Markets in everything
A new app offering to record your phone calls and pay you for the audio so it can sell the data to AI companies is, unbelievably, the No. 2 app in Apple’s U.S. App Store’s Social Networking section.
The app, Neon Mobile, pitches itself as a moneymaking tool offering “hundreds or even thousands of dollars per year” for access to your audio conversations.
Neon’s website says the company pays 30¢ per minute when you call other Neon users and up to $30 per day maximum for making calls to anyone else. The app also pays for referrals. The app first ranked No. 476 in the Social Networking category of the U.S. App Store on September 18 but jumped to No. 10 at the end of yesterday, according to data from app intelligence firm Appfigures.
On Wednesday, Neon was spotted in the No. 2 position on the iPhone’s top free charts for social apps…
However, Neon’s marketing claims to only record your side of the call unless it’s with another Neon user.
Here is the full story, via Mark.
Friday assorted links
1. Five reforms for science funding.
2. Canon of art works about Washington, D.C. They forgot to list “No Way Out,” one of the best DC movies, with Gene Hackman.
3. Private equity in the hospital industry.
5. The Economist on talent and spotting geniuses.
6. How common is accidental invention?
7. Evaluating LLMs on real world tasks.
Mick West, by the way, initially was dismissing “drones over Denmark” reports, he is not a reliable source rather a reflexive nay-sayer.
Why is Milei begging for a bailout?
There are two primary reasons.
First, he pegged Argentina’s real exchange rate too high, hoping this would appease voters by getting inflation down more quickly. That was a miscalculation. It also was a violation of market or libertarian principles. The problems here are not an instance of market failure, rather Milei forgot his own principles.
Second, the opposition did very well in a recent election. So everyone is afraid the reign of Milei, or like-minded leaders, is not going to last for so long. That precipitated a crisis in the markets. But that is hardly an argument against Milei, even though it happened on his watch. It is an argument against the likely alternatives to Milei.
So it is a mistake to read recent events as somehow a repudiation of market or libertarian principles.
My excellent Conversation with Steven Pinker
Here is the audio, video, and transcript. Here is part of the episode summary:
Tyler and Steven probe these dimensions of common knowledge—Schelling points, differential knowledge, benign hypocrisies like a whisky bottle in a paper bag—before testing whether rational people can actually agree (spoiler: they can’t converge on Hitchcock rankings despite Aumann’s theorem), whether liberal enlightenment will reignite and why, what stirring liberal thinkers exist under the age 55, why only a quarter of Harvard students deserve A’s, how large language models implicitly use linguistic insights while ignoring linguistic theory, his favorite track on Rubber Soul, what he’ll do next, and more.
Excerpt:
COWEN: Surely there’s a difference between coordination and common knowledge. I think of common knowledge as an extremely recursive model that typically has an infinite number of loops. Most of the coordination that goes on in the real world is not like that. If I approach a traffic circle in Northern Virginia, I look at the other person, we trade glances. There’s a slight amount of recursion, but I doubt if it’s ever three loops. Maybe it’s one or two.
We also have to slow down our speeds precisely because there are not an infinite number of loops. We coordinate. What percentage of the coordination in the real world is like the traffic circle example or other examples, and what percentage of it is due to actual common knowledge?
PINKER: Common knowledge, in the technical sense, does involve this infinite number of arbitrarily embedded beliefs about beliefs about beliefs. Thank you for introducing the title with the three dots, dot, dot, dot, because that’s what signals that common knowledge is not just when everyone knows that everyone knows, but when everyone knows that everyone knows that and so on. The answer to your puzzle — and I devote a chapter in the book to what common knowledge — could actually consist of, and I’m a psychologist, I’m not an economist, a mathematician, a game theorist, so foremost in my mind is what’s going on in someone’s head when they have common knowledge.
You’re right. We couldn’t think through an infinite number of “I know that he knows” thoughts, and our mind starts to spin when we do three or four. Instead, common knowledge can be generated by something that is self-evident, that is conspicuous, that’s salient, that you can witness at the same time that you witness other people witnessing it and witnessing you witnessing it. That can grant common knowledge in a stroke. Now, it’s implicit common knowledge.
