 Together, the Trump and Biden administrations have authorized over $157 billion in direct
    0:37:16 government payments to farmers and ranchers.
    0:37:21 And now Trump is promising more tariffs in his second term, which means the cycle may
    0:37:29 start again.
    0:37:30 And that’s it for this bonus episode.
    0:37:34 From our archive, we will be back shortly with a new episode.
    0:37:36 Until then, take care of yourself.
    0:37:40 And if you can, someone else too.
    0:37:42 Freakonomics Radio is produced by Stitcher and Renbud Radio.
    0:37:46 You can find our entire archive on any podcast app.
    0:37:51 It’s also at Freakonomics.com, where we publish transcripts and show notes.
    0:37:55 This episode was produced by Matt Hickey and updated by Theo Jacobs.
    0:38:00 Freakonomics Radio network staff also includes Dalvin Aboulagi, Alina Cullman, Augusta Chapman,
    0:38:05 Eleanor Osborne, Ellen Frankman, Elsa Hernandez, Gabriel Roth, Greg Rippon, Jasmine Klinger,
    0:38:10 Jason Gambrel, Jeremy Johnston, John Snars, Muirak Bowditch, Morgan Levy, Neil Carruth,
    0:38:14 Rebecca Lee Douglas, Sarah Lilly, and Zach Lipinski.
    0:38:20 Our theme song is “Mr. Fortune” by the Hitchhikers, and our composer is Luis Guerra.
    0:38:23 As always, thank you for listening.
    0:38:28 When I was a Fulbright scholar and had to explain myself to the cohort when we got to
    0:38:32 London, I said, “Well, my background is tomatoes,” and everybody just laughed.
    0:38:48 I hadn’t realized that it was not such a normal background.
    0:38:49 Stitcher.
    0:38:52 (upbeat music)
    0:39:02 [BLANK_AUDIO]

    Last week, we heard a former U.S. ambassador describe Russia’s escalating conflict with the U.S. Today, we revisit a 2019 episode about an overlooked front in the Cold War — a “farms race” that, decades later, still influences what Americans eat.

     

    • SOURCES:
      • Anne Effland, former Senior Economist for the Office of Chief Economist in the U.S.D.A.
      • Shane Hamilton, historian at the University of York.
      • Peter Timmer, economist and former professor at Harvard University.
      • Audra Wolfe, writer, editor, and historian.

     

     

  • 614. Is the U.S. Sleeping on Threats from Russia and China?

