Category: Political Science
I guest host an NYT podcast with Michael Kratsios, Trump science advisor
Here is the audio, video, and transcript. Here is one excerpt:
Cowen: Talk me out of this worry: So we agree science is an ecosystem, and there’s always a temptation to want to fund the most dynamic, most productive parts of the ecosystem. And right now, that would probably be A.I.
But if you need the whole ecosystem to be working well, arguably you should be funding, at the margin, the less productive parts, which need the aid. That will sometimes be universities, but there’s plenty of other inefficient parts of our ecosystem.
So is this plan not putting more resources into the parts that are working well, but we get stuck with bottlenecks if the parts that are not working well end up with fewer resources?
Kratsios: Well, luckily, we’re not investing all of our money for the federal government into S.I. for science. It’s a portfolio approach. And obviously one ——
Cowen: But it’s a net shift toward artificial intelligence, right?
Kratsios: Well, I would argue — and I think this is a very important distinction — it’s not investing in superintelligence, it’s investing in superintelligence for science.
So the question is, I think a lot of people argue: Oh, why would the federal government want to invest more in superintelligence when billions, if not trillions, of dollars are being invested in the private sector into superintelligence? And I would agree with that statement. We shouldn’t be doing that.
The government isn’t funding how to create a next frontier model. That’s something that our great American companies are working on.
But applying those models to scientific discovery is still in its early stages. And as you know, if you think about the trend or the path by which we’ve gotten to this place with L.L.M.s — we started first with being able, essentially, to scrape the whole corpus of the internet, to use that to train a large language model.
The next chapter of that was around coding, where the model builders realized: Oh, we have really good coding data, and we can actually train these models to be good at coding. So then we had this rise of Anthropic and OpenAI Codex and all this stuff.
And I think, to me, the next chapter is around science, and the data that you need to train these large language models for science is still one that we’re working on a lot. And we were very proud to announce 190 federal data sets being made public in order to help train these science models.
But ultimately, you’re going to be applying this superintelligence to everything from material science to chemistry to math to physics, and we have to be in a position to actually leverage that.
Definitely interesting throughout, pretty much entirely we are discussing the Trump administration science plan, authored by Michael.
Will bystander economies be able to finance their governments?
From Jesús Fernández-Villaverde:
Will AI poison the public finances of many modern states? There is a real risk that it will.
Yesterday, I circulated a new paper, “Saving for the Machines,” which makes a simple point. Building the AI transformation will require enormous investment. The only way to induce agents to save for that investment is through a large increase in the real interest rate. For instance, in my benchmark scenario, the ten-year real yield jumps from 5.1% to 13.6% on impact.
But that means government borrowing will become much more expensive. Here is a back-of-the-envelope calculation. Take a government that owes 100% of GDP in 2025 (a typical case in Western Europe) and runs a balanced primary budget from then on (not so typical but never mind; I want to build an optimistic scenario). That means the debt ratio changes only with the gap between the real interest rate and growth.
I input the interest rate and the growth rate for my benchmark transition to full automation, and I roll over the debt at the short rate. I consider two economies. The first economy is an AI adopter, for example, the U.S., which experiences an AI boom at home. The government pays the new interest rate but also enjoys faster growth.
The second economy is a bystander, for example, Spain. This economy lives in an integrated financial market but does not adopt AI (this is an extreme case of zero adoption, just to make the exercise transparent): it pays the same world interest rate and continues growing at its old 1.6% trend.
Let’s first consider the adopter. With an intertemporal elasticity of substitution of one-half, the Euler equation implies that consumption growth is about half the real interest rate. Hence, the gap between the interest rate and growth does not close during the AI-driven growth boom. Instead, it widens. For example, with a unit elasticity of substitution among tasks, the real rate rises from 5.1% to 42% by 2040, while growth increases only from 1.6% to 22%. Debt doubles by 2038, reaches 296% of GDP in 2040, and 907% in 2045. To hold the ratio at 100%, the government needs a primary surplus of 10% of GDP in 2035 and 24% from 2045 onward. With a low elasticity of substitution of 0.2, the numbers are milder, but the pattern is the same: 204% in 2040, 397% in 2045, and a stabilizing surplus of 13% of GDP.
