WEBVTT - Monopsony, or How You Get Underpaid 0:00:01.680 --> 0:00:05.640 Coolz Media. 0:00:06.720 --> 0:00:09.800 Welcome to take it after Here a podcast where I 0:00:09.920 --> 0:00:14.040 try to explain economics to you and Molly. I'm your host, 0:00:14.040 --> 0:00:16.840 bia Wung, and thank you Molly for agreeing to do this, 0:00:16.960 --> 0:00:19.120 especially on extremely short notice, so. 0:00:19.079 --> 0:00:20.400 I appreciate it. 0:00:20.480 --> 0:00:24.120 I am so excited to struggle to learn. 0:00:24.800 --> 0:00:28.640 So, okay, there's good news and bad news. 0:00:29.040 --> 0:00:31.639 The good news is that the central thing that this 0:00:31.720 --> 0:00:36.480 episode is about, nominally is a concept called monopsony. 0:00:36.720 --> 0:00:38.320 And it's actually really easy. 0:00:38.360 --> 0:00:38.440 No. 0:00:38.520 --> 0:00:40.360 See you said that, you said that in the word 0:00:40.440 --> 0:00:42.720 chat earlier, you said monopsy and I was like, oh man, 0:00:42.800 --> 0:00:43.839 she's so tired. 0:00:43.880 --> 0:00:44.960 That's not even a word. 0:00:45.960 --> 0:00:48.400 Well, okay, this actually gets into the thing because this 0:00:48.640 --> 0:00:51.720 is a word that was made up specifically for this concept. 0:00:52.400 --> 0:00:53.479 Unfortunately, I do also have. 0:00:53.479 --> 0:00:56.040 To do the bad news, which is that to actually 0:00:56.080 --> 0:00:58.160 understand the history of this, we do have to explain 0:00:58.160 --> 0:01:02.920 stuff that's legitimately very complicated. So I'm locked in. Yay, 0:01:03.160 --> 0:01:06.280 but okay, okay, monopsony. The hook of this, this is 0:01:06.319 --> 0:01:08.280 part of the reason why you get paid like shit 0:01:09.280 --> 0:01:13.280 is because of monopsony. So I first was interested in 0:01:14.240 --> 0:01:19.319 writing about this specifically for this show because Weirdly, NPR's 0:01:19.400 --> 0:01:24.800 Planet Money Like discovered the concept of monopsony and did 0:01:24.800 --> 0:01:28.320 it a couple of pretty interesting pieces on the history 0:01:28.360 --> 0:01:34.120 of the concept and the place that they go with 0:01:34.200 --> 0:01:37.440 it is they start talking about one of my favorite economists, 0:01:37.880 --> 0:01:41.160 Joan Robinson, who is really good and we're gonna spend 0:01:41.160 --> 0:01:44.360 most of this episode talking about her. But one of 0:01:44.400 --> 0:01:46.679 the stories that they tell this is a very famous 0:01:46.720 --> 0:01:50.440 story in the circles of economists that I'm around, I guess, 0:01:51.280 --> 0:01:54.480 is about her sitting down with like a British classicist 0:01:54.480 --> 0:01:57.880 and inventing the term monopsony. So, okay, what is what 0:01:57.960 --> 0:01:58.600 is monopsony? 0:01:58.640 --> 0:02:00.720 It's one something mono. 0:02:01.320 --> 0:02:04.920 You know what a monopoly is. So monopoly is when 0:02:04.960 --> 0:02:08.000 one seller, right, So okay, it's like, yeah, you have 0:02:08.480 --> 0:02:10.320 I don't know, you have like Google, which is a 0:02:10.360 --> 0:02:13.720 monopoly on like search engines, right, And you know, monopoly 0:02:14.560 --> 0:02:16.799 doesn't necessarily and what we'll be getting into this more 0:02:16.800 --> 0:02:18.560 in a second, it doesn't necessarily have to mean that 0:02:18.560 --> 0:02:22.520 there's literally only one right. But you know, like the US, 0:02:22.560 --> 0:02:25.960 like every market you are dealing with in the United 0:02:26.000 --> 0:02:29.560 States is some kind of monopoly where you know, sometimes 0:02:29.600 --> 0:02:32.399 there's like a big three, or sometimes there's like two, 0:02:32.760 --> 0:02:35.079 or sometimes there's maybe five, or sometimes it's. 0:02:35.000 --> 0:02:38.040 Quite literal, like we only have one power company in Virginia. 