Category: Law
The Trump Administration’s Threat to Scientific Research
In The Nationalization of American Science I warned that the Trump administration’s rewriting of the seemingly mundane Regulation for Federal Financial Assistance was a tremendous threat to America’s historically successful decentralized system of science funding. Many others are now sounding the alarm.
It’s not surprising that organizations like the AAAS oppose the rule, albeit with unusually strongly worded dissents:
This latest move is a brazen power grab by the Director of the Office of Management and Budget to buck the will of Congress and the American people and will make future discoveries less likely. If this rule becomes final, Americans’ hopes for future cures, national security and economic strength will rely on the scientific sensibilities of the nation’s chief bureaucrat. Alzheimer’s disease will not be cured by a budget analyst from either political party.
But we are now seeing strong pushback from independent thinkers such as:
Grayson Logue writing at The Dispatch:
A sweeping new rule proposed by the Trump administration could remake how that money is awarded and give the president and his political appointees discretion to cancel funding or target recipients for virtually any reason—with little opportunity for recourse.
White House officials argue the new rule is necessary to assert more accountability over federal grantmaking, but observers fear the shift will expand opportunities for politicization, abuse, and even corruption for an administration that has already demonstrated a penchant for using the levers of the federal government to punish partisan enemies and reward ideological allies.
if I was trying to ruin American leadership in scientific research this is pretty much the kind of rule I would write…One of the genuine difficulties with observing the second Trump term is that the assault on state capacity and impartiality has been so multipronged that it is difficult to keep track of everything going on. But these proposed rule changes are monumental and catastrophic.
and Noah Smith:
MAGA’s attack on science is even worse than it looks…despite science’s overwhelming popularity and public trust, Trump and his administration are launching an unprecedented and devastating attack on American science — cutting funding, and forcing science projects to undergo ideological review by government commissars.
It may be that the Trump administration has pushed too far, but my real worry is that we are losing an equilibrium. Science was never completely independent of politics, of course, but even at the worst of times, funding was decentralized and the culture-war material that dominated the headlines was never more than a tiny fraction of the whole. Like an independent judiciary, independent science has been an American virtue. COVID policy, gender policy, and now the Trump administration’s weaponization of these mistakes may have destroyed that equilibrium.
As I wrote in my original post, we are adopting the loser policies of authoritarian nations but those policies are the norm elsewhere for a reason. Centralized control of science is the default because it serves the people in power of whatever party. Decentralization is the fragile exception—a historically unusual achievement that is easier to destroy than rebuild.
Addendum: And here is Andrew Gelman.
New space policy Substack from Mercatus
We are Rebecca, Max, and Aakrith. We are researchers at The Mercatus Center, a research organization dedicated to classical liberal ideas. Rebecca is a philosopher, Max is an economist, and Aakrith is a political scientist. Together, we are the Space Team, and this is our Substack.
We’re here to persuade you that space policy is increasingly important. And that getting space policy right offers humankind astonishing opportunities. In particular, we’re currently thinking hard about innovation, competition, federalism, property rights, and life in space.
Here is the link.
Land Reclamation!
“Buy land,” they said, “they aren’t making any more.” But in fact, we used to make a lot of land. Half the land area of Boston, a quarter of Manhattan, and 15% of San Francisco were raised from the sea before 1970. Tyler has already pointed to Zigmund Forrest and Max Tabarrok’s piece on land reclamation in Works in Progress. Check it out, it’s an excellent piece.
But also don’t miss Connor Tabarrok’s historical overview of land reclamation featuring the ancient Iraqi city of Ur, Alexander the Great’s siege of Tyre, and the amazing flood tanks built under the city of Tokyo! Connor, a civil engineer by trade, points out that most land reclamation isn’t done to build cities with land fill but rather to create farmland through drainage:
In the lower 48 states, the US Fish and Wildlife Service estimates that wetlands covered 221 million acres in the 1780s and 104 million by the 1980s. That is roughly 117 million acres drained in two centuries, a loss rate the report puts at 60 acres an hour, sustained for 200 years. For comparison, the total urban footprint of the United States is around 70 million acres. America has drained substantially more wetland than it has built city, and nearly all of that drained land became farmland.