    AI transcript
    0:00:08 Hey there, it’s Stephen Dubner. Before we get to our episode, I’d like to invite you
    0:00:14 to come see Freakonomics Radio Live. I will be in San Francisco on January 3rd and in
    0:00:20 Los Angeles on February 13th. For tickets, go to Freakonomics.com/LiveShows. They are
    0:00:29 selling riskily, I believe is the word, so hustle up. Again, that is Freakonomics.com/LiveShows.
    0:00:34 One more thing, the episode you’re about to hear is what audio people call a two-way,
    0:00:40 what normal people call a one-on-one conversation. Most Freakonomics Radio episodes aren’t like
    0:00:46 this. We typically feature multiple voices, multiple angles, sometimes even multiple stories,
    0:00:52 but there is a real opportunity to be had by going deep with one person. So, for the month
    0:00:56 of December, we are featuring some one-on-one conversations. You will be hearing about the
    0:01:01 revolution in the GLP-1 weight-loss drugs. You’ll hear from one of the best magazine
    0:01:08 editors of this generation. And in a special episode of the podcast “People I Mostly Admire,”
    0:01:12 you’ll hear a mind-blowing conversation between Steve Levitt and an astonishingly creative
    0:01:19 neuroscientist. In today’s episode, a conversation with a political figure who, several times
    0:01:25 over his career, has been in the room where it happened with Donald Trump, with Joe Biden,
    0:01:31 and with Vladimir Putin. And one last reminder about our upcoming live shows with very special
    0:01:42 guests. San Francisco, January 3rd, Los Angeles, February 13th. You can get tickets at Freakonomics.com/LiveShows.
    0:01:50 As always, thanks for listening.
    0:01:55 We begin this story on June 16th of 2021.
    0:02:01 This is a one-on-one meeting in Geneva, nothing else going on. Both presidents fly in just
    0:02:02 for this meeting.
    0:02:06 The two presidents are Joe Biden and Vladimir Putin.
    0:02:13 So let me set the scene for you. For Biden, he has, I think, five days of meetings before
    0:02:20 this in London and Brussels, G7, NATO leaders, etc. Biden looks great, he flies in. Putin
    0:02:30 flies in. He’s coming from Moscow. He lands. He looks great, physically. Was relaxed. Cracking
    0:02:34 jokes. Some of them at our expense.
    0:02:38 The one-on-one meeting isn’t truly a one-on-one. It’s what State Department folks call a one-plus
    0:02:46 one. It’s Biden, with Secretary Blinken sitting next to him, but not speaking. Putin and his
    0:02:50 foreign minister, Lavrov, sitting next to him.
    0:02:52 The timing was significant.
    0:02:58 It’s been a rocky spring between the United States and Russia. We expel some Russian diplomats.
    0:03:05 They expel some of my colleagues from embassy Moscow. Biden calls Putin a killer. Navalny
    0:03:06 is imprisoned.
    0:03:10 The one-plus one would be followed by a second meeting.
    0:03:15 They have what’s called an expanded bilat, an expanded bilateral meeting. Those of us
    0:03:20 who were going into the expanded bilat, there was a break. Secretary Blinken told us what
    0:03:24 the two leaders had talked about in the one-on-one meeting.
    0:03:26 What did they talk about?
    0:03:31 Biden gave a reassurance to Putin, look, I’m not looking for regime change in Russia. We’re
    0:03:37 looking for the phrase that was used at the time was guardrails for our relationship with
    0:03:38 Russia.
    0:03:42 And what did Biden and Putin talk about in that second meeting?
    0:03:49 The headline is, what did they not talk about? Ukraine. I look back now and I say, the way
    0:03:57 Putin conducted himself, he had decided he was going to invade Ukraine. He was going
    0:03:59 to take what he thought was his.
    0:04:06 As we all know, Putin did invade Ukraine several months after that sit-down. Today, on Freakinomics
    0:04:11 Radio, a conversation with John J. Sullivan, a lifelong Republican who has served under
    0:04:16 five U.S. presidents, including Donald Trump and Joe Biden, Sullivan happened to be on
    0:04:23 duty in Moscow as U.S. ambassador during the 2022 invasion of Ukraine. He’s just published
    0:04:29 a book called Midnight in Moscow, a memoir from the front lines of Russia’s war against
    0:04:37 the West. It reads a bit like a thriller, spies and subterfuge threats and bluffs enormously
    0:04:44 high stakes. The bulk of the book explains from inside the house the Russian Federation’s
    0:04:49 decision to escalate its war in Ukraine. It is a train wreck that you can’t look away
    0:04:56 from. And it left John Sullivan thinking that U.S. foreign policy these days is a bit of
    0:04:57 a mess.
    0:05:01 Our politicians aren’t leading Republicans or Democrats.
    0:05:09 He sees frequent miscalculations. If you think cutting off Ukraine is going to assist your
    0:05:16 pressure campaign on Iran, you’re crazy. And he sees multiple flashpoints. These are
    0:05:24 countries governed by leaders and governments that are immensely hostile to the United States.
    0:05:31 In the book, Sullivan isn’t quite an alarmist, but in conversation, different story.
    0:05:37 There may not be a Pearl Harbor-like incident, but my fear is that it’s going to come and
    0:05:39 we’re not prepared.
    0:05:43 I learned a great deal from this conversation with John Sullivan, and I suspect you will
    0:05:56 too. Let’s get it started.
    0:06:02 This is Freakonomics Radio, the podcast that explores the hidden side of everything with
    0:06:12 your host, Stephen Dubner.
    0:06:16 John Sullivan now splits his time between Washington, D.C. and Connecticut. He grew
    0:06:22 up in Boston, attended Brown University, and then Columbia Law School, and launched a
    0:06:29 perfectly respectable, but if we’re being honest, slightly dull career as a corporate
    0:06:35 lawyer. There were already a lot of lawyers in his family, even a family law firm in Providence.
    0:06:41 But there was also an uncle, Bill. He was a combat naval officer during World War II,
    0:06:44 and afterward he joined the Foreign Service.
    0:06:49 He was a three-time ambassador. He served in Saigon during the early part of the Vietnam
    0:06:55 War, ambassador of the Philippines, and then the last U.S. ambassador to Iran.
    0:06:58 This had made an impression on his nephew.
    0:07:05 He’s a young kid. I remember just being hooked on this conception of public service. Don’t
    0:07:11 get me wrong. It’s not an easy life. It’s hard on family life, but boy, the rewards
    0:07:17 are fantastic. Serving the United States abroad and standing for the United States
    0:07:23 and all that we aspire to stand for and seeing the American flag flying over a mission in
    0:07:26 a country like Russia, it’s really gratifying.
    0:07:30 Sullivan has spent the past several decades toggling between corporate law and government
    0:07:35 service. He worked in the Justice Department under the First President Bush, and in commerce
    0:07:41 and defense under the Second Bush. In 2016, he was back in private practice when Trump
    0:07:47 was elected. I was as surprised as many were, he writes in his book. I was not an active
    0:07:51 Trump supporter, but I did still believe in Ronald Reagan’s famous 11th commandment,
    0:07:56 “Thou shalt not speak ill of any fellow Republican.”
    0:08:01 Sullivan had voted for Trump with no thought that I would ever be invited to work in his
    0:08:06 administration, he writes. He adds that his wife, Grace, also a high-powered lawyer who
    0:08:11 has since died, had not voted for Trump and would not have been supportive if I were going
    0:08:17 to work for him at the White House. But it wasn’t the White House that called, it was
    0:08:22 the Defense Department. Secretary Jim Mattis wanted Sullivan as his general counsel, and
    0:08:29 that’s where Sullivan was heading until he got a better offer. Deputy Secretary of State
    0:08:36 under Rex Tillerson. That job he took, and when Tillerson was fired by Tweet after barely
    0:08:41 a year on the job, Sullivan became acting secretary. He reverted to deputy when Mike
    0:08:47 Pompeo took over as secretary. Sullivan liked Pompeo, and they worked well together. But
    0:08:55 that first Trump administration was an exercise in chaos. Nothing like its Republican predecessors,
    0:09:02 Sullivan writes, undisciplined and unconventional. So, when he learned that the U.S. Ambassador
    0:09:08 to Russia was resigning, Sullivan put himself up for the post. It’s hard to emphasize how
    0:09:14 unusual this was, trading in a high-status job in Foggy Bottom for a diplomatic post
    0:09:19 in Moscow. What did President Trump think of this move?
    0:09:24 He thought Secretary Pompeo wanted to get rid of me, and the look on his face said, “If
    0:09:28 that’s not the reason, then why would anybody in their right mind want to do that?”
    0:09:33 But Sullivan made it clear to Trump that no, he wasn’t getting fired by Pompeo. He was
    0:09:35 just ready for a new challenge.
    0:09:43 So that was my last conversation with him in August of 2019. Never spoke to him as ambassador.
    0:09:49 The last time I spoke to him was, he asked me if I really wanted to go to Russia. Did
    0:09:53 have a lot of interactions with him, though, as deputy secretary.
    0:09:56 And what were Sullivan’s impressions then?
    0:10:04 President Trump looks at our overseas relationships, entanglements, whatever you want to call it,
    0:10:10 looks at it purely from a transactional economic standpoint. If it makes sense for the United
    0:10:17 States economically, and he defines economically narrowly, and a lot of economists disagree
    0:10:21 with that, but Putin’s got a very similar outlook if you think about it.
    0:10:27 And so it was that John Sullivan gave up the chaos of Washington, D.C. for a new chaos
    0:10:32 in Moscow. Here’s how he puts it in his book, “I believed the Russian government did not
    0:10:37 want any physical harm to come to me while I was in Russia. On the other hand, the Russian
    0:10:43 government devoted a huge number of personnel and resources to try to annoy, provoke, criticize,
    0:10:46 frustrate, embarrass, and compromise me.”
    0:10:51 I mean, I knew what the Russians were about because I’d been deputy secretary of state
    0:10:58 for three years. What I saw when I went there, it was a government different from any other
    0:11:07 government I dealt with before. Their characterization of us as an enemy, they are at war with us.
    0:11:12 And we in the United States, and particularly in Washington, it’s hard to get people to
    0:11:20 really believe it, including at the State Department. We in Moscow at Embassy Moscow would be looking
    0:11:27 for support for reciprocity. If the Russians did something to our mission, we’d be looking
    0:11:33 for Washington to give a little payback to the Russian side. The response, well, geez,
    0:11:40 that’s really kind of nasty. We’d never do, I’m like, you have no idea what we’re dealing
    0:11:49 with here. That’s my message. We don’t understand how different these governments in Moscow
    0:11:58 and Beijing are from us with leaders that are willing to use military force.
    0:12:04 When Donald Trump was first elected in 2016, he spoke warmly of Vladimir Putin. If Putin
    0:12:11 likes Donald Trump, I consider that an asset, not a liability. By the time John Sullivan
    0:12:17 got to Moscow in early 2020, things had changed. The Trump administration had imposed a variety
    0:12:23 of sanctions on prominent Russians and on Russia itself. One sanction came after a Russian
    0:12:29 malware attack on US financial institutions, another after attempted Russian interference
    0:12:36 in the 2018 US elections. Trump included more sanctions in a 2019 executive order in response
    0:12:42 to a Russian assassination attempt in Salisbury, England. The target was a former Russian spy
    0:12:47 who was exposed to a nerve agent that had been applied to his front door. He survived,
    0:12:52 but a British civilian died when she reportedly sprayed herself with perfume containing the
    0:12:58 same nerve agent. Her boyfriend had found it in a collection bin. In addition to imposing
    0:13:04 these sanctions on Russia, the Trump administration had been backing Ukraine as it faced increasing
    0:13:10 Russian aggression. This was a few years after Russia annexed Crimea and started backing
    0:13:16 Russian separatists in the Donbass region of Ukraine, but it was a couple years before
    0:13:22 Russia’s full-scale invasion of Ukraine. Then, in 2020, Trump lost the election to
    0:13:29 Joe Biden. John Sullivan was asked by the Biden administration to stay on as their man
    0:13:35 in Moscow. Biden announced that the US would be pulling out of Afghanistan.
    0:13:42 Biden, always skeptical, going back to his days as vice president in the Obama administration,
    0:13:49 skeptical of the US being a presence in Afghanistan, he decides in the spring we’re getting out.
    0:13:56 He’s following through on the plan that had been negotiated in the Trump administration.
    0:14:03 He says, “We’re out by September 11th. 20 years from the attack on September 11th, 2001,
    0:14:08 we’re out of Afghanistan.” And this brings us back to that meeting in Geneva between
    0:14:15 Biden and Putin. It’s the summer of 2021. It’s been a rocky spring between the United
    0:14:20 States and Russia. This was only the second time that Putin and Biden had met face-to-face.
    0:14:26 The first was in 2011, when Biden was vice president under Barack Obama. After that meeting,
    0:14:32 Biden had said that Putin had no soul. And now recently, as president, Biden had called
    0:14:38 Putin a killer. Like John Sullivan said, it had been a rocky spring.
    0:14:43 By the way, the Russians are increasing their troop presence in Southwestern Russia, threatening
    0:14:54 an invasion of Ukraine. And out of it all, Biden suggests a meeting with Putin in Geneva.
    0:15:03 Good note, in April, after Biden called Putin a killer, Putin withdrew his ambassador from
    0:15:10 the United States. And the Russian government said to me, “You need to go home too.” I
    0:15:16 said, “Are you declaring me persona non grata? Are you expelling the U.S. ambassador?” And
    0:15:20 they said, “Oh, God, no. But you do need to go home because no one is going to talk
    0:15:26 to you.” Putin said this at one of his phone calls during this period with Biden. He said,
    0:15:29 “You should bring your ambassador home because he’s going to have nothing to do because no
    0:15:33 one will talk to him.” Biden says, “Let’s meet.” Putin agrees.
    0:15:38 So they meet in Geneva at an 18th-century villa. People asked me, you know, what was
    0:15:44 Biden like? Was he healthy? Was he with it? Biden shows up in Geneva and he looked great.
    0:15:51 I mean, he looked like a healthy man in his late 70s. I did not see any of the decline
    0:15:58 which was then obvious a few years later. So the meetings, there were two meetings.
    0:16:04 We heard about this earlier, the one-plus-one and then the expanded bilateral meeting. John
    0:16:09 Sullivan was in that second meeting. And what did the U.S. want out of this meeting?
    0:16:16 I got the sense both under the Trump and Biden administrations, we want to pivot to Asia,
    0:16:22 make this Russia problem go away, tell them to put a sock in it, put this guy, Progosian,
    0:16:30 in a cage. Just calm down, calm, right? We and you can move on to bigger and better things.
    0:16:35 And what was your impression of that message? Well, with the benefit of 2020 hindsight, let
    0:16:41 me tell you what I saw. In the expanded bilateral meeting, they spent more time talking about
    0:16:48 Afghanistan than they did Ukraine. Biden’s asking for the Russians not to oppose the
    0:16:54 U.S. having a counterterrorism presence in Afghanistan. This will help Russia. We’re
    0:17:01 going to keep al-Qaeda, the Taliban, we want to keep them under wraps. And that helps Russia.
    0:17:06 We will cooperate with you. That sounds like a pretty smart ploy, right? Let’s create a common
    0:17:11 enemy team up on this. We’ll get over our differences and move on. If you were dealing
    0:17:16 with a normal country and a normal leader and you’re not, so what does Putin do? Putin says,
    0:17:24 “Okay, well, we’re not a big fan of that, but just spitballing here. Maybe we’ll let you share
    0:17:32 our 201st base in Tajikistan, which is right on the border with Afghanistan.” That is a huge
    0:17:40 Russian military base in Central Asia, one of their key military installations. This is not
    0:17:47 some little counterterrorism intel monitoring. This is a big, important Russian military facility.
    0:17:55 Putin says it. I’m sitting directly across from Colonel General Gerasimov, who is not KGB-trained.
    0:18:04 His eyes widened and he sort of gasped a little bit like, “Whoa.” And it’s clearly a joke. Putin
    0:18:09 starts to chuckle. Did Biden take it as a joke? So Biden is, we’re all on our side like, “What the
    0:18:16 heck?” And then his foreign minister Lavrov is talking about something else. Putin interrupts him,
    0:18:23 puts his hand over Lavrov’s mouth and looks at Biden and says, “Be careful negotiating with this
    0:18:30 guy. He’s Armenian.” It’s an ethnic joke, right? It’s like he’s going to fleece you. He’ll pick your
    0:18:40 pocket. He’s Armenian. He chuckled and how loose he was. This is not a man who sat down and said,
    0:18:48 “I’ve got a serious problem in Ukraine that’s threatening the existence of my country.
    0:18:54 Let’s talk, buddy.” But fast forward, in November, that was his position.
    0:18:59 So listening between the lines to you now, John, and please correct me if I’m wrong,
    0:19:04 at that meeting in Geneva, the US was getting ready to pull out of Afghanistan. That ended up
    0:19:12 happening in August of 2021. And then Russia ends up going into Ukraine about six months after in
    0:19:18 February of 2022, correct? Correct. So listening between the lines, what I hear is that Putin is
    0:19:23 sizing up Biden here and saying, “Well, he’s not very substantial. He doesn’t seem to have much
    0:19:31 of a plan or a spine. And therefore, I’m going to take this meeting. We’ll joke a bit. I’ll tease
    0:19:35 him a bit. I’ll see how he pushes back. Sounds like he doesn’t push back very much.” And it
    0:19:40 sounds as though you’re saying that even though Putin had decided long ago that he would be going
    0:19:46 into Ukraine hard with force, that this meeting, if nothing else, assured him that he wasn’t going
    0:19:51 to get a lot of trouble from the US. Is that right? I would quibble. I think it’s unfair to Biden.
    0:19:56 I think Biden, and he said this in his press conference after the meeting in Geneva, he said,
    0:20:03 “Look, I’m giving this guy one last chance. Can we stabilize this relationship?”
    0:20:06 But isn’t that a little bit like telling your seven-year-old, “Listen, you’ve got one more
    0:20:12 chance to put down the paint?” After the meeting, they did back-to-back press conferences.
    0:20:18 The first question that’s asked by Russian state media, so this is Putin asking himself the question,
    0:20:24 “What did you talk about the most important issue for all of Russia is Ukraine? What did
    0:20:28 you discuss with Biden about Ukraine?” And Putin says, “Well, really didn’t come up that much.”
    0:20:33 Biden said he wants Ukraine to enforce the Minsk agreements, and if that’s his view,
    0:20:37 that’s productive, but we really didn’t talk about it. But let’s talk about Afghanistan and
    0:20:42 how that factors in, because some people make the claim once Putin saw Afghanistan—
    0:20:44 But that was the green light.
    0:20:50 No, no, no, no, no. He decided to do this long ago. What I will say is, in criticism,
    0:20:59 I clued myself in this. As I look back, maybe he had decided, but he hadn’t yet pulled the trigger.
    0:21:06 Could we have stopped him? I think Afghanistan was the nail in the coffin. The withdrawal
    0:21:16 is underway while we’re meeting in June. What really has an impact is the calamity that starts
    0:21:25 in July and then into August. The culmination is the terrorist attack on the 26th of August,
    0:21:30 and then the missile strike that killed 10 innocent Afghans.
    0:21:31 The US missile strike.
    0:21:37 The missile strike. One of Putin’s most senior and important advisors, a guy named
    0:21:42 Nikolai Patreshov, he gives an interview, again, to Russian state media in Russian,
    0:21:52 directed to Ukraine. He says, “I have no idea why you people think it’s in your interest to
    0:22:00 associate with the United States and its vassals. Look what they’re doing to their major non-NATO
    0:22:07 ally in Kabul. Do you think they’re going to defend you? Absolutely not. You’re crazy. We’re
    0:22:15 your Slavic sisters and brothers. Why are you shunning us looking for protection from this
    0:22:23 feckless North American giant who goes around the world and creates wars and problems and then
    0:22:28 leaves disasters in its wake? Look what they’re doing in Afghanistan.”
    0:22:34 Donald Trump said during this campaign, the 2024 campaign, he said Russia would not have
    0:22:39 invaded Ukraine if he had been president. I’m curious what you make of that claim generally.
    0:22:47 That’s just as wrong as it can be. Putin is going to achieve his aims in Ukraine,
    0:22:54 which he and everyone who speaks for his government have said consistently since the day the special
    0:23:02 military operation began. February 24th, 2022, we’re going to denazify and demilitarize Ukraine.
    0:23:11 He was going to achieve those means either by Ukrainian capitulation or by what the Russians
    0:23:19 call military technical means, which is an invasion. Maybe if Trump had been reelected
    0:23:27 instead of Biden winning in November 2020, if he had changed course, stopped supporting Ukraine,
    0:23:32 maybe Ukraine would have had a capitulate. Putin was going to accomplish his war aims
    0:23:38 by hook or by crook, by capitulation or by invasion. So what I say particularly to my
    0:23:44 Republican friends, okay, you don’t support Ukraine. What’s your Russia policy? If your
    0:23:51 Russia policy starts with cutting off Ukraine, not only is your Russia policy going to fail,
    0:23:59 but if you think cutting off Ukraine is going to assist your pressure campaign
    0:24:07 on Iran, you’re crazy. And oh, by the way, how is this going to influence President Trump’s friend
    0:24:13 Little Rocket Man and Pyongyang and Xi in Beijing? And how would you say Trump’s winning the 2024
    0:24:19 election will affect Putin’s thinking and at least the short-term future for Putin and Russia?
    0:24:26 They’re celebrating Trump’s victory, but there are a fair number of people around Putin
    0:24:32 who say, wait a minute, let’s not get carried away. We remember what the first Trump administration
    0:24:37 was like. He wanted to have conversations in a relationship with Putin, but they imposed
    0:24:42 all these sanctions. The other thing they’re concerned about is Trump’s energy policy.
    0:24:48 What if it reduces dramatically the price of oil? That could have a bigger effect
    0:24:53 on the Russian economy than all the sanctions and export controls, which I support that the
    0:24:58 Biden administration has imposed. Could reduce the price of oil by producing much more in the US?
    0:25:05 Exactly, exactly. From the Russian perspective, it’s all about the price of oil. If that price of
    0:25:12 oil dips significantly, that affects their ability to continue to fund the war. There’s a political
    0:25:17 scientist at the University of Chicago, Robert Pape, who argues that these economic sanctions
    0:25:23 at the US levy is against Russia. Trump used sanctions, as did Obama before him and Biden
