You are listening and
watching Bloomberg Business Week
on this Thursday.
A little chilly out here.
>> Unseasonably cool and
wet in this part of the country.
>> He is such the diplomat.
>> Okay, well, look,
I'm a Californian.
You can never complain about rain
if you're a Californian and
this state is going through
a severe drought right now.
I mean, it has been for
as long as I can remember.
So any rain is welcome.
>> Silver lining in the clouds.
Right now we have a couple of
members of the Stanford Graduate
School of Business team.
We have Senior Associate Dean
Paul Oyer.
He oversees the MBA MBA program,
he's professor of economics,
he's also author of a new book
an economist goes to the game,
we'll talk about that in a moment.
And Professor Kate Kacy, Associate
Professor of Political Economy.
She worked for the World Bank,
she worked for
the government of Sierra Leone,
focuses among other areas of
political accountability so much.
But we want to talk to them
because I think it has to do
with a co teaching model that often
happens at Stanford.
So we welcome them.
First of all, thank you for
having us on your campus.
And it's great to kind of talk with
the different constituents, if you
will, of the Stanford community,
including yourself.
Paul, let me ask you, first of all,
you do oversee the MBA programs.
>> I do. >> What's top of mind when
you think about what you want to
make sure that the student body and
a student population is getting
here at Stanford.
>> Yeah, I think the students these
days have so
many demands on their time and
getting them to really take the two
years that they're here and
immerse themselves in the academic
and the other things that
the program has to offer and not,
and really come here with a goal.
I think that's a key to being
successful.
And then having great professors
like Kate and so forth,
makes it easy for
them to focus on academics.
So, a lot of the time, but
there's just so many things you can
do in two years at Stanford.
>> We'll talk about that a little
bit because I remember when I was,
I did go to business school a few
years ago and in our introduction,
the Dean I remember saying,
think about business school having
three stools, one is academics, one
is recruiting and one is social.
So whenever I was studying for
a test, I'd always think to myself,
am I doing more than 33%
of academics right now?
Should I be out having beers with
my classmates?
How do you see that?
>> So first of all,
I would agree that those
are the three legs of the stool.
That doesn't mean they have
to be equal legs.
I like to remind people we're
a graduate school at Stanford
University, which is the best
research university in the world.
Some of you listening may disagree.
>> [LAUGH] >> But we're right up
there no matter what.
>> Among the.
>> Well, number one according
to Bloomberg Business.
>> [LAUGH] >> Business schools for
sure.
And thank you for that,
we appreciate it.
Absolutely, the people who come
here have already excelled in
academic and undergrads and
often with prior advanced degrees.
So academics is very important,
we would not be a part of
Stanford University if we weren't
providing that.
Yes, there's other
things are really important.
Some, they're more important to
some people than to others and
that's our job as faculty is to
keep people focused on
the academics and remind them that
that's what they're here for and
that's going to create value for
them in their careers later on
>> So I just want to know on that
three pronged stall beer.
>> No, I over-index on academics
[LAUGH] because it was, I mean,
I went kind of late.
I had a lot of catching up to do.
>> All right. I just
wanted to check.
All right, so Kate, let's bring you
in on this because you, the
political economy is so important.
And I think about our world at
large, whether war in Ukraine,
Russia, supply chains,
pushback against globalization.
There's so much going on, the
money, influence in politics, which
ultimately impacts the economy.
What is it that you hope students
who come here to get an MBA
at Stanford, what they walk away
with and what they think about when
it comes to political economy?
>> Yeah, that's a brilliant
question.
So I think what's most important to
think about is governments
intervene in markets all the time
everywhere.
There's not a country in the world
that doesn't have
different pieces of legislation,
foreign regulatory changes, high
profile court cases that shapes
the market environment, right?
So you want to be able to
understand how government works, so
you can make some reasonable
forecasts about how policy might
change because those interventions,
they create winners and
losers, right?
They impose direct costs, but
they create opportunities.
So the idea is to be able
to anticipate policy and
then reformulate your strategy in
a proactive way.
>> If I can follow- >> Yeah.
>> In terms of the money in
politics- >> Yeah.
>> How does that skew and make it
so that maybe when it comes to the
US economy or the global economy,
that we either get more out of it
or we don't get as much as we could
maybe get out of it if- >> Yeah.
>> There wasn't so
much money in politics.
>> Yeah, I think it's important
to keep in mind that the US Is one
system right?
So one advantage of allowing
lobbying is that it's above board,
it's on the table,
you can regulate it and
you can be transparent on it.