0:02:38.320 --> 0:02:39.400 Yeah, yeah, you know. 0:02:39.440 --> 0:02:42.919 And sometimes monopolies are deliberately set up by the state, 0:02:43.440 --> 0:02:45.320 right where sometimes you know, the state, a state would 0:02:45.360 --> 0:02:46.920 just be like, yeah, fuck it, there's only one power 0:02:46.960 --> 0:02:47.560 company here. 0:02:47.800 --> 0:02:50.600 Oh no, it's a private company. It's a private company. 0:02:50.800 --> 0:02:53.160 Yeah right, yeah, but sometimes private companies will be hand 0:02:53.200 --> 0:02:56.600 at monopolies like this, right. Utility companies are a thing 0:02:56.600 --> 0:02:58.680 where it does kind of make sense because having two 0:02:58.680 --> 0:03:01.720 companies setting up rival ele grids is like a nightmare. 0:03:02.080 --> 0:03:03.880 But well, that's why the state should do it. 0:03:04.880 --> 0:03:05.160 Yeah. 0:03:05.200 --> 0:03:07.600 Well it's like it's like, yeah, this is the issue though, right, 0:03:07.600 --> 0:03:10.960 And this is why monopoly in theory is like a 0:03:11.080 --> 0:03:14.920 thing that economists are not supposed to like, because monopoly 0:03:15.000 --> 0:03:18.040 screws up the sort of like perfect competition between all 0:03:18.080 --> 0:03:21.200 of these one million different companies that's supposed to like 0:03:21.240 --> 0:03:23.280 make your life good because they're all forced to sell 0:03:23.320 --> 0:03:26.600 everything at like the lowest possible price because they have 0:03:26.639 --> 0:03:29.080 to outcompete everyone else. And it's like all of this stuff. 0:03:29.400 --> 0:03:31.160 But then if you if you have one monopoly. They 0:03:31.200 --> 0:03:33.360 can charge you whatever the fuck price they want because 0:03:33.360 --> 0:03:35.480 there's only one of them, and the alternatives are to 0:03:35.560 --> 0:03:36.280 you eat shit. 0:03:36.360 --> 0:03:40.480 Or like like Amazon choking out. It was one hundred diapers, right, 0:03:40.480 --> 0:03:43.280 It was a diaper company that offered like affordable order diapers, 0:03:43.640 --> 0:03:48.080 I mean undercut them really hard, concentrated period of time. 0:03:48.480 --> 0:03:50.800 So they went out of business and they jacked with 0:03:50.800 --> 0:03:51.720 the prices on dipers. 0:03:51.960 --> 0:03:52.600 Yep, yep. 0:03:52.680 --> 0:03:55.320 This is basically just what the modern tech economy is 0:03:56.040 --> 0:03:59.080 is that some company will come in with like one 0:03:59.160 --> 0:04:02.000 hundred billion dollar there's worth of tech money. There were 0:04:02.000 --> 0:04:04.040 a bunch of ride share wars in India over this, 0:04:04.120 --> 0:04:07.480 where like all these rideshare companies were basically giving people 0:04:07.520 --> 0:04:09.800 for like really really low cost rides. I mean they're 0:04:09.800 --> 0:04:11.600 obviously still screwing the drivers, but like. 0:04:11.600 --> 0:04:14.040 Oh yeah, naturally, yeah yeah. 0:04:14.080 --> 0:04:15.800 And so they were just trying to like edge of 0:04:15.840 --> 0:04:16.919 when I was out of the market so that they 0:04:16.920 --> 0:04:18.839 could take control of it and raise the prices and 0:04:18.839 --> 0:04:19.720 stuff eventually. 0:04:19.839 --> 0:04:23.400 Because it's like, you know, the capitalism enthusiast likes to 0:04:23.480 --> 0:04:26.800 imagine that the economy is like you know, Darwinian evolution, 0:04:27.040 --> 0:04:30.240 survival of the fittest, right, we evolve and compete and 0:04:30.279 --> 0:04:34.200 the best man wins. But actually it's more like intentionally 0:04:34.320 --> 0:04:39.400 introducing mongooses to the islands of Hawaii. Yeah, that's yeah, 0:04:39.600 --> 0:04:42.680 this is an evolution. You just introduce a giant weasel 0:04:42.680 --> 0:04:43.800 that aid all the bird eggs. 0:04:44.160 --> 0:04:44.400 Yeah. 0:04:44.480 --> 0:04:45.880 Right, And it's like, you know, if you look at 0:04:45.920 --> 0:04:49.080 how capitalism spreads historically, it's it's not even like capitalism 0:04:49.080 --> 0:04:53.360 doesn't outproduce other like economic systems. Usually what it does 0:04:53.440 --> 0:04:55.800 is like, you know, there's there's this line in the 0:04:55.800 --> 0:04:58.599 Communist Manifesto that I think Marx was extremely wrong about. 