Those new service sector jobs
It’s 85 years since Brian O’Nolan, better known as Flann O’Brien and Myles na gCopaleen, proposed a Book Handling Agency in The Irish Times.
On Sunday evening, Flann’s idea became reality. In a Berlin bar’s back room, Cabinet Magazine, a literary quarterly, assembled a crack team of white-coated literary experts to make your unread books look well-read – at moderate prices.
For €5 you could get an “essential” handling package including a “professional” spine-break for your book, “two commonplace page markers, 2 scholastic dog-ears; 4 underlined passages; 1 arbitrary yet discerning piece of marginalia; and 1 contextually appropriate piece of marginalia”.
The premier package added “mauling the edges” of the book with a drill and sand paper, thanks to the “vice-chiefs of abrasion (light, heavy)” as well as “one stain using cheap wine, coffee etc”, hand-applied by a “fluid dynamics specialist”.
There is a learning dimension as well:
“We learned that, to look authentic, coffee needs to be dropped at a different height than wine,” said Sina Najafi, editor-in-chief of Cabinet magazine, who organised the evening and took on the professional spine-breaking.
Here is the full story, via Benen Harrington.
Wednesday assorted links
1. New Stephen Dubner talk show.
2. “Spain accelerates and already contributes 65% of the population growth in Europe”
3. Scott Alexander defends AI chip regulation. If AI can be that powerful (which Scott believes), there will be a significant way to make lots of money building a very strong open model. I do not see how the regulators stop this on a global basis, and his recipe may well accelerate the trend.
4. Should we train AIs to be risk-averse?
5. The Invite is a good movie.
Sub-Saharan Africa facts of the day
In aggregate its farmers are growing more cereals, such as maize (corn) and rice, than ever: nearly five times as much as in the 1960s, when many countries achieved independence. But most of those gains came from cultivating more land, which cannot go on for ever (see chart 1). Africa, once sparsely populated, is getting crowded. The amount of arable land per person has been falling for decades, and now sits at roughly the global average.
That might not matter if farmers were also growing more crops per hectare. But recently gentle growth in agricultural productivity has given way to stagnation, perhaps even decline. Consider figures drawn from national statistics in Africa by the Food and Agriculture Organisation (FAO), a UN body. Cereal yields did not grow between 2020 and 2024, the latest data point (see chart 2). Nor did total factor productivity (TFP), a measure of how efficiently inputs of all kinds (such as labour and machinery) are turned into produce. Most African countries had lower agricultural TFP in 2023 than a decade before.
This seems to be more than a pandemic blip. In a paper published in 2024, Douglas Gollin of Tufts University in Massachusetts and his co-authors analysed data from surveys of 55,000 household farms in six African countries between 2008 and 2019. They estimated that, for smallholdings, yields and TFP were already falling by 3-4% a year then. They found steeper declines than the FAO did, perhaps because their sample did not include large farms, or because official statistics are sketchy.
Here is more from The Economist.
Toward a theory of uni-context
Here is a good dialogue between Derek Thompson and Agnes Callard, excerpt:
Callard: In general, goodness is more context-dependent than badness. There isn’t really anything that’s good all the time for everyone independent of context. Happiness depends on your context and who you are. There isn’t anything that will always make a person happy. But there are reliable ways to make people unhappy. There’s a set of evils that are close to universal: death, pain, illness, violence. Even if someone’s in very different circumstances from yours, if you see they’re being subjected to one of those, you can interpret it as suffering and understand it.
So we should predict that what we see on the internet, insofar as people are trying to be legible to large groups, is that they focus their attention on things that show up to everyone. Take two strangers on the internet trying to talk to each other. What are they going to coordinate on as a topic they can both care about? It’s likely going to be something bad.
And here is from Derek:
Here are some questions that I consider self-evidently compelling about the modern world:
- Why is the news media so interested in telling you how much the world sucks all the time?
- Why are so many of us obsessed with distraction and managing our attention?
- Why is it so hard to stop comparing ourselves to others?
- And why does everything in art and design seem the same these days?
And more from Agnes:
With identity categories like woman, disabled, gay, Jewish, or American, the striking thing is that you are a member of those categories in every circumstance. There is no circumstance in which I stop being a woman. Identity is a hat you never take off. So identity is well suited to a uni-contextual world.
Worth pondering, interesting throughout.
