The ai Boom
The tiny country of Anguilla (pop 15,000) has an official country top-level domain code for the internet of .ai. Domain name registrations have surged from 48,000 in 2018 to 870,000 in the year to date and that source of revenue alone now accounts for nearly 50% of state revenues.
Hat tip: Cremieux based on this analysis.
AI Scientists in the Lab
Today, we introduce Periodic Labs. Our goal is to create an AI scientist.
Science works by conjecturing how the world might be, running experiments, and learning from the results.
Intelligence is necessary, but not sufficient. New knowledge is created when ideas are found to be consistent with reality. And so, at Periodic, we are building AI scientists and the autonomous laboratories for them to operate.
…Autonomous labs are central to our strategy. They provide huge amounts of high-quality data (each experiment can produce GBs of data!) that exists nowhere else. They generate valuable negative results which are seldom published. But most importantly, they give our AI scientists the tools to act.
…One of our goals is to discover superconductors that work at higher temperatures than today’s materials. Significant advances could help us create next-generation transportation and build power grids with minimal losses. But this is just one example — if we can automate materials design, we have the potential to accelerate Moore’s Law, space travel, and nuclear fusion.
Our founding team co-created ChatGPT, DeepMind’s GNoME, OpenAI’s Operator (now Agent), the neural attention mechanism, MatterGen; have scaled autonomous physics labs; and have contributed to important materials discoveries of the last decade. We’ve come together to scale up and reimagine how science is done.
The AI’s can work 24 hours a day, 365 days a year and with labs under their control the feedback will be quick. In nine hours, AlphaZero taught itself chess and then trounced the then world champion Stockfish 8, (ELO around 3378 compared to Magnus Carlsen’s high of 2882). That was in 2017. In general, experiments are more open-ended than chess but not necessarily in every domain. Moreover context windows and capabilities have grown tremendously since 2017.
In other AI news, AI can be used to generate dangerous proteins like ricin and current safeguards are not very effective:
Microsoft bioengineer Bruce Wittmann normally uses artificial intelligence (AI) to design proteins that could help fight disease or grow food. But last year, he used AI tools like a would-be bioterrorist: creating digital blueprints for proteins that could mimic deadly poisons and toxins such as ricin, botulinum, and Shiga.
Wittmann and his Microsoft colleagues wanted to know what would happen if they ordered the DNA sequences that code for these proteins from companies that synthesize nucleic acids. Borrowing a military term, the researchers called it a “red team” exercise, looking for weaknesses in biosecurity practices in the protein engineering pipeline.
The effort grew into a collaboration with many biosecurity experts, and according to their new paper, published today in Science, one key guardrail failed. DNA vendors typically use screening software to flag sequences that might be used to cause harm. But the researchers report that this software failed to catch many of their AI-designed genes—one tool missed more than 75% of the potential toxins.
Solve for the equilibrium?
Lerner Symmetry Bites
President Trump recently boasted:
.@POTUS: “We’re going to take some of that tariff money that we made — we’re going to give it to our farmers… We’re going to make sure that our farmers are in great shape.”
A practically textbook example of Lerner Symmetry! In an earlier post, I highlighted Doug Irwin’s Three Simple Principles of Trade Policy. Principle One is Lerner Symmetry—a tax on imports is a tax on exports:
Exports are necessary to generate the earnings to pay for imports, or exports are the goods a country must give up in order to acquire imports….if foreign countries are blocked in their ability to sell their goods in the United States, for example, they will be unable to earn the dollars they need to purchase U.S. goods.
…The equivalence of export and import taxes is not an obvious proposition, and it is often counterintuitive to most people. Imagine taking a poll of average Americans and asking the following question: “Should the United States impose import tariffs on foreign textiles to prevent low-wage countries
from harming thousands of American textile workers?” Some fraction, perhaps even a sizeable one, of the respondents would surely answer affirmatively. If asked to explain their position, they would probably reply that import tariffs would create jobs for Americans at the expense of foreign workers and thereby reduce domestic unemployment.Suppose you then asked those same people the following question: “Should the United States tax the exportation of Boeing aircraft, wheat and corn, computers and computer software, and other domestically produced goods?” I suspect the answer would be a resounding and unanimous “No!” After all, it would be explained, export taxes would destroy jobs and harm important industries. And yet the Lerner symmetry theorem says that the two policies are equivalent in their economic effects.
