Category: Education
AI and the First Amendment
The more that outputs come from generative AI, the more the “free speech” treatment of AIs will matter, as I argue in my latest column for The Free Press. Here is one excerpt, quite separate from some of my other points:
Another problem is that many current bills, including one already passed in California, require online platforms to disclose which of their content is AI-generated, in the interest of transparency. That mandate has some good features, and in the short run it may be necessary to ease people’s fears about AI. But I am nervous about its longer-run implications.
Let’s say that most content evolves to be jointly produced by humans and AI, and not always in a way where all the lines are clear (GPT-5 did proofread this column, to look for stylistic errors, and check for possible improvements). Does all joint work have to be reported as such? If not, does a single human tweak to AI-generated material mean that no reporting is required?
And if joint work does have to be reported as joint, won’t that level of requirement inevitably soon apply to all output? Who will determine if users accurately report their role in the production of output? And do they have to keep records about this for years? The easier it becomes for individual users to use AI to edit output, the less it will suffice to impose a single, supposedly unambiguous reporting mandate on the AI provider.
I am not comfortable with the notion that the government has the legal right to probe the origin of a work that comes out under your name. In addition to their impracticality, such laws could become yet another vehicle for targeting writers, visual artists, and musicians whom the government opposes. For example, if a president doesn’t like a particular singer, he can ask her to prove that she has properly reported all AI contributions to her recordings.
I suspect this topic will not prove popular with many people. If you dislike free speech, you may oppose the new speech opportunities opened up by AIs (just build a bot and put it out there to blog, it does not have to be traceable to you). If you do like free speech, you will be uncomfortable with the much lower marginal cost of producing “license,” resulting from AI systems. Was the First Amendment really built to handle such technologies?
In my view free speech remains the best constitutional policy, but I do not expect AI systems to make it more popular as a concept. It is thus all the more important that we fight for free speech rights heading into the immediate future.
The Economics Nobel goes to Mokyr, Aghion and Howitt
The Nobel prize goes to Joel Mokyr, the economic historian of the industrial revolution and the growth theorists Phillippe Aghion and Peter Howitt best known for their Schumpeterian model of economic growth.
Here’s a good quote from Nobelist Joel Mokyr’s the Lever of Riches.
Yet the central message of this book is not unequivocally optimistic . History provides us with relatively few examples of societies that were technologically progressive. Our own world is exceptional, though not unique, in this regard. By and large, the forces opposing technological progress have been stronger than those striving for changes. The study of technological progress is therefore a study of exceptionalism, of cases in which as a result of rare circumstances, the normal tendency of societies to slide toward stasis and equilibrium was broken. The unprecedented prosperity enjoyed today by a substantial proportion of humanity stems from accidental factors to a degree greater than is commonly supposed. Moreover, technological progress is like a fragile and vulnerable plant, whose nourishing is not only dependent on the appropriate surroundings and climate, but whose life is almost always short. It is highly sensitive to the social and economic environment and can easily be arrested by relatively small external changes. If there is a lesson to be learned from the history of technology it is that Schumpeterian growth, like the other forms of economic growth, cannot and should not be taken for granted.
Aghion and Howitt’s Schumpeterian model of economic growth shares with Romer the idea that the key factors of economic growth must be modelled, growth is thus endogenous to the model (unlike Solow where growth is primarily driven by technology, an unexplained exogenous factor). In Romer’s model, however, growth is primarily horizontally driven by new varieties whereas in Aghion and Howitt growth comes from creative destruction, from new ideas, technologies and firms replacing old ideas, technologies and firms.
Thus, Aghion and Howitt’s model lends itself to micro-data on firm entry and exit of the kind pioneered by Haltiwanger and others (who Tyler and I have argued for a future Nobel). Economic growth is not just about new ideas but about how well an economy can reallocate production to the firms using the new ideas. Consider the picture below, based on data from Bartelsman, Haltiwanger, and Scarpetta. It shows the covariance of labor productivity and firm size. In the United States highly productive firms tend to be big but this is much less true in other economies. In the UK during this period (1993-2001) the covariance of productive and big is considerably less than half the rate in the United States. In Romania at this time the covariance was even negative–indicating that the big firms were among the least productive. Why? Well in Romania this as the end of the communist era when big, unproductive government run behemoths dominated the economy. As Romania moved towards markets the covariance between labor productivity and firm size increased. That is the economy became more productive as it reallocated labor from low productivity firms to high productivity firms.