0:04:59.160 --> 0:05:02.080 We're just talking of like like trade is the cannon 0:05:02.120 --> 0:05:04.880 that will bring down Chinese walls. And he's talking about 0:05:04.920 --> 0:05:08.600 like free trade will like destroyed China's trade bearers. It's like, well, no, 0:05:09.240 --> 0:05:12.560 like China's trade barriers were brought down by the Opium Wars, 0:05:12.600 --> 0:05:16.800 like the British Navy like sailed in and like besieged 0:05:16.880 --> 0:05:20.880 the capital, like you know, but when people talk about monopolies, 0:05:21.440 --> 0:05:25.520 they're talking about selling goods right, right. And what Chillan 0:05:25.640 --> 0:05:31.680 Robinson realizes very quickly is that hold on, this is 0:05:31.760 --> 0:05:35.080 also true for employers, right. If you are trying to 0:05:35.240 --> 0:05:40.800 find a fucking job right under sort of like the 0:05:41.440 --> 0:05:44.840 models of perfect competition that like neoclassical economics, the economics 0:05:44.839 --> 0:05:49.360 that like you learned in school, they just normally assume that, oh, yeah, 0:05:49.360 --> 0:05:50.800 you can just switch jobs really easily. 0:05:50.839 --> 0:05:52.279 So obviously companies have to pay. 0:05:52.160 --> 0:05:55.799 You, right, But in most towns there's one major employer 0:05:55.839 --> 0:05:57.200 who kind of sets the bar. 0:05:57.440 --> 0:05:59.280 Yeah, like here at TVA. 0:05:59.160 --> 0:06:02.880 Yeah, like it'ss or like Walmart, and like, if you 0:06:02.960 --> 0:06:06.440 ever had to find a job, like you understand how 0:06:06.520 --> 0:06:07.080 this works. 0:06:07.160 --> 0:06:10.719 I actually have it, but I understand in the theory. 0:06:11.960 --> 0:06:14.520 To the listener, you've you've had to find a job. 0:06:14.600 --> 0:06:16.880 Here you're speaking to you're speaking to the only person 0:06:16.920 --> 0:06:18.480 who's never applied for a job. 0:06:19.960 --> 0:06:21.719 Literally never applied for a job. 0:06:22.400 --> 0:06:26.040 It's a complicated situation. Yeah, I've never Like, oh wow, 0:06:26.320 --> 0:06:26.880 good for you. 0:06:27.000 --> 0:06:30.200 I love this for you. This rules for everyone else. 0:06:30.279 --> 0:06:33.279 Yeah, Like it's really obvious that you know, there exists 0:06:33.279 --> 0:06:36.360 conditions where you have monopolies, but for like hiring people, 0:06:37.000 --> 0:06:40.120 So Joan Robinson like at this meeting with this classes 0:06:40.320 --> 0:06:45.080 coins the term monopsony to be like okay, there's one seller, Okay, I'm. 0:06:45.040 --> 0:06:47.440 Usually against a neologism, but I understand the need for 0:06:47.480 --> 0:06:47.880 this word. 0:06:48.040 --> 0:06:50.320 I'm on board. Yeah, I'm on board with Joanne. 0:06:50.800 --> 0:06:53.760 It's a good word. She she's really cool. Yeah. 0:06:53.839 --> 0:06:57.920 I spread mentioned the caveat here, which is she does 0:06:58.040 --> 0:07:02.080 do the like classic n eighteen fifties communist thing of 0:07:02.160 --> 0:07:05.359 like going to China and then getting led around on 0:07:05.400 --> 0:07:07.880 like state sponsored tours and then coming back and assuming 0:07:07.920 --> 0:07:11.720 you understand what's happening in communist China, And that didn't 0:07:11.760 --> 0:07:13.880 go great, but you know, a lot the rest of 0:07:13.920 --> 0:07:17.120 her work is really good. And this