What Can Vampires Teach Us About Economics? Full Transcript

This is a transcript of the Freakonomics Radio podcast “What Can Vampires Teach Us About Economics?

[MUSIC: Arturo Sacchetti, “Toccata Und Fugue in D Minor” (from Organ Masterworks)]

Stephen J. DUBNER: Levitt, you know, I feel like I know you pretty well. And yet there’s one essential fact about you that I have no idea. And I could guess. And I’d have a 50-50 chance, but I’m just going to ask you:


DUBNER: Are you Team Edward or Team Jacob?

Steve LEVITT: Team Edward, for sure.


LEVITT: So it was a long time ago that I read Twilight, but I had a reaction to it that was different than any other person I’ve ever met, which is somehow Twilight had a very calming effect on me, almost like, like enlightenment. Somehow when I read the book it just allowed me to be completely at peace with the world. It was completely bizarre, it was very noticeable though. And I think it related to Edward and the life of the vampires. So in the book the vampires live forever and they basically have nothing to do. And they also have decided to make choices about not following their deepest desires of drinking human blood, but instead making do, and being civilized and drinking only animal blood. And there was something about that whole portrayal of the vampires which made me feel a kinship with them.

DUBNER: It inspired you?

LEVITT: It did. No, it made me very calm and kind towards people for about three months. And then you know, things always fade after that.

DUBNER: Would you like to be a vampire if you could?

LEVITT: I think I would want to be a vampire, that wouldn’t be so bad.

DUBNER: And would you rather be a vampire or a werewolf?

LEVITT: I think I would want to be…Well, the werewolf…Yeah, I think I would want to be a vampire. I think that the vampires…I’m much more a vampire in spirit than a werewolf.


ANNOUNCER: From WNYC: This is FREAKONOMICS RADIO, the podcast that explores the hidden side of everything. Here’s your host, Stephen Dubner.

[MUSIC: Richard Ames, “Skip Step”]

DUBNER: Steve Levitt is my Freakonomics friend and co-author. He teaches economics at the University of Chicago. We were talking about the appeal of being a vampire.

LEVITT: I like the idea of the timelessness of it. And one of the things that’s happened  to me and I think maybe happened to you as well is that as I’ve gotten older the amount of free time that I have has shrunk to nothing, and I wish I had much more time to invest and to learn, and the vampires have nothing but time. They just sit around. You know, the don’t sleep and they can get everywhere in a few seconds. And so they’re very patient and well-learned. And I would like to have the constraint of time lifted, at least for a while. But on the flipside then you get stuck, if you get attached to things other than vampires, then you know that they’re going to disappear very quickly, so you have to turn them into vampires.

DUBNER: Now, considering that stories of the undead are fiction, and supernatural fiction at that, what ideas or themes strike you as an economist as noteworthy?

LEVITT: So to be honest, I’ve never thought for two seconds about the economics of the undead. But in general it seems like the operative motivation in many of the fantasy and science fiction genre is the removal of the normal constraints. So in Twilight, for instance, all sorts of constraints have been removed. So there’s no need for sleep and there’s no need for money for the Cullens. And they live forever and they can get everywhere so quickly that you can then begin to fantasize about what you would do when you have no constraints. Of course you need conflict so you have a bunch of other things they have to worry about like other mean vampires, and werewolves and stuff like that. But, what I find interesting in fiction is when the author can create an alternative universe that has enough similarities in it that you kind of can get onboard with it, and yet it allows you to get excited about things. So Harry Potter would be the best example of that, because that’s a universe that’s very parallel to ours, yet somehow things are very different, and it’s fun and playful to investigate that.

[MUSIC: The San Andreas Fault, “Bags Unlimited” (from Encantada E.P.)]

DUBNER: So Steve Levitt, an economist, had never really thought about the economics of the undead. But, you know, he’s hardly the only economist out there.

Glen WHITMAN: Both Jim and I had an interest in zombies and vampires and other forms of the undead going back many, many years.

DUBNER: That’s Glen Whitman. He’s an economist at California State University, Northridge.

WHITMAN: And I also have a second career as a TV writer. I wrote for the TV show Fringe for many years and now I’m writing for the TV show Matador.

DUBNER: The “Jim” he mentioned is Jim Dow, who teaches finance at Northridge.

WHITMAN: In fact, the two of us bonded over Buffy the Vampire Slayer, when we discovered that we were both fans of it.

DUBNER: And so, Glen Whitman and Jim Dow decided to put together a book called Economics of the Undead: Zombies, Vampires, and the Dismal Science. It contains 23 essays by a variety of scholars, with titles like “Tragedy of the Blood Commons: The Case for Privatizing the Humans” and “Investing Secrets of the Undead.” I am not kidding. These are serious people taking on serious topics – for instance:

WHITMAN: Whether a zombie apocalypse could actually be good for the economy…

DUBNER: Right? That’s worth thinking about, isn’t is? After all, we spend a lot of time  thinking about the economic impact of war and natural disasters:

Steve HORWITZ: We saw for example in New Orleans after Hurricane Katrina and parts of the northeast after Sandy, that unemployment rates drop when labor’s being devoted to cleaning up a mess.

