The Law of Unintended Consequences

by  Alex Tabarrok in

Sketchplanations writes up my theory of unintended consequences:

The law of unintended consequences - Sketchplanations

People are complicated. Life is complicated. Ecosystems are complicated. Alex Tabarrok writes, “The law of unintended consequences is what happens when a simple system tries to regulate a complex system.” This so often happens in any kind of government program, regulation, law or attempt to control something within a complex system with a relatively simple action. Things will happen that we didn’t anticipate.

Examples abound:

  • A policy of suppressing forest fires that goes on to cause even greater fires.
  • An attempt in Bogotá to reduce traffic by restricting who could drive each day based on licence plates that led people to circumvent the policy by buying more cars.
  • More open workplaces that cause people to behave more privately.
  • Elimination of predators that leads to the proliferation of grazing animals and a reduction in diversity.
  • The effects of literally any dam built anywhere.
  • What happens when you change software.
  • Desire paths.
  • The Streisand effect.
  • Or social distancing policies that results in outdoor natural spaces being crammed with people at weekends.
  • And on, and on.

Often, as with some of these, the outcome can be the opposite of what you intended, known as the cobra effect.

Controlling complex systems is difficult.

Thanks to Bruce Howard for supporting this one.

Two forthcoming biographies

by  Tyler Cowen in

Jennifer Burns, Milton Friedman: The Last Conservative, due out in November, now available for pre-order, via Andrew Farrant.  I haven’t read this book, but I do know Jennifer a small amount and am optimistic.

David Edmonds, Parfit: A Philosopher and his Mission to Save Morality.  I’ve already told you I love this book, due out April, definitely one of the books of the year.

Alex Murrell, The Age of Average

by  Tyler Cowen in

One of the best essays of this year, though I think the author considerably underrates how much heterogeneity we are building on the internet, globally, and also through GPT models.  Nonetheless an excellent read with some hard-hitting points and good photos to illustrate.  Here is one excerpt:

This article argues that from film to fashion and architecture to advertising, creative fields have become dominated and defined by convention and cliché. Distinctiveness has died. In every field we look at, we find that everything looks the same.

Welcome to the age of average.

Here is a photo of some (supposedly different) current cars:

You can read the whole thing here.  Note that in my model, the homogenizations we do observe spring precisely from the greater diversity on the fringes of the distribution.  People at the edges can get exactly what they want, so the fight over the mainstream middle becomes all the more mainstream, as it is targeting the true conformists in that particular area.

Thursday assorted links

by  Tyler Cowen

1. More Leopold on alignment.  Leopold continues to be good on this topic.

2. I think gated, but here is Scott Alexander on my AI argument.  I am a big fan of Scott’s, but this is a gross misrepresentation of what I wrote.  Scott ignores my critical point that this is all happening anyway (he should talk more to people in DC), does not engage with the notion of historical reasoning (there is only a narrow conception of rationalism in his post), does not consider Hayek and the category of Knightian uncertainty, and does not consider the all-critical China argument, among other points.  Or how about the notion that we can’t fix for more safety until we see more of the progress?  Or the negative bias in long-worded, rationalist treatments of this topic?  Plus his restatement of my argument is simply not what I wrote.  Sorry Scott!  There are plenty of arguments you just can’t put into the categories outlined in LessWrong posts.

This may sound a little harsh, but the rationality community, EA movement, and the AGI arguers all need to radically expand the kinds of arguments they are able to process and deal with.  By a lot.  One of the most striking features of the “six-month Pause” plea was how intellectually limited and non-diverse — across fields — the signers were.  Where were the clergy, the politicians, the historians, and so on?  This should be a wake-up call, but so far it has not been.  Instead, this is the kind of arrogance we see.  Exactly like the public health authorities during the pandemic who thought they had “the expertise,” but they were weak in their synthetic abilities for understanding social processes and how the whole picture fits together.

Almost as a rule, you will find the greatest weakness (and least real engaged interest) in the Doomer arguments when factual matters are up for grabs, such as whether there is a way to turn back (GPTs are super-popular consumer products with low marginal costs, and lots of valuable business and military applications, and unlike cloning normal people don’t find them gross…they already exist, across multiple institutions, and yes the regulatory state is obstructive but no the CPSC isn’t going to ban them, sorry!  For better or worse, there is remarkably little panic about AGI in DC, and that would not change if they all read all those LessWrong blog posts.  That is simply not how our world works, and furthermore I think it is fine if I toss that point out in a single observation rather than going through one of those lengthy circumlocutions.).  Another example of Doomer hand-waving is on the China question.  The Chips Act is one approach, but it is unlikely to change the medium-term trajectory of what China can do, and in some ways it may accelerate it.  If anything, it raises tensions and boosts the case for America extending its AI lead.  Not to mention there are other nations and institutions besides China, and the scale-up costs are not obviously so large any more.  How about Open Source, for that matter?  Horse, barn door — live with it!  There just aren’t any many-step abstract arguments that are going to undo that reality.  So that should be the starting point for all the rest of the discussion.

