Rabindranath Tagore's Conversation with Albert Einstein

Excerpted from: A Tagore Reader, edited by Amiya Chakravarty.
Tagore and Einstein met through a common friend, Dr. Mendel. Tagore visited Einstein at his residence at Kaputh in the suburbs of Berlin on July 14, 1930, and Einstein returned the call and visited Tagore at the Mendel home. Both conversations were recorded and the above photograph was taken. The July 14 conversation is reproduced here, and was originally published in The Religion of Man (George, Allen & Unwin, Ltd., London), Appendix II, pp. 222-225.



TAGORE: I was discussing with Dr. Mendel today the new mathematical discoveries which tell us that in the realm of infinitesimal atoms chance has its play; the drama of existence is not absolutely predestined in character.

EINSTEIN: The facts that make science tend toward this view do not say good-bye to causality.

TAGORE: Maybe not, yet it appears that the idea of causality is not in the elements, but that some other force builds up with them an organized universe.

EINSTEIN: One tries to understand in the higher plane how the order is. The order is there, where the big elements combine and guide existence, but in the minute elements this order is not perceptible.

TAGORE: Thus duality is in the depths of existence, the contradiction of free impulse and the directive will which works upon it and evolves an orderly scheme of things.

EINSTEIN: Modern physics would not say they are contradictory. Clouds look as one from a distance, but if you see them nearby, they show themselves as disorderly drops of water.

TAGORE: I find a parallel in human psychology. Our passions and desires are unruly, but our character subdues these elements into a harmonious whole. Does something similar to this happen in the physical world? Are the elements rebellious, dynamic with individual impulse? And is there a principle in the physical world which dominates them and puts them into an orderly organization?

EINSTEIN: Even the elements are not without statistical order; elements of radium will always maintain their specific order, now and ever onward, just as they have done all along. There is, then, a statistical order in the elements.
TAGORE: Otherwise, the drama of existence would be too desultory. It is the constant harmony of chance and determination which makes it eternally new and living.

EINSTEIN: I believe that whatever we do or live for has its causality; it is good, however, that we cannot see through to it.

TAGORE: There is in human affairs an element of elasticity also, some freedom within a small range which is for the expression of our personality. It is like the musical system in India, which is not so rigidly fixed as western music. Our composers give a certain definite outline, a system of melody and rhythmic arrangement, and within a certain limit the player can improvise upon it. He must be one with the law of that particular melody, and then he can give spontaneous expression to his musical feeling within the prescribed regulation. We praise the composer for his genius in creating a foundation along with a superstructure of melodies, but we expect from the player his own skill in the creation of variations of melodic flourish and ornamentation. In creation we follow the central law of existence, but if we do not cut ourselves adrift from it, we can have sufficient freedom within the limits of our personality for the fullest self-expression.

EINSTEIN: That is possible only when there is a strong artistic tradition in music to guide the people's mind. In Europe, music has come too far away from popular art and popular feeling and has become something like a secret art with conventions and traditions of its own.

TAGORE: You have to be absolutely obedient to this too complicated music. In India, the measure of a singer's freedom is in his own creative personality. He can sing the composer's song as his own, if he has the power creatively to assert himself in his interpretation of the general law of the melody which he is given to interpret.

EINSTEIN: It requires a very high standard of art to realize fully the great idea in the original music, so that one can make variations upon it. In our country, the variations are often prescribed.

TAGORE: If in our conduct we can follow the law of goodness, we can have real liberty of self-expression. The principle of conduct is there, but the character which makes it true and individual is our own creation. In our music there is a duality of freedom and prescribed order.

EINSTEIN: Are the words of a song also free? I mean to say, is the singer at liberty to add his own words to the song which he is singing?

TAGORE: Yes. In Bengal we have a kind of song-kirtan, we call it-which gives freedom to the singer to introduce parenthetical comments, phrases not in the original song. This occasions great enthusiasm, since the audience is constantly thrilled by some beautiful, spontaneous sentiment added by the singer.

EINSTEIN: Is the metrical form quite severe?

TAGORE: Yes, quite. You cannot exceed the limits of versification; the singer in all his variations must keep the rhythm and the time, which is fixed. In European music you have a comparative liberty with time, but not with melody.

