Alex Tabarrok

In Utah v. Strieff, the Supreme Court has again weakened Fourth Amendment rights. The Sotomayor and Kagan (joined by Ginsburg) dissents are excellent and important. Sotomayor summarizes the basic issue in the case:

The Court today holds that the discovery of a warrant for an unpaid parking ticket will forgive a police officer’s violation of your Fourth Amendment rights. Do not be soothed by the opinion’s technical language: This case allows the police to stop you on the street, demand your identification, and check it for outstanding traffic warrants—even if you are doing nothing wrong. If the officer discovers a warrant for a fine you forgot to pay, courts will now excuse his illegal stop and will admit into evidence anything he happens to find by searching you after arresting you on the warrant. Because the Fourth Amendment should prohibit, not permit, such misconduct, I dissent.

If outstanding warrants were few and far between and distributed more or less randomly the case would have been wrongly decided but of little practical importance. Outstanding warrants, however, are common and much more common in some communities than others. As I wrote in 2014, in Ferguson, MO a majority of the population had outstanding warrants and not because of high crime:

You don’t get $321 in fines and fees and 3 warrants per household from an about-average crime rate. You get numbers like this from bullshit arrests for jaywalking and constant “low level harassment involving traffic stops, court appearances, high fines, and the threat of jail for failure to pay.”

Sotomayor and Kagan understand all this and the incentives the case now creates for bad policing. Here’s Kagan (who cites some of my work):

…far from a Barney Fife-type mishap, Fackrell’s seizure of Strieff was a calculated decision…As Fackrell testified, checking for outstanding warrants during a stop is the “normal” practice of South Salt Lake City police….And find them they will, given the staggering number of such warrants on the books.

…The majority’s misapplication of Brown’s three-part inquiry creates unfortunate incentives for the police— indeed, practically invites them to do what Fackrell did here….Now the officer knows that the stop may well yield admissible evidence: So long as the target is one of the many millions of people in this country with an outstanding arrest warrant, anything the officer finds in a search is fair game for use in a criminal prosecution. The officer’s incentive to violate the Constitution thus increases: From here on, he sees potential advantage in stopping individuals without reasonable suspicion—exactly the temptation the exclusionary rule is supposed to remove.

Sotomayor is at her most scathing in explaining the indignity and serious consequences of an arrest even without a conviction (citations removed for clarity):

The indignity of the stop is not limited to an officer telling you that you look like a criminal. The officer may next ask for your “consent” to inspect your bag or purse without telling you that you can decline. Regardless of your answer, he may order you to stand “helpless, perhaps facing a wall with [your] hands raised.” If the officer thinks you might be dangerous, he may then “frisk” you for weapons. This involves more than just a pat down. As onlookers pass by, the officer may “‘feel with sensitive fingers every portion of [your] body. A thorough search [may] be made of [your] arms and armpits, waistline and back, the groin and area about the testicles, and entire surface of the legs down to the feet.’”

The officer’s control over you does not end with the stop. If the officer chooses, he may handcuff you and take you to jail for doing nothing more than speeding, jaywalking, or “driving [your] pickup truck…with [your] 3-year-old son and 5-year-old daughter…without [your] seatbelt fastened.” At the jail, he can fingerprint you, swab DNA from the inside of your mouth, and force you to “shower with a delousing agent” while you “lift [your] tongue, hold out [your] arms, turn around, and lift [your] genitals.” Even if you are innocent, you will now join the 65 million Americans with an arrest record and experience the “civil death” of discrimination by employers, landlords, and whoever else conducts a background check. And, of course, if you fail to pay bail or appear for court, a judge will issue a warrant to render you “arrestable on sight” in the future.

…[all of this, AT] implies that you are not a citizen of a democracy but the subject of a carceral state, just waiting to be cataloged.

Newspaper headlines trumpeted that the middle class is shrinking but to a large extent that is because people are moving into the upper middle class not because they are getting poorer. By one measure, the middle class has shrunk from 38% of the US population in 1980 to 32% today but at the same time the upper middle class has grown from 12% to 30% of the population today.