But the adopter has a way out. The capital share goes to one, so net capital income is about 88% of GDP, and a flat tax on it can cover the surplus. A 36% tax on net capital income holds the debt at 100% of GDP in the limit with unit elasticity, and a 20% tax does so with strong complementarity across tasks. The tax is above the gap because it slows growth, from 21.9% to 13.6% with unit elasticity and from 11.7% to 9.1% with an elasticity of 0.2, while it does nothing to the rate the Treasury pays, which technology pins at the machines’ net return. Painful, but the boom survives and the adopter can pay its debt.
The grim news is that the bystander economy has no way out. Its capital income is still a third of GDP, which grows at 1.6%, and the surplus it needs is 11% of GDP in 2030, 26% in 2035, and 44% forever with unit elasticity (18% and 24% with an elasticity of 0.2). On a balanced primary budget, its debt doubles by 2033 and triples by 2035. No tax system raises that.
Two more bad pieces of news for the bystander. First, long yields jump on impact, so a Treasury that issues ten-year debt pays more, and sooner, than rolling over at the short rate assumes: it is the same bill but front-loaded. Second, the bystander’s own capital flows to the machines abroad, so its GDP and tax base fall below trend. One relief is that households can save for other people’s machines and get rich on the returns, which the bystander’s government can tax to some extent. This back-of-the-envelope calculation is a benchmark, not a forecast of what is to come. But the arithmetic is simple, and it runs counter to the hope that an AI-fueled growth boom will take care of public debt, because growth comes with an interest rate that is twice as high. Not a pretty future for most of Western Europe. Due to AI, the choice is between default, inflation, or, most likely, financial repression: capital controls that keep domestic savers from investing in machines abroad.
I am somewhat more optimistic than this. The assumption of zero Spanish adoption already is noted, but also ideas are public goods, and Spain can benefit from American (and Chinese) AI, and the resulting scientific advances. The long-run supply of capital also might be quite elastic, we will see.
New Matt Faherty study of the NSF
From the Executive Summary:
- Therefore, the NSF, NIH, and the federal government should put far more resources and effort into developing metascience. With proper metascience efforts, the NSF could run experiments on science funding reform proposals, such as shifting to a people-over-projects funding model or directly funding replication efforts, and determine which reforms will most improve NSF outcomes. The NSF’s September 2026 announcement of an Office of Metascience is a welcome step toward this goal. This report’s recommendations can help guide the office’s development, its experimental agenda, and the evaluation of its results.
- On July 21, 2026, Michael Kratsios, the director of the White House Office of Science and Technology Policy, released “Science: A New Golden Age,” a report for the President that, if fully enacted, might constitute the greatest overhaul of federal science policy since World War II. Based on my interviews and research, I strongly support most of the report’s recommendations and conclusions, and I believe the wider science community should as well.
Here is the entire study, of interest throughout. Here is an earlier Matt Faherty study on improving the NIH.
Against Laissez-Faire Democracy
In a new paper, Brennan and Freiman argue persuasively that:
the arguments against laissez-faire capitalism apply in a rather straight way against laissez-faire democracy. This should be a rather startling result, considering that laissez-faire capitalism is widely rejected, yet laissez-faire democracy is widely accepted.
All the typical market failure arguments–externalities, asymmetric information, principal-agent problems, behavioral issues–apply to democracy. For example:
democracies also suffer from obvious externality problems. Indeed, this is the key difference between markets and politics. Market decisions are usually and mostly internalized; negative externalities are seen as an anomaly to be corrected. Political decisions are by nature public. For instance, about 37% of the eligible
voting public, and 26% of the entire population of the UK voted in favour of Brexit, but the effects of Brexit are borne by everyone else, including losing voters, eligible voters who abstained, children and other citizens ineligible to vote, future generations, and foreigners.…The problem is similar to the pollution of individual automobile drivers or airline passengers. We drive too much and pollute too much because we bear the benefits of these actions but pass the costs onto others. Individually we matter little but collectively we matter a great deal. If externality regulation is prima facie justified in the case of pollution, it is prima facie justified in the case of voting.