    0:25:29 after him. Pape argues that sanctions essentially don’t work, that they’re a nice fallback for
    0:25:35 folks like you, people in state, for ambassadors, et cetera, to feel like you’re doing something.
    0:25:41 What’s your view on that? That’s a great question. The obvious answer, and anyone who says anything
    0:25:48 different is just blinking at reality. Sanctions did not and will not, unless they’re much more
    0:25:57 vigorously enforced, influence Russia’s policies with respect to, you name it, Ukraine, Iran,
    0:26:04 North Korea, et cetera. A couple of things, though, they are necessary but not sufficient.
    0:26:10 It’s not as though, okay, well, then we should just continue to do business with Russia and forget
    0:26:15 that they committed a murder in Salisbury, England, an innocent woman, Don Sturgis.
    0:26:23 They sent an FSB colonel who committed a cold-blooded murder on the streets of Berlin, shot a person
    0:26:30 to death, a Chechen opposition leader, election interference, cyber. Are we then just supposed
    0:26:38 to ignore it? I think sanctions have had a significant impact on the Russian economy.
    0:26:45 The current prime lending rate in Russia is 21%. It reminds me a little bit of the United States
    0:26:52 in the ’60s and ’70s with the great society spending on Vietnam and the price the US economy
    0:26:58 pays in the ’70s and into the early ’80s is rampant inflation. That’s what Putin’s doing now.
    0:27:03 They’re pumping money into their defense industrial base. They’re paying off their own people,
    0:27:09 those who are being killed, their families, average Russians seeing pensions, salaries,
    0:27:14 et cetera, increasing because he doesn’t want to lose popular support. The Russian people
    0:27:18 in their economy, they’re going to pay a price for it. So he’s gritting his teeth
    0:27:23 and he’s going to accomplish his goals in the special military operation,
    0:27:28 but the Russian economy five, 10 years from now is going to pay the price.
    0:27:36 Coming up after the break, how does Vladimir Putin sell this story to the Russian public?
    0:27:45 I may be a peasant, but boy, I’m part of a special country with a special mission in the world.
    0:27:50 More from John J. Sullivan coming up. I’m Stephen Dubner and you are listening to Freakonomics Radio.
    0:28:06 John Sullivan was US ambassador to Russia from February 2020 until September 2022.
    0:28:12 So he was on duty when Russia launched what it called a special military operation in Ukraine.
    0:28:18 The rest of the world calls it a war. The war has lasted nearly three years and has killed tens of
    0:28:25 thousands on both sides. The US has invested in the Ukrainian cause significantly, but also
    0:28:32 cautiously. When it comes to poking a bear, the Russian bear is perhaps the worst bear to poke.
    0:28:37 Embassy Moscow was John Sullivan’s last government posting and he has since retired
    0:28:42 from the Foreign Service. I asked if he would accept a role in the new Trump administration.
    0:28:49 I can assure you that I will not be taking a role in the Trump administration as evidenced by the
    0:28:54 fact that two people I remain close with have been ruled out as potential candidates for a new
    0:28:59 administration, Mike Pompeo and Nikki Haley. I’m on that list, I’m afraid.
    0:29:05 For anyone old enough to remember or anyone who’s read some Russian history or literature,
    0:29:12 there is this deep sense of loss. This was a country and a culture full of brilliant writers,
    0:29:19 thinkers, artists, scientists, philosophers, a lot of dissidents too, of course, but it seems
    0:29:25 from the outside at least as though that history has been paved over entirely, that the Russian
    0:29:32 Federation of today bears no resemblance. It’s tragic. I went to Russia as an amateur Russell
    0:29:39 file for all the reasons you said. All live accomplished in science, technology, engineering,
    0:29:45 medicine, etc. During the pandemic, instead of working for the betterment of humankind,
    0:29:53 they’re falsely promoting their Sputnik V vaccine, which was never properly tested.
    0:29:59 It was seized by the Kremlin as an instrument to promote Russian nationalism. Look, we’re the
    0:30:06 best. That’s the Kremlin hijacking the strengths of the Russian people, whether it’s in science,
    0:30:13 technology, their religion, the Russian Orthodox Church is now an instrument, I’m sorry to say,
    0:30:23 of the Kremlin, of Putin. He has turned all of those strengths to his purpose of recreating this
    0:30:28 Russian Empire. There are a lot of Russian people who agree with him who are saying, “Ada boy,
    0:30:34 you go and do that for us.” You write about the famous idea that Putin really has three advisors,
    0:30:37 Ivan the Terrible, Peter the Great, and Catherine the Great.
    0:30:43 Correct. Other than his nostalgia for the Russian Empire, what are his goals, would you say?
    0:30:52 It’s not nostalgia. He is looking to recreate. There are a lot of ordinary Russians who lament
    0:30:59 the weakened state of their Russia. Just as hope is a powerful tool in the United States,
    0:31:08 that vision of empire, yeah, I may be a kulak, I may be a peasant here in Russia, but boy,
    0:31:15 I’m part of something big. I’m part of a special country with a special mission in the world.
    0:31:19 I don’t know if you’re a betting man, but given his position at this moment, given his
    0:31:25 accomplishments at this moment, and given the lack of ability of the US, the UN, and others to
    0:31:28 fight back, what do you think are his chances of achieving that goal?
    0:31:34 Well, he thinks he’s in, and it’s probably true in the short term, a better position than he was,
    0:31:43 say, in early 2023, roughly a year after the war had started, the Russian military had not just
    0:31:52 failed but been embarrassed. So things were really looking bad for him. In September of ’22,
    0:31:59 he had to order mobilization. It included some conscription, which was very unpopular.
    0:32:04 It’s a different world now, and it’s not just the election of Trump. It’s what’s happened in
    0:32:10 Berlin with the breakdown in the current coalition, Chancellor Schultz going to have to stand for
    0:32:17 reelection, and the Germans themselves, the German government, announcing that it’s not going to be
    0:32:23 providing as much support for Ukraine as it had earlier in the war. So from Putin’s point of view,
    0:32:29 things are a lot better now than they were a year or a year and a half ago.
    0:32:34 So John, I can imagine some Americans who didn’t vote for Trump listening to this and saying,
    0:32:37 you know, I don’t see much daylight between Trump and Putin.
    0:32:44 That’s a misunderstanding of who Putin is and what Putin does. It’s not rhetoric. It’s reality.
    0:32:54 Look, Donald Trump, when he gets confirmed on January 20th, 2025, at 12.01 p.m., he’s a lame duck.
    0:32:59 Now, he’ll have lots of influence. He’s got coattails, but he’s never running again,
    0:33:05 and the jockeying for who succeeds him is going to start. And, you know, he’s going to be limited
    0:33:14 by Republicans in the Senate. There are Republicans in the Senate, even with the 53-vote majority,
    0:33:20 who are, and I don’t know what the Secretary of Defense nominee would say if asked about,
    0:33:28 for example, the importance of our NATO alliance. But I guarantee you that any nominee who said
    0:33:34 we should withdraw from NATO would never get confirmed by a wide margin. The Putin-Trump
    0:33:42 analogy, I mean, that’s a vast overstatement. And that type of political rhetoric, in fact,
    0:33:49 undermines marshaling the American people and leading the American people to oppose Putin.
    0:33:53 But if Trump just wants to cut Ukraine loose, what’s to stop him?
    0:34:00 There are things he can do as Commander-in-Chief that Congress wouldn’t be able to stop. The
    0:34:07 military cooperation, the intelligence cooperation can all be cut off. If that happens, and more
    0:34:12 importantly, the American leadership that’s influenced the Europeans, if that goes away,
    0:34:20 how long can the Ukrainians hold out, then maybe this Russian special military operation after,
    0:34:25 you know, three years of failure, they accomplish what they originally set out to do
    0:34:30 on February 24, 2022. That’s certainly possible.
    0:34:37 But it sounds as though you have a substantial amount of hope that the constitutional separation
    0:34:38 of powers remains intact.
    0:34:44 Oh, absolutely. I guess the right way to characterize me as an institutionalist,
    0:34:50 and particularly the federal judiciary. I never traveled to the PRC when I was
    0:34:56 Deputy Secretary of State. I traveled there a lot 10, 12 years before when I was Deputy
    0:35:03 Secretary of Commerce. And what the Chinese government could not understand was they would
    0:35:10 never accept the concept of an independent judiciary. The idea that a single federal judge
    0:35:16 or a court of appeals or even nine justices on the Supreme Court could issue an order
    0:35:23 in, for example, a matter of national security that a court could order the president to do
    0:35:28 something and that he would have to do it. They could not believe that that would happen.
    0:35:34 So I do have faith. You know, people ask me all the time, you know, he’s going to stay
    0:35:37 after his term. He’s not going to stay after his term.
    0:35:41 This is Trump you’re talking about. But what makes you say that? Because he certainly
    0:35:42 tried last time.
    0:35:48 Well, he certainly tried last time, but he has, by the terms of the amended constitution,
    0:35:53 is limited to two terms. He says things off the top of his head. I’ve seen it in person
    0:35:59 that he knows can’t happen like that big beautiful wall on the southwestern border of
    0:36:05 the United States that was going to be paid for by Mexico. Trust me, he’s got one term left
    0:36:12 and that’s it. He’s 78 years old. What condition is he going to be in at the end of his term?
    0:36:13 Think about what happened to Biden.
    0:36:19 After the break, we hear about some worst case scenarios.
    0:36:22 I am not Winston Churchill and I hope I’m wrong.
    0:36:29 And some mildly encouraging news. I’m Steven Dubner. This is Freakonomics Radio. We will be right back.
    0:36:46 John Jay Sullivan, former State Department official and U.S. Ambassador to Russia,
    0:36:52 still has a lot to say about American foreign policy, especially when it comes to China or
    0:36:57 what he calls the PRC, the People’s Republic of China and, of course, Russia.
    0:37:04 There are no opposition leaders left in Russia. There literally is no independent media left.
    0:37:09 It is a police state just as the Soviet Union was, even more so.
    0:37:13 Let’s say that for whatever reason, Putin vanished tomorrow.
    0:37:17 What would happen? Who would be running the Russian Federation? What would that look like?
    0:37:21 Because you do make the argument that Putin has kept a lid on certain kinds of things.
    0:37:30 There are some, I believe, who have been urging him to use a tactical nuclear weapon in Ukraine,
    0:37:36 or maybe an unconventional weapon. I thought they might use a chemical weapon in Mariupol,
    0:37:42 the last holdout in southern Ukraine. So my answer to that question is,
    0:37:48 if Putin doesn’t wake up tomorrow, the war continues. The war is not unpopular.
    0:37:52 Once the war starts, the average Russian
    0:38:00 doesn’t want to see, as they call it, their boys slaughtered or lose in Ukraine.
    0:38:03 Given the state of Russian media, how much information do people get?
    0:38:08 Very little. And you have to work hard to get anything other than the state media.
    0:38:12 What they do see, though, is bodies coming back.
    0:38:17 How surprised would you be if you woke up tomorrow and Russia did use nuclear weapons against Ukraine?
    0:38:18 I’d be shocked.
    0:38:19 Because why?
    0:38:26 Well, first, as I understand it from military experts, there isn’t a real practical use for a
    0:38:33 tactical nuclear weapon. So it’s strictly a political use of the weapon. And if it’s a political
    0:38:42 use, if Putin were, for example, to decide, all right, my mission to denazify Ukraine hasn’t
    0:38:48 proceeded quickly enough, I’m just going to nuke Kiev. What is his dear friend in Beijing going
    0:38:56 to think? I come back to the PRC as a key. Putin meets with Xi at the start of the Olympics in
    0:39:04 2022. They issued this extraordinary document, lengthy statement, page after page, declaring how
    0:39:11 they’ve got this, it’s stronger than an alliance. Dear friends, the Russians have since used that
    0:39:19 phrase frequently. My recollection is that Xi and his government haven’t used that phrase since.
    0:39:29 And what happened since? It started the day of the invasion. Putin’s threats to use a nuclear
    0:39:37 weapon. Xi has said more than once the use of nuclear weapons in this conflict, the PRC would
    0:39:46 not support. If a portion of Kiev disappears under a mushroom cloud, that’s heat, and Putin doesn’t
    0:39:55 want that. That’s the type of shock that’s going to wake up the American people. We spend, if you
    0:40:04 include the Department of Defense and the budgets for the intelligence community, we spend a trillion
    0:40:12 dollars a year to defend our country. The two principal threats to the United States,
    0:40:22 1A, the PRC, 1B, the Russian Federation. The amount of money we already spend to defend ourselves
    0:40:29 against Russia is astronomical. My ultimate point is we need to oppose Russian aggression
    0:40:37 that is now exhibiting itself in brutal form in Ukraine. We need to recognize that the Russian
    0:40:44 Federation is as aggressive, maybe more aggressive than the Soviet Union. Anybody who’s got a heart
    0:40:52 or a brain wants this violence to stop, but it’s not going to stop because the Russians aren’t going
    0:40:59 to quit until they accomplish their war aims. Their war aims, I guarantee, are broader than
    0:41:05 just Ukraine. You know, there’s a history here. There are 15 Soviet republics that Putin thinks
    0:41:10 are his. That’s what he’s looking to reestablish. Let’s pretend for a minute that you’re not on
    0:41:14 the outs with the Trump crowd and that you were invited back. Let’s say you were invited back
    0:41:20 as Secretary of Defense or Secretary of State. Put three things on the table that we can do
    0:41:24 to turn the heat down or to change the leverage that Russia is pursuing.
    0:41:32 Yeah, it’s a little difficult to do that without also engaging the PRC. The North
    0:41:40 Korean sending troops to fight with the Russians in Europe not only has unnerved and infuriated
    0:41:44 the South Koreans, but Beijing isn’t happy about this.
    0:41:48 And you think there’s an avenue there for Trump and Xi to discuss?
    0:41:49 Possibly.
    0:41:52 If you were advising Trump, what would you offer as an incentive?
    0:41:54 An incentive for the Chinese?
    0:41:54 Yes.
    0:42:02 Well, you know, there are a lot of things on the table. My fear is we can’t offer Taiwan.
    0:42:08 You know, they’re worried about would he really come and defend us and not just the Taiwanese,
    0:42:13 the South Koreans too. So what I would say to the incoming Trump administration,
    0:42:21 we have to let them know that the war that they’re supporting and perpetuating in Europe
    0:42:27 has now become globalized in ways that adversely impact them because you see quotes from the South
    0:42:34 Koreans now saying, you know, can Trump be trusted? Can the Americans be trusted, not just Trump?
    0:42:37 And do we need a nuclear weapon to protect ourselves?
    0:42:41 What kind of deal do you think Trump will pursue with Putin over Ukraine?
    0:42:46 Because he seems to see it as a mess on his desk that he just wants to get rid of.
    0:42:53 Right. So that’s been the attitude going back to the Obama administration,
    0:43:02 maybe even the Bush 43 administration. My charge as ambassador was make the Russia problem go away.
    0:43:10 We want guardrails. Now there’s been this horrific war in Ukraine. We got to make it stop.
    0:43:16 Why? Because we got to pivot to Asia. So here’s my problem with the political discussion in the
    0:43:23 United States. Our leaders, Republicans and Democrats, don’t talk about these types of issues.
    0:43:32 Rewind 44 years. The Carter administration has started to rebuild, reinvest post-Vietnam in
    0:43:38 the Defense Department, right? We don’t go to the Summer Olympics in Moscow. Our leaders,
    0:43:44 our presidents, talk to the American people about these issues, whether it was Reagan with
    0:43:50 the Evil Empire, the Strategic Defense Initiative, putting intermediate-range nuclear missiles in
    0:43:57 West Germany. Presidents used to talk in detail about security issues, and the American people
    0:44:06 knew about them. We don’t have that discussion. It’s childish. It’s not serious. President Biden
    0:44:12 himself, I’ve not heard him say this, but it’s been reported that he has, since the war started
    0:44:22 in Ukraine, said we in the Obama administration, we sort of blew it in 2014. We let this guy get
    0:44:27 away with it. Crimea you’re talking about. Crimea and in the Donbas. Remember, there’s real conflict
    0:44:34 in the Donbas with Russian military units involved shooting down a commercial airliner
    0:44:42 that kills a couple hundred people. We have not taken seriously this threat that an aggressive
    0:44:48 nationalist Russia opposes a country that’s the largest landmass in the world with the largest
    0:44:55 stockpile of nuclear weapons with a seat as a permanent member of the UN Security Council.
    0:45:00 Russia is one of just five permanent members of the UN Security Council, but that certainly didn’t
    0:45:07 keep them from invading Ukraine. What does that say about the UN? Should we consider it as toothless,
    0:45:12 as obsolete as critics say? Yeah, I’m as big a critic. I haven’t gone so far as my friend John
    0:45:18 Bolton and say we can cut off the top half of the headquarters and save the money. My State
    0:45:24 Department colleagues, particularly those who have worked on international organizations issues for
    0:45:33 decades, devoted their careers to it, wince when I say this, but it’s just completely ineffective.
    0:45:44 We now have had the UN Secretary General go to the BRICS summit in Russia, shake hands with Putin,
    0:45:56 imagine if there were such a thing, if the League of Nations still existed, and in January of 1940,
    0:46:01 the Secretary of the League went to Berlin and shook hands with Hitler.
    0:46:07 So John, it strikes me that most Americans, probably most people everywhere, are primarily
    0:46:13 concerned with short-term problems, right? We get very distraught if the price of gas goes
    0:46:19 up 50 cents a gallon, but in terms of elections or policy decisions halfway around the world
    0:46:25 that may affect things five or ten years later, we don’t have much patience for that.
    0:46:30 And I’m curious if you’re calling for a significant reassessment, realignment of how
    0:46:35 we think about foreign policy and downstream effects. You know, I go back to Syria,
    0:46:41 the Obama administration’s red line in Syria, which it then essentially ignored later, triggered
    0:46:46 this massive outflow of refugees from Syria into Europe, which further destabilized those
    0:46:51 countries that were already turning against immigrants. The list goes on and on. So I’m
    0:46:56 curious what kind of decisions you see on the near horizon that we should pay attention to now,
    0:47:03 because they will reverberate. It’s coming. Something is coming that is going to shake
    0:47:10 the establishment and the American people. If there is a greater global conflict,
    0:47:16 for example, between Israel and Iran that closes the Persian Gulf, that makes the
    0:47:21 Houthi violence in the strait that leads into the Red Sea, you know, increases that,
    0:47:28 and God forbid, with Taiwan, the effect on the global economy, you talk about supply chain
    0:47:37 disruption. Oh my God. The analogy I draw to where we are today is the late 1930s. If you
    0:47:43 look at the old movie tone newsreels, and you got, you know, the man on the street in the United
    0:47:50 States being interviewed, you know, the chancellor, yeah, he’s rough around the edges. What he’s
    0:47:56 doing with the Jews, that’s really bad. But look, Germany was in tough straits after the war and,
    0:48:02 you know, the peace treaty and, you know, once Germany gets back on its feet, it’ll soften.
    0:48:10 At the same time, Churchill, much more closely observing. And in harm’s way, let’s say. And in
    0:48:20 harm’s way, Churchill gives these speeches warning about what’s coming. And they’re combined into a
    0:48:25 book that’s published in the United States, and the title of it is “While England Slept.”
    0:48:29 So you’re saying we’re asleep now? We’re asleep. And our politicians aren’t leading
    0:48:36 Republicans or Democrats. Now, I don’t know, I may be completely wrong, there may not be a
    0:48:42 Pearl Harbor-like incident. But my fear is that it’s going to come. And we’re not prepared. And
    0:48:50 the American people haven’t been told how serious these risks are. Putin calls the United States
    0:48:56 Russia’s enemy. J.D. Vance was asked recently, would he call Russia an enemy? And he said no.
    0:49:02 Well, Putin calls you an enemy. So you’re trying to shake us all by the shoulders and wake us up?
    0:49:07 I am not Winston Churchill. And I hope I’m wrong. But it’s more dangerous than you think.
    0:49:15 The only place befitting an honest man in Russia at the present time is a prison.
    0:49:23 That’s a line written in the late 19th century by Leo Tolstoy. I have a feeling John Sullivan can
    0:49:29 identify. My thanks to him for this conversation. Again, his book is called Midnight in Moscow.
    0:49:36 The last time we had a U.S. Ambassador on the show, it was Rom Emanuel, who had been posted in
    0:49:42 Japan. You can hear that episode number 553 wherever you get our show. It’s called
    0:49:49 The Suddenly Diplomatic Rom Emanuel. Meanwhile, next week on the show, we go one-on-one with
    0:49:56 Rom’s big brother, Zeke Emanuel, to talk about one of the biggest medical advances in recent history.
    0:50:03 You know, this is why people do science. What does the GLP-1 revolution mean for you
    0:50:08 and for the U.S. healthcare system? Don’t get me started. We’ve got to have a whole
    0:50:12 another conversation about that issue. That’s next time on the show. Until then,
    0:50:18 take care of yourself and if you can, someone else too. Freakonomics Radio is produced by Stitcher
    0:50:25 and Renbud Radio. You can find our entire archive on any podcast app, also at Freakonomics.com,
    0:50:30 where we publish transcripts and show notes. This episode was produced by Zach Lipinski,
    0:50:35 with help from Dalvin Abouaji. Our staff also includes Alina Cullman, Augusta Chapman,
    0:50:40 Eleanor Osborn, Ellen Frankman, Elsa Hernandez, Gabriel Roth, Greg Rippin, Jasmine Klinger,
    0:50:45 Jason Gambrel, Jeremy Johnston, John Schnars, Lyric Bowditch, Morgan Levy, Neil Caruth,
    0:50:50 Rebecca Lee Douglas, Sarah Lilly, and Theo Jacobs. Our theme song is “Mr. Fortune”
    0:50:55 by the Hitchhikers. Our composer is Luis Guerra. As always, thanks for listening.
    0:51:07 I don’t know what got me off on this rant, but pardon me, I’ve kissed the Blarney Stone twice.
    0:51:16 The Freakonomics Radio Network. The hidden side of everything.
    0:51:24 Stitcher.