Josh Zumbrun at the WSJ has an excellent piece on new research from the (liberal-leaning) Urban Institute and elsewhere:

upper middle

There is no standard definition of the upper middle class. Many researchers have defined the group as households or families with incomes in the top 20%, excluding the top 1% or 2%. Mr. Rose, by contrast, uses a more dynamic method similar to how researchers calculate the poverty rate, which allows for growth or shrinkage over time, and adjusts for family size.

Using Census Bureau data available through 2014, he defines the upper middle class as any household earning $100,000 to $350,000 for a family of three: at least double the U.S. median household income and about five times the poverty level. At the same time, they are quite distinct from the richest households. Instead of inheritors of dynastic wealth or the chief executives of large companies, they are likely middle-managers or professionals in business, law or medicine with bachelors and especially advanced degrees.

Smaller households can earn somewhat less to be classified as upper middle-class; larger households need to earn somewhat more.

Mr. Rose adjusts these thresholds for inflation back to 1979 and finds the population earning this much money has never been so large. One could quibble with his exact thresholds or with the adjustment that he uses for inflation. But using different measures of inflation, or using higher income thresholds for the upper-middle class, produces the same result: substantial growth among this group since the 1970s.

Ban the box policies forbid employers from asking about a criminal record on a job application. Ban the box policies don’t forbid employers from running criminal background checks they only forbid employers from asking about criminal history at the application/interview stage. The policies are supposed to give people with a criminal background a better shot at a job. Since blacks are more likely to have a criminal history than whites, the policies are supposed to especially increase black employment.

One potential problem with these laws is that employers may adjust their behavior in response. In particular, since blacks are more likely than whites to have a criminal history, a simple, even if imperfect, substitute for not interviewing people who have a criminal history is to not interview blacks. Employers can’t ask about race on a job application but black and white names are distinctive enough so that based on name alone, one can guess with a high probability of being correct whether an applicant is black or white. In an important and impressive new paper, Amanda Agan and Sonja Starr examine how employers respond to ban the box.

felony-ban-the-boxjpg-4cf5965f1e8f84ed_largeAgan and Starr sent out approximately 15,000 fake job applications to employers in New York and New Jersey. Otherwise identical applications were randomized across distinctively black and white (male) names. Half the applications were sent just before and another half sent just after ban the box policies took effect. Not all firms used the box even when legal so Agan and Starr use a powerful triple-difference strategy to estimate causal effects (the black-white difference in callback rates between stores that did and did not use the box before and after the law).

Agan and Starr find that banning the box significantly increases racial discrimination in callbacks.

One can see the basic story in the situation before ban the box went into effect. Employers who asked about criminal history used that information to eliminate some applicants and this necessarily affected blacks more since they are more likely to have a criminal history. But once the applicants with a criminal history were removed, “box” employers called back blacks and whites for interviews at equal rates. In other words, the box leveled the playing field for applicants without a criminal history.

Employers who didn’t use the box did something simpler but more nefarious–they offered blacks fewer callbacks compared to otherwise identical whites, regardless of criminal history. Together the results suggest that employers use distinctively black names to statistically discriminate.

When the box is banned it’s no longer possible to cheaply level the playing field so more employers begin to statistically discriminate by offering fewer callbacks to blacks. As a result, banning the box may benefit black men with criminal records but it comes at the expense of black men without records who, when the box is banned, no longer have an easy way of signaling that they don’t have a criminal record. Sadly, a policy that was intended to raise the employment prospects of black men ends up having the biggest positive effect on white men with a criminal record.

Agan and Starr suggest one possible innovation–blind employers to names. I think that is the wrong lesson to draw. Agan and Starr look at callbacks but what we really care about is jobs. You can blind employers to names in initial applications but employers learn about race eventually. Moreover, there are many other margins for employers to adjust. Employers, for example, could simply start increasing the number of employees they put through (post-interview) criminal background checks.

Policies like ban the box try to get people to do the “right thing” by blinding people to certain types of information. But blinded people tend to use other cues to achieve their interests and when those other cues are less informative that often makes things worse.

