Category: Education
Does the United States Spend Enough on Public Schools?
I remain happy to provoke my readers:
The United States ranks low among peer countries on the ratio of teacher spending to per capita GDP. Is this (in)efficient? Using a spatial equilibrium model we show that spending on schools is efficient if an increase in school spending funded through local taxes would leave house prices unchanged. By exploiting plausibly exogenous shocks to both school spending and taxes, paired with 25 years of national data on local house prices, we find that an exogenous tax-funded increase in school spending would significantly raise house prices. These findings provide causal evidence that teacher spending in the U.S. is inefficiently low.
That is from a new paper by Patrick J. Bayer, Peter Q. Blair, and Kenneth Whaley. Via the excellent Kevin Lewis.
My podcast with Curt Jaimungal
Available in twenty-six languages:
It is available on standard podcast sites as well.
Curt lists the following as topics we covered:
– Tariffs and US-Canada trade relations
– Canada becoming the 51st state
– Trump administration’s tactics with Canada
– Economic philosophy vs. pure economics
– University/academic life benefits
– Grant system problems and bureaucracy
– Mental health in graduate students
– Administrative burden growth
– Tenure’s impact on risk-taking and creativity
– Age and innovation across fields
– Problems with grant applications
– AI’s role in grant applications and academic review
– Deep research and O1Pro capabilities
– AI referee reports
– Public intellectual role
– Information absorption vs. contextualization
– Reading vs. active problem solving
– Free will and determinism
– Religious beliefs and probabilities
– UAP/UFO evidence and government files
– Emotional stability and stress response
– Personality traits and genetics
– Disagreeableness in successful people
– Identifying genuine vs. performative weirdness
– Nassim Taleb’s ideas and financial theories
– Academic debate formats
– Financial incentives and personal motivation
– New book project on mentoring
– Podcast preparation process
– Interviewing style and guest preparation
– Challenges with different academic fields
– Views on corporate innovation
– Current AI transformation of academic life
Curt has a very impressive YouTube site where he interviews people about their “Theories of Everything.” Here is the related Substack.
My years in Fall River, Mass.
I lived there from ages 4 to 7, which spans 1966 to 1969. At that time, Fall River about forty years past its textiles manufacturing peak, as southern competition had deindustrialized the city. My father was invited to run the Chamber of Commerce there, with the hope that he could help revitalize things, and so the family moved.
I recall liking New England, and preferring it to my earlier Hudson County, NJ environs. All of a sudden we had a large yard and things felt nicer. The neighbors were chattier and less surly. The dog (Zero) could run around the neighborhood free, which I found both astonishing and good. I did not understand that the city had fantastic architecture. My father complained about it being provincial.
Whenever we would drive back and forth from NJ to Fall River, my sister and I would see a building in Providence, RI and for whatever reason we called it “the monkey squisher.” For trips to the shore, we would go to Cape Cod, and let the dog run on the beach.
Mr. and Mrs. Jennings were the immediate neighbors, and they treated us almost like their own kids. Their own boy was grown and in the service. Two other neighbors were Kathy and Carol Fata (sp?), who were slightly older than Holly and me, and again super-friendly. I believe they were either Lebanese or Syrian, which was common in Fall River at that time.
Most of all, I was into baseball and baseball cards in those years. I used them to learn some math and statistics, and of course to learn about the players. I watched baseball games on TV all the time, and to this day I remember some baseball stats from that era. I received an autographed baseball from Russ Gibon, Red Sox catcher at the time. Naturally I was a Red Sox fan. I had an allowance of a quarter a week, and on the way home from school would stop at a small newspaper store and buy baseball cards. The 1968 World Series was a huge thrill for me, and I was rooting for the Detroit Tigers and Mickey Lolich. I still remember the close call at the plate with Bill Freehan and Lou Brock.
Most of my reading was books on science and dinosaurs, or books on baseball. I was especially fond of a science book series called “Ask Me Why?”. I looked at maps plenty, and my favorite map was that of Italy, due to the shape of the country.