… The Dutch invented the modern polder and have spent eight centuries pushing back the North Sea, and the result is one of the densest, richest countries in Europe. Yet around two-thirds of the country’s dry land is farmland. Flevoland, the newest province, is 1,410 square kilometers reclaimed from the Zuiderzee in the 1950s and 60s, and it was laid out as an agricultural basin, not a city. The country with the most reclaimed land per person uses it to grow potatoes, graze dairy cattle, and ranks as the world’s second-largest agricultural exporter.
The other reason that we drained land historically was to get rid of mosquito-driven malaria and to improve sewage.
In the mid-1800s the land south and west of the Washington Monument was the Potomac Flats, a tidal marsh that collected the city’s sewage and exposed it to the sun twice a day. The stench reached the White House. In 1882 Congress appropriated $400,000 and the Army Corps of Engineers, under Major Peter Hains, began dredging the river’s shipping channels and pumping the mud onto the flats. The work created more than 600 acres of new ground and a Tidal Basin engineered to flush the Washington Channel with each tide. The Lincoln and Jefferson Memorials stand on that fill. So do the cherry trees, planted in 1912 on land that had been open water within living memory.
Much more of interest at the whole thing.
Why we stopped making land
From Zigmund Forrest and Maxwell Tabarrok in Works in Progress:
In total, around eight percent of the land in America’s major coastal cities was underwater in the 1890s and has since been reclaimed. This includes the land under several major airports, like Newark, Logan, and SFO, as well as neighborhoods like the Financial District in San Francisco, the Back Bay in Boston, and Camden in Philadelphia. Some cities, like Boston and Charleston, have doubled in size by reclaiming land.
Today, reclamation should be more common than ever. Land values in some cities are thirty times what they were in 1950, and high-tide flooding is four to eight times as frequent. Reclamation could extend and protect our coastal cities as it has for centuries. But rather than reclaim more land, we have virtually ceased to reclaim any at all. Since the completion of Battery Park City in 1976, there has not been a single major urban land reclamation project in the United States and only a handful of port expansions.
…Reclamation stopped abruptly in the 1970s when a wave of environmental regulations made it enormously expensive to reshape the landscape. And it halted at the same time in every other country that passed similar laws.
Recommended.
How Britain Became as Poor as Mississippi
How Britain Became as Poor as Mississippi is a good piece in the Atlantic by Idrees Kahloon filled with colorful anecdotes of a nation in decline:
The health service now has to spend more money settling maternity-malpractice claims than it does on actually providing maternity care. Many Brits can neither obtain an appointment with a publicly funded dentist nor afford a private one; in a 2023 survey, one in 10 reported doing DIY dental work, in extreme cases extracting their own teeth or gluing broken crowns back together.
Incomes can be shockingly low: Junior doctors recently went on strike for the 15th time in three years over their salaries, which start at just £38,800; the median salary for British civil servants is £35,680. In April, amid the Iran conflict, the Daily Mail pounced on Prime Minister Keir Starmer for vacationing in Valencia, Spain, at what the tabloid described as a luxury hotel, costing £200 a night.
Americans are likely to come away a bit smug, especially as Independence Day approaches and Europeans are enjoying our giant stadiums and central air conditioning. Look deeper, however, and Britain’s story becomes more uncomfortable. Does this sound familiar?
Recent plans to transform the country have rested in no small part on High Speed 2, a superfast rail line intended to connect London with Birmingham, Leeds, and Manchester. But since HS2 was proposed, in 2009, its costs have tripled, to more than £100 billion. It is the most expensive rail line in the world. (A special structure to protect a rare bat species near the rail line in Buckinghamshire required 8,000 permits and was built at a cost of £216 million.) The most important sections of the proposed route have been lopped off. The rump line—going from Birmingham, Britain’s second-largest city, to not-quite-central London—may be finished by 2040…. HS2 has been delayed for so long that two swiftly built towers near the terminus now themselves look derelict and in need of demolition.
