Hiring on general talent makes more sense in high-trust environments

This article argues that a society’s level of social trust influences employers’ hiring strategies. Employers can focus either on applicants’ potential and select on foundational skills (e.g., social skills, math skills) or on their readiness and select on more-advanced skills (e.g., pricing a derivative). The higher (lower) the social trust—people’s trust in their fellow members of society—the more (less) employers are willing to invest in employees and grant them role flexibility. Employers in higher-trust societies are therefore more attentive to applicants’ potential, focusing more on foundational skills than on advanced skills. We empirically test this theory by using a novel dataset of more than 50 million job postings from the 28 European Union countries. We find that the higher a country’s social trust, the more its employers require foundational skills instead of advanced skills. Our identification strategy takes advantage of multinational firms in our sample and uses measures of bilateral (country-to-country) trust to predict job requirements, while including an instrumental variable and fixed effects on country, year, employer, and occupation. These findings suggest a novel pathway by which social trust shapes employment practices and organizational strategies.

That is from a new article by Letian Zhang and Shinan Wang, via the excellent Kevin Lewis.

Claude 3 Opus and AGI

As many MR readers will know, I don’t think the concept of AGI is especially well-defined.  Can the thing dribble a basketball “with smarts”?  Probably not.  Then its intelligence isn’t general.  You might think that kind of intelligence “doesn’t matter,” and maybe I agree, but that is begging the question.  It is easier and cleaner to just push the notion of “general” out of the center of the argument.  God aside, if such a being exists, intelligence never is general.

In the structure of current debates, the concept of “AGI” plays a counterproductive role.  You might think the world truly changes once we reach such a thing.  That means the doomsters will be reluctant to admit AGI has arrived, because imminent doom is not evident.  The Gary Marcus-like skeptics also will be reluctant to admit AGI has arrived, because they have been crapping on the capabilities for years.  In both cases, the stances on AGI tell you more about the temperaments of the commentators than about any capabilities of the beast itself.

I would say this: there is yet another definition of AGI, a historical one.  Five years ago, if people had seen Claude 3 Opus, would they have thought we had AGI?  Just as a descriptive matter, I think the answer to that question is yes, and better yet someone on Twitter suggested more or less the same.  In that sense we have AGI right now.

Carry on, people!  Enjoy your 2019-dated AGI.  Canada has to wait.

Concluding remarks: Forget that historical relativism!  True AGI never will be built, and that holds for OpenAI as well.  Humans in 2019 were unimaginative, super-non-critical morons, impressed by any piddling AI that can explain a joke or understand a non-literal sentence.  Licensing can continue and Elon is wrong.

Tide turning in Washington State?

From an MR reader:

Good story here about one man in Washington state fighting the battle against the progressive tide. He single handedly got six initiatives on the ballot to repeal progressive reforms over the past few years. These include a police pursuit law that prevents police from chasing criminals in most cases, and a capital gains tax despite the Washington State constitution specifically banning income tax.

One man takes on state government and wins after passage of 3 voter initiatives (fox13seattle.com)

Big recent news is that 3 of the 6 initiatives have already passed in the State legislature, and the rest will be sent to the voters as ballot questions.

We also have a new moderate city council in Seattle that is pressing charges against protestors who disrupt city meetings, making hard drugs illegal again, and trying to re-fund the police department. Also it looks like 12 (out of hundreds) of protestors that recently shut down I-5 in the heart of the city will be prosecuted.  This all would have seemed impossible under the former mayor and city council.  Definitely a feeling in the air that the tide has turned to some degree.

I await further reports.

What can be learned from Singaporean health care institutions?

Besides the usual, that is.  Max Thilo of the UK has a new and excellent study on this, here is one excerpt from the foreword by Lord Warner:

Second, and critical, the Singaporeans are not fixated on delivering services from acute hospitals – the most expensive part of any healthcare system because of its fixed overheads and expensive maintenance. As this report demonstrates “the reason why Singapore spends so much less on health than other developed countries is its low hospital utilisation.” Instead, Singapore has invested in highly productive polyclinics and low-cost telemedicine. The result is that Singaporeans can visit their GP more often than English patients. In their polyclinics they also improve productivity by separating chronic and acute care.