Rather than ban the box a plausibly better policy would be to require the box. Requiring all employers to ask about criminal history would tend to hurt anyone with a criminal record but it could also level racial differences among those without a criminal record. One can, of course, argue either side of that tradeoff and that is my point.

More generally, instead of blinding employers a better idea is to change real constraints. At the same time as governments are forcing employers to ban the box, for example, they are passing occupational licensing laws which often forbid employers from hiring workers with criminal records. Banning the box and simultaneously forbidding employers from hiring workers with criminal records illustrates the incoherence of public policy in an interest-group driven system.

Ban the box is another example of good intentions gone awry because the man of system tries to arrange people as if they were pieces on a chessboard, without understanding that:

…in the great chess-board of human society, every single piece has a principle of motion of its own, altogether different from that which the legislature might chuse to impress upon it. If those two principles coincide and act in the same direction, the game of human society will go on easily and harmoniously, and is very likely to be happy and successful. If they are opposite or different, the game will go on miserably, and the society must be at all times in the highest degree of disorder. (Adam Smith, ToMS)

Addendum 1: The Agan and Starr paper has much more of interest. Agan and Starr, find, for example, evidence of discrimination going beyond that associated with statistical discrimination and crime. In particular, whites are more likely to be hired in white neighborhoods and blacks are more likely to be hired in black neighborhoods.

Addendum 2: Agan was my former student at GMU. Her undergraduate paper (!), Sex Offender Registries: Fear without Function?, was published in the Journal of Law and Economics.

Homicide Data by Weapon

by on June 16, 2016 at 12:06 pm in Data Source, Economics, Law | Permalink

Here is FBI homicide data by weapon for 2014:


In 2014, 248 people were killed by rifles. Rifles would include “assault weapons”. Thus, more people are killed by knives than by assault weapons. Indeed, more than twice as many people are killed by “hands, fists, feet, etc.” than by assault weapons. (Some of these numbers could change slightly with “Firearms, type not stated” although most of these are probably handguns).

The data may be uncomfortable to both left and the right. The left because banning “rifles” would obviously not save many lives even if one assumed no substitution effect towards other weapons and banning “assault weapons”, however defined, would do even less. The right because handguns are by far the primary weapon used to kill.

Regulation and Rents

by on June 15, 2016 at 8:01 am in Economics | Permalink

Here’s James Bessen writing in the Harvard Business Review:

…in 1992 Congress passed the Cable Television Consumer Protection and Competition Act in response to high cable TV rates. Regulators expected cable prices to fall by 10%. Instead, however, cable companies changed their programming bundles, prices did not fall, and corporate valuations increased. The chart below shows that the aggregate market value of cable companies relative to assets (Tobin’s Q) rose following the Act, compared to valuations of other firms.


Regulation doesn’t seem to have reduced profits in the cable industry and may have increased profits. Is there a general lesson here? In a new paper, Bessen finds that the answer is yes:

The pattern around the 1992 Cable Act is representative: I find that firms experiencing major regulatory change see their valuations rise 12% compared to closely matched control groups. Smaller regulatory changes are also associated with a subsequent rise in firm market values and profits.

This research supports the view that political rent seeking is responsible for a significant portion of the rise in profits. Firms influence the legislative and regulatory process and they engage in a wide range of activity to profit from regulatory changes, with significant success. Without further research, we cannot say for sure whether this activity is making the economy less dynamic and more unequal, but the magnitude of this effect certainly heightens those concerns.

Addendum: Reed Hundt, chairman of the FCC from 1993 to 1997, discusses cable TV regulation during this period in the comments.

WTF™ Citibank?

by on June 14, 2016 at 11:28 am in Economics, Law | Permalink

I had to verify this on several websites because it seemed like an April Fool’s joke but it checks out:

Citigroup Inc sued AT&T Inc on Friday, saying the phone company’s use of “thanks” and “AT&T thanks” in a new customer loyalty program infringed its trademark rights to the phrase “thankyou.”

Yes, Citi trademarked thankyou. No space! What an innovation! Now they are suing because AT&T has a similar customer loyalty program using “thanks” and “AT&T thanks”.

The IP system is out of control.

Hat tip: Mark Thorson.