is kind of 0:07:17.160 --> 0:07:24.400 where Planet Money does a really interesting history skip where 0:07:24.880 --> 0:07:28.040 in their version of the story they go oh yeah, 0:07:28.040 --> 0:07:31.000 and then everyone just kind of ignored it until recently 0:07:31.000 --> 0:07:33.680 it got picked back up by these economists who were like, wow, 0:07:33.720 --> 0:07:35.880 we did peer reviewed research and we found out that, like, 0:07:36.520 --> 0:07:39.600 it turns out that yeah, actually there isn't perfect competition 0:07:39.640 --> 0:07:42.000 in the labor market and that yeah, labor markets are 0:07:42.040 --> 0:07:44.000 controlled by these like monopolies. 0:07:44.480 --> 0:07:47.680 And I guess you have to do studies to prove things. 0:07:47.680 --> 0:07:49.720 You can't just vibe it out. But I would say 0:07:49.760 --> 0:07:51.920 just the general vibe, like I could have told you 0:07:51.960 --> 0:07:54.120 that I told you that. 0:07:53.840 --> 0:07:58.480 Mollie, Okay, I have such bad news for you, which 0:07:58.560 --> 0:08:01.720 is we are going to it's the person in this 0:08:01.840 --> 0:08:04.840 story whose idea it was to be like, hey, we 0:08:04.880 --> 0:08:08.360 should like figure out how the economy works using data. 0:08:08.480 --> 0:08:10.280 That was a new concept for them. 0:08:10.400 --> 0:08:11.080 Yeah. 0:08:11.080 --> 0:08:14.520 Yeah, was was invented by a guy. We're good to 0:08:14.560 --> 0:08:16.640 get to the story of the invention. 0:08:16.520 --> 0:08:18.679 Of and it was in like nineteen seven. 0:08:18.880 --> 0:08:21.280 This is a sign I got. 0:08:21.520 --> 0:08:25.400 It was like the thirties, nineteen thirties when we invented this. 0:08:25.520 --> 0:08:27.760 It was in two thousand and four. They brought math 0:08:27.800 --> 0:08:28.280 into it. 0:08:29.000 --> 0:08:29.440 Oh god. 0:08:29.920 --> 0:08:32.560 One of my absolute favorite stories of all time is, like, 0:08:32.679 --> 0:08:34.280 you know, in like the nineties, there was like the 0:08:34.360 --> 0:08:37.400 craze over chaos theory, which I think the only artifact 0:08:37.400 --> 0:08:40.400 of that is like the chaos theory guy in Jurassic Park, 0:08:40.920 --> 0:08:42.960 Mate of my Flashes, wings and all these things happened. 0:08:43.040 --> 0:08:45.480 Like a chaos theory is. It's a it's a like 0:08:45.480 --> 0:08:49.480 a genuinely very interesting math concept. But the thing about 0:08:49.559 --> 0:08:52.240 chaos theory is that it only applies to things that 0:08:52.280 --> 0:08:54.080 are third order equations. 0:08:53.559 --> 0:08:56.240 A thing I definitely know what that is. 0:08:56.440 --> 0:08:58.160 Yeah, we could go off in a tangent on this 0:08:58.240 --> 0:08:59.959 but I'm just I'm just gonna tell the econ joke. 0:09:01.320 --> 0:09:03.000 So everyone economics to me was like, oh my god, 0:09:03.040 --> 0:09:03.800 there's this hot topic. 0:09:03.840 --> 0:09:05.560 But the problem is it doesn't apply to the economic 0:09:05.600 --> 0:09:07.240 stuff people are doing in the nineties because they don't 0:09:07.280 --> 0:09:09.319 use third order equations. They only use second order ones 0:09:09.320 --> 0:09:12.400 because they're dumbasses. This is like one of the trends 0:09:12.400 --> 0:09:14.000 of the show is that the people who do mainstream 0:09:14.040 --> 0:09:16.079 economics are extremely dumb. 0:09:16.240 --> 0:09:19.080 And I've always had that feeling, but because I don't 0:09:19.120 --> 0:09:21.200 understand the economy, it's hard for me to be sure. 0:09:21.800 --> 0:09:25.520 Yeah, well it's it's because it's ideologically motivated, right, you 0:09:25.559 --> 0:09:28.080 know the reason that you study economics in high school? 0:09:28.280 --> 0:09:29.959 Who studies economics in high school? 