Thus, President Trump is having to subsidize farmers because farmers are exporters. Import tariffs make it harder for exporters to sell abroad. Using tariff revenue to subsidize the losses of exporters is a textbook illustration of Lerner Symmetry because the export losses flow directly from the tax on imports! The irony is that President Trump parades the subsidies as a victory while in fact they are simply damage control for a policy he created.
AI and the FDA
Dean Ball has an excellent survey of the AI landscape and policy that includes this:
The speed of drug development will increase within a few years, and we will see headlines along the lines of “10 New Computationally Validated Drugs Discovered by One Company This Week,” probably toward the last quarter of the decade. But no American will feel those benefits, because the Food and Drug Administration’s approval backlog will be at record highs. A prominent, Silicon Valley-based pharmaceutical startup will threaten to move to a friendlier jurisdiction such as the United Arab Emirates, and they may in fact do it.
Eventually, I expect the FDA and other regulators to do something to break the logjam. It is likely to perceived as reckless by many, including virtually everyone in the opposite party of whomever holds the White House at the time it happens. What medicines you consume could take on a techno-political valence.
Agreed—but the nearer-term upside is repurposing. Once a drug has been FDA approved for one use, physicians can prescribe it for any use. New uses for old drugs are often discovered, so the off-label market is large. The key advantage of off-label prescribing is speed: a new use can be described in the medical literature and physicians can start applying that knowledge immediately, without the cost and delay of new FDA trials. When the RECOVERY trial provided evidence that an already-approved drug, dexamethasone, was effective against some stages of COVID, for example, physicians started prescribing it within hours. If dexamethasone had had to go through new FDA-efficacy trials a million people would likely have died in the interim. With thousands of already approved drugs there is a significant opportunity for AI to discover new uses for old drugs. Remember, every side-effect is potentially a main effect for a different condition.
On Ball’s main point, I agree: there is considerable room for AI-discovered drugs, and this will strain the current FDA system. The challenge is threefold.
First, as Ball notes, more candidate drugs at lower cost means other regulators may become competitive with the FDA. China is the obvious case: it is now large and wealthy enough to be an independent market, and its regulators have streamlined approvals and improved clinical trials. More new drugs now emerge from China than from Europe.
Second, AI pushes us toward rational drug design. RCTs were a major advance, but they are in some sense primitive. Once a mechanic has diagnosed a problem, the mechanic doesn’t run a RCT to determine the solution. The mechanic fixes the problem! As our knowledge of the body grows, medicine should look more like car repair: precise, targeted, and not reliant on averages.
Closely related is the rise of personalized medicine. As I wrote in A New FDA for the Age of Personalized, Molecular Medicine:
Each patient is a unique, dynamic system and at the molecular level diseases are heterogeneous even when symptoms are not. In just the last few years we have expanded breast cancer into first four and now ten different types of cancer and the subdivision is likely to continue as knowledge expands. Match heterogeneous patients against heterogeneous diseases and the result is a high dimension system that cannot be well navigated with expensive, randomized controlled trials. As a result, the FDA ends up throwing out many drugs that could do good.
RCTs tell us about average treatment effects, but the more we treat patients as unique, the less relevant those averages become.
AI holds a lot of promise for more effective, better targeted drugs but the full promise will only be unlocked if the FDA also adapts.
The Return of the MR Podcast: In Praise of Commercial Culture
The Marginal Revolution Podcast is back with new episodes! We begin with what I think is our best episode to date. We revisit Tyler’s 1998 book In Praise of Commercial Culture. This is the book that put Tyler on the map as a public intellectual. Tyler and I also wrote a paper, An Economic Theory of Avant-Garde and Popular Art, or High and Low Culture, exploring themes from the book. But does In Praise of Commercial Culture stand the test of time? You be the judge!
Here’s one bit:
TABARROK: Here’s a quote from the book, “Art and democratic politics, although both beneficial activities, operate on conflicting principles.”
COWEN: So much of democratic politics is based on consensus. So much of wonderful art, especially new art, is based on overturning consensus, maybe sometimes offending people. All this came to a head in the 1990s, disputes over what the National Endowment for the Arts in America was funding. Some of it, of course, was obscene. Some of it was obscene and pretty good. Some of it was obscene and terrible.