EINSTEIN: Can the Indian music be sung without words? Can one understand a song without words?

TAGORE: Yes, we have songs with unmeaning words, sounds which just help to act as carriers of the notes. In North India, music is an independent art, not the interpretation of words and thoughts, as in Bengal. The music is very intricate and subtle and is a complete world of melody by itself.

EINSTEIN: Is it not polyphonic?

TAGORE: Instruments are used, not for harmony, but for keeping time and adding to the volume and depth. Has melody suffered in your music by the imposition of harmony?

EINSTEIN: Sometimes it does suffer very much. Sometimes the harmony swallows up the melody altogether.

TAGORE: Melody and harmony are like lines and colors in pictures. A simple linear picture may be completely beautiful; the introduction of color may make it vague and insignificant. Yet color may, by combination with lines, create great pictures, so long as it does not smother and destroy their value.

EINSTEIN: It is a beautiful comparison; line is also much older than color. It seems that your melody is much richer in structure than ours. Japanese music also seems to be so.

TAGORE: It is difficult to analyze the effect of eastern and western music on our minds. I am deeply moved by the western music; I feel that it is great, that it is vast in its structure and grand in its composition. Our own music touches me more deeply by its fundamental lyrical appeal. European music is epic in character; it has a broad background and is Gothic in its structure.

EINSTEIN: This is a question we Europeans cannot properly answer, we are so used to our own music. We want to know whether our own music is a conventional or a fundamental human feeling, whether to feel consonance and dissonance is natural, or a convention which we accept.

TAGORE: Somehow the piano confounds me. The violin pleases me much more.

EINSTEIN: It would be interesting to study the effects of European music on an Indian who had never heard it when he was young.

TAGORE: Once I asked an English musician to analyze for me some classical music, and explain to me what elements make for the beauty of the piece.

EINSTEIN: The difficulty is that the really good music, whether of the East or of the West, cannot be analyzed.

TAGORE: Yes, and what deeply affects the hearer is beyond himself.

EINSTEIN: The same uncertainty will always be there about everything fundamental in our experience, in our reaction to art, whether in Europe or in Asia. Even the red flower I see before me on your table may not be the same to you and me.

TAGORE: And yet there is always going on the process of reconciliation between them, the individual taste conforming to the universal standard.

Rabindranath Tagore: In Conversation with H. G. Wells

Excerpted from: A Tagore Reader, edited by Amiya Chakravarty.
Tagore and H.G. Wells met in Geneva in early June, 1930. Their conversation is reported here.


TAGORE: The tendency in modern civilization is to make the world uniform. Calcutta, Bombay, Hong Kong, and other cities are more or less alike, wearing big masks which represent no country in particular.

WELLS: Yet don't you think that this very fact is an indication that we are reaching out for a new world-wide human order which refuses to be localized?

TAGORE: Our individual physiognomy need not be the same. Let the mind be universal. The individual should not be sacrificed.

WELLS: We are gradually thinking now of one human civilization on the foundation of which individualities will have great chance of fulfillment. The individual, as we take him, has suffered from the fact that civilization has been split up into separate units, instead of being merged into a universal whole, which seems to be the natural destiny of mankind.

TAGORE: I believe the unity of human civilization can be better maintained by linking up in fellowship and cooperation of the different civilizations of the world. Do you think there is a tendency to have one common language for humanity?



WELLS: One common language will probably be forced upon mankind whether we like it or not. Previously, a community of fine minds created a new dialect. Now it is necessity that will compel us to adopt a universal language.

TAGORE: I quite agree. The time for five-mile dialects is fast vanishing. Rapid communication makes for a common language. Yet, this common language would probably not exclude national languages. There is again the curious fact that just now, along with the growing unities of the human mind, the development of national self-consciousness is leading to the formation or rather the revival of national languages everywhere. Don't you think that in America, in spite of constant touch between America and England, the English language is tending toward a definite modification and change?

WELLS: I wonder if that is the case now. Forty or fifty years ago this would have been the case, but now in literature and in common speech it becomes increasingly difficult to distinguish between English and American. There seems to be much more repercussion in the other direction. Today we are elaborating and perfecting physical methods of transmitting words. Translation is a bother. Take your poems - do they not lose much by that process? If you had a method of making them intelligible to all people at the same time, it would be really wonderful.

