COMPLEXITY: Physics of Life

Steven Teles & Rajiv Sethi on Jailbreaking The Captured Economy (EPE 04)

Episode Notes

As the old nut goes, “To the victor goes the spoils.” But if each round of play consolidates the spoils into fewer hands, eventually it comes to pass that wealthy special interests twist the rules so much it undermines the game itself. When economic power overtakes the processes of democratic governance, growth stagnates, and the rift between the rich and poor becomes abyssal. Desperate times and desperate measures jeopardize the fabric of society. How might nonpartisan approaches to this wicked problem help us walk the system back into a healthy balance?

Welcome to COMPLEXITY, the official podcast of the Santa Fe Institute. I’m your host, Michael Garfield, and every other week we’ll bring you with us for far-ranging conversations with our worldwide network of rigorous researchers developing new frameworks to explain the deepest mysteries of the universe.

This week on Complexity we speak with Steven Teles, political scientist at Johns Hopkins University and SFI External Professor Rajiv Sethi, Professor of Economics at Barnard College, Columbia University about how self-serving economic actors intervene in regulation to stifle innovation, increase inequality, and contribute to the conditions in which violence can flourish. Referencing Teles’ aisle-crossing book The Captured Economy with co-author Brink Lindsey, we link the problem of regulatory capture in its myriad forms to Sethi’s work on race, inequality, and crime, which we discussed in Episode 7 (Rajiv Sethi on Crime, Stereotypes, and The Pursuit of Justice). At the interface between the left and right, public and private, our guests shed light on the forces that divide — and may help reunite — the USA and other modern nations.

Be sure to check out our extensive show notes with links to all our references at Note that applications are now open for our Complexity Postdoctoral Fellowships! Tell a friend. And if you value our research and communication efforts, please subscribe, rate and review us at Apple Podcasts or Spotify, and consider making a donation — or finding other ways to engage with us — at

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More on the Emergent Political Economies SFI Research Theme:

SFI launches new research theme on emergent political economies

Complexity 82 - David Krakauer on Emergent Political Economies and A Science of Possibility (EPE 01)

Complexity 83 - Eric Beinhocker & Diane Coyle on Rethinking Economics for A Sustainable & Prosperous World (EPE 02)

Complexity 84 - Ricardo Hausmann & J. Doyne Farmer on Evolving Technologies & Market Ecologies (EPE 03)

Referenced in (or related to) this episode:

The Captured Economy: How The Powerful Enrich Themselves, Slow Down Growth, and Increase Inequality
by Brink Lindsey and Steven Teles

Shadows of Doubt: Stereotypes, Crime, and the Pursuit of Justice
by Brendan O’Flaherty and Rajiv Sethi

Complexity 19 - David B. Kinney on the Philosophy of Science

Common as Air
by Lewis Hyde

Signalling architectures can prevent cancer evolution
by Leonardo Oña & Michael Lachmann

Scaling of urban income inequality in the USA
by Elisa Heinrich Mora, Cate Heine, Jacob J. Jackson, Geoffrey B. West, Vicky Chuqiao Yang and Christopher P. Kempes

Crime and Punishment in a Divided Society
by Rajiv Sethi

Rajiv Sethi discusses gun violence, critical race theory, and bezzles
on The Glenn Loury Show (video)
(audio-only podcast link)

The Gun Deal by Rajiv Sethi (Substack)

Rajiv Sethi reviews Boldrin/Levine’s Against Intellectual Monopoly

Steven Teles and Brink Lindsey on EconTalk with Russ Roberts

Is Nothing Sacred? Rajiv Sethi on Salman Rushdie (Substack)

Rajiv Sethi with Bari Weiss and David French on gun violence

Rajiv Sethi on James Tobin’s Hirsch Lecture on Functional Inefficiency in Finance (Substack)

Episode Transcription

Steven Teles (0s): And in order to legitimate the kinds of inequalities that go along with innovation, we need ways to create systems of redistribution and public goods and collectively consume things in order to make that system not become politically toxic, then have people not respond by trying to simply throw sand in the gears when keeping the gears going is actually how we produce wealth. On the other hand, whenever anyone has produced wealth, or especially in this case, it's for normal profits, they are not going to be eager to get those up. 

They're going to create every mechanism they can in order to prevent the system we had talked about of how competition ends up eating away at those super normal profits. And so there's always going to be the system where people are going to try to capture a government in order to prevent the competitive mechanism from challenging. I always say everybody likes creative destruction, except people who've got something to be creatively destroyed. One of the basic determinants of whether or not you have a system that constantly generates both innovations and the adaptations to deal with those innovations is whether government is efficiently target hardened against capture by those interests themselves. 

Michael Garfield (1m 40s): As the old nut goes to the victor go the spoils. But if each round of play consolidates the spoils into fewer hands, eventually it comes to pass that wealthy, special interests twist the rules so much it undermines the game itself. When economic power overtakes the processes of democratic governance, growth stagnates, and the rift between the rich and poor becomes a bissell.  Desperate times and desperate measures jeopardize the fabric of society. 

How might nonpartisan approaches to this wicked problem, help us walk the system back into a healthy balance. Welcome to 


podcast of the Santa Fe Institute. I'm your host, Michael Garfield, and every other week, we'll bring you with us for far ranging conversations with our worldwide network, rigorous researchers, developing new frameworks to explain the deepest mysteries of the universe. This week on complexity, we speak with Steven Teles political scientist at Johns Hopkins University and Rajiv Sethi, SFI External Professor of Economics at Barnard College at Columbia University about how self-serving economic actors intervene in regulation to stifle innovation, increase inequality, and contribute to the conditions in which violence can flourish. 

Referencing Teles's 

Iowa Crossing 

book, the captured economy with coauthor Brink Lindsey we linked the problem of regulatory capture and its myriad forms to set these work on race, inequality, and crime, which we discussed in episode seven at the interface between the left and right public and private, our guests shed light on the forces that divide and may help reunite the USA and other modern nations. Be sure to check out our extensive show notes with links, to all of our references at

 and note that applications are open now for our Complexity postdoctoral fellowships. Tell a friend. If you value our research and communication efforts, please subscribe, rate, and review us at applepodcasts or spotify and consider making a donation or finding other ways to engage with us at

Thank you for listening. Steven Teles, it's wonderful to have you on 


podcast, Rajiv Sethi. I'm glad to have you back. 

Steven Teles (4m 3s): Thank you. Happy to be on with you. 

Michael Garfield (4m 5s): We tend to start this show with just a bit of autobiographical grounding. Like I said, Rajiv, we've had you on, but that was years ago. So what I'd love is for each of you, let's start with you Steven, to give a bit of a background into your story as a mind and how it is that you came to devote yourself to the exploration of the kinds of topics and questions that we're going to discuss today just so that we can put a face on all these ideas. 

