This week, we speak with Dr. Lisa Cook, a professor in the department of economics and in international relations at Michigan State University. She has served as a senior economist at the Council of Economic Advisers under President Barack Obama and has held positions or conducted research at the National Bureau of Economic Research; the Federal Reserve banks of Minneapolis, New York and Philadelphia; and the World Bank. As the first Marshall Scholar from Spelman College, she received a second B.A. from Oxford University before earning her Ph.D. from the University of California, Berkeley.
Originally expecting to pursue a career in the law, she explains how she made her way towards academia, finding economics to be “incredibly fun.”
Cook brings a quantitative background to economics. Her research has been unique and groundbreaking, backed by deep mathematical proofs, and often revealing of overlooked truths. Her study on economics found that of all academic PhDs. granted, only 0.6% in economics went to Black women. (see Black women are underrepresented in economics, which is bad for everyone).
But her deepest and most fascinating research is on the nature of violence, innovation and race: Violence and Economic Activity: Evidence from African American Patents, 1870 to 1940. She presented some of her preliminary findings to a variety of economists, expecting lots of pushback, and was instead encouraged to publish. No less a luminary than Milton Friedman pointed out how extra-legal violence interfered with the operations of the Free Market. African American patents peaked in 1899, and have since fallen dramatically. Only 6 patents per million go to African Americans in the population, versus 40 per million for women, and 235 per million for all others. She demonstrated this has a massive negative impact on future economic growth.
Cook points out that the there are 50 white entrepreneurs for every African American one. She points out that small business and start ups are the best path for economic success in America, and this growing fissure during the pandemic is highly problematic.
You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Overcast, Google, Bloomberg, Stitcher, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here.
Be sure to check out our Masters in Business next week with Ray Dalio, founder and Chairman of Bridgewater Associates, the qworld’s largest hedge fund. He’s also the author of the New York Times bestseller, Principles: Life and Work, and is known for the practical yet unconventional theory of economics he spells out in his video series “How the Economic Machine Works.” His latest book, The Changing World Order: Why Nations Succeed and Fail, will be published January 12, 2021.
Lisa Cook’s Favorite Books
The Deficit Myth: Modern Monetary Theory and the Birth of the People’s Economy by Stephanie Kelton
Moneyball: The Art of Winning an Unfair Game by Michael Lewis
The World According to Fannie Davis: My Mother’s Life in the Detroit Numbers by Bridgett M. Davis
The Color of Money: Black Banks and the Racial Wealth Gap by Mehrsa Baradaran
From Here to Equality: Reparations for Black Americans in the Twenty-First Century by William A. Darity and A. Kirsten Mullen