TAGORE: Music of different nations has a common psychological foundation, and yet that does not mean that national music should not exist. The same thing is, in my opinion, probably true for literature.

WELLS: Modern music is going from one country to another without loss - from Purcell to Bach, then Brahms, then Russian music, then oriental. Music is of all things in the world most international.

TAGORE: May I add something? I have composed more than three hundred pieces of music. They are all sealed from the West because they cannot properly be given to you in your own notation. Perhaps they would not be intelligible to your people even if I could get them written down in European notation.

WELLS: The West may get used to your music.

TAGORE: Certain forms of tunes and melodies which move us profoundly seem to baffle Western listeners; yet, as you say, perhaps closer acquaintance with them may gradually lead to their appreciation in the West.

WELLS: Artistic expression in the future will probably be quite different from what it is today; the medium will be the same and comprehensible to all. Take radio, which links together the world. And we cannot prevent further invention. Perhaps in the future, when the present clamor for national languages and dialects in broadcasting subsides, and new discoveries in science are made, we shall be conversing with one another through a common medium of speech yet undreamed of.

TAGORE: We have to create the new psychology needed for this age. We have to adjust ourselves to the new necessities and conditions of civilization.

WELLS: Adjustments, terrible adjustments!

TAGORE: Do you think there are any fundamental racial difficulties?

WELLS: No. New races are appearing and reappearing, perpetual fluctuations. There have been race mixtures from the earliest times; India is the supreme example of this. In Bengal, for instance, there has been an amazing mixture of races in spite of caste and other barriers.

TAGORE: Then there is the question of racial pride. Can the West fully acknowledge the East? If mutual acceptance is not possible, then I shall be very sorry for that country which rejects another's culture. Study can bring no harm, though men like Dr. Haas and Henri Matisse seem to think that the eastern mind should not go outside eastern countries, and then everything will be all right.

WELLS: I hope you disagree. So do I!

TAGORE: It is regrettable that any race or nation should claim divine favoritism and assume inherent superiority to all others in the scheme of creation.

WELLS: The supremacy of the West is only a question of probably the past hundred years. Before the battle of Lepanto the Turks were dominating the West; the voyage of Columbus was undertaken to avoid the Turks. Elizabethan writers and even their successors were struck by the wealth and the high material standards of the East. The history of western ascendancy is very brief indeed.

TAGORE: Physical science of the nineteenth century probably has created this spirit of race superiority in the West. When the East assimilates this physical science, the tide may turn and take a normal course.

WELLS: Modern science is not exactly European. A series of accidents and peculiar circumstances prevented some of the eastern countries from applying the discoveries made by humanists in other parts of the world. They themselves had once originated and developed a great many of the sciences that were later taken up by the West and given greater perfection. Today,
Japanese, Chinese and Indian names in the world of science are gaining due recognition.

TAGORE: India has been in a bad situation.

WELLS: When Macaulay imposed a third-rate literature and a poor system of education on India, Indians naturally resented it. No human being can live on Scott's poetry. I believe that things are now changing. But, remain assured, we English were not better off. We were no less badly educated than the average Indian, probably even worse.

TAGORE: Our difficulty is that our contact with the great civilizations of the West has not been a natural one. Japan has absorbed more of the western culture because she has been free to accept or reject according to her needs.

WELLS: It is a very bad story indeed, because there have been such great opportunities for knowing each other.

TAGORE: And then, the channels of education have become dry river beds, the current of our resources having been systematically been diverted along other directions.

WELLS: I am also a member of a subject race. I am taxed enormously. I have to send my check - so much for military aviation, so much for the diplomatic machinery of the government! You see, we suffer from the same evils. In India, the tradition of officialdom is, of course, more unnatural and has been going on for a long time. The Moguls, before the English came, seem to have been as indiscriminate as our own people.

TAGORE: And yet, there is a difference! The Mogul government was not scientifically efficient and mechanical to a degree. The Moguls wanted money, and so long as they could live in luxury they did not wish to interfere with the progressive village communities in India. The Muslim emperors did not dictate terms and force the hands of Indian educators and villagers. Now, for
instance, the ancient educational systems of India are completely disorganized, and all indigenous educational effort has to depend on official recognition.