Steven Teles (4m 37s): Yeah. So I don't know where to start but I'm recording here in DC. And I went away and ended up coming back to I'm within like a half a mile of work. My mom used to teach community college in Montgomery County, right outside of DC. And to some degree, both my parents were part at some point in what you might think of as the elite civil service, the on-sites of the parts of the government that were generally viewed at least the time as being relatively functional. So my dad worked at NASA during the high point in the romantic period of that governmental function. 

And my mom after she taught community college, worked at the national science foundation. And so on the one hand, I had a sense just from growing up that government was capable of doing kind of exciting, important things. But I was also aware from, I was a journalist at the very lowest level of the journalistic hierarchy when I was in college. And I went around and looked at lots of different government agencies. And I was really struck by how different they were. There were some agencies are like where my parents had worked that were, you know, very high prestigious people were really excited. 

They always want to tell you what they were doing. And then I was also going into government agencies where you can never find anybody where everybody was obscure about exactly what they were doing. And that variety of the fact that government could both be very effective, but it could also be dominated by special interests, could be incompetent, was always pretty central to me. And so I took that with the graduate school, and this is sort of relevant to what we're going to talk about. I studied with a bunch of conservatives on James Caesar, Martha Derthick, who at one point was also the head of governmental studies at Brookings, Steve Rhodes, who was a trained oddly enough, both by Alfred Kahn at Cornell who Rajiv will know of, who was a great student of regulation, but also Allan Bloom, the famous Straussian. 

And all of that was part of my influence that I thought of myself as kind of a liberal, who was always in conversation with conservatives. Lots of my work has been about conservatives or in some ways was in conversation, was trying to sort of put my more galitary and instincts into conversation with challenges I'd gotten from a variety of different kinds of conservatives and bolts, sort of Straussian political theory and versions of what now people smugly called neoliberal economics. 

Michael Garfield (7m 2s): Excellent. 

Rajiv Sethi (7m 5s): I was born in India, Michael, my family moved to the UK when I was 11. And that was a big shock to the system. Started becoming very aware of my appearance and the way people reacted to it, how stereotypes affect inferences that people make about you, how they react to you and so on. And so that had a big impact actually on my thinking and my personality without my really realizing it. I was there for 10 years in total. I did my undergraduate work at the University of Southampton in the UK in mathematics. 

So I had not studied in economics at that point, and I didn't want to go to graduate school in math. I wanted to travel and I wanted to do some good in the world, I guess. And I applied to an organization and ended up in Sierra Leone in West Africa for a couple of years, just teaching math in high school and the economy there those two years went through a huge transformation. Inflation picked up and people started taking their kids onto their farms. This was in a rural area. And instead of teaching them, you know, just to make ends meet, cause their salaries just wouldn't cover basic needs. So just ended up shifting towards farming, along with their classrooms, shifting onto the fields and so on. 

And so I just got really interested in economic development in inflation interest in these things that I had not really had any training in understanding. And so after another year I went back to India for a year. You know, again, felt like a foreigner again, actually I'd been away for such a long time. So then after that, I came to the U.S. for graduate work in economics. I work mostly on information and beliefs in various capacities, including this course, which I think we'll discuss. So that connects with what Steve just said, but through the economics training and teaching, I came gradually back to this original interest in sort of identity communication, inference, belief, stereotypes, and so on. 

So my work one way or another attaches to those themes, but especially in recent years about crime in the criminal justice system, where you have interactions involving strangers at every level, you know, offenders and victims, judges, and defendants going for some officers and suspects, you know, weaknesses, other weaknesses or weaknesses and prosecutors and people make judgements about each other snap judgements, if you like, based on very little information. So that set of themes that I've been exploring in recent years, mostly with a collaborator of mine, Daniel O’Flaherty at Columbia. 

Michael Garfield (9m 14s): Yeah. And it just worth pointing out that the entire first conversation that I had with you back in, I think episode seven was about that book. And so I really encourage people to do a little bit of archeology and travel back for a much more focused conversation about that, particularly, but I want to connect all of that in the next hour or so to the book that you Steven wrote with Brink Lindsey and interesting kind of aisle crossing, a collaborative authorship effort called 

The Captured Economy

, how the powerful enrich themselves slow down growth and increase inequality. 

And as I think this conversation will make clear, there's a very, very deep link between all of these issues of the way that stereotyping enters the criminal justice system and the problems with violence and inequality in that way. And then the issues that you're describing Steven in this book about regulatory capture and misregulation sort of the systemic creation of those inequalities, although from a very different angle. 

So if you would please give people a kind of a course overview of this book and the four ways that you and Lindsey are talking about this problem, like the four case studies or examples that you give here. 

Steven Teles (10m 42s): Let me actually just take a privilege to go back a second, because I think there's some relationships between Rajiv’s work, my previous book 

Prison Break 

and what we're talking about and captured economy and in prison break, which again is Rajeev knows one of the basic insights that's not specific to the question of criminal justice is about how people process information. And the basic insight is that people process information through identity. The first question people ask about a new factor, a new situation is what do people like me think about this? 

Not is this fact true or false. So they ask essentially is this piece of information, identity appropriate, and only having recognized that the information is not a threat to their identity, are they open to new kinds of information? And so the book 

Prison Break 

is about how conservatives convinced other conservatives that the problems with the criminal justice system were identity appropriate for them to address.  And so we could get into all the details of that, but that's how I think about the act of persuasion as you have to make information, not a threat to identity. And so that's relevant to this book because the book faces in both directions. It's a kind of Janice faced book and that it's got a message that's not exactly traditionally comfortable for both the left and the right. To the right we're making an argument that concern about inequality is entirely consistent with other identity commitments that people on the right have. The way we do that is to say that a very large part of inequality is not generated by the spontaneous interaction of supply and demand. 

It's not by the market itself, but that all through the economy are various forms of governmental action that themselves generate highly concentrated wealth and income, right? And that traditionally the way that economists think about inequality is that markets should actually have some very powerful tools for eating away at inequality, right? That is if you get periods where you get super normal profits in some area that sends information that sends signals to other producers to come in, and those super normal profits should get eaten away by the force of competition in less there are barriers to entry so the signals don't generate more supply. And that is exactly what we have in huge swaths of the American and other economies. And so if that's the case and the way I always talk about this as the conservative paradox that conservatives in the one hand have often thought that their role was to legitimate inequality, to justify inequality. On the other hand, they spend all their time complaining about how much regulation there is and how horrible it is. Well, if there's all this regulation and it's having all these maligned effects on the economy, it's hard to believe that would not show up in the distributional tables. 

And that sends part of the argument is conservatives should have absolutely no problem talking about inequality, given how much inequality is produced by the state rather than produced by the market. On the other hand to the left, we are arguing that lots of inequality is produced by government. And if you care about inequality, you can't just talk about inequality as a problem. That's a problem of markets and you have to think of it as a problem of government and the channel through which lots of that happens is regulation. 

