As part of a project for Capital Matters, called Capital Writing, I’ll be interviewing authors of economics books for the National Review Institute’s YouTube channel. This time, I talked with Tyler Cowen of George Mason University, the author of GOAT: Who Is the Greatest Economist of All Time and Why Does It Matter? Below you will find an edited transcript of a few key parts of our conversation as well as the full video of our interview.
Cowen’s book is also available for free online, including a special tool to explore the book with AI. You can read the whole thing and ask the AI chatbot trained on the book your own questions by clicking here.
Dominic Pino: “GOAT” might be a term that is sort of unfamiliar to people who aren’t sports fans. It’s usually used in the context of saying who is the “Greatest Of All Time,” when you’re talking about a football player or a basketball player. But you use it to talk about economics in this book.
Tyler Cowen: That’s right. One thing I try to do in the book is to write about economics as if I’m a fan. So when we read about movies or sports or music, often we want to read things written from the perspective of a fan. So I thought, why not apply this to economics? So I’ve loved economics and economists my whole life. And that’s what I try to communicate in this work.
DP: And what was it that got you started on that path to economics? Because a lot of people will be fans in this way of sports or music or movies or things like that. Why is it that economics is the channel of that sort of passion in your life?
TC: Well, if that’s a biographical question, it started more or less when I was age 13 and I just started reading some economics, and some of it actually included National Review. Some of it was from the Foundation for Economic Education. It was mostly books I had taken out from the public library. Some of it was Milton Friedman, different textbooks. You know, a year later, like Hayek and Adam Smith, and I just kept on reading and fell in love with it as a way of thinking.
DP: People will say Michael Jordan might be the GOAT of basketball, Tom Brady might be the GOAT of football. You say that John Stuart Mill is the GOAT of economics. That might be a sort of unusual claim that some people wouldn’t expect, considering Mill as a great economist. What is it about him that made you put him at No. 1?
TC: Well, I don’t quite say that he’s GOAT. I say that he’s my favorite of the major contenders. And that’s true as a subjective claim. I think the strongest objective case is simply for Adam Smith, because he was the first and most fundamental economist. But if you say it’s Adam Smith, in a sense, there’s no further comparison. And of the different candidates, Smith is in some ways the worst economic thinker, simply because the others could build on him.
What I find appealing about John Stuart Mill is that he builds out a full-blown case for liberalism. I think most of that case succeeds. I think economics is fundamentally something we use to build a better society. And who saw the big picture most clearly, including free speech and limits on government and the value of liberty? For me, that was John Stuart Mill. So I don’t think you can say he was the best economic analyst. Someone like Milton Friedman, among others, clearly would beat him. But nonetheless, he’s my favorite. And on rights of women, Mill also is the best economic writer to this very day.
DP: Let’s talk about sort of the criteria you set up for how to analyze this. Obviously, you say you’re writing from the perspective of a fan, and so your personal biases come in, and you say what those are in each of the chapters. But what are some of the other things that you’re looking at to determine whether an economist should be in consideration for GOAT?
TC: They should have had real-world relevance. They can’t have just been wrong about everything. They should have done some micro and done some macro. They should have done theory and empirics. Those seem to me to be reasonable standards, maybe not fully objective, but I think most people could agree on something like those.
DP: Then who are the economists that you consider as finalists? You mentioned Mill, you mentioned Smith, you mentioned Friedman, but there were three others you mentioned as well.
TC: John Maynard Keynes, I think clearly is in contention. He’s not my favorite, but obviously a thinker of major impact. Friedrich Hayek, who was the most right about socialism and central planning, clearly is in contention. And, a bit of a dark-horse pick, but I say Malthus, who wrote in the early 19th century on population, and you could say the environment. I’m myself not a Malthusian. But if it turns out that he’s right, maybe I’ve undervalued him as GOAT.
DP: Malthus sort of is a byword today for being wrong because he was talking about the problems that come with population growth and basically saying that society will hit a point where you won’t be able to grow enough food to feed people and so the population won’t be able to continue to grow. That turned out to not be right with the Industrial Revolution, with huge advances in the productivity in agriculture, and so on. But you sort of nonetheless say that there is actually really good economic analysis in Malthus, even though that central claim might not have turned out to be right.