WELLS: "Recognition" by the state, and good-bye to education!

TAGORE: I have often been asked what my plans are. My reply is that I have no scheme. My country, like every other, will evolve its own constitution; it will pass through its experimental phase and settle down into something quite different from what you or I expect.

Interview with the famous Economist

*BIG DOGS EAT FIRST: THE FALSE ECONOMICS OF ELECTRICITY DEREGULATION—AN INTERVIEW WITH DR. EUGENE P. COYLE, ENERGY ECONOMIST*
An Interview with Dr. Eugene P. Coyle, Energy Economist,

Interviewed by Dan Berman, Ph.D., November 28, 2001.

Copyright © 2001 by Dan Berman & Eugene P. Coyle.
San Francisco, October 20, 2001

DB: How did you get interested in public power? It is not a common interest among economists.

EPC: As a young man I was a member – and still am, technically -- a member of the International Brotherhood of Boilermakers, the union that builds power plants. I worked on a couple of power plants being built in New Jersey.

I studied economics in college and then went into the USAF. First as an Aviation Cadet, going through flight school. I went through jet fighter school and later helicopter school.

After the service, and some commercial flying, I worked on Wall Street, picking stocks of utility companies to buy. I worked for Brown Brothers Harriman & Company, a powerful private bank. Prescott Bush, the father of George Bush the First was a partner and a US Senator at the same time. Averill Harriman, Special Ambassador under Kennedy and Johnson, was a partner.

Clients of Brown Brothers owned a lot of stock in utility companies, so I could easily call on the CEOs of utility companies I was considering for investment. Later I went to grad school in economics.

DB: So you talked with the CEOs of utility companies around the United States?

EPC: Yes, and because our clients owned a lot of stock, the officers were quite frank with me. I learned a lot about their strategic thinking at that time. I wrote articles for the bank's investment letters on investment prospects and on the bond market.

The insights I got led me to write my dissertation entitled /THE THEORY OF INVESTMENT OF THE REGULATED* */FIRM*/./* I think it is still the best theoretical work on how regulated utilities behave.

* *

*/*/*/Interviewed by Dan Berman, Ph. D., co-author (with John T. O’Connor) of WHO OWNS THE SUN? PEOPLE, POLITICS, AND THE STRUGGLE FOR A SOLAR ECONOMY*. *This interview will be posted under “Coyle” at www.publicpowernow.org <http://www.publicpowernow.org/>, an on-line magazine, along with other recent writings and testimony./

DB: Were you always going to pursue the subject of utilities?

EPC: No. My dissertation was really in economic theory -- in the context of electric power. I guess I thought of myself as a micro-economic theorist. But when the first oil crisis hit I called up Sylvia Siegel, to ask her to help me with a project in Berkeley.

DB: Who is Sylvia Siegel?

EPC: Sylvia is the woman who founded TURN, the California group still representing consumers in utility matters. Very witty and a lot of fun. She had great strategic insights and understood the issues at a deep level. She's a genius at media and communications. She's retired now.

DB: Did she help you with your project?

EPC: Anybody who knows Sylvia knows I ended up helping her, rather than the other way around. I worked with her at TURN, which at that time was really just Sylvia and a post office box.

I knew as much about utilities as anybody in the country outside of the utilities themselves at that time, and of course the energy crisis made that a hot area. My work on the first California rate case of that era, in 1974, was the economic piece of getting the CPUC to adopt what are now called "Baseline rates." I quickly became well known around the US and that launched my consulting career.

DB: When you finished your Ph.D. at Boston College, where did you go to work?

EPC: What I learned at my first teaching job is really an important part of my education. I taught at a Catholic women's college in Boston, Emmanuel College. I had just learned all the elegant theory that every other micro-econ student learns. I was a little older than the typical new Ph.D. because I'd worked on Wall Street, been in the service, and flown as a commercial pilot for a couple of years.

I loved the elegance of the theory, but because I'd seen a lot of the world, working with the Boilermakers, in the Air Force in Asia and flying in South America, I knew the theory didn't have much relevance to the economy. But that kind of economics was all I had been taught, all I knew.