And also people on the left often talk about, well, the powerful research insulate their wealth back into politics. Bernie Sanders talks about this constantly. It would be a big surprise if they didn't invest in regulation is one of those mechanisms in order to preserve their existing economic power and status. So part of what we're trying to do is get people on the left to think in a critical way about regulation, in what form, at least for certain kinds of regulation, we can get into that a second, because we are pretty careful to dis-aggregate regulation in this book, but in particular sort of sector specific regulation of the kind we're talking about in the book, that this is a problem that people on the left should recognize and should not feel is identity inappropriate for them to discuss 

Michael Garfield (15m 10s): Perfect. Rajiv, at any point, you feel like breaking in with comments, just let me know. Cause I know that the first act of this conversation is a little bit weighted more in his direction, but feel free to. 

Rajiv Sethi (15m 20s): No, no, no, that's fine. I just have one brief comment actually about this sort of identity filter that barracks people to take certain positions. And I've always found it really paradoxical that those who have a lot of faith in government to do good, which would be mostly the people on the left are the least inclined to sort of take action and voice concerns when it does not. So for example, with regard to fraud and abuse and corruption and so on, and those who really would like a much smaller government and more on the right and the, especially the libertarian, right also the pointing out fraud and abuse and so on I would have thought that those who have faith in government would be most concerned about incidences when one sees evidence of poor functioning. But that doesn't seem to be the case because people didn't take a defensive posture because if you live playing into the hands of those who came to meet those kinds of arguments. So that's just another way of sort of putting it, I think to Steve's point. 

Steven Teles (16m 12s): Yeah. And the other identity point that's relevant here is in part, our two parties are divided up by one party being the party of the producer interest of government. So Democrats to a large degree, a core part of their political coalition are the people who produce government services like teachers and their unions, public sector workers in their unions. So for that reason, it's hard for them not to feel defensive about government in all forms. People often in the left talk and say, well, government is what we do together. 


Well, that's only true at a very abstract sense and you know, is true only for people who've never walked down to city hall who realize that actually government is a quite specific interest. And again, if you've been in lots of the rest of the world, you would find that abstraction of government being what we do together, as opposed to a specific, separate interest to be extremely hard to swallow. But I mean, one thing also say is the left has always had two minds on this. Either on the one hand, thinking about government again is representing what we all do together, but also being the executive committee of the bourgeoisie. People on the further left have always been much more skeptical of wondering whether the state is just the instrument of private power. 

And so there's always been a version of this position that's more skeptical about whether or not government is a good instrument for acting on our underlying normative principles then you might think. I think there's also been resources again, oddly enough, further to the left of this kind of skepticism. 

Michael Garfield (17m 49s): And also just to annotate this, because part of this is just upending your insights with relevant SFI publications. A conversation I had with David Kenney a couple of years ago when he was post-doc here, working on formal epistemology was on his work on the economic incentives to ignore one's privilege. And you can see that manifesting in pretty much every corner of this conversation. Now that we're here, I'd like to give you some time to expose it on the four places that you see the capture of regulation and the establishment of rent-creating policies in this. 

And from there, I'd like to kind of focus on just two of those, but I'd love for you Steven to lay out the way that your, as you put it, dis-aggregating regulation here. 

Steven Teles (18m 44s): So we should think about regulation. First of all, in two forms. There's sector, specific regulation, and then there's generic regulation, right? So when you think about say anti-discrimination law, they apply to firms across the entire economy. To some degree environmental regulations, certainly like clean air applies pretty economy-wide. And often the argument for regulation in those cases is very different than what we see in the sector specific regulation. We talk about sector specific regulations in this book. The examples we have are licensing zoning and housing, intellectual property, and finance. I'll start with one example just to make it easier for your listeners to sort of understand which is we talk a lot about medical licensing and medical licensing is the one we picked because that's the one where a licensing regime is most clearly upward redistributing and its effect. And one way to think about this is there are doctors being produced all over the world, back in India, where Rajiv is from.

They produce a lot of doctors, right? Many of them would like to come to the United States. They would be willing to practice for less than doctors in the United States are paid. Because the difference between what doctors are paid in the end with doctors in the United States is so large. This is one of the usual arguments that economists make per why it's good to have global immigration is that one of the effects of that is it can actually be anti-inequality because it can actually pull down the salaries and rents of those at the very top. But the medical profession has all kinds of ways to prevent competition for America doctors, right? 

One is our immigration regime and the way it combines with our licensing regime, which is there's a lot of people who had been doctors in India who came over to the United States and could never get licensed to practice because they would have to go through a whole new set of medical training and everything else. And so instead they're driving taxis and doing other things. I've heard lots of, of people who tell me about their father, who was a doctor in India. And then he came to the United States and could never practice. That's one of the mechanisms. The other example, I often give that I love, and this is in dentistry, right? 

And I can do this because almost everybody hates dentists. In most states, dental hygienists are required to work in the office of a dentist. And this is my really bad pun coming. So I'm warning here, right? What that means is like dentists are able to extract a rent from their dental hygienists. That is a dental hygienist. We're able to go and work together and create their own dental hygienist practices where they could refer to dentists if somebody needed a crown or whatever, but they could do all the cleaning themselves. They would be able to take all the profit for themselves, but because they're required by law to go and practice in a dentist office, the dentist is able to extract a significant amount of the profits and is able to charge a lot more for that service then they would have the dental hygienists for serving on the road. And so those are some of the ways that again, regulation has this upward redistributing effect and licensing is one of the easiest places to see it. Intellectual property is another one. Think about, you know, Taylor Swift, I shouldn't use this because it already likes Taylor Swift.  I should use somebody, everybody hates. But one of the reasons why Taylor Swift is as wealthy as she is, is that her recordings for all eternity now because of how we keep rolling over copyright terms are literally protected by government. 

So when the book, we essentially say that intellectual property is a kind of misnomer, what it really is, is intellectual monopoly. And that's true, not just music, but it's true in medicine. And one thing we also argue is this also slows out innovation and slows down growth because it slows down the rate at which other people can use other people's innovations and build them into their own creation. So while to some degree, intellectual property may create an incentive for people to create, it also has the effect of slowing down the degree to which other people can adopt those innovations for themselves. 

And so that ends up buth slowing down the growth and increasing inequality because it creates this enormous rent on the part of Taylor Swift. And also increasingly we now build those intellectual property rules into international trade agreements. A lot of international trade agreements with people ordinarily sit on their couch and they think, well, that must be them dropping tariffs. But in fact, lots of what it is, are agreements for other countries to accept American intellectual property. 

Rajiv Sethi (23m 18s): There's a couple of interesting examples to illustrate what Steve just said. So under apartheid, it happened to be the case that there was a very severe shortage of doctors in the areas to predominantly black areas. So there was segregation, residential segregation, and most of those suffering doctors were white. African nurses, black South African nurses ended up doing a lot of the things that we normally accustomed to have doctors do it. And they did it pretty well. And they ended up being perhaps know among the best trained and the most capable nurses worldwide because they were really, really filling in for the doctors. 