TC: And I think the third edition of Malthus’ book is much better than the first edition. So there’s two ways of reading the third edition. In the third edition, Malthus says, well, clearly we can avoid all these problems. It’s just that human beings are not virtuous enough to find the right solution. And that may end up being correct. It could easily end up being correct. So Malthus is the economist who focuses our attention on lack of virtue.
But there’s a more general version of the Malthusian argument, which is simply that when you have exponential processes, if they don’t all line up in the right way, you’re in for big trouble. So today, low fertility seems to be the problem, not high fertility. But it’s still basically a Malthusian argument that an exponential process, like a total fertility rate below one, just leads you to disaster. And maybe that’s the biggest problem we face. So that too would resurrect Malthus in some form.
He’s not my final pick, to be clear. And I think he was too pessimistic. But the actual Malthus is quite different from, say, what you might think if you read Julian Simon on Malthus.
DP: The virtue point is interesting as well. You say Malthus brought that up, but John Stuart Mill also talked about the need for “virtue and intelligence” in society, I think is the term he used. And then Adam Smith was concerned with this as well, with how the division of labor might cause problems for virtue. But since those older thinkers, especially older British thinkers, economists have sort of gotten away from considering virtue as an important part of their discipline. They have become much more empirically focused, much more mathematically focused as well. Do you see that as sort of a regress in economics considering that three of the GOAT contenders are concerned with this virtue issue?
TC: I would put it this way: The quality of statistical work today is much, much better than it was in any of these earlier times or even 20 years ago. But that said, these other traditions need to make a comeback. Our world has a lot of problems. Our politics is getting more and more screwed up. If we economists don’t think more about virtue and politics and liberty and free speech, we’re just going to lose it all. So it needs to make a comeback. Part of the goal in writing this book was to help it do so and resurrect interest in these questions.
DP: What do you think that looks like for today’s economists to be working on virtue?
TC: Well, I think one needs some kind of public presence. So you could write for a magazine, write for a blog or a Substack, be on Twitter, have a podcast, also ideally do research and write books related to ideas of virtue and morals and ethics. It’s there in some regards in current economics, but it’s also specialized and formalized. It doesn’t get crystallized into lessons that people actually respond to. So I think the incentives are for hyper-specialization, and that’s where things have gone wrong.
DP: One of the economists that you consider but doesn’t make it to be finalist is Gary Becker. One of the things he’s famous for is applying economics to areas where it wasn’t applied before. So things like economics of crime or economics of the family, things like that. And he does this with Chicago price theory as the tool that explains everything. You don’t seem to think that that’s probably the best way to go about this, but that was something that Becker was doing, and you say economists don’t really do that anymore and that his influence has sort of declined since his death.
TC: I’m a big fan of Becker, but I have some mixed feelings about him. On the plus side, I feel he could have won five different Nobel prizes and deserved them all. But that said, a lot of his approaches are a bit too reductionist for me. There’s something about both the family and crime, the two cases you mentioned, that are not just about optimizing behavior. You need some theory about how people perceive reality and social norms and what they consider to be just.
And toward the very, very end of his life, Becker actually himself moved in that direction. But the work he’s best known for doesn’t really do that. The main reason I downgrade Becker as GOAT is just that I don’t think he’s going to beat out Milton Friedman. No slight intended to Becker. He’s one of the true greats. But if you’re comparing Becker and Friedman, you know, Milton Friedman is the one who’s in the running, I think. And I thought that was a pretty fair judgment.
DP: There are a couple other honorable mentions as well that were covered. What were some of those other ones other than Gary Becker?
TC: Paul Samuelson is one of them. He’s one of the very, very sharpest of all economists. He had very important contributions in just building out contemporary micro and macro. He was an amazing economic modeler. But, you know, in terms of being GOAT, for me, first, he’s too narrow. And I think he was just flat-out wrong on too many things. He thought the Soviet Union would catch up to the U.S. economy. That to me is a sign of a very bad economic understanding, kind of an unforgivable sin, I might even say.
He disagreed with Milton Friedman. He thought a lot of inflation was some kind of cost-push or wage-push phenomenon. Even if you think that’s sometimes true, he just lost that debate. He was wrong on a lot of macro, and Friedman beat the pants off of him. So I have great respect for Samuelson’s sharpness, intelligence, and modeling abilities, but I don’t think he makes the final short list of the top six.