I recall watching the 1968 presidential election, and having my mother explain it to me. I also watched on TV the funeral procession for RFK, and I asked my grandmother, who then lived with us, why the police guards were not moving. “If they move an inch, they take them out and shoot them!” she snapped back loudly and decisively. In those days, people said things like that.
My kindgarten teacher we called “Mrs. Penguin,” though I doubt that was her real name. She would twist the ears of kids who made trouble, though that was not me. I had a letter box, but it bored me because my reading skills were ahead of those of my classmates. There was a girl named Stephanie in my class, and I thought she was cute. School simply did not seem like a very efficient way to learn.
In my hazy memories, I very much think of the Fall River days as good ones.
50 Takes from Kevin Bryan
A very good list from Kevin Bryan. 49 out of 50 correct, excellent ratio.
1) Ukrainians are heroes who suffered a ton.
2) Putin obviously covets Georgia and the Baltics also.
3) EU not in talks because they basically have no hard power; France even lost the Sahel.
4) The far right European parties are bad.
5) Pretending parties that win state and EU elections, and are in govt in NL and AT and IT, aren’t legitimate will not end well.
6) And in fact EU & UK speech laws not on side of liberty.
7) (but EU food and kid culture is better!)
8) Europe’s demographic crisis is really severe; not sure what the solution is.
9) Engineer training esp in France, Italy, Switz is excellent.
10) That talent should produce better econ outcomes, so econ policy must be dreadful.
11) Trump clearly doesn’t value democracy.
12) Most of his actual actions are much milder than his words.
12) Would be a disaster if that changed.
13) Censorious right wing culture will cause backlash just like woke culture did (put another way, 90s civic culture was better!)
14) Decline in trust in universities, media, and public health was our own fault.
15) Broader ideological diversity would be a huge improvement.
16) “Smart people in private sector” are much more ideologically diverse.
16) Canada has resources and good demographics so future is strong.
17) But culture based on “we aren’t US” is a dead end.
18) CA attitude to US like Calif attitude towards Texas: many stereotypes, little knowledge, and getting crushed on growth.
19) Most Middle East problems easy to solve but populace even crazier than leaders.
20) With exception of Iran, who would be great ally of West based only on median “voter”.
21) Dubai isn’t somewhere I’d live, but economically it is most fascinating success of recent decades.
22) Future of India very bright – English, young, educated, democratic, globally focused, successful expats.
23) Bangladesh as well.
24) Pakistan has problems that are very hard to fix, though Hunza is prettiest place in the world.
25) China underrated: the growth is actually staggering and tech leapfrogging in many areas is clear.
26) Chinese universities getting very strong, many foreign students from dev world.
27) But society way more closed than when I worked there 20 yrs ago, HK stolen, Taiwan?
28) Korea and Japan are delightful, but what will happen to countries who lose 20% of population in a generation?
29) Vietnam and Indonesia are very interesting going forward, esp former, as important powers.
30) Australia as well: resources and culture.
31) The future is African: tautology based on demographics.
32) The Sahel can easily get much much worse.
33) As can Central Africa, largely because of Kagame.
34) Ethiopia, Kenya, Nigeria, Ghana, Bénin as growth miracles seems possible, though.
35) Latin America is joyous and way underappreciated for cultural interest.
36) But highly polarized Presidential systems make it so hard to improve.
37) And the educational underperformance is a real barrier to growth.
38) US is clearly economic engine of world, and more so now than 10 years ago, and you are deluded to think otherwise.
39) Why? Energy costs and tech sector, esp AI, plus growing pop of high grit immigrants. Have to get these right.
40) Avg US govt quality is not good but generally it doesn’t try to do very much, which makes it less of a problem.
41) But it isn’t filled with fraud – it is almost all old age transfers and military and interest.
42) More federalism, weaker courts would be better (this is Canada’s secret – federal courts don’t matter).
43) More transfers to young would be better: preK, service opps, parental leave, guaranteed vacation.
