Conversations with Tyler: A Special Conversation with Nicholas Copernicus, Adam Smith, and William Stanley Jevons

I was feeling impish this morning, so I gave Claude 4.6 Sonnet (Medium) the following prompt:

Back in the 20th century Steve Allen did a series of TV shows called “Meeting of Minds,” where people from different time periods were brought together to have a discussion. I want you to imagine a special episode of “Conversations with Tyler” in which Tyler Cowen moderates a discussion between Copernicus, Adam Smith, and Stanley Jevons on economics. For reference I have placed three documents in the project folder. Two books by Tyler Cowen, one on marginalism and the other on the Great Economists (GOAT), which has material on Adam Smith.. There’s a shorter document by Copernicus (in Latin), filename, “Copernicus on economics.”

I’ve appended its response below the entirely imaginary Five TC Bucks note. Click on the image to see the detail. Note that ChatGPT did the image, not Claude.

Conversations with Tyler: A Special Episode
Tyler Cowen in Conversation with Nicholas Copernicus, Adam Smith, and William Stanley Jevons

[Recorded live at the Mercatus Center, George Mason University. The set is the standard one — a small round table, minimal lighting, no audience. Tyler Cowen sits across from three guests who have, for the purposes of this episode, been freed from the constraints of mortality and non-overlapping centuries. Copernicus speaks through a translator when needed, though he proves surprisingly comfortable in English, given how many languages he actually commanded. Smith retains his Edinburgh-via-Kirkcaldy cadence. Jevons is precise, energetic, and fidgets with what appears to be a small logometer.]

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TYLER: So let me start with something that might seem unfair to Nicholas, but I think actually redounds to his credit. Tyler Cowen — the other Tyler Cowen, me — has written that astronomers of the sixteenth century were sometimes better economists than the economists of the same period, because there essentially were no economists. And that you, Nicholas, were one of the first people to state the quantity theory of money. Now here's my question: did you think of yourself as doing economics, or did you think of yourself as solving a political crisis?

COPERNICUS: The distinction you draw would not have occurred to me. I was asked by the Diet of Prussia — by the princes, by the king's administrators — to address a practical emergency. The currency of this land had been debased so many times, by so many hands, in so many mints, that commerce had ceased to function in any stable way. The goldsmiths prospered — they were the only ones who could extract the silver from the degraded coin before the next debasement arrived. Everyone else suffered. So yes, I was solving a political crisis. But a crisis requires a theory, or you are merely thrashing. You cannot prescribe a remedy for a disease you have not diagnosed.

TYLER: And your diagnosis was what exactly?

COPERNICUS: That money is a mensura — a measure. It is like a unit of length or weight. If your ulna varies from day to day, you cannot do carpentry. If your currency varies in its silver content from month to month, you cannot do trade. The injury to commerce is the same in both cases, but the monetary injury is more insidious because it proceeds occulta quadam ratione — by a kind of hidden logic. People notice a bad harvest immediately. They do not immediately notice that the coin has been shaved, but they feel its effects: prices rise, foreign merchants refuse your money, the best craftsmen leave for regions with sounder currency.

SMITH: If I may — this is exactly the confusion I spent considerable effort untangling in Wealth of Nations when I took on the mercantilists. They believed that the accumulation of specie was wealth. What Canon Copernicus is describing from his Prussian experience is that even that modest goal — hoarding silver — is self-defeating. The moment you debase the coinage, you have, in a sense, exported your silver to every foreign merchant clever enough to melt the coins.

COPERNICUS: Precisely. The goldsmiths and those who know the quality of metals — they are the only beneficiaries. They collect the old coin, extract the silver, sell it at a premium, and leave behind a pile of copper. My recommendation was blunt: stop minting until the existing coin has restored its value, establish at most two mints for all of Prussia, and make the coin of one mint and one standard.

TYLER: Gresham's Law, essentially, before Gresham.

COPERNICUS: Before whom?

TYLER: Thomas Gresham. He gets credit for the principle that bad money drives out good. Roughly a generation after you stated it.

COPERNICUS: (pause) This is the way of things. Copernicus waits for Copernicus. In astronomy as in monetary theory.

JEVONS: I want to press on the word "measure," if I may. Canon Copernicus treats money as a standard — a fixed reference against which goods are priced. But what I discovered, or rather what I was forced to discover when trying to establish whether the value of gold had actually fallen after the Australian and Californian gold rushes of the 1850s, is that money itself has no fixed value. It is itself a commodity whose degree of utility — whose marginal utility, to use the language I was then working out — varies with its quantity. The quantity theory you describe is already implicit in this: flood the market with debased coin, and each unit of coin buys less, not merely because there is more of it, but because its intrinsic silver content is lower and everyone knows it.