DUBNER: That’s Steve Horwitz.

HORWITZ: Charles A. Dana Professor of Economics and Department Chair at St. Lawrence University in Canton, New York.

[MUSIC: Heavy G and the Boogaloo Communicators, “Wantu Wazuri” (from Makin’ It Happen)]

DUBNER: The chapter that Horwitz wrote, along with Sarah Skwire, is called “Eating Brains and Breaking Windows.” This refers to a famous 19th-century story called “The Parable of the Broken Window” by the French economist Frederic Bastiat. It was part of an essay called “That Which Is Seen, and That Which Is not Seen.” But it’s not just a parable about a broken window; to economists, it’s know as “The Broken-Window Fallacy.”

HORWITZ: In the original essay, Bastiat imagines, you know, we have a small quiet  village and a young hoodlum throws a brick through the window of a house, right, shattering, shattering the window.

WHITMAN: And of course, the owner of the house, that had the broken window was unhappy about it.

HORWITZ: And the people gather around and they cluck their tongues about how terrible this is, and, you know, kids today, and all that. And then finally someone says:

WHITMAN: Well this is actually good, because it’s going to be generating business for the glazier, the window maker.

HORWITZ: And that’s income for the glazier and the glazier will have maybe a hundred dollars that he can spend on maybe a new pair of shoes, and the shoe maker will have some money.

DUBNER: This line of thinking leads people to say…

HORWITZ: Well maybe it’s not such a terrible thing after all that the young hoodlum has broken this window.

WHITMAN: And so that’s an argument for why you might think that a disaster could actually be good for the economy.

DUBNER: But remember: it’s the broken-window fallacy.

HORWITZ: The fallacy of course is that…

WHITMAN: You cannot look just at what is seen. You also have to see what is not seen. In other words, the business activity that would have happened if it hadn’t been for that disaster.

HORWITZ: If the homeowner doesn’t have the window broken, the homeowner has got  $100 to spend on something else, and has a functioning window.

DUBNER: So you can see where the economists are going with this theory as it relates to the undead:

HORWITZ: How does it work for the zombie apocalypse, well…

WHITMAN: It’s absolutely the case that if there were an invasion of zombies, there would be a great deal of economic activity generated.

DUBNER: Sure, people might rush to fill up their gas tanks and buy a lot of groceries. Probably stock up on supplies, like axes to crush the zombies’ brains.

HORWITZ: You know, all the preparations that it would take to prepare for that apocalypse…

WHITMAN: We’d have to have cleanup of the bodies and the property destruction and so forth.

HORWITZ: All those expenditures, while, sure, they create jobs and they create economic activity, they don’t really create wealth.

WHITMAN: If we hadn’t had to spend all of those things fighting off zombies, we would have been able to spend all of those resources doing other things to make our lives better.

HORWITZ: Food, clothing, shelter, flat screen TVs, whatever it might be. Right?

WHITMAN: And so, on that level it’s in a sense a wash — plus, of course, there’s the fact that we have all of the death and destruction wreaked by the zombies.

HORWITZ: All those exchanges, you know, from buying shotguns at Wal-Mart to cleaning up the bodies, to rebuilding houses afterwards are all about either maintaining or getting us back to where we were before. What we want, what economic progress means, is people trading and exchanging  in ways that continually get them new and better things that they desire more.

WHITMAN: And so, we’re actually worse off for the zombie apocalypse. Which is of course what common sense should tell us. But sometimes people will find a way to talk themselves into some pretty unusual propositions when it comes to economics.

[MUSIC: Pailboy, “The Bomb”]

DUBNER: Coming up on Freakonomics Radio: let’s say you love vampires but you don’t love the violence that comes from vampires attacking humans for our blood. Might there be a solution?

Enrique GUERRA-PUJOL: If vampires had the choice to buy blood, they would probably do so.

DUBNER: And… if you’re a vampire-loving economist hoping to meet a vampire-loving mate, where’s that supposed to happen?

WHITMAN: Uh, in the nerdiest of possible ways, I met her at Comic Con.

DUBNER: One more thing: if you enjoy the biting commentary offered by Freakonomics  Radio, why don’t you subscribe – it’s free and easy at iTunes and with other podcast apps.


ANNOUNCER: From WNYC: This is FREAKONOMICS RADIO. Here’s your host, Stephen Dubner.

[MUSIC: Dave Carter, “Moanna” (from Commitment and Change)]

DUBNER: Hello, professor Guerra-Pujol?


DUBNER: Hey, it’s Stephen Dubner, how are you?