44) That said, US policy directionally right, and Germany has more to learn economically from Texas than vice versa (let people build, keep energy cheap).
45) Still, institutions matter, and hard to rebuild once destroyed.
46) EU = no war in W Eur for 80 years = it is good.
47) NATO, UN, World Bank have flaws, but they are so cheap and global stability so rare historically that they are good.
48) Greenland in CoFA, free labor movement with Canada and US: both good, made harder by DT rhetoric.
49) Shame is useful to keep public servants and regular Joes on straight and narrow path.
50) But at the end of day, success more important than words. Strong countries and societies and global orders are not build on words & soft power, but on growing liberty & prosperity.
*Steven Weinberg: A Life in Physics*
A fun book, I enjoyed the read. Here is one bit:
There is another contribution to my productivity. While sitting at my desk at home doing physics or preparing classes, or doing some science writing, I picked up the habit of watching classic movies or the History Channel on television. My TV is always turned on in its corner of my desk. Doing the two things at once doubles the value of my time. And the movie keeps ne gnawing at a problem in physics when I might otherwise have knocked back my chair and decamped in frustration.
And:
At this time, Louise [his wife] literally saved my life. Through my friendship with Bernie Feld, I found myself welcome at, and attending, international meetings of various experts on the problems of the international order. Louise understood the situation better than I did. She advised me to have nothing further to do with Bernie’s world, if I wanted to get anything done in physics. She made me see that this was a world of disheartened older men giving themselves something important-looking to do, but that I was an optimistic young man with real work to do. I do not exaggerate when I confess that she saved my life.
You can order it here.
Emergent Ventures winners, 40th cohort
Akhil Kumar, 19, Toronto, global health issues and general career development.
Janet Shin, Berkeley, neurotech and brain imaging.
Diana Leung, San Francisco, AI and bio and machine learning.
Kyle MacLeod, Oxford University, economics videos on YouTube.
Aarav Sharma, Singapore, high school, to work on exoskeletons and AI.
Megan Gafford, NYC, writings on aesthetics, Substack.
Alice Gribbin, Berkeley, to write a book on Correggio and beauty.
Kaivalya Hariharan, MIT, to work on man-machine collaboration and AI, with previous EV winner Uzay Girit.
Eve Ang, Singapore, high school, biosciences and building exoskeletons.
Alex Chalmers, London area, writing on tech, progress, and policy.
Elanu Karakus, Stanford, Turkey, a smart flower to help bees find flowers.
Ishan Sharma, Washington DC, policy work on geologic hydrogen.
Parker Whitfill, economics PhD student at MIT, evaluations of differing AI systems.
Sympatheticopposition.com, @sympatheticopp, San Francisco, writing and Substack.
Yes there are further EV winners and an additional cohort coming soon! Apologies for any delays.
Again, here is the AI engine, built by Nabeel Qureshi, for searching through the longer list. Here are previous cohorts of EV winners.
How to teach people how to work with AI
I have a very concrete and specific proposal for teaching people how to work with AI. It is also a proposal for how to reform higher education.
Given them some topics to investigate, and have them run a variety of questions, exercises, programming, paper-writing tasks — whatever — through the second or third-best model, or some combination of slightly lesser models.
Have the students grade and correct the outputs of those models. The key is to figure out where the AIs are going wrong.
Then have the best model grade the grading of the students. The professor occasionally may be asked to contribute here as well, depending on how good the models are in absolute terms.
In essence, the students are learning how to grade and correct AI models.
Just keep on doing this.
Of course the students need to learn subject matter as well, but perhaps this process should be what…one-third of all higher education?
You might think the models are too good for human grading and correction to matter at all, whether now or in the future. That may be true at some point. That is the same scenario, however, where it does not matter what we teach the students. Might as well teach them for the world-states in which they are of some use at all.
This is all apart from the PhD you might get in gardening, but even there I think you will need to spend some time learning how to correct and judge AI models.