I started teaching these very bright women what I had been taught. I was drawing the curves on the blackboard like every other economist is still doing, After a few weeks of class the students -- this was at the time of the Vietnam War and the Civil Rights struggles -- the students said "We are not willing to listen to this stuff. We want to learn about the economy." Students were very militant around Boston in those days and I was in big trouble. I said, "Well, gee, this is all I know." Me with a Ph.D.! And the students very generously said, "Well, if that's all you know, you can do that; but let's see if we can learn something about the economy too." And so I embarked on learning economics. My dissertation was an attempt to move in the right direction, but without those women I might never have broken away from the economics with no content still taught in every economics department.

DB: You just wrote a fascinating study called /PRICE DISCRIMINATION, ELECTRONIC REDLINING AND PRICE FIXING IN DERGEULATION ELECTRIC POWER/. You say that electric deregulation can't work for small businesses and residential consumers. Can you explain why?

EPC: Electric power has a cost structure that makes it different from some other industries. There is a huge upfront cost to building a power plant. A large new power plant is hundreds of millions of dollars. Once you've laid out that kind of money, you have to run that plant full time and sell as much as you can. You sell as much as possible at a high price and then to keep the plant running full tilt you sell at a lower price to everyone else. By selling all the output possible -- we call it running at a high capacity factor -- you can spread the fixed costs of the plant over the maximum number of kilowatt -hours.

It is what the airlines do -- sell the business customers high-priced tickets and then fill the plane with leisure travellers for whatever they will pay. Even a few dollars is better than getting nothing from an empty seat. It is the cost structure that makes them do that. If the plane leaves the gate with an empty seat they'll get nothing. They are better off selling a vacationer a cheap ticket -- as long as they can keep the business flyer from getting the cheap ticket too.

You see the pharmaceutical companies doing the same thing right now. They spend a lot on research but actually manufacturing the pill costs almost nothing. They sell AIDS drugs here for $10,000 per patient per year. It only costs them maybe 50 cents to make that pill. So the cost of a daily pill, is 365 times 50 cents, or $182.50, rather than $10,000.00.

But in Brazil and South Africa the governments said "Wait a minute. People are dying. We can make the stuff ourselves for 50 cents per day per patient, the formula is in the literature." The drug companies were under heavy pressure, both political and moral. They agreed to sell at a lower price as long as the governments didn't break their patents. The only thing they wanted to be sure of was that the low-priced AIDS drugs from Brazil didn't get back here to undercut their market.

And the anthrax scare brings out another example. Bayer, the manufacturer of Cipro, was charging a high price. Canada said "Ok, we'll ignore the patent and let a generic company supply us." Then the U.S. made similar threats and Bayer cut the price almost in half. It was better for Bayer to do that then have the whole patent system go down. Now the rest of the world is asking the United States why it was so tough in helping the drug companies against Brazil and South Africa and quickly changed positions when it needed cheap Cipro.

DB: I want to be sure to understand you. Tie this back to electricity for me.

EPC: Well, an unregulated power plant has to find enough of a market in order to run at a high capacity factor. Let's say it spreads the total costs equally over each unit of sales -- selling at what we call the average cost of production. It might not get enough sales at that price to run at full capacity. If it fell short, then each unit would have to be priced even higher, to spread the overhead costs. The better way is what the airlines have been doing. Find some customers to pay more than the average price, and then fill out the sales to somebody else who will fly only if the price is low.

DB Ok, but with the airlines the small customer gets the breaks. Why won't that happen in electricity?

EPC With the airlines the business customer has to make the trip and doesn't want to be on the road over the weekend. That's why the airlines required a Saturday night stay. Leisure travelers will fly if the price is attractive, but can always choose to drive or stay home if the price seems too high.

In electricity it’s the other way around. Electricity is a necessity for the small business and residential customers; and they have limited options to generate their own power, to switch fuels, and so on. They are captive customers. The big customers have some options such as switching fuels, or building their own power plant. So the small customers will be gouged and the big customers will get the low prices.

It isn't that the airlines like small customers better and give them a break. And it isn't that power plant owners are just out to gouge small customers. Each of them is driven by cost structure and by what economists call the customer's elasticity of demand.

DB So you are saying that no matter what else restructuring does, small business and residential customers are going to be hurt.

EPC Yes, there is no way around it. To be profitable they will have to discriminate, and the target of the price discrimination will be customers who don't have alternatives.