0:09:29.960 --> 0:09:32.560 I didn't know there are like economics classes in high school, right, 0:09:32.600 --> 0:09:32.880 like that? 0:09:33.000 --> 0:09:33.160 Right? 0:09:33.200 --> 0:09:35.160 Sorry when I say studies, like yeah, like you had 0:09:35.200 --> 0:09:38.640 to take an economy greade school. Yeah. The reason there 0:09:38.640 --> 0:09:41.840 are economics classes in high schools is not to teach 0:09:41.840 --> 0:09:42.520 people economics. 0:09:42.600 --> 0:09:44.760 It's specific it was specifically. 0:09:44.120 --> 0:09:47.840 Designed as an anti communist thing, to like teach kids 0:09:47.840 --> 0:09:52.200 how capitalism really works through like again a model where 0:09:52.360 --> 0:09:56.040 they don't teach you that monopolies exist. And you know, obviously, 0:09:56.080 --> 0:09:59.079 like some of this has been incorporated into more modern stuff, 0:09:59.120 --> 0:10:01.120 like the couset of a monopol seed like kind of 0:10:01.920 --> 0:10:06.360 has entered into the lexicon of like the economics you 0:10:06.360 --> 0:10:09.000 get taught as like a little tiny baby child, which 0:10:09.040 --> 0:10:12.280 is not actually economics. It's literally propaganda. That's what it 0:10:12.320 --> 0:10:12.920 was designed to be. 0:10:13.120 --> 0:10:15.280 I mean, how fun to get to pretend to be 0:10:15.320 --> 0:10:18.040 a scientist when you don't do real math and really 0:10:18.040 --> 0:10:19.200 you're just a propagandist. 0:10:19.960 --> 0:10:21.360 Oh, it's so fun. It's so fun. 0:10:21.559 --> 0:10:22.959 One of the other things, like if if you're ever 0:10:23.080 --> 0:10:25.960 like in university settings and you want to just like 0:10:26.080 --> 0:10:28.440 listen to someone complain about shit for a while, go 0:10:28.520 --> 0:10:31.040 talk to the math people about the ship people get 0:10:31.200 --> 0:10:34.120 Nobel prizes for in economics, where it's like this is 0:10:34.200 --> 0:10:37.880 like shit that like a child who studies mathematics could do. 0:10:38.200 --> 0:10:40.320 The math doesn't even have a Nobel prize, right if 0:10:40.320 --> 0:10:42.280 you want to get like a Fields Medal, there's not. 0:10:42.880 --> 0:10:44.720 Nope, that's so sad for the math guys. 0:10:44.760 --> 0:10:45.760 Matho doesn't have one. Yeah. 0:10:45.800 --> 0:10:48.240 Well, and the other thing is econsolable price is fake too. 0:10:48.280 --> 0:10:50.760 This is this is another thing that's important. It's not 0:10:50.920 --> 0:10:53.600 one of the prizes that was set down by by Nobel, 0:10:53.800 --> 0:10:55.120 which I like the Nobel prices. 0:10:55.160 --> 0:10:56.760 They created their own. 0:10:56.720 --> 0:10:58.800 And the dynamite guy knew what he was doing. 0:10:58.880 --> 0:11:02.120 Yeah, but it's like literally like the Central Bank of 0:11:02.200 --> 0:11:05.640 Sweden made their own and called it a Nobel and 0:11:05.679 --> 0:11:06.920 it's not a real one. 0:11:06.960 --> 0:11:07.720 It's a fake one. 0:11:08.040 --> 0:11:11.120 Wait, so you're saying that if we are confident enough. 0:11:10.960 --> 0:11:13.199 In our assertion, oh, yeah, we could just make a Nobel. 0:11:13.160 --> 0:11:16.720 We could tell people that we are Nobel laureates in podcasting. 0:11:16.840 --> 0:11:18.199 Yeah, I mean as a huge thing. 0:11:18.360 --> 0:11:21.080 You also have to have an extraordinarily large amount of 0:11:21.120 --> 0:11:23.640 money to do to do propaganda. 0:11:23.320 --> 0:11:25.199 For this, because the reason this works. 