So there's a sort of chorus line between those who are licensed and those who can perform many of the tasks that required the licensing, but are not immediate to do that without having the licensing. So that's an example of Steve's point. The other thing I'd point out is that a couple of economists, Michele Boldrin and David Levine wrote this book about 12 years ago, so-called about intellectual property and they actually called it against intellectual monopoly. So they, they use that term deliberately. And in fact, one of the things they pointed out in that book, that's just a little anecdote is that the patent law goes back I think a statute in the UK or the statute of monopolies from 1523, something like that. So the word monopoly was sort of sanitized and it was replaced with a more innocuous term intellectual property for the purpose of sort of protecting the rights, but also the lucrative nature of those who held those rights. 

Michael Garfield (24m 42s): So I don't want to move too far, too fast here, but everything that the two of you have just brought up links out in my estimation to some other work that we talk about on the show quite a bit that has been going on at SFI over the last couple of years, one being a paper coauthored by our Professor Michael Lachmann on signaling architectures can prevent cancer evolution and where they're basically saying that the way that the body basically creates a regulatory burden for licensing on the requisition of nutrients is what makes it difficult for cancer to cheat the system. 

So you've got that on the one end, which is this question of actually to what extent do we actually want innovation or do we want to accelerate innovation when as we know from the work of people like Geoffrey West, that we're stuck in this accelerating ratchet of innovation and crisis cycles where every new innovation can create these externalities that then end up coming back to bite us. And the whole system becomes kind of increasingly unstable as things become more and more difficult to respond to adequately in the time available. 

So that's me playing kind of a sympathy for the devil card here, but Steven, before I hand it back to you, I just want to make another link here because I think that this starts to edge into specifically the question of the way that regulation and then also just the fact of cities and the fact of the scale of our society all plays into the issues of crime, inequality, and injustice that I want to focus on with Rajiv, which is that, you know, we've got this paper that was led by one of our former undergraduate researchers, Elissa Mora she worked on it with a huge of people, including Geoff West, Vicky Yang and Chris Kempes on the scaling of urban income inequality in the USA where, you know, there's been this line coming out of the urban scaling, work that in us, in cities that patent production scales super linearly per capita with population. And that's a celebrated thing that this is related somehow to income, but then they broke it down. They decompose the statistics and found that this was all basically getting captured again by the top decile of people living in those cities. 

And so it seems like cities generate more patents per capita and cities are more unequal. Places are kind of effectively synonymous statements. So yeah, I'm curious your thoughts on all this. 

Steven Teles (27m 34s): Let me start out. So there were about 14 questions there, disaggregate a little bit. So the first thing I'll say is I'm a almost unreserved innovation fan and a believer in economic growth that I think those are good things. And I also say, I think urbanization is a good thing. I'm going to give the devil his due in a second, just to give you a warning. So I'm not going to be a complete Pollyanna here. So I do think innovation and growth is the way that we get out of a situation of poverty and misery and ignorance. 

And so I don't actually think any of us need to apologize for that. And there's lots of places in the world that could use less poverty, misery and ignorance, but you know, that's a social system. It's a social system that produces that. And it's certainly the case that every thing that we produce that produces innovation also produces things that we did not intend and societies and this is why, again, effective, I would also say rapid government is an important pair with an innovative market economy because an innovative market economy is also always producing these coordination and other kinds of effects that we need some collected mechanism for dealing with both as an economic phenomenon and as the political phenomenon.

That is in order to legitimate the kinds of inequalities that go along with innovation we need ways to create systems of redistribution and public goods and collectively consume things in order to make that system not become politically toxic and have people not respond by trying to simply throw sand in the gears when keeping the gears going is actually how we produce wealth. On the other hand, the argument of the book, this sort of sociological argument of the book is that whenever anyone has produced wealth, or actually in this case for normal profits, they are not going to be eager to get those up. 

They're going to create every mechanism they can in order to prevent the system we had talked about of how competition ends up eating away at those supernormal profits. And you know, this is true throughout most of human history. You can think about the countries with the largest inequalities, think about Latin American countries with huge landholdings. That was what the classic rents, the rents that were described at the classic economists. They were almost all land rents, right? That was what people were describing. 

And so there's always going to be the system where people are going to try to capture a government in order to prevent the competitive mechanism from challenging. I always say everybody likes creative destruction, except people who've got something to be creatively destroyed, right? And so one of the basic determinants of whether or not you have a system that constantly generates both innovations and the adaptations to deal with those innovations is whether government is efficiently target hardened against capture by those interests themselves. 


And this is why Peter Evans years ago wrote this book on economic growth, which you called Embedded Autonomy, which is saying these were the characteristics of states they were able to become developmental is they were both embedded enough in their society to understand what the problems are that society were and the resources, and also to be legitimate. But they also have enough autonomy from that society not to be captured by the most powerful groups. And so that's part of our sociology. To go back to your geographic concentration, to some degree, some geographic concentration is inevitable as a result of a glomeration economies, the fact that there's a lot of innovation when you put people together and you put people into cities, and there's a reason why cities grow. The one place where I'm skeptical of some of the agglomeration economy, people is it's also the case that some of those sort of in general, coastal agglomeration driven economies are also the places where there's enormous rents being extracted and exploited. It's not an accident that financial centers like London and New York or centers that drive an intellectual property like San Francisco and Los Angeles or other. 

There's a reason why some of what they've got is they've captured a rent. They've captured a financial rent, they've captured intellectual property rent. And so some of that geographic inequality is a result of that rather than the fact that they're just more productive. I think there's a reason to be a little skeptical about whether their productivity is just like a fact of their underlying intellectual capacity of who lives there and about whether or not they've got the golden egg and they're protecting it. 

So I think there's some of both, and there's an argument that if you were actually to eat away at some of these economic rents, you might also end up leading us to a somewhat different geographic dispersion of economic. 

Rajiv Sethi (32m 43s): Yeah, that's absolutely right. I mean, when I wrote a review of the Boldrin and Levine book this about 10 years ago, so actually talk about the distinction that was made by Adam Smith, the founding of economics, he talked about productive and unproductive labor. And one of the things that you need to invest in, if you have intellectual property rights that are very strict, very encompassing, and very well-protected is you need what has come to be referred to as godly. But I mean, that could take the point of defensive patterns. So lawyers or just people, you know, just like physical property needs to be guarded in some way to agents with the state or through private agents. Intellectual property also needs to be guarded, right? 

Is somebody violating your patent and your copyright? And if so, then, you know, what action are you going to take and what contraction might be taken against you and so on. And all of this actually is a drag on growth because those people and people who are litigators are extremely skilled, extremely well-trained and so on. And if you've got very large population of people in those sectors, including of course in the financial sector, which, as Steve mentioned also discusses at length in the book, then you have got fewer people in other productivity enhancing fields, possibly in engineering or other kinds of activities. 

And the growth rate of the economy is obviously going to depend on the composition. So there's a connection between the extent of coverage of intellectual property and the composition of the workforce, especially the highly skilled workforce. And the other question very briefly that you haven't addressed just yet, the defense of intellectual property is of course made on innovation grounds. If you don't have the patents, you won't get this development. If you don't have the copyrights, you know, creators will not create. And so on. And here there's a couple of really interesting examples. Again, going back to the Levine book, one is, you know, public documents. 