They go on to suggest regulations that might apply to democracy. Noting first that:
…pretty much everyone already accepts some government actions which are plausibly seen as vote or democratic regulation. For instance, some issues are put directly to voters, while others are left to elected leaders, while others are left to judges and bureaucracies, and still others are removed from political consideration entirely. The timing and place of elections, who is permitted to vote (at what age), who is permitted to run for office, and so on are kinds of regulation. Government funding of public education is in part meant to be a non-laissez-faire subsidy meant to increase voter competence. Many readers are likely comfortable with government regulation of campaign donations, campaign expenditures and even which kinds of speech are permitted. Probably almost all readers reject straight up markets in votes (Freiman 2014). Each of these things is a kind of government regulation of democracy which inhibits laissez-faire democracy.
The authors sketch possible regulations while stipulating, for the sake of argument, universal, equal suffrage—no weighted votes or knowledge tests for voting eligibility. Possibilities include paying citizens to pass a voluntary civics exam; tracking campaign promises and fining deceptive claims; regulating political advertisements more like drug advertisements; and requiring supermajorities for certain decisions. See the paper for more.
You may object that these regulations would be captured by special interests, be administered by biased officials, or have unintended consequences. Indeed, welcome to the argument for laissez-faire.
The Greg Clark Symposium
Earlier I wrote “Greg Clark may well be the most important social scientist of the 21st century.” Thus, the symposium in Econ Journal Watch on Clark’s new but perhaps not forthcoming book is very welcome. The symposium includes serious critics, most notably Stuhler and Benning, but I suspect even the critics would agree with Arden and Plomin who write:
We agree wholeheartedly with Clark’s overall message that genetics accounts for outcomes long assumed to be due to nurture. Like other books in his trilogy, Clark marshals evidence from diverse sources to support his argument.
The data reach in this book—1600–2026—is jaw-dropping. Clark (and his colleague Neil Cummins) turned to wedding-register marks, probate courts, Huguenot wills, Oxbridge matriculation rolls, Sandhurst cadet lists, Wedgwood servants, and the Guild of One-Name Studies, to name a few. These data are imaginative, arresting, and inspiring. The analyses conducted, given the manifest complexities of harmonising across data types, time, and place, are impressive.
…This audacious scholarly book properly lights a fire under important questions. We look forward to following the work, its critics, and its rebuttals. It’s a terrific scientific contribution; because it is so thoroughly interdisciplinary, it will enrich and enliven the conversation about social status, its causes, and malleability.
One thing I am struck with from the critics (not just those in the symposium) is that most acknowledge that twin and adoption studies have badly undermined the claim that parental investments are big determinants of adult ability and earnings. The critics are correct that more elaborate environmental models can reproduce genetic-looking correlations but keeping an environmental explanation alive is not the same as vindicating the explanation people originally believed. Clark and many others have pushed the debate far into new territory.
There is also a basic asymmetry between the competing explanations. Genetics supplies independently established inheritance rules. When an environmental model reproduces the same patterns by choosing transmission rules precisely because they mimic genetic inheritance, it is accommodating the evidence, not independently predicting it. True, Clark also requires some free parameter choices, but he is clear that these can and need to be independently estimated.
The kinds of parental effects being demonstrated also matter. The nurture effects the environmentalists point to often seem to be for optional, steerable, or transferable choices than for more fundamental abilities, that is, changing what a child chooses to do with a given set of abilities, versus changing those abilities. Parents, for example, have more influence over religious identification than over religiosity, more influence over wealth than income, more influence over educational attainment than IQ.
The genetic arguments in the book draw the most criticism and yet the book has much else offer as Clark notes. For example:
Social status is inherited as strongly as height. Even relatives as distant as nine generations apart, 270 years, still show significant correlation in social status.
That is a very striking finding–especially given the intervening industrial revolution, multiple wars, huge changes in social mores etc.–but if it stands, it does so independent of the genetic explanation.
The fact that this monumental and challenging book–right or wrong–cannot find a major academic publisher is an intellectual scandal. The editors at Princeton University Press and the University of Chicago Press should be ashamed.
Addendum: See previous MR posts on Clark including Tyler’s Conversation.