    John J. Sullivan, a former State Department official and U.S. ambassador, says yes: “Our politicians aren’t leading — Republicans or Democrats.” He gives a firsthand account of a fateful Biden-Putin encounter, talks about his new book Midnight in Moscow, and predicts what a second Trump term means for Russia, Ukraine, China — and the U.S.

     

    • SOURCES:
      • John Sullivan, former U.S. Deputy Secretary of State and former U.S. Ambassador to Russia. 

     

     

  • 613. Dying Is Easy. Retail Is Hard.

    AI transcript
    0:00:02 (dramatic music)
    0:00:05 On Thanksgiving morning,
    0:00:08 roughly 30 million people will catch at least
    0:00:11 some of the Macy’s Thanksgiving Day Parade on TV.
    0:00:13 For a lot of them, it wouldn’t feel like
    0:00:15 Thanksgiving without the parade.
    0:00:18 Last week, we spoke with the parade’s executive producer,
    0:00:19 Will Kos.
    0:00:22 I asked him why it’s so popular.
    0:00:25 His answer was pure tevia.
    0:00:28 I’d say tradition.
    0:00:32 Tradition, tradition, tradition is at the core.
    0:00:34 It’s really about having this thing,
    0:00:37 this giant thing that shows up for you.
    0:00:39 Everything’s giving morning
    0:00:41 and it’s gonna be a little bit of spectacle,
    0:00:43 a little bit of kitsch, a little bit of art.
    0:00:46 It’s become a moment in time for all of us
    0:00:47 to drive back to.
    0:00:51 But even our favorite traditions
    0:00:54 are not guaranteed their place in the future.
    0:00:58 The Macy’s department store has been around for 166 years
    0:01:01 and they’ve put on a parade for the past 100.
    0:01:03 We spent last week trying to figure out
    0:01:06 how much money Macy spends to make the parade
    0:01:11 and how much they earn from sponsorships and TV ad sales.
    0:01:14 That was one part of this story that interested us.
    0:01:17 The other part is the future of retail itself
    0:01:21 or at least the kind of retailing represented by Macy’s.
    0:01:23 They like to call the parade their annual gift
    0:01:26 to the nation, which is a nice sentiment.
    0:01:29 But there are two things you should know about that.
    0:01:34 This gift is likely quite profitable for the giver,
    0:01:35 which is unusual.
    0:01:38 Also, the Macy’s parade may be
    0:01:42 one of the most valuable assets that Macy still has.
    0:01:44 For most of the 20th century,
    0:01:46 Macy’s was a retailing giant,
    0:01:49 but it’s been in trouble for years.
    0:01:51 And if it were to disappear
    0:01:54 the way that Sears and Montgomery Ward
    0:01:57 and Lord and Taylor and many other department stores
    0:02:01 have disappeared, the parade would likely disappear as well.
    0:02:05 How likely is it that Macy’s disappears?
    0:02:08 That’s one of the questions we’re asking in this episode.
    0:02:11 Macy’s is a publicly traded company
    0:02:14 worth a bit more than $4 billion.
    0:02:16 That is not very much.
    0:02:20 The target chain is worth about $60 billion.
    0:02:24 Walmart, 720 billion.
    0:02:27 Macy’s real estate is thought to be worth roughly double
    0:02:30 its $4 billion stock market value.
    0:02:32 You could take that to mean
    0:02:34 that Macy’s simply is no longer very good
    0:02:35 at being a department store
    0:02:39 or that department stores in general are doomed.
    0:02:41 Over the years on this show,
    0:02:43 we’ve interviewed quite a few CEOs
    0:02:46 and most of them were in thriving industries,
    0:02:50 biotech and software, energy and entertainment.
    0:02:53 We haven’t talked much about the retail industry,
    0:02:55 but the fact is that a huge share
    0:02:58 of the global economy is a retail economy.
    0:03:03 So we thought this was a conversation worth having.
    0:03:05 Today on Freakinomics Radio,
    0:03:09 Macy’s CEO Tony Spring makes his case.
    0:03:11 – We are not just a retailer.
    0:03:13 We are not just a physical store.
    0:03:17 We are a celebrator of life’s moments.
    0:03:19 We also hear a dissenting voice.
    0:03:22 – Until it’s successful, keep your mouth shut
    0:03:24 because you create expectations
    0:03:25 that may not be realistic.
    0:03:27 – And we look at another retailer
    0:03:29 who is swimming against the tide.
    0:03:32 – I drove by the bookstore and I could see in the window
    0:03:35 that people were really enjoying themselves
    0:03:36 and I thought that’s what I want.
    0:03:40 – But is wanting something enough to make it happen?
    0:03:42 (upbeat music)
    0:03:53 – This is Freakinomics Radio,
    0:03:56 the podcast that explores the hidden side of everything
    0:03:59 with your host, Stephen Dubner.
    0:04:01 (upbeat music)
    0:04:09 – Tony Spring became CEO of Macy’s
    0:04:11 in February of 2024
    0:04:12 and he was appointed chairman of the board
    0:04:14 a couple months later.
    0:04:16 He is proud of his parade,
    0:04:19 but he recognizes that a parade isn’t enough.
    0:04:22 – I want to be perceived as giving this gift
    0:04:23 to the city and to the nation.
    0:04:25 I also want to do a lot of business.
    0:04:27 I’ll give you an adage that one of my former colleagues
    0:04:28 at Bloomingdale said to me,
    0:04:30 we want to win an Oscar.
    0:04:32 We also want to win at the box office.
    0:04:34 – So you grew up just north of New York City
    0:04:35 in Westchester County.
    0:04:36 – I did.
    0:04:41 – How much did you know about or go to Macy’s as a kid?
    0:04:43 – I certainly went to Macy’s Herald Square
    0:04:45 and it felt like an adventure.
    0:04:47 Everything was overwhelming.
    0:04:51 The oversized ceilings, the environments, the storytelling.
    0:04:52 I love this.
    0:04:54 – Those old wooden escalators.
    0:04:57 – And they are still there functioning to this day.
    0:04:59 But I actually fell in love with retail
    0:05:01 working in hospitality.
    0:05:03 I worked in a Burger King restaurant
    0:05:05 when I was in high school.
    0:05:07 I remember starting that job
    0:05:09 and feeling like working with the customer
    0:05:12 was the most exciting thing, hearing the cash register ring,
    0:05:14 being able to serve consumers.
    0:05:16 But that first week on the job,
    0:05:18 all I was doing was cleaning the parking lot.
    0:05:20 After about a week, the manager pulled me aside.
    0:05:21 He said, do you know why you were working
    0:05:23 in the parking lot for a week?
    0:05:24 I said, I have no idea.
    0:05:27 He said, because that’s the first impression
    0:05:28 that people have.
    0:05:29 And if the parking lot is dirty,
    0:05:31 they think the restaurant is dirty.
    0:05:32 They don’t think the food is fresh.
    0:05:35 And that first impression mentality stuck with me
    0:05:37 all throughout my retail career.
    0:05:40 – Spring went to Cornell University
    0:05:43 and studied in its world famous hospitality school.
    0:05:46 There he met a recruiter from Bloomingdale’s,
    0:05:50 a beloved old luxury retailer in New York City.
    0:05:52 They were looking to place Cornell graduates
    0:05:54 in their executive training program.
    0:05:56 Maybe you remember the Seinfeld episode
    0:06:00 where Jerry’s parents want him to quit comedy
    0:06:03 and join the Bloomingdale’s executive training program?
    0:06:05 Jerry wasn’t interested,
    0:06:08 but Tony Spring was and he loved it.
    0:06:10 This was in 1987.
    0:06:15 – The company was well known for of the moment ideas.
    0:06:17 If you remember back in the late ’80s,
    0:06:19 there were these rocking flowers
    0:06:22 that came out of Asia that moved to music.
    0:06:25 Bloomingdale’s, they were the ones who sold the mood rings.
    0:06:28 They sold a piece of the Berlin Wall when it came down.
    0:06:30 They had merchandise out of India
    0:06:32 and out of China before anyone else.
    0:06:33 – Bloomingdale’s had by then
    0:06:36 long been part of a retail conglomerate called Federated.
    0:06:40 Macy’s tried to acquire Federated, but failed.
    0:06:44 Soon after, Federated entered bankruptcy.
    0:06:47 Couple years later, Macy’s entered bankruptcy,
    0:06:50 at which point Federated came out of bankruptcy
    0:06:53 and acquired Macy’s, got that.
    0:06:56 Federated became the biggest department store company
    0:07:00 in the US, but they also knew the power of the Macy’s brand.
    0:07:04 So they changed the company name to Macy’s, Inc.
    0:07:08 and rebranded many of their other stores as Macy’s.
    0:07:09 Although not Bloomingdale’s,
    0:07:12 that brand was strong enough to stand on its own.
    0:07:15 In 2015, Macy’s, Inc.
    0:07:18 acquired the high-end beauty retailer, Blue Mercury.
    0:07:20 So those are the three main brands
    0:07:22 that today make up Macy’s, Inc.
    0:07:26 Blue Mercury, Bloomingdale’s, and Macy’s.
    0:07:29 For now, Tony Springs says they will remain separate,
    0:07:34 but the mix will change as Macy’s itself continues to shrink.
    0:07:38 Back in 2007, there were more than 800 Macy’s stores.
    0:07:39 Now there are fewer than 500,
    0:07:43 and that number is due to fall again soon by quite a lot.
    0:07:47 So Tony Springs’ job is to at least stop the bleeding.
    0:07:50 He does have a positive attitude.
    0:07:54 Even though a lot of America needs to re-embrace Macy’s,
    0:07:57 there’s still plenty of people who are shopping at Macy’s.
    0:07:59 41 million active consumers,
    0:08:03 five different generations shopping at Macy’s.
    0:08:06 – Earlier this year, Tony, you faced a takeover challenge
    0:08:08 from the investment firm, Arc House,
    0:08:10 and the asset manager, Brigade.
    0:08:11 And this was not the first time
    0:08:14 that activist investors have come after Macy’s.
    0:08:16 The current market capitalization of your firm
    0:08:19 is only around 4.2 billion as we speak,
    0:08:23 and Arc House offered 6 billion, I believe.
    0:08:26 I’ve read that your real estate portfolio
    0:08:30 is worth between $7 billion and $11 billion.
    0:08:32 First of all, does that estimate seem about right?
    0:08:33 Do you or no?
    0:08:36 – I’ll leave that to the real estate experts.
    0:08:39 – All right, so what’s your best case to shareholders
    0:08:41 for why they should be happy
    0:08:44 that you turned down that offer?
    0:08:45 – Let’s put it in context.
    0:08:48 It was a proposal, not an offer.
    0:08:49 It wasn’t fully financed.
    0:08:52 After seven months of due diligence,
    0:08:55 the board unanimously voted to move on
    0:08:58 and focus on creating value for our shareholders.
    0:09:01 We remain open to a valuation that is higher
    0:09:04 than we are today, but the most important thing
    0:09:06 we can do as a leadership team
    0:09:08 is get to work on delivering a better experience
    0:09:09 for the consumer.
    0:09:11 – Okay, so the market cap is real.
    0:09:12 That’s verifiable.
    0:09:14 Let’s call it 4.2 billion.
    0:09:16 Let’s say that that real estate estimate
    0:09:18 between $7 and $11 billion.
    0:09:21 Let’s assume that that’s accurate-ish.
    0:09:23 What does it say that your market cap
    0:09:27 is roughly half of the real estate value?
    0:09:29 – Now is the time to buy Macy’s.
    0:09:31 (laughs)
    0:09:32 – Okay, anything more on that though?
    0:09:34 Because, you know, if I’m in…
    0:09:35 – Well, I mean, I look at it as being
    0:09:38 an absolutely attractive stock to buy.
    0:09:40 The multiple is low.
    0:09:42 The company has made a commitment
    0:09:44 to turn itself around
    0:09:46 and deliver a better experience for the customer.
    0:09:49 It’s a portfolio company, so it’s not just Macy’s.
    0:09:52 You get Bloomingdale’s and Blue Mercury.
    0:09:54 And you’re at a moment in time
    0:09:56 where there’s been so much disruption at retail.
    0:09:59 If I could get in at an inexpensive price,
    0:10:02 why wouldn’t I wanna capitalize on the future
    0:10:03 of what this company is?
    0:10:06 And then by the way, the real estate has value.
    0:10:08 The company’s also proven over the last seven years
    0:10:11 we’ve monetized over $2.5 billion worth of real estate.
    0:10:13 – Monetized meaning sold?
    0:10:14 – Sold.
    0:10:16 So to your point, how can the sum of the parts
    0:10:18 not be worth more?
    0:10:20 Look, I don’t get to value the company.
    0:10:23 I can only comment on how the company’s been valued.
    0:10:25 We are a retail company first.
    0:10:29 We enjoy and benefit from a great portfolio of real estate.
    0:10:31 And we’ll continue to look at opportunities
    0:10:36 to both acquire assets as well as divestive assets.
    0:10:39 – When we’re talking about the value
    0:10:41 of Macy’s Inc. real estate,
    0:10:43 we’re really talking about the bigger Macy’s
    0:10:45 and Bloomingdale’s locations
    0:10:47 where the company owns the building.
    0:10:49 They rent most of their smaller stores
    0:10:52 as well as their Blue Mercury locations.
    0:10:55 Tony Spring is planning to close and sell
    0:10:58 around 150 of the bigger Macy’s stores.
    0:11:01 This should raise roughly half a billion dollars.
    0:11:05 At the same time, he plans to open some smaller Macy’s stores
    0:11:08 and to expand Bloomingdale’s and Blue Mercury.
    0:11:10 – We are ambitious, we are hungry,
    0:11:13 we are interested in being better in the future.
    0:11:16 You essentially have a healthy company
    0:11:19 that has you throw in the parade, the fireworks,
    0:11:22 the flower show, a relevancy gap
    0:11:25 that will be addressed by this leadership team.
    0:11:27 – I’m glad you brought up the parade, Tony.
    0:11:29 No one we’ve spoken with at Macy’s
    0:11:33 wants to talk about the economics of the parade.
    0:11:35 It’s plainly expensive to produce,
    0:11:39 but based on a rough calculation of sponsorship dollars
    0:11:41 and TV ad sales,
    0:11:44 it’s obviously quite valuable to you as well.
    0:11:49 Is it possible that the parade is the most valuable asset
    0:11:51 in the Macy’s portfolio?
    0:11:53 – I would say the most valuable,
    0:11:55 but I would say it’s a valuable asset
    0:11:57 in the Macy’s portfolio.
    0:11:59 The same way I would say Harold Square
    0:12:01 is a valuable asset in our portfolio.
    0:12:03 This is the advantage I think we have.
    0:12:05 We are not just a retailer.
    0:12:08 We are not just a physical store.
    0:12:11 We are a celebrator of life’s moments.
    0:12:13 I use the ordinary to the extraordinary.
    0:12:16 The ordinary of I just need to run in and get a pair of socks.
    0:12:20 I just need to get a new pair of jeans to the extraordinary,
    0:12:21 the parade, the fireworks,
    0:12:23 and how about your 50th birthday party?
    0:12:26 How about you’re, hopefully you’re one marriage
    0:12:27 to the person you love.
    0:12:28 How about the birth of your son?
    0:12:32 I mean, these are the moments that I think Macy’s
    0:12:35 can be and should be and is known for.
    0:12:37 (gentle music)
    0:12:45 – And here’s someone who is not quite as confident
    0:12:47 about the future of Macy’s.
    0:12:50 – Macy’s has a hell of a challenge over the next few years
    0:12:51 to remain upright,
    0:12:54 let alone become successful as they once were.
    0:12:56 – That is Mark Cohen.
    0:12:58 – M-A-R-K-C-O-H-E-N.
    0:13:00 – Cohen recently retired as a professor
    0:13:04 and director of retail studies at Columbia Business School.
    0:13:07 Before that, he worked for 30 years in the retail business.
    0:13:10 His first job was at Abraham and Strauss,
    0:13:12 which no longer exists.
    0:13:16 His final job was as CEO of Sears Canada,
    0:13:18 which also no longer exists.
    0:13:21 I asked Cohen why the Columbia Business School
    0:13:23 even teaches retail studies.
    0:13:26 – It’s not the sexiest industry.
    0:13:29 It is arguably the largest.
    0:13:33 Retailing is 70 to 80% of the world’s economy.
    0:13:37 There’s been an enormous resurgence in interest in retailing,
    0:13:40 largely on the side of entrepreneurship.
    0:13:41 I would also point out
    0:13:45 that some of the world’s largest individual fortunes
    0:13:48 have been made coming out of retail,
    0:13:50 obviously the Walton family.
    0:13:54 Then there’s the ubiquitous Jeff Bezos experience at Amazon.
    0:13:57 – Zara is a big one into techs, right?
    0:13:57 – You bet.
    0:14:00 – LVMH, a different kind of retail, I guess,
    0:14:01 but still retail.
    0:14:02 – That’s right.
    0:14:04 – So some retailers are obviously thriving.
    0:14:08 And I’ve seen data suggesting that the e-commerce apocalypse
    0:14:11 just hasn’t happened, that good brick and mortar has a future.
    0:14:14 But let’s take a case study of failure.
    0:14:16 Let’s talk about Sears.
    0:14:19 They were massive, and now they’re pretty much dead.
    0:14:23 You were a senior executive at Sears before its demise.
    0:14:26 I assume it wasn’t your fault, but…
    0:14:29 – No, it wasn’t my fault.
    0:14:30 The underlying issue in retailing
    0:14:33 is the customer has never disappeared.
    0:14:35 The customer has never gone away.
    0:14:38 The customer, worldwide, is hard-coded
    0:14:40 to want to shop for things,
    0:14:44 the only self-limiting issues being their economic capability
    0:14:47 and their proximity to a marketplace.
    0:14:49 At the turn of the 20th century,
    0:14:52 customers in the United States were able to shop
    0:14:55 by coming downtown to shop
    0:14:59 in an emerging department store emporium.
    0:15:01 They also began to be able to shop
    0:15:04 in the early 20th century through catalogs
    0:15:06 like Sears Robux.
    0:15:09 If you couldn’t find it in a Sears catalog,
    0:15:10 you didn’t need it.
    0:15:13 You could buy everything from a barrel to a,
    0:15:15 you build it, house.
    0:15:17 And they built out the facility
    0:15:20 with which to fulfill customer demand,
    0:15:22 literally throughout the United States.
    0:15:25 In the aftermath of World War II,
    0:15:29 millions of servicemen began to return from overseas
    0:15:33 and were eager on catching up on their lives
    0:15:35 and forming households.
    0:15:38 They began to migrate from urban centers
    0:15:42 and rural communities into newly formed suburbs.
    0:15:46 Dwight Eisenhower, the US president in the ’50s,
    0:15:48 has a lot to do with the emergence
    0:15:51 of mid-20th century retail
    0:15:55 when he caused the interstate highway system to be built,
    0:15:57 having come out of World War II
    0:16:02 and witnessing the efficacy of the German Autobahn.
    0:16:04 His rationale was we have to have a way
    0:16:08 to move men and material north, south, east and west
    0:16:11 efficiently as opposed to a cross two-lane black top,
    0:16:15 which is what connected the United States at that time.
    0:16:16 Of course, we were never invaded.
    0:16:19 There was no reason for the interstate highway system
    0:16:22 to be an adjunct of the defense department.
    0:16:27 What it did was it spawned an enormous amount of migration
    0:16:29 into newly formed suburbs,
    0:16:32 which were being built in close proximity
    0:16:34 to these interstate highways.
    0:16:39 So there was this emergence of suburban-based mall retailing
    0:16:43 which hollowed out traditional downtown-based retailing
    0:16:45 in hundreds of US cities.
    0:16:47 Sears was one of those department stores
    0:16:50 that migrated to the suburban malls.
    0:16:54 And they became the largest retailer in the world
    0:16:56 through the 1960s.
    0:16:58 So what happened to Sears?
    0:17:03 Success, in many cases, brings complacency, hubris.
    0:17:09 Success seeds failure in many enterprises
    0:17:11 as they become larger and larger
    0:17:14 and become convinced that they are the last word.
    0:17:18 It was a very insular, inwardly-facing business.
    0:17:21 In fact, when the two founders of Home Depot
    0:17:24 came to visit Sears Robuck some years ago,
    0:17:26 looking to get some financial support
    0:17:29 to launch their business,
    0:17:32 they basically got laughed out of the meeting
    0:17:35 by senior executives at Sears who looked at them
    0:17:39 as upstarts who had nothing to offer.
    0:17:42 Okay, that’s Mark Cohen on the rise and fall of Sears.
    0:17:45 How about Macy’s at its peak?
    0:17:48 Macy’s was a brilliantly constructed
    0:17:50 general merchandise emporium,
    0:17:54 servicing customers from low-middle income
    0:17:57 all the way up into near luxury.
    0:17:59 They were very good-looking stores
    0:18:02 that were very powerfully merchandised,
    0:18:05 topical and current,
    0:18:07 and they did it very consistently.
    0:18:10 When you say it was powerfully merchandised,
    0:18:11 I’ve read you write before about
    0:18:13 what makes a good store good and a bad store bad.
    0:18:15 What are some things that Macy’s did
    0:18:16 when they were very good?
    0:18:19 One of the most important things they did
    0:18:22 was they created a over-large business
    0:18:26 consisting of housewares products
    0:18:28 by creating on the lower level
    0:18:29 of their Herald Square store
    0:18:31 something they called the seller.
    0:18:33 Good use of underground real estate too.
    0:18:36 Yes, so they took a whole variety of categories
    0:18:38 that were not up until that point
    0:18:41 viewed as particularly sexy or fashionable.
    0:18:43 They gave them a home,
    0:18:45 amped up their presentation,
    0:18:48 and built a business that customers
    0:18:51 would previously have seen as a place
    0:18:53 to buy utility products.
    0:18:55 We need another frying pan
    0:18:58 to a place to buy an entire suite of cookware.
    0:19:00 And they did it brilliantly.
    0:19:02 It was putting the puzzle pieces together
    0:19:04 in a way that hadn’t been done before.
    0:19:07 Which decades were the strongest decades for Macy’s?
    0:19:11 Probably the ’60s and ’70s.
    0:19:13 How profitable was Macy’s in its heyday?
    0:19:14 It was very profitable.
    0:19:16 I don’t have a specific number to say,
    0:19:19 but they were viewed as good as it gets.
    0:19:21 How fashionable were the clothes
    0:19:23 at Macy’s during its heyday?
    0:19:24 Very fashionable.
    0:19:28 They were purveyors of the best brands of the day.
    0:19:32 And Macy’s also invested in a whole portfolio
    0:19:34 of private label brands
    0:19:37 in both apparel and accessories and in home.
    0:19:39 So you’re telling us all these things that Macy’s did,
    0:19:41 basically what Macy’s stood for
    0:19:43 for these several decades.
    0:19:45 When you look at Macy’s today,
    0:19:47 what does it stand for?
    0:19:49 Well, unfortunately, and in my view,
    0:19:51 Macy’s doesn’t stand for anything today.
    0:19:54 A consumer facing enterprise,
    0:19:58 a brand, a store, a website has to stand for something.
    0:20:00 It has to have a point of view
    0:20:03 that not only is recognized by customers
    0:20:06 as something they want to associate with,
    0:20:09 but differentiates itself from competition
    0:20:12 and is able to defend itself from competition.
    0:20:15 So what’d they do wrong in these last several decades?
    0:20:20 Well, Macy’s began to prop up their lagging productivity
    0:20:25 and they began to play the last man standing game.
    0:20:26 You know, buy your competition