DB The experience of California in the last year and a half seems to indicate that there is something dreadfully wrong with restructuring. I mean besides discrimination against small customers. How would you fix that?

EPC Electricity is an industry which has to be regulated in some way. Besides the cost structure problem, which itself is a major one for an industry providing an essential service, there are the issues of reliability and safety. The market doesn't ensure that there will be enough generating capacity to serve the public. The market doesn't do what the public wants with respect to clean energy. For both reliability and green or clean power this industry has to be planned. For safety they can't be allowed to keep cutting jobs.

DB Don't unregulated businesses plan?

EPC They plan, but in the interest of the owners, not the public interest. In terms of electric reliability it is in the owner's interest to be short of capacity, to keep the price high, so reliability is threatened.

We are not going to get reliable power, we're not going to get clean power, we're not going to get green power unless it's through public ownership or strong regulation.

DB Most economists seemed to me to be in favor of deregulation. They believe in the market and think it will fix everything, not just electricity. Isn't that the conventional wisdom among the big name economists? Are they paid off by people who hope to make a fortune from deregulated electricity?

EPC It is actually much worse than that. Of course there is a lot of money to be made by consulting for companies pushing deregulation but the problem is much more serious than that. Economists are trained to believe only one thing, which is that if you let the market set the price everybody will be better off.

The problem is deep in the universities, where the belief in the market is passed on in spite of the obvious flaws that we see everyday. Poverty, pollution, homelessness, racial discrimination, lower pay for women. Economists are trained to say, and worse, to believe, that you can assume that those problems aren't related to the economy.

This summer there was a paper given at Jackson Hole, Wyoming, where all the highest muck-a-mucks of finance and economics gather every year to discuss the world's problems. Two of the biggest names in economics wrote a paper together where they said the market does a magnificent job of producing economic welfare. They put in parenthesis "(if the initial distribution of wealth is satisfactory)". That is a mighty big "if." We know most of the wealth in this country is concentrated in very few hands, and that many have little or nothing in terms of assets. Many families have negative net worth, and even people who own their homes might owe more on credit cards than the equity in the house. But economists assume that we all are on a par. Then they can show, with equations and graphs, that the market works.

That Jackson Hole paper is just a handy example. It is more than you usually get in plain language from an economist. But economists make many more assumptions that also fly in the face of reality. And those assumptions are key to their beliefs.

DB I hear rumors about some of the stars getting $5,000 for a speech at a luncheon. Don't you think that influences them?

EPC Well, all the big consulting money comes from the big players. But I think there is a more important problem with economists. Most of them will say the market works better than public regulation, public planning, public control. And they are taught that, and in turn teach the next generation.

DB If the economics is so wrong, why aren't they challenged?

EPC They are. Some really big names have come out with serious challenges over the years -- John Maynard Keynes, John Maurice Clark, some real purists out of the University of Chicago. It doesn't make a dent. It is partly the same problem that I had when my students challenged me -- I didn't know what else to say. But the biggest thing is that the economics departments in our leading universities -- and all the ones with less prestige that follow along -- the departments drive out dissent. They only teach one school of economics, what is called "marginalism" or "neo-classical" economics.

There is currently a big student revolt in France which has the government looking at what is taught in economics. Now it is spreading to other countries. 27 Ph.D. candidates at Cambridge University in England wrote a letter demanding a wider view of the world. I think the fact that the 27 students put their letter out anonymously says a lot about the state of things. This student revolt is spreading world wide. They are demanding a new economics which they very descriptively call "Post-Autistic Economics."

DB Well, if big name economists point out the flaws, as you are claiming, why don't the flaws get corrected? Why do we have to have_ One Market Under God_, to use the title of the recent book by Thomas Frank?

EPC I read a very clear explanation of that recently, I think it was in the latest "Post-Autistic Economics" newsletter. Someone was quoted as saying that economists keep two sets of books. One set is for students, journalists and legislators where the economists talk about perfect competition and the glories of the market. The other set is used when they are challenged, and they say, "Yes, we know there isn't perfect competition, we know the wealth isn't distributed fairly, there are flaws in the analysis, but we are writing articles about all that." They are always giving bad advice but then claim that in "rigorous scholarship" they get it right.