GUERRA-PUJOL: Oh, hi Stephen, very well, thank you.

DUBNER: Enrique Guerra-Pujol is a professor of law at the University of Central Florida. His chapter in Economics of the Undead is called “Buy or Bite?”

DUBNER: As a legal scholar, and as a professor of law, let me just ask you this. What’s the problem with vampires? And how would you propose to fix it?

GUERRA-PUJOL: Well, when we look at vampires—what I call the vampire world—I would put my thumb on the main problem: violence. It just, you know when it comes down to it you know you see a lot of gory stuff going on in the vampire world. But here’s what it comes to: As a legal scholar, I’m not just here to describe a problem. On a normative perspective, I’d like to solve it, and I think the solution is there right under our nose. It’s let vampires buy blood. And so I wrote a piece where I talk about this possibility and explain  how markets work, why black markets tend to be violent—not just in the vampire world, but generally—and describe, hey, why it makes sense for vampires to want to buy blood, and why some of us—probably not all of us—why it would make sense for us to sell blood.

DUBNER: Okay, I’d like to read to you a portion of the introduction to your piece. You write that, “Most members of the vampire race resort to coercion, compulsion, and confiscation to get what they want the most: Blood. But why?” You write, “Why are vampires such parasitic predators? Maybe we are asking the wrong question. Maybe we should be asking why don’t vampires offer to buy our blood instead of taking it by force?” So, do you have answer to that question? Why don’t they, in the literature, offer to buy blood?

GUERRA-PUJOL: Two words: legal failure. Economists often talk about market failures when certain voluntary transactions impose costs on others or on society. Here I’m talking about legal failure. What I mean by that is when the law, for a wide variety of reasons, prevents transactions from taking place in the first place, prevents market transactions. And what it really comes down to, is this intuition that, you know, if vampires had the choice to buy blood, they would probably do so.

DUBNER: You think so really? You don’t think that goes against the nature of vampires? Isn’t what makes vampires fun or attractive — if one is attracted to them — the fact that they go and take via the neck the living hot blood, as opposed to walk into, you know, the equivalent of a California pot dispensary and buy a little packet or a tablet or a capsule. That wouldn’t be any fun, would it?

GUERRA-PUJOL: Yeah, I am certain that some vampires do obtain a thrill, right, a rush of sucking people’s blood by force, but what I’m getting at is that not necessarily all vampires.  In fact, sort of a subtext of my piece is that vampires may not necessarily be all evil or all bad.

DUBNER: So you’re saying that vampires are essentially driven to violence by the lack of a legal market in blood?

GUERRA-PUJOL: Exactly right, exactly right.

[MUSIC: Scott Hallgren, “Milonga” (from Tango – Jazz (live in Studio C))]

DUBNER: So his solution is an obvious one: a legal market for blood, so that vampires don’t have to attack us.

GUERRA-PUJOL: When you take blood by force, you run the risk of retaliation, and so what I describe is that a lot of vampires might say, ‘Well, wait a minute, you know, taking blood is not necessarily free, right? I’m generating a risk of retaliation by vampire slayers, and so maybe if I have the choice of buying blood, I might just prefer the peace of mind.’  Same reason why somebody buys pot down at the dispensary as opposed in some, shady dark alley.

DUBNER: That’s a great point. As Milton Friedman might have said it if he were in on this conversation, ‘There ain’t no such thing as a free blood suck.’ Let me ask you for a moment to describe the legal status of blood sale or purchase in the U.S. and elsewhere.

GUERRA-PUJOL: Just to put it simply, and lay it out there, really, blood transactions are under the, what I call, the shadow of the World Health Organization. The World Health Organization, though it’s merely a, you know, private organization, right, does actively encourage all nation-states to prohibit the sale of blood. And some countries—for example, our friends in the United Kingdom—have acted on that prohibition, and it’s unlawful to sell blood. In the United States, though, it’s a little trickier. We have something from 1984, the National Transplant Organ Act [sic], which prohibits the sale of human organs, human tissues, but does not address the question of blood or ova, sperm, those type of genetic material. And so, in the United States, technically, right, you own your own blood and you could say there’s no express prohibition against the sale of blood, but at the same time you have sort of this dark, looming shadow, where other types of genetic material and human organs, the sale of which are prevented. And so, this is what I address it in the paper, one category of legal failure is simply uncertainty. Not saying one way or the other which sales are allowed and which are not.

DUBNER: And when there’s a legal uncertainty, how do people tend to behave? I realize that’s too broad of a question because people behave in a lot of different ways, but what sort of incentives or disincentives or tendencies toward anti-social behavior are created by legal uncertainties?

