Month: December 2024
Paul Krugman retires as Times columnist
Here is the NYT announcement.
I hope they consider Noah Smith as the obvious replacement…
Friday assorted links
1. AI video for training embodied agents?
2. “She uses the hashtags “hemmaflickvän” and “hemmafru” (Swedish for stay-at-home girlfriend and housewife) and describes herself as a “soft girl” – an identity that embraces a softer, more feminine way of living rather than focussing on a career.” Link here.
4. How will AI and the law interact?
5. Jeffrey Wernick, prediction markets pioneer.
You Have Been Warned
New paper in Science, A single mutation in bovine influenza H5N1 hemagglutinin switches specificity to human receptors. If that isn’t clear enough, here is the editor’s summary:
In 2021, a highly pathogenic influenza H5N1 clade 2.3.4.4b virus was detected in North America that is capable of infecting a diversity of avian species, marine mammals, and humans. In 2024, clade 2.3.4.4b virus spread widely in dairy cattle in the US, causing a few mild human cases, but retaining specificity for avian receptors. Historically, this virus has caused up to 30% fatality in humans, so Lin et al. performed a genetic and structural analysis of the mutations necessary to fully switch host receptor recognition. A single glutamic acid to leucine mutation at residue 226 of the virus hemagglutinin was sufficient to enact the change from avian to human specificity. In nature, the occurrence of this single mutation could be an indicator of human pandemic risk. —Caroline Ash
Time to stock up on Tamiflu and Xofluza.
Addendum: See also A Bird Flu Pandemic Would Be One of the Most Foreseeable Catastrophes in History
My excellent Conversation with Stephen Kotkin
It was so much fun we ran over and did about ninety minutes instead of the usual hour. Here is the audio, video, and transcript. Here is part of the episode summary:
Tyler sat down with Stephen to discuss the state of Russian Buddhism today, how shamanism persists in modern Siberia, whether Siberia might ever break away from Russia, what happened to the science city Akademgorodok, why Soviet obsession with cybernetics wasn’t just a mistake, what life was really like in 1980s Magnitogorsk, how modernist urban planning failed there, why Prokofiev returned to the USSR in 1936, what Stalin actually understood about artistic genius, how Stalin’s Georgian background influenced him (or not), what Michel Foucault taught him about power, why he risked his tenure case to study Japanese, how his wife’s work as a curator opened his eyes to Korean folk art, how he’s progressing on the next Stalin volume, and much more.
And here is one excerpt:
COWEN: What did you learn from Michel Foucault about power, or indeed anything else?
KOTKIN: I was very lucky. I went to Berkeley for a PhD program in 1981. I finished in 1988, and then my first job was at Princeton University in 1989. In the middle of it, I went for French history, and I switched into Habsburg history, and then finally, I switched into Russian Soviet history. I started learning the Russian alphabet my third year of the PhD program when I was supposed to take my PhD exams, so it was a radical shift.
Foucault — I met him because he came to Berkeley in the ’80s, just like Derrida came, just like Habermas came, Claude Lévi-Strauss, the anthropologist, came through. It was California. They were Europeans, and there was a wow factor for them. Foucault was also openly gay, and San Francisco’s gay culture was extraordinarily attractive to him. It was, unfortunately, the epoch of the AIDS epidemic.
One time, I was at lunch with him, and he said to me, “Wouldn’t it be amazing if somebody applied my theories to Stalinism?” I’m sitting there, okay, I’m 23 years old. Imagine if you had traveled to Switzerland in the late 19th century, and you went up in those Engadin mountains, and you were at some café in the mountain air, and there’s this guy with a huge forehead and hair up in the air sitting there, and you went and introduced yourself. You said, “Hello, I’m Tyler,” and he said, “Hello, I’m Friedrich Nietzsche.” You would say, “Well, geez, this is interesting. I should have more conversations with you.”
So, that’s the experience I had. I had read Foucault in seminar because it was very fashionable to do so, obviously, especially at Berkeley, especially in a culture that tilts one way politically, and I think you’ll guess which way that might be. But I didn’t understand what he said, so I went up to him as a naïf with this book, Madness and Civilization, which we had been forced to read, and I started asking him questions. “What does this mean? What does this mean? What is this passage? This is indecipherable.”
He patiently explained to the moron that I was what he was trying to say. It sounded much more interesting coming from him verbally, sitting just a few feet away, than it had on the page. I was lucky to become the class coordinator for his course at Berkeley. He gave these lectures about the problem of the truth-teller in Ancient Greece.