And from Max:

During a recent trip, I met with the CEO of the largest telemedicine provider in Singapore. He casually mentioned that UK patients were already using his service. This seemed surprising. No comprehensive data is available for the costs of UK telemedicine services, so I googled the cost of online appointments in the UK and Singapore. Singaporean appointments are less than half the price of those in the UK. The most affordable online appointment I found in the UK was £29. Yet, many providers charge significantly more – for instance, Babylon Health lists its price for private GP appointments at £59. In contrast, Doctor Anywhere, Singapore’s leading telemedicine provider, offers services for just £12.27 Doctor Anywhere has an app where patients can log on and see patients virtually. They make and then register the diagnosis. The rest of the process, including referrals and prescriptions, is automated.

Recommended.

A pessimistic account of the Milei reforms

Eduardo Costantini, a billionaire property developer, supports Milei’s plans but describes his handling of Congress as an “unforced error”. “The legislative strategy he had clearly didn’t work,” he says. “He came away from this first round practically empty-handed.”

Nicolás Pino, head of agribusiness lobby La Sociedad Rural Argentina, says cutting spending without also delivering deep reforms of Argentina’s state in the legislature is “no solution”. He urges the president to “lower tensions” with Congress and try again. “He will find many people ready to help him.”

But Milei appears to think otherwise. People who deal with the government say the president is now more dependent than ever on a small inner circle of true believers and his army of social media followers, to whom he devotes more than two hours a day online. His closest advisers include his sister Karina, who used to sell specially decorated cakes on Instagram and is now the presidential chief of staff, and Santiago Caputo, a 38-year-old political consultant and social media guru whose father is a cousin of Luis Caputo, the former Wall Street trader now serving as finance minister…

Some question Milei’s economic results too. Eduardo Levy Yeyati, an economist and professor at Torcuato di Tella university in Buenos Aires, believes the much-vaunted fiscal surplus in January benefited from accounting tricks such as shuffling government payments around. “The surplus is unsustainable,” he says. “It can only be sustained if the government passes tax measures.”

I am not saying this is true, as I genuinely do not know the latest.  But it is the pessimistic account, if you are looking to catch a dose of that.  Here is more from Michael Stott and Ciara Nugent at the FT.  You will note that the (black market) peso is up, but only modestly.

But does he care about on-time performance?

While the 17-year-old does indeed live on trains, he does so entirely legally. And with a surprising amount of comfort.

Lasse travels 600 miles a day throughout Germany aboard Deutsche Bahn trains. He travels first class, sleeps on night trains, has breakfast in DB lounges and takes showers in public swimming pools and leisure centres, all using his unlimited annual railcard.

The self-employed coder technically has no fixed abode and appears to really enjoy his unusual way of life, something which he chronicles regularly on his blog, Life on the Train.

Here is the full story, via John McLennan.  It costs him about ten thousand euros a year.  And he reports:

‘My favourite route leads through the Middle Rhine Valley between Mainz and Bonn. Here the trains always travel very slowly along the river. It’s a beautifully picturesque route that stretches at the foot of the vineyards. The view outside is wonderful.’

I can second that judgment.

Is Bidenomics working?

It is too soon to say, as I express in my 2x the usual length Bloomberg column.  It is amazing how many people are swallowing this one whole.  Here is the simplest point:

The biggest problem is that it’s not yet clear these investments are going to pay off. They are being paid for with borrowed money, not higher taxes or lower spending elsewhere. It is always possible to boost wages and employment in the short run by funding new investments with borrowed money. The critical question is whether those investments will succeed in the long run.

And:

If they do not, today’s boom will eventually turn into a bust. Sooner or later, the federal government will have to pay for all this borrowing and spending, and that will mean some mix of (additional) tax hikes and spending cuts. That contractionary fiscal policy will hurt the economy, giving back some or all of the gains it is reaping today. The net effect of this reversal of fiscal policy could even be negative.

And is it working?

One defense of the limited global scope of Bidenomics is that the most the US can hope to do is to “take care of our own.” That may be true, but it does not alter the underlying reality. If the new investments do not bring about a significantly greener world, they will have failed. In a matter this serious, it really is about results.

Another possible outcome is more optimistic: Namely, the rest of the world will move to cheap green energy without needing support from Bidenomics. If that’s the case, however, then Bidenomics’ green-energy investments are still hard to justify. Why couldn’t the US simply borrow cheaper technologies from the rest of the world?

The most favorable scenario for Bidenomics is that US investments lead, through faster innovation and shallower learning curves, to cheaper green energy sources that otherwise would not have come about. Again, that is certainly possible. And again, it is hardly obvious that it is the most likely outcome.

We shall see.  The “everything-bagel” gets discussed as well.