So the nine 11 commission report was, you know, it's completely free. It's been free since 2004, it's published online. You can download the PDF, but you know, there's a version of it published by W.W. Norton, not there's another one by St. Martin's Press. Norton, I think sort of 1.1 million copies apparently made quite a bit of money on it. And so it's possible to actually disseminate, publish, and profit, even from things that are not protected by copyright. And similarly, they talk about certain industries that don't have protection, like fashion. Fashion is extremely innovative and restaurants, and sports. 

I find sports extremely interesting. The innovation in sports from the Fosbury flop in the high jump is not banded. Obviously everybody started to do it when you could jump higher jumping, backwards and so on and football, every season you've got new plays and so on basketball, triangle offense, all of these things are outside of the scope of intellectual property, but that doesn't stop innovation. And so I think one needs to think to the extent to which one needs it, perhaps one needs it to some degree, but maybe not to the degree to which we have it. And this is exactly the dynamic Steve mentioned, which is that, you know, those who benefit from it are going to try to preserve it and then try to argue that if you were to fail to preserve it, you know, they'd be a calamity. 

Steven Teles (35m 34s): Well, although I just want to give an example in sports. So I'm in D.C. where we have the worst owner of any sports enterprise in the entire world, which is Daniel Snyder who owns the Washington Commanders. And one thing that's interesting is people often think, you know, oh, the United States is like the home of rugged capitalism, right? And that's true in many areas, it's entirely not true in sports. If you own a sports franchise, a major league baseball team, a football team, a basketball team, no matter how bad it is, you have a property right in being in the major league of that sport. And this is very different. My wife is from Britain as Raji and I talked about this she's half Bangladeshi grew up. So she actually has some of the similar experiences that Rajiv had in Britain. And the thing that always strikes her is she's like, you know, every year, a lot of the excitement in British soccer is about not just about who's going to win, but who's going to get relegated to the lower vision in soccer, right? Because nobody is guaranteed, right? Let's last year, a whole bunch of teams, Norwich always famously like gets relegated and it comes back up and gets relegated and comes back up. 

But people lose, you know, owners lose enormous amounts of money. If they really incompetently run their soccer team, they will get punished in often incredibly punishing ways. So in that way, you know, European soccer is much more red in tooth and claw and American football is, and there's no real punishment for incompetence. And that actually has some, there's some similarities to that in other kinds of regulated areas of the American economy. So I don't know, did you want to talk about zoning and housing? 

Cause that's when we haven't really gotten to. 

Michael Garfield (37m 13s): Yeah, but I want to make the connection here because this is either a flaw in my own cognition or something that I have internalized just from the culture of SFI and its pension for deep abstraction and generalization, which is that there seems to me to be a very robust analogy between the enclosure and zoning and regulation of physical land and everything that we've been talking about with respect to intellectual property and that there is a connection between Rajiv what you were just talking about with respect to the pathological blooming of the prison industrial system in the United States and concomitant guard labor, including private security outside of that system with the way that the intellectual comments, which I'm sure you've read. 

Louis Hydes Common as Air, which stands now with your book, Steven, as one of the two great things that I've read on the history of intellectual property and it's controlled, but he makes the point that the first enclosure was actually the commons land. The second enclosure wasn't intellectual and the third veers into your comments on finance, because the third enclosure as Lewis Hyde notes is entirely speculative. It's like you mentioned biotech companies, patenting genes in the human genome where there's actually no known function yet. 

And they're essentially making a bet on the further medical utilization of this stuff. And so at any rate, I want to read just briefly, a couple of short passages here to state the problem and then kick it back to you. You and Lindsey note in this book that “according to a white house report lawsuits by patent trolls, which are companies that pick up patent portfolios simply for the purpose of profiting from infringement lawsuits tripled between 2010 and 12 alone going from 29 to 62%. 

And that most patent infringement suits are now brought by firms that make no products at all. And his chief activity is to prevent other companies from making products.” And this connects to the land use thing through an earlier comment you make in the book that patent thickets and the challenges of even knowing whether or not you're working on a product or service that is in some way already protected by intellectual property law creates a tragedy, the anti-commons where rather than clear ownership rights, creating perverse incentives, leading to resource depletion, you get an excess of overlapping and perhaps conflicting property claims leading to under utilization of resources. 

So again, that's me sort of contradicting what I said earlier, but at any rate, I think obviously here in Santa Fe, a shout out to my friend, Daniel Werwath, who works at the Santa Fe Affordable Housing Coalition and is in a constant battle against the not in my backyard pressures that you talk about in this book of, you know, people that have established some measure of comfort for themselves and therefore are trying to make it impossible for new homeowners and new economic entrance to actually guarantee themselves the same comforts. 

Yeah. There's a ball of yarn for ya. Another 14 questions. 

Steven Teles (40m 29s): Yeah. Do you use the zoning example? Right? I mean, this is one that I think is actually a pretty clean argument for the framework that we're using, because up until the 1970s, pretty much at every period in which there had been a increase in economic activity in some place the housing market had equilibrated. So this is Ed Glasser has shown in his work, right? So one of the natures of capitalist economies is you have uneven growth geographically, right? 

Someplace becomes the hot place. You know, it's Denver, it's San Francisco. There's always a gold rush somewhere, but before, whenever that happened, somehow we were able to throw up housing in that place. And so the people who owned land in that place or owned a house in that place would have an incentive to go and build on that to whatever level of density was appropriate, given the population pressures. And starting in the 1970s, that process breaks down that suddenly economic activities happening, where people are getting higher wages, stop producing more housing too, that would respond to the demands for people to live there. And that's true in New York and San Francisco and LA and DC and everywhere else. And what that means is suddenly all the people who had a house in some place or an apartment had an enormously valuable asset because it was rendered artificially scarce because one of the advantages right of housing, is everywhere there's some world to build housing in the sky. So Rajiv you've lived in New York. There's lots of room in the sky in New York. People have found a way in New York is not even the densest place in the entire world, but it's really hard to build in that way anymore. And what that means is the people who already have a house are massively benefited by the fact that they have control over what everybody else can do on their property. And the consequence of that is especially given how important housing wealth is in the United States it turns out a huge amount of the increase in wealth inequality is simply a result of these scarcity generated rents and Mark Rugley the economist is actually shown this in his work that a lot of increases in wealth that people like Pekidy have shown were really just generated by increases in housing wealth. And again, a lot of those are in places like San Francisco. My favorite story, this is Marc Andreessen, the venture capital billionaire, who in fact is criticized a lot of these zoning constraints and has made arguments again. 

