December 21, 201 Lunch with the FT: Tyler Cowen By John McDermott The infovore and author

of An Economist Gets Lunch explains his sure-fire way of hun ting down cheap, tasty food James FergusonIt is the hottest day in Virginia histo ry and Tyler Cowen has asked me to meet him at noon in an Ethiopian caf in the Bu ild America strip mall, a rectangular plot off Interstate 395, the spur route li nking the state with Washington, DC. I arrive 10 minutes early. Cowen is already seated by the window of Seleme, peering at scattered papers from a World Bank r eport. He looks up and breaks the news: They don t have any food. We slope out and confront the 40C heat. Cowen has a plan B. He heads left; his h itman stride at odds with his professorial get-up brown loafers, grey slacks and a black short-sleeved shirt. The two-sided mall has about 80 one-storey brick u nits and is bordered by a car park dotted with SUVs. We pass exotic cafs, hookah bars and money changers: it looks as if a bazaar has commandeered a boulevard of retirement bungalows. We find our new spot, Kebericho, which looks like the old spot. A young Ethiopian man with half an eye on the local news sips a Corona beer at t he bar. The waitress breaks off her conversation with a male friend and gestures that we pick one of the dozen tables. We opt for a central spot equidistant fro m the four speakers blaring arrhythmic African pop music. I ask Cowen why he cho se the mall. Competition works. So when you have a cluster you know the ones that survive have to be good. The menu s breakfast options, cholesterol terrorists stra pped with butter and eggs, are also a good sign, he says. In most of the world br eakfast is an important meal. We denigrate it.

It is, though, inauspicious when there appears to be no food. Cowen tries to ord er foul ( no , our waitress says), tibs ( no ), biblis ( no ), negatos ( sorry ), any item fr the breakfast menu ( no breakfast ) and a vegetarian sampler ( we have no vegetables ). Without missing a beat, he puts his finger to the menu: This one, this one, this one, this one, this one. The Powell Doctrine approach to ordering works. We will be fed. Cowen, 50, is an economist. He teaches at George Mason University (GMU), a few m iles away. His research spans monetary policy, the economics of culture and poli tical philosophy. But he is no stuffy prof. Marginal Revolution, the blog he wri tes with colleague Alex Tabarrok, receives about 200,000 views per post. It is r eplete with pithy observations on German morality, high-frequency trading, colle ge basketball, Congolese music, Beijing food, Indonesian traffic jockeys, and so on; so long as there is a market at work. The cyber-flneur s 11th and most recent book, An Economist Gets Lunch (2012), is a guide to using basic economic concepts such as competition (Exhibit A: Build Ame rica mall) to find cheap, high-quality grub. His 10th, The Great Stagnation (201 1), which argues that rich countries have picked most of the low-hanging fruit of growth land, public education, female entry to the workforce, IT has been influe ntial among western policy makers desperate to revive their moribund economies. This year, Cowen was invited to 10 Downing Street to discuss his ideas. . . . Back in Kebericho, Cowen continues to explain the benefits of eating here rather than half an hour away, in Washington. It s a more interesting cultural experience : one learns more about the world, it may even be healthier and, of course, you

pay less, and you discover things so it s a complete Pareto improvement. This is a vintage Cowen sentence: buoyant, inductive and concluded with an economic concep t. The waitress s male friend approaches and tells us she is worried. It s going to be t oo much for you ... to pay, and to eat. We insist we are up to the task. It probab ly doesn t work out this way for Lunch with the FT most of the time, Cowen observes . Usually they have food, and they try to sell you more of it at a higher price. Born in Bergen County, New Jersey ( a great place to grow up, there s a lot of human capital ), Cowen won the state chess championship aged 15. His father, who ran th e northern New Jersey Chamber of Commerce, wanted him to become an accountant. I nstead he studied economics at GMU and Harvard, and visited Germany, where his f ascination with food began. Three decades and 84 countries later, Cowen has a ho ned method for how to find a tasty local: find someone between the ages of 30 and 50 in the transport business, with whom I shared a common language, and just as k where do people go. And then I would go there no matter what ... the chance th at it will be very good is near 100 per cent. This talk is inspiring edacious thoughts. Against initially improbable odds, our meal arrives. Four piles of beef ooze ferrous grease into a thin plate of bread , turning it red like a bloody bandage. Cowen identifies the spice-cooked suspec ts as kwanta firfir (beef jerky); awaze tibs (beef cubes); minchet abish (beef s tew); and kidfo (raw beef). But he spots a problem: our raw beef is cooked. They think we re wusses. After asking for the real deal, he tells me that a lot of the pr oblem with eating out at a place like this is not even choosing but convincing t hem you re serious . For Cowen, people who can find inexpensive, tasty food are the same type of peop le that use information to make themselves more productive economically. In his book The Age of the Infovore (2010), he argues that the internet means informati on can be better absorbed, organised and deployed than ever before. That s where co ntemporary innovation is at, in lieu of the flying car, or the teleporter, or th e trip to Mars. Cowen is walking-talking-tweeting evidence for his theory. Why, then, apart from an early surge in the 1990s, hasn t the internet led to more measurable economic gains? My view of the internet is that it is way overrated in what it s done to dat e but considerably underrated in what it will do. He notes that it took decades f or earlier major inventions to have institutions built around them, such as road s for cars and grids for electricity. If you re an optimist about what has come bef ore, you tend to be a pessimist about what s on the way. I share Cowen s optimism about the latent potential of the web but I suggest that it isn t all positive. Silicon Valley directly creates very few jobs, at least rel ative to its companies valuations. The returns to capital are large; to labour mu ch less so. Meanwhile, outdated patent law hinders competition. In terms of direc t job creation, it s very low, Twitter even less than Facebook. But think of it th is way: it does create wealth, and in the long term people creating personal ser vices will do well. So I think job creation will be sluggish for the next 20 yea rs ... But it won t be that all jobs go away; people will have to shift what they do. As parents with iPad-addled children understand, today s toddlers will surely go o n to do far more with the internet than our generation of relative dilettantes. Nevertheless, I wonder whether it is not more important to learn the languages o f the future: is it better to learn code or Mandarin? I don t think it s either, Cowen says. I think it s how to understand psychology. To understand marketing. Because the more wealth you have, and the more unequally concentrated it is, the more pr essure there is for the attention of people with money.

