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Kenneth S. Rogoff is a Professor of Economics and the Maurits C. Boas Chair of International Economics. This interview has been edited for length and clarity.
FM: You are an international chess grandmaster who drew the attention of Bobby Fischer when you were only a teen. But, you took an unexpected turn from other members of the chess pantheon when you applied to Yale at eighteen, launching your career in economics. What made you decide to switch paths?
KSR: I generally list three things. The first thing was, I didn’t like to travel so much. I was mostly in Europe or Canada, around the United States, Mexico, but it was a lot of travel on my own. There was nobody, there was no parent traveling with me. I was just living on my own.
The second reason is, when I was back in Rochester, where I grew up, I had something like a social life, and I valued it a lot. You can imagine I was pretty nerdy, but I had a social life, and on the road, I really had none, and at 16, 17, I didn’t have the skill set, basically — some of your classmates may have at that age, but I just didn’t — and so I was kind of lonely.
And the third thing is, I felt I wanted to do something more important with my life.
FM: Is there a connection between what you find satisfying about chess and what you find satisfying about economics?
KSR: There are connections, but it’s not easy to draw a straight line. There are many things I’ve learned from chess that help me in economics. A very crude and simple one is I understood that AI was coming way before other economists, at least in the circles I was speaking to. You’re going to find this very hard to believe in your generation, but if I went back just 10 years, everyone thought we would never have innovation again, that we were in what Larry Summers called “secular stagnation.” That was a common view on Wall Street and central banks and such.
And I had seen God. I had followed AI and chess even from the late-197os when I was a graduate student at MIT. I played the then-best program, which was pretty impressive. I played it maybe 20 or 30 games, but I could see that if it kept improving, I wouldn’t.
Everybody makes mistakes, everybody doesn’t see things, but you often forget that about yourself. You think that you know everything. And I learned that lesson as I got to play all the best players.
FM: AI has the potential to be both a formidable opponent and an amazing teacher for the next generation of chess players. What role do you see AI playing in the future of chess?
KSR: The future is here. For a couple of decades, it’s played the role of reinvigorating the game. Fresh looks at things we didn’t understand.
So far, AI has been good for human chess. It’s made it richer, but it’s probably increased the role of memorization even beyond what it was. And so there’s sort of a need to do something like randomize the opening moves or something. But that’ll probably buy another 50 years, and I don’t know what’s after that.
FM: During your teens, you left high school and lived solo in Yugoslavia, playing in chess tournaments across Europe and supporting yourself on your prize winnings. What was it like to live abroad so young?
KSR: I wasn’t scared, which I should have been. I was earning enough money. I could have paid for myself to stay in hotels when I wasn’t at tournaments, but I didn’t like that idea, so I would actually sometimes sleep in train stations, park benches, youth hostels, because other people my age were doing that. And of course nowadays, that just seems like you’re setting yourself up for something horrible. But I just didn’t think about it at the time. I certainly learned a lot about life from that, from the kind of people you interact with. Being so focused on chess, my ignorance about life and culture was indescribable.
I go to see Casablanca and, you know, everyone’s applauding. Why are they applauding? Oh, that’s Humphrey Bogart! Just had no idea. I wasn’t totally ignorant, but my level of culture was stupefying from being so focused. But on the other hand, I kind of understood the underground economy, which is tax evasion more than illegal activity, but particularly in Eastern Europe, there’s a lot of black market. Boy, did I understand that. At 16 or 17, I had seen a lot. I had seen huge hordes of cash that some people had — just things you wouldn’t see as a teenager growing up in Rochester, New York.
FM: Could you tell me about your forthcoming book, [“Our Dollar, Your Problem”]?
KSR: It’s a sweeping history of the postwar rise of the dollar against all the challenges it faced. It looks at the difficulties of dealing with the dollar, crypto, and challenges ahead.
FM: Could you explain Bitcoin to me?
KSR: It’s not a currency. It’s ultimately a transactions mechanism. I’m in the school of thought that thinks it’s not infinitely valuable, because it can’t be real money, but it’s also not worthless, because Bitcoin, and more precisely Bitcoin derivatives are very useful in the underground economy. The technology is very clever, and it is a spin off of so many ideas, but there is this tradeoff between secrecy and the government’s ability to inexpensively trace stuff. If you do dirty nuclear bomb somewhere, the government’s going to spend whatever resources they can to track you down. But if you’re doing more mundane criminal activity, it’s an arms race. It’s a problem, and I believe it’s something that should be regulated, quite contrary to what’s happening right now.
FM: What do you think of the idea of universal basic income?
KSR: It’s a little bit economically illiterate, so it depends on what it means. I’m a big believer in redistributing income. But on the other hand, if you give everybody, you know, $20,000 or something, the taxes are just blinding. Our system can’t take that. So, I think it makes a lot of sense to have a really strong safety net for low-income people, some of it direct transfer, some of it free healthcare, education. I think food stamps is a fantastic program.
The idea of [universal basic income] is good, but the government doesn’t have infinite pockets. People think Harvard has $50 billion and just could make everything free, and actually when you go through the math, that’s just not even close to being true, given everything it’s doing.
FM: If you were put in charge of U.S. economic policy, what reforms would you make?
KSR: What does it mean to be put in charge? You’re not — you need a consensus. It needs to be something that stands the test of time.If you want to put in change that’s lasting, you need to convince people that you have something better. So, to pick a concrete example, I would favor having a tremendous simplification of our income tax. Hong Kong has something like that — your income tax is one page. Whereas in the United States, it’s very complicated. They make it very complicated for a reason: The Congresspeople like to get paid off. They like the lobbyists to get money. They love it that you have to go around and lobby for everything. So if we had a simpler system, it would improve our politics, it would be less corrupt.