…Building infrastructure, or much of anything else, has become all but impossible in the United Kingdom. In addition to having the world’s most expensive (not yet built) train line, Britain also hosts the world’s most expensive (not yet built) nuclear-power plant, Hinkley Point C. Its environmental-impact assessment ran 31,401 pages; the plant will feature a £700 million “fish disco,” which will pulse sounds underwater to deter animals from its intake pipes.
Upon closer inspection, the United States looks a lot less like a shining city on a hill and a lot more like a declining Great Britain, appendaged with one or two dynamic sectors, most notably AI. The similarities are especially obvious in the retrograde solutions Britain has lumbered into, namely attacking immigrants and trade—Brexit being the equivalent of a high tariff regime. Nations in decline, like people, tend to lash out at others rather than deal with their real problems. Needless to say, neither immigrants nor trade explain Britain’s—or California’s—inability to build high-speed rail or other infrastructure.
It is discomforting to watch the birthplace of the Industrial Revolution, individual rights, and free speech—the nation that once built the railways, the steam engines, the factories that remade the world—lose the capacity to build much of anything, or even to tolerate people speaking their minds. In parallel, instead of dealing with our real problems—almost all of our creation—the right gets literally hysterical over symbolic culture-war questions like birthright citizenship, while the left nominates candidates with Marxist-Leninist sympathies. The abundance and progress movements are some of the few shining lights. It’s not too late. But Great Britain is a warning.
Rent Control: The Ceiling Trap
Rent control is in the news again. Check out my new website, Rent Control: The Ceiling Trap. Here is just one bit:
Norway abolished its rent control in 1982, and the economist Are Oust realized the newspapers had been quietly recording the whole experiment. He collected housing classifieds from Oslo’s Aftenposten from 1970 to 2008 and watched the market turn inside out.
Under rent control, Oslo’s listings pages looked nothing like a housing market. It was tenants who advertised, pleading their qualities to landlords — “housing wanted” ads outnumbered “housing for rent.” Ten to fifteen percent of those ads were placed by the tenant’s employer, vouching for them the way a bank vouches for a borrower. Tenants offered babysitting, gardening, snow-shoveling, and janitorial work on the side to sweeten the deal. Landlords, for their part, could demand a tenant of a particular gender, age, occupation, region of origin — some ads specified “strong Christian beliefs.” Deposits commonly ran to 50 or 60 months’ rent, occasionally 100 or more: tenants effectively lent the landlord the equity of the flat, interest free. And only about 20 percent of “for rent” ads dared print the rent, much of which would have been illegal.
Then the ceiling lifted. Within a few years the page flipped: landlords advertised to tenants, roughly 80 percent of listings printed an asking rent, the mega-deposits vanished, and the demands for snow-shoveling Christians of specified gender dwindled to nothing. The price went back to doing the rationing — so nothing else had to.
Check out the whole thing–it’s fabulous.
My Conversation with Joanne Paul
Here is the audio, video, and transcript. Here is the episode summary:
Joanne Paul is a historian at the University of Sussex, author, and a go-to Tudor expert on YouTube. She tells Tyler she’s drawn to the 16th century because it sits between the medieval and the modern, and because its paths not taken are a way of asking whether our own world had to turn out this way. Her biography Thomas More: A Life takes its subject in that spirit, refusing to reduce More to either martyr or monster.
Tyler and Joanne discuss how More influenced Erasmus, what to make of Utopia, why fear drove More’s persecution of heretics, how Holbein’s portraits of More and Cromwell differ, what movie depictions get wrong about More, how his execution was viewed at the time, how the Tudor period paved the way for Shakespeare and the scientific revolution, the surprising social mobility of the period, how the City of London governed itself and where that clashed with the Crown, Joanne’s upbringing in Canada and what drew her to English history, what she thinks sits beneath a lot of Britain’s current stagnation, the subject of her next book, and much more.
Excerpt:
COWEN: As you point out in the book, and you’re well aware, he oversaw the persecution of heretics. He oversaw torture. He was misogynistic when he wrote about women. Was he just a bad guy? Is that the correct picture of More, or am I supposed to admire him? He took a stand on principle, and he died, but what was the principle, really? To defend Catholicism, which then was also an instrument of torture?
PAUL: As a historian, I take one of my principles as to not try to put people into a box of good or evil.
COWEN: I’m not a historian. Should I just dislike him?