0:11:24.920 --> 0:11:26.760 Is that the Nobel Prize in economics is also a 0:11:26.760 --> 0:11:29.360 propaganda effort, right, And one of the ways you can 0:11:29.400 --> 0:11:31.480 tell us a propaganda effort is that they didn't give 0:11:31.480 --> 0:11:33.480 what a Joanne Robinson, who was one of the most 0:11:33.840 --> 0:11:38.120 influential economists who has ever lived. Justice for Joanne genuinely 0:11:38.360 --> 0:11:41.000 like it's it's outrageous. It's just like one of the 0:11:41.000 --> 0:11:43.400 few things even to the people who hate her are like, yeah, no, 0:11:43.480 --> 0:11:45.720 she should have gotten one, because she's one of the 0:11:45.800 --> 0:11:49.480 people who invents the idea that competition isn't perfect, like 0:11:49.520 --> 0:11:53.040 she invents imperfect competition where there's like monopolies and shit, 0:11:53.920 --> 0:11:56.280 say this is all like there's something that's like foundational 0:11:56.320 --> 0:12:00.320 to like everyone's to some extent understanding of economics, but 0:12:00.360 --> 0:12:02.800 most of our ideas are completely ignored and saying like 0:12:02.880 --> 0:12:05.240 monopsony is like a thing that you put in textbooks. 0:12:05.240 --> 0:12:07.240 But then when you're trying to like you know, you're 0:12:07.280 --> 0:12:10.920 you're an economist that like not even like the fucking 0:12:11.000 --> 0:12:13.920 Heritage Institute or Hairriage Foundation or whatever, you're at like 0:12:14.080 --> 0:12:16.480 a just like a random economics think tank, right, like 0:12:16.520 --> 0:12:20.160 you don't take Knopsony into account when you're like, hey, 0:12:20.200 --> 0:12:22.120 we can't raise the minimum wage because if you raise 0:12:22.120 --> 0:12:24.640 the minimum wage, then everyone's going to get fired. And 0:12:24.679 --> 0:12:26.240 it turns out to like, well, no, that's not true. 0:12:26.280 --> 0:12:28.600 And the reason that's not true is because if you 0:12:28.760 --> 0:12:33.360 assume that neoclassical economics is real, is that companies aren't 0:12:33.440 --> 0:12:37.040 hiring people at like the lowest possible wage that like 0:12:37.080 --> 0:12:39.400 that they could do without someone going to somewhere else. 0:12:40.000 --> 0:12:41.599 They're hiring them even. 0:12:41.360 --> 0:12:44.439 Lower than that because they can suppress the wages because 0:12:44.559 --> 0:12:46.320 where the fuck else are you going to work right? 0:12:46.520 --> 0:12:46.720 Right? 0:12:47.120 --> 0:12:50.680 But also like people like human behavior is not subject 0:12:50.720 --> 0:12:53.680 to the rules of mathematics in that straightforward kind of 0:12:53.720 --> 0:12:54.240 way either. 0:12:54.760 --> 0:12:58.000 No, it's very dumb and like, because this goes back 0:12:58.000 --> 0:12:59.719 to something that's important to all of this, which is 0:12:59.760 --> 0:13:03.640 that like, economics as a field is not it's not 0:13:03.720 --> 0:13:06.880 a science. It doesn't come from science. It comes from 0:13:06.960 --> 0:13:10.920 moral philosophy. The economy guys, they're always saying stuff. They're 0:13:10.960 --> 0:13:13.800 just like confidently asserting something and showing me a graph 0:13:13.880 --> 0:13:16.160 that's just like does not reflect my lived reality at all, 0:13:16.160 --> 0:13:17.760 But they're very confident about the graph. 0:13:18.080 --> 0:13:18.240 No. 0:13:18.679 --> 0:13:22.040 Well, and that's the thing because because because it's originally philosophy. 0:13:21.559 --> 0:13:23.400 It's like, no, the economy is going great. 0:13:23.400 --> 0:13:24.280 It's like not, we're right, not. 0:13:24.320 --> 0:13:25.320 From not in my house. 0:13:25.800 --> 0:13:27.320 No, it's like it's fucking bullshit. 0:13:27.640 --> 0:13:31.199 That's a reflection of the fact that economics as a 0:13:31.280 --> 0:13:34.080 discipline works backwards from the way that a science works, 0:13:34.080 --> 0:13:37.800 which is economics starts out with assumptions about how humans work. Right, 0:13:37.800 --> 0:13:39.640 It starts out with the assumption that like everyone's like 0:13:39.679 --> 0:13:44.240 a rationally calculating actor who's like seeking to maximize their 0:13:44.280 --> 0:13:45.080 own utility. 