FM: Your wife, the filmmaker, journalist, and television producer Natasha Lance Rogoff helped bring Sesame Street to Russia in the 1990s. It sounds exciting, but perilous, too. Did you know her then? And if so, can you tell me more about this period of your lives?
KSR: We met during the production, maybe about a third of the way through. We met in the U.S. on sort of a double blind date where neither person knew each other. I spoke Russian from my chess days, and from studying it at school, and from Yale, too.
It’s an incredible story, the making of Sesame Street. It was a very violent period in Russia, and she took incredible risks. And it’s also creatively exciting, because the Russians are incredibly creative artists and musicians. She had 400 people working for her at the time: Russians who were puppeteers, artists, musicians, screenwriters, directors. She was just in her early 30s when she was doing this. I mostly saw her when she was in New York. I did go to Russia to visit her once — but you can read the book, [“Muppets in Moscow: The Unexpected Crazy True Story of Making Sesame Street in Russia”] It’s changed her life.
FM: From “Searching for Bobby Fischer” to “The Queen’s Gambit,” movies and TV shows about chess seem to tap into a fundamental human fascination with strategy and genius, and the occasional darkness of that genius. Why do you think chess captures people’s imaginations this way?
KSR: I think it’s more visceral to express than mathematics.
“The Queen’s Gambit” took things to another level. It’s very creative. It was very original. The typical movie with chess, they typically have the person writhing in agony. But actually, when you’re trying to think clearly, you’re just staring. You’re just calm. When you’re writhing, it’s actually because you’re batting yourself on the head, because you’re not thinking clearly. So they had Anya Taylor-Joy just stare out into space. Now, she happens to be an incredibly beautiful actress, but what they’re capturing on the camera of how she’s thinking, and her focus, was very, very original.
FM: “For the love of money is the root of all evil” (1 Timothy 6:10) is one of the most quoted and misquoted maxims of the Bible. Why do you think this line has stuck around?
KSR: What that’s trying to capture — again, I’m no biblical scholar, I’m no philosopher — is that people can be corrupted by money, their judgement can be corrupted, and it can somehow bring out people’s baser human instincts. But, that said, in economics, there’s a lot of problems where it’s very hard to have an even swap, and the invention of money has been really fantastic for being able to do those trades. There’s a phrase we say: It eliminates the need to have double-coincidence at once, meaning you have what I have and I have what you have. And in a very simple society, that worked. There were only a couple things we could have. But it’s way too complicated to live without money now. It’s been one of the great inventions in mankind.
It allows society to be more complex, it allows us to do things we wouldn’t be able to do.
FM: If you could recommend one book to college students, what would the book be?
KSR: [“The Wealth and Poverty of Nations,” by David S. Landes.] It was actually incredibly insightful about the importance of institutions and what makes some countries do well and other countries not do well.
It’s a beautifully written book. It’s not just an important book. I think it was a number-one New York Times bestseller for 40 weeks, and people don’t read economics books, but that’s a wonderful book to read.
FM: What is the most memorable chess match you ever played?
KSR: In modern times — the last 45 years — there’s only been one game, a game I played against Magnus Carlsen, who is by far the world’s best player. In 2012, it was an exhibition game. It was one-on-one, and I somewhat miraculously made a draw, so it’s a little hard to top that for my 45 years. When I was playing professionally, I think the most memorable game was when I was 15. I was playing the number two player in the world. His name is Bent Larsen.
We were playing what was basically the championship game at the Canadian championship. He was so upset that he’s playing this 15-year-old punk on national TV, because, you know, he was a much better player, but I had won the right to be there. I finished second, ultimately, in the tournament. In order to make a point, he sat there reading a newspaper, and would just sort of look up when I moved and make a quick, quick move to sort of impress on everyone how he wasn’t trying.
The game ended up being a draw. I should have continued and won. I was chicken and gave him a draw. But it was quite an experience.
FM: When you were actually playing these games, how did it feel?
KSR: The hardest thing in chess is to be able to concentrate after you’ve made a mistake. You’re going to make a mistake. It’s very hard to go through a game where the position didn’t turn on you. Maybe you were winning and now it’s equal. Maybe it was equal and you’re losing. Maybe you’re winning, and now not so easily.
Chess is sort of a game of mistakes. It’s very hard to play perfectly. Learning to stay calm in the face of your humanness, you know, making mistakes — it’s something that you discipline yourself to do.
FM: Do you have any advice, economic or otherwise, for students?
KSR: We live in a society where creativity is everything.
You can be creative within a very narrow field. You can be in physics and you can be very creative. You can be in medicine. You could be in English and be very creative. But I think, particularly if you’re a Harvard student, it’s a real waste to just think, ‘What can I get the best test score on? What’s the “safest” pay when I leave?’ It’s just not the ticket to being very happy. We live in a society where there really is some level of abundance for people who’ve made it to being a Harvard student. You’re nervous, you think you can’t do this and that, but your possibilities are endless. And just trying to think of “How can I make the most money? How can I be the most safe?” is a mistake. First of all, your money’s not safe. Your job’s not safe. What is safe is your creativity. That’s not something that’s easily changed.
—Associate Magazine Editor Clara Shapiro can be reached at clara.shapiro@thecrimson.com.