And so it's turned out that an Atherton, the town he lives in, he actually intervened in all these local zoning decisions in order to keep Atherton from building any more housing. And so this problem is a really deep problem. It includes both inequality and growth. So like the bay area, there's lots of jobs working for people with lots of wealth that you could do. They demand a lot of services. They're willing to pay a lot for massages and everything else that wealthy people like, but people who live in other parts of the country who could get much higher wages simply can't afford to live there because people like Marc Andreessen are keeping people from building in the peninsula, in the south bay. 

So that's a big part of this story as well. And what it means is there's just less economic growth in this area than there could be. There could be a lot more companies getting created. Instead they're getting spilled out other places where arguably there's less agglomeration effects. There's less spillover effects and the last storyI'll give it, I give a talk with break on this book at Apple University. And after the talk, people were talking about it and they were like, well, we're not really, you know, hiring that many people. We're hiring people at other places. And they said, well, because people don't want to come here because there's no where to live. 

And right across the three, I think it's right across the street was just this low level strip mall. Right? That's what's ridiculous. Whenever you go to south bay and everyone complains that, you know, housing so expensive, like the reason for that is you have all these like single level houses and you have all these strip malls. You've got plenty of air here. So there's my rant. 

Michael Garfield (44m 49s): Excellent. 

Rajiv Sethi (44m 50s): One thing that hasn't come up yet, and I think we should talk a little bit about, which is in Steve's book is on the role of information. So why is it that we have a system such as this? Part of the reason is because government activity relies on information from the parties that are being regulated. And those people who are being regulated have incentives to transmit information selectively and strategically, and will transmit information in ways that serve their own interests. I have a couple of questions for Steven regarding this, but maybe Steve, could you just elaborate on that as the fundamental unifying process that lies in the background with regard to all of your examples, to one extent or another? 

Steven Teles (45m 31s): Yeah. So I should do a shout out to a book that I'm not sure if Rajiv knows, but the work of Frank Baumgartner and Brian Jones, who've written a bunch of books on agenda setting, a lot of which are really about information and how the information processing of political systems matters. One of the basic arguments they have is that democratic political systems are not good at parallel processing, right? They're basically serial processing systems. I'm doing this just to suck up to you, Santa Fe, people who talk in this language. 

So, you know, but they have a hard time dealing with multiple things at once, right? So there's thousands of things the political system could be dealing with at any one time, but the pipe for what it can deal with is actually really narrow. And so I'm going to mix a metaphor. So if I'm a rent seeking kind of enterprise, so I've got some cozy little systems, what I'm counting on is the political system can only pay attention to so many of these at once. So one way to think about it is it's like a revolver with an enormous cylinder, right? 

And every year we're spinning the cylinder and somebody is going to get shocked, but there's only one or two bullets in the revolver at any one time. So if I've got one of these operations, really what I want to do is just make sure that nobody's paying attention. That's the worst thing. If I've already got some rent seeking kind of arrangement, all I need to do is hope that they pay attention to somebody else because in general, especially in the United States, all of our political systems are heavily weighted towards stasis. All of the systems and this is why the thing I always tell libertarians, right, is all of those systems, the separation of powers that you like, because you think they slow governments, growth are also things that protect whatever government's already doing from getting clawed back. So the one example I use in the book is there was a Supreme court case on the North Carolina dentist. And so the North Carolina Dental Association was sued basically on antitrust grounds because essentially the governmental agency that was regulating it was operating like an extension of the North Carolina Dental Association. 

So when they had meetings, the only people who showed up at the meetings of the North Carolina dental board or members of the North Carolina Dental Association, and they were the members of the board. So it's not a surprise that, for example, in this case, they came up with a regulation saying that people couldn't operate like teeth whitening, boosts in the mall because they said that that was doing dental work without a license, even though it's actually entirely safe for people to do teeth whitening, what you can basically do at home too. But the point is why do those systems reproduce themselves? 

Well, one is about attention and attention. And the information are obviously related, which is that obviously the dentists have an enormous incentive to pay attention to what government is doing when it's regulating the dental industry. Everybody else doesn't. So parts of just straight Mancur Olson, you don't need to get past that or find that, you know, Mancur Olson takes you pretty far. And now again, we do have ways to get around that problem. There are some democratic solutions for the problems incident to democracy. 

One of those is subsidized participation. So when you think about schools have all these same problems that is teachers unions have an incentive to pay attention to school boards and they're the ones who show up at school board meetings who participate in school board elections, right? That's also, they liked the fact that school boards are elected separately from the rest of government and that there were an off cycle elections and everything else because it means that they get to pay close attention to that. And nobody else is going to pay attention. Well, we actually did something about it, right? 

Foundations, lots of philanthropists invested in lots of organizations to participate in education politics. That's a lot of what the politics of school reform was about, was breaking some of that attentional and informational monopoly that the producers of that service had. And that has actually created a fair amount of competition in that sector, right? It's still significantly dominated by the producers, but not entirely, but there are so many of these dimensions on which a piece of government gets captured by his producers. 

They have an incentive to attend to it and also to whatever they can to sort of tamp down interest, right? That's most of what their job is to do is just to keep their sector boring. And that's what most lobbyists do is people have an end that they imagined that would lobbyists are doing is like going and twisting people's arms. What they're really doing is they're like an advanced sensing device where they're just going around, making sure that nobody's interested and whenever they get any indication that anyone was interested trying to tamp it down. 

Michael Garfield (50m 28s): Just so you know, and with respect to the limit that we've put on this, if the two of you have taken it precisely where I wanted to basically pass the ball back to you, Rajiv. But I mean, I know you said you wanted to follow up with some questions on that. 

Rajiv Sethi (50m 41s): No, I think what Steve said about attention and interest, yes, if you have some policy in place that favors you, you want other people to basically not know what it was just neglected, and there's also the revolving door problem that you might want to regulate people in a way that makes your job prospects better in the future quite often in finance with regard to people at the fed or the treasury moving into investment banks, but there's also an intrinsic problem of information, right? I mean, if you think about financial regulation, you know, stress tests require banks to report something about their balance sheets and their positions and estimate what would happen if you have an ABC what to occur. 

And so you're relying on that and there's no really that's sort of intrinsic to the system, right? There's no way to prevent that. And what I really have been thinking about a bit and, you know, not being able to answer to any satisfaction is about the FDA actually. So the FDA requires information from drug producers, pharmaceutical companies. And the biggest recent example is of course, with regard to vaccines and, you know, they conduct clinical trials and you have to evaluate them. And then you decide, you know, okay, let's recommend that this is taken for five to 12 year olds and so on and so forth. And of course it's in the interest of the company to have that regulation come out in favor of people purchasing their product people or the insurance companies or the government. 

And I'm just wondering, Steve, you know, how are we as a public, suppose that we read your book and understand your arguments and realize that there's, this information barrier is strategic and selective information communication. How should we react actually to the FDA recommending, let's say five to 12 year olds should be vaccinated or people who are 20 year old college students should be vaccinated or get a second booster after three doses even if they've just recently had the disease, this is in the interest of the company. 