It leads to bad policy and provides cover for politicians intent on doing the wrong thing. But that's what’s going on in the leading universities. And almost all the rest.

Let me just add one thing. The effect of this sort of economics in our graduate schools drives out the best students. The best students think "This isn't about the economy, this isn't why I wanted to learn economics." And they leave economics. The students who get caught up in the elegance of the theory, no matter how irrelevant to people and the economy -- they stay and become professors. So it gets perpetuated, generation after generation. I got caught up in that elegance myself but luckily got free of it, as I talked about earlier.

DB So you are thanking those brilliant young Catholic women at Emmanuel College in Boston for helping you break out of that strait-jacket?

EPC Yes, they straightened me out.

DB It seems to me that the question of cost structure of electric power is the key to how your analysis differs from a lot of the economists who extol the market, who pray to the God of the market. Is that right?

EPC Yes, it is a key part of it. I think on Wall Street people look at actual industries and how they operate. Economists look at curves and think about how companies would operate if the companies conformed to the curves.

DB Are you the first person to see the importance of cost structure?

EPC Wow! No, I'm just copying a century of famous economists who have understood this.

DB Well who are these, and if they are so famous why doesn't that get taught in the universities?

EPC You went to Yale University didn't you? We can go back to an economist who became the president of Yale University in the early part of the 20^th Century, A. T. Hadley. There were others before him, but he was a prominent American. In the 1920s John Maurice Clark of Columbia University, and a leading economist, wrote a very well known book, _Studies in the Economics of Overhead Costs_. I mentioned Keynes earlier. In my own monograph I cited Lester Telser of the University of Chicago and a bunch of economists following him who are active right now. And then I mentioned before a paper given at Jackson Hole this year. That was by Larry Summers, former Secretary of the Treasury and now the President of Harvard and Brad DeLong of UC Berkeley. It's amusing that the President of Yale discovered this in 1896 and the President of Harvard re-discovered it in 2001.

DB OK, so there's a long list, a long history of economists that you've learned from. But why isn't this taught in the universities?

EPC Well, that's a very complex question in the history of economics. But I think the main reason is that it cuts the legs right out from under worship of the market. It smashes the idol in the temple.

DB Go back to that Jackson Hole paper you've mentioned a couple of times. Was that about electric power?

EPC Summers and DeLong, the authors, described in the paper what people are calling "the _new_ natural monopolies." Stress on the word "new." They want to talk about how industries like pharmaceuticals and software have to have a monopoly to be profitable. It is the cost structure of drug and software companies that they rely on for the conclusion. Those industries have large costs up front -- overhead costs, or fixed costs --- which put them in the category of "new natural monopolies." But that's the same cost structure that is the reason for the old natural monopolies -- like electric power. But to answer your question, they never mention electric power.

DB So your argument is that electric generation is still a natural monopoly because of its cost structure, and because of that it needs to be publicly controlled, either through public ownership or regulation. Have I got that right?

EPC Yes.

DB Let's talk about public ownership for a minute. I happened to have a discussion on KPFA with Severin Borenstein of the University of California Energy Institute. And I brought up the fact that in 1998 the 18 public power entities in Northern California sold $1.5 billion worth of electricity for an average price of 7.64 cents per kilowatt-hour. PG&E sold $7.0 billion worth of electricity at 9.29 cents per kilowatt-hour. I ran this number by professor Borenstein and asked him "Do you study this phenomenon? Do you study the fact that public power entities, which are democratically governed, actually deliver power for a lower price? And do you work that into your theoretical model?

And he replied "We don't study that."

A month or two later, in the spring of 2001, he gave a talk at the California Public Utilities Commission. He was asked the same questions and once again he said it wasn't something his Institute studied, and that perhaps this was a discussion for another time.

I'm wondering how we break into this closed system with what we are calling our "new" paradigm, which is really as old as the hills? Do you have any suggestions?

EPC I think the solution is political. Electric power, because it is a necessity for modern life, is a political problem for the public. Bills are going up, service is getting poorer, reliability is down. People have to run grassroots campaigns, all over the country, to either get regulation back in place or form new public power utilities. To do both really. We can't expect economists and the universities to lay out an analysis to get there. It is time for people to express what they want -- cheap, clean, reliable electricity.