    0:20:28 and decide that’s the secret to life
    0:20:30 because now you don’t have to compete
    0:20:32 with someone head to head.
    0:20:36 They also consolidated all of their regional banners
    0:20:38 under the heading Macy’s.
    0:20:43 They did this in an attempt to retain their relevance,
    0:20:45 which was under tremendous pressure
    0:20:48 because of all of these specialty store chains.
    0:20:52 And then the big box off mall retailers
    0:20:55 started to do an enormous amount of volume.
    0:20:59 And then of course, there’s Jeff Bezos, Amazon.
    0:21:02 I’m curious as Macy’s business and reputation
    0:21:04 founded for all these decades,
    0:21:07 what kind of brands would no longer sell to them
    0:21:09 because they don’t want their stuff in a Macy’s?
    0:21:13 Well, Macy’s has historically abused their vendor community.
    0:21:17 And I’ve used that word and some former CEOs
    0:21:19 at Federated Macy’s have objected to it,
    0:21:21 but they can’t object very loudly
    0:21:24 because they know damn well that I’m telling the truth.
    0:21:29 They have been historically tremendously one-sided
    0:21:31 in their behavior.
    0:21:35 Many brands grudgingly supported their merchandise
    0:21:35 being sold at Macy’s
    0:21:38 ’cause they did not have an alternative.
    0:21:40 They now have alternatives.
    0:21:43 What specifically did Macy’s do to their vendors
    0:21:45 that you’re calling abusive, paying late,
    0:21:47 not marketing well, what was it?
    0:21:52 They would be pounded for best price upfront.
    0:21:55 And then there would be demands made for advertising
    0:21:57 and presentation allowances,
    0:22:00 demands made for gross margin guarantees,
    0:22:05 markdown protection, exclusives.
    0:22:06 In other words, if you sell us,
    0:22:08 you can’t sell anybody else.
    0:22:12 Macy’s played the, we want it all our way game
    0:22:13 for many, many years.
    0:22:16 And many brands basically took a deep breath
    0:22:18 and did business with them
    0:22:21 because that was the only game in town for their merchandise.
    0:22:24 So if we were talking 10 years from now,
    0:22:26 do you think Macy’s still exists?
    0:22:27 It’s problematic.
    0:22:30 They have survived several attempts by activists
    0:22:35 to move into the stock, to monetize their assets,
    0:22:37 which is principally their real estate.
    0:22:39 And they’ve all failed because frankly,
    0:22:41 there’s no they’re there,
    0:22:43 even though you could argue that Harold Square
    0:22:45 in New York Union Square in San Francisco
    0:22:48 are worth an enormous amount of money.
    0:22:51 Is there a buyer who’s going to pay billions of dollars
    0:22:54 to put an office tower on top of Harold Square?
    0:22:56 Answer is no.
    0:22:59 – So Mark, I am not a business analyst of any sort,
    0:23:01 but when I look at Macy’s,
    0:23:03 I see a company whose market cap is a bit
    0:23:07 over $4 billion with a real estate portfolio,
    0:23:09 estimated at roughly double that.
    0:23:12 And when I look at their other assets,
    0:23:15 their Thanksgiving Day Parade is massive,
    0:23:18 not only as marketing for the brand itself,
    0:23:19 but as a profit center.
    0:23:22 They’re selling sponsorships for the balloons and floats
    0:23:23 and who knows what else.
    0:23:26 And they’re getting a share of the ad sales
    0:23:28 for one of the biggest TV events of the year.
    0:23:32 So am I crazy, Mark,
    0:23:34 for thinking that the Macy’s Parade
    0:23:37 is maybe the single most valuable asset
    0:23:39 that Macy still has?
    0:23:40 – Well, you’re not crazy,
    0:23:42 but you have to reflect on the fact
    0:23:43 that for anything to have value,
    0:23:46 there has to be someone who holds the value
    0:23:49 and someone who has an interest in possessing the value.
    0:23:54 Would the Super Bowl ad madness have any firmament
    0:23:59 if there was no Super Bowl supporting that three hour window?
    0:24:04 So the Parade has been forever attached to Macy’s
    0:24:06 as a name and over the years,
    0:24:10 it became a commercial issue unto itself.
    0:24:13 They don’t tell you how much it costs to put on the Parade
    0:24:16 and they won’t tell you how much they receive in return.
    0:24:19 They will never reveal it unless it was required by law.
    0:24:23 It is likely to be a substantial profit generator.
    0:24:26 Nothing gets presented during the Parade
    0:24:29 that doesn’t have a price tag attached.
    0:24:33 But of course, it doesn’t translate these days
    0:24:36 into footsteps to doing business inside the store.
    0:24:39 – After the break,
    0:24:41 Tony Spring thinks he knows how to get the footsteps
    0:24:43 inside the store.
    0:24:44 I’m Steven Dubner.
    0:24:45 This is Freakonomics Radio.
    0:24:46 We’ll be right back.
    0:24:57 We’ve been talking about the fate of Macy’s
    0:24:59 with Mark Cohen,
    0:25:02 a former retail executive and business school professor
    0:25:06 and Tony Spring, the CEO of Macy’s.
    0:25:09 Spring spent nine years as CEO of Bloomingdale’s,
    0:25:12 a more upscale store within the Macy’s portfolio.
    0:25:16 And in early 2024, he took over the mother ship.
    0:25:20 Spring knows, as does the entire retail industry,
    0:25:23 that Macy’s ink is not in great shape.
    0:25:26 So he has been asked to engineer a turnaround.
    0:25:30 He came up with a strategy called a bold new chapter.
    0:25:32 – The strategy is made up of really strengthening
    0:25:34 the Macy’s brand.
    0:25:37 And that includes divesting about 150 stores
    0:25:39 that are no longer relevant.
    0:25:41 – When Spring says divesting,
    0:25:43 that means shutting down the failing stores
    0:25:45 and selling the real estate.
    0:25:49 What else is in the bold new chapter strategy?
    0:25:51 – It’s investing into the improvements
    0:25:53 within our merchandise assortment.
    0:25:56 We’ve revamped the entire private brand portfolio,
    0:25:58 exiting brands that were no longer relevant,
    0:26:00 introducing new brands that resonate
    0:26:03 with multi-generations of consumers.
    0:26:05 – I asked for an example of this.
    0:26:08 – Right now you have this trend on young kids,
    0:26:10 boys wearing perfume, you know, cologne.
    0:26:12 They’ve seen it on social media, on TikTok.
    0:26:14 And so we got to lean into that.
    0:26:15 We got to have the best assortment
    0:26:17 of perfumes and colognes for kids
    0:26:20 so that they think of Macy’s as being a great destination
    0:26:22 to buy their fragrances.
    0:26:25 – Okay, what else is Tony Spring working on?
    0:26:27 – Improving the condition of our stores,
    0:26:30 more staffing, better visual presentation,
    0:26:32 embracing different store formats.
    0:26:35 And then at the Bloomingdale’s and Blue Mercury brands,
    0:26:38 it’s leaning into the affluent and luxury consumer.
    0:26:41 And surrounding it is this desire to take cost
    0:26:44 that is not visible to the consumer through automation,
    0:26:47 through reducing complexity out of the business
    0:26:50 so that we can give the customer just a better experience
    0:26:51 no matter how they shop.
    0:26:53 – So here’s something you’ve said in the past.
    0:26:56 I love stores, I’m a store guy,
    0:26:58 but bad stores are bad stores.
    0:27:00 You just told me that you are planning
    0:27:03 to close a lot of stores that are no longer relevant.
    0:27:05 What makes a bad store bad?
    0:27:08 What makes an irrelevant store irrelevant?
    0:27:10 – You’re the last store open in the mall.
    0:27:15 The store was built in 1965 for a different time period.
    0:27:18 The store has a roof that’s about 37 years old
    0:27:20 on a 30-year lifeline.
    0:27:21 The elevator doesn’t work,
    0:27:23 the escalator breaks five times a year.
    0:27:25 The brands don’t wanna sell us,
    0:27:27 so it’s made up of private brands
    0:27:30 and brands that don’t care about their points of distribution.
    0:27:32 – I’m looking at something here, Tony.
    0:27:36 It’s a consumer survey with 1,200 respondents.
    0:27:41 It shows that awareness of Macy’s is incredibly high, 88%.
    0:27:44 But then when you look at the other categories,
    0:27:49 Macy’s popularity, usage, loyalty, Macy’s buzz,
    0:27:52 those are all in the 20 to 30% range.
    0:27:55 That is an unbelievable gap.
    0:27:58 So what makes you think you can recover from that?
    0:28:01 – I’m a big believer in self-awareness and ambition.
    0:28:02 You need to know who you are
    0:28:04 before you can get to what you want to be.
    0:28:07 We spent a greater part of 18 months
    0:28:09 basically saying we’re not good at this,
    0:28:12 we need to work on that, this needs to be stronger.
    0:28:14 We did our own version of that same survey
    0:28:16 which said high level of awareness,
    0:28:18 not a strong enough level of conversion.
    0:28:20 The issue remains with us.
    0:28:23 How well do we execute our strategy?
    0:28:25 How fast do we move?
    0:28:27 How well do we communicate those changes?
    0:28:30 – So there is a practice among some businesses
    0:28:32 called a pre-mortem.
    0:28:33 I don’t know if you’ve ever heard of this.
    0:28:35 – I am very fond of it.
    0:28:39 – So you imagine that things have failed
    0:28:41 and then before it has a chance to fail,
    0:28:43 you sit and think, well, why would it have failed?
    0:28:45 And let’s fix that now.
    0:28:48 So if you were to pre-mortem Macy’s Inc. right now,
    0:28:52 what do you think are the biggest existential threats
    0:28:54 to its continued longevity?
    0:28:55 Is it online shopping?
    0:28:57 Is it discount retailers?
    0:29:00 Is it maybe people just deciding to buy less stuff,
    0:29:01 et cetera, et cetera?
    0:29:03 – I think disintermediation,
    0:29:06 the brands being able to go directly to the consumer,
    0:29:08 the brands deciding that you are not as important
    0:29:10 a point of distribution.
    0:29:13 And this comes down to being a people business.
    0:29:15 The people that are attentive,
    0:29:18 return your phone calls, texts or emails,
    0:29:21 pay you on time, treat your brand with respect.
    0:29:23 Those are the people that are gonna continue to sell you
    0:29:25 or wanna sell you in the future.
    0:29:28 – Name a brand partner or two that’s pulled out of Macy’s
    0:29:30 over the last five or 10 years.
    0:29:31 – Nike would be one.
    0:29:34 They took an 18 month break and then decided
    0:29:36 that they needed more points of distribution
    0:29:39 and we’ve built a nice business back together again.
    0:29:41 – Name a couple brands that you’d like to have
    0:29:42 that you don’t have yet.
    0:29:45 – We’d love to have Tory Burch at Macy’s.
    0:29:47 We have a nice business at Bloomingdale’s.
    0:29:50 We would love to have On Running,
    0:29:52 which is a great sneaker brand that we have
    0:29:55 at Bloomingdale’s that we don’t have at Macy’s.
    0:29:56 – So what is that kind of conversation like
    0:29:58 with a brand like let’s say Tory Burch
    0:30:01 of trying to convert them or include them in Macy’s
    0:30:03 since they’re already in Bloomingdale’s?
    0:30:05 – Yeah, you have to talk about, again,
    0:30:08 the benefit of a multi brand retail environment
    0:30:11 where you’re talking to 41 million active customers
    0:30:14 at Macy’s versus 4 million active customers
    0:30:15 at Bloomingdale’s.
    0:30:16 Based on the scale of Macy’s,
    0:30:18 you have more affluent customers shopping at Macy’s
    0:30:20 than shopping at Bloomingdale’s.
    0:30:23 You have a more diverse customer shopping at Macy’s.
    0:30:25 Bloomingdale’s is a great business.
    0:30:27 I love that brand having grown up there,
    0:30:28 but that’s a slice of America.
    0:30:31 Macy’s is America and if you really want to understand
    0:30:34 how fashion works across the country,
    0:30:36 you need a partner like Macy’s
    0:30:38 that can help give you that feedback.
    0:30:41 – Describe for me what a good Macy’s store looks like
    0:30:41 in the near future.
    0:30:45 What specifically is changing and improving?
    0:30:47 – You hopefully will go to Macy’s
    0:30:50 and find a wide variety of assortment,
    0:30:53 but not the endless aisle you’ve been hearing about.
    0:30:55 I don’t want to wander down some place that never ends.
    0:30:56 I want to go to the best aisle
    0:30:59 where I have actual variety, not redundancy.
    0:31:01 So you’re going to show me a handful of items
    0:31:03 in a category ’cause I want to buy a polo shirt
    0:31:05 and you’re going to give me good, better best.
    0:31:07 You’re going to be in stock in my size.
    0:31:10 I’m going to be greeted by somebody who’s pleasant.
    0:31:12 I’m going to be rung up efficiently and effectively.
    0:31:16 I also might go and meet my boyfriends, girlfriends,
    0:31:19 whoever it is, and me enter through the store
    0:31:20 and actually discover some things
    0:31:22 that I haven’t heard of or seen before.
    0:31:25 I might stop into the cafe or to the restaurant
    0:31:28 or Starbucks and grab a latte.
    0:31:30 And I’ll remember the experiences being,
    0:31:33 Macy’s is there for me when I need them.
    0:31:36 – We spoke with one retail analyst who,
    0:31:37 by the way, as a fan of yours,
    0:31:40 he thinks the turnaround is really promising.
    0:31:43 He said that your parade, quote, generates magic,
    0:31:45 but that’s not always the experience
    0:31:46 of shopping at Macy’s.
    0:31:49 He said, you guys run this fantastic parade,
    0:31:52 but you can’t put any magic into your shop floor.
    0:31:54 I’m curious to hear your response to that.
    0:31:57 And I’m also curious to know whether you think about
    0:31:59 integrating the parade designers
    0:32:02 into your customer experience team somehow.
    0:32:05 – Yeah, I think a challenge given, challenge taken.
    0:32:09 How do I recreate a once a year phenomenon
    0:32:11 that has, let’s just say, a few dollars thrown at it
    0:32:14 to make it extremely magical?
    0:32:16 I think it should inspire us to step up
    0:32:19 and to deliver something far better.
    0:32:21 But I think we also can’t hold the mirror
    0:32:23 on the parade to the store experience
    0:32:26 and say, that’s what every day is going to be.
    0:32:29 – Given that you want to grow your luxury business
    0:32:32 and given your Bloomingdale’s background,
    0:32:35 I’m curious if you’re thinking about trying to use the parade
    0:32:37 to move things in that direction.
    0:32:40 Should we look for a Tory Burch float, for instance,
    0:32:42 or anything in that direction?
    0:32:44 – If Tory Burch had something to say in the parade,
    0:32:46 I’d love for them to be in the parade.
    0:32:50 You will see more integration in the future
    0:32:52 of the things that we do in the parade
    0:32:54 to the things that we do in the store.
    0:32:55 Think about it this way.
    0:32:58 Black Friday is the kickoff to the final parts
    0:33:00 of the holiday season.
    0:33:03 And we own America in conveying that message.
    0:33:06 Thanksgiving is a family celebration
    0:33:08 that begins not on the day of Thanksgiving,
    0:33:10 begins several weeks before.
    0:33:12 Do you have enough chairs?
    0:33:13 Do you have enough plates?
    0:33:14 How do I keep people active?
    0:33:16 Do I have games for them to play?
    0:33:20 So we have this opportunity to be a part of America’s Day
    0:33:22 in a very meaningful way before
    0:33:25 and the kickoff to America’s celebration
    0:33:27 of the gifting time of the year
    0:33:31 with the 28 and a half or 29 million people watching.
    0:33:33 (upbeat music)
    0:33:37 (upbeat music)
    0:33:39 By the way, Macy’s does already sell
    0:33:41 some Tory Burch merchandise,
    0:33:44 like watches, fragrances and sunglasses,
    0:33:47 but not the more expensive items like bags or shoes,
    0:33:50 which they would like to sell.
    0:33:52 So we just heard Tony Springs’ plan
    0:33:55 for a bold new chapter.
    0:33:56 Will it work?
    0:33:58 I have no idea.
    0:34:01 The bad news coming out of Macy’s doesn’t seem to stop.
    0:34:04 Just recently, Macy’s revealed that an employee
    0:34:08 had intentionally hidden around $150 million
    0:34:11 in delivery expenses over the past few years.
    0:34:13 This news forced a delay
    0:34:15 of the company’s quarterly earnings report.
    0:34:18 That is bad.
    0:34:21 While the retail industry may not be as technically complicated
    0:34:24 as a lot of the industries we’re used to talking about
    0:34:27 on this show, like healthcare or artificial intelligence,
    0:34:30 it is plenty complicated in its own way.
    0:34:33 This makes it hard for any outsider to predict
    0:34:36 whether Tony Spring will be successful.
    0:34:40 So we went back to an insider, Mark Cohen,
    0:34:43 the former retail executive and business school professor,
    0:34:48 to ask what he thinks of the bold new chapter strategy.
    0:34:51 Well, I’m generally speaking hostile to sloganeering.
    0:34:54 And Macy’s has been guilty of sloganeering
    0:34:56 for well over a decade.
    0:34:59 They were invested in the magic of Macy’s,
    0:35:03 which basically there was no magic to Macy’s.
    0:35:07 The most recent CEO was all invested
    0:35:10 in something called a Polaris strategy,
    0:35:13 which not to be crude was more bulls*** than real.
    0:35:18 There’s no there, there behind what Tony Spring
    0:35:21 has been able or willing to describe.
    0:35:25 His general description of improvements
    0:35:27 in terms of making the assortments
    0:35:30 more relevant to consumers.
    0:35:32 That’s kind of like motherhood and apple pie.
    0:35:34 I don’t decry him for saying those words,
    0:35:37 but at the end of the day, I’m from the school that says,
    0:35:41 come up with the idea, put the idea in place,
    0:35:43 measure its success via failure.
    0:35:46 And once it’s successful, start talking about it.
    0:35:49 But until it’s successful, keep your mouth shut
    0:35:52 because you create expectations that may not be realistic.
    0:35:55 When’s the last time you were in a Macy’s?
    0:35:58 A few months ago, I passed through Harold Square
    0:36:01 whenever I’m in Midtown and some time before that,
    0:36:06 I hit a bunch of their suburban branches in Metro New York.
    0:36:10 When I’m asked to comment about someone’s success or failure,
    0:36:13 I try to be at least up to date
    0:36:15 in the observations that I make.
    0:36:18 So what did those Macy’s stories look like to you?
    0:36:19 They looked terrible.
    0:36:23 I’m told that Tony Spring has begun a process
    0:36:25 of cleaning up their act.
    0:36:28 I don’t know him, but I know him by way of background.
    0:36:32 He did a marvelous job of ensuring that Bloomingdale’s
    0:36:36 was a pristine, up-to-date, well-presented store.
    0:36:40 And so I’m told there has begun a process
    0:36:42 of improvement that’s visible.
    0:36:45 This literally means turning the stores
    0:36:49 into something far more clean, neat, and friendly
    0:36:52 than they had become under prior regimes.
    0:36:54 Okay, so the clean, neat, and friendly I get,
    0:36:56 but you’re also talking about the lack of good assortment,
    0:36:58 the lack of stuff that people want.
    0:37:00 What do they need to do there?
    0:37:02 Well, you have to start with clean, neat, and friendly,
    0:37:04 and then you have to fill the store
    0:37:09 with merchandise customers really want to buy.
    0:37:11 How hard can that be to figure out?
    0:37:13 That is the codex of retailing
    0:37:16 that is enormously difficult to do.
    0:37:19 It takes years and years and years
    0:37:23 to build a team of people who can create assortments,
    0:37:26 which, by the way, have to be created, recreated,
    0:37:30 represented almost every day,
    0:37:33 especially today when the customer’s loyalty
    0:37:35 can’t be counted upon.
    0:37:38 If you please a customer today, they may very well come back.
    0:37:41 If you piss them off today, they may never come back.
    0:37:43 (upbeat music)
    0:37:46 After the break, we talk to a very different kind
    0:37:50 of retailer who seems to have the loyal customer thing
    0:37:50 all worked out.
    0:37:52 (audience applauding)
    0:37:53 – It’s gorgeous inside.
    0:37:55 The building itself is so cool.
    0:37:58 – I hate change, but I think some of the stuff
    0:37:59 he’s doing is good.
    0:38:02 (audience cheering)
    0:38:05 – I’m Steven Dovner.
    0:38:07 This is Free Kinomics Radio.
    0:38:08 We’ll be right back.
    0:38:10 (upbeat music)
    0:38:13 (upbeat music)
    0:38:18 (upbeat music)
    0:38:24 How do you design a store where people are dying to shop?
    0:38:26 Macy’s is trying to figure that out.
    0:38:29 Again, having been largely unsuccessful
    0:38:31 for the past few decades after building
    0:38:35 one of the biggest department store chains in history.
    0:38:37 At the very least, Macy’s does know how
    0:38:40 to throw a killer parade.
    0:38:43 Last week in part one of this series,
    0:38:44 we heard from Jeff Kinney,
    0:38:47 author of the Diary of a Wimpy Kid books,
    0:38:50 which has sold nearly 300 million copies.
    0:38:52 For the past 14 years,
    0:38:55 Kinney has had a giant balloon in the Macy’s Parade,
    0:38:58 a balloon of Greg Hefley, the Wimpy Kid himself.
    0:39:02 Jeff Kinney lives with his family in Plainville, Massachusetts,
    0:39:07 and he has built a mid-sized media empire around Wimpy Kid.
    0:39:11 Spin-off book series, films, a musical, board games,
    0:39:12 quite a bit more.
    0:39:16 And he’s got one more project that is related-ish,
    0:39:17 but not quite.
    0:39:20 – We have a bookstore in the center of town,
    0:39:21 which is called An Unlikely Story,
    0:39:24 which has been in business for about nine years.
    0:39:27 – If I were to come visit your bookstore,
    0:39:29 how much Wimpy Kid do I see there?
    0:39:32 – You’d see very little Wimpy Kid at the bookstore.
    0:39:35 We’ve got a statue of Greg on the main floor,
    0:39:38 but mostly it’s a general bookstore.
    0:39:45 – You’ve probably never heard of Plainville.
    0:39:47 Only about 10,000 people live there.
    0:39:51 – I moved up to Massachusetts in 1995.
    0:39:54 My wife and I picked Plainville
    0:39:57 by creating a Venn diagram of three locations,
    0:40:01 Boston Logan Airport, TF Green Airport in Providence,
    0:40:04 and then my wife’s parents live in Worcester,
    0:40:07 and right at the intersection of those three places
    0:40:09 is this little town called Plainville.
    0:40:12 – Plainville is about an hour’s drive to Boston,
    0:40:15 half an hour to Providence, Rhode Island,
    0:40:17 and 15 minutes to Foxboro Mass,
    0:40:19 where the New England Patriots of the NFL
    0:40:21 play their home games.
    0:40:24 So what led Jeff Kinney to build this big bookstore here?
    0:40:27 – We started creating it about 12 years ago
    0:40:31 on the site of an old market called Fox Market,
    0:40:34 which had been built in, I think, 1853
    0:40:36 before Lincoln became president.
    0:40:39 It was a beloved market that everyone had
    0:40:42 at the center of their lives for decades and decades.
    0:40:45 It had been abandoned for about 17 years.