It was very far removed from . . . I had no classical training. Yes, I had Latin in high school because I went to Catholic school, and it was a required subject. I started as an altar boy with the Latin Mass, which quickly changed because of what happened at Vatican II. But no Greek, so it was completely Greek to me. Forgive me, that wasn’t planned that I was going to say that. It just happened spontaneously.
Anyway, I just kept asking him more questions and invited him to go to things, and so we would have lunches and dinners. I introduced him to this place, Little Joe’s in Little Italy, part of San Francisco, which unfortunately is no longer there. It was quite a landmark back then, and then he would repair after dinner to the bathhouses in San Francisco by himself. I was not part of that. I’m neither openly nor closeted gay, so that was a different part of Foucault that I didn’t partake in, but others did.
Anyway, I would ask him these things, and he would just explain stuff to me. I would say, “What’s happening in Poland?” This is the 1980s, and he would say things to me like, “The idea of civil society is the opiate of the intellectual class.” Everybody was completely enamored of the concept of civil society in the ’80s, especially via the Polish case, and so I would ask him to elucidate more. “What does that mean, and how does that work?”
He told me once that class in France came from disease in Paris — that it wasn’t because of who was a factory worker, who wasn’t a factory worker, but it was your neighborhoods in Paris and who died from cholera and who didn’t die from cholera. A colleague of ours who was another fellow graduate in Berkeley ended up writing a dissertation using that aside, that throwaway line.
I was able to ask him these questions about everything and anything. What he showed me — this is your question — what he showed me was how power works, not in terms of bureaucracy, not in terms of the large mechanisms of governance like a secret police, but how all of that is enforced and acted through daily life. In other words, the micro versions of power. It’s connected to the big structures, but it’s little people doing this. That’s why I said totalitarianism is using your agency to destroy your own agency.
That means denouncing your neighbors, being encouraged to denounce your neighbors for heresies, and participating in that culture of denunciation, which loosens all social trust and social bonds and puts you in a situation of dependency on the state. You’re a gung-ho activist using your agency, and the next thing you know, you have no power whatsoever. So, those are the kinds of things that I could talk to him about.
After he passed away from AIDS in the summer of 1984 — it was the AIDS epidemic, horrific. He passed away, and we had a memorial for him. I was still a PhD student, remember. I didn’t finish until ’88. There was this guy, Michel de Certeau, who wrote a tribute to Foucault in French that he was going to deliver at the event. It was called “The Laughter of Foucault.” I had these conversations with de Certeau about his analysis of Foucault and the pleasure of analytic work, which had been a hallmark of Foucault.
De Certeau taught me a phrase called “the little tactics of the habitat,” which became one of the core ideas of my dissertation and then book, Magnetic Mountain, about this micropower stuff. Even though Foucault was gone, I was able to extend the beginning of the conversations with Foucault through de Certeau.
I learned how power works in everyday life, and how the language that you use, and the practices like denunciation that you enact or partake in, help form those totalitarian structures, because the secret police are not there every minute of every day, so what’s in your head? How are you motivated? What type of behavior are you motivated for?
We say, “Okay, what would Stalin do in this situation?” Many people approach their lives — they’ve never met Stalin; they’ll never meet Stalin — but they imagine what Stalin might do. That gets implanted in their way of thinking; it becomes second nature. I learned to discuss and analyze that through Foucault.
I have to say, I didn’t share his analysis that Western society was imprisoning, that the daily life practices of free societies were a form of imprisonment in its own way. I never shared that view, so it wasn’t for me his analysis of the West that I liked. It was the analytical toolkit that I adapted from him to apply to actual totalitarianism in the Soviet case.
Excellent throughout.
Why are no trillion dollar companies being created in Europe?
That is the theme of a new Substack by Pieter Garicano, here is one excerpt:
These answers, according to a recent paper by Olivier Coste and Yann Coatanlem, two French investors, miss the point: the reason more capital doesn’t flow towards high-leverage ideas in Europe is because the price of failure is too high.
Coste estimates that, for a large enterprise, doing a significant restructuring in the US costs a company roughly two to four months of pay per worker. In France, that cost averages around 24 months of pay. In Germany, 30 months. In total, Coste and Coatanlem estimate restructuring costs are approximately ten times greater in Western Europe than in the United States…
Consider a simple example. Two large companies are considering whether to pursue a high risk innovation. The probability of success is estimated at one in five. Upon success they obtain profits of $100 million, and the investment costs $15 million.