My excellent Conversation with Luis Garicano
Here is the audio, video, and transcript. Here is part of the episode summary:
Tyler and Luis start their conversation with Spain — housing, NIMBYism, and the productivity crisis; Spanish literature and why the Civil War still looms so large; and what Chicago taught Luis about party discipline in European politics. Then to the EU’s unanimity problem, capital markets, and Denmark’s flexicurity model; a round of overrated-versus-underrated on Rosalía, Penélope Cruz, and Sgt. Pepper’s; and finally into Messy Jobs — why retraining programs fail, whether AI’s leisure dividend has arrived, and whether Spain could ever achieve AI sovereignty.
Excerpt:
COWEN: Why is there a current productivity crisis in Spain?
GARICANO: Productivity indeed hasn’t grown for three decades, more or less. We’re currently having extensive growth. We’re having immigration, we’re having tourism, but we don’t really have productivity. A lot of it has to do with the political economy. I think if you want to explain the West, not just Spain, you have to understand who is voting and who is this being governed for. Spain is a particularly low-fertility, high life-expectancy country. We have the fifth-lowest fertility and the fifth-highest life expectancy in the world grosso modo, and very high pensions.
Essentially, all the GDP growth we’ve had has gone, 100 percent of the GDP growth we’ve had since 2008 has gone to pensions, to the pensioners. In terms of investment, there is very little in terms of productive investment. We have this fantastic highway network and this high-speed rail network. It’s not really getting the maintenance it needs. Just as one example, the country is basically being governed by and for the older retired people.
COWEN: What does the optimistic scenario look like? You don’t have to predict it’s going to happen, but lay out for me how it could all go well. You would get productivity growth of 1.5 percent a year, and economic growth a bit higher than that.
GARICANO: Spain has amazing fundamentals for the current situation, meaning we could easily be very electricity-energy rich due to solar, wind, and nuclear. We have all this empty space where you could put nuclear plants without much resistance. In fact, we are closing them for political reasons. The energy could be a big advantage. It’s a really amazing place to live. There is no more diverse geography and climate and nature anywhere in Europe, I think, or close to, and beautiful. You could easily see a situation where Spain becomes Florida, or Austin, Texas. Think of Texas. It attracts technology, attracts talent who wants to live there, attracts energy, builds the data centers, et cetera. That scenario is not impossible. The political economy is the tricky part.
COWEN: Doesn’t that mean you actually don’t have good fundamentals? You said you don’t even have a YIMBY movement. Life there really is quite good. I’ve been many times. It’s one of my favorite countries to visit. Isn’t that like a resource curse where there’s no sense of crisis? Old people live for a long time. It’s very comfortable. The weather’s great. The food is amazing. Aren’t those, in fact, liabilities in a time of very rapid change?
And another, on a very different topic:
COWEN: On Messy Jobs, your new and excellent book, you argue very persuasively, “In my view, AI will not lead to anything like mass unemployment, maybe not even to a rise in unemployment, because jobs will become messier and the AIs won’t be able to do them.” Is that a fair description of part of your argument?
GARICANO: I think that’s completely right. Yes.
COWEN: Now, I agree with you, but I think my worry is the opposite, that I know a lot of people, they want simple jobs, they’re okay with some measure of tedium, and that if most jobs become messy jobs, for them, that’s quite stressful, and they’re upset and disoriented. Do you worry about that?
GARICANO: I think that we will have to have a tolerance for human relations. Is that what your friends don’t want? We have a tolerance for relational work that is complex, that has politics in it, that has a big human component, and that’s the part that is going to stay. If people just want to be in their desk typing away, I think two good ways to think about it is work from home and outsourcing. If you think of which jobs were offshored, let me say offshored, in the big offshoring wave to India, those are jobs that are not messy. They’re clean. The company specifies the jobs. They say, “Okay, we can specify this job perfectly. Let’s ship you up.”
Those jobs are the same exact ones that are under complete threat of disruption. A lot of the work from home, when it doesn’t involve a lot of submittings, I guess, has the same feature. Those jobs are clean, single-task, and very often verifiable. You can just see how the performance is going and have your RL, your reinforcement learning loop work on those. I think those are gone.
The messy component that I want to emphasize, many people will say, “Oh, AI will tend to the messiness as well.” I think that there is some messiness that is contingent and that AI can streamline, but there is a lot of messiness that is both relational and has to do with a deeper aspect of the knowledge problem that doesn’t really go away. As AI advances, many aspects of Hayek, Polanyi, and all these knowledge problems are still there.