GUERRA-PUJOL: Two points. Number one, if there is a demand for a given good or service, the demand doesn’t just go away just because the law’s unclear, or just because the law in fact prohibits a certain transaction. And of course, a case in point would be drug transactions or prostitution or what have you. So demand is there. In the vampire world, of course, the demand is all the more compelling because the need for blood is a part of the vampire physiology. But here’s what else happens. Not only does demand not go away; lawbreakers will crowd out law abiders. And what do I mean by that? I mean that a lot of persons will say, ‘Well, you know what? Law’s unclear, I’m not going to sell my blood. I’m not going to buy blood. This is not clear. What if the deal goes wrong? What if I’m not given the type of blood that I was promised. I can’t really sue in the courts to enforce this type of agreement. If I do the outcome is uncertain.’ And so what we end up have happening is, people who are willing to take this type of risk—lawbreakers, generally speaking—will come in and fill this demand. And when you have lawbreakers filling in the demand, that’s sort of another source of violence, right? And so, that’s why I think it’s important that the law get it right, and if we want to address violence, consider legalizing this type of market.

[MUSIC: In The Nursery, “Wexford Bull Ring” (from Electric Edwardians)]

DUBNER: Alright, I love your idea. I love the idea that the violence of vampires is created by a legal failure, by which there’s no blood for them to purchase or barter for or whatever, but—I hate to rain on this awesome parade of yours—but wouldn’t fixing the problem as you propose also destroy the literature, itself? Isn’t the whole beauty of vampire literature the illegal and dangerous and violent procurement of said blood? And are you willing to live, Professor Guerra-Pujol, with being the person responsible for killing off the vampire genre?

GUERRA-PUJOL: That is a great question. But here’s the deal. Just like we have legal markets in, you know, selling and buying cars, right? There’s still car theft. There’s always going to be people who, for whatever reasons, right—and that’s a whole other literature—may want to still steal cars. So I still think, I still think I may kill off some small part of the literature, but I still think, you know, there will be cunning and thrill-seeking vampires who will want to live outside the law. And so there should still be hope for aspiring writers and whatnot.

[MUSIC: Rouge, “Reminiscence” (from Festival Rouge French Cabaret Music: Edith Piaf & Beyond)]

DUBNER: Earlier, you will remember, we spoke with one of the book’s editors:

WHITMAN: My name is Glen Whitman, and I’m an economist and also a TV writer.

DUBNER: Whitman wrote two chapters about the romantic relationships between human girls and vampire boys.

WHITMAN: I’ve always been fascinated by applying economics to understand relationships, specifically speaking as a guy who is now married, but I had a long period of single-hood. It took me a while, I spent a while out there on the market.

DUBNER: I wonder if you could share with us anything that you’ve learned whether as an economist or just a plain old human being from studying vampires, something that’s changed the way that you live your life or think about anything.

WHITMAN: This is going to make me seem like one of those people who never changes and never learns a lesson. But the perspective that I brought specifically to the chapters about vampire-human dating were really the lessons that I had already applied. They were already the way that I thought about human-human relationships. And now that’s something that changed. It was as a result of thinking in those  terms, thinking about search-matching theory when I first learned about it sometime in the late 90’s when I was in graduate school. And that had an effect on me at the time. It made me realize the degree to which the idea of “the one,” the single person that you are destined by the universe to end up with, is kind of  silly concept. So instead it’s a much more reasonable way to think about it, to say, look, even if the kind of person I could be with 1 only one in a million, that’s still a huge number of people in a world of billions of people, right? And so that means what there really is a set, not “the one,” but the set. And what you’re hoping to do is to land somebody who is in that set. And so that made me think in terms of my dating strategy, how I would meet people, in terms of trying to maximize the number of, the number of people that I could meet, or at least find out about enough to know whether they could conceivably be in this set. So doing that, you know, decreases the cost of actually finding somebody. Now, talking about it this way makes it sound like I was sitting around with pencil and paper and a spreadsheet.

DUBNER: Yes it does. Yes it does.

WHITMAN: And that’s not accurate. That’s not accurate at all. What my dating life actually looked like, when I had one, was much like other people’s. It involved a lot of going out to bars and meeting people. It really was just a mindset.

DUBNER: And how did you meet your wife ultimately?

WHITMAN: In the nerdiest of possible ways, I met her at Comic Con.

DUBNER: We’ve got to stop now, it doesn’t get any better than that. Sorry, go ahead.

WHITMAN: At the Wrath of  Kahn party we bonded over talking about Buffy and Angel.

DUBNER: Oh man, that is a beautiful story. What is her name?


DUBNER: Brynn, you’re a lucky lady, and Glen, I’m sure you’re a lucky guy too.

WHITMAN: Extremely.

DUBNER: Thank you so much for talking today, it was a blast.

WHITMAN: Absolutely.

[MUSIC: Summer Villains, “Boo!” (from Halloweenilicious)]


This is a transcript of the Freakonomics Radio podcast “What Can Vampires Teach Us About Economics?