One of the companies is in California, where if the innovation fails the restructuring costs $1 million. The other company is in Germany, where restructuring is 10x more expensive, it costs $10 million (a conservative estimate).
The expected value of this investment in California is a profit of $5 million. In Germany the expected value is a loss of $3 million.
Recommended.
Thursday assorted links
2. These South Korean Catholic priests should be bloggers.
3. Zero-based regulation by James Broughel. And from Alex Adams.
4. RLHF propaganda posters, funny stuff.
5. Scientific breakthroughs of 2024.
6. Weather forecasting breakthroughs with AI.
7. Scott Sumner on Cowen and Tabarrok on money. The key I think is to have a theory that explains why nominal variables sometimes forecast very well, and other times not well at all — this is very hard! I read Scott as significantly overrating the forecasting power of the nominal in the data.
Before AI replaces you, it will improve you, Philippines edition
Bahala says each of his calls at Concentrix is monitored by an artificial intelligence (AI) program that checks his performance. He says his volume of calls has increased under the AI’s watch. At his previous call center job, without an AI program, he answered at most 30 calls per eight-hour shift. Now, he gets through that many before lunchtime. He gets help from an AI “co-pilot,” an assistant that pulls up caller information and makes suggestions in real time.
“The co-pilot is helpful,” he says. “But I have to please the AI. The average handling time for each call is 5 to 7 minutes. I can’t go beyond that.”
Here is more from Michael Beltran, via Fred Smalkin.
Using AI to analyze changes in pedestrian traffic
That is the topic of my latest Bloomberg column, here is one bit:
Fortunately, there is new research. We have entered the age where innovative methods of measurement, such as computer vision and deep learning, can reveal how American life has changed.
Researchers at the National Bureau of Economic Research compiled footage of four urban public spaces, two in New York and one each in Philadelphia and Boston, from 1979-1980 and again in 2008-2010. These snapshots of American life, roughly 30 years apart, reveal how changes in work and culture might have shaped the way people move and interact on the street.
The videos capture people circulating in two busy Manhattan locations, in Bryant Park in midtown and outside the Metropolitan Museum of Art on the Upper East Side; around Boston’s Downtown Crossing shopping district; and on Chestnut Street in downtown Philadelphia. One piece of good news is that at least when it comes to our street behavior, we don’t seem to have become more solitary. From 1980 to 2010 there was hardly any change in the share of pedestrians walking alone, rising from 67% to 68%.
A bigger change is that average walking speed rose by 15%. So the pace of American life has accelerated, at least in public spaces in the Northeast. Most economists would predict such a result, since the growth in wages has increased the opportunity cost of just walking around. Better to have a quick stroll and get back to your work desk.
The biggest change in behavior was that lingering fell dramatically. The amount of time spent just hanging out dropped by about half across the measured locations. Note that this was seen in places where crime rates have fallen, so this trend was unlikely to have resulted from fear of being mugged. Instead, Americans just don’t use public spaces as they used to. These places now tend to be for moving through, to get somewhere, rather than for enjoying life or hoping to meet other people. There was especially a shift at Boston’s Downtown Crossing. In 1980, 54% of the people there were lingering, whereas by 2010 that had fallen to 14%.
Consistent with this observation, the number of public encounters also fell. You might be no less likely to set off with another person in tow, but you won’t meet up with others as often while you are underway. The notion of downtown as a “public square,” rife with spontaneous or planned encounters, is not what it used to be.
I prefer the new arrangements, but of course not everybody does. The researchers are
China markets in everything
This is very interesting, and I think a world first: a local government in China has just sold its sky, literally. This is the government of Pingyin County, Jinan, Shandong Province who sold for 924 million yuan (approximately $130 million) a 30-year concession to operate and maintain its low-altitude economic projects to a company called Shandong Jinyu General Aviation Co., Ltd. The “low-altitude economy” is a big trend in China at the moment. XPeng, one of China’s leading EV manufacturers, recently released a low-altitude flying car for instance. Drone deliveries are becoming increasingly common in Chinese cities, and various regions are actively developing low-altitude transportation networks. Shanghai, for instance, plans to establish 400 low-altitude flight routes by 2027. But this is the first time a local government has monetized its low-altitude airspace…
Here is more from Arnaud Bertrand. Via Jesper.