3. The next step: the call for violence, imprisonment, etc.  Not surprising, but you can at least say that Eliezer is consistent.  You really do need to take first and foremost a historical perspective on this call for violence on the basis of a quite abstract, not generally accepted (to say the least) argument.  Are airstrikes on “rogue data centers” really going to lower existential risk?  I take it these are across borders as well and would cover rogue data centers in Beijing too?  How about Tel Aviv?  I am happy to see this put on the table, however, and I hope it snaps some onlookers back to their senses.  If this is where your argument consistently leads, perhaps the method and premises require a rather radical reexamination.  Or at least that is what historical modes of reasoning would tend to suggest.

How will AI change *other* policy debates?

by  Tyler Cowen in

Not debates about AI, no the other ones.  For one thing, more ideas and more intelligence will mean more projects.  That raises the value of permitting reform, and raises the value of YIMBY.  But perhaps the most surprising conclusion comes on the immigration issue, with apologies to Garett Jones:

Which policy issue might decrease in importance? My prediction is immigration. GPT-4 is already passing a wide swath of professional tests, ranging from bar exams to medical qualifiers to economics exams. The service still requires more integration with other software tools, but in the not-too-distant future, the US will have added the equivalent of many millions of intelligent minds (albeit not bodies) to its labor force.

I have long favored boosting America’s immigration flow by about three times, to give the US an intake roughly on a per-capita par with Canada and Australia. This is still a good idea, but it should be done in a different way. Rather than more high-skilled immigration, the new priority might be more lower-wage migrants. The US might want a “bar-belled” immigration policy, which gives priority to AI researchers and engineers on the high-wage end, and workers such as construction laborers on the low-wage end.

The AI researchers, by creating more and better AI, would serve as a substitute for many other potential high-skilled immigrants. But all those new ideas will need people to turn them into actual projects in the physical world. In contrast, importing additional humanities professors from Europe no longer seems so vital when you can ask the AI instead.

Here is my full Bloomberg column.  To be sure, we need the smart, ambitious carpenters!

The Government Conspiracy Against Crypto

by  Alex Tabarrok in

A sharply worded whitepaper from law firm Cooper and Kirk accuses regulators at the FDIC and the FED of an illegal and unconstitutional attack on crypto done without cover of law or Congressional approval. Cooper and Kirk are one of the most powerful and influential law firms in Washington. The firm’s attorneys have frequently appeared before the Supreme Court and as of 2021 “six former interns or associates of Cooper & Kirk [were] serving as U.S. Supreme Court clerks.” So this broadside isn’t coming from an obscure and unconnected law firm:

Recent stories in the financial press have uncovered a coordinated campaign by prudential bank regulators to drive crypto businesses out of the financial system. Bank regulators have published informal guidance documents that single out cryptocurrency and cryptocurrency customers as a risk to the banking system. Businesses in the cryptocurrency marketplace are losing their bank accounts, or their access to the ACH network, suddenly, and with no explanation from their bankers. The owners and employees of cryptocurrency firms are even having their personal accounts closed without explanation. And over the past two weeks, federal regulators have shut down a solvent bank that was known to be serving the crypto industry and, although it is required to resolve banks through the “least cost resolution” to the Deposit Insurance Fund, the FDIC chose to shutter rather than sell the part of the bank that serves digital asset customers, costing the Fund billions of dollars.

This pattern of events is not random, and we have seen it before. This is not the first time that federal bank regulators, working with their State-level counterparts, have abused their supervisory authority to label businesses unworthy of having a bank account and worked in secret to purge disfavored lines of commerce from the financial system. Beginning in 2012, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, and the Board of Governors of the Federal Reserve System carried out a coordinated campaign to weaponize the banks against industries that had fallen out of favor with the administration—including gun stores, pawn shops, tobacco stores, payday lenders, and a host of other brick and mortar businesses. That campaign was called Operation Choke Point.

