Path Home Shows 2017 Show Archive March 2017 Show 1711 Russ Roberts - Money Isn’t Everything

Russ Roberts - Money Isn’t Everything

For a happy life, one economist says, you should pursue education as a tool to acquire skills for a fulfilling, rewarding and financially sustainable career.
Russ Roberts - Money Isn’t Everything

Russ Roberts - Money Isn’t Everything

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Show 1711: Russ Roberts - Money Isn’t Everything
Air Date: March 12, 2017



Rob McClendon: Well, Russ Roberts is most definitely a free market economist even in areas that traditionally have been the role of government, and I asked him about the future of education.

Russ Roberts: There is two types of reason, two reasons we go to college, right? One is to learn stuff, and the other is to get certified as smart enough to have gone through college. And we now live in a world where a huge portion of the stuff we learn in college can be gained at zero cost to yourself, on the web, in podcasts, in MOOCs online, courses online. It’s an incredible world, incredible time to be curious. The problem is that sometimes that’s not enough, they also need to certify that they’ve mastered those subjects. The fact that I’ve sat in on those classes, I’ve watched the videos, maybe didn’t quite get it, right? So the question is can we develop ways to certify people for, to certify people that they understood the material. My preference would be that you find ways to do that. Because what that will mean is that the best teachers will make an enormous sum of money and will teach tens of thousands of students instead of now where they make a lot of money but still not as much as they would in that world, but they still, they do OK, but they only teach a few thousand students. And then mediocre and poor teachers are teaching lots of students too. Now, that’s the biggest problem, again, in the K-12. You’re in a 10th-grade algebra class, and you’ve got a bad algebra teacher? Can’t get a refund; you’re stuck. Wouldn’t it be great if a school that can’t find a great algebra teacher let you learn algebra online? Now, we haven’t solved that problem yet. It’s brand new. There are a lot of advantages to face-to-face learning that happen. One of them is testing, which we just talked about. But the other is, there’s something special about face-to-face. It’s not the same when you do it over a screen, it’s not the same when you do it with tens of thousands of people. You lose something there. Is what you lose outweighed by the fact that a tremendous teacher is the one making the video that you’re watching? And we’re going to see how that plays out. But it's got a lot of potential.

Rob: When you look out over the grand landscape of the economy, the world economy, still U.S. output is so much greater than anyone else. How do you feel going forward over the next, arbitrary number, 20 years, about where our economy is heading on the path that it’s currently on?

Roberts: Well, we live in a very competitive world obviously. And that’s a good thing overall. I’m thrilled that China’s growing. That’s good for America. It’s good for China, right? They count, I care, I’m glad that there are fewer people starving to death around the world compared to 20 years ago. It’s been an incredible change in how the poorest people live. There’s still, tragically, about a billion people living in desperate poverty, and we struggle to find ways to help them. But I think it’s a great thing that everybody, that on average people have gotten a lot richer in the last 20 years. Is that going to continue outside the United States and inside the United states? It’s hard to say. Most of the big changes have occurred in China and India. Are those sustainable? Hard to know. Are we going to continue to be the great innovators we have been? And is our standard of living going to continue to grow? And I’m hopeful. We have certain advantages that are going to persist. One is, we have a great culture, we have a great social system of trust, we have a great social system of risk taking. We honor people who fail, we don’t stigmatize them, which means that if you start a company and you go broke, you get another chance and you get to use what you learned from going broke to maybe do better the next time, and that’s fantastic. So we have an entrepreneurial culture that is really unparalleled. There is no other place in the world that has this level of innovation at that level of activity of start-ups, of venture capital, that’s not going to go away unless we mess it up, I don’t think we will. The real question is that why can’t we extend that a little more widely to the rest of the economy, a competitive environment where people who are successful do really well, and people who fail, fail. That’s what I think is the key to our success as an economy. And to the extent we embrace picking winners and losers, to the extent we embrace subsidizing people that have special privileges and power, we move away from that, and we, I think, hamper our ability to encourage prosperity here.

Rob: What do you want to get across to anyone that might be sitting out in this audience, maybe watching your videos online, what do you want to get across to them when it comes to being economically successful?

Roberts: I think I’d say, the most important thing is to remember that money isn’t everything. We’re blessed to live in a very wealthy society, we’re blessed to live in an incredible cornucopia of material well-being for most Americans. We are richer, even the poorest American today is richer than 99 percent of anyone who has ever lived in history, and is richer than most people around the world today. So we’re very lucky that we don’t have to worry a lot about starvation and depravation of the kind that is unfortunately still elsewhere. So we have that privilege, and that gives us the chance to not just do the thing that’s more materially successful. So when I give people, if somebody cares to ask me advice like you have, I always tell students, don’t take, for your first job, don’t take the job that pays the most money. Now, if you’re lucky, that’s the best job to take, but it’s not by itself the rule. Take the job that where you learned the most. Take the job that’s most rewarding. Take the job that’s most fulfilling. Take the job that takes the skills that you love using and puts them to work. Maybe that job, isn’t going to pay the most, but you’ll still have a good life, and you’ll be thrilled with what you do with your day-to-day work on the job every moment kind of existence. And I think money is very seductive, and the first great economist, Adam Smith, understood that wealth was good, but as a goal in and of itself, it wasn’t so good, it could be destructive and to remember that there are other things that matter, like family and values and virtue. And so don’t just do stuff that makes you rich, because that won’t make you so happy. If it saved your family from starvation, yeah, take, go for the money, but we live, we’re lucky enough where we can do the things that we find satisfying as well, and those count, and I always remind people to take those into account.

Rob: Russ Roberts, thank you so much.

Roberts: My pleasure. Thank you.