Wednesday assorted links
2. These names are not amongst the nine billion names of God.
3. Russ Roberts podcast with the translator of Life and Fate.
4. The Baby Money Index. Qatar is number three.
5. Lessons from working in an art gallery, excellent post recommended.
Info Finance has a Future!
Info finance is Vitalik Buterin’s term for combining things like prediction markets and news. Indeed, a prediction market like Polymarket is “a betting site for the participants and a news site for everyone else.”
Here’s an incredible instantiation of the idea from Packy McCormick. As I understand it, betting odds are drawn from Polymarket, context is provided by Perplexity and Grok, a script is written by ChatGPT and read by an AI using Packy’s voice and a video is produced by combining with some simple visuals. All automated.
What’s really impressive, however, is that it works. I learned something from the final product. I can see reading this like a newspaper.
Info finance has a future!
Addendum: See also my in-depth a16z crypto podcast (Apple, Spotify) talking with Kominers and Chokshi for more.
Nicholas Bagley on DOGE
A unilateral pause won’t be as helpful as Musk and Ramaswamy seem to think. Many businesses, especially big businesses, have to certify their legal compliance to government agencies—most notably via financial reports to the Securities and Exchange Commission, where false certifications can trigger criminal penalties under Sarbanes-Oxley. Few will feel comfortable ignoring rules that are still on the books just because DOGE tells them they might someday be rescinded.
What’s more, you need smart bureaucrats to make sure that rescissions hold up in court. Under settled law, established way back in the Reagan administration, “an agency changing its course by rescinding a rule is obligated to supply a reasoned analysis for the change.” Compiling that analysis requires technical skills that agency bureaucrats will have and that DOGE will lack. Slashing the federal workforce will thus work at cross-purposes to deregulation.
Here is the whole piece, excellent analysis.
The end of oil?
It is now plausible to envision scenarios in which global demand for crude oil falls to essentially zero by the end of this century, driven by improvements in clean energy technologies, adoption of stringent climate policies, or both. This paper asks what such a demand decline, when anticipated, might mean for global oil supply. One possibility is the well-known “green paradox”: because oil is an exhaustible resource, producers may accelerate near-term extraction in order to beat the demand decline. This reaction would increase near-term CO2 emissions and could possibly even lead the total present value of climate damages to be greater than if demand had not declined at all. However, because oil extraction requires potentially long-lived investments in wells and other infrastructure, the opposite may occur: an anticipated demand decline reduces producers’ investment rates, decreasing near-term oil production and CO2 emissions. To evaluate whether this disinvestment effect outweighs the green paradox, or vice-versa, I develop a tractable model of global oil supply that incorporates both effects, while also capturing industry features such as heterogeneous producers, exercise of market power by low-cost OPEC producers, and marginal drilling costs that increase with the rate of drilling. I find that for model inputs with the strongest empirical support, the disinvestment effect outweighs the traditional green paradox. In order for anticipation effects on net to substantially increase cumulative global oil extraction, I find that industry investments must have short time horizons, and that producers must have discount rates that are comparable to U.S. treasury bill rates.
That is from a new NBER working paper by Ryan Kellogg.
Interview with Jonathan Levin, economist and Stanford president
Stanford Review: …Several freshmen I have talked to have bemoaned their mandatory COLLEGE classes that are contract graded, meaning that students will receive an A if their work is turned in on time regardless of quality. One frosh even told me that all of her first quarter classes are contract graded. How does this set students up for success at Stanford and beyond?
President Levin: So the COLLEGE curriculum, that’s part of the design—and of course, it’s a new course. So many aspects of COLLEGE are an experiment. We’re learning. The faculty who teach it are learning about the best design for that class, what the syllabus should look like, what’s the best way to manage discussion, what’s the teaching model, what’s the grading model. And that’s something that the Faculty Senate discussed maybe 18 months ago or last year, the grading model, and at the time, they presented some evidence suggesting that it seemed to have been a positive experience.
Here is the link, Julia Steinberg did a great job. Interesting throughout. Jon you are an awesome economist, but you have to have much better answers than these, even by the standards of bureaucratic blah blah blah. We are looking to you to save Stanford, and bring a modicum of leadership and common sense, after the previous president was revealed to be a fraudster, among his other drawbacks. But more is needed than simply trying not to answer any of the questions!
Tuesday assorted links
1. Are humble scientists trusted more?
2. I thought this was hilarious (you won’t), that just shows how far gone I am.
3. The labor market regulatory culture that is Belgium.
5. Without weight loss drugs, Danish gdp growth would be about zero.