    0:40:48 So once Wimpy Kid took off, we bought the building,
    0:40:50 took it down, and created a bookstore.
    0:40:52 – Why did you wanna do that?
    0:40:56 You already had a very going concern with your property
    0:40:57 that had all these other tentacles.
    0:41:01 Why did you wanna commit to a big physical property
    0:41:02 like a bookstore?
    0:41:04 You were probably doing this at the time
    0:41:07 when independent bookstores were closing at the rate of,
    0:41:08 I don’t know, one a week or something.
    0:41:10 So what gave you this impulse?
    0:41:13 – A lot of people were really embarrassed
    0:41:16 by the derelict building in the middle of our town.
    0:41:19 We just wanted to build a building
    0:41:21 that the town could feel proud of.
    0:41:24 So my goal was just to create a nice building
    0:41:26 and put the word Plainville on the side.
    0:41:30 We didn’t give any thought to what was going to be inside.
    0:41:33 At a certain point, I was really legitimately thinking
    0:41:36 about just making it a basketball court inside
    0:41:39 because I figured we could save a lot of money
    0:41:40 if it was just hollow.
    0:41:43 – It’s been described to me from other people
    0:41:46 who are not you that your bookstore is
    0:41:50 an absurdly successful stop on the book tour circuit
    0:41:54 that every author worth anything wants to come
    0:41:55 to your bookstore and do an event
    0:41:58 and does in fact, how did that happen?
    0:42:00 – Well, that’s music to my ears.
    0:42:02 First of all, we created a really
    0:42:05 architecturally special place.
    0:42:07 As a touring author, I’ve seen hundreds of bookstores
    0:42:08 all over the world.
    0:42:11 So we really tried to capture the essence
    0:42:14 of what makes a bookstore feel homey
    0:42:16 and special and magical.
    0:42:19 We use lots of old materials to make it feel
    0:42:20 like it was really lived in.
    0:42:23 It doesn’t hurt that we’re on the route
    0:42:25 between Providence and Boston.
    0:42:27 If we’re in the middle of Iowa or something like that,
    0:42:30 it would be a lot harder for authors to reach us.
    0:42:32 – Is the bookstore profitable?
    0:42:34 – The bookstore is not profitable.
    0:42:38 We lose quite a bit of money each year in the six figures.
    0:42:41 There are lots of different reasons for that.
    0:42:44 We do try to pay fairly, but we also, you know,
    0:42:47 we give a lot of our employees healthcare, things like that.
    0:42:51 – So you moved to this town, you’re raising your kids there.
    0:42:54 You’ve got your wimpy kid property growing
    0:42:56 and developing and it sounds like a very happy
    0:42:58 productive place for you to live.
    0:43:01 Then you decide to open a bookstore,
    0:43:03 which I don’t know if you have a financial advisor.
    0:43:06 I’m guessing they would have advised you against that.
    0:43:07 – Yes, I think so.
    0:43:08 – But you did it.
    0:43:09 – Yes.
    0:43:11 – And you still have it, even though, as you said,
    0:43:12 you’re losing quite a bit of money.
    0:43:16 And then you decide rather than pulling back
    0:43:19 what sounds to me like you’re instead doubling down,
    0:43:21 if not more, so describe that.
    0:43:25 – Yes, we are redeveloping the whole downtown center,
    0:43:28 which is about four city blocks.
    0:43:31 This is an ambitious plan, maybe a foolish plan,
    0:43:34 but also really an exciting plan.
    0:43:37 Downtown Plainville has been depressed for years.
    0:43:39 – Tell me a little bit about the history of the town,
    0:43:43 like a lot of the Northeast and New England.
    0:43:46 I’m guessing there was a kind of industrial
    0:43:48 or manufacturing or commercial heyday
    0:43:51 that is long in the rear view mirror.
    0:43:52 All these towns and small cities
    0:43:55 are trying to either hang on or reinvent themselves.
    0:43:57 Where does Plainville fall in that?
    0:44:01 – Plainville was built around a jewelry industry.
    0:44:04 One of the companies was called Whiting and Davis,
    0:44:06 employed thousands of people.
    0:44:07 And what they’re most known for
    0:44:10 was creating the chain mail dress
    0:44:15 that Tina Turner wore in Mad Max Thunderdome.
    0:44:18 But yeah, now the center of town is sort of hollowed out.
    0:44:21 And in fact, a factory building that stood there
    0:44:25 for at least 80 years were about to take it down
    0:44:28 in about two days and create something new.
    0:44:36 – We decided to take a drive up from New York
    0:44:38 to see Plainville for ourselves.
    0:44:40 It took about three and a half hours.
    0:44:43 Getting close to town, we pass some outlet shops,
    0:44:46 some nice houses and some not so nice houses.
    0:44:49 We keep going and they are on Route 1A.
    0:44:52 We instantly see that Jeff Kinney was right.
    0:44:56 Depressing downtown, really nice bookstore.
    0:44:58 The contrast is stark.
    0:45:01 I could imagine an author driving into town
    0:45:03 on a book tour thinking,
    0:45:07 I’m going to kill the publicist who sent me here.
    0:45:08 There aren’t a lot of buildings.
    0:45:11 Most of them are rundown, tired.
    0:45:14 And then you come upon an unlikely story.
    0:45:16 I finally get the name.
    0:45:20 And it looks more like the ideal of a New England bookstore,
    0:45:22 like something that only Hollywood writers
    0:45:24 would dare imagine.
    0:45:28 The building is, like Kinney said, architecturally special.
    0:45:32 It’s three stories built in a style he calls federal wharf,
    0:45:34 muscular and proud, like something you’d see
    0:45:38 in a wealthy port town like Boston or Portland.
    0:45:40 It’s late Saturday morning when we arrive
    0:45:42 and inside the store is already crowded.
    0:45:47 All ages, busy cash registers, a humming cafe.
    0:45:49 The walls are hung with old wooden signs
    0:45:52 from old Plainville, but the tech is modern.
    0:45:55 Nice lighting, helpful employees everywhere,
    0:45:57 even nice bathrooms.
    0:45:59 If it weren’t for the books,
    0:46:01 you’d be surprised it’s a bookstore.
    0:46:04 On the day we visited,
    0:46:06 Kinney was hosting a presentation
    0:46:09 called Plainville Center Past and Present.
    0:46:13 He wanted to show his renovation plan to the community.
    0:46:16 Thank you so much for coming today.
    0:46:18 He was nervous beforehand.
    0:46:21 Kinney knows he is a very big fish in this small pond,
    0:46:25 and because he is an unusually considerate person,
    0:46:26 he’s worried that his plan
    0:46:28 will upset some of the old timers.
    0:46:30 I asked him if he had had to buy out
    0:46:32 the other business operators in town
    0:46:34 and how complicated that was.
    0:46:39 We did buy out the other operators,
    0:46:40 but I wouldn’t put it that way
    0:46:43 because it sounds like a little bit of a hostile action.
    0:46:45 We floated the balloon with each of these property holders
    0:46:49 and said, “Hey, tell us if you’re ever ready to move on.”
    0:46:52 And in fact, the owner operators of the tool factory
    0:46:53 that was across the street,
    0:46:55 they were just ready to retire.
    0:46:59 So how many people here actually shop at Fox Market?
    0:47:01 Okay, great.
    0:47:02 As soon as people started walking in,
    0:47:05 I said, “Okay, everybody here knows much more
    0:47:08 “about Plainville’s history than I do.”
    0:47:11 As it turned out, Kenny didn’t need to worry.
    0:47:13 The presentation was well attended
    0:47:15 and it went over well too.
    0:47:17 Kenny showed some images
    0:47:20 of what a new Plainville Square would look like
    0:47:23 and the town historian, Christine Moore,
    0:47:27 showed some images of the before times, the better times.
    0:47:30 The crowd was older, not surprisingly.
    0:47:33 There was very little descent and a lot of reminiscing
    0:47:35 and trying to refresh the memory.
    0:47:38 Whose grandfather ran which hardware store
    0:47:40 and which factory closed down when?
    0:47:42 And you remember that milkshake?
    0:47:44 You could only get it, such and such drugstore.
    0:47:47 (audience applauding)
    0:47:52 Afterward, Kenny invites us outside
    0:47:54 to see what will be where,
    0:47:56 if everything goes according to his plan.
    0:48:01 – We are at the intersection of Bacon Street in 1A
    0:48:03 in Plainville, Massachusetts.
    0:48:05 And this is where Plainville Square
    0:48:07 is going to come to life.
    0:48:12 So far we have a bookstore and a parking lot.
    0:48:15 But this is going to become an anchor restaurant,
    0:48:18 a beer garden, hopefully an Airbnb,
    0:48:21 and maybe a few other buildings as well.
    0:48:25 But right now you’re here on a day when this is ash and dust.
    0:48:27 We just took down seven buildings.
    0:48:30 So if you had been out of town for the weekend,
    0:48:33 you might feel like the town you grew up in
    0:48:35 has been flattened by a hurricane.
    0:48:38 But this is the pallet that we have to work with
    0:48:40 and we’re going to start building up.
    0:48:42 – What’s your budget?
    0:48:44 – Our budget, we don’t know yet,
    0:48:45 but I think that this is going to cost somewhere
    0:48:48 between 17 million and about $35 million.
    0:48:49 – Yeah.
    0:48:52 Do you ever have conversations with friends and family
    0:48:55 about what you might have done instead with that money?
    0:48:58 – No, I don’t often do that.
    0:49:01 I think people respect what we do with our money.
    0:49:02 We’re doing something a little bit unusual,
    0:49:05 investing in the town and infrastructure of the town.
    0:49:08 The thing that really gets me excited
    0:49:10 is the idea of changing this town,
    0:49:14 not for just our generation, but for generations to come.
    0:49:17 Motivation is that famous Greek proverb
    0:49:19 that a society doesn’t become great
    0:49:21 until old men plant trees
    0:49:23 that they’ll never enjoy the shade of.
    0:49:27 – The only place in Plainville
    0:49:28 where you can see the future
    0:49:30 is back at Jeff Kinney’s bookstore.
    0:49:33 A crowd is already starting to gather.
    0:49:35 By evening, there will be hundreds of people
    0:49:38 lined up around the block for a visiting author.
    0:49:41 (audience cheering)
    0:49:47 The author is a local hero, Jason Tatum,
    0:49:48 of the Boston Celtics.
    0:49:50 He is one of the best, richest,
    0:49:52 and most famous athletes in the world,
    0:49:55 fresh off a Celtics championship
    0:49:57 and an Olympic gold medal.
    0:49:59 He has come to the big bookstore
    0:50:01 in the little town of Plainville
    0:50:03 to talk about a children’s book he just published.
    0:50:05 It’s called “Baby Dunks a Lot.”
    0:50:08 For authors of this magnitude,
    0:50:11 Jeff Kinney himself runs the Q&A.
    0:50:12 – All right, Jason, thank you so much
    0:50:14 for coming to an unlikely story.
    0:50:15 We’re so honored to have you here.
    0:50:16 It’s really cool.
    0:50:18 So let’s everybody give up one more time for Jason.
    0:50:21 (audience cheering)
    0:50:26 So you’ve done lots of different events
    0:50:28 before Q&As and things like that,
    0:50:31 but have you ever done something like this as an author?
    0:50:33 – This is a first for me.
    0:50:36 I played basketball in front of a thousand people,
    0:50:39 but I’m honestly a little nervous to be up here.
    0:50:41 – Wait a second, you also play basketball?
    0:50:42 (audience laughing)
    0:50:43 Did not know.
    0:50:44 All right, this is cool.
    0:50:46 We’re off to a good start.
    0:50:46 But I was–
    0:50:49 – The Q&A was a big success.
    0:50:51 Tatum had pre-signed hundreds of books,
    0:50:54 so he didn’t stick around long afterward,
    0:50:56 but the store stayed open late
    0:50:58 and the crowd kept shopping.
    0:51:00 We wanted to know what they thought
    0:51:03 of Jason Tatum, of the store,
    0:51:06 and of their other local hero, Jeff Kinney.
    0:51:08 We spoke with Benjamin McCuchy.
    0:51:11 – Jason Tatum is my basketball hero.
    0:51:15 I wanna be in the NBA and be just like him
    0:51:20 and getting to see him and Jeff Kinney at the same time.
    0:51:21 And Jeff Kinney’s my favorite author.
    0:51:23 It’s just amazing for me.
    0:51:26 We heard from Izzy Gaudet.
    0:51:28 – We just did a loop through the bottom
    0:51:32 and it’s got so much, like from books to non-books.
    0:51:34 I’m definitely gonna have to come back.
    0:51:36 – And here’s Chris Alba.
    0:51:38 – Growing up here in North Attleboro,
    0:51:40 this corner was always like,
    0:51:43 it was a very dilapidated building, very old
    0:51:44 and it didn’t look great.
    0:51:47 He’s totally redone the way this entire area looks.
    0:51:50 It’s really popular and it looks awesome.
    0:51:51 So I love it.
    0:51:57 – I think that there is a chance for so much improvement.
    0:51:59 Like if we lived in Beverly Hills,
    0:52:02 we would have no interest in doing this kind of a thing.
    0:52:06 But Plainville can be changed in a really outsized way.
    0:52:09 – I assume it felt like you were rowing against the tide
    0:52:11 by opening an independent bookstore
    0:52:12 in a relatively small place,
    0:52:15 but it does seem like independent bookstores
    0:52:17 are back on the rise.
    0:52:22 They’ve done fairly well through COVID and then post COVID.
    0:52:24 It strikes me, and I may be wrong,
    0:52:27 that as the world continues to get bigger and faster
    0:52:31 and more consolidated and more digital and more connected,
    0:52:35 that there’s a counter push for a return to the handmade
    0:52:37 and the homemade and for community.
    0:52:38 What’s your view on that?
    0:52:39 – I think there is.
    0:52:42 I think that people are craving
    0:52:44 this feeling of connectedness.
    0:52:47 I’m really surprised that the effects of COVID
    0:52:50 have had such a long tail.
    0:52:51 I think we’re seeing the effects of COVID
    0:52:54 on these 20-something year old people
    0:52:57 who didn’t have a high school graduation,
    0:52:59 who now want to go into jobs
    0:53:02 where they work with peers physically in person.
    0:53:06 I think that a bookstore is part of that experience.
    0:53:08 But I also think that there’s a practical aspect to it,
    0:53:11 is that you really can’t replicate
    0:53:14 the book buying experience online.
    0:53:17 It’s similar to the record buying experience.
    0:53:19 We grew up in a time where you went to the record store
    0:53:22 and you flipped through the big albums
    0:53:25 and looked at the artwork and heard the music overhead.
    0:53:27 It was just better.
    0:53:31 – So, Macy’s is undergoing its own rehab
    0:53:32 or renovation at the moment.
    0:53:36 They’re trying to figure out how this very old-fashioned,
    0:53:40 still prominent brand can persevere
    0:53:42 and succeed in the 21st century.
    0:53:44 And it strikes me as their challenges
    0:53:45 are similar to what you’re trying to do now,
    0:53:49 which is build a place or create a space
    0:53:52 where people want to be with other people doing stuff
    0:53:55 that a lot of people stop doing during our digital revolution.
    0:53:58 Do you see any connection between yourself
    0:54:01 and someone like them, some big corporate entity
    0:54:03 that’s trying to reinvent their future?
    0:54:06 – One of the things that’s been really surprising to me
    0:54:09 is that a major beer operator,
    0:54:10 and I can’t name names right now
    0:54:11 because we haven’t signed papers,
    0:54:15 but they’re interested in being in downtown Plainville.
    0:54:18 And I said, “Why are you interested in being here?”
    0:54:21 And they said, “Because if you’re here,
    0:54:22 you’re the thing that people do.
    0:54:25 If we go into Boston or a big town like that,
    0:54:29 you’re competing with 30 or 40 other restaurants.
    0:54:31 But in a place like this,
    0:54:34 you’ve got a shot at becoming the show.”
    0:54:39 So it’s possible that if we set the table just so
    0:54:42 that we will get partners that we weren’t expecting to get.
    0:54:46 And maybe Macy’s could be a part of something like this.
    0:54:48 – I’m very curious about what’s going to happen
    0:54:52 because we’re asking this really big question,
    0:54:55 which is if you invest in your downtown,
    0:54:57 can you change the fate of a town?
    0:55:00 Can you change the way that people feel about the town?
    0:55:03 Can you make the town a model for other towns?
    0:55:05 I don’t know the answer to that.
    0:55:07 And I think that’s gonna be my life’s work
    0:55:10 is figuring out if this kind of thing can work.
    0:55:16 – This made me think of the slogan that Macy’s
    0:55:20 has adopted for its turnaround, a bold new chapter.
    0:55:23 That could have also been the name of Jeff Kinney’s bookstore,
    0:55:26 but an unlikely story is better.
    0:55:29 In fact, an unlikely story might not be a bad slogan
    0:55:32 for Macy’s considering what it is up against.
    0:55:35 So I went back to CEO Tony Spring
    0:55:38 and I asked him what he thought of Jeff Kinney’s
    0:55:40 new and improving Plainville
    0:55:43 and whether Macy’s might consider opening up
    0:55:44 some kind of store there.
    0:55:46 – We are always open to evaluating
    0:55:50 different real estate opportunities for retail.
    0:55:52 I applaud what he’s doing.
    0:55:55 I want vibrant towns across this country.
    0:55:57 – Spring still lives in Westchester County,
    0:55:59 where he grew up.
    0:56:01 Westchester has some of the nicest,
    0:56:03 leafiest suburbs in America
    0:56:08 with small town main streets and high median incomes.
    0:56:11 – My town, we probably have more banks and restaurants
    0:56:13 than anything else, nail salons.
    0:56:15 I miss the candy store, I miss the bookstore,
    0:56:17 I miss the record store.
    0:56:20 Retail is that mix of variety
    0:56:22 that creates the reason for the stroll
    0:56:24 and the reason to spend locally.
    0:56:27 So we want Macy’s to be a part of that experience.
    0:56:30 You know, I wish Jeff the best, I would say,
    0:56:32 follow the adage from Cheers,
    0:56:34 make sure you know everybody’s name.
    0:56:36 Those little touches make the absolute difference
    0:56:38 in where you choose to shop again.
    0:56:41 (gentle music)
    0:56:45 It’s hard to predict the future of Macy’s
    0:56:48 or the future of Plainville, Massachusetts.
    0:56:52 Tony Spring and Jeff Kinney are both investing a lot
    0:56:53 in their respective turnarounds
    0:56:56 and it’s natural to wish them well.
    0:56:59 On the other hand, people are fickle,
    0:57:02 markets are fickle and generally speaking,
    0:57:04 you don’t succeed in the future
    0:57:06 by trying to mimic the past.
    0:57:11 But for now, those concerns will have to wait.
    0:57:14 It is Thanksgiving Eve, Spring and Kinney
    0:57:16 both have a parade to get to.
    0:57:18 (upbeat music)
    0:57:23 – I’ll be with my wife.
    0:57:24 I don’t think my kids will come
    0:57:27 because they’ll probably be cooking Thanksgiving
    0:57:30 and maybe a brother-in-law or sister-in-law too.
    0:57:32 And the Macy’s leadership family
    0:57:35 and hopefully some customers and colleagues
    0:57:38 will sit in the grandstand like many others
    0:57:40 and will enjoy the parade as it hits 34th Street.
    0:57:42 – There’s something really hypnotic
    0:57:46 about seeing one of those giant helium balloons
    0:57:48 move between the buildings.
    0:57:51 It’s the outsizedness which is so exciting.
    0:57:54 It’s really cool when you see a giant Papa Smurf
    0:57:58 go by somebody’s window or Clifford the Big Red Dog
    0:58:01 and you see the scale of the thing.
    0:58:04 – What do you think the parade represents?
    0:58:09 It’s this weirdly old-fashioned traditional event
    0:58:13 that in a world of much more dazzling modes
    0:58:18 of entertainment draws 30 million people a year on TV
    0:58:19 which is astonishing to me.
    0:58:20 So what does it feel like
    0:58:22 to be an essential component of that?
    0:58:24 – It feels like legitimacy to me.
    0:58:27 It feels like you’re making a statement about your brand
    0:58:30 that you’re not just wishing and hoping
    0:58:31 that you’re a part of this.
    0:58:34 It’s like a theory or a thesis that you’re saying,
    0:58:36 I think we belong here.
    0:58:39 And then after a certain amount of time, you say,
    0:58:41 you know what, we do belong here.
    0:58:42 This is right.
    0:58:46 – Do you interact with other property creators
    0:58:48 or representatives at the parade?
    0:58:51 – I’ve become friends with Jeanne Schultz,
    0:58:53 the widow of Charles Schultz.
    0:58:54 And it’s a small club.
    0:58:57 So it’s pretty cool to be a part of that club.
    0:59:00 – In a battle of balloons,
    0:59:04 would Greg or Snoopy win?
    0:59:07 – I’m gonna switch the question to be the Muppets.
    0:59:10 The first year, Diary of a Wimpy Kid,
    0:59:13 Greg Heffley was right behind Kermit the Frog.
    0:59:15 – You think he could have taken him?
    0:59:19 – Well, I was staring down the backside of a frog
    0:59:22 and I said, that feels about right to me, you know?
    0:59:28 – My thanks to Jeff Kinney and the Plainville crew
    0:59:30 for spending time with us.
    0:59:33 Ditto Tony Spring and the Macy’s crew.
    0:59:37 Also to Mark Cohen for his sober retail insights
    0:59:40 and thanks especially to you for listening.
    0:59:43 I hope you have a great holiday season.
    0:59:46 Meanwhile, coming up next time on the show,
    0:59:49 the real world remains challenging.
    0:59:54 – Putin looked great physically, was relaxed,
    0:59:58 cracking jokes, some of them at our expense.
    1:00:02 We hear an insider’s view of Russian ambition,
    1:00:06 Ukrainian desperation and the American response.
    1:00:10 – Our politicians aren’t leading Republicans or Democrats.
    1:00:12 – We speak with John J. Sullivan,
    1:00:16 former Deputy Secretary of State and US Ambassador to Russia.
    1:00:18 That’s next time on the show.
    1:00:20 Until then, take care of yourself
    1:00:23 and if you can, someone else too.
    1:00:26 Freakonomics Radio is produced by Stitcher and Renbud Radio.
    1:00:29 You can find our entire archive on any podcast app
    1:00:32 also at Freakonomics.com,
    1:00:34 where we publish transcripts and show notes.
    1:00:37 This series was produced by Alina Cullman
    1:00:40 and we had recording help from George Hicks
    1:00:42 and research help from Daniel Moritz-Rabson.
    1:00:44 Our staff also includes Augusta Chapman,
    1:00:46 Dalvin Abouaji, Eleanor Osborne,
    1:00:49 Ellen Frankman, Elsa Hernandez, Gabriel Roth,
    1:00:52 Greg Rippon, Jasmine Klinger, Jason Gambrale,
    1:00:54 Jeremy Johnston, John Schnars,
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    1:00:58 Rebecca Lee Douglas, Sarah Lilly,
    1:01:00 Teo Jacobs, and Zac Lipinski.
    1:01:03 Our theme song is “Mr. Fortune” by the Hitchhikers
    1:01:05 and our composer is Luis Guerra.
    1:01:13 – We used to be slacksville for a time, I think unofficially
    1:01:17 and so, Plainville seemed like a giant upgrade.
    1:01:18 (camera clicking)
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    1:01:34 you