COPERNICUS: I will not quarrel with the analysis, though your language differs from mine. What I found is that the regions of Prussia which had maintained good currency were also the regions with flourishing workshops, skilled artisans, and abundant goods. The regions with debased currency had become idle. You say this is because the marginal utility of a sound currency is higher. I say it is because craftsmen and merchants are not fools: they will go where their labor and their goods are honestly compensated. 

[I wonder what Copernicus actually understood by the phrase, "marginal utility"?] 

TYLER: Adam, let me come to you here. Smith, you spent a great deal of Wealth of Nations attacking mercantilism — the view that national wealth consists in the accumulation of precious metals. But you also granted mercantilists more credit than many of your defenders are comfortable with. You said their arguments were "partly solid and partly sophistical." What did you actually concede to them?

SMITH: What I conceded is that commerce and defense are entangled in ways that pure theory does not capture cleanly. The Navigation Acts — requiring that trade to Britain's colonies be carried in British ships — were bad economics by almost any reckoning. They raised prices, restricted trade, enriched a narrow set of interests at the expense of the broader public. But I wrote, and I meant it, that defense is of more importance than opulence, and that the Navigation Acts, whatever their economic defects, had served to maintain British naval power. One cannot always afford the luxury of consistent principle. (small smile) Though I tried to be consistent as often as possible.

TYLER: Jevons, here is a question directed at you specifically: why did it take from roughly 1776, the publication of Wealth of Nations, until 1871, the publication of your Theory of Political Economy, for economics to absorb the idea that value is determined at the margin — by the last unit, not the total quantity? Smith understood the diamonds-water paradox but did not resolve it. You resolved it. What took so long?

JEVONS: I have thought about this a great deal, and I believe the answer is that the resolution required mathematics, and economics had declined to use mathematics, or rather had not yet learned that it could use mathematics. The idea that utility diminishes with quantity is not — once stated — particularly obscure. Galileo came close to it. My precursors in the British literature, Jennings and MacLeod, came close to it. But close is not enough. You need to be able to state the law precisely, apply it to a schedule, differentiate, and find the first-order conditions. You need calculus, or at least the habit of mind that calculus cultivates. Once I had that tool in hand, the whole of exchange theory reorganized itself very quickly. I felt it opening up.

COPERNICUS: The mathematization of the heavens required the same threshold. Ptolemy had constructed an elaborate system that worked — it predicted the positions of the planets with reasonable accuracy — but it was an apparatus of epicycles, each added to correct the last. What Copernicus — what I — did was not primarily add new observations. I reorganized the picture from the center outward, and the mathematics became enormously simpler. The complexity was in the old system, not in nature.

SMITH: I wonder if the analogy holds as well as it might appear. In astronomy, you can check your mathematics against the positions of stars. There is a fact of the matter to which the mathematical framework must answer. In economics — and this is perhaps a weakness in my own work, which I will admit without too much prompting — the phenomena are so entangled with human will, custom, law, and history that a mathematically elegant theory may answer to nothing real at all. I had no mathematics to speak of in Wealth of Nations, and I am not sure I missed it.

JEVONS: With respect, Mr. Smith — and I have the greatest respect for your work, which I began reading as a young man in Liverpool — the difficulty you identify is precisely the reason mathematics is necessary and not merely decorative. Without measurement, without indices, without the ability to track the variation of prices over time, we are trading opinions about opinions. My work on price index numbers — computing the fall in the value of gold since the Australian rushes, using a geometric mean rather than an arithmetic mean to correct for errors in the data — that is not an optional supplement to economic reasoning. It is the only way to know whether we are right.

TYLER: Let me push on something you just said, which is very Cowenian in a certain way. You discovered what we now call the Jevons Paradox: that improvements in the efficiency of coal use, rather than reducing coal consumption, tend to increase it, because cheaper effective energy stimulates more demand for energy. This came up again in January 2025 — a hundred and sixty years after your original analysis — when DeepSeek released a large AI model that required far fewer chips to run than comparable systems, and the question immediately arose: would this reduce the demand for chips, or increase it, through the same mechanism? 

[Hmmm...For all its cleverness, it doesn't seem to have occurred to Claude that the others wouldn't have the faintest idea what the last half of that paragraph is about. Still, as Richie Brockelman would say, "What the hey!"]

JEVONS: (leaning forward) And?

TYLER: And the answer appears to be: increase it. Microsoft's chief executive said so within hours. The demand for AI services will expand to absorb the new efficiency.