PAUL: No, I think you should be interested in these contradictions. I think you should be interested in the complexity that is the human experience. I think we should ask questions about why someone who is clearly very educated, clearly very intelligent, clearly very worldly in many ways, has also these beliefs that we rightly and should condemn. With Thomas More, I think he comes to these beliefs out of a place of fear. I think that’s something that we should take note of. He was afraid of what he would consider the Lutheran heresy. He was afraid of how it would lead to the breakdown of his society, and he was convinced by those people who held that to be the case.
I think that there are important lessons in that for us today, the way that we can become convinced that a group will lead to the breakdown of our society, that fear can lead to that hatred and indeed that violence. I think that’s an important lesson. If we just reject, oh, he was bad, then I don’t think we understand the way in which someone like Thomas More can become convinced that way. In terms of his role in opposing heresy, yes, he advocated for the persecution of heretics. He thought it was right and just that they were burned at the stake. I think that at times his role in that has been overstated, and I think we just need to understand what it was in historical reality.
He imprisoned heretics. He interrogated them. We don’t know if he tortured them. That was something he was accused of at the time. He said he didn’t. I don’t know that we’ll ever find evidence either way on that. There were three cases that he oversaw as Lord Chancellor of those who were burned at the stake. I only say that because I see on social media and the like and people presenting me with the suggestion that hundreds were put to the flames by Thomas More personally. I just think we have to understand what it is that we are actually talking about.
And:
COWEN: What precursors of the scientific revolution do you see, other than education? That’s coming in the 17th century. Is there more emphasis on calculation or measurement or accounting? What are the roots in the Tudor period?
PAUL: A lot of that comes from the Renaissance, as indeed humanism does. There’s this reintroduction of a lot of classical texts, an advocacy for reading these classical texts, particularly Greek texts and learning Greek. A lot of it is coming from an engagement with Greek mathematics and science. The other thing, and this is something I really emphasize when I’m teaching the scientific revolution with my students, is that we have to remember that the scientific revolution isn’t this grand triumph of science over religion or mysticism or what have you, that these two things very much go hand in hand through the 16th and into the 17th century.
The scientific method, for instance, comes from alchemy, which we might think of as an occult science. The methodology for scientific experimentation comes out of this desire to find the philosopher’s stone. Someone like John Dee is this polymath, as well as this occultist, Francis Bacon, has his interests in these sort of mystical elements as well. The growth and interest in what we might think of as mystical texts, a lot of them having to do with Judaism, as well as these Greek texts, comes together to form, I think, something that looks like the foundations of the scientific revolution.
A good episode with many points of interest. And I enjoyed Joanne’s recent book Thomas More: A Life.
Aaron Levie on current implicit AI regulation
We now have de facto AI regulation. It’s not obvious why from here on out models that have certain levels of capability or are trained on certain compute sizes won’t have to be reviewed by the government before release.
Realistically, as AI models became more and more powerful this was going to be inevitable (I think it’s too early, but here we are). So now it’s mostly just interesting to think about the implications and scenarios from here. A few would be:
* America gets to control who gets access to frontier intelligence and when. This generally works as long as we remain at the frontier at all times and don’t have a risk of being surpassed. At the moment we have a clear lead in frontier intelligence so this is a good bet, but lots of motivated parties would love to change that.
* This likely creates backlog of AI releases which means that we will see less rapid fire back and forth jumps in model progress. Bull/fine case is that we just get bigger step functions per release at a slower rate and we end up at the same point we would have. Bear case is those incremental smaller jumps were necessary for the continued flywheel of innovation.
* Other countries likely have even more incentive to at least hedge their bets with sovereign AI strategies so aren’t dependent on access to US AI all times. Previously this was relatively moot because the alternative wasn’t good enough, but that could change out of necessity and what we’re seeing in China.
* Open weights obviously a big winner here as it becomes what likely sovereign AI gets built out on, and what (for now) can still be released to the market without the same controls. One interesting question would be how regulation eventually extends to open models, which would have its own set of long term consequences.
Anyway some big updates to everyone’s mental models of AI regulation as a result of the capabilities we’re now seeing in AI. Wild times.