One way of putting it is you have reason to believe that he knows that I know that he knows that I know that he knows, et cetera, even if you don’t literally believe it in the sense that that thought is consciously running through your mind. I think there’s a lot of interplay in human life between this recursive mentalizing, that is, thinking about other people thinking about other people, and the intuitive sense that something is out there, and therefore people do know that other people know it, even if you don’t have to consciously work that through.
You gave the example of norms and laws, like who yields at an intersection. The eye contact, though, is crucial because I suggest that eye contact is an instant common knowledge generator. You’re looking at the part of the person looking at the part of you, looking at the part of them. You’ve got instant granting of common knowledge by the mere fact of making eye contact, which is why it’s so potent in human interaction and often in other species as well, where eye contact can be a potent signal.
There are even species that can coordinate without literally having common knowledge. I give the example of the lowly coral, which presumably not only has no beliefs, but doesn’t even have a brain with which to have beliefs. Coral have a coordination problem. They’re stuck to the ocean floor. Their sperm have to meet another coral’s eggs and vice versa. They can’t spew eggs and sperm into the water 24/7. It would just be too metabolically expensive. What they do is they coordinate on the full moon.
On the full moon or, depending on the species, a fixed number of days after the full moon, that’s the day where they all release their gametes into the water, which can then find each other. Of course, they don’t have common knowledge in knowing that the other will know. It’s implicit in the logic of their solution to a coordination problem, namely, the public signal of the full moon, which, over evolutionary time, it’s guaranteed that each of them can sense it at the same time.
Indeed, in the case of humans, we might do things that are like coral. That is, there’s some signal that just leads us to coordinate without thinking it through. The thing about humans is that because we do have or can have recursive mentalizing, it’s not just one signal, one response, full moon, shoot your wad. There’s no limit to the number of things that we can coordinate creatively in evolutionarily novel ways by setting up new conventions that allow us to coordinate.
COWEN: I’m not doubting that we coordinate. My worry is that common knowledge models have too many knife-edge properties. Whether or not there are timing frictions, whether or not there are differential interpretations of what’s going on, whether or not there’s an infinite number of messages or just an arbitrarily large number of messages, all those can matter a lot in the model. Yet actual coordination isn’t that fragile. Isn’t the common knowledge model a bad way to figure out how coordination comes about?
And this part might please Scott Sumner:
COWEN: I don’t like most ballet, but I admit I ought to. I just don’t have the time to learn enough to appreciate it. Take Alfred Hitchcock. I would say North by Northwest, while a fine film, is really considerably below Rear Window and Vertigo. Will you agree with me on that?
PINKER: I don’t agree with you on that.
COWEN: Or you think I’m not your epistemic peer on Hitchcock films?
PINKER: Your preferences are presumably different from beliefs.
COWEN: No. Quality relative to constructed standards of the canon…
COWEN: You’re going to budge now, and you’re going to agree that I’m right. We’re not doing too well on this Aumann thing, are we?
PINKER: We aren’t.
COWEN: Because I’m going to insist North by Northwest, again, while a very good movie is clearly below the other two.
PINKER: You’re going to insist, yes.
COWEN: I’m going to insist, and I thought that you might not agree with this, but I’m still convinced that if we had enough time, I could convince you. Hearing that from me, you should accede to the judgment.
I was very pleased to have read Steven’s new book
Pulse
Today we are launching my favorite feature of ChatGPT so far, called Pulse. It is initially available to Pro subscribers.
Pulse works for you overnight, and keeps thinking about your interests, your connected data, your recent chats, and more. Every morning, you get a custom-generated set of stuff you might be interested in. It performs super well if you tell ChatGPT more about what’s important to you.
In regular chat, you could mention “I’d like to go visit Bora Bora someday” or “My kid is 6 months old and I’m interested in developmental milestones” and in the future you might get useful updates.
Think of treating ChatGPT like a super-competent personal assistant: sometimes you ask for things you need in the moment, but if you share general preferences, it will do a good job for you proactively.
This also points to what I believe is the future of ChatGPT: a shift from being all reactive to being significantly proactive, and extremely personalized.
That is from Sam Altman.
Is a mild stagflation coming?
That is the topic of my latest article for The Free Press. The general picture is not altogether encouraging:
How about unemployment?
The labor market has been deteriorating, albeit slowly, since the waning days of the Biden administration. Indeed, for the first time since 2021, there are more unemployed Americans than there are open jobs.