But there's other models like
the UK has much less money in
politics and more like state
funding of campaigns and
more of a level playing field.
So I think it's important to look
around and appreciate how different
markets have different governance
institutions.
>> So Professor Casey I'm wondering
from the students that you
interact with.
Are you seeing good portion of them
go and work for governments?
Go into public service like you
did earlier in your career?
The reason I ask is because
Business School is expensive.
>> Yeah. >> And
you need to cover those costs.
And a lot of people do come to
business school with the idea they
will leave earning in the top
income bracket.
>> Right. >> How do you reconcile-
>> Yeah. >> Tthose things?
>> Yeah, so I think those
are important trade-offs.
And obviously, students have
to find their own passion and
their own pathway.
>> One of the things that I've
always found important because I've
worked for the World Bank and
the government before, is that
the skills that you get in an MBA
program are incredibly valuable in
running large public organizations.
So we don't have a lot of students
that go into government but
the ones that do, I think
are incredibly well equipped to run
efficient, impactful organizations.
>> You have one that becomes
the prime minister of the UK
>> Exactly.
>> The flip side of that is that
you work for the government for
a while, yeah.
And then you go and
you work in the private sector and
you get paid handsomely for that,
>> Dean Orwell Commoni because I
want you to talk about the co
teaching model that happens
here at Stanford.
Tell us about it and
how it helps students.
>> Right, so the foundation on
which the academic side of the MBA
program is built is we have faculty
that are at the cutting edge.
They're writing papers that
are really leading their
research fields.
But we ask them to be very
practical in their teaching.
And sometimes a way to take that
practicality to the next level is
to actually find somebody from
industry or some sort of
practitioner to come in and
co teach with them.
So I'll give you
a couple of examples.
There's a finance professor named
Elliot Strebreliof who co teaches
two different classes,
one on venture capital and
one on private equity.
He's teaching those with partners
in those types of firms,
incredibly valuable courses.
The complementarities between
the practitioner and the professor
where, professors Derby lab,
Eliot will say, here's some of what
the research shows on this and
that and then the partner will come
in and say, well, okay,
but let me add a little context on
how it works in the real world.
And then he'll say something
about we don't quite understand why
that is.
And then the professor will be
like, well, let me give you
a framework that when we put that
in the context of the SO and
SO model, that will help put
a framework around that and
give you some ideas.
So I once co taught a class that
was with a guy who had
been a partner at McKinsey.
And that was a class about
inequalities, it was a little more
about public policy issues.
And I'm a labor economist.
I would bring in a lot of what
the research said.
And he would be like, he was
the top economic adviser to the.
>> He will be like
Paul in reality [LAUGH].
>> He was the top economic
adviser to Governor Newsom and
he would be like, Okay, here's how
we get these things done.
Here's how we take that and and
get it done.
>> Is it is it 50 50 In scenarios
like that?
Or they in every
classroom with you?
>> So, the beauty of Stanford and
the blessing and
the curse of Stanford is our
courses are just really at
the discretion of the professor.
And so some of the team teaching
will be like somebody will do 80%
of the talking or
really drive the discussion.
Others will be 50, 50.
Sometimes more of the practitioner,
sometimes more the lecture.
Some of our classes are case based,
many of our classes are more
experiential, some will be even
a little more traditional lecture,
not very many of those anymore.
So, it really varies.
>> It's interesting too, Kate.
You talked about political economy,
political economics, and
you're right,
there's different models.
When I was asking you about money
and politics, there's
different models, US versus the UK.
>> Yeah. >> There's also, we talk
about the world and so often we're
talking about the developed world.
You do a lot of work in
the developing world.
Where great ideas come from, but
there's also tension.
So tell us about how the importance
of bringing the emerging
economy into your teachings.
>> Yeah, So we try to have a very
global perspective in the course.
So, I mean, just to give you some
examples, we look at political risk
in oil and gas in Argentina.
We look at mobile money and
how do you fit in with the central
bank regulators in Nigeria.
We looked at political risk
around auto manufacturing in India.
And then we look at US healthcare
reform.
I mean,
talk about money in politics,
that was a huge part of it.
I think the message is sort of
twofold.
One is a little
bit of a sales pitch to look beyond
the wealthiest countries for
opportunities, if that's something
you're interested in.
And to recognize that if you
think about the role of
government as you kind of move
away from the wealthiest countries,
the ability of the state to
intervene in markets and
really shape market opportunities,
I think it's more amplified and
even more important.
So trying to be savvy, trying to
understand who these regulators
are, who's a politician, like why
do they put themselves forward?