0:13:45.200 --> 0:13:48.000 And I've never met that person. Yeah, it's philosophy. I 0:13:48.240 --> 0:13:51.760 actually no, I love maximizing utility. Don't get me started 0:13:51.760 --> 0:13:53.400 on maximizing my economic utility. 0:13:53.679 --> 0:13:58.640 It's literally utilitarianism, right, It's not something that's derived from 0:13:58.679 --> 0:14:03.040 from empirical data. It starts with an assumption about how 0:14:03.080 --> 0:14:06.320 things work and then projects that assumption onto the world. 0:14:06.880 --> 0:14:10.160 I don't want to be melodramatic, but I'm having a 0:14:10.200 --> 0:14:13.960 breakthrough here in my understanding of what economics is. I 0:14:14.000 --> 0:14:17.319 thought they were just being dumb before suddenly I see 0:14:17.360 --> 0:14:18.240 it completely differently. 0:14:18.480 --> 0:14:22.680 Yeah, it's ideologically motivated reasons. They have a philosophy. They 0:14:22.720 --> 0:14:26.320 were attempting to mathematically define, like project their philosophy onto 0:14:26.320 --> 0:14:29.840 the world, and it doesn't work very well because it's philosophy. 0:14:29.920 --> 0:14:30.760 It's not right. 0:14:30.760 --> 0:14:34.040 They're trying to prove a conclusion rather than map reality. 0:14:34.400 --> 0:14:37.600 Yeah, they're going backwards. Yeah, and this is something that 0:14:37.600 --> 0:14:39.360 we're going to get into in a second. But first 0:14:39.480 --> 0:14:41.640 we're going to get into are the products and services 0:14:41.640 --> 0:14:42.840 that support this podcast? 0:14:42.960 --> 0:14:43.200 Wow? 0:14:43.440 --> 0:14:44.600 Speaking of the economy. 0:14:44.760 --> 0:14:57.240 Woo, we are back. 0:14:58.120 --> 0:15:00.800 So one of the things that's actually interesting about the 0:15:00.840 --> 0:15:02.560 story of Joan Robinson. 0:15:02.800 --> 0:15:07.600 Is that there's a reason why almost no one. 0:15:07.640 --> 0:15:09.400 I mean, I don't know that people people listening to 0:15:09.480 --> 0:15:12.600 this podcast have a higher likelihood of knowing who Joan 0:15:12.680 --> 0:15:15.720 Robinson is than like almost any other group of people 0:15:15.720 --> 0:15:18.280 on Earth. But like, there's a reason why she's not 0:15:18.640 --> 0:15:20.440 extremely well known by normal people. 0:15:20.600 --> 0:15:22.160 I'm gonna be so honest with emia. 0:15:22.240 --> 0:15:25.960 The only economists I know are the ones that Jabier 0:15:25.960 --> 0:15:28.200 and Malay named his clone dogs after. 0:15:29.080 --> 0:15:30.840 That makes sense. Well, like people like you've heard of you, 0:15:31.120 --> 0:15:33.240 like you've heard of like Adam Smith. Right, that's true. 0:15:33.240 --> 0:15:34.360 That's not one of the clone dogs. 0:15:34.760 --> 0:15:37.360 John Robinson is an economist who is important enough that 0:15:37.480 --> 0:15:39.280 like you should know who she is. 0:15:39.360 --> 0:15:40.760 Yeah, but he would not have named one of the 0:15:40.760 --> 0:15:42.360 clone dogs after her. I think they're I think they're 0:15:42.360 --> 0:15:45.680 all boys. No, absolutely not. He probably like he would 0:15:45.760 --> 0:15:46.360 chainsaw her. 0:15:46.480 --> 0:15:47.240 It's bad. 0:15:48.200 --> 0:15:51.000 But the reason that you don't know who she is, 0:15:51.040 --> 0:15:54.280 and the reason that Monopsony kind of like sat in 0:15:54.320 --> 0:15:56.680 the closet of Mainshon economics until people started digging it 0:15:56.720 --> 0:16:02.080 out recently, is because John Robinson is part of a 0:16:02.120 --> 0:16:05.120 tradition of heterodox economics, which is it's you know, the 0:16:05.160 --> 0:16:09.160 economics that's not the mainstream ones and all of those 0:16:09.160 --> 0:16:13.000 people who got systematically purged from every academic institution over 0:16:13.040 --> 0:16:17.560 the span of about thirty years by the neoclassical economists because. 