Economists can only guess as to why this is happening. Some like to argue that labor markets are “taking a pause” or have “run out of steam,” two metaphors that may hold some truth but should not be mistaken for well-reasoned explanations. Another popular hypothesis is that artificial intelligence has slowed new hiring. That may be true for some sectors, such as mid-tier tech programmers or call center workers, but it is unlikely to have a large enough effect to account for most of the recent labor market slowdown.
As the Bureau of Labor Statistics has revised job creation numbers, it has become increasingly clear that the American economy has not been creating many new jobs for some time. For instance, revised numbers show that between April 2024 and March 2025, the economy generated 911,000 fewer jobs than the initial monthly calculations. Revisions to the June figures even showed a loss of 13,000 jobs. That is bad news in its own right, but it is also a negative harbinger for the future.
Once workers begin losing their jobs—and job creation weakens more generally—a kind of cumulative unraveling can take place. For instance, jobless workers have less money to spend, which decreases demand in the economy, and that usually translates into further job loss. Once the job loss dynamic is set in general motion, it can accelerate rapidly.
Uncertainty surrounding the Trump tariffs has also discouraged private sector investment, which weakens future job creation. So the best bet is that the economy, a year or two from now, will have noticeably higher unemployment.
Note that gdp growth might remain fine, so it will be a funny kind of stagflation…
Thursday assorted links
1. Energy projects delayed or cancelled.
2. Roger Scruton, predicting 1997 for Britain.
3. One definition of “the South.” This guy should get a job gerrymandering?
5. Takatoshi Ito, RIP. Japanese advocate of inflation targeting.
6. Per year.
Who are the important intellectuals today, under the age of 55?
I do not mean public intellectuals, though they are an important category of their own. For this question in earlier times you might have mentioned Foucault, Nozick, or Jon Elster. They were public intellectuals of a sort, but they also carried considerable academic heft in their own right. They promoted ideas original to them.
So who today are the equivalents? Important, original thinkers. With impact. You look forward to their next book or proclamation. Under age 55. Bitte.
Reading Orwell in Moscow
In this paper, I measure the effect of conflict on the demand for frames of reference, or heuristics that help individuals explain their social and political environment by means of analogy. To do so, I examine how Russia’s full-scale invasion of Ukraine in February 2022 reshaped readership of history and social science books in Russia. Combining roughly 4,000 book abstracts retrieved from the online catalogue of Russia’s largest bookstore chain with data on monthly reading patterns of more than 100,000 users of the most popular Russian-language social reading platform, I find that the invasion prompted an abrupt and substantial increase in readership of books that engage with the experience of life under dictatorship and acquiescence to dictatorial crimes, with a predominant focus on Nazi Germany. I interpret my results as evidence that history books, by offering regime-critical frames of reference, may serve as an outlet for expressing dissent in a repressive authoritarian regime.
That is from a job market paper by Natalia Vasilenok, political science at Stanford. Via.
What of American culture from the 1940s and 1950s deserves to survive?
In the comments, Elijah asks:
Would love to read a post about which movies and novels from this era do and do not deserve to survive and why.
I do not love 20th century American fiction, so maybe I am the wrong person to ask. I started with GPT-5, which gave this list of novels from those two decades. I’ve read a significant percentage of those, and would prefer:
Raymond Chandler, J.D. Salinger, Nabokov, Patricia Highsmith, Shirley Jackson, and lots of science fiction. The I, Robot stories are from the 1940s, and the book published in 1950. A lot of the “more serious” entries on that list I feel have diminished somewhat with age.
Great Hollywood movies from that era are too numerous to name. In music there is plenty of jazz, plus Elvis, Chuck Berry, James Brown, Buddy Holly, doo wop, “the roots of rock” (includes some one hit wonders), Muddy Waters, Howlin’ Wolf, the Everlies, the Louvin Brothers, Johnny Cash, lots of country and bluegrass and blues, and many other very well known names from the 1950s. It is one of the most seminal decades for music ever. The 1940s are worse, perhaps because of the war, but still there is Rodgers and Hammerstein, lots of big band, and Woody Guthrie.
Contra Ted Gioia, much of that remains well-known to this day, though I would admit Howard Hanson and Walter Piston have fallen by the wayside. Overall, I think we are processing the American past pretty well.