What3Words Mongolia

by on June 14, 2016 at 7:28 am in Uncategorized | Permalink

Earlier this year I wrote that every 3m*3m place on the face of the planet can now been addressed by just three words:

what3words has identified every one of the 57 trillion 3mx3m squares on the entire planet with just three, easy to remember, words. My office, for example, not my building but my office, is token.oyster.whispering. Tyler’s office just down the hall is barons.huts.sneaky. (Especially easy to remember if you recall this is Tyrone’s office as well.)

Every location on the earth now has a fixed, easily-accessible and memorable address. Unpopulated places have addresses for the first time ever, of course, but now so do heavily populated places like favelas in Brazil where there are no roads or numbered houses. In principle, addressing could be done with latitude and longitude but that’s like trying to direct people to web sites with IP addresses–not good for humans.

The post office of Mongolia has just announced that they will use the system.

Mongolians will be the first to use the system for government mail delivery, but organizations including the United Nations, courier companies, and mapping firms like Navmii already use What3Words’ system.

Mongol Post is switching to the What3Words system because there are too few named streets in its territory. The mail network provides service over 1.5 million square km (580,000 square miles), an area that’s three times the size of Spain, though much of that area is uninhabited. Mongolia is among the world’s most sparsely populated countries, and about a quarter of its population is nomadic, according to the World Bank.

Even in the capital city of Ulaanbataar, not all streets are named. When people don’t have a street address, the current solution is for them to travel to a collection point to pick up their post, says Chris Sheldrick, the co-founder and chief executive of What3Words. People have to write a series of detailed directions, in addition to the address, so that mail-delivery people know where to drop off letters, Sheldrick say.

WSJ: In the 1960s the future of aviation seemed bright. In 1958 Boeing had built its first jetliner, the 707, which cruised at speeds of up to 600 mph. The Concorde came along in 1969, flying at Mach 2—more than 1,500 mph. An age of affordable supersonic flight seemed inevitable, promising U.S. coast-to-coast travel in just 90 minutes.

Today, neither the Concorde nor any other supersonic passenger jet operates. And the 707, still in limited use, remains one of the fastest commercial jets operating in the world. What happened?

Regulation happened. In 1973, shortly after Boeing abandoned the 2707, its Mach 3 government-funded competitor to the British- and French-made Concorde, the Federal Aviation Administration issued a rule banning supersonic transport over the U.S.

And why did we ban supersonic transport? It seems almost like a joke–because we were worried about noise. What would Chuck Yeager say? (He’s still alive and re-enacted his 1947 supersonic flight in 2012 at the age of 89).

Moreover, the noise scare was overblown. Incredibly, it was only after the FAA banned supersonic transport over the US that a careful study was done at Heathrow airport and that study found that the Concorde taking off and landing was only modestly louder than a regular jet. Moreover, as the study reported:

Whenever there was a Concorde departure from Heathrow, subsonic jets recorded a higher or equal noise level at the relevant fixed monitoring sites on 2 days out of 3.

The technology to produce quieter supersonic aircraft exists today but we won’t see really big investment in the industry until the outright ban on supersonic aircraft is lifted. As Dourado and Hammond write:

If the original ban was an overreaction, today it’s an outright absurdity—and remains in place due more to regulatory inertia and the FAA’s deeply precautionary culture than a sober accounting of costs and benefits.

I suspect that we will eventually lift the ban and get quieter and faster supersonic aircraft. But when we do so don’t make the mistake of thinking that it was wise to wait. As I pointed out in my earlier piece on Uber of the Sky, technological development is endogenous. If you ban supersonic aircraft, the money, experience and learning by doing needed to develop quieter supersonic aircraft won’t exist. A ban will make technological developments in the industry much slower and dependent upon exogeneous progress in other industries.

When we ban a new technology we have to think not just about the costs and benefits of a ban today but about the costs and benefits on the entire glide path of the technology.

Wealthier people are healthier and live longer. Why? One popular explanation is summarized in the documentary Unnatural Causes: Is Inequality Making us Sick?