Here is the link. I would say I have long thought something like this was coming, but am pleased we got in so much early progress “under the wire” up until now. And here is more from Aaron.
Two Roads to Fast Clinical Trials, and the US Takes Neither
The HHS (FDA, NIH, ARPA-H and related agencies) is moving to speed clinical trials in what they are calling Operation TrialBlazer (kudos on the pun). The motivator, of course, is China:
China has made biotechnology a strategic national priority, systematically expanding its clinical research infrastructure with government backing, streamlined regulatory pathways, and sustained investment. In 2021, China’s global share of Phase 1 trials surpassed the United States’ share for the first time, a milestone that would have seemed unlikely just a decade earlier. And in 2024, China surpassed the United States in the total number of clinical trials registered, with over 7,100 registered, representing 39% of global trials…. For certain cutting edge modalities, including cell and gene therapy, radioligand therapy, and stem cell therapy, China uses investigator-initiated trials to provide additional flexibility, though with some tradeoffs around oversight and quality control. This means that drugs can move into human testing if a researcher has an interest and funding. In the U.S., comparable trials might wait years to start.
I am also pleased to see that they mention Australia, another advanced democracy, as a leader in clinical trial regulation:
Australia’s Clinical Trial Notification System allows trials to begin in fewer than 70 days after a final protocol is submitted, with regulatory approval granted in as little as 21 to 28 days and sites activated within 6 to 12 weeks.
Keep those comparisons in mind. Operation TrialBlazer proposes some good reforms such as CMC clarification. CMC is Chemistry, Manufacturing, and Controls–and it deals with the basics of manufacturing a drug. The FDA, however, is very risk averse and companies know that so they have often gone overboard in CMC: for example, proving stability of a formula at 6+ months when the trial is to last only a few weeks or documenting their full commercial manufacturing process before they even know if the drug works and knowing full-well that the process will be changed many times before a drug actually gets to market. In short, a lot of cost for very little benefit. The FDA is now clarifying that this kind of thing is not necessary. Good, that is low-hanging fruit. There are other good ideas as well.
But note what they are not proposing. Despite using China and Australia as exemplars they are not going down either path. Where China is fastest is in cell therapy, gene therapy, radioligand, and stem cell work and in these areas, China lets trials proceed on an investigator-initiated basis: as the TrialBlazer document puts it, a drug can move into humans “if a researcher has an interest and funding.” China then combines this open (or lax) front end (for these products) with an all-of-government industrial policy to accelerate winners.
The US is declining to go down that path. Ok, not my call, but I get it. But they are also declining to follow Australia. In Australia there is also no government prospective regulatory evaluation of most early-phase clinical trials. Under the Clinical Trial Notification (CTN) scheme, the sponsor submits their protocol package to a Human Research Ethics Committee (HRECs)–Australia’s IRBs–and once the ethics committee approves, the sponsor notifies the regulator, the Therapeutic Goods Administration (TGA), and pays a fee. The TGA does not read and clear the package before the trial starts. The roughly 21-to-28-day “approval” and sub-70-day start figures in the document are fast precisely because the regulatory step is not an evaluation. The government regulator stays out of the front end for most clinical trials, although in direct contrast with China it does step in for the highest risk biologicals. China has decided, high-risk, high-reward.
Australia does certify the certifiers, the HRECs. Europe uses a similar system for medical device approval. It’s a system proposed by former medical officer at the FDA Henry Miller and one I have long supported for the US. China is more laissez-faire.
The US architecture in contrast rests on the “gold standard” FDA reviews and the “FDA will retain full regulatory authority and decision-making.” In short, all of the TrialBlazer reforms are about making the gatekeeper faster, cheaper to prepare for, and less uncertain. None of it is about getting rid of the gatekeeper.
Addendum: Full disclosure, I did some consulting with ARPA-H on related work. See also my previous post on the a radical deregulatory approach, Montana’s SB535 and a Potential Biotech Renaissance in America
California’s Gay Certification Program
Chris Rufo and Austen Hufford have a good piece on California’s Gay Certification program. Yes, you read that right.