Place Effects on Fertility Decision: Evidence from Mover Design
This paper investigates the causal impact of place-based factors on fertility decision using mover design and data from the Panel Study of Income Dynamics (1968-2019). We find that moving to a state with a 1 percentage point higher birth rate increases the probability of childbirth by 0.9 percentage points, with cumulative effects reaching 3.8 percentage points three years post-move. The response demonstrates concentration among first births and exhibits systematic variation across demographic characteristics—with particularly pronounced effects observed among white women who are married, younger, and have higher income levels. Our variance decomposition shows the contribution of place effects to fertility variance increased from 4.7 percent to 26.0 percent before and after the Great Recession, with geographical variation in contraceptive access and healthcare infrastructure showing the strongest correlations with these place effects. This research emphasizes the importance of considering contextual factors in fertility research and policy interventions.
That is from a new paper by Hantao Wu and Man Zhu. Via the excellent Kevin Lewis.
Dwarkesh’s Question
One question I had for you while we were talking about the intelligence stuff was, as a scientist yourself, what do you make of the fact that these things have basically the entire corpus of human knowledge memorized and they haven’t been able to make a single new connection that has led to a discovery? Whereas if even a moderately intelligent person had this much stuff memorized, they would notice — Oh, this thing causes this symptom. This other thing also causes this symptom. There’s a medical cure right here.
Shouldn’t we be expecting that kind of stuff?
It’s a very good question. In 2023, I quipped, “I think they have, we just haven’t asked them.” Maybe, but less clear today. Dwarkesh reports that there have been no good answers.
It’s later than you think
Here is a short essay by Hollis Robbins on AI and education, excerpt:
Every faculty member should begin to write a detailed memo specifying the following: “What specific knowledge do I possess that AGI does not? What unique insights or capabilities can I offer that exceed AGI systems? Which students, and in which topics, would benefit enough to pay to learn from me and why?” Faculty who cannot produce this memo with concrete, defensible answers have no place in the institution. There is no middle ground.
Every dean must immediately audit their course catalog against one criterion: what advanced knowledge or skills does this course offer that AGI cannot replicate? Each course must demonstrate specific knowledge transfer or skill development that exceeds AGI capabilities. It will become obvious that the highest value courses are those aligned with specific faculty expertise. General education courses focused on basic knowledge transfer become indefensible. If the information is general enough to be called “general education,” AGI can deliver it more effectively than any human instructor. This will eliminate most of the current curriculum.
Universities will retain faculty in three categories: those advancing original research beyond AGI capabilities, those who teach the use of advanced equipment and sophisticated physical skills, and those handling previously undiscovered source materials or developing novel interpretations that outstrip AGI’s analysis. In the sciences, this means laboratory-based faculty who validate AGI-generated research proposals and offer advanced hands-on training with advanced equipment. In engineering and the arts, it’s faculty who guide students in high-level physical manipulation, augmented by AI tools. In the humanities, it’s scholars working with newly discovered primary sources, untranslated manuscripts, or archaeological evidence not yet processed by AI, as well as those creating fundamentally new interpretive frameworks that transcend AGI’s pattern-recognition capacities.
The curriculum narrows dramatically. Most lecture courses disappear. What remains are advanced research seminars where faculty share findings from new source materials or original experiments, intensive laboratory and studio sessions for hands-on skills, and research validation practicums where students learn to test AGI hypotheses. This represents a 60-70% reduction in current faculty positions, with remaining roles requiring fundamentally different capabilities than traditional academic work.
There is more of interest at the link.
Three Simple Principles of Trade Policy
Are we in a trade war today? Who knows? Doesn’t really matter. It’s always a good time to review important principles. A good source is Doug Irwin’s Three Simple Principles of Trade Policy published in 1996. Below I have updated occasionally with more recent data.
Principle 1: 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.
Exports and imports rise and fall together. It is surely obvious that if you want more imports you must export more (barring a bit of borrowing see below). The same thing is true in other countries. As a result, it is also true that when you import more you export more.