The lives of a CEO, a lab supervisor, a janitor, and an unemployed mother illustrate how class shapes opportunities for good health. Those on the top have the most access to power, resources and opportunity – and thus the best health. Those on the bottom are faced with more stressors – unpaid bills, jobs that don’t pay enough, unsafe living conditions, exposure to environmental hazards, lack of control over work and schedule, worries over children – and the fewest resources available to help them cope.

The net effect is a health-wealth gradient, in which every descending rung of the socioeconomic ladder corresponds to worse health.

If this were true, then increasing the wealth of a poor person would increase their health. That does not appear to be the case. In important new research David Cesarini, Erik Lindqvist, Robert Ostling and Bjorn Wallace look at the health of lottery winners in Sweden (75% of winnings within the range of approximately $20,000 to $800,000) and, importantly, on their children. Most effects on adults are reliably close to zero and in no case can wealth explain a large share of the wealth-health gradient:

In adults, we find no evidence that wealth impacts mortality or health care utilization, with the possible exception of a small reduction in the consumption of mental health drugs. Our estimates allow us to rule out effects on 10-year mortality one sixth as large as the crosssectional wealth-mortality gradient.

The authors also look at the health effects on the children of lottery winners. There is more uncertainty in the health estimates on children but most estimates cluster around zero and developmental effects on things like IQ can be rejected (“In all eight subsamples, we can rule out wealth effects on GPA smaller than 0.01 standard deviations”). Overall for children:

Our results suggest that in a model of child development parameterized to match conditions in Sweden, the effect of permanent income on children’s outcomes is small. With the exception of obesity risk, we estimate precise zero or negative effects in subpopulations for which theories of child development predict larger benefits of wealth. For example, though the mechanism differs, investment models (Becker and Tomes 1979) and parental stress models (Bradley and Corwyn 2002) predict larger positive effects of wealth shocks in families with low incomes. The small impact of wealth on proxies for parenting behavior may explain why the shocks to permanent income appear to have few discernible intergenerational impacts.

One point to note is that they are looking primarily at children born prelottery although they do not find any health effects in infants born postlottery.

As the authors note, Sweden is an affluent society with an extensive social safety net. Nevertheless, there is still a significant health-wealth gradient in Sweden. We might get larger causal estimates of wealth on health elsewhere but the Swedish results bound how far we can reduce the gradient.

The bottom line: Is inequality making us sick? No.

Addendum: The methodological note below was an impressive sign of how research standards at the frontier are changing, expect to see more like this in the future:

To minimize concerns about undisclosed multiple-hypothesis testing, our intergenerational analyses were prespecified in an analysis plan posted in the public domain before running any regressions of child outcomes on the treatment variable (Cesarini et al. 2014).

Addendum 2: See the comments for useful additional information from Erik Lindqvist, one of the authors.

One branch of the effective altruism movement emphasizes the rigorous evaluation of charities. A second branch is focused on a different but related aspect, career choice. Choosing a career to benefit others actually strikes me as a bit of a downer–get out the sackcloth and ashes, repent, renounce your sins and all that.

The 80,000 hours research charity, co-founded by William MacAskill, can be a bit preachy but they have assembled and reviewed a large amount of research on careers–not just on what makes a career useful but also what makes it enjoyable. Young people spend surprisingly little time thinking about a career. There’s a lot more advice about choosing and getting into a college than there is serious advice about choosing a major let alone figuring out a practical plan towards a career.

The 80,000 hours career guide, offers quite a bit of practical, scientifically-based advice and it’s not the usual join the Peace Corp kind of thing.

Here’s two lovely hard-headed graphs that skewer common wisdom and give a taste of their approach:



If you know a young person nearing college, the career guide is well worth a few hours of their time.

Uber is not only fast and convenient it spreads the capital cost of an automobile over a large group of people, thereby increasing efficiency. A typical general aviation aircraft costs ten times or more the price of an automobile so the case for an Uber of the sky is strong. Indeed, shortly after the Wright Brothers flew, informal ride-sharing bulletin jetsonsboards and word of mouth connected pilots with passengers who wanted to hitch a ride and were willing to share the cost.