In 1986, Governor George Deukmejian signed Assembly Bill 3678, which required certain CPUC-regulated utilities to submit annual “plans” for buying goods and services from woman- and minority-owned companies. Two years later, CPUC created its “Supplier Diversity Program,” which would enforce the law and set contracting “goals” for large utilities.
Under a series of Democratic governors, the program has expanded to include gay-owned businesses. In September 2014, then-Governor Jerry Brown signed legislation requiring CPUC to recognize “LGBT-owned businesses” as eligible for supplier-diversity benefits. Five years later, Governor Gavin Newsom expanded the program further, “encouraging” other companies involved in the energy sector to award contracts to gay-owned firms.
…This scheme raises an obvious question: How does a business qualify as officially gay? Paperwork. Supplier Clearinghouse, a group that certifies firms for the CPUC program, features a list of qualifications linked on its website. Applicants can secure certification by providing a letter from an “LGBT organization” attesting to their sexual preferences; proof that a newspaper identified them as “LGBT”; or three letters from “personal contacts” written “on company letterhead” attesting to their homosexual orientation. Corporate officials who “falsely represent” their business as gay face up to a year in county jail.
So there you have it. Under the logic of ever increasing privileges for pretty much anyone except white males we now certify whether someone is gay or not.
This is an economics blog, however, so let’s turn from the culture war and ask, following Luke Froeb at Managerial Economics, what these set-asides cost the taxpayer:
A set-aside moves price through two separate channels, and they push the same direction.
- First, it shrinks the number of bidders, so the second-lowest cost is higher (or the second-highest value is lower).
- Second, the set-aside bidders themselves may be higher-cost or lower-value than the bidders they replace.
Both channels move price against the government….The lesson applies to California. Fewer, weaker bidders mean a worse deal for the government.
Brannman and Froeb estimate that set asides for small businesses reduce revenues in timber auctions by 15%, a substantial amount.
Addendum: It is worth noting that optimal auction theory tells us that it can sometimes be in the seller’s interest to handicap a strong bidder in order to make them increase their bids. Thus, in theory, an “affirmative action” program (not a set-aside) that deemed a bid from a minority firm as say 5% higher (so a minority bid at 100 can beat a non-minority bid at 104) could raise revenues. Note, however, that this optimal auction story only works when the minority firm loses the bid! In practice, even these sorts of schemes are money losers for the taxpayer.
Bastiat’s telephone?
- Oakland has seen a 37% decrease in car break-ins over the last year.
- What’s good news for car owners is less so for repair shops that specialize in window and windshield replacements.
- Multiple businesses have reported a sharp decline in their income as a result.
Here is the article, via Air Genius Gary Leff.
Colorado’s Funeral Mistake
Today about a quarter of the US workforce are required to have a license to work in their chosen profession, up from just 5 percent in 1950. Almost always the trend has been to add occupational licensing over time, but in 1983 Colorado did something unusual: it delicensed funeral service workers such as funeral directors. Brandon Pizzola and I analyzed what happened in our 2017 paper, Occupational licensing causes a wage premium: Evidence from a natural experiment in Colorado’s funeral services industry.
What we found was that delicensing reduced wages, reduced prices, and caused a shift towards cremation rather than the more expensive mortuary services preferred by funeral directors. Here’s a key figure.
But that is not the end of the story. In 2023 a series of gruesome abuses came to light involving the sale of body parts, rotting bodies, and worse. Newspapers repeatedly noted that Colorado was the only state not to license funeral service workers. As a result, Colorado is relicensing funeral service workers as of 2027.
The problem is that there is no evidence that abuses were worse in Colorado. It’s easy to find similar abuses—including sexual abuse of corpses—in states with heavy licensing. Pizzola and I didn’t examine the rate of necrophilia among funeral workers in our paper (silly us), but we did cite the following:
A recent US government review of occupational licensing concluded that “the empirical research does not find large improvements in quality or health and safety from more stringent licensing” (CEA, 2015). Similarly, Colorado revisited their decision in a 1990 sunrise review that considered reinstating occupational licensing. The Colorado Department of Regulatory Agencies found that since the 1983 occupational delicensing: (1) “there had been incidents of malpractice within the profession but no widespread pattern of abuse,” (2) “[a]llegations of significant threats to the public health, safety and welfare perpetrated by the death care industry in Colorado regarding the improper disposal of human or infectious wastes had not been supported by verifiable evidence,” and (3) “claims that the public in Colorado had suffered or might suffer significant detriment due to a lack of trained mortuary science practitioners caused by the abolition of the Board were unsupported” (Colorado Department of Regulatory Agencies, 2007).