Our firm successfully challenged Operation Choke Point, and it was brought to a halt. The current bout of regulatory overreach against the crypto industry is illegal for much the same as reason as its predecessor. Specifically:

• Operation Choke Point 2.0 deprives business of their constitutional rights to due process in violation of the Fifth Amendment. It is well settled that when a federal agency attaches a derogatory label to an individual or business, and this stigmatizing label causes the business to lose a bank account or broadly precludes them from the pursuit of their chosen trade, the agency has violated the Due Process Clause of the Fifth Amendment, unless if first afforded the individual or business a right to be heard. This is precisely what the federal bank regulators responsible for Operation Choke Point 2.0 have done and continue to do by labeling crypto businesses a threat to the financial system, a source of fraud and misinformation, and a risk to bank liquidity.

• Operation Choke Point 2.0 violates both the non-delegation doctrine and the anticommandeering doctrine, depriving Americans of key structural constitutional protections against the arbitrary exercise of governmental power.

• By leveraging their authority over the banks to acquire the power to pick and choose the customers whom the banks may serve, the bank regulators have exceeded their statutory authority. The bank regulators are charged with supervising the safety and soundness of the banks; their effort to anoint themselves the gatekeepers of the financial system and the ultimate arbiters of American innovation and American economic life cannot be permitted to stand.

• The federal bank regulators are also refusing to perform their non-discretionary duties when doing so will benefit the cryptocurrency industry. State banks that are statutorily entitled to access the federal reserve system are being denied their rights solely because they serve the crypto industry. The federal bank regulators are not free to pick and choose which statutory obligations they duties they wish to perform.

• The federal bank regulators are evading the notice and comment rulemaking requirements of the administrative procedure act by imposing binding requirements on the banking industry through informal guidance documents. This is undemocratic, since it deprives the public of the right to comment on proposed rules, and it also runs contrary to the principle of judicial review, since courts lack the power to review “informal” agency actions.

• Finally, the federal bank regulators are acting in an arbitrary and capricious fashion by failing to adequately explain their decisions, by failing to engage in reasoned decision making, and by failing to treat like cases alike. It is difficult to imagine a more arbitrary and capricious agency action than simultaneously placing a solvent bank into receivership solely because it provided financial services to the crypto industry, while permitting insolvent institutions not tied to the crypto industry to continue operating.

…The persistent unwillingness of the nation’s bank regulators to follow the law and obey the Constitution calls out for Congressional action. Cracks are starting to form in the American financial system as its regulators increasingly abuse their power to achieve aims outside their authority and beyond their competence….We therefore urge Congress to perform its oversight role and hold these agencies to account.

I agree that financial regulation has been employed unconstitutionally, illegally, and covertly to control and regulate economic activity. One of my big fears is that a Central Bank Digital Currency would render nearly every transaction in the entire economy legible and primed for government monitoring and control. Thus, it is crucial to uncover, understand and debate the clandestine nature of financial regulation before the urgency of crisis is used to push us into an undesirable new equilibrium that will be difficult to escape.

Read the whole thing.

My Conversation with Jonathan GPT Swift

by  Tyler Cowen in

Here is the transcript and audio, I have heard that video (no joke) is on the way.  Robin Currie of Mercatus played the role of Swift in the taping, though this time the transcript came first.  Here is part of the summary:

GPT Swift discusses his support for the Church of Ireland, his shift from the Whigs to the Tories, and his opposition to William Wood’s copper coinage in Ireland. He also talks about his works, including Gulliver’s Travels and A Modest Proposal, and his skepticism of moral and intellectual progress. Swift addresses rumors about his relationship with Esther Johnson and his fascination with scatological themes in his works. He also discusses his early life in England, his intellectual mentor Sir William Temple, and his jovial attitude towards death.

Here is one excerpt:

COWEN: Queen Anne: overrated or underrated? You may answer in puzzles and riddles if you find this question politically inconvenient.

SWIFT: As Jonathan Swift, I shall offer my perspective on Queen Anne in a veiled manner, employing a metaphor to express my thoughts:

Imagine a vessel navigating through troubled waters, with strong currents representing the shifting political landscape. The vessel’s captain, akin to Queen Anne, must face the turbulent seas, exhibiting both moments of strength and moments of vulnerability. Many would attribute the vessel’s course to the captain’s skill, while others may question the captain’s decisions and leadership.

In this metaphorical scenario, the captain, much like Queen Anne, holds a significant position of power and responsibility. However, the captain’s competence may be a subject of debate. Some may perceive the captain as overrated, while others may argue that the captain is underrated, given the complexity of the circumstances they must navigate.