Aghion and Howitt’s work centers on how new ideas emerge and how creative destruction turns those ideas into real economic change through the birth and death of firms. But creative destruction is never painless—growth requires that some firms fail and that labor be displaced so resources can flow to new, more productive uses. Aghion and Howitt will likely point to the United States as dealing with his process better than Europe. Business dynamism has declined in Europe relative to the United States, a worrying fact given that business dynamism has also declined in the United States. Nevertheless, the US has a more flexible labor market and appears more open to both the birth of new firms (venture capital) and the deaths of older firms. Yet, in both the United States and around the the world the differences between high productivity and low productivity firms appears to be growing, that is the dispersion in productivity is growing which means that the good ideas are not spreading as quickly as they once did. Aghion and Howitt’s work gives us a model for thinking about these kinds of issues–see, for example, Ten Facts on Business Dynamism and Lessons from Endogenous Growth Theory.
Claims about education and convergence
This paper studies how human capital shapes the economic geography of development. We develop a model in which the cost of acquiring human capital varies across space, and regions with higher human capital innovate more. Locations are spatially connected through migration and trade. There are localized agglomeration economies, and human-capital-augmenting technology diffuses across space. Using high-resolution data on income and schooling, we quantify and simulate the model at the 1° x 1° resolution for the entire globe. Over the span of two centuries, the model predicts strong persistence in the spatial distribution of development — unlike spatial dynamic models without human capital, which predict convergence. Proportionally lowering the cost of education in sub-Saharan Africa or Central and South Asia raises local outcomes but reduces global welfare, whereas the same policy in Latin America improves global outcomes. An alternative policy equalizing educational costs across sub-Saharan Africa generates relatively worse outcomes, as population reallocates within the region toward less productive areas. Central to these results is the estimated negative correlation between the education costs and local fundamentals, as well as inefficiencies in the spatial allocation due to externalities.
That is I think a genuinely new idea? Here is the NBER working paper from
Is the earned income tax overrated?
This policy has been so popular with economists on a bipartisan basis, yet a recent piece in ReStud raises some doubts, as the wage subsidies induce many to drop out of school:
As a complement to the federal earned income tax credit (EITC), some states offer their own EITC, typically calculated as a percentage of the federal EITC. In this paper, we analyse the effect of state EITC on education using policy discontinuities at US state borders. Our estimates reveal that an increase in the state EITC leads to a statistically significant increase in the high school dropout rate. We then use a life-cycle matching model with directed search and endogenous educational choices, search intensities, hirings, hours worked, and separations to investigate the effects of EITC on the labour market in the long run and along the transitional dynamics. We show that a tax credit targeted at low-wage (and low-skilled) workers reduces the relative return to schooling, thereby generating a powerful disincentive to pursue long-term studies. In the long run, this results in an increase in the proportion of low-skilled workers in the economy, which may have important implications for employment, productivity, and income inequality. Finally, we use the model to determine the optimal design of the EITC.
That is by One simple lesson is that policy economics is often not easy. Via the excellent Kevin Lewis.
MR Podcast: Our Favorite Models, Session 1
The Marginal Revolution Podcast is back and this time Tyler and I discuss some of our favorite models or ways of thinking about the world. We begin with Spence on Monopolies, Harberger on Incidence and Solow on Growth. Here’s one bit:
TABARROK: You have an increase in the corporate tax. What happens?
COWEN: One lesson of the Harberger model is actually anything can happen. Who bears the burden? Is it capital, is it labor, or is it consumers? In the simplest versions of the model, what you have is both a substitution, capital versus labor in the taxed sector, and you have substitutions across sectors. You have a whole series of different effects. One of the first and simplest lessons from Harberger, which is really neat, but people just hadn’t gotten it before, is if you tax the corporate sector under a lot of reasonably general assumptions, the rate of return on capital goes down equally in both sectors, which to us is standard fare.
What will happen is capital flows out of the corporate sector into the noncorporate sector, that lowers the marginal rate of return on capital in the nontaxed sector, and simply the notion of capital can suffer in both sectors. Again, a revelation, maybe self-evident to us having written this principles textbook, but it shocked people. The partial equilibrium models never show that.
TABARROK: When you tax the corporations, you’re also taxing the mom-and-pops.
COWEN: And the nonprofits and whatever, wherever else the capital might flow.
TABARROK: Yes. This was one of the first useful applications of general equilibrium.
COWEN: That’s right. On that, it’s really held up. International affairs, one of the lessons is if you turn the other sector or add another sector that’s international, basically small economies cannot afford to tax capital at very high rates because so much of the capital will flow elsewhere.