What ended up happening is the whole process got bureaucratized. The NEA ended up afraid to make highly controversial grants. They spend more on overhead. They send more around to the states. Now, it’s much more boring. It seems obvious in retrospect. The NEA did a much better job in the 1960s, right after it was founded, when it was just a bunch of smart people sitting around a table saying, “Let’s send some money to this person,” and then they’d just do it, basically.
TABARROK: Right, so the greatness cannot survive the mediocrity of democratic consensus.
COWEN: There are plenty of good cases where government does good things in the arts, often in the early stages of some process before it’s too politicized. I think some critics overlook that or don’t want to admit it.
TABARROK: One of the interesting things in your book was that the whole history of the NEA, this recreates itself, has recreated itself many times in the past. The salon during the French painting Renaissance, the impressionists hated the salon, right?
COWEN: Right. And had typically turned them away because the works weren’t good enough.
TABARROK: There could be rent-seeking going on, right? The artists get control. Sometimes it’s democratic politics, but sometimes it’s some clique of artists who get control and then funnel the money to their friends.
COWEN: French cinematic subsidies would more fit that latter model. It’s not so much that the French voters want to pay for those movies, but a lot of French government is controlled by elites. The elites like a certain kind of cinema. They view it as a counterweight to Hollywood, preserving French culture. The French still pay for or, indirectly by quota, subsidize a lot of films that just don’t really even get released. They end up somewhere and they just don’t have much impact flat out.
Here’s the episode. Subscribe now to take a small step toward a much better world: Apple Podcasts | Spotify | YouTube.
The United States is Starved for Talent, Re-Upped
I wrote this post in 2020. Time to re-up (no indent);
The US offers a limited number of H1-B visas annually, these are temporary 3-6 year visas that allow firms to hire high-skill workers. In many years, the demand exceeds the supply which is capped at 85,000 and in these years USCIS randomly selects which visas to approve. The random selection is key to a new NBER paper by Dimmock, Huang and Weisbenner (published here). What’s the effect on a firm of getting lucky and wining the lottery?
We find that a firm’s win rate in the H-1B visa lottery is strongly related to the firm’s outcomes over the following three years. Relative to ex ante similar firms that also applied for H-1B visas, firms with higher win rates in the lottery are more likely to receive additional external funding and have an IPO or be acquired. Firms with higher win rates also become more likely to secure funding from high-reputation VCs, and receive more patents and more patent citations. Overall, the results show that access to skilled foreign workers has a strong positive effect on firm-level measures of success.
Overall, getting (approximately) one extra high-skilled worker causes a 23% increase in the probability of a successful IPO within five years (a 1.5 percentage point increase in the baseline probability of 6.6%). That’s a huge effect. Remember, these startups have access to a labor pool of 160 million workers. For most firms, the next best worker can’t be appreciably different than the first-best worker. But for the 2000 or so tech-startups the authors examine, the difference between the world’s best and the US best is huge. Put differently on some margins the US is starved for talent.
Of course, if we play our cards right the world’s best can be the US best.
Celebrate Vishvakarma: A Holiday for Machines, Robots, and AI
Most holidays celebrate people, gods or military victories. Today is India’s Vishvakarma Puja, a celebration of machines. In India on this day, workers clean and honor their equipment and engineers pay tribute to Vishvakarma, the god of architecture, engineering and manufacturing.
Call it a celebration of Solow and a reminder that capital, not just labor, drives growth.
Capital today isn’t just looms and tractors—it’s robots, software, and AI. These are the new force multipliers, the machines that extend not only our muscles but our minds. To celebrate Vishvakarma is to celebrate tools, tool makers and the capital that makes us productive.
We have Labor Day for workers and Earth Day for nature. Viskvakarma Day is for the machines. So today don’t thank Mother Earth, thank the machines, reflect on their power and productivity and be grateful for all that they make possible. Capital is the true source of abundance.
Vishvakarma Day should be our national holiday for abundance and progress.
Hat tip: Nimai Mehta.