    Macy’s wants to recapture its glorious past. The author of the Wimpy Kid books wants to rebuild his dilapidated hometown. We just want to listen in. (Part two of a two-part series.)

     

    • SOURCES:
      • Mark Cohen, former professor and director of retail studies at Columbia Business School.
      • Will Coss, vice president and executive producer of Macy’s Studios.
      • Jeff Kinney, author, cartoonist, and owner of An Unlikely Story Bookstore and Café.
      • Tony Spring, chairman and C.E.O. of Macy’s Inc.

     

     

  • 612. Is Macy’s Thanksgiving Parade Its Most Valuable Asset?

    AI transcript
    0:00:08 Hey there, it’s Stephen Dubner with a quick word before today’s episode.
    0:00:12 We have a new listener survey that I would love you to take if you have the time and
    0:00:13 the interest.
    0:00:19 We are always trying to get better around here and feedback helps, so please go to Freakonomics.com/survey.
    0:00:32 It’ll only take a few minutes.
    0:00:36 I really only started paying attention to the Macy’s Thanksgiving Day parade about 10
    0:00:41 years ago, when my family and I moved into the neighborhood where the parade starts and
    0:00:44 where the night before they stage everything.
    0:00:47 This is on the Upper West Side of Manhattan.
    0:00:52 We take over two extra-wide streets to lay out the giant balloons.
    0:00:57 Each balloon arrives folded up flat in its own small rolling cart.
    0:01:02 It gets unpacked, unfolded, laid out on the pavement, and then comes the helium.
    0:01:07 There’s a truck nearby with big helium canisters stacked horizontally on a rack.
    0:01:11 Up close, the balloons are really big.
    0:01:16 You see this as soon as they start drinking up some helium and puff up to full size.
    0:01:22 Tonight is Wednesday, the night before the parade, Inflation Night, they call it.
    0:01:26 So the balloons aren’t allowed to rise to parade height.
    0:01:31 Each one has a net thrown across the top and the net is held down by sandbags.
    0:01:36 If you happen to be passing by on foot, this can provide an unusual view of your favorite
    0:01:44 balloon character, a bulging eyeball, a massive derriere, some very chubby fingers.
    0:01:48 Many thousands of people come see the balloons on Inflation Night.
    0:01:54 It is an unusual and joyful scene for the visitors and the locals.
    0:01:59 For many people, myself included, it is the best New York night of the year.
    0:02:04 A lot of people who live on these blocks throw Inflation Parties up in their apartments.
    0:02:09 And when you look straight down out of your window, you get another unusual and wonderful
    0:02:11 view of the balloons.
    0:02:16 I’ve watched this whole operation for several years now, and every year, I’m a little
    0:02:18 bit more impressed.
    0:02:24 The parade people execute the mission with a blend of military efficiency and childlike
    0:02:25 glee.
    0:02:29 You can’t help but marvel at how much planning must go into it.
    0:02:32 Also, how good the execution has to be.
    0:02:39 Not just from the parade side of things, but from the city side and the broadcasting side.
    0:02:42 And it’s not like they have weeks or even days to set up.
    0:02:49 On Wednesday morning, the streets are normal, full of cars, trucks, jaywalkers, dogs, bikes,
    0:02:54 and then the balloon people come and you get to see the real, up-close version of the thing
    0:02:59 that everybody else has to watch on TV, in miniature.
    0:03:04 The cleanup begins as soon as the last balloon enters the parade on Central Park West, and
    0:03:10 by the time they reach the Macy’s flagship store down in Harold Square, our streets
    0:03:14 are back to cars and trucks again, although not so many since it’s still Thanksgiving
    0:03:15 morning.
    0:03:19 Like I said, it’s only recently that I began paying attention to the parade.
    0:03:25 I do remember it being on TV when I was a kid, but I don’t know, I guess I just wasn’t
    0:03:27 a parade person.
    0:03:32 Seeing it up close made me curious, and after last year’s parade, I took a look at the TV
    0:03:33 ratings.
    0:03:43 Holy, nearly 30 million viewers, another 3 million plus watch in person from the sidewalks
    0:03:48 and grandstands, but the TV numbers blew me away.
    0:03:52 As you may know, the television juggernaut these days is the National Football League.
    0:03:58 Of the 100 most watched broadcasts last year, 93 were NFL games.
    0:04:03 The Macy’s parade was one of the remaining 7, beaten out only by the State of the Union
    0:04:04 address.
    0:04:10 A TV audience of 30 million must generate a lot of ad revenue, and then I got to wondering
    0:04:16 how much, and then I got to wondering how much it costs to produce the parade.
    0:04:18 Simple questions, right?
    0:04:21 As it turns out, not so simple.
    0:04:27 Macy’s is one of the oldest department stores in the US, and it has a lot of traditions.
    0:04:33 One of those traditions is not talking about the economics of its Thanksgiving parade.
    0:04:38 They like to call it their annual gift to the nation, and we all know it’s not polite
    0:04:45 to ask how much a gift costs, but today, on Freakonomics Radio, we ask anyway.
    0:04:58 Why?
    0:05:01 This is the first of a two-part series.
    0:05:04 We will look into the cost of the raw materials.
    0:05:06 We do have our finger on the pulse of helium.
    0:05:09 We’ll look at how New York City pitches in.
    0:05:13 I don’t know how you guys found me, by the way.
    0:05:15 Because most people don’t know I exist.
    0:05:21 We will hear from the CEO of Macy’s, who’s trying to keep an old store alive when so
    0:05:23 much retail is dying.
    0:05:26 I want to be perceived as giving this gift to the city and to the nation.
    0:05:28 I also want to do a lot of business.
    0:05:33 And we ask an industry expert what Macy’s stands for today.
    0:05:35 Macy’s doesn’t stand for anything today.
    0:05:41 So come along as we drink the helium and wonder if the Macy’s parade may be the most valuable
    0:05:55 lesson Macy’s has.
    0:06:01 This is Freakonomics Radio, the podcast that explores the hidden side of everything with
    0:06:12 your host Stephen Dubner.
    0:06:17 We are hardly the first people to wonder how much it costs to stage the Macy’s Thanksgiving
    0:06:18 Day Parade.
    0:06:24 There are published estimates ranging from around $10 to $15 million, but they’re just
    0:06:29 estimates and it’s unclear where those numbers come from, which makes sense.
    0:06:33 Macy’s doesn’t like to talk about it, and therefore it’s hard to even identify all
    0:06:34 the costs.
    0:06:38 It’s also hard to quantify the benefits.
    0:06:43 Keep in mind that most of the balloons and floats in the parade are sponsored by big brands
    0:06:48 that are presumably paying big money for the millions of eyeballs that will see them.
    0:06:52 And the parade itself is one big ad for Macy’s.
    0:06:56 But let’s start by focusing on the costs.
    0:07:01 There is, of course, the expense of building and maintaining the balloons and floats.
    0:07:05 There is the casting and wrangling of the marching bands and other performers.
    0:07:10 And there are all sorts of city services, police and sanitation and counter-terrorism
    0:07:13 that somebody’s paying for.
    0:07:18 And then there are all the personnel costs for the Macy’s parade unit, which is a year-round
    0:07:19 operation.
    0:07:23 So we figured we might as well start at the source.
    0:07:27 Will Koss, and I’m the executive producer of Macy’s Thanksgiving Day parade.
    0:07:29 And what does Will Koss actually do?
    0:07:35 The executive producer oversees the entire production of the parade from our balloon and
    0:07:41 float design, construction fabrication, and delivery to New York City on parade day to
    0:07:47 all of the logistics as it relates to shutting down three and a half miles of New York City
    0:07:49 on the busiest travel day in New York.
    0:07:54 Koss grew up in New York in the Bronx and he went to college nearby on Long Island.
    0:07:57 I traveled really far.
    0:08:00 Have you ever lived outside of the New York City area then?
    0:08:02 I’ve not.
    0:08:04 Koss now lives on the Upper West Side with his wife and daughter.
    0:08:06 He’s 44 years old.
    0:08:13 He started out as a producer for MTV, Nickelodeon, YouTube, and he got the Macy’s job in 2021.
    0:08:16 But he sounds like a lifer.
    0:08:21 They’re part of the tradition of Thanksgiving morning for millions of people.
    0:08:22 If you love marching bands, we’ve got that.
    0:08:24 If you love giant balloons, we’ve got that.
    0:08:25 We’ve got floats.
    0:08:27 We’ve got celebrity.
    0:08:28 We’ve been a staple.
    0:08:32 Whether you’re sat in front of the television or have it on in the background just using
    0:08:37 us as a soundtrack to your Thanksgiving morning, we’re there.
    0:08:44 Macy’s itself was founded in 1858 by Roland Hussie Macy, a former whaler from Nantucket.
    0:08:51 He ran dry goods stores in Massachusetts and California before settling in New York City.
    0:08:55 They sold everything from clothing and furniture to groceries and books.
    0:09:02 By 1902, according to one history of the store, the human wants were few indeed that the Macy’s
    0:09:04 store could not meet.
    0:09:09 By 1924, the Macy’s flagship store in Herald Square was the world’s largest store with
    0:09:13 over one and a half million square feet.
    0:09:18 That year, Macy’s sponsored its first parade, a six-mile march through Manhattan.
    0:09:25 It featured three horse-drawn floats, four professional bands, and camels, elephants,
    0:09:28 and bears borrowed from the Central Park Zoo.
    0:09:34 In these early days, Macy’s released big helium balloons into the sky after the parade and
    0:09:37 offered a $100 reward for the return.
    0:09:44 That tradition ended in 1932 when a novice pilot, going for the reward, crashed into
    0:09:46 a balloon in the sky.
    0:09:51 It has now been 100 years since the first parade, although this year’s addition is only the
    0:09:55 98th since they took three years off during World War II.
    0:09:58 The parade today looks a lot different than it used to.
    0:10:03 When there are 30 million people watching on TV, appearances matter.
    0:10:06 We are the largest televised variety show of the year.
    0:10:10 There’s something about the work that we do that connects multi-generational.
    0:10:15 It’s a responsibility that we don’t take lightly, knowing that we have that impact on
    0:10:18 so many folks.
    0:10:25 The demographics are far and wide and are representative of everyone that’s in New York City and America.
    0:10:26 That is Jen Neal.
    0:10:33 And I oversee the strategy, the creative development, and the operations for all of our live events
    0:10:36 and specials across NBCU.
    0:10:41 NBCUniversal is the network that has carried the Macy’s parade for 71 years.
    0:10:45 Neal’s team produces roughly three dozen big live events a year.
    0:10:51 Christmas at Rockefeller Center, New Year’s Eve, the People’s Choice Awards, red carpets
    0:10:56 around Hollywood’s biggest nights like the Grammys, the Oscars.
    0:10:58 My role focuses on the entertainment side.
    0:11:03 But we have incredible teams on the sports side that do the Super Bowl and the Olympics.
    0:11:09 Can you compare the production and coverage of the parade to the Super Bowl?
    0:11:13 Obviously, with the Super Bowl, there are many, many, many elements and features and
    0:11:14 so on.
    0:11:21 But it is, in the end, a self-contained athletic competition on one big patch of turf, whereas
    0:11:28 the parade is this roving, multi-mile extravaganza through New York City.
    0:11:33 There’s incredible complexity in terms of the production.
    0:11:41 Each year, there are a number of elements that stay the same and each year we are evaluating
    0:11:43 what we want to evolve and change.
    0:11:46 Do the Broadway shows kick off the show?
    0:11:49 Is it better to have them in the second or third hour?
    0:11:54 A Super Bowl is incredible and there’s many dynamics that go into that, but you’re still
    0:11:59 covering a football game which has the same rules and the same field of play each year.
    0:12:01 What is the timeline from your end?
    0:12:04 When do you start working on a given year’s parade?
    0:12:09 We start looking at it right after the parade ends, truly, the week or two after.
    0:12:14 In fact, this year is the 98th year of the parade and we are already talking about the
    0:12:18 99th and the 100th anniversary.
    0:12:23 The parade is an 18-month pre-production to execution process.
    0:12:25 That’s will cost again.
    0:12:31 My full Macy Studios team is over 65 full-time folks that range from our partnership team
    0:12:36 to our creative team to our studio production team, logistics, project management, production
    0:12:37 management.
    0:12:40 The 65 number is our full-time.
    0:12:43 As we get closer, we expand considerably.
    0:12:47 The week before, they paint the star on 34th Street.
    0:12:51 The Monday and Tuesday nights, we shut down 34th Street in front of Macy’s, we’re rehearsing
    0:12:53 with all the performers.
    0:13:00 Wednesday night, we’ve introduced in the last two years a countdown show to bring to life
    0:13:05 the inflation of the balloons that happen magically on the Upper West Side.
    0:13:10 Then Thursday, we have a call time, the day of Thanksgiving, 2 a.m.
    0:13:13 And Jen, where do you spend parade day?
    0:13:14 I’m in the truck.
    0:13:16 I’m in the truck on parade day.
    0:13:17 Which is where?
    0:13:19 On 34th Street or Jason to 34th Street.
    0:13:21 What’s that day like for you?
    0:13:24 There’s a lot of energy, a lot of adrenaline.
    0:13:28 We go live at 8.30 through noon, so it’s three and a half hours of that coverage.
    0:13:33 We have preparation and contingencies and plans for every single thing that can happen
    0:13:34 along the way.
    0:13:42 And then I do, once every parade, take 30 seconds during a commercial break and jump out into
    0:13:49 the streets and see the scale of Snoopy or the Minion or the Doughboy adjacent to the
    0:13:50 buildings in New York.
    0:13:51 And it’s magic.
    0:13:55 It also sounds incredibly expensive to produce from your side.
    0:14:01 Not just the coverage part, but the coordination and the run of show and talent and so on.
    0:14:03 Can you just talk about how extensive that is?
    0:14:09 We don’t really get into the cost of everything, but what I can say is we know that this is
    0:14:14 incredibly valuable to our advertising partners.
    0:14:19 And we know that advertising messages that are in the parade deliver stronger memorability
    0:14:20 and likability.
    0:14:29 I did see on the NBC Universal site a report about the power of the parade from a consumer
    0:14:30 perspective.
    0:14:35 It said that the year-over-year growth demonstrates that NBC Universal is moving consumers down
    0:14:37 the purchase funnel.
    0:14:40 What does that mean, moving consumers down the purchase funnel?
    0:14:44 First, our job is we got to make sure that this is incredibly entertaining and relevant
    0:14:46 and great TV.
    0:14:52 And second, brands want to be associated with this because their messaging is woven in and
    0:14:55 each brand takes a different strategy to do that.
    0:14:57 Can you give me an example?
    0:15:03 When you are a Genio turkey and you want to have a turkey float, they’re going to want
    0:15:07 to talk about the number of years of the big turkey spectacular and what Genio brings to
    0:15:08 you.
    0:15:14 Well, the star of the Thanksgiving meal has arrived on a green and gold platter.
    0:15:16 The signature colors of its gracious host, Genio.
    0:15:22 If you’re the jolly green giant, you’re going to talk about Holly traditions and some of
    0:15:23 those products.
    0:15:30 Well, there in the valley on the farm, the green giant oversees the fall harvest, ensuring
    0:15:36 that each vegetable for your Thanksgiving table is picked at the peak of perfection.
    0:15:42 In other words, yes, the Macy’s Thanksgiving Day parade is a parade, but unlike a memorial
    0:15:49 parade or a victory parade or a pride parade, this one is plainly a commercial venture,
    0:15:50 a marketing venture.
    0:15:54 If you have a Minions float, you’re definitely going to talk about Stuart the Minions and
    0:15:55 the frantic bananas.
    0:16:00 Ronald McDonald, Smokey the Bear, all of these are traditions and floats that have their
    0:16:06 own unique messaging from forest fires to fundraising for children’s hospitals to the
    0:16:32 wonder ship float.
    0:16:48 We did later find an estimate from Vivex, a company that tracks commercial ad spending.
    0:16:54 They report that brands spent $76 million to advertise on NBC during last year’s parade
    0:16:55 broadcast.
    0:17:00 Macy’s would, as the saying goes, neither confirm nor deny.
    0:17:06 And that TV revenue presumably wouldn’t include money the brands pay Macy’s directly for
    0:17:09 the rights to sponsor a balloon or a float.
    0:17:13 Although we should say not every balloon or float is bringing in sponsor money because
    0:17:16 some of them are promoting Macy’s itself.
    0:17:18 Here’s Will Kos again.
    0:17:25 Tom Turkey and Santa are Macy’s owned and are the iconic elements that open and close
    0:17:26 the parade.
    0:17:30 Okay, so there’s no royalties being paid to the Santa Claus Foundation or anything like
    0:17:32 that, I assume.
    0:17:36 So I want to ask you about the relationships with the brands and whatever you’re willing
    0:17:39 or able to tell me about the financial relationship.
    0:17:44 My wife’s favorite balloon when she was a kid, she grew up in New York, was the Pillsbury
    0:17:50 Doughboy and the first year we lived on this block, when we woke up the next morning at
    0:17:58 like 6 a.m. and we looked down it’s just this magical site with the sunrise off the balloons
    0:18:03 and there was the Doughboy and we could see like the patches his butt was taped a little
    0:18:06 bit and it was just so beautiful and endearing.
    0:18:11 And I thought, wait a minute, is that still the Pillsbury Doughboy, does Pillsbury still
    0:18:12 even exist?
    0:18:16 Then I started to think about Snoopy and I thought about Snoopy I knew was the emblem
    0:18:20 of MetLife for a while and I thought, oh, does that mean it’s a MetLife balloon?
    0:18:26 So let me just make it an open thread for you to tell me what you can about why the
    0:18:32 balloons that are in the parade are in the parade and how that relationship works.
    0:18:39 Pillsbury Doughboy, Snoopy, our peanut characters, SpongeBob SquarePants, the goal with all of
    0:18:45 our balloons is to create a moment that’s instantly recognizable in the sky as it relates
    0:18:48 to selection of balloon.
    0:18:53 The most important goal is to ensure that each of the characters resonates with our audiences
    0:18:55 and our audiences 1 to 100.
    0:19:01 So we have some of those we’ll call them legacy characters and then we have new characters
    0:19:04 that are appealing to a much younger audience.
    0:19:09 And Will, what if someone like me came to you and I said, hey, Will, I’ve got this brand
    0:19:11 Freakonomics Radio.
    0:19:15 In some ways it’s a pretty big brand, but you know, it’s kind of like a big niche brand.
    0:19:17 It’s not Teenage Mutant Ninja Turtles.
    0:19:19 It’s not, you know, Spider-Man.
    0:19:20 I recognize that.
    0:19:25 But I’ve also got a pretty beautiful visual image, what we call an orple, right?
    0:19:28 It’s an apple that you cut open and it’s an orange in the middle and it’s, you know, it’s
    0:19:29 fruit.
    0:19:30 Who doesn’t like fruit?
    0:19:36 And I think it would be worth my while to try to figure out how to get my brand in front
    0:19:37 of the world.
    0:19:41 These 30 million people are watching on TV, these 3 million that are there.
    0:19:44 Would you even take a meeting with me?
    0:19:46 You’re taking the meeting right now.
    0:19:49 You’re underselling the brand, my friend.
    0:19:52 We’re open to taking every meeting and every conversation.
    0:19:57 This is not an exclusive members only type of event.
    0:20:02 Well, maybe not quite members only, but it is a small club.
    0:20:06 This year there are 17 giant balloons in the parade.
    0:20:12 Sadly, the Freakonomics Orple is not one of them, but this guy has one.
    0:20:16 I pinch myself when I see the balloon fly down the main avenue there.
    0:20:23 That is Jeff Kinney, an owner of an unlikely storybook store in Plainville, Massachusetts,
    0:20:26 and I am the author of the Diary of a Wimpy Kid series.
    0:20:32 Now for those who are children or have children who have read those books, you are somewhere
    0:20:39 between, I don’t know, Jesus Christ and pick your favorite cult hero ever.
    0:20:42 What’s it been like to be you these last 15, 18 years?
    0:20:47 The ride for me has been a lot like the Truman Show.
    0:20:52 I feel like I created this character who’s a stick figure and somehow that has propelled
    0:20:56 me into the most unusual situations you could ever imagine.
    0:21:01 How many books have there been now and how many copies sold globally?
    0:21:04 There are 19 books in the main series.
    0:21:11 I have four or five spin-off books and there have been about 295 million sold.
    0:21:14 For people who don’t know the series or don’t know the character, just talk to me for a
    0:21:15 minute about Greg Heffley.
    0:21:16 Who is he?
    0:21:20 What is his interior and exterior life like?
    0:21:23 Greg Heffley is a complicated character.
    0:21:25 He’s a bit of a mess.
    0:21:27 He doesn’t always do the right thing.
    0:21:32 At the time that I was writing Wimpy Kid, I was reading Harry Potter, which is about
    0:21:34 a boy who’s an aspirational character.
    0:21:35 He’s heroic.
    0:21:37 Greg isn’t heroic.
    0:21:41 He doesn’t really want to hear about his best friend Raleigh’s vacation and their awesome
    0:21:42 adventures.
    0:21:46 He’s like a Larry David type in a way.
    0:21:49 He’s very flawed, but hopefully still lovable.
    0:21:54 Give me a little bit of the origin story of Wimpy Kid itself and Greg Heffley himself
    0:21:58 and how you brought them to life, how long it took, etc.
    0:22:01 My big dream was to become a newspaper cartoonist.
    0:22:05 When I was growing up, we got the Washington Post every morning.
    0:22:07 My father opened the paper to the comics page.
    0:22:14 When I got up, it was already open to the far side and Bloom County and Calvin and Hobbes.
    0:22:16 You had good taste in comics.
    0:22:17 Yes.
    0:22:19 I was like, “Well, I know where I want to be.
    0:22:23 I want to be at the top of that page.”
    0:22:27 In college, I created a comic strip that got the attention of the Washington Post.
    0:22:33 They did a big, full-page article on the style section and said, “Hey, this is the next
    0:22:37 big thing, this comic by this guy,” and I believed it.
    0:22:44 Then I hit the reality of shrinking newspapers and the limits of my own talent and I couldn’t
    0:22:46 break into the comics.
    0:22:50 After about three years of flunking my head into the wall, I realized that it wasn’t going
    0:22:52 to happen for me.
    0:23:00 At the time I was keeping a journal, the journal was an organic mix of text and cartoon illustrations
    0:23:04 that showed what was happening in my life at the time.
    0:23:07 I looked at it and I said, “Hey, maybe I’ve got something here.
    0:23:10 I can’t be in newspapers, but maybe I can be in books.”
    0:23:13 I thought, “I’ll fictionalize this.
    0:23:17 First, I’ll write down every funny thing that happened to me in my life as a kid.”
    0:23:21 I thought I could do that in about two months.
    0:23:23 Instead it took four years.
    0:23:29 It was a 77-page sketch journal, but I filled it with enough ideas for five books.
    0:23:34 Then, as I understand, but correct me if I’m wrong, you’re working as a game developer
    0:23:40 for Pearson Education and you begin to publish some of this work online on a Pearson site
    0:23:41 called FunBrain.com.
    0:23:42 Is that right?
    0:23:43 That’s right.
    0:23:47 Thomas was looking for something to keep traffic up over the summer months.
    0:23:50 He said, “Hey, I’m working on this thing.
    0:23:51 It’s not really for kids.
    0:23:56 It’s more like the wonder years where an adult is looking back on their childhood, but it
    0:23:57 could work.”
    0:24:00 I started publishing online.
    0:24:06 After about a year, we had 12 million readers and a guy, a lot of encouragement from adult
    0:24:11 readers who were following my almost blog-like entries.
    0:24:13 Okay, and then that leads to a book contract.
    0:24:15 Just walk me quickly through the mechanics.
    0:24:16 What came first?
    0:24:17 Was there an agent?
    0:24:20 Was there a reach-out from a publisher or editor?
    0:24:22 I went to New York Comic-Con.
    0:24:24 I walked around with a sample packet.
    0:24:29 I heard about a guy who published a webcomic called “Mom’s Cancer.”
    0:24:32 I talked to the editor at a booth.
    0:24:36 He said, “This is exactly what we’re looking for,” and I was off to the races.
    0:24:40 You wind up publishing with Harry N. Abrams, correct?
    0:24:41 Yes.
    0:24:45 At the time, Harry N. Abrams would be known as an art book publisher, so those gorgeous
    0:24:51 picture books that you have on your coffee table, primarily, they weren’t doing a lot
    0:24:53 of this kind of thing.
    0:24:58 What I really liked was that they treated books as an object to be valued.
    0:25:03 They put a lot of craftsmanship into their publishing, and I thought, “If I sign with
    0:25:09 Harry N. Abrams, that might elevate the work itself,” and that’s the way it’s been with
    0:25:10 Wimpy Kid.
    0:25:16 About two weeks after the book was published, it got on the New York Times bestseller list,
    0:25:18 which was just an absolute shock.
    0:25:23 I remember my wife and I were jumping up and down on our kid’s bed.
    0:25:24 We just couldn’t believe it.
    0:25:30 Now it’s been on the list a combined total of something like 900 weeks.
    0:25:36 Let’s now talk about how you came to intersect with the Macy’s Parade.
    0:25:44 In about 2010, Diary of Wimpy Kid was doing pretty well, and we had an ambitious publicist
    0:25:50 named Jason Wells who said, “Hey, I think we could get a balloon in the Macy’s Parade.”
    0:25:54 He approached Macy’s and said, “Hey, how about a balloon?”
    0:25:59 They said, “It might not be ready for a balloon, but how about a float?”
    0:26:06 The idea I remember was that there was going to be a standing Greg Hefley, and at the base
    0:26:11 of the float would be a bunch of kids reading, so it would be a float to promote reading
    0:26:13 and literacy.
    0:26:17 That sounds a little, what’s the word I’m looking for, more reverent perhaps than the
    0:26:20 Wimpy Kid brand is.
    0:26:21 That’s right.
    0:26:26 We said we’re going to hold out a little bit and see if we get into balloon territory.
    0:26:27 Then what happens next?
    0:26:34 The next year, I think I got named to Time Magazine’s Most Influential People list.
    0:26:35 Congratulations in that.
    0:26:37 It theoretically makes you balloon worthy.
    0:26:38 Yeah.
    0:26:39 Right.
    0:26:40 Macy said, “Yes, please.
    0:26:44 We’d like to do a giant helium balloon.”
    0:26:49 My publisher was kind enough to sign on for the terms.
    0:26:53 Tell me what you know about that negotiation and the terms of the deal.
    0:26:58 As you can probably imagine, the terms are proprietary, so I can’t talk about that, but