TABARROK: Instead of it flowing to the noncorporate sector, it just flows out of the country.
COWEN: That’s right, which is like the other sector not affected by this particular tax. In 1962, a lot of small economies treated their capital very badly. Many still do, but there’s been a real revolution where even fairly statist economies—like the Nordics over time shifted to treating capital income pretty generously. Singapore would be another example. Again, it’s simple once you know it, but the Harberger model taught us that.
TABARROK: What about the labor margin?
COWEN: The debate since then has been how much of the tax is borne by capital and how much is borne by labor? On one hand, the Harberger model teaches you anything can happen. That’s useful intuitively. In fact, when you investigate it empirically, it’s what you would expect to happen that mostly happens. That is, capital does bear more of the tax than labor.
TABARROK: Labor bears a chunk.
COWEN: Yes. A typical estimate might be a third. There’s no free lunch from the point of view of labor. Furthermore, a lot of the capital is owned by labor through pension funds. If you take that into account, I don’t have an exact number for you, but I think it’s plausible to think labor might bear half the burden of the corporate tax. Again, you can show that pretty simply. The estimates are not exact, but just a big advance for economics. If you ask me, what ideas do I use all the time, that’s one of them.
The Harberger basic model, it doesn’t have land, but there’s the issue of what if you have three factors in the model, you would start with the Harberger model. If you’re a NIMBY who thinks there’s this kind of land monopoly in a city or land rents are very high because we stifle building, the incidence of a lot of taxes, even in general equilibrium models, can fall on the land for a city.
TABARROK: Yes, because the land can’t escape.
COWEN: That’s right.
TABARROK: As we say in the textbook, elasticity is equal to escape, right?
Here’s the episode. Subscribe now to take a small step toward a much better world: Apple Podcasts | Spotify | YouTube.
Who exactly is rigid again?
In an adversarial collaboration, two preregistered U.S.-based studies (total N = 6181) tested three hypotheses regarding the relationship between political ideology and belief rigidity (operationalized as less evidence-based belief updating): rigidity-of-the-right, symmetry, and rigidity-of-extremes. Across both studies, general and social conservatism were weakly associated with rigidity (|b| ~ .05), and conservatives were more rigid than liberals (Cohen’s d ~ .05). Rigidity generally had null associations with economic conservatism, as well as social and economic political attitudes. Moreover, general extremism (but neither social nor economic extremism) predicted rigidity in Study 1, and all three extremism measures predicted rigidity in Study 2 (average |bs| ~ .07). Extreme rightists were more rigid than extreme leftists in 60% of the significant quadratic relationships. Given these very small and semi-consistent effects, broad claims about strong associations between ideology and belief updating are likely unwarranted. Rather, psychologists should turn their focus to examining the contexts where ideology strongly correlates with rigidity.
That is from a new piece by Shauna M. Bowes, Cory J. Clark, Lucian Gideon Conway III, Thomas Costello, Danny Osborne, Philip E. Tetlock, and Jan-Willem van Prooijen. Via the excellent Kevin Lewis.
Emergent Ventures winners, 47th cohort
Vivek Kommi, 16, London, Extend healthy human lifespan by hacking the neuroimmune axis.
Adam Essemaali, northern Italy, 16, a new platform.
Rushil Kukreja and co-workers, northern Virginia, high school, devices to see through walls.
Sheehan Quirke, also known as The Cultural Tutor, London, work with David Perell, on why beauty has disappeared in the modern world.
Sambhav Baid, Singapore, measuring when antibiotics have stopped working.
Skyler Lee, Cumming, Georgia, high school, better app for language teaching.
Santiago del Solar, Waterloo, Ontario, exoskeletons.
Daniel Remler, WDC, AI and diplomacy.
Jacob Neplokh, University of Chicago, political theory and the great books.
Kyle Redlinghuys, London, AI-enhanced pre-natal testing.
Paddy Corcoran and Sean Cahill, 16 and 17, Tipperary, app for TikTok and study.
Juan David Campolargo, Illinois, to write a book on universities and how to get the most out of them.
And here is Nabeel’s semantic search for previous EV winners.
Helen Andrews on the feminization of culture
Uri Bram on throwing a good party
Interesting throughout, here is one excerpt:
14) Couples often flake together. This changes the probability distribution of attendees considerably, and so your chance of losing a quorum in a small-group setting. Small-group couple-events (e.g. 3-4 couple dinner parties) are very hard to manage in a high-flake society, as a result.