DP: One of the things you mentioned in Samuelson’s favor though is his work of building the MIT economics department as an institution. You talk about this with some of the others as well, institution-building being one of the things that you were considering for who is GOAT. First of all, why do you think that that’s something that’s in Samuelson’s favor? And then second, why do you think that that was an important thing to consider?
TC: It’s a big part of your contribution to the world. I mean, think of the people who built up early National Review. If you’re assessing their legacy, surely that should count, whatever it was that they did. So if you look at Adam Smith, he didn’t build an institution. But if you think of David Hume as more powerful than most institutions, Smith was his best friend, and they discussed everything and worked together closely. So that’s a big thing in Smith’s favor.
John Maynard Keynes, you could say his attention moved sequentially, but say Bretton Woods — imperfect, but probably more or less the best we could have done at the time. Keynes gets a lot of credit for designing that. Friedman and Becker helped build up University of Chicago, most of all Friedman. Becker stayed there longer. Samuelson and Solow, and somewhat Modigliani, MIT.
So we can have different preferences, like do we prefer the Chicago or MIT approach? But trying to look at it a step back, I think you have to give Samuelson a lot of credit for that, because when he arrived at MIT, it was not so impressive a place. And by the time he left it, it was clearly the No. 1 department.
DP: And you say that as a Harvard grad.
TC: Correct. No, I have mixed feelings about my own alma mater. But people who do things should be greatly respected. Keynes’s work at the Versailles Conference — again, I don’t agree with all of it, but it was something very real. He did it, and it had impact. He managed it very well. I think it definitely counts in his favor.
DP: I have to say, I think you snubbed one economist, and I want to make a brief case for that economist. I’m not sure he should have been a finalist, but I think he should have certainly at least been an honorable mention. And that’s Ronald Coase. He did lots and lots of work on law and economics, sort of helping to stand up that subdiscipline of the field, which has been very influential in how we view the law in the United States especially, but also around the world. He’s the author of “The Problem of Social Cost,” which is one of the most cited papers in economics. That was critical of the way that economists were looking at things in the middle of the 20th century. He said, look, you guys need to look at the total effect of policy. He introduced concepts of Coasean bargaining, which other economists built on after that to create the Coase theorem, which was very influential as well. The study of regulation, he’s a big part of that. He was at University of Chicago for a long time, as were other GOAT contenders. He also wrote “Nature of the Firm” as an undergrad. And that was one of the things he was eventually cited for in his Nobel Prize. And even if it might not hold up super well, and I think there are parts of it that don’t, the fact that he was already on that level as an undergrad, I think, says a lot about him as a thinker. Why did you snub Ronald Coase?
TC: Well, I agree I should have covered Coase more than I did, but I can’t see making him go above, say, Friedman or Becker in spite of the very impressive achievements you cite. So it’s not about everyone who’s great. The book is like, who is GOAT? And I just don’t think he quite did enough to be GOAT.
Two other people I snubbed, but for somewhat different reasons, Marx and Mises. Whatever you think of them, they’re important figures. They don’t really come up. There’s a very good chance I’ll write things on them separately. It’s why they’re not in this book. I don’t think either is GOAT, to be clear. Certainly not Marx. But they too got snubbed. Jevons, Walras, Menger . . . there’s just some more things I’m going to write.
DP: Okay, what is that future book going to look like, you think?
TC: Well, “book” is a funny word because once you publish the thing in an AI, it’s more than a book. Some would say less than a book. I’m not sure what the next thing I do will look like, but I don’t think it will be a traditional book. I think it will be some kind of hybrid product.
But I want to write more on history of economic thought, and the names I just mentioned are on my short list of what to cover. But you know, you start things and sometimes it takes off in your mind and sometimes it doesn’t. So I’m not a hundred percent sure about any of those, but that’s what’s percolating in my mind at the moment, are those figures, the marginal revolution, Marx and Mises. And Mises, you know, what I’m really interested in are his two books, Socialism and Liberalism. Certainly the Misesians are fans of everything Mises did, but it seems to me in the broader communities, those books are grossly underrated. And if I did something on Mises, I would focus on those.