94. David Leiser — How We Misunderstand Economics and Why it Matters

The Michael Shermer Show

Michael Shermer

Dialogue, Science, Reason, Michaelshermer, Natural Sciences, Skeptic

4.4 • 921 Ratings

🗓️ 10 December 2019

⏱️ 83 minutes

🔗️ Recording | iTunes | RSS

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Summary

This is the first book to explain why people misunderstand economics. From the cognitive shortcuts we use to make sense of complex information, to the metaphors we rely on and their effect on our thinking, this important book lays bare not only the psychological traits that distort our ability to understand such a vital topic, but also what this means for policy makers and civil society more widely.

Shermer and Leiser dive into the mismatch between the complexities of economics and the constraints of human cognition that lie at the root of our misconceptions, as well as explore:

folk economics and why our intuitions are so often wrong
the evolutionary origins of our thinking about economics and why we are not prepared cognitively to understand complex economic ideas
Universal Basic Income
income inequality
CEO pay and why we think it’s too high
the importance of trust in economic exchanges
tariffs and Trump
China, and
reparations for slavery vs. reparations for the Holocaust.

David Leiser is Full Professor of Economic and Social Psychology at Ben-Gurion University of the Negev, Israel. He is Past President of the International Association for Research in Economic Psychology, and President of the Economic Psychology Division of the International Association of Applied Psychology. He studies lay conceptions, especially in the economic domain.

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Transcript

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0:00.0	My guest today is David Liser. He is a full professor of economic and social psychology at
0:07.4	Ben Gurion University of the Nogev Israel. He is past president of the International Association for Research
0:14.9	and Economic Psychology and president of the Economic Psychology division of
0:19.4	the International Association of Applied Psychology.
0:23.1	He studies lay conceptions, especially in the economic domain.
0:26.7	As you hear from the conversation, it's mostly psychology and not so much boring economics. I know they call it the dismal science, his book is called how we
0:36.9	misunderstand economics and why it matters. So we mostly talk about those kinds of issues that befuddle, not just voters, but all of us.
0:46.8	What is an economy?
0:47.8	What does it mean to grow an economy?
0:49.8	Why is it not really like a fixed pie? And why when someone else has more than I have it doesn't mean
0:55.8	I can't get that and what does it mean to slap tariffs on China?
1:00.8	And so we get into all that plus then I end talking about reparations for
1:05.2	N reparations for African Americans and thus perhaps maybe Native Americans and
1:10.7	what about the analog since David is Jewish and lives in Israel, Germany paying
1:16.0	reparations for the Holocaust in more recent times and so on.
1:20.6	So we get into that as well. Lots of interesting topics. Again if you support the
1:26.1	podcast, appreciate the podcast you can support it at skeptic.com slash donate either directly through the Skeptic Society or through
1:34.7	Patreon actually I meant to open this conversation with David with one of my
1:39.6	favorite quotes from an economist John Maynard Keynes from his general theory of employment
1:45.2	interest in money from 1935. Why I think even though I'm not that interested
1:51.6	personally in economics.
1:52.7	I think it's one of the most important things anybody can study.
	...

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