Principle 2: Businesses are Consumers Too
Business firms are, in fact, bigger consumers of imported products than are U.S. households.
As of 2024, more than 64% of imports are intermediate products. See here for the data.
By viewing imports not as final consumer goods but as inputs to U.S. production, policy makers can more clearly recognize that the issue is not so much one of “saving” jobs but of “trading off’ jobs between sectors. This brings home forcefully the most important lesson in all of economics-there is no such thing as a free lunch. Every action involves a trade-off of some sort. Higher domestic steel prices help employment in the steel industry but harm employment in steel-using industries. Higher domestic semiconductor prices help employment in the semiconductor industry but harm employment in semiconductor using industries. As john Stuart Mill wrote in 1848 in the context of import protection, “The alternative is not between employing our own country-people and foreigners, but between employing one class or another of our own country-people.”
Principle 3: Trade Imbalances Reflect Capital Flows
There is a fundamental equation of international finance that relates this net borrowing and lending activity to the current account. The equation is:
Exports – Imports = Savings – Investment
The powerful implication of this equation is that if a country wishes to reduce its trade deficit, the gap between its domestic investment and its domestic savings must be reduced.
…A country’s trade balance is related to international capital flows–not with open or closed markets, unfair trade practices, or national competitiveness. If a country wants to solve the “problem” of its trade deficit, it must reverse the international flow of capital into its country. In many cases net foreign borrowing can be reversed by reducing the government fiscal deficit. [emphasis added, AT]
Doug concludes:
These three simple principles of trade policy…[have] stood the test of time, they come as close to truths as anything economists have to offer in any area of policy controversy. Yet they are routinely denied, explicitly or implicitly, in trade policy debates in the United States and elsewhere. I do not imagine that a greater appreciation of these principles would invariably bring about more liberal trade policies; I offer them, rather, in the more modest hope that they might lead to sounder debates in which the real consequences of government policies are confronted more seriously than at present.
Hat tip: Erica York.
Deep Research
I have had it write a number of ten-page papers for me, each of them outstanding. I think of the quality as comparable to having a good PhD-level research assistant, and sending that person away with a task for a week or two, or maybe more.
Except Deep Research does the work in five or six minutes. And it does not seem to make errors, due to the quality of the embedded o3 model.
It seems it can cover just about any topic?
I asked for a ten-page paper explaining Ricardo’s theory of rent, and how it fits into his broader theory of distribution. It is a little long, but that was my fault, here is the result. I compared it to a number of other sources on line, and thought it was better, and so I am using it for my history of economic thought class.
I do not currently see signs of originality, but the level of accuracy and clarity is stunning, and it can write and analyze at any level you request. The work also shows the model can engage in a kind of long-term planning, and that will generalize to some very different contexts and problems as well — that is some of the biggest news associated with this release.
Sometimes the model stops in the middle of its calculations and you need to kick it in the shins a bit to get it going again, but I assume that problem will be cleared up soon enough.
If you pay for o1 pro, you get I think 100 queries per month with Deep Research.
Solve for the equilibrium, people, solve for the equilibrium.
Emergent Ventures Africa and Caribbean winners, sixth cohort
Maya Chouikrat, Algeria, to support training for an international olympiad of informatics team.
Mercy Muwanguzi and Kwesiga Pather, Uganda, for sanitation robotics to be used in medical centers.
Johan Fourie, South Africa, Professor of Economics at Stellenbosch University, to write a graphics novel on classical liberalism in a South African context.
Ken Opalo, Associate Professor, Georgetown University, for blogging on African economic development.
Katharine Patterson, Botswana, to support graduate internship in robotics research at NASA Jet Propulsion Laboratory.
Cyril Narh, Ghana, for general career development.
Jon Ortega, travel grant to Silicon Valley.
Alex Kyabarongo, Uganda, Doctor of Veterinary Medicine from Makerere University, to pursue graduate school in the USA for biosecurity.
