The North Korean summit and deal

Many of you have asked what I think, so here goes:

1. There is a secret (and unenforceable) deal beneath what is reported.  You may think this is good or bad, but for heaven’s sake don’t just be judging the press release.

2. If they didn’t actually agree to anything, that is fine.

3. I am reading so much yelping about how Trump “legitimized” Kim.  The status quo ex ante simply was terrible, and there is no reason to think this change is for the worse.  Trump’s great “virtue” in this regard was simply to be some mix of ignorant/disrespectful of the prior “expert consensus” and approach the problem afresh with a rather direct transactional and person-centered, personality-centered mentality.

4. As I tweeted: “Isn’t the whole point of the “deal” just to make them go visit Singapore? The real spectacle is not always where you are looking. And I hope someone brought them to the right chili crab place.”

The goal is to show the North Korean leadership there is a better way than playing the Nuclear Hermit Kingdom game.  We won’t know for some time whether this has succeeded.  Here is good FT coverage on this point.  There are in fact numerous signs that the North Koreans are considering serious reforms.  Of course those could be a feint, but the probabilities are rising in a favorable direction.  Economic cooperation with South Korea is increasing at an astonishing pace.

5. The chance that North Korea someday becomes an unruly version of an American client state has gone up.  The chance of a kind of faux, “on paper” Korean reunification has gone up too.

6. No, North Korea isn’t giving up its nuclear weapons.  The more important question is to what extent they will use those weapons in the future to check China.

7. How is it that Dennis Rodman played in only two All-Star games?

8. In expected value terms, this is the biggest triumph of the Trump presidency.  Most of all, however, you should be agnostic.  The negative commentary I am seeing is mostly sour grapes, misplaced frustration, and it is weak in the quality of its argumentation.  Here is one of Trump’s better tweets.

Washington Metro Qatar markets in everything

Metro significantly relaxed its policies on extended hours for the Washington Capitals’ run to the Stanley Cup Final, including extending service for Thursday night’s series win without ever planning for any cash to change hands, WTOP has learned.

Since last summer, Metro has required a $100,000 deposit for each additional hour of service, and Metro suggested Wednesday that the Capitals’ parent company, Monumental Sports and Entertainment, would cover those costs for Thursday night’s game.

In fact, Thursday night’s extended service was part of a trade between the Caps and Metro that Metro valued at $100,000, Metro spokesman Dan Stessel said in an email…

Revised requirements issued last year normally call for the $100,000 deposit two weeks ahead of an event for each extra hour of service. Instead, Metro is billing each of the other groups that agreed to pay for the extended service for Capitals playoff games after the fact, Stessel said…

The bills being sent to those other groups — Qatar (via the Downtown BID), Comcast and Uber — will already include the discount for any fares paid during extended hours of service.

Here is the bizarre story, via Bruce Arthur.  For those of you who don’t get the joke, the D.C. Metro system shuts down too early relative to when many sporting events are likely to end.

From the comments, Vitalik Buterin



1. In retrospect, was it a good decision to have ethereum bytecodes executed on every single mining node? And if not, would he have selected sharding and plasma or a different solution?

2. How confident is he that transitioning to proof-of-stake will be successful? What are the risks of proof-of-stake?

I’ll answer this one here in detail because it’s probably too technical for it to be valuable to put a good answer into a Conversation with Tyler.

> 1. In retrospect, was it a good decision to have ethereum bytecodes executed on every single mining node? And if not, would he have selected sharding and plasma or a different solution?

Ultimately the answer is, yes given the knowledge we had at the time, no given what we know today. If I was doing Ethereum back then with the knowledge that I have today, I would obviously shoot straight for exactly the design that the research team is shooting for today (Casper PoS, sharding), and I would have actively encouraged developers to work on state channels and Plasma from day 1. Layer 1 scaling (sharding) and layer 2 scaling (state channels and Plasma) are complementary; gains from the two are multiplicative with each other, so it’s not a matter of A vs B, it’s A and B.

Ultimately, for a distributed validation system to work, you need to satisfy two properties:

1. There are enough (randomly sampled) nodes on average validating any given piece of data that invalid data will under no circumstances get through.
2. There are mechanisms that can ensure that if bad data *does* get through (eg. because of a 51% attack), then clients can detect this. In a sharded system, there is obviously too much data for clients to verify directly, but there are indirect approaches that can be used that can give equivalent assurances with some additional security assumptions (STARKs, fraud proofs, data availability proofs…)

> 2. How confident is he that transitioning to proof-of-stake will be successful? What are the risks of proof-of-stake?

Close to 100% confident that proof of stake is possible in principle; many chains are using (crappy versions of) it already. There’s obviously the question of how strong properties we can achieve with PoS though, and there are some edges of that that are still being worked out. The main risks that I see are (i) weird game-theoretic attacks on the specific design that we end up going with, and (ii) pool centralization.