Cowen is right that technology is a driver of inequality and, as countries becom e more unequal, there will be more jobs for those who can get the rich to buy st uff. But if the future is about manipulation, I m not sure this is a good thing. Th at s a value-laden way of putting it , he says. Take your own How To Spend It: that s m arketing, is it manipulative? If it tried to manipulate me, it failed. You re not s usceptible to a $30,000 watch, I say. This watch cost about $60 and works just fi ne. Part of the thing about being an infovore is spending your money more effect ively. I suggest that inefficient consumption is also a case for progressive taxation. Cowen is more sceptical: To balance our budgets, taxes on the wealthy will go up. It s a fait accompli. But you also have a lot of the wealthy who give to charity and use the internet to give far more efficiently. Inequality is not a bad thing per se, he suggests later. At some point we ll arrive at a future where a lot of pe ople have stagnant real incomes but they won t count as poor in the contemporary s ense. You will neither be correct to say that they are well-off but they will ha ve a lot of free stuff, not much money in the bank. . . . Though I find his vision of the future somewhat bleak, Cowen s amiable deployment of logic is hard to dispute. I also find his focus on the individual refreshing: so much of the debate in Britain and the US about growth is centred on what gov ernment or the central bank or companies can do to get the economy moving. Cowen has views on all that but, as with all good libertarians, his view of the world starts and ends with the individual it s about how you or I can use simple, free ideas to live richer (in all senses) lives. Nevertheless, he is worried about the number of people going into finance. I thin k about this a lot: you re young, you come from a smart, wealthy family, you re some how supposed to show that you re successful quite quickly. Banking, law, consultan cy allow you to do this; engineering, science and entrepreneurship less so. Your friends expect it, your parents, your potential mates do ... So we see so many talented people very quickly having to signal how smart they are but that may no t be the longest-term social productivity. Our new, raw kidfo arrives. An object lesson in needing to get servers to take yo u seriously, Cowen says between mouthfuls. I turn to politics. What does he look for in a candidate? What I would like to vote for is a candidate that is socially liberal, a fiscal conservative, broadly libertarian with a small l but sensible a nd pragmatic and with a chance of winning. That s more or less the empty set. The closest to this he ever found were the Free Democrats in West Germany. This inevitably leads us to today s Germany and the eurozone crisis. Well I think I ve alw ays been the hopeful one, he says once the kidfo is scoffed. For Cowen, it is vit al to separate the euro from Europe. It s remarkable what a religion [the euro] can be ... This is the symbol of the fact we don t shoot at each other any more it s no t! It s a misguided currency area and you weren t shooting at each other before you had it. I consider asking more about Europe but sitting in an Ethiopian restaurant in su burban Virginia, trying to make myself heard over the synth-engorged rumblings o f Nigerian hip-hop, I turn back to the man himself and how he manages his time a cross his various projects. He is writing a book, about technology and humans, w rapping up the first semester of his online course on development economics, tea ching at GMU, researching, and blogging, always blogging. I don t really watch TV, h e says. He wakes early but not Margaret Thatcher early , and writes about 300 days a year, usually in the morning.

There is no doubt Cowen is ruthlessly and admirably efficient; an infovore. I su ggest he s also, however, phenomenally smart . I don t know what that means, he says. an, I can absorb a lot of information about basketball. I like basketball but I m not like being smart about it. And then he s off again ... Sports is remarkably cogn itive. I think it s underrated just how smart it is. Actually, if I had more time, I would spend more time with sports. Watching it, reading about it, I think it s oddly underrated. I want to shoot the breeze for another three hours but I have to drive to a wedd ing in southern Virginia and my co-driver is honking the car horn. I pay the bil l: $15.99 for our ad hoc tasting menu, plus another $2 for a double espresso I q uickly swallow. I m honoured to be driving down the average price [of Lunch with th e FT], Cowen says. I suggest we could do it again in 10 years. Well, the real chal lenge would be can I get the price down further in 10 years, and I bet I can. Wi th innovation. John McDermott is the FT s executive comment editor

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