My GOAT book now has updated software/AI
Tuesday assorted links
Occupational Licensing Around the World
Hartley and Kleiner have a new Fed Minneapolis working paper surveying workers around the world to measure occupational licensing by country. In the United States, occupational licensing has increased substantially over time, so one might expect licensing to rise with income. Their headline result is the opposite: occupational licensing is negatively correlated with GDP per capita. Many developing countries such as India, South Africa, and the Philippines have a lot of occupational licensing while Denmark, Sweden and France have relatively little. Similarly, countries which rate poorly in measures of government quality, such as regulatory quality, political stability, the rule of law, and corruption have more occupational licensing.
I do have some concerns, however. The figure for India of 42% of workers requiring a government license seems too high. Admittedly this is the home of the License Raj but I worry about the survey results. In order to mark a surveyed worker as requiring an occupational license HK require that the worker say that a) they have a license and b) a license is required to work in their profession. But in India there are many workers who do not have a license and a license is required to work in their profession–HK, however, consider these workers confused and drop them from the analysis. That is appropriate for a developed country where there aren’t many illegal unlicensed workers but, as the authors later discuss, informality is very high in India so working illegally is not uncommon.
Including these workers would make the true India figure even higher than HK report but I think with such a high degree of informality we also have to wonder whether survey responders in India really are responding the same way as in Germany. Perhaps they are reporting a license isn’t really required since very few workers have one. In India, for example, some 60% of “licensed” drivers have an fake or invalid license and many have no license at all so maybe workers are just reporting the facts on the ground.
Within the United States, professions are regulated in some states but not others—Louisiana, for instance, requires florists to be licensed. (Do license-holding Louisiana florists produce better, safer arrangements? I don’t think so.) Given this variation even within a single country, we’d expect considerable variation across countries too. Multiple independent surveys—not just HK—confirm that Denmark, Sweden, and even France have less occupational licensing than the United States. Since these countries have high state capacity, we can rule out the hypothesis that licensing exists for safety or quality. The implication is clear: occupational licensing is often about rent-seeking, not quality assurance.
Addendum: See also my review of Allensworth’s The Licensing Racket which finds that licensing board spend most of their time and effort on regulating entry rather than quality and my paper on the surprise delicensing of occupational licensing in the funeral industry in Colorado.
Incentives matter, installment #1637
I had long wondered about this:
Performance metrics can misalign individual and organizational incentives. We study a clean case: an NBA player holding the ball as a quarter expires must choose between a low-probability “heave” that can only help his team and protecting his shooting statistics. We model this decision as a metric-driven principal-agent problem and test it using play-by-play data from 2015-16 through 2025-26, exploiting the 2025-26 Heave Rule, which removed the individual statistical penalty for end-of-quarter heaves. Before the reform, players heaved on 58 percent of opportunities; reluctance was concentrated among efficient shooters and players in contract years, as the model predicts. After the reform, the heave rate jumped to 94 percent, the efficiency gradient collapsed, and difference-indifferences estimates using the untreated fourth quarter confirm the effect is sharp, immediate, and smallest among the players with the least efficiency to protect. Removing a metric distortion realigned individual behavior with team objectives almost completely.
That is from a recent paper by James W. Kemper and Noah Liptack,titled “Overcoming Misaligned Incentives: Evidence from the NBA Heave Rule.” Via the excellent Kevin Lewis.
Creating your own religion in an AI-drenched world
Religious life, I think one thing we’ll see, and this is, again, pretty soon, it won’t be hard to create your own religion. I’m not sure many people will do this. I don’t think most people will. But they’ll be like accretions to the religions we have now. And I think with Fable 5, you could even do this already. Like, you ever actually try to read through the Hindu sacred texts? They’re pretty naughty, pretty detailed, quite long. Many parts are great and dramatic. I wouldn’t say they’re smoothly or evenly written. Not all of it is well written. They have significant meaning. For some people, a lot of people consume them through stories they’re told with their children. It’s not that every Hindu is like reading through the whole Ramayana. That’s all fine. But if you can sit down with, you know, the latest quad, whatever, and create your own set of sacred books. Again, I think like 2% of people are going to do this. Not most people. People have other interests, other hobbies. A lot of people aren’t religious. But if 2% of people do this, you end up with a lot of new religious accretions. Some of them will be totally new religions. But I think a lot will just be like, here are my sacred books of Christianity, or my add-ons to the Book of Mormon, or my whatever’s. There’ll be this extreme religious diversity. I don’t know, too much, too little. I think it will be quite different.
Again, that is from my recent DeepMind talk. Perhaps two percent is too high, and only a fraction of one percent of the population will do this, with agents. You still end up with a great deal of religious accretion and innovation.