COWEN: How much retraining will be required and how frequent will that retraining have to be? If I think of me working with agents, I have to retrain myself every month or two. That’s difficult for me. It’s not stressful given my position, but I can imagine it would be stressful. Can we really just put a big chunk of the labor force through that?
Definitely recommended.
The Tragedy of Nikole Hannah-Jones
Nikole Hannah-Jones famously sent her child to a predominantly black/lower-income public school in New York City. Now her child says she shouldn’t have been used as political fodder.
The essay makes for hard reading and I acknowledge NHJ’s courage in writing about her mistakes and the cost to her child. The piece is raw and true when talking about her personal choices, but the larger story in which NHJ embeds her personal history is mostly false. The problem isn’t funding. The failures she documents are failures of management and accountability, not lack of resources. NYC spends upwards of $40k per pupil on average, the highest of any large district in the country. Moreover, schools in NYC with lower-income students get more than the average. PS 307, where NHJ initially sent her child, is currently funded at just over 52k per student, far above the national average.
Nationally, there haven’t been big gaps in funding within states by race or income for decades. NHJ has reckoned with her failing her own child but she has not yet reckoned with the failure of her entire educational philosophy.
The role of ideology in blinding NHJ is dramatic. NHJ’s daughter earns high grades in her math classes but she fails standardized tests. Most parents, especially conservatives, know what that means. The classes are a lie. But NHJ is blinded by ideology and assumes it’s the standardized tests that are biased. It’s only when her daughter demands to go to a better school that she and her daughter confront the truth:
Najya knew very little algebra and had huge gaps in many of the building blocks of math that she should have learned in elementary school, like mastery of long division and fractions.
The confrontation is almost disastrous:
My child’s confidence wilted like an unwatered plant. She started to develop an almost debilitating anxiety around taking tests. She became sullen at school and began to act out. For the first time ever, I got messages from teachers about Najya’s behavior.
Fortunately, Najya battles back and recovers but much more could be said here about the costs of social promotion, DEI and mismatch on the so-called beneficiaries.
Ironically, NHJ invokes the heroic history of Black Americans integrating schools to justify keeping her own child in a segregated one. Painful.
NHJ thought that she and her husband–politically connected, astute people who were not afraid to speak up–could do well for their daughter and the other kids in the school. But in the end she has written a great piece on why voice fails–even a powerful voice–in the absence of the threat of exit. Hannah-Jones could have saved herself some grief and her child a poor education by reading my post The tragedy of Jonathan Kozol.
It’s been said that Ayn Rand’s heroes don’t exist, but her villains do. Case in point. Hannah-Jones says that she and her husband “felt an obligation to make educational decisions based on the collective good.” But she wasn’t just sacrificing herself for her ideology; she was sacrificing her child, who had no choice in the matter. “I don’t think she’s deserving of more than other kids,” she said in 2017. Nearly a decade later, Najya reminded her that in the abstract your child may not deserve more than other children, but she is nevertheless entitled to expect more from you. “Sometimes I wish instead of always thinking about other kids, you would have thought about me.” You don’t have to be a Randian to think that your child should not be sacrificed to the collective good, but it doesn’t hurt.
Why Papua New Guinea is so interesting
And this leads to the most interesting part of this story: how the highlanders were so isolated for so long.
I want to acknowledge that the highlanders were not completely, hermetically sealed off from the outside world – it’s just that knowledge of outside world never actually made it to them or vice versa.
Over time, a few goods did make their way up to the highlands: pigs, about 3,000 years ago; the sweet potato, which is South American and arrived about 300 to 400 years ago; and tobacco, also American, which came the same way.
The journey the sweet potato and tobacco took to get there is a good example of how this all worked without transmitting further information. The Spanish and Portuguese brought both plants to the spice islands (in what is now Indonesia), just off the western tip of New Guinea, in the 1500s. The sultanates had been trading with the western tip of the coastal region of New Guinea for centuries. So the plants crossed over and started moving east along the coast and up into the interior. Beyond that point, there were no merchants. But when a woman married into the next clan over, she took cuttings from her family’s garden with her. Each new family then planted the same, saw that it worked, and passed it on. At that pace the sweet potato crossed the highlands in a century or two, with nobody knowing where it came from beyond the tribe beside them.