    0:27:01 it was a multi-year situation.
    0:27:05 You pay a certain amount to get the balloon made, and then a certain amount to have it
    0:27:07 flown every year.
    0:27:13 That first balloon flew for three years, and then we re-upped and flew it for another three.
    0:27:18 That’s really the pattern we’ve been in for now a good long time.
    0:27:24 I have no idea what Macy’s deals look like with other creators if we’re standard, if
    0:27:27 we have our own separate thing.
    0:27:33 Has Harry and Abrams continued to basically pay for or subsidize the participation?
    0:27:37 To their great credit, Abrams has continued to support the balloon.
    0:27:41 This past balloon, I chipped in because, of course, I have a big stake in this as well.
    0:27:44 Any idea what it costs to make it?
    0:27:49 I don’t know what the actual costs are to make a balloon, but I would guess it’s somewhere
    0:27:52 around a low $100,000 range.
    0:27:58 I guess the big question is, how do you and your publisher think about ROI?
    0:28:04 All that that implies, not just whether it extends and grows the brand and sells more
    0:28:09 books and so on, but if it creates a different sort of awareness around the brand?
    0:28:10 That’s a really good question.
    0:28:12 We think about it a lot.
    0:28:17 It’s possible that the balloon is one of the legs of a chair.
    0:28:22 If you kicked out that leg, maybe the whole thing collapses.
    0:28:28 The fact that Wimpy Kid is still going strong suggests that the balloon is a part of that
    0:28:29 equation.
    0:28:34 But there’s also some real pride that’s associated with the balloon.
    0:28:38 Everybody gets to hold the string and walk down the streets of New York City.
    0:28:39 What’s that like?
    0:28:43 It’s nerve-wracking in a way because you’re sort of presenting yourself to the world.
    0:28:47 You’re saying, “Hey, my property is worthy of being here.”
    0:28:52 I remember the first few years, we would walk the balloon down the main avenue and I think
    0:28:55 people were sort of scratching their heads.
    0:28:56 What’s this?
    0:28:57 Is this Charlie Brown?
    0:28:59 Who is this?
    0:29:05 Over time, one of the rewards of this has been that Wimpy Kid is sort of seeped into the
    0:29:07 cultural consciousness.
    0:29:11 Now, most people know what the cheese touch is.
    0:29:13 Explain the cheese touch for those who aren’t familiar.
    0:29:18 There’s a piece of cheese in the first book that sits under a basketball hoop and it becomes
    0:29:23 an existential threat to Greg and to all of the middle schoolers.
    0:29:28 Everybody’s worried about getting the cheese touch because it means certain death in the
    0:29:33 middle school popularity ranking.
    0:29:37 This year will be Wimpy Kid’s 14th consecutive Macy’s Parade.
    0:29:43 That puts him on the all-time leaderboard, but he’s still way behind Snoopy with 43
    0:29:46 differences and Pikachu with 24.
    0:29:50 Kenny told me that a balloon typically lasts three to five years.
    0:29:53 He is now on the third version.
    0:29:57 I think we’ve gotten better and better at it and now Greg really looks exactly like
    0:29:59 I’d like him to look.
    0:30:00 Describe the current balloon.
    0:30:08 The current balloon has Greg sort of hunched over getting ready to touch the piece of cheese.
    0:30:11 So I said to Macy’s, “We really need to do something special.
    0:30:13 What can we do?”
    0:30:18 And they came up with an idea that the cheese itself could be in a cart or a car.
    0:30:24 That’s like a motorized vehicle that could spin and sort of spew green smoke into the
    0:30:28 air to make the cheese look like it’s emitting smells.
    0:30:29 Let’s go back for a sec.
    0:30:33 Describe the design process and how involved you are.
    0:30:34 It’s really exciting.
    0:30:39 It starts with a sketch and then it moves to kind of a pen and ink drawing.
    0:30:45 And then Macy’s has to turn that into a 3D model, which is not so easy with my character.
    0:30:47 My characters are two-dimensional purposefully.
    0:30:51 I don’t have any sense of 3D space at all.
    0:30:56 And so the first time we saw a wimpy kid balloon was the first time we saw Greg Hefley articulated
    0:30:58 in three dimensions.
    0:31:00 He has a butt.
    0:31:05 In the early days with Macy’s, I’d go down to Hoboken, New Jersey, and there would be
    0:31:08 a clay model waiting for me.
    0:31:10 The clay was still pliable.
    0:31:14 And then we would make changes on the fly with a really skilled artist.
    0:31:19 It would spin around on a pole so we could see it from every angle and really imagine
    0:31:23 what it would look like from the street level.
    0:31:28 Since Jeff Kinney’s first wimpy kid balloon, the Macy’s Parade Studio has moved from Hoboken
    0:31:31 to nearby Monarchy, New Jersey.
    0:31:36 And rather than clay, balloon modeling now is done with 3D printers.
    0:31:39 Coming up after the break, let’s go to Monarchy.
    0:31:42 Welcome to Macy’s Studios.
    0:31:43 I’m Stephen Dovner.
    0:31:45 This is Freakonomics Radio.
    0:31:57 We’ll be right back.
    0:32:03 Will Koss, the parade’s executive producer, met us at the Macy’s Parade Studios in Monarchy,
    0:32:07 New Jersey, just a few miles across the Hudson River from Manhattan.
    0:32:09 This is our 3D printing room.
    0:32:12 So this is Diary of a Wimpy Kid.
    0:32:16 We’re looking at a three-foot plastic model of Greg Hefley.
    0:32:20 We’ve got our character here actually laying on the table at the moment.
    0:32:27 But if he was sitting in flight position, he’d be pointing at the stinky cheese, which will
    0:32:30 be preceding him down the line of March.
    0:32:34 We are inside a sprawling brick and glass building that from the outside looks like
    0:32:41 an office building, but inside it’s a 72,000 square foot warehouse with 44-foot ceilings
    0:32:44 and a variety of workshop stations.
    0:32:48 It’s also a little bit noisy.
    0:32:53 The floor that we’re standing on right now is our fabrication floor.
    0:32:58 As we walk through, Koss points out some floats under construction, including a new float
    0:33:00 representing the Bronx Zoo.
    0:33:07 So we’ll have giraffes, we’ll have tigers, we’ll have gorillas, birds.
    0:33:12 These giraffes and tigers are not real the way they would have been back in the beginning.
    0:33:19 Every element that you see here being sculpted by our very, very talented artists start as
    0:33:20 a block of foam.
    0:33:26 We’re going to walk over to meet the legend himself, Mr. John Cheney.
    0:33:29 Good to see you.
    0:33:31 I brought some friends to talk to you.
    0:33:36 John Cheney is a carpenter who has worked on nearly 50 Macy’s parades.
    0:33:42 I came to New York and I wanted to be an artist, so I went to the Art Students League and in
    0:33:47 a few months I started running out of money, but my dad used to always have the parade on
    0:33:52 and I met some girl who wanted to work in the costume shop, so I said, “I’ll just walk
    0:33:56 over to Macy’s and see what’s happening.”
    0:34:02 Fifty years ago it was a lot different than all the paperwork now.
    0:34:08 They had this hiring rail, we got up to the rail, and there were all these kids around
    0:34:14 with very nice suits and everything, and I got ripped up jeans and a t-shirt on.
    0:34:18 I said, “I want to work the parade,” and that’s how I got hired.
    0:34:22 And how does it feel for Cheney to work year round on something that will be seen for just
    0:34:23 one day?
    0:34:30 Well, millions of people see it, so the exposure is really great, but there is something mind
    0:34:36 boggling about doing all this work for one night and setting it all up to one day and
    0:34:38 now taking it down.
    0:34:40 I guess that’s part of the pressure.
    0:34:46 You have this incredible deadline, and we work all night in the beautiful weather because
    0:34:50 we don’t even dare say that out of the words.
    0:34:53 The week before is maybe the hardest time.
    0:34:57 It’s like getting into the water, you know, once you’re in there, damn it, we’re doing
    0:34:58 it.
    0:35:00 I don’t care what’s going wrong, let’s go.
    0:35:06 Cheney is one of a couple dozen members of a team of carpenters, sculptors, welders,
    0:35:11 electricians, costume designers, and what are called balloon technicians.
    0:35:12 Here’s Will Koss again.
    0:35:16 Right now we’re on the balloon studio floor.
    0:35:24 This hour, balloons are flattened, they make their way over to our heat sealing tables,
    0:35:32 and this is essentially a sewing machine, but instead of a needle and string, it’s actually
    0:35:39 melting the two pieces together, and we actually have a balloon in process right now.
    0:35:43 This is Marshall, our Paw Patrol pup.
    0:35:48 Marshall is a Firehouse Dalmatian from the animated kids show Paw Patrol.
    0:35:53 So Marshall is presently rigged to one of our rigging points in the ceiling.
    0:36:00 At this point, he just looks like a big white round blob with no distinguishable limbs.
    0:36:03 That’s because of how these giant balloons are built.
    0:36:07 The head right now is the chamber that’s inflated.
    0:36:13 The rest of the balloon is deflated because we’re working specifically on the head unit,
    0:36:15 and that’s how all of our balloons are fabricated.
    0:36:19 They’re fabricated into chambers, which gives us some flexibility.
    0:36:26 We do run into a situation on parade day to quickly try to remedy that one specific area
    0:36:29 without compromising the integrity of the entire balloon.
    0:36:34 Jeff Kinney had told us earlier about a mishap with the Wimpy Kid balloon.
    0:36:40 Yeah, I think Greg’s hand popped this last year, and it looked a little bit sad, but
    0:36:41 these things happen.
    0:36:47 Marshall, the Dalmatian, is a new balloon in this year’s parade, one of six.
    0:36:52 All the new balloons will need to have a dry run outdoors before the parade.
    0:36:56 Our volunteers, our balloon handlers, and our flight management team have an opportunity
    0:37:02 to see the balloons working in real time and reacting in wind conditions and take notes
    0:37:04 and prepare for Thanksgiving Day.
    0:37:07 This dry run is called Balloon Fest.
    0:37:11 It happens in the parking lot of MetLife Stadium in East Rutherford, New Jersey, about four
    0:37:15 miles from the Macy’s Studio in Monarchy.
    0:37:19 Balloon Fest is always held on the first Saturday of November.
    0:37:21 Good morning, everyone!
    0:37:25 Welcome to the Balloon Fest!
    0:37:29 There are several hundred volunteers to handle the balloons.
    0:37:33 On parade day, there will be five thousand parade volunteers.
    0:37:37 Okay, I need twenty handlers!
    0:37:43 The six new balloons, including Marshall and Minnie Mouse and the new Spider-Man, they
    0:37:48 are already inflated and held down under a net with sandbags.
    0:37:55 When the time comes, the sandbags are taken away, the nets are pulled off, and the volunteers
    0:38:00 slowly unroll the thin ropes that are attached to what they call the handling bones, which
    0:38:14 are plastic X-shaped grips.
    0:38:18 Once the balloons are up in the air, the volunteers walk them around the parking lot.
    0:38:23 Will Koss is paying close attention, everything looks good.
    0:38:34 Hereby is the helium truck.
    0:38:36 Here is the helium guy.
    0:38:38 The trailer is about forty feet long.
    0:38:42 There are twelve high-pressure steel tubes in there.
    0:38:47 If you could get all the helium out of each one of those tubes, you could fill about six
    0:38:49 to eight of these balloons with a single trailer.
    0:38:50 His name is Kevin Lynch.
    0:38:53 I’m the Vice President of Global Helium for Messer.
    0:38:57 Messer is one of the big players in the helium market.
    0:39:02 It and the companies it has acquired have been providing helium to the Macy’s Parade
    0:39:03 for decades.
    0:39:07 The helium that’s here today started in an underground helium reservoir in Amarillo,
    0:39:11 Texas, and here we are filling balloons.
    0:39:16 But if you put too much helium in it, that whole crew of people would be, you know, rising
    0:39:17 up into the sky.
    0:39:23 Lynch tells us that each giant balloon takes around 15,000 cubic feet of helium.
    0:39:25 So, how much does that cost Macy’s?
    0:39:31 I can’t tell you that, that’s, we can’t talk about sensitive commercial topics out
    0:39:34 here.
    0:39:38 The price of helium itself is not a particularly sensitive topic.
    0:39:42 Helium is used widely in medical settings and elsewhere, and there’s a strong global
    0:39:44 market for it.
    0:39:49 Believe it or not, giant balloons consume only a tiny share of the helium market.
    0:39:54 We did a rough calculation of what it would cost to fill the 17 balloons in this year’s
    0:39:56 parade if you paid market price.
    0:39:59 It was around $425,000.
    0:40:04 I asked Will Koss if this sounded about right, but he wouldn’t take the bait.
    0:40:10 I also asked him what Macy’s does about the occasional helium shortage.
    0:40:13 We do have our finger on the pulse of helium.
    0:40:18 It’s a market that adjusts over time, but we plan for it and have good relationships with
    0:40:23 our vendors across our helium supply teams.
    0:40:29 What’s your biggest concern or anxiety or, you know, the thing on your to-do list that
    0:40:31 keeps you up the night before?
    0:40:33 I guess I would assume the weather, but maybe I’m wrong.
    0:40:36 The weather is definitely a concern for us.
    0:40:43 We are a rain or shine event, so unless there’s significant weather that would impact the
    0:40:45 flight of the balloons.
    0:40:47 Wind, particularly, yeah.
    0:40:48 Yeah.
    0:40:53 Wind is one of the most potential risks on our overall parade.
    0:40:55 We’ve had some snow in our history.
    0:40:56 I don’t wish that on us.
    0:40:59 I’ve been fortunate enough to have relatively good weather.
    0:41:01 I know my time is coming at some point.
    0:41:04 It’s probably good for the broadcast, though, isn’t it, snow?
    0:41:11 It would look beautiful, but we do still have to get 5,000 people and 27 floats and 17 large
    0:41:19 balloons down the parade route, so I’d love it to snow at 12.01 or 11.59.
    0:41:25 So far, we’ve heard from the key people who create and broadcast the Macy’s parade, but
    0:41:31 there’s one more partner, sort of a silent partner, without whom it could not happen.
    0:41:34 If there were no permits, it would be a free-for-all.
    0:41:35 I’m Stephen Dubner.
    0:41:36 This is Free Economics Radio.
    0:41:38 We’ll be right back.
    0:41:48 Yes, there are giant character balloons drifting through the sky, and yes, there are floats
    0:41:54 and marching bands, Broadway performers, but the real star of the Macy’s Thanksgiving Day
    0:41:59 parade, if we’re being honest, come on, you know who it is.
    0:42:00 It’s New York City.
    0:42:05 My name is Dawn Tolson, and I’m the Executive Director of Citywide Event Coordination and
    0:42:09 Management and the Street Activity Permit Office, and those are a lot of words.
    0:42:12 Tolson has worked in New York City government for a decade.
    0:42:19 Her office issues permits for many types of events, street fairs and farmers markets,
    0:42:22 festivals, and of course, the Macy’s parade.
    0:42:26 We told her we were trying to put together the costs of the parade, and she did give
    0:42:29 us a little bit of pricing information.
    0:42:34 An application fee is non-refundable, and that’s $25, and then it ranges from zero,
    0:42:40 no cost whatsoever, up to something that could be 66K per block, depending on the use of
    0:42:42 space and the impact.
    0:42:49 The Macy’s parade uses 40 plus blocks, and it is undeniably high-impact.
    0:42:56 Does that mean that Macy’s pays the city something like $3 million, 40-some blocks times 66K
    0:42:57 per block?
    0:42:59 Oh, I can’t say how much they pay.
    0:43:01 Could try.
    0:43:03 Macy’s is a partner with the city.
    0:43:11 They put onto very iconic events in New York City that are birthdays and holiday events
    0:43:13 for America.
    0:43:17 The other one she’s talking about is the Macy’s 4th of July fireworks, which no offense to
    0:43:21 fireworks is nowhere near as big a deal as the parade.
    0:43:25 And so we know the importance of that, and we work with them, but I can say that they
    0:43:31 do work really hard with us to make sure that we are very cognizant of the amount of resources
    0:43:36 that we’re using, that we’re not overextending, that we’re also being fair to the employees
    0:43:37 and the workers.
    0:43:43 When Toulson talks about the resources the city is using, these are serious resources,
    0:43:46 including law enforcement and emergency crews.
    0:43:49 Here is Will Kos again from Macy’s.
    0:43:54 The security plan is a quite detailed plan.
    0:43:58 You could imagine if you were throwing a parade for three and a half million people on the
    0:44:04 sidewalks and 30 million people watching a live broadcast that you would invest a lot
    0:44:07 in security planning and execution.
    0:44:12 There’s a variety of personnel that are visible on the parade route and other layers of security
    0:44:14 that are less visible.
    0:44:16 Hats off to the NYPD.
    0:44:20 There are people out there that were there since 1 a.m. in the morning putting barricades
    0:44:25 in place and moving vehicles around so you don’t even hear a car honking.
    0:44:30 Then you’ve got counterterrorism, working with the FBI on any kind of threats.
    0:44:34 You’ve got Tarrou, their technical assistance unit, who are doing the counter drone stuff
    0:44:40 with the FBI, and then you’ve got the DCPI, their press group, doing press conferences
    0:44:43 with their chief of departments and chief of patrols.
    0:44:46 Basically you’re enacting the entire NYPD.
    0:44:50 What does it cost to enact the entire NYPD?
    0:44:52 How much of that comes from Macy’s?
    0:44:58 The parade for all its goodwill and vibes is a commercial event, so you could imagine
    0:45:02 Macy’s contributing heavily to the city services.
    0:45:07 On the other hand, even if you don’t buy my argument that New York City is the real
    0:45:12 star of the show, the city does get a lot out of the parade.
    0:45:17 When I was a kid and saw the parade on TV, I barely noticed the floats and balloons I
    0:45:20 was staring at Central Park West.
    0:45:27 To a farm boy, which is what I was, the balloons and floats were cute, but the fantasy was
    0:45:29 New York.
    0:45:34 So does New York City kick in all those resources for free for the Macy’s parade?
    0:45:39 Does the cost of the permit itself cover all these services?
    0:45:44 Those are questions that no one would directly answer on either the city side or the Macy’s
    0:45:50 side, and there are other city resources to talk about, other city agencies that get
    0:45:51 involved.
    0:45:55 We have four walkthroughs with all of those agencies, because then we’re walking the
    0:45:57 route four times.
    0:46:00 In New York City, the city of scaffolding.
    0:46:05 There’s a lot of obstructions along the path, and so we have to walk that path to see what
    0:46:10 construction is going on, what potholes are in the street, what is up above.
    0:46:12 Light lamps, for instance.
    0:46:16 In 1997, the parade was held on a very windy day.
    0:46:21 At Central Park West and 72nd Street, the six-story tall cat in the hat balloon hit
    0:46:24 a lamp post and knocked off part of it.
    0:46:29 Several people were injured, including one woman who was in a coma for 24 days.
    0:46:33 Macy’s and the city now work together to prevent that kind of thing.
    0:46:34 Will costs again.
    0:46:41 All of our balloons and floats starting up at 77th Street and all the way through 34th
    0:46:42 Street.
    0:46:46 That entire parade route has to be cleared of any aerial obstruction.
    0:46:51 This clearing process includes what costs calls light swings.
    0:46:59 We have a team to physically move all of the light poles out of the way, so they’re loosening
    0:47:03 them and then we’re actually swinging all of the poles.
    0:47:05 It’s done under the dark of night.
    0:47:06 And Don Tolson again.
    0:47:07 Sanitation.
    0:47:09 We haven’t even talked about sanitation.
    0:47:13 I didn’t know this until a couple years ago that there’s a special unit that deals
    0:47:14 with the horse refuse.
    0:47:20 This horse refuse comes from the NYPD and Parks Department mounted units that march
    0:47:21 in the parade.
    0:47:25 So we forgot to call them one year, it was not pretty.
    0:47:30 One of our responsibilities is to clean up the horse poop.
    0:47:31 That is Jessica Tisch.
    0:47:35 When we spoke with her, she was New York’s sanitation commissioner.
    0:47:42 We have one to two sanitation workers for every four to five horses.
    0:47:45 Tisch has just been named commissioner of the NYPD.
    0:47:51 As sanitation commissioner, her job was to make the parade route as photogenic as possible
    0:47:56 on Thanksgiving Day from 8.30 a.m. Eastern time until noon.
    0:48:01 Those streets, about 42 blocks, they need to sparkle because New Yorkers and people
    0:48:08 from around the world all converge on that part of the city and we want those streets
    0:48:10 to look really good.
    0:48:14 After the parade is obviously a huge effort.
    0:48:20 We have about 150 sanitation workers who are involved in the post parade cleanup.
    0:48:27 They are doing manual cleaning with brooms and baskets, but also our mechanical brooms
    0:48:34 which can sweep 1,500 pounds of litter are out in full force.
    0:48:41 About 71,000 pounds of trash is collected by the Department of Sanitation as part of
    0:48:46 the cleanup of the Thanksgiving Day parade.
    0:48:52 Once again, we couldn’t learn anything significant about how these costs are allocated or perhaps
    0:48:53 shared.
    0:48:56 New York City plainly derives value from the parade.
    0:49:02 There’s the marketing value of the broadcast, but also three and a half million in-person
    0:49:06 spectators generate a lot of economic activity.
    0:49:08 How much?
    0:49:13 Those numbers too are shock of shocks, hard to come by.
    0:49:18 If we began this episode hoping to run even a rough cost-benefit analysis of the Macy’s
    0:49:22 Thanksgiving Day parade, we have failed.
    0:49:25 Too many of the costs are privately held.
    0:49:30 We can guesstimate the overall TV ad revenues, but we don’t know how that money is split
    0:49:37 between Macy’s and NBC and whatever agencies or other middlemen are involved.
    0:49:39 So we took one more shot.
    0:49:42 We asked to speak to the man at the top.
    0:49:45 Tony Spring, Chairman and CEO of Macy’s Inc.
    0:49:49 So Macy’s refers to the parade as, quote, “a privately sponsored and privately funded
    0:49:54 event and is regarded by Macy’s as its annual gift to the nation.”
    0:50:00 I understand that as with most gifts, you don’t tell people how much the gift costs
    0:50:05 when you’re giving it to them, but why is it so important that no one knows how much
    0:50:06 the parade costs?
    0:50:09 Because we’ve been trying to figure it out and really failing.
    0:50:10 Why?
    0:50:12 We want to know how much lying can cost to produce.
    0:50:14 But I can figure that out.
    0:50:16 Okay, go to the Hayden Planetarium and what did it cost?
    0:50:18 I can figure that one out too, Tony.
    0:50:20 I can’t figure out the parade.
    0:50:23 I guarantee you, you’re bright enough, much brighter than me.
    0:50:24 You can figure this out.
    0:50:30 But I would like to focus more on the fact that 100 years later, 98 parades later, this
    0:50:36 thing is still relevant and is a great example of if we were still marching animals up and
    0:50:38 down the street, it wouldn’t be as relevant today.
    0:50:43 But the fact that it evolved over time and includes a level of modernity, includes a
    0:50:48 level of history, floats that have been there over the years, floats that are new this year,
    0:50:51 balloons that are new this year, that is just like the fireworks.
    0:50:55 I think what makes it such an amazing spectacular.
    0:51:00 Okay, so the Macy’s parade is still relevant.
    0:51:04 Here’s a bigger question, especially for Tony Spring.
    0:51:07 Is Macy’s still relevant?
    0:51:13 Coming up next time in part two of our series, Brick and Mortar Retail has been declining
    0:51:18 for years and Macy’s is planning to close 150 of their stores.
    0:51:23 Tony Spring took over less than a year ago and he is pushing for a renaissance.
    0:51:25 At least he’s optimistic.
    0:51:27 Now is the time to buy Macy’s.
    0:51:34 Next time we go deep with Tony Spring and we get another view too.
    0:51:39 Macy’s has a hell of a challenge over the next few years to remain upright, let alone
    0:51:41 become successful as they once were.
    0:51:46 We also visit Wimpy Kid author Jeff Kinney up in Massachusetts, where he is trying to
    0:51:49 launch his own retail renaissance.
    0:51:51 You invest in your downtown.
    0:51:53 Can you change the fate of a town?
    0:51:56 And I don’t know the answer to that.
    0:51:58 That’s next time on the show.
    0:52:00 Until then, take care of yourself.
    0:52:03 And if you can, someone else too.
    0:52:09 So if you’d like to learn more about Helium, be sure to follow another podcast we make,
    0:52:12 the economics of everyday things.
    0:52:17 Host Zachary Crockett went deep on Helium’s supply and demand in an episode that will
    0:52:19 be out very soon.
    0:52:22 Freakonomics Radio is produced by Stitcher and Renbud Radio.
    0:52:28 You can find our entire archive on any podcast app, also at Freakonomics.com, where we publish
    0:52:30 transcripts and show notes.
    0:52:33 This episode was produced by Alina Coleman.
    0:52:36 We also had recording help from Alexander Overington.
    0:52:42 And special thanks this week to Thomas Recupero for the research paper, and to Harlan Cobin.
    0:52:47 Our staff also includes Augusta Chapman, Dalvin Abouaji, Eleanor Osborne, Ellen Frankman,
    0:52:52 Elsa Hernandez, Gabriel Roth, Greg Rippen, Jasmine Klinger, Jason Gambrell, Jeremy Johnston,
    0:52:57 John Schnarrs, Lyric Bowditch, Morgan Levy, Neil Caruth, Rebecca Lee Douglas, Sarah Lilly,
    0:53:03 Theo Jacobs, and Zach Lipinski. Our theme song is “Mr. Fortune” by the Hitchhikers.
    0:53:05 Our composer is Luis Guerra.
    0:53:08 As always, thank you for listening.
    0:53:16 When I see a crowd, I’m thinking to myself, “Wait a minute, did I issue a permit for
    0:53:30 that?”
    0:53:33 [MUSIC PLAYING]

    The 166-year-old chain, which is fighting extinction, calls the parade its “gift to the nation.” With 30 million TV viewers, it’s also a big moneymaker. At least we think it is — Macy’s is famously tight-lipped about parade economics. We try to loosen them up. (Part one of a two-part series.)

    Please take our audience survey at freakonomics.com/survey.

     

    • SOURCES:
      • John Cheney, carpenter at Macy’s Studios.
      • Will Coss, vice president and executive producer of Macy’s Studios.
      • Jeff Kinney, author, cartoonist, and owner of An Unlikely Story Bookstore and Café.
      • Kevin Lynch, vice president of global helium at Messer.
      • Jen Neal, executive vice president of live events and specials for NBCUniversal Media Group.
      • Tony Spring, chairman and C.E.O. of Macy’s Inc.
      • Jessica Tisch, commissioner of the New York City Department of Sanitation; incoming commissioner of the New York City Police Department.
      • Dawn Tolson, executive director of Citywide Event Coordination and Management and the Street Activity Permit Office for the City of New York.