Persistent Inequality in Publishing in Economics
This paper documents new facts about concentration in publishing in economics. First, the profession grows downward . The number of economists grew almost sixfold since 1990, but new entrants publish in lower-tier journals while incumbents hold the top. Second, there is high and persistent concentration at the top. Along with the downward growth, the top-1% authors accounted for 38.4% of top-5 publication credit in 1990 and for 78.3% in 2025. Third, the persistence is widespread within cohorts, within subfields, and within gender. Fourth, new journals only slightly dilute concentration. Fifth, elite authors diversify on topics faster than the rest of the profession. We interpret the findings with a screening model of attention under information overload. The evidence is consistent with the model: as the field grows, citations concentrate on established work and the conditional citation premium of top-author papers narrows.
By Ricardo Dahis, via the excellent Samir Varma.
The wisdom of Conor Sen
The age 20-24 unemployment rate is now ~unchanged since the AI boom began…
Link and picture here.
Monday assorted links
2. Claims about cats (NYT). I guess they have no Coase theorem after all.
3. Iran and the Strait (WSJ).
4. “I used to be one of these people.” And Timothy Lee. As for this exchange, in the 2040 scenario strong AI is a power magnet in a way that milk or eggs or electricity are not. I do understand the claim that one might prefer this extreme governmental power to a greater role for the private sector, but extreme governmental power it is going to be, again at least under the 2040 scenario assumptions about the spread and efficacy of AI.
5. Scott Sumner engages with Fable on market monetarism.
6. “The number of students admitted to Ph.D. programs this fall dropped 15 percent from the previous year, according to data from over 50 top research universities…” (NYT) Partial data suggest that the year before the decline may have been eleven percent.
“Markets are competitive if and only if P != NP”
I prove that competitive market outcomes require computational intractability. If P = NP, firms can efficiently solve the collusion detection problem, identifying deviations from cooperative agreements in complex, noisy markets and thereby making collusion sustainable as an equilibrium. If P != NP, the collusion detection problem is computationally infeasible for markets satisfying a natural instance-hardness condition on their demand structure, rendering punishment threats non-credible and collusion unstable. Combined with Maymin (2011), who proved that market efficiency requires P = NP, this yields a fundamental impossibility: markets can be informationally efficient or competitive, but not both. Artificial intelligence, by expanding firms’ computational capabilities, is pushing markets from the competitive regime toward the collusive regime, explaining the empirical emergence of algorithmic collusion without explicit coordination.
From Philip Z. Maymin. File under “Claims…”
My talk at DeepMind
Here is a transcript of my remarks, anything from the audience (Q&A with comments) has been cut out. Excerpt:
The problem will not be how does my life get meaning, but how do I deal with all the meaning my life will have? A kind of exhaustion. And this comes up in the labor supply debates. So again, there’s one point of view like, oh, there’s AGI, there’s going to be mass unemployment. The more moderate, reasonable point of view is not that there’s mass unemployment. Many jobs still require humans. There’s comparative advantage. But total leisure time will go up. I think that’s likely the correct view, but across what time horizon?
If you think about your lives today, like I’m much busier and I’m busier because of AI. I’m working much harder. I don’t have to do that. But the point is my relative wage gradient for working harder today, it’s really quite extreme. And if I were, say, an 18 year old, I would feel I really had to work hard not to fall behind. There’s this new thing coming to the world. All sorts of people will be jumping on it. If I only start looking at it when I’m age 23, I’m behind by X number of years. So I would truly be working hard. At age 64, I don’t have to feel I need to work that hard. I can always just say if I choose to, well, I’m going to run out the clock, as they say, just kind of step back and wait until I die and I’ll be fine. I’m not going to do that.
Every time a new model comes out, I’m still excited. I used to be very excited. But they come out more and more frequently. And now I look at my calendar and I’m like, uh-oh, could you all wait a week, please? Because you want to be ready. You want to play around with it. You want to test it out. You want to talk about it with your friends. It’s a slight bit of an exhaustion. And again, for you all working here, you have access to models that haven’t come out yet or maybe will never come out. But all the time, you have fresh stimuli. And I hope, I think you must all be drenched in meaning. And you’re like, oh, my goodness, someone else tells me, look at this new model. What do I do with that?
So I think sometimes, like, when will the time come when the leisure dividend from AI arrives? No one is forcing you to work harder. But there’s a substitution effect from the higher implicit wage on your future earnings that if you work harder now, it will have a payoff. You’ll at least avoid being behind.
Interesting throughout, definitely recommended.