0:16:17.320 --> 0:16:19.120 The government doesn't want you to know their ideas. 0:16:19.200 --> 0:16:21.800 I mean, like well, like like genuinely, what happened was 0:16:21.880 --> 0:16:23.280 it was like it was, it was a bunch of 0:16:23.280 --> 0:16:26.520 these people like hired by capitalists in order to do 0:16:26.560 --> 0:16:29.200 propaganda for them, and they went through and systematically took 0:16:29.280 --> 0:16:32.360 over and purged all of the country's economics departments. 0:16:32.480 --> 0:16:35.120 If what she's saying is the entire framework of your 0:16:35.120 --> 0:16:39.200 worldview just like functionally doesn't work. Yeah, yeah, that's that's 0:16:39.200 --> 0:16:41.120 not a good vibe for them. 0:16:41.280 --> 0:16:43.040 So let's talk about. 0:16:43.040 --> 0:16:46.560 The kind of tradition that John Robinson operates in, because 0:16:46.560 --> 0:16:50.600 this is actually a story that really really tangentially the 0:16:50.640 --> 0:16:54.280 planet money people kind of allude to and then never 0:16:54.360 --> 0:16:59.920 talk about again, even though it's fascinating. So John Robinson 0:17:00.760 --> 0:17:03.000 is I guess you could call her one of the 0:17:03.440 --> 0:17:06.080 sort of first people in what you would call the 0:17:06.119 --> 0:17:07.440 post Kinesian tradition. 0:17:07.920 --> 0:17:10.719 Absolutely, I'm always saying that, do you know who Canes 0:17:10.840 --> 0:17:13.800 is an economist? Was his name Maynard? 0:17:14.000 --> 0:17:16.640 Yeah? John Maynard Kinesa. 0:17:17.200 --> 0:17:20.080 He's like, like, if you remember one thing about Canes, 0:17:20.720 --> 0:17:22.240 like if you need to just be like you have 0:17:22.280 --> 0:17:24.040 a flash card, you need to be like someone says, 0:17:24.080 --> 0:17:28.560 Canes he's the I guess like decidagal terms like countercyclical spending. 0:17:28.600 --> 0:17:29.640 But he's he's the. 0:17:29.640 --> 0:17:34.000 Guy who's like, when economy bad, government should spend money 0:17:34.480 --> 0:17:37.280 in order to make economy not bad. Again, that's like 0:17:37.320 --> 0:17:39.800 the most basic part of Kanesianism. 0:17:39.280 --> 0:17:40.080 And that's all I need. 0:17:40.800 --> 0:17:42.280 Yeah, But like to think about. 0:17:42.400 --> 0:17:45.040 Canes is that like he wants like a nicer version 0:17:45.040 --> 0:17:48.240 of capitalism, but he is like a capitalist, and so 0:17:48.640 --> 0:17:51.600 there's a sort of milieu around him that John Robinson 0:17:51.640 --> 0:17:55.320 is kind of part of. But there's a lot of 0:17:55.400 --> 0:17:59.520 elements of it, and people who Canes like take stuff 0:17:59.560 --> 0:18:04.840 from who are extremely obscure now because you know, kines 0:18:04.880 --> 0:18:07.640 did a version of it that like took the radicalism out. 0:18:08.040 --> 0:18:10.000 I promised earlier you were going to get to the 0:18:10.040 --> 0:18:13.800 guy who like invented the concept of actually doing scientific 0:18:13.840 --> 0:18:16.320 studies for macroeconomics. 0:18:17.000 --> 0:18:18.440 That reach that makes me. 0:18:18.640 --> 0:18:22.879 So mad that the answer to that question isn't the first. 0:18:22.640 --> 0:18:25.480 Guy who put math in who just had that we 0:18:25.520 --> 0:18:26.800 should do math and economics. 0:18:26.800 --> 0:18:29.040 Oh, the first guy that did it, the first economists, right, 0:18:29.160 --> 0:18:30.400 the guy even been in economics. 0:18:30.440 --> 0:18:35.880 Right, economists do a bunch of math. It's just not math, that's. 0:18:35.440 --> 0:18:40.080 But like, we should study the currently existing reality. 0:18:40.400 --> 0:18:42.040 Yeah, the world first. 0:18:42.480 --> 0:18:45.119