Monday assorted links

1. Houston (Siena) fact of the day.

2. Royals receiving payment from land.

3. Katherine Boyle on the hard realignment.

4. Most common domesticated animal, by county, counting humans (and pheasants!).

5. “Lebron was created by the OLS gods.

6. Claude 3 from Anthropic.  Exciting times.

7. “Our findings suggest that lower returns increase inequality, which contradicts Piketty’s (2014) r-g formula.

U.S.A. yikes fact of the day

Between January 2016 and December 2022, the monthly antidepressant dispensing rate increased 66.3%, from 2575.9 to 4284.8. Before March 2020, this rate increased by 17.0 per month (95% confidence interval: 15.2 to 18.8). The COVID-19 outbreak was not associated with a level change but was associated with a slope increase of 10.8 per month (95% confidence interval: 4.9 to 16.7). The monthly antidepressant dispensing rate increased 63.5% faster from March 2020 onwards compared with beforehand. In subgroup analyses, this rate increased 129.6% and 56.5% faster from March 2020 onwards compared with beforehand among females aged 12 to 17 years and 18 to 25 years, respectively. In contrast, the outbreak was associated with a level decrease among males aged 12 to 17 years and was not associated with a level or slope change among males aged 18 to 25 years.

That is by Kao-Ping Chua, et.al., from the high-quality journal Pediatrics.  So that is how we respond to crises?  By doping up the young women?  Yikes!

Via the excellent Kevin Lewis.

Further data on alcohol use amongst American youth

This paper provides the first long-run assessment of adolescent alcohol control policies on later-life health and labor market outcomes. Our analysis exploits cross-state variation in the rollout of “Zero Tolerance” (ZT) Laws, which set strict alcohol limits for drivers under age 21 and led to sharp reductions in youth binge drinking. We adopt a difference-in-differences approach that combines information on state and year of birth to identify individuals exposed to the laws during adolescence and tracks the evolving impacts into middle age. We find that ZT Laws led to significant improvements in later-life health. Individuals exposed to the laws during adolescence were substantially less likely to suffer from cognitive and physical limitations in their 40s. The health effects are mirrored by improved labor market outcomes. These patterns cannot be attributed to changes in educational attainment or marriage. Instead, we find that affected cohorts were significantly less likely to drink heavily by middle age, suggesting an important role for adolescent initiation and habit-formation in affecting long-term substance use.

Here is the article by Tatiana Abboud, Andriana Bellou, and Joshua Lewis, via tekl once again.  People, you can make things easier for the political philosophers — why should they have to weigh liberty against utility?  Just give up drinking voluntarily.

Kind of like the NBA All-Star game

In the NBA All-Star game, no one is playing defense any more, and so the score was a ridiculous 211-186, something which would never happen in a regular season game.  (Note that some of the league’s finer defenders were on the floor, though Joel Embiid, the reigning MVP and an intimidating defender, was sidelined due to injury.)  Some part of the ethic of (defensive) service has disappeared, though the players are still happy to shoot and score.  And they certainly will play defense hard when the playoffs roll around.

I’ve never seen papers on the labor supply of royal families (Cowen’s Second Law?), but I do wonder what it varies with.  It is hard to use one’s royal position to influence politics, at least in the UK.  And certainly you are not paid more if you work harder.  The King or Queen nominally owns a lot of land and art, but in practice one cannot pull income streams from those assets.  You can have a Michelangelo drawing hung in your bedroom, but that if anything is a reason not to go out in public.

You can use a royal family position to meet with lots of important people, but toward what end?  Raising money for your next start-up?  Alternatively, you can work harder to raise your stature and influence with the other royal family members (now we’re getting somewhere).  But what if that equilibrium falls apart, if only because of one or two initial defections, or in the case of the King an illness?  What external force would keep the whole struggle for royal family influence going?  Is this a case of multiple competitive equilibria, and now we (they?) are stuck in the low effort corner?  Can Lina Khan work on this?

What if they are all just pissed off with the lot of us?  In that case, what is our next move in this von Stackelberg game?  Should America reapply to the Empire with some trembling hand probability?  Would it suffice to give them Newfoundland back?  Take Northern Ireland off their hands?  Do they want us to send more or fewer tourists to London?  Should one of them marry Taylor Swift, or at least date her, to remain in the public eye?

If the NBA All-Star game is to improve, perhaps viewer censure (or mockery) for the non-cooperators is the primary way forward?