And what fascinates me is that even with the highlands as sealed off as they were, such significant goods still got in. Sweet potatoes allowed a population explosion in the highlands: they give far more calories per acre, and pigs can live off them. So in a 10,000 year sealed off universe, after the invention of agriculture, the biggest change to highland life happened in the last 500 years, which I guess isn’t a coincidence, as the sweet potato got there through the same structural forces that later brought the Australians.
Here is much more from Daniel Frank, fascinating throughout.
My excellent Conversation with Annie Lowrey
Here is the audio, video, and transcript. Here is the episode summary:
Annie Lowrey’s new book, The Time Tax, argues that the most regressive levy in American life is the hours each of us must spend on hold, in waiting rooms, and filling out forms a competent state would have pre-filled — roughly fifty a year on average, and far more if you’re poor. Tyler spends much of this conversation pressing the opposite case, asking whether that bureaucracy is quietly serving a useful purpose by rationing knee surgeries that don’t work, deterring fraud, or screening for immigrants with gumption.
So Tyler and Annie hash it out over an hour, covering why TANF and other welfare programs are the worst offenders, the political economy of submerged benefits like the child tax credit, whether the postal service should be zeroed out over ten years the way Denmark did, whether the government should be nudging people out of rural areas, lessons from the COVID unemployment fraud, areas where the time tax is flat instead of regressive, which private sector time taxes are most onerous, whether AI agents will pay these taxes for us within five years, the logic of easy benefits plus randomized harsh audits, the case for less federalism, whether voting should be easier or harder, how the UBI studies changed her priors, where you can find the best moss in the world, her favorite example of Brutalist architecture, tattoos as permanent ephemera, Christianity’s role in liberalism and the post-Christian right, how reporting beats tourism, the time tax of friendship, what she’ll learn next, and more.
Excerpt:
LOWREY: The postal service and Social Security’s retirement programs. Those are both pretty good. Social Security also has other programs, SSI, which is mostly used by very, very low-income seniors with disabilities or who are blind. Disability insurance is run by the Social Security Administration. The retirement program, it’s less than 1 percent overhead. It’s great. It does all the work for you.
COWEN: Isn’t our whole postal service a time tax in the aggregate? Denmark, just this year, abolished its postal service. They don’t have any. Now, I understand we’re not in a position to do exactly the same, but shouldn’t we be moving away from postal service, basically zeroing it out over the next 10 years?
LOWREY: Did they make it so that it’s all digital? Did they digitize things?
COWEN: Well, I don’t know who the “they” is. Direct mail there has gone away.
LOWREY: Oh, yes, that’s interesting. I don’t know. I think in a high inequality country such as ours, where you still have a lot of people who don’t have smartphones and don’t have computers, that’s why I would be very concerned about the postal service going away.
COWEN: That’s why we need 10 years. You want to tax people, tax in the broad sense of the term, living in rural areas, if only because it’s much harder to have government help them, right?
LOWREY: Yes.
COWEN: If rural areas don’t get mail anymore, maybe that’s a good thing.
LOWREY: I don’t think that that’s a good thing for the people in the rural areas, though. There’s always going to be people in rural areas. As a general point, do you want the government to be encouraging people to not live in rural areas?
COWEN: Absolutely, that’s me. Welcome to the show.
LOWREY: That’s feels very nanny state-ish of you, Tyler.
COWEN: I don’t want to subsidize rural areas, and we do it in so many ways, including with our farm programs.
LOWREY: We do. We really, really absolutely do.
COWEN: It gets harder to help people with government. There’s a lot more market power in rural areas, like how many supermarkets are there, how many hospitals, probably just one, if that. Let’s get everyone into the suburbs, or heaven forbid, the cities.
LOWREY: I can’t imagine a less popular policy than that.
COWEN: Absolutely.
Interesting throughout, and full of good spirit. Again, here is Annie’s very good book The Time Tax: How Government Wastes Our Time — And How to Fix It.