You don't want to do the wrong thing debate about this. This brings us to maybe if we're going to talk about discourse at all debate about this is stifled by the fact that people are very quickly labeled anti-vaxxers. But if one takes the logic of your argument, seriously, in order to be some doubt about what the government is telling us, whether they got to COVID with regard to vaccines, with regard to masking and so on. And the question is, you know, how is one to sort of reverse engineer this in a way that you come up with a sort of sensible understanding of what the situation really is, if information were fully and completely communicated? 

Steven Teles (52m 59s): Yeah. So it's funny. I was actually talking to Michael's colleague Will Tracy, about something very similar with something I'm thinking about doing with Santa Fe about the evolution of the professions and that increasingly the sort of political homogeneity of the professions is I think setting up a problem where the basic authority that they need from the rest of society is going to gradually get withdraw. And so you see this, if you think about what's the deep structure underneath these things about CRT and the way that governments are responding, part of it is, is that there's a perception that the professions are part of one party coalition. 

So now this is less about interest group capturing more about the substance party capture professions and that as a consequence, the argument is, well, first of all, we can't trust what they're saying, because what they're saying is simply a result of the political coalition of which they're a part. And one example that you could think about the way that like a lot of the public health risks, you know, community responded to the protests around police abuse and that they had been telling you ready to say it in the house. And then suddenly they were like legitimating having big outdoor meetings. 

And that raises questions, I think about whether or not these professions are in fact expressing the basic source of knowledge that's internally generated, or whether they're a part of a part of a political coalition and their beliefs are based upon that political coalition incentives and whether or not they become sort of ideological monocultures in which some of these questioning, which again should be because these professions are supposed to serve the entire society they need a certain degree of intellectual or ideological diversity. And I worry a lot about that, that in order to have professions performing the kinds of functions Rajiv is talking about, they need to have very vigorous systems to generate internal dissent. They need to affirmatively encourage internal descent of that kind. When in fact it seems like they're becoming more and more monocultures and that's true in academia. We know this about the decline of the conservative professor, right? I could have a committee that was all conservatives at Virginia when I was there. And you couldn't do that anymore. Right? When I have friends who were at Harvard in the late 1970s, you could have a committee in political science at James Q. Wilson and Edward Banfield and Sam Huntington and Nathan Glazer. And, you know, like you keep going down, you couldn't put a committee like that together at Harvard anymore. This is a little far from the captured economy stuff, but it's a lot of what I'm thinking about in my own work now that, that sort of ideological closure of the professions is creating a legitimacy crisis for the professions and for their ability to play really important roles, not just in government, but in the economy as well. 

Michael Garfield (55m 58s): Awesome. So I want to try and make one hail Mary pass here and bring a lot of the stuff that you two have been talking about over the last 20 minutes or so, and actually through the whole call together into a question that focuses more on work Rajiv, and specifically on two pieces that we'll share in the show notes, one being crime and punishment in a divided society, and also your recent appearance on Glenn Loury's show in which you make a point that I think really speaks to everything that has just been said about the problems with information flows in society and the role of attention and the limits on our attention in all of this, which was in your conversation on gun violence. 

You talk about how all of the attention paid to banning assault rifles, requiring background checks, et cetera, will not actually stop a majority of the gun violence in the United States because we're talking about a difference of 500 people being killed a year in mass shootings versus 19,000 people total annually being killed in gun violence generally. And that this is ultimately an issue of salience in the same way that plane crashes are far less common than automobile accidents, but they capture our attention so much more. And it seems that again, to link back to scaling laws and so on that, and we talked about this thought when we had you back on the show in episode seven, that part of the problem with stereotyping is that things have accelerated to the point where we have to make these snap judgements. 

And we're leaning on our attentional and cognitive biases in a way that we are ordinarily aren't, which I think is kind of like another angle on everything that was just sad about the way that lobby groups and the attempts to sort of manage these information flows can contribute to misregulation. So we spent this whole time mapping the problem, and it seems like the solution or the strategy that is hinted at, through all of this comes out of your work broadly, but is specifically addressed in the piece that you wrote where you say that in order to break out of the trap of the inequity in the treatment of people in different racial groups in the justice system to focus on changing beliefs when these are at variance with the underlying facts, and that you say we're co-authored by SFI External Professor Mahzarin Banaji arguing the black white differences in implicit associations arise in part from the fact that black respondents have more positive exposure to black friends and family and the ultimate source of experience themselves, that the desegregation of social contact is a key driver in repairing the differences across groups and beliefs. And so in the conversation you have with Glenn, you give this anecdote about the Camden county police and how they're restructuring the policing in that area, increased foot patrols, and the cops were introducing themselves to locals. And then you get an increase in witness cooperation that can start to sort of undo the problems that were caused by the concern that basically you can't actually work with the police that there's like a breakdown in trust between these different groups and something related. 

I mean, that seems deeply related to this larger question about the legitimacy crisis of the professions and the breakdown in trust between people operating in different sectors. So, I mean, in a way I want to ask the two of you starting with you, Rajiv, whether you think I'm oversimplifying this by saying that it seems like when I had Brian Arthur on the show, and he said that economies above a certain size probably need to pay more attention to active redistribution of resources, because it's like a heart becoming necessary as an organism scales to the point where passive diffusion of nutrients can no longer happen through the tissue. 

And that what we're really talking about here, at least as regards the United States is. And you wrote about this in your recent piece, on Salman Rushdie and in your conversation with Glenn, that we need to remember that the United States has this identity as a melting pot, and that if we're going to make good on the implications, the findings of recent research like that of, you know, Matt Jackson's on how rich friends, poor friend relationships, improve economic outcomes, that what we're really talking about is figuring out how to mix people back in together. 

You know how to get people talking across lines of identity. Again, I'm trying to establish something kind of deep in general here, and I'd love to know to what degree you can offer or challenge rigor on that. 

Rajiv Sethi (1h 0m 45s): Gosh, there's a lot there, Michael, I don't know whether to talk about gun violence or witness cooperation, police reform campaign, or discourse, but this tying this to our discussion of discourse, the debate about gun control or gun violence more generally, and the debate about policing. These are two of the most polarized discussions that take place in our society. People have very hardened positions and there's very little real communication going on. And so I tried to talk to Glenn on his show a bit about these issues and other issues, but I also had spent an hour or so on Barri Weiss on her show, her honestly podcast with Dave French. 

And it was I think, a very productive conversation. So you're right. So with regard to guns, people start to think about these issues. They become very salient when there's a big incident like you've already, or Buffalo, people are outraged the atrocious number of deaths, very cruel and brutal away, but there are a lot of states in the United States from guns every year, about 19,000 last year of which about 500 were, as you said, from mass shootings of the kind we saw in Buffalo. And people understand that we talk about assault, weapons, bans, and so on in the wake of those shootings. 

But most of the killings that take place with handguns and in my conversation with Bari Weiss in particular, I think that people on the left or to begin with an acknowledgement that the second amendment doesn't just exist in constraint legislation, but it's deeply popular, very, very tied to the identity of a whole bunch of people that, you know, repeat of the second amendment is unimaginable within the next generation or two, at least, even though many conservatives, including George Will have argued for it. But given that it's there, it's very meaningful and it's a very strong attachment to it. Policies that try to address ownership are not going to go very far. 

