It’s great to speak to smart people. In addition to your expertise in economics, I saw your name on a list of Jewish chess players as a Grandmaster.
Yes. I was a professional chess player in my youth and still follow the game. But I don’t play anymore.
I don’t know why it’s culturally or politically acceptable to list chess players as Jewish or non-Jewish, but as a Jewish person I’m certainly tickled by the fact that Jews are good at chess.
At one time, half of the top chess players in the world were Jewish. When I was in Sunday school growing up, I remember that that was one of the figures we were given. That was in the 1950s. But you can really do that about anything because there’s nothing to be embarrassed about.
I think that Asia has a lot of good chess players.
India is really up and coming now, but when I was playing there wasn’t a single Asian Grandmaster, believe it or not. India is neck and neck for the leading country right now.
You’re a professor of economics at Harvard as well. Is there a natural connection between the two?
It has taken a long time for me to express it fully, but I think I’ve taken a lot from chess. There are big things and little things. One thing you might laugh at is that it teaches you to think about what the other person is thinking in any negotiation or debate. Of course, there are other ways to come to that. It also teaches you the value of long-term strategic thinking, to look at the long run.
In economics, I’ve leaned into looking at long historical data sets. I feel that people focus too much on recent trends and aren’t looking over the horizon. Chess also teaches you a lot of discipline. There are certainly many other things I’ve learned from it as well. For example, having seen artificial intelligence being used in chess, I think I understood it much quicker than my economist contemporaries. I had a debate with Peter Thiel and Garry Kasparov in which I said it was going to change everything, and they said that it wouldn’t.
Chess seems to entail more strategic thinking than economic health and cycles, which may also depend on human emotions, politics and national interests.
One of the things I enjoy so much about economics is that it can, if you let it, use both sides of your brain. John Maynard Keynes was particularly good at this. Strategic thinking is important. If you want to think about what interest rates and inflation are going to be, you need to think about what kind of political pressures the Federal Reserve will face. A lot of economists think that doesn’t matter. They say that the Fed only looks at setting monetary policy, akin to adjusting your thermostat. But that’s not the case. The Fed is facing these living pressures. Donald Trump brings that out in spades. He has his ideas and is willing to use muscle to put them in. But Nixon also did that, and the Democrats, had they won, would be doing that in their own quiet ways. Going back to chess, strategic thinking and game theory are very important when thinking about political economy.
You mentioned Donald Trump. He’s certainly a risk-taker and likes trial and error. Is he playing with the global economy, especially with tariffs, meaning that if it works it works, and if not we’ll change course?
First, let me say that as someone who is Jewish and a huge supporter of Israel, I am so happy that he took action on Iran. I think that will be a singular moment in his presidency, and frankly, it gave him a lot of credibility. When he says he’s a risk-taker and is willing to do something, he follows up on it. I say this to everyone, even to people who are very much opposed to it.
On the global economy, he has very good instincts about many things. As a chess player, I like to describe him as a coffeehouse chess player, which is not an insult. It’s someone who plays more instinctively and doesn’t necessarily always follow book learning and the rules.
You are correct about his willingness to do trial and error. A lot of people miss that when he says something and then changes his mind. It’s a very positive quality of his. You can say that he doesn’t have an ideology; fine. But as John Maynard Keynes said, “When the facts change, I change my mind.” Trump has really demonstrated the ability to do that.
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