When discussing AI policy, start with China
Whatever your ideas for regulating AI, I say start with China. Do not put China as an afterthought at the end of your proposal, mentioned in a vague wish that something good ought to happen and that maybe the future of humanity can be secured.
During the 2023 U.S.-China nuclear talks, America proposed missile-launch notifications, a nuclear crisis hotline, and processes to limit the use of outer space for military conflict. China declined all of those. Blame the U.S. if you wish (do we always keep our word?), but that is what happened.
China also broke off meaningful arms control talks. You may think it is their right to play catch-up, and to be cynical of our motives, but that is what happened.
How well did China exchange timely information about Covid, and cooperate with stopping its initial spread?
Get the picture?
If you start with China in your discussion, you will end up with sensible proposals before getting too caught up in your moods of the day. If you are reading proposals or for that matter tweets for AI regulation, and the writer does not deal with these China issues in a forthright and very specific manner, you should be very suspicious indeed.
Here is Ezra and Matt Sheehan, discussing related issues (NYT).
The Prediction Archive
The Prediction Archive is a public database of tens of thousands of world predictions. Using AI it tracks predictions over many decades and marks to market. I was surprised to discover that I am currently the highest ranked individual predictor in the world! Huh, I would not have predicted that.
Ranks are based on the Wilson score so you get credit not just for accurate predictions but for making enough predictions so that uncertainty about accuracy is reduced. Bryan Caplan was more accurate than I was but makes fewer predictions. Tyler made more many predictions than I did and was only somewhat less accurate. What the AI marks as predictions seem sometimes to be more about contemporary events, so take the numbers with a grain of salt. I expect to fall in ranking as the archive expands. Other people the archive covers include Peter Zeihan, Scott Alexander and Warren Buffett.
My very interesting Conversation with Jared Diamond
Here is the audio, video, and transcript. Here is part of the episode summary:
So which leaders do make a difference?
Tyler and Jared debate that question, including conditions what a religious founder needs to succeed, whether destructive leaders matter more than constructive ones, why individual leaders have mattered so little in Papua New Guinea, whether we undervalue preventers, how much Rachel Carson and the Resnicks really mattered, whether Botswana’s success will endure, Jared’s own place in intellectual history, and what he’d tell an ambitious 25-year-old about how to become consequential. They go on to cover whether New Guineans are smarter, his reasons for why the Industrial Revolution started in England, what he learned from Jim Robinson about natural experiments, why he’s more optimistic about the environment than when he wrote Collapse, what he’d do about nuclear risk, the 189 bird species on his street in Los Angeles, why the MacArthur “genius grant” left him depressed for a week, why he’s listening to one Bach cantata a week, what he hopes to work on as he enters his nineties, and more.
Excerpt, we start with this:
COWEN: Who do you think is the least replaceable leader in human history?
DIAMOND: Wow. Wow. The least replaceable leader in human history. Frankly, my answer is none. There has been no unreplaceable leader in human history because over a long time, things wash out. A candidate, of course, would be Jesus Christ, but there were half a dozen other prophets in the Roman Empire at that time discussed in the New Testament. If Christ had died in childbirth, one of those other prophets might have taken over. I would say that in the long run, there is no leader that has made a difference.
COWEN: Well, you say “might have taken over,” but that’s probabilistic, right? Say with a 40 percent chance, someone else would have taken over. It still seems in expected value terms, Christ made an enormous difference.
DIAMOND: Certainly, his religion made an enormous difference. Christ himself was the charismatic founder, but a religion needs three things: It needs a charismatic founder, it needs an organizer, and often it needs a general because new religions often face opposition. The organizer for Christianity was St. Paul. In the case of the Mahdi’s religion of the Sudan in the late 1800s, the Mahdi was the charismatic founder, and he was the organizer, and he was the general. In the case of Islam, Muhammad was the founder and the organizer and the general. Religions may have three roles, some of which are sometimes played by the same person.
COWEN: Without the figure of Muhammad at exactly the time he came along, is it not quite easy to imagine a Middle East not unified under Islam, not unified with the common language of Arabic? In some ways, maybe a bit more like the Caucasus, which remains a crazy quilt of different patterns. Thus, Muhammad is one of the three or four most consequential leaders ever.