But if one looks at the data, there's one encouraging thing in it, which is that there isn't a very strong correlation between gun ownership and gun homicide. It's a very strong connection between gun ownership and gun suicide. And sometimes in discussing these issues, we will pull those two things together. And that's an era. You know, those are two very different phenomenon, but a lot of gun homicides are done with lost and stolen weapons. There's about 280,000 it's estimated lost and stolen guns each year. They flow from states with relatively less regulation to states with strict regulation. And if one can do something about that, I think one could make a dent in the larger problem. 

And what can I do about that? And, you know, one can think about the responsibilities of gun owners. I think people who are fans of the second amendment who are responsible gun owners also are open to arguements about incentives for other people to be made, you know, made responsible like themselves. And if incentives are created where people store their firearms safely, if they are liable, for example, to harm that is caused by firearms that are lost and stolen and not properly reported. If for example, they were required to take out insurance to compensate victims rising from those harms. And so on. 

We don't have time to go into a lot of the details, but I was trying to sort of carve out a policy to which people across the board might be receptive, or might at least give an airing to. And the same thing with policing.  With policing also, you've got very hardened positions, but, you know, we have 16,000 also police departments in the United States, another 3000 Sheriff's offices, huge amount of heterogeneity in practices and selection in training and promotion in disciplinary procedures and so on, leadership. And the upside of this is that you can look to examples of successful, some sort of moderate improvement. 

And one such example, as you mentioned, is exists in Camden for budgetary reasons in around 20 11, 20 12, they had to just disband the police department, not because they wanted to, but because they couldn't pay them and it was replaced, you know, and it was a sort of coalition of folks who became involved. It was replaced by county police department. They started from scratch. They changed the selection practices. They hired some of the old people back, but everybody had to apply again. And that police force actually managed to achieve exactly, like you said, create a witness corporation, more case closures, fewer complaints against police. Although there was some, and it's not perfect by any means, but it was more effective in offering protection to the population than the previous police department, but it was also larger. 

So it doesn't really fit a narrative that, you know, getting rid of the police department abolition or the funding, of course these positions are nuanced and many people understand different things by them, but what happened again, it doesn't really fit any particular ideological narratives. And if one needs to learn from it, I think one has to set those dispositions aside and just take a look at what happens and how one might replicate it. So I've been trying to have these conversations. I mean, Steve started off this by saying that, you know, he was raised intellectually among conservatives and he continues to engage in this kind of conversations. 

I just feel like we're not going to get anywhere if we don't have some sort of common understanding from which to begin debate. And so I've been very interested in talking to people who might come at it from different positions, but that requires also understanding their positions. Otherwise we just stopped past each other. So I don't know, you raised a lot of issues. I've addressed two of them, but I just hand off to see this. 

Michael Garfield (1h 5m 40s): Yeah. I was going to say just Steve, it strikes me that again, to stress this analogy that a lot of this ultimately falls into something that we could kind of been as zoning which is about, you know, why our city is the place to live anyway, you know, these issues of density and bringing people together and the idea that the way forward is through the novelty generated by these surprise associations. And so how might we, based on the insights here and, you know, kind of embodied in your collaboration with libertarian Brink Lindsey, you know, think about rezoning ourselves culturally, and then, you know, reshaping the incentive structures so that we can kind of work against all of the ways that we've elaborated over the last hour, pull us apart from one another. 

And reentrant those divisions. 

Steven Teles (1h 6m 34s): Yeah. So, I mean, I thought a lot about, again, certainly in the context of the university that, you know, universities are becoming a kind of example of ideological monocropping and that that's bad in a lot of ways. One, I think it's actually bad for conservatives. I think conservatives are getting worse at being conservative than they used to be. Again, I would say when I was a kid, we all think when I was a kid, you know, giants walked the earth. 


But there were these incredibly impressive, important conservative thinkers. I mean, certainly in economics and Rajiv's field more libertarians, but you know, in my field, in political science, right. Again, I mentioned that before, just at Harvard, right? Sam, Huntington, James Q. Wilson, Nathan Glazer, all these people. And that was just in one institution. And one thing that meant is their colleagues had to present arguments that could like stay in the muster of these people, arguing with them. 


And decreasingly, does anybody have to worry that somebody like that is going to raise an uncomfortable, you know, so it's just an example that Rajiv, you've probably seen right. In department seminars at Hopkins, which I love it and think is a great place. And I should make that clear. People can almost, without thinking, say things about something called neo-liberalism without ever having to actually think about rigorously, what it is the phenomenon they're talking about is t. 

They often talk about it in these terms, like it's the geist, like it's just some malign force that's taken over everything, which is like bad social science. But again, if nobody's going to question it and they're asking like, what, what do you mean by neo-liberalism? Is that actually even a thing? Is it reasonable to describe it as an actor in the world, as opposed to all these kinds of issues are a result of what you get when you get ideological monocropping. And so on the one hand, I think there's a really good argument that elite institutions for sorting through knowledge are important for some of the reasons we've talked about before. In some ways they can be forces that operate against some of the concentrated interest in society, because they can generate knowledge in some ways in subsidized ways. One of the reasons why we have the knowledge we have about some of these areas of sort of concentrated economic power is that the university is a gigantic subsidy for things that don't have concentrated financial subsidy for them. And that's a great thing that universities can do. But to do their function, they need to not serve the purpose of just reproducing their own ideological character. 

And I think that's one danger that almost any kind of form of knowledge like this has is that, the internal diversity that makes those things work the best is not a naturally occurring phenomenon. Our natural tendencies are to want to gather up people who are like us. And when we do faculty hiring, we look for people who are like us and you play that over thousands and thousands of times, and also in graduate admissions and everything else. And you get a lot of homogeneity. 

And I think that's what we're producing this as somewhat what we're producing in professions as well. And I think it's going to make it very hard for these sources of knowledge that are important for the larger ways that liberal democracies develop some kind of immune system against capture to perform their function because they're increasingly going to be seen, not as referees in our larger political system, but as combatants. 

Michael Garfield (1h 10m 19s): I appreciate both of you going over the established time for this conversation. Do either of you have any final words before I thank you and wish you well, 

Rajiv Sethi (1h 10m 27s): No, just thanks, Steve. It was a fun conversation and I hope you interact more in the future. 

Steven Teles (1h 10m 33s): Yeah, it was fun. And again, you know, people always learned a lot from Santa Fe Institute and I always say that Santa Fe is also my favorite place in the world. So you're very lucky to be working there. 

Michael Garfield (1h 10m 43s): I hope you come visit. Thank you for listening. Complexities produced by the Santa Fe Institute, a nonprofit hub for complex system science located in the high desert of New Mexico. For more information, including transcripts research links and educational resources, or to support our science and communication efforts. Visit