Moreover, the licensing requirements—mandating various hours of training and so forth—have very little to do with the types of abuses that generated public support for relicensing. How many hours of “don’t have sex with corpses” training is required? And the funeral director in the worst Colorado case was in fact sentenced to 40 years in jail. Isn’t that incentive enough?
People want what cannot be guaranteed: good behavior in all circumstances. And they will reach for a licensing regime if it promises that, even when such promises are empty.
My Conversation with Dave Baszucki
Dave is CEO and co-founder of Roblox, and here is the audio, video, and transcript. From the episode summary:
With over 100 million daily active users and projected revenue bookings of $7 billion this year, it is one of the largest gaming economies in the world—and one that has made millionaires out of teenage developers in Argentina, South Korea, and everywhere in between.
Tyler and Dave explore why Roblox decided early against prioritizing advertising revenue, why Dave thinks the main competition of Roblox is its own execution speed rather than Fortnite, whether every mega platform inevitably becomes an everything app, how falling token costs will change the platform, why he insists all the games on Roblox are beautiful, whether Robux should have a floating exchange rate, why admitting you have kids under 13 on your platform turns out to be a competitive advantage, why he’s skeptical of blanket social media bans, what his son’s experience with bipolar disorder taught him about metabolic health, his two-year sabbatical between companies that involved a motorhome trip across North America and a stint hosting talk radio in Santa Cruz, why Mutiny on the Bounty remains one of his favorite books, what he’ll learn next, and much more.
Excerpt:
COWEN: What percentage of your games now do you feel are beautiful?
BASZUCKI: All of them.
COWEN: Some look just quite ordinary. They might be fun, but I wouldn’t say they’re beautiful, right?
BASZUCKI: Well, I was trying to go a couple levels out of the box on you there. The reason I feel they’re beautiful is when you said that, I immediately went to look and feel, but then I tried to imagine the 12-year-old or the 18-year-old or the 30-year-old struggling to build something wonderful and the human connection to those games. By that definition, I think they’re all beautiful. They are all the efforts of creation of real people trying to pour their hearts out to make something that other people love to play.
On an artistic basis, I think you could ask me what percent of paintings in the MoMA do I think are beautiful. I’d probably say 20 percent. If I had to look at 1,000 Roblox games, I wouldn’t name which is more beautiful to me because I think that’s less important than really the heartfelt work of all the creators.
COWEN: I’ve been struck when I look at gaming at how much people don’t seem to care much about the visual beauty of their games. I would have expected something different, say, 15 years ago, and they just want a game that engages them somehow. Normal standards of visual beauty seem to have fallen away. Is that incorrect? Would you correct that impression in some manner?
BASZUCKI: I think you’re absolutely correct. What I feel you may actually be describing, if we looked into other disciplines, the evolution of story from the campfire to written to audio to a movie, and the increasing fidelity; all of those stories, in a way, are beautiful, but at the time, for the vast majority of the creators, it may be that writing is just easier than producing a 4K Hollywood movie. I feel that’s a little bit like the metaphor you’re talking about right now in gaming.
For the vast majority of people, their story or their idea for their game is actually pretty beautiful. Whether it’s a fashion game like Dress to Impress or it’s a grow garden game, the games are arguably beautiful, even if they don’t look photorealistic. What I think we’ll see is, over time, as AI helps accelerate the ability to make games look really polished in any style the creator wants—could be photorealistic, could be anime, could be a Warner Brothers 2D cartoon look—you and I might say that looks more beautiful, but the core gameplay is still somewhat the original gameplay. I think we are going to see games arguably look more beautiful, even though I think they’re all beautiful.
The dialogue is a bit slow to get underway, but there are many interesting parts.