Flytenow created an app to more easily connect pilots to “passengers” who would pay a share of the “cost” (the reason for the quotes will become clear) but was shut down by the FAA. Flytenow argued that they were simply modernizing the bulletin board system but the FAA worried that they were doing an end run around regulation. The Federal Aviation Act of 1958 requires pilots who are being compensated for their services to have a commercial license. Flytenow was shut down.

Jared Meyer interviewed the founders:

Jared Meyer: …from what I understand, it is still completely legal to find people to share flights (and their costs) by using old-fashioned tools such as bulletin boards or telephone calls. Why does the FAA not allow people to use peer-to-peer online interaction to make the process much more efficient and inclusive?

Alan Guichard: You’re exactly right. Pilots have always been allowed to share flights as long as the pilot and the passenger share a common purpose, which they clearly have on an online bulletin board such as Flytenow. The FAA’s concern is that online interaction will lead to sharing beyond what they refer to as “friends and acquaintances.”

For example, the FAA explained that advertising a shared flight on Facebook would be permissible if a person only had a few friends, but that the same flight would transform the pilot into Delta or American Airlines if he or she had “thousands” of friends.

An Uber of the sky would increase the number of private flights and put pressure on the airlines. It would also create some safety issues. Right now only the rich regularly risk their life in a small airplane. Do we want more people to have access? It’s debatable but there is certainly some level of safety where we would want more passenger-carrying small-aircraft. But which is chicken and which is egg? Safety doesn’t just happen–safety is in part an endogenous consequence of investment and demand. How will we get flying cars if we restrict investment?

Muhammad Ali

by on June 4, 2016 at 7:18 am in History, Law, Sports | Permalink

AliMuhammad Ali has passed away at the age of 74. Given the great love and honor shown to him since carrying the Olympic Torch at the Atlanta games in 1996 and being awarded the Presidential Medal of Freedom by George Bush in 2005 it is perhaps difficult to remember how reviled he was in the 1960s after he converted to Islam, changed his name, and refused to be drafted.

David Susskind, the well regarded television producer and talk show host, said this to Ali in a bitter exchange in 1968:

I find nothing amusing or interesting or tolerable about this man. He’s a disgrace to his country, his race, and what he laughingly describes as his profession. He is a convicted felon in the United States. He has been found guilty. He is out on bail. He will inevitably go to prison, as well he should. He is a simplistic fool and a pawn.

We should remember these things, however, because more than Ali’s courage in the ring, it was Ali’s courage in fighting the US government and much of the US public that made him a great American.

Open and Closed India

by on June 2, 2016 at 7:25 am in Economics, History, Law | Permalink

In an interview the LSE’s distinguished economic historian Tirthankar Roy was asked how his work on colonial India informs our understanding of contemporary India.

What was similar between the colonial times and the post-reform years? The answer is openness. The parallel tells us that openness to trade and investment is good for capitalism, whether we consider the colonial times or the postcolonial. The open economy did not deliver capitalistic growth in the same fashion in both eras. But there were similarities. In both the periods, not only commodities but also capital and labour were mobile, which encouraged freer flow of knowledge, skills, and technology, and created incentives for domestic producers to become better at what they were doing.

…It is necessary to stress the lesson that open markets and cosmopolitanism were good for the Indian economy, because the political rhetoric in India remains trapped in nationalism, which tends to blame global trade and global capital for poverty and underdevelopment. That sentiment started as a criticism of the British Raj, nurtured by the left, and the negativity persists. The pessimistic view of openness is based on a misreading of economic history. There were many things seriously wrong with the British Raj, but market-integration was not one of these. Influenced by a wrong reading of history, India’s politics remains unnecessarily suspicious of globalisation and cosmopolitanism.

For evidence of rhetoric trapped in nationalism look no further than the Indian government’s refusal to allow Apple to sell used iPhones in India.

Hat tip: Pseudoerasmus on twitter.

Larry Summers asks:

How…could our society have regressed to the point where a bridge that could be built in less than a year one century ago takes five times as long to repair today?

As I wrote in Launching:

Our ancestors were bold and industrious–they built a significant portion of our energy and road infrastructure more than half a century ago. It would be almost impossible to build the system today. Unfortunately, we cannot rely on the infrastructure of our past to travel to our future.