JEVONS: I would have predicted exactly that. And I will say something that may be uncomfortable: the same mechanism applies to this conversation. If you make a discovery cheaper to transmit — through printing, through journals, through the kind of instantaneous publication that I imagine now exists — you do not reduce the production of ideas. You increase it, and you increase the amount of bad ideas along with the good. There is a quantity theory of scholarship: flood the market, and each unit of analysis is worth somewhat less.

SMITH: (dryly) I observed something similar about the professoriate when I wrote about the incentives for university teaching. Endow a chair and remove the teacher's dependence on student fees, and you reduce the incentive to teach well. You have, in a sense, debased the educational currency.

COPERNICUS: Then we have been discussing the same thing for some time under different names.

TYLER: Here is a question I would put to all three of you, because I think it tests something important. Adam, in Wealth of Nations you worried that the division of labor — the very force that drives economic growth — also produces workers who are, in your phrase, "mutilated" by their specialization. Stupid and ignorant in everything but their narrow task, lacking in martial virtue, incapable of the broader civic life. Jevons, you believed economics was on the verge of becoming a fully mathematical science, which is a form of extreme specialization. Nicholas, your great work required that you step outside the consensus of your field entirely. So: is specialization a blessing or a trap?

SMITH: Both, simultaneously, which is a deeply unsatisfying answer that I nonetheless believe is correct. The division of labor is the engine of everything — every increase in material well-being since the pin factory, every machine invented to save the labor of a boy who would rather play than open and close valves. You cannot have it without the costs. My suggestion — and it was a serious suggestion, though sometimes treated as an afterthought — was that the state had a genuine obligation to provide education for the laboring classes, precisely to counteract the narrowing effects of market specialization. The market would not solve this problem itself; the market is the cause of it.

JEVONS: I think the concern is somewhat overstated, or rather, misdirected. The danger is not specialization per se but specialization without adequate foundations. A chemist who knows no physics will make errors that a broader education would prevent. What I found, in my own career, is that the willingness to move across domains — from chemistry to meteorology to logic to economics — is itself a cognitive habit, a trained disposition, that cannot be reduced to any single specialty. The generalist instinct can coexist with deep technical mastery. I built a logic machine and I also worked on sunspot cycles and business cycles, and I do not think I was impoverished by either.

COPERNICUS: In my case the matter was somewhat different. The consensus of my field — that the Earth sits at the center of the heavens — was wrong. Specialization had produced a community of scholars deeply expert in the wrong framework. My Commentariolus, the brief sketch I circulated in manuscript before the De revolutionibus, was in some sense an act of heresy against the specialists. The generalist reading I had done — in Greek astronomy, in Pythagorean philosophy, in the mathematics of the Arabs — gave me a vantage point that no pure specialist could occupy. I would say the lesson is: accumulate your specialty, but keep one window open to the outside, because sometimes the view from inside is simply false.

TYLER: Final question, and I will put it to each of you in turn. If you were an economist today — working in the current period, with access to large datasets, machine learning, the kinds of tools that now exist — what would you work on?

COPERNICUS: Currency. The problems I faced in Prussia have not disappeared; they have generalized. You have created monetary systems of extraordinary complexity and abstraction, and the underlying question — what is this unit of account actually measuring, who controls its debasement, and who profits from that control — remains as live as it was in 1517. Your digital currencies, your central bank experiments, your inflations and deflations — these are the same disease in new clothing. I would study the political economy of monetary corruption. I would name names.

SMITH: I would work on the education problem. Not because I lack imagination, but because it has become more urgent, not less. The division of labor now extends to cognitive work in ways I could not have anticipated, and the question of what kind of human being the economy produces — not just what goods it produces — strikes me as the central question. You have instruments now that could actually measure whether people are becoming more or less capable of governing themselves, of exercising judgment, of participating in civic life. I spent twenty years as a professor, and I cared deeply about those questions. I would return to them.

JEVONS: I would work on the Jevons Paradox in its modern forms. Energy, computation, intelligence itself — each efficiency gain appears to produce a rebound in consumption that exceeds the original saving. We do not understand the dynamics of this well enough. At what rate does the rebound exhaust the efficiency? Are there goods for which the paradox does not hold? What are the implications for policy? And I would insist on doing this with the best available index numbers, which is to say with extreme care about what exactly we are measuring and how the errors compound. The mistake is always to believe that because you are measuring, you are right.

TYLER: Nicholas Copernicus, Adam Smith, William Stanley Jevons — thank you. This has been a Conversations with Tyler special episode.

(Copernicus nods, turns to his two companions, and appears to say something in Latin. Smith laughs. Jevons immediately reaches into a coat pocket and produces a notebook.)

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Conversations with Tyler is produced by the Mercatus Center at George Mason University. This special episode was sponsored by no one in particular, which is, as Adam Smith would note, itself a form of invisible hand.