The British War on Slavery
In August of 1833 the British passed legislation abolishing slavery within the British Empire and putting more than 800,000 enslaved Africans on the path to freedom. To make this possible, the British government paid a huge sum, £20 million or about 5% of GDP at the time, to compensate/bribe the slaveowners into accepting the deal. In inflation adjusted terms this is about £2.5 billion today (2025) but relative to GDP the British spent an equivalent of about $170 billion to free the slaves, a very large expenditure.
Indeed, the expenditure was so large that the money was borrowed and the final payments on the debt were not made until 2015. When in 2015 a tweet from the British Treasury revealed this surprising fact, there was a paroxysm of outrage as if slaveholders were still being paid off. I see the compensation in much more positive terms.
Of course, in an ideal world, compensation would have been paid to the slaves, not the slaveowners. Every man has a property in his own person and it was the slaves who had had their property stolen. In an ideal world, however, slavery would never have happened. Thus, the question the British abolitionists faced is not what happens in an ideal world but how do we get from where we are to a better world? Compensating the slaveowners was the only practical and peaceful way to get to a better world. As the great abolitionist William Wilberforce said on his deathbed “Thank God that I should have lived to witness a day in which England is willing to give twenty millions sterling for the abolition of slavery!”
The 1833 Slavery Abolition Act was preceded by the 1807 Slave Trade Act which had banned trade in slaves. In an excellent new paper, The long campaign: Britain’s fight to end the slave trade, economist historians Yi Jie Gwee and Hui Ren Tan assemble new archival data to assess how the Royal Navy’s anti slave-trade patrols expanded over time, how effective they were at curtailing the trade, the influence of supply-side enforcement versus demand-side changes on ending the trade, and why Britain persisted with this costly campaign.
Britain’s naval suppression campaign began on a modest scale but the campaign grew in strength throughout the 19th century, peaking in the late 1840s to early 1850s when over 14% of the entire Royal Navy fleet was deployed to anti-slavery patrols. The British patrols captured some 1,600 ships and freed some 150,000 people destined for slavery but they were at best only modestly successful at reducing the slave trade. The big impact came when Brazil, the largest remaining market for enslaved labor (by the mid-19th century, nearly 80% of trans-Atlantic slave voyages sailed under Brazilian or Portuguese flags), enacted its anti slave-trade law in 1850. Britain’s campaign was not without influence on the demand side however as passage of the Aberdeen Act in 1845 allowed the Royal Navy to seize Brazilian slave ships and that put pressure on Brazil and helped spur the 1850 law.
The suppression patrols were expensive (consuming ships, men, and funds), and Britain derived no direct economic benefit from them. Yet, even during the Napoleonic Wars, the Opium Wars, and the Crimean War, the Royal Navy continued to station ships, even high-tech steam ships, off West Africa to catch slavers. Due to the expense, the patrols were controversial and there were attempts to end them. Gwee and Tan look at the votes on ending the patrols and find that ideology was the dominant factor explaining support for the patrols, that is a principled opposition to the slave trade and a belief in the moral cause of abolition kept Britain in the war against slavery even at considerable expense.
Ordinarily, I teach politics without romance and look for interest as an explanation of political action and while I don’t doubt that doing good and doing well were correlated, even during abolition, I also agree with Gwee and Tan that the British war on slavery was primarily driven by ideology and moral principle as both the compensation plan and the support of the anti-slavery patrols attest.
British taxpayers shouldered an enormous military and financial burden to eliminate slavery, reflecting a generosity of spirit and a sincere attempt to address a moral wrong—an act of atonement that stands as one of the most unusual and significant in history.
Housing 101
John Arnold points us to this table on new apartments and pointedly notes that the population of LA (18.5 m) is more than 7 times that of Austin (2.5m).
MR readers will not be surprised to learn that apartment prices are falling in Austin.
Meanwhile the WSJ reports another shocker, New York’s Airbnb Crackdown, in Force for Two Years, Hasn’t Improved Housing Supply. But guess what has happened? Ok, you don’t have to guess. Hotel prices have increased:
Hotels tend to benefit from tighter Airbnb restrictions, especially in New York City. Significantly reducing the number of apartments that can be rented for less than 30 days undeniably boosts demand for hotel rooms in a city visited by tens of millions of tourists a year.
Without the law, “we would be in a catastrophic situation,” said hotelier Richard Born, who owns 24 hotels across the city.