15) Create as much circulation at your party as you can. People circulate more when standing than when sitting, so try to encourage standing for those who can e.g. by having high-top tables, or taking away chairs from around tables, or leaving shelves and counter-tops open for people to rest their plates and drinks.
16) Put the food in one part of the room and the drinks in another, or spread the food and drinks out around the space, so that people have lots of excuses to move around the room.
Via (duh) The Browser.
My excellent Conversation with John Amaechi
Here is the audio, video, and transcript. As I said on Twitter, John has the best “podcast voice” of any CWT guest to date. Here is the episode summary:
John Amaechi is a former NBA forward/center who became a chartered scientist, professor of leadership at Exeter Business School, and New York Times bestselling author. His newest book, It’s Not Magic: The Ordinary Skills of Exceptional Leaders, argues that leadership isn’t bestowed or innate, it’s earned through deliberate skill development.
Tyler and John discuss whether business culture is defined by the worst behavior tolerated, what rituals leadership requires, the quality of leadership in universities and consulting, why Doc Rivers started some practices at midnight, his childhood identification with the Hunchback of Notre Dame and retreat into science fiction, whether Yoda was actually a terrible leader, why he turned down $17 million from the Lakers, how mental blocks destroyed his shooting and how he overcame them, what he learned from Jerry Sloan’s cruelty versus Karl Malone’s commitment, what percentage of NBA players truly love the game, the experience of being gay in the NBA and why so few male athletes come out, when London peaked, why he loved Scottsdale but had to leave, the physical toll of professional play, the career prospects for 2nd tier players, what distinguishes him from other psychologists, why personality testing is “absolute bollocks,” what he plans to do next, and more.
Excerpt:
COWEN: Of NBA players as a whole, what percentage do you think truly love the game?
AMAECHI: It’s a hard question to answer. Well, let me give a number first, otherwise, it’s just frustrating. 40%. And a further 30% like the game, and 20% of them are really good at the game and they have other things they want to do with the opportunities that playing well in the NBA grants them.
But make no mistake, even that 30% that likes the game and the 40% that love the game, they also know that they like what the game can give them and the opportunities that can grow for them, their families and generation, they can make a generational change in their family’s life and opportunities. It’s not just about love. Love doesn’t make you good at something. And this is a mistake that people make all the time. Loving something doesn’t make you better, it just makes the hard stuff easier.
COWEN: Are there any of the true greats who did not love playing?
AMAECHI: Yeah. So I know all former players are called legends, whether you are crap like me or brilliant like Hakeem Olajuwon, right? And so I’m part of this group of legends and I’m an NBA Ambassador as well. So I go around all the time with real proper legends. And a number of them I know, and so I’m not going to throw them under the bus, but it’s the way we talk candidly in the van going between events. It’s like, “Yeah, this is a job now and it was a job then, and it was a job that wrecked our knees, destroyed our backs, made it so it’s hard for us to pick up our children.”
And so it’s a job. And we were commodities for teams who often, at least back in those days, treated you like commodities. So yeah, there’s a lot of superstars, really, really excellent players. But that’s the problem, don’t conflate not loving the game. And also, don’t be fooled. In Britain there’s this habit of athletes kissing the badge. In football, they’ve got the badge on their shirt and they go, “Mwah, yeah.” If that fools you into thinking that this person loves the game, if them jumping into the stands and hugging you fools you into thinking that they love the game, more fool you.
COWEN: Michael Cage, he loved the game. Right?
But do note that most of the Conversation is not about the NBA.
Higher education is not that easy
More than two years into a conservative takeover of New College of Florida, spending has soared and rankings have plummeted, raising questions about the efficacy of the overhaul.
While state officials, including Republican governor Ron DeSantis, have celebrated the death of what they have described as “woke indoctrination” at the small liberal arts college, student outcomes are trending downward across the board: Both graduation and retention rates have fallen since the takeover in 2023.
Those metrics are down even as New College spends more than 10 times per student what the other 11 members of the State University System spend, on average. While one estimate last year put the annual cost per student at about $10,000 per member institution, New College is an outlier, with a head count under 900 and a $118.5 million budget, which adds up to roughly $134,000 per student.
Here is the full story. Maybe you think this is exaggerated, but I never hear from anyone that the venture is going well. There is a reason for that. A tiny bit you can blame on the FAA.
Good job people, congratulations…
“Sonnet 4.5 does complete replication checks of an econpaper.”
That is Kevin Bryan, here is more from Ethan Mollick.
Zambia fact of the day
It is worse than you think:
Of 360,000 children aged 15 in Zambia only five (not 5%, 5 total) could read at “globally proficient levels.”
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
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.