Joshua Regrello, Trinidad and Tobago, first Steelpannist to perform on the Great Wall of China, Guinness Record Holder for longest steelpan performance, for general career development.
Liam O’Dea, London/Argentina, data science research into parliamentary records of the Caribbean for the last 200 years.
Joshua Payne, undergrad at University of Chicago, for research into mRNA vaccine optimisation, and career development.
Abdoulaye Faye, Senegal, developing Catyu, a firm that designs remotely operated robots.
Devaron Bruce, Barbados, PhD candidate at UWI, to support research in political reform in the Caribbean.
Tony Odhiambo, Kenya, undergrad at MIT, for enhanced training of top performers in mathematics olympiads in Kenya.
Sebastian Naranjo, Panama, PhD candidate at Renmin University of China, to support research on the diplomatic relations of China in Central America.
Ivoine Strachan, Bahamas, for research into designing and developing a VR bodysuit
Phumiani Majozi, South Africa, to establish a think tank promoting classical liberalism in South Africa
Pearl Karungi, Rwanda, for research into redesigning menstrual products.
Emmanuel Nnadi, Nigeria, Microbiologist, to support visiting research at the University of Waterloo in phage therapies.
Youhana Nassif, Egypt, to support an animation and arts showcase in Cairo.
Frida Andalu, Tanzania, to support visiting research in petroleum engineering at the University of Aberdeen.
Rupert Tawiah-Quashie, Ghana, to support his research internship at Harvard University concerning symbolic reasoning in AI models.
I thank Rasheed Griffith for his excellent work on this, and again Nabeel has created excellent software to help organize the list of winners, using AI.
Those unfamiliar with Emergent Ventures can learn more here and here. The EV African and the Caribbean announcement is here and you can see previous cohorts here. If you are interested in supporting this tranche of Emergent Ventures, please write to me or to Rasheed.
o1 pro
Often I don’t write particular posts because I feel it is obvious to everybody. Yet it rarely is.
So here is my post on o1 pro, soon to be followed by o3 pro, and Deep Research is being distributed, which uses elements of o3. (So far it is amazing, btw.)
o1 pro is the smartest publicly issued knowledge entity the human race has created (aside from Deep Research!). Adam Brown, who does physics at a world class level, put it well in his recent podcast with Dwarkesh. Adam said that if he had a question about something, the best answer he would get is from calling up one of a handful of world experts on the topic. The second best answer he would get is from asking the best AI models.
Except, at least for the moment, you don’t need to make that plural. There is a single best model, at least when it comes to tough questions (it is more disputable which model is the best and most creative writer or poet).
I find it very difficult to ask o1 pro an economics question it cannot answer. I can do it, but typically I have to get very artificial. It can answer, and answer well, any question I might normally pose in the course of typical inquiry and pondering. As Adam indicated, I think only a relatively small number of humans in the world can give better answers to what I want to know.
In an economics test, or any other kind of naturally occurring knowledge test I can think of, it would beat all of you (and me).
Its rate of hallucination is far below what you are used to from other LLMs.
Yes, it does cost $200 a month. It is worth that sum to converse with the smartest entity yet devised. I use it every day, many times. I don’t mind that it takes some time to answer my questions, because I have plenty to do in the meantime.
I also would add that if you are not familiar with o1 pro, your observations about the shortcomings of AI models should be discounted rather severely. And o3 pro is due soon, presumably it will be better yet.
The reality of all this will disrupt many plans, most of them not directly in the sphere of AI proper. And thus the world wishes to remain in denial. It amazes me that this is not the front page story every day, and it amazes me how many people see no need to shell out $200 and try it for a month, or more.
What should I ask Chris Arnade?
Chris Arnade…is an American photographer and writer. He worked for 20 years as a bond trader on Wall Street; in 2011, he started documenting the lives of poor people and their drug addictions and commenting on the state of the society of the United States. He did this through photographs posted on social media and articles in various media…
Here is Chris’s Substack, here is Chris on Twitter. So what should I ask him?