Moving on Up
James Heckman and Sadegh Eshaghnia have launched a broadside in the WSJ against the Chetty-Hendren paper The Impacts of Neighborhoods on Intergenerational Mobility I: Childhood Exposure Effects. It’s a little odd to see this in the WSJ but since the Chetty-Hendren paper has been widely reported in the media, I suppose this is fair game. Recall the basic upshot of Chetty-Hendren is that neighborhoods matter and in particular
…the outcomes of children whose families move to a better neighborhood—as measured by the outcomes of children already living there—improve linearly in proportion to the amount of time they spend growing up in that area, at a rate of approximately 4% per year of exposure.
I am not going to referee this dispute but I did enjoy the audacity of one placebo test run by Eshaghnia. Eshaghnia runs the same statistical models as Chetty-Hendren but substitutes birth length (“the distance between a newborn’s head and heels”) instead of adult earnings and college attendance rates. Now, obviously, moving cannot affect birth length! Yet, Eshaghnia finds, in essence*, that children of parents who move to taller neighborhoods have taller children, in parallel with CH who find that children of parents who move to higher income neighborhoods have higher income children. Moreover, the covariance is stronger the earlier parents move. Since birth length is correlated with cognitive abilities and other later life outcomes this is highly suggestive that CH are not finding (pure) causal effects.
* I have simplified slightly for intuition. Technically, Eshaghnia shows that children’s birth‑length ranks align with the destination–origin permanent‑resident birth‑length difference, and that alignment is ≈0.044 stronger for each year earlier the move.
Addendum: Chetty et al. do not find similar results in California (see in particular Figure 2).
The Simple Mathematics of Chinese Innovation
The NYTimes has a good data-driven piece on How China Went From Clean Energy Copycat to Global Innovator, the upshot of which is that the old view of China as simply copying (“stealing” in some eyes) no longer describes reality. In some fields, including solar, batteries and hydrogen, China is now the leading innovator as measured by high-quality patents and scientific citations.
None of this should surprise anyone. China employs roughly 2.6 million full-time equivalent (FTE) researchers versus about 1.7 million in the United States. On a per-capita basis the U.S. is ahead—about 4,500 researchers per million people versus China’s 1,700—but population scale tips the balance. China simply has more researchers in absolute terms. If you frame it in terms of rare cognitive talent, as in my post on The Extreme Shortage of High IQ Workers—the arithmetic is even more striking: 1-in-1,000 workers (≈IQ 145) ~170,000 in the U.S. labor force and ~770,000 in China. Scale matters.
In the 20th century the world’s most populous countries were poor but that was neither the case historically nor will it be true in the 21st century. The standard of living in China remains well below that in the United States and China may never catch U.S. GDP per capita, but quantity is a quality of its own. More people means more ideas.
To be clear, the rise of China and India as scientific superpowers is not per se a threat. Whiners complain about US pharmaceutical R&D “subsidizing” the world. Well, Chinese pharmaceutical innovation is now saving American lives. Terrific. Ideas don’t stop at borders, and their spread raises living standards everywhere. It would be wonderful if an American cured cancer. It would be 99% as wonderful if a Chinese scientist did. What matters is that when more scientists attack the problem, the odds of a cure rise so we should look favorably on a world with more scientists. That is progress.
The danger is not China’s rise but America’s mindset. Treat science as zero-sum and every Chinese patent looks like a loss. But ideas are nonrival: a Chinese breakthrough doesn’t make Americans poorer, it makes the world richer. A multi-polar scientific world means faster growth, greater wealth, and accelerating technology—even if America wins a smaller share of the Nobels.
Could China Have Gone Christian?
The Taiping Rebellion is arguably the most important event in modern history that even educated Westerners know very little about. It’s also known as the Taiping Civil War and it was one of the largest conflicts in human history (1850–1864), with death toll estimates ranging from 20 to 30 million, far exceeding deaths in the US civil war (~750,000) with which it overlapped. The civil war destabilized Qing China, weakening it against foreign powers and shaped the trajectory of 19th- and 20th-century Chinese politics. In China the Taiping Civil War is considered the defining event of the 19th-century.