IMO Satoshi’s PoW is really nice in part because of its sheer simplicity; the simplicity helps with decentralization because pretty much anyone can understand how it works, whereas traditional non-PoW consensus algos like PBFT are far more complex. Casper FFG was designed in part to replicate something close to PoW-style simplicity while still having the safety and liveness properties of traditional BFT consensus algos; and I’m obviously interested in minimizing complexity of the sharding design as well.

Here is the link, he offers several other “highly technical” answers in the comments.

My take on why Singapore works so well

That is the topic of my new Bloomberg column, of course I am considering only one small piece of a larger puzzle.  Here is one bit:

I view the development of Singaporean civil service culture as one of the world’s great managerial and political success stories of the last 50 years, though it remains understudied and underdiscussed in the West.

Singapore also mixes many of the virtues of both small and big government. The high quality of the civil service means the country gets “good government,” which pleases many liberals and progressives. The high quality of the decision-making means Singapore often looks to market incentives – congestion pricing for the roads is one example of many – which pleases conservatives and libertarians…

Is Singapore a small government or a big government country? The correct answer is both. Government spending is about 17 percent of GDP, which makes it look small and helps hold down taxes, which is good for business and productivity. (And there are no additional state and local governments.) But if you look at stocks rather than flows, the government owns shares in many critical Singapore businesses, plus it de facto controls lucrative sovereign wealth funds. The government claims ownership of the land, although it allows for active markets for transferring rights of use. All of these resources give the government the ability and credibility to get things done.

I even take on the chewing gum caricature…do read the whole thing.

Monday assorted links

1. “We have every right to hate you.

2. Land Grant colleges were good for the United States.

3. Eric Weinstein video explains the Intellectual Dark Web.

4. How captured is our economy? (, a new website resource from Lindsey and Teles).

5. “Retired fire chief Richard Gasaway refers to this apparent slowing down of time in tense situations as tachypsychia, which roughly translates as “fast mind.”

6. North Korean officials explore Singapore.

7. “Thomas Schelling’s medal went on the block May 31 at a Los Angeles auction house, fetching $187,000. His family donated the proceeds to the Southern Poverty Law Center, a nonprofit that fights hate and bigotry and advocates for civil rights through litigation.”  Link here.  And: “…his widow, Alice Schelling, says the most influential book he ever read was one for children, the 1927 Newbery Medal winner “Smoky the Cowhorse” by Will James.”

We will never disapprove of current levels of animal cruelty

Not fundamentally, no.  However terrible our current treatment of animals may be, most of us don’t seem to mind very much, and I suppose that is consistent with what a Darwinian theory would predict.  Here are a few facts about the sociologically specific nature of vegetarianism:

  1. The majority of vegans are female in gender: e.g., 74% in USA [27], 66% in Germany [39] and 63% in UK [29];

  2. They tend to be liberal-leftist politically: in USA, we have a 52% of liberals versus a 14% of conservatives and a 34% of self-styled “neutral” [27];

  3. They are generally more educated than carnists (e.g., Ipsos Mori [29] for UK and Mensik et al. for Germany [39]);

  4. They are more likely to be found in urban than country areas, with prevalence in big cities (e.g., Ipsos Mori [29] for UK, Roy Morgan Research for Australia [49] and Mensik et al. for Germany [39]);

  5. They display an inclination to secular/atheist views on religion matters (e.g., Humane Research Council [27], where it is shown that about half of the American community of vegans/vegetarians is not religious—a percentage that is considerably higher than that of the general population).

Less predictable may be the fact that a rather high percentage of vegans/vegetarians revert to carnism after a certain amount of time (in US, according to Humane Research Council [27], 2% of the respondents were vegans/vegetarians, while no less than 10% were former vegans/vegetarians)…

Not by chance, of the mentioned 10%, one third dropped the lifestyle after 3 months or less, one half within a year, and therefore only less than 20% “resisted” for more than a year.

That is from a recent article by Dario Martinelli and Aušra Berkmanienė.  It seems, by the way, that Israel is the country with the highest measured percentage of vegans.  Is that because it is a way of keeping semi-kosher without quite admitting one is doing so?

Artificial meat?  Yes, yes I know.  But we already have cauliflower, and drenched in yogurt sauce and green cardamom pods and garam masala that is quite delicious, and yet it doesn’t seem to matter.  Vegetarian food in India already tastes better than most meat dishes consumed in the United States.

Hat tip goes to Rolf Degen.

The long-run consequences of male-biased sex ratios

From Pauline Grosjean & Rose Khattar, forthcoming, Review of Economic Studies:

We document the short- and long-run effects of male-biased sex ratios. We exploit a natural historical experiment where large numbers of male convicts and far fewer female convicts were sent to Australia in the 18th and 19th centuries. In areas with more male-biased sex ratios, women were historically more likely to get married and less likely to work outside the home. In these areas today, both men and women continue to have more conservative attitudes towards women working, and women work fewer hours outside the home. While these women enjoy more leisure, they are also less likely to work in high-ranking occupations. We demonstrate that the consequences of uneven sex ratios on cultural attitudes, labor supply decisions, and occupational choices can persist in the long run, well after sex ratios are back to the natural rate. We document the roles of vertical cultural transmission and marriage homogamy in sustaining this cultural persistence.