DIAMOND: That’s possible. That’s a big question. It’s harder to become clear about Muhammad than it is about Christ, because we don’t know what the weather was like in Arabia at that time. Weather makes a big difference. If it was rainy, that would mean lots of plant growth for lots of babies and for feeding an army. We just don’t have information on the weather in Arabia at that time.
A counter-example is Genghis Khan, who developed the largest land empire in world history, all the way from China to Poland. Recently, why did Genghis Khan do it when there were other steppe leaders like Adolf Hühnlein and Timur the Turk? We’ve learned recently that the wettest time on the steppes in the last 2,000 years was around the time of Genghis’s birth. He was born at exactly the right time at the right place. If he had been born 200 miles further away and 20 years earlier, we wouldn’t know anything about him. In the case of Muhammad, we just don’t know whether the time of his birth was a particularly propitious time to found a religion in that area or not.
COWEN: The very notion that the two first names we’re talking about, they’re both religious leaders, right? They’re not kings. They’re not inventors. Do you think that suggests a vision of the world where it’s ideas that really matter and somewhat at variance with your own geography-based theories?
Interesting throughout, and we debated pomegranate juice as well. I enjoyed reading Jared’s new book Profits, Prophets, Coaches, and Kings: (When) Do Leaders Matter?
Is Lichtenstein an actual monarchy?
It seems so:
Internal documents reviewed by the FT show that three days earlier, behind the walls of Vaduz Castle, Europe’s wealthiest ruling dynasty had quietly approved an overhaul that strengthens the authority of a prince who already wields extraordinary power over his 42,000 citizens, while reducing some of the rights and checks exercised by his relatives in the Princely House of Liechtenstein.
Even before the changes, Prince Alois could veto legislation, dismiss the government, dissolve parliament, appoint judges and reject laws approved by referendum. In June, the Catholic prince said he would veto a citizens’ initiative to legalise abortion during the first 12 weeks of pregnancy, even if voters backed it…
The latest changes to the House Law go far beyond succession. According to internal documents, the prince gains greater discretion over who belongs to the dynasty and explicit authority to set rules on family names, titles and coats of arms. The Family Council, a body of relatives that oversees dynastic affairs, will expand from three to five members but loses an important check: the prince will no longer need its consent for pardons, only to consult it…
The reforms were approved not by parliament or the public, but by members of the dynasty itself.
Who values democracy?
This paper examines the conventional view that redistribution is central to the democratization process using data from stock markets. Consistent with this view, democratizations have a large, negative impact on asset valuations driven by a rise in redistribution risk. Across 90 countries over 200 years, risk premia are substantially elevated— similar in magnitude to financial crises—prior to and during democratizations. A shift in Catholic church doctrine in support of democracy provides causal evidence that democratizations increase risk premia. Successful democratizations lead to substantial redistribution: the size of the public sector grows, income inequality falls, and the labor share of income rises. An extended version of the canonical redistribution-based model of democratization that includes asset prices can quantitatively explain these effects. Reductions in inequality and increased taxes explain approximately half of the results. The rest comes from greater economic competition and equality in government spending. The model also explains the negligible asset pricing response to autocratizations. Neither an increase in macroeconomic risk nor generic political risk can explain the results.
That is by Max Miller, now published in the JPE, ungated copy here.
*Visions from San Francisco Bay*
European and American capitalism were different. The violence of human clashes in America took place on the surface, in the open. The violence in Europe became formalized, coalesced with class divions hallowed by centuries; it was interiorized, ingrained, or baked in, if one may use such an expression. American capitalism was founded on daring, resourcefulness, largesse, waste; European capitalism was founded on one powerful passion — miserliness. These patterns, which still endure, explain why America succeeded in creating a vast, new sector of the economy adapted to needs that become increasingly evident the closer we come to the twenty-first century: the sector of the universities, research institutes, laboratories, with billions of dollars invested in them. Western Europe, where education always has been the preserve of a narrow elite, failed to produce anything like it. The prodigality of private capital in America made the beginnings possible; money from taxes joined in at the next stage. Miserliness with capital in Europe effectively prevented the laying of foundations for this new sector, and it is doubtful whether the government treasuries will ever be able to over come ever-widening gap.
That is from Czeslaw Milosz’s Visions from San Francisco Bay.