The most surprising aspect of the civil war is that the rebels were Christian. The rebellion has its genesis in 1837 with the dramatic visions of Hong Xiuquan. In his visions, Hong and his elder brother traveled the world slaying demons, guided onwards by an old man who berated Confucius for failing to teach proper doctrines to the Chinese people. (I draw here on Steven Platt’s excellent Autumn in the Heavenly Kingdom). It is perhaps not coincidental that Hong began experiencing his visions after failing the infamously stressful Chinese civil service exams for the third time. It wasn’t until 1843, however, after he failed the exams for the fourth time, that he had an epiphany. A Christian tract that he had never read before suddenly unlocked the meaning of his visions–the elder brother was Jesus Christ, making Hong the second son of the old man, God.
With his visions unlocked, Hong threw himself into learning and then teaching the Gospels. He quickly converted his cousin and a neighbor and they baptized themselves and began taking down icons of Confucianism at their local school. Confucianism, of course, underpinned the exam system that Hong had grown to hate (Recall, that a similar pattern is visible in India today, where mass exams generate large numbers of educated but frustrated youth).
The wild visions of a lowly scholar wouldn’t seem to have the makings of a revolutionary movement but this was the beginning of the century of humiliation when China was forced to confront the idea that far from being the center of civilization it was in fact a backward and weak power on the world stage. Moreover, China was governed by foreigners, the Manchus, who despite ruling for 200 years had never really integrated with the Chinese population. Hence, Hong’s calls to kill the demons merged with a nationalist fervor to massacre the Manchus. Hong proclaimed himself the Heavenly King and his movement quickly grew to more than a million zealous warriors who captured significant territory including establishing the Taiping Heavenly Kingdom with its capital at Nanjing.
The regime banned foot‑binding, prostitution and slavery, promoted the equality of men and women, distributed bibles, and instituted a 7-day week with strict observance of the sabbath. To be sure, this was a Sinicized, millenarian Christianity, more Old Testament than new but the Christianity was serious and real and the rebels appealed to British and Americans as their Christian brothers. One Taiping commander wrote to a British counterpart:
You and I are both sons of the Heavenly Father, God, and are both younger brothers of the Heavenly Elder Brother, Jesus. Our feelings towards each other are like those of brothers, and our friendship is as intimate as that of two brothers of the same parentage. (quoted in Platt p.40)
Now, as it happened, the Heavenly Kingdom fell to the Qing, but it was a close thing and could easily have gone the other way. Western powers—above all Britain, but also the United States—hedged their bets and at times fought both sides, yet for short-sighted reasons ultimately tilted toward the Qing, an intervention Ito Hirobumi later called “the most significant mistake the British ever made in China.” Internal purges fractured the movement, alliances went unmade, and crucial opportunities slipped away. Yet the moment was pregnant with possibility. Hong Rengan, Hong Xiuquan’s cousin and prime minister from 1859, pushed sweeping modernization: railroads, steamships, postal services, banks, and even democratic reforms. These initiatives would likely have brought what one might call Christianity with Chinese Characteristics into closer alignment with Western Christianity.
Indeed, it is entirely plausible that with only a few turns of history, China might now be the world’s most populous Christian nation. And if that seems hard to believe, consider what did happen. Sixty three years after the fall of Nanjing in 1864, China again erupted into civil war under Mao Zedong. This time the rebels triumphed, and instead of a Christian Heavenly Kingdom the world got a Communist People’s Republic. The parallels are striking: both Hong and Mao led vast zealous movements that promised equality, smashed tradition, and enthroned a single man as the embodiment of truth. Both drew on foreign creeds—Hong from Protestant Christianity, Mao from Marxism-Leninism. Both movement had excesses but of the counter-factual and the factual I have little doubt which promised more ruin. The Heavenly Kingdom pointed toward a biblical moral order aligned with the West, the People’s Republic toward a creed that delivered famine, purges, and economic stagnation. Such are the contingencies of history—an ill-timed purge in Nanjing, a foreign gunboat at Shanghai, a missed alliance with the Nian. Small events cascaded into vast consequences. For the want of a nail, the Heavenly Kingdom was lost, and with it perhaps an entirely different modern world.
Inside India’s endless trials
The FT’s Krishn Kaushik covers the courts in India:
…in one recent example a Delhi court concluded a property dispute after 66 years. Both the original litigants were dead. Still, the lawyer for one of the warring parties cautioned that the conclusion was in fact not the end, as the ruling would be appealed.