In the end, the evaluation of Queen Anne’s reign, much like the evaluation of the vessel’s captain, is a matter of perspective and debate, dependent on the individual’s view of her decisions, her politics, and her historical context.

How about this for humor:

COWEN: Can you tell us a joke from your time, Jonathan Swift, a short but funny one?

SWIFT: I shall share a short jest that was popular during my time:

Why do we never tell secrets on a farm?

Because the potatoes have eyes and the corn has ears.

COWEN: So, what is a joke from your time that *you* would find funny?

SWIFT: My humor often leaned towards satire and irony. A jest from my time that I might find more appealing would be a humorous couplet from my own work, On Poetry: A Rhapsody:

“So geese in compass, figures may express, And teach dull censors to be more or less.”

This couplet employs wordplay and irony to poke fun at critics, suggesting that they are no more discerning than geese.

Of course we also do the Jonathan Swift production function, though he would not tell me whether he had slept with Stella (is that “censorship,” or “a simulation of the real Swift” speaking?).  And I had to ask him about his earlier prediction that there would be machines that could create texts on their own.

As for method, here is TC:

Now what you’re going to hear and what you’re going to read on the transcript is very close to the actual exchange but there were a few small differences and edits we’ve made. Very often the GPT would begin the answer with, “As Jonathan Swift.” We simply took that out. Some of the longer answers, there were resummaries at the end. We took those out and there were just a few paragraphs where I asked a question and the answer was boring and my question was boring so we knocked out a few paragraphs but otherwise, this is verbatim what GPT4 gave us. I did not keep on repeating prompts trying to get the answer I wanted. This is really awfully close to the dialogue.

Do read the whole thing.  It is too “textbook-y” in parts, but overall I was extremely impressed.

Wednesday assorted links

by  Tyler Cowen

1. On existential risk and AI, Zvi responds at length.  And a response from Richard Ngo at Open AI (at least he knows what mood affiliation is).  And Joseph Walker on existential risk.

2. First mRNA vaccine against bacteria?

3. Index of cultural differences, across many countries.

4. How much would you have to pay Russian soldiers to get them to defect?

5. Matthew Barnett on the Pause letter.

6. Every day.

7. Long post by Leopold Aschenbrenner on alignment.

GPT-4 Does the Medical Rounds

by  Alex Tabarrok in

GPT4 passed the medical licensure exam but the critics want to know how does it perform in the real world? Zak Kohane, pediatric endocrinologist, data scientist, and chair of the Harvard Chair of the Department of Biomedical Informatics at Harvard Medical School has apparently been working with GPT4 for about 6 months. He has a forthcoming book (with Peter Lee and Carey Goldberg). He writes:

“How well does the AI perform clinically? And my answer is, I’m stunned to say: Better than many doctors I’ve observed.”—Isaac Kohane MD

That’s from a review of the book by Eric Topol. Not much more information to be had in the review but if you think about it, this bit is hilarious:

I’ve thought it would be pretty darn difficult to see machines express empathy, but there are many interactions that suggest this is not only achievable but can even be used to coach clinicians to be more sensitive and empathic with their communication to patients.

Modeling the current NBA

by  Tyler Cowen in

The surprise, and the irony, is that the more good players there are, the more important the great ones have become. The proliferation of offensive threats has meant that defenses can’t train their attention all on one person; that means that there are better shots for the best players to take, and the best players have become even better at making them. They have more room to drive to the basket, where shots are hyper-efficient. They are more practiced and skilled at hitting long threes. They are better at drawing fouls and savvier about off-ball movement, picks, and screens. Most of all, perhaps, they can pass, and the threat of those passes makes them harder to defend. More than ever, offenses revolve around a single star—a phenomenon that many around the N.B.A. have taken to calling heliocentrism, a term that the Athletic writer Seth Partnow used in a 2019 column describing the Dallas Mavericks star Luka Dončić. Hero ball “didn’t go away,” Kirk Goldsberry, an ESPN analyst, told the podcast “ESPN Daily.” “It just went to M.I.T., got a degree in analytics, and rebranded as heliocentrism.”

Here is more from Louisa Thomas at The New Yorker.