Hat tip goes to the excellent Kevin Lewis.

Sunday assorted links

1. What makes a country good at soccer?  (The Economist)

2. The Coasean Koreas.  Important.

3. The language of Mister Rogers.

4. “The 43% of Democrats who say the U.S. benefits from having a class of rich people is down significantly from six years ago, and Democrats remain much more negative than either Republicans or independents about the impact of a rich class.”  Amazing.

5. Does “musical paralysis” set in after age 28? (not for me)

6. The successes of Nigerian-Americans.

*Won’t You Be My Neighbor?*

That is the title of the new documentary on the life and career of Mister Rogers.  Are there better movies on?:

1. The roots of American greatness.

2. The importance of “will” in building a succcessful career.

3. Toleration and individualism and respect for children.

This has to go down as one of the better documentaries, and it seems Mister Rogers was a better and more important thinker than many of the intellectuals of his time.  I had not known that Rogers had been trained and ordained as a Presbyterian minister.

On top of all that, the film is Straussian throughout.  Definitely recommended.  By the way, the documentary doesn’t mention this, but the show actually had its origins in Toronto on CBC.

What I’ve been reading

Gregory Claeys, Marx and Marxism, a better than expected take on where Marxism came from and how Marx’s different intellectual periods fit into his life.  One of the better introductions to Marx, noting that it does not stress issues of economic theory.

Tarjei Vesaas, The Ice Palace.  Not well known in the United States, but still one of the better Norwegian novels.  Short, readable, concerns a boy who goes missing.

Peter Cozzens, The Earth is Weeping: The Epic Story of the Indian Wars for the American West.  Very good overall history of the post-Civil War campaigns against Native Americans, still highly relevant for understanding American foreign policy, and attitudes toward guns, among other things.

David Olusoga, Black and British: A Forgotten History.  A very strong work about race relations on the other side of the Atlantic.  I had not known that “Ob-La-Di, Ob-La-Da” is Yoruba for “life goes on.”  The song as a whole was intended by Paul McCartney as a parable of the possibility of West Indian assimilation and it was a direct response to Enoch Powell.  Definitely recommended.

Linda Yueh’s What Would the Great Economists Do?: How Twelve Brilliant Minds Would Solve Today’s Biggest Problems, is probably the closest we will come to having an updated version of Robert Heilbroner.

Joshua Keating, Invisible Countries: Journeys to the Edge of Nationhood looks at Abkhazia, Kurdistan, Somaliland, Liberland, and a Mohawk reservation straddilng the U.S.-Canada border, as well as a Pacific Island that might disappear.  An interesting book for fans of alternative governance arrangements.

I’ve now see the page proofs for Steven Pearlstein’s Can American Capitalism Survive?: Why Greed is Not Good, Opportunity is Not Equal, and Fairness Won’t Make Us Poor.  His view is not mine, but if you want his view this book is the place to get it…


US exports increased 14.4 percent from YTD April 2016 to YTD April 2018, from $725.8 billion to $830.5 billion.

US imports increased 16.5 percent from YTD April 2016 to YTD April 2018, from $886.2 billion to $1,032.3 billion.

Here is the source, via James Hohman.  You don’t have to credit Trump with much if any of that, the broader point is that, as I argued yesterday, the age of trade is hardly over.

The Economic Limits of Bitcoin and the Blockchain

From Eric Budish at the Booth School of Business at Chicago:

The amount of computational power devoted to anonymous, decentralized blockchains such as Bitcoin’s must simultaneously satisfy two conditions in equilibrium: (1) a zero-profit condition among miners, who engage in a rent-seeking competition for the prize associated with adding the next block to the chain; and (2) an incentive compatibility condition on the system’s vulnerability to a “majority attack”, namely that the computational costs of such an attack must exceed the benefits. Together, these two equations imply that (3) the recurring, “flow”, payments to miners for running the blockchain must be large relative to the one-off, “stock”, benefits of attacking it. This is very expensive! The constraint is softer (i.e., stock versus stock) if both (i) the mining technology used to run the blockchain is both scarce and non-repurposable, and (ii) any majority attack is a “sabotage” in that it causes a collapse in the economic value of the blockchain; however, reliance on non-repurposable technology for security and vulnerability to sabotage each raise their own concerns, and point to specific collapse scenarios. In particular, the model suggests that Bitcoin would be majority attacked if it became sufficiently economically important — e.g., if it became a “store of value” akin to gold — which suggests that there are intrinsic economic limits to how economically important it can become in the first place.

I like the framework of this paper, though I wonder if there shouldn’t be more on the coordination costs of mounting a “double spending” attack, namely how exactly the returns from the attack should be divided.  Perhaps the most positive scenario for Bitcoin is if those coordination costs rise with the returns to the attack itself, in which case a much higher market value for Bitcoin still might be stable.