Three years ago, after pondering a dispute for 16 years, the supreme court sent back a 60-year-old land case for fresh adjudication to a lower court, which had already taken over 30 years to give its judgment in 2006.
A 2021 study [excellent study, AT] of Mumbai real estate found that more than a quarter of the projects under planning or construction and 43 per cent of all “built-up spaces” in the city were under some litigation. My apartment block was one of them.
…One of the reasons for this accumulation is human resources. India has around 16 judges per million people, compared to over 150 for the US. In 2016, the issue brought the country’s chief justice, TS Thakur, to tears during a speech as he requested that the government hire more judges to wade through the “avalanche” of backlog.
Reminds me of one of my favorite MR posts, A Twisted Tale of Rent Control in the Maximum City.
Resources for Teaching Tariffs
Trump has put tariffs on the economics agenda in a way that hasn’t been true for decades. As a new semester of principles of economics begins, here are some resources for teaching tariffs.
Comparative Advantage (video)
The Microeconomics of Tariffs and Protectionism (video)
Why Do Domestic Prices Rise with Tariffs? (post)
Trade Diversion (Why Tariffs on More Countries Can Be Better) (post)
Manufacturing and Trade (post), Manufacturing Went South (post) and Tariffs Hurt Manufacturing (post)
Three Simple Rules of Trade Policy (Lerner symmetry, imports are inputs, trade balances and capital flows; post)
Tariffs and Taxes (post), Tariffs are a Terrible Way to Raise Revenue (Albrecht post) and Consistency on Tariffs and Taxes (post)
Globalization: Economics, Culture and the Future (video)
The Tariff Tracker, great source for real time tracking of prices such as below (the data can be downloaded):
The War on Roommates: Why Is Sharing a House Illegal?
Boarding houses were made illegal by zoning that enforced single family homes and by rules limiting occupancy, demanding every room have a private bathroom, outlawing shared kitchens, requiring parking spaces for every resident etc.
How States and Cities Decimated Americans’ Lowest-Cost Housing Option is an excellent, hard-hitting piece making and extending these points and significantly it’s not from a libertarian think tank but Pew:
Low-cost micro-units, often called single-room occupancies, or SROs, were once a reliable form of housing for the United States’ poorest residents of, and newcomers to, New York, Chicago, San Francisco, and many other major U.S. cities. Well into the 20th century, SROs were the least expensive option on the housing market, providing a small room with a shared bathroom and sometimes a shared kitchen for a price that is unimaginable today—as little as $100 to $300 a month (in 2025 dollars).
In the late 19th and early 20th centuries, landlords converted thousands of houses, hotels, apartment buildings, and commercial buildings into SROs, and by 1950, SRO units made up about 10% of all rental units in some major cities. But beginning in the mid-1950s, as some politicians and vocal members of the public turned against SROs and the people who lived in them, major cities across the country revised zoning and building codes to force or encourage landlords to eliminate SRO units and to prohibit the development of new ones. Over the next several decades, governments and developers gradually demolished thousands of SROs or converted them to other uses, including boutique hotels for tourists. And as SROs disappeared, homelessness—which had been rare from at least the end of the Great Depression to the late 1970s—exploded nationwide.
The Pew piece does an excellent job of documenting how laws are beginning to change. I especially appreciated this point: the simplest reform is to stop making it illegal for unrelated people to share a home!
Perhaps the simplest method of creating low-cost shared housing is to allow unrelated individuals to share a house in the same way that relatives are allowed to share a house.67 But many communities limit the number of unrelated people who can live together—in some places, to as few as two. Such laws make sharing a house for a group of roommates—which usually enables rents lower than having an individual apartment—illegal. The U.S. has a record number of unused bedrooms, but many cannot be rented because of restrictions on house sharing by unrelated roommates, even if that would be the most profitable use for the landlord and the most affordable option for the tenants.68 To enable this low-cost housing option, Iowa, Oregon, and Colorado all passed bipartisan legislation to strike down local codes that prohibit house-sharing (in 2017, 2021, and 2024, respectively).69
So many of our problems are created by busybodies and do-gooders who prevent people from using their own property.