More corruption in the Harvard leadership
Harvard School of Public Health Dean Andrea A. Baccarelli received at least $150,000 to testify against Tylenol’s manufacturer in 2023 — two years before he published research used by the Trump administration to link the drug to autism, a connection experts say is tenuous at best.
Baccarelli served as an expert witness on behalf of parents and guardians of children suing Johnson & Johnson, the manufacturer of Tylenol at the time. U.S. District Court Judge Denise L. Cote dismissed the case last year due to a lack of scientific evidence, throwing out Baccarelli’s testimony in the process.
“He cherry-picked and misrepresented study results and refused to acknowledge the role of genetics in the etiology” of autism spectrum disorder or ADHD, Cote wrote in her decision, which the plaintiffs have since appealed.
Here is more from The Crimson.
Why we should not auction off all H1-B visas
I am fine with auctioning off some of them, but it should not be the dominant allocation mechanism. The visas work best when they support young talents who are unproven and perhaps liquidity constrained. Sundar Pichai was not a big star when he received his H1-B.
How about the business paying? Well, that is hard for a lot of start-ups. McKinsey, the employer who got Sundar his visa, might have coughed up the 100k, but Sundar did not stay there very long, only about two years. Which is what you might expect from the most talented, upwardly mobile candidates. That will discourage even well-capitalized businesses from making these investments, or they might try to lock in their new hires more than is currently the case.
So a pure auction mechanism probably is not optimal here, even though again it is fine to auction off some of the slots.
Wednesday assorted links
2. Cass Sunstein on liberalism (New Yorker). Often Chotiner interviews are very good, but this one I felt was quite unfair, the cancel culture game all over again. Cass praises Hayek, and Chotiner responds by noting a poor and apparently racist attitude of Hayek’s. If someone said they were a Keynesian economist, would your first reaction be to ask about Keynes’s anti-Semitism? Especially in a short interview. Chotiner also uses the spousal card against Cass, and Cass’s unwillingness to speak ill of a dead acquaintance (and yes that is the right word here) against him. So I expect better than this.
3. WSJ covers Thiel on the Antichrist. Some of the theologians do not like the competition.
4. NFL teams are punting less (WSJ). As economists have been recommending for some while.
Michael Clemens on H1-B visas
From 1990 to 2010, rising numbers of H-1B holders caused 30–50 percent of all productivity growth in the US economy. This means that the jobs and wages of most Americans depend in some measure on these workers.
The specialized workers who enter on this visa fuel high-tech, high-growth sectors of the 21st century economy with skills like computer programming, engineering, medicine, basic science, and financial analysis. Growth in those sectors sparks demand for construction, food services, child care, and a constellation of other goods and services. That creates employment opportunities for native workers in all sectors and at all levels of education.
This is not from a textbook narrative or a computer model. It is what happened in the real world following past, large changes in H-1B visa restrictions. For example, Congress tripled the annual limit on H-1B visas after 1998, then slashed it by 56 percent after 2004. That produced large, sudden shocks to the number of these workers in some US cities relative to others. Economists traced what happened to various economic indicators in the most-affected cities versus the least-affected but otherwise similar cities. The best research exhaustively ruled out other, confounding forces.
That’s how we know that workers on H-1B visas cause dynamism and opportunity for natives. They cause more patenting of new inventions, ideas that create new products and even new industries. They cause entrepreneurs to found more (and more successful) high-growth startup firms. The resulting productivity growth causes more higher-paying jobs for native workers, both with and without a college education, across all sectors. American firms able to hire more H-1B workers grow more, generating far more jobs inside and outside the firm than the foreign workers take.
An important, rigorous new study found the firms that win a government lottery allowing them to hire H-1B workers produce 27 percent more than otherwise-identical firms that don’t win, employing more immigrants but no fewer US natives—thus expanding the economy outside their own walls. So, when an influx of H-1B workers raised a US city’s share of foreign tech workers by 1 percentage point during 1990–2010, that caused7 percent to 8 percent higher wages for college-educated workers and 3 percent to 4 percent higher wages for workers without any college education.
Here is the full piece.
What should I ask Sam Altman?
I will be having a conversation with him at a Roots of Progress event, though it will not be a formal CWT Conversation per se. So what should I ask him?
To be clear, this is the conversation with Sam I want to have…