What are they trying to achieve?
What are their constraints?
How does the firm fit in with that
agenda or conflict with it?
>> We certainly spend a lot of time
today talking about the challenges
that this country faces when it
comes to volatility in the markets
when we see high prices.
We've also spent a lot of
time in recent months talking
about the challenges emerging
economies face specifically
with a strengthening dollar.
And how they could be between
a rock and a hard place if they
have dollar denominated debt.
I'm wondering in this kind of
bizarre world that we're living in
right now, to what extent you're
worried about emerging economies
being left behind even more so
than they have been historically as
a result of what's playing out in
the global financial system?
Yeah, I think that's a great point,
right?
I mean, and it's incredibly
challenging.
And I think it speaks to this is
a truly globalized world now and
what happens in the US and
what happens in Europe affects
every other country, right?
And I think when you think about
your ability to raise
capital in one environment and
bring it to bear in another,
all of these things become
extremely complicated.
>> Well, when you think about
what's really wonderful in reading
about Stanford and just
the coverage that we've done over
the years, the experiences that
students have, the experiential
learning that is such
a big part of what you folks do.
And I think about the real
life events.
Just this year,
the crypto market, Dean Neuer, how
do you guys incorporate that in?
What comes up in conversations that
ultimately may help you guys
develop different courses you want
to teach or different programs that
you want to have here at Stanford?
>> Yeah, that's a great question.
The curriculum is a living thing,
it's moving very quickly.
And that's where the practitioners
and the lecturers can be very
helpful because they can jump in
and add topics in a way that
the faculty, the academic
research market is a little slower.
>> Yeah. >> Shall we say,
to develop?
And so the topics.
>> Of cos the crypto that
if you think just in the last 6
to 12 months, what has happened?
>> Exactly, and now having said
that, our finance professors,
of course, are adjusting and
talking about crypto and the
relevant context in their classes.
>> So we do stay on top of that and
students ask for,
we want to learn about crypto and
we try to add courses or
content around that.
The business school has to be
a vibrant place because we want to
be very rigorous in academic, but
we have to be relevant.
We're trying to train people to go
out and manage actual organizations
and they have to learn things in
the context of which
that's going to be done.
>> [LAUGH] Metaverse,
you can't laugh,
you're in Silicon Valley.
Can you laugh?
[LAUGH] >> I think you can.
I think it's allowable.
We'll allow.
>> Dean, you're sitting on your
book right now.
>> My God.
>> There it is.
>> How did that happen?
>> [LAUGH] Goes to game.
>> [LAUGH] >> My goodness.
>> [LAUGH] >> [LAUGH] >> How to
throw away $580 million and
other surprising insights from
the economics of sports.
You have it there on the cover if
you're watching us on the screen on
QuickTake or@bloomberg.com or
on YouTube,
how do you throw away $580 million?
>> Well, the title comes
from the NBA strike,
which was about 10 years
ago now And I'm a labor economist.
There's one chapter that's all
about why athletes get paid so
much and why some have long-term
contracts and some don't.
And then there's a contract about
collective bargaining agreements.
And that's the example that
generates the 518.
That's the labor economist in me.
The book is about sports more
generally.
So, maybe one of my favourite
parts is about the story of how
you should think about whether or
not to invest in your child's
sporting career.
Or why maybe my favourite thing to
be honest is the story about why
Korean women are so great at golf,
which, when you think about it,
is there's no good reason for that.
But it's at least to me,
it's all economics.
And I turn on Sports Center and
I see economics.
I'm a little weird that way.
>> Listen, we've done broadcasts
from just before the Super Bowl.
We call it power players because
athletes have become so influential
with the amount of money in sports
and other gaming and gambling is
getting much more involved.
Just got about 40 seconds or so
left, final thoughts from you in
terms of when you think about
the importance of your students?
>> Yeah, I mean,
this is like a gift to be
able to interact with them, and
they're here and what I love about
them is they're very passionate and
they're very ambitious.
And they go off in all kinds of
different directions and
it's wonderful to see them flourish
when they leave.
>> We're just about 20 seconds.
What do you hope when a student
comes here and gets an education?
What do you hope they walk
away with?
One thing, very important.
>> I hope they come up with
a broader view of what they can do
to influence their organization and
and influence beyond the Oregon.
>> All right, we're going to
leave it on that note.
Guys, thank you so much.
Really enjoyed this.
Good luck with the book.
>> Thanks. >> And
your associate dean,
Paul Euer of Stanford, of course,
and Professor Kate Casey, associate
professor of political economy.