Summers alludes to the regulatory thicket as a cause of the infrastructure slowdown but doesn’t have much to say about fixing the problem. Here’s a place to begin. Repeal all historic preservation laws. It’s one thing to require safety permits but no construction project should require a historic preservation permit. Here are three reasons:

First, it’s often the case that buildings of little historical worth are preserved by rules and regulations that are used as a pretext to slow competitors, maintain monopoly rents, and keep neighborhoods in a kind of aesthetic stasis that benefits a small number of people at the expense of many others.

Second, a confident nation builds so that future people may look back and marvel at their ancestor’s ingenuity and aesthetic vision. A nation in decline looks to the past in a vain attempt to “preserve” what was once great. Preservation is what you do to dead butterflies.

Ironically, if today’s rules for historical preservation had been in place in the past the buildings that some now want to preserve would never have been built at all. The opportunity cost of preservation is future greatness.

Third, repealing historic preservation laws does not mean ending historic preservation. There is a very simple way that truly great buildings can be preserved–they can be bought or their preservation rights paid for. The problem with historic preservation laws is not the goal but the methods. Historic preservation laws attempt to foist the cost of preservation on those who want to build (very much including builders of infrastructure such as the government). Attempting to foist costs on others, however, almost inevitably leads to a system full of lawyers, lobbying and rent seeking–and that leads to high transaction costs and delay. Richard Epstein advocated a compensation system for takings because takings violate ethics and constitutional law. But perhaps an even bigger virtue of a compensation system is that it’s quick. A building worth preserving is worth paying to preserve. A compensation system unites builders and those who want to preserve and thus allows for quick decisions about what will be preserved and what will not.

Some people will object that repealing historic preservation laws will lead to some lovely buildings being destroyed. Of course, it will. There is no point pretending otherwise. It will also lead to some lovely buildings being created. More generally, however, the logic of regulatory thickets tells us that we cannot have everything. As I argued in Launching:

There are good regulations and bad regulations and lots of debate over which is which. From an innovation perspective, however, this debate misses a key point. Let’s assume that all regulations are good. The problem is that even if each regulation is good, the net effect of all the regulations combined may be bad. A single pebble in a big stream doesn’t do much, but throw enough pebbles and the stream of innovation is dammed.

It’s time to blow the dam. Creative destruction requires some destruction.

The Visual6502 team reverse-engineered one of the chips used in the early Atari video game system:

…we exposed the silicon die, photographed its surface at high resolution and also photographed its substrate.  Using these two highly detailed aligned photographs, we created vector polygon models of each of the chip’s physical components – about 20,000 of them in total for the 6502.  These components form circuits in a few simple ways according to how they contact each other, so by intersecting our polygons, we were able to create a complete digital model and transistor-level simulation of the chip.

This model is very accurate and can run classic 6502 programs, including Atari games.

By the way, this is the same idea that Robin Hanson argues will be used to create Ems of human brains.

Eric Jonas and Konrad Kording then applied the same types of techniques which neuroscientists use to try to understand the human brain to the simulation–including lesion studies, analysis of spike trains, and correlation studies. Could the tools of neuroscience be used to understand the much simpler Atari brain? The answer is mostly no. The authors, for example, looked at three “behaviors”, Donkey Kong, Space Invaders and Pitfall (!) and they are able to find transistors which uniquely crash one of the games but not the others.

We might thus conclude they are uniquely responsible for the game – perhaps there is a Donkey Kong transistor or a Space Invaders transistor.

Of course, this conclusion would be very misleading but what are we then to make of similar brain lesion studies? The authors conclude:

…we take a simulated classical microprocessor as a model organism, and use our ability to perform arbitrary experiments on it to see if popular data analysis methods from neuroscience can elucidate the way it processes information. We show that the approaches reveal interesting structure in the data but do not meaningfully describe the hierarchy of information processing in the processor. This suggests that current approaches in neuroscience may fall short of producing meaningful models of the brain.

I was surprised to read this:

Granger causality [37] has emerged as a method of assessing putative causal relationships between brain regions based on LFP data.