Can Online Activity Be Regulated? Evidence from Adult Websites
The consequences of online regulations depend on the extent to which users can circumvent restrictions or substitute toward noncompliant platforms. Since 2023, 25 U.S. states have implemented age verification laws that caused prominent adult websites (including Pornhub) to restrict local access for all users. We study how these restrictions affected browsing activity using individual-level panel data. Access restrictions reduced overall time spent on adult sites by roughly 10%. Specifically, for every 100 hours spent on top adult sites before restrictions, about 50 hours remained accessible at noncompliant sites that never restricted access, 30 hours persisted through VPN-based circumvention, 10 hours were substituted from compliant sites to noncompliant sites, and 10 hours were no longer spent on adult sites.
That is from a new NBER working paper by Matthew Brown, Emily J. Davis, and Devin G. Pope.
Montana’s SB535 and a Potential Biotech Renaissance in America
In 2024, China’s NMPA approved 83 new drugs, the FDA approved 50. China’s share of new commercial clinical trials jumped from 8% globally in 2013 to 30% in 2024, just behind the US at 35%. Last year, China-based Jiangsu Hengrui Pharmaceuticals overtook AstraZeneca as the top clinical trial sponsor in the world.
What’s remarkable is how China is winning: deregulation and capitalism. It’s faster and easier to set up a clinical trial in China than in the United States. China is even experimenting with the peer approval model I’ve long advocated. The Medical Tourism Pilot Zone on Hainan island lets medical institutions import and use any pharmaceutical or device approved in the EU, US, or Japan — no separate Chinese approval needed. China is using our own regulatory judgments to get treatments to its patients faster than we do.
The core problem is that our clinical trial and drug approval system is slow and expensive. Getting a new drug to market in the US takes billions of dollars and a decade or more of clinical trials — and all of that before a company earns a single dollar. The consequence is drug lag and drug loss and also learning loss. Innovation is a dynamic process. You must build to build better.
It’s not over for the United States, however. Montana’s SB535, signed into law in May 2025, is the most important regulatory innovation in drug approval in my lifetime. The law authorizes investigational drugs and therapies that have cleared Phase I trials to be prescribed and sold — bypassing the traditional FDA approval pathway. It makes Montana the first state to license experimental treatment centers, “one stop shops” for otherwise hard-to-access care.
This is a very big deal.
SB535 makes Montana the only state in the nation where firms can move more quickly from a successful Phase I trial into limited commercialization. This positions Montana as a highly attractive location for biopharma, biotherapeutics, and other life sciences companies that want to accelerate time-to-market while continuing the federal FDA approval process.
Montana’s regulatory system creates the possibility of a self-funding clinical pipeline: companies using early commercial revenues to finance the path to full FDA approval. You get treatments to patients faster, and you keep companies alive long enough to prove their treatments work. Experimental treatments are not for everyone–these treatments are cash based–no Medicaid or Medicare and probably no private insurance either–but after conventional treatments have failed experimental treatments should be available for some patients, both for their benefit and for ours.
Montana is not alone. Florida now allows non-FDA approved stem cell therapies:
A new law in Florida, CS/CS/SB 1768, allows physicians to market and administer stem cell therapies that have not been approved by the U.S. Food and Drug Administration (FDA) for orthopedic conditions, wound care and pain management.
These experiments in regulatory federalism are vital and not just for patients but also for geopolitical competition. I am thrilled China is pursuing medical innovation (I predicted and applauded this in my TED talk) but I also don’t want to see America falling behind.
The Trump administration has been supportive. I would like to see HHS and the FDA working with companies operating under state right-to-try frameworks — sharing data, clarifying federal-state boundaries favorably, and treating these experiments as the biotech competitiveness infrastructure they are.
The FDA approval process has long been treated as the only legitimate path to market. The cost of that orthodoxy is measured in companies that never reached viability, innovations that never got off the ground, and patients who died when they didn’t have to. I have spent thirty years trying to get people to see the invisible graveyard. That’s hard. Most remain blind. But China’s bursting pipeline of new drugs is visible — could this be a Sputnik moment for biotech?
An American biotech renaissance — driven by AI, federalism, and regulatory innovation — is possible. The path forward is to double down on what makes America great: the laboratories of democracy are working, and in Montana and Florida, so are the labs.