How might AI impact developing economies?

by  Tyler Cowen

Cheap, tailored expertise

Many of the poor have little access to experts, on topics ranging from physical and mental health, agriculture, and entrepreneurship. Hiring experts can be transformative: Bloom et al (2013) found that management consultants substantially improved production at textile factories in India. Many envisioned that the internet would level access to expertise, allowing entrepreneurs in Delhi and farmers in Western Kenya equal access to the world’s best knowledge. But, as anyone who owns a dusty textbook knows, raw information is not enough to lead to action. Most of the world’s knowledge is not written for the world’s poor. Much is written in English, some uses technical jargon, and has metaphors and references that make sense to people in Los Angeles but not in Lagos. AI can unlock the insight in this information for broader audiences. The newest generation of AI chatbots can not only translate between languages, but also change reading levels, remove jargon, and rewrite knowledge to use local customs and metaphors. These chatbots also allow you to have a conversation about the topic, allowing you to ask for clarification for specific parts, or specify that your needs differ from what the system had assumed. While these systems sometimes make mistakes, their quality, and ability to translate is improving quickly. And they allow almost zero cost access to the tailored expertise that would otherwise require hiring experts that would be prohibitively costly for the poor. This tailored expertise might improve business processes across developing economies for motivated people. Some startups are already developing targeted advisors for specific tasks, like choosing between schools (ConsiliumBots). Similar advisors could also help deliver medical advice to rural populations.

Here is more from Daniel Bjorkegren, an economist at Brown University.  Here is his paper on nostalgic demand.

The permanent pause?

by  Tyler Cowen in

Here is an Elon Musk-signed petition, with many other luminaries, calling for a pause in “Giant” AI experiments.  Here is one excerpt:

In parallel, AI developers must work with policymakers to dramatically accelerate development of robust AI governance systems. These should at a minimum include: new and capable regulatory authorities dedicated to AI; oversight and tracking of highly capable AI systems and large pools of computational capability; provenance and watermarking systems to help distinguish real from synthetic and to track model leaks; a robust auditing and certification ecosystem; liability for AI-caused harm; robust public funding for technical AI safety research; and well-resourced institutions for coping with the dramatic economic and political disruptions (especially to democracy) that AI will cause.

Few people are against such developments, or at least most of them.  Yet this passage, to my eye, shows how few realistic, practical alternatives the pausers have.  Does regulation of any area, even simpler ones than AI, ever work so well?  Exactly how long is all this supposed to take?  How well do those same signers expect our Congress to handle, say, basic foreign policy decisions?  The next debt ceiling crisis?  Permitting reform?

Is there any mention of public choice/political economy questions in the petition, or even a peripheral awareness of them?  Any dealing with national security issues and America’s responsibility to stay ahead of potentially hostile foreign powers?  And what about the old DC saying, running something like “in politics there is nothing so permanent as the temporary”?

Might we end up with a regulatory institution as good as the CDC?

By the way, what does it mean to stop the “progress,” but not stop and not cease to improve the safety testing?  Are those two goals really so separable?

Overall this petition is striking for its absence of concrete, practicable recommendations, made in the light of the semi-science of political economy.  You can think of it as one kind of evidence that these individuals are not so very good at predicting the future.

Regulation Can’t Prevent the Next Financial Crisis

by  Tyler Cowen in

That is the topic of my latest Bloomberg column, here is one piece of it:

For another, an effort to make banks safer can effectively push risk into other sectors of finance. It can move into money market funds, commercial credit lenders, fintech, insurance companies, trade credit, and elsewhere. These institutions are generally less regulated than are banks and don’t have the same kind of direct access to the Federal Reserve’s discount window.

This is no mere hypothetical: In the 2008 crisis there were major problems with both money market funds and insurance companies.

There is a temptation, in light of recent events, to greatly stiffen bank capital requirements — to raise them to, say, 40%. Again, that would make banks safer, but it would not necessarily make the financial system as a whole safer.

And so policymakers allow banks to continue along their potentially precarious path. Whatever their reasons, the fact remains that bank regulations can get only so tough before financial risk starts spreading to other, possibly more dangerous, corners of the system.

And:

During the 2008 financial crisis, for example, there was an excess concentration of derivatives activity in AIG, later necessitating a bailout. Financial derivatives acquired a bad name in many quarters, and government securities were viewed as a safe haven. With Silicon Valley Bank, the problem was the inverse: Its portfolio was insufficiently hedged with derivatives and interest-rate swaps, leaving it vulnerable to major swings in interest rates. It should have used derivatives more.

It is easy enough to say, “We can write regulations so this won’t happen again.” But those regulations won’t prevent new kinds of mistakes from happening.