Category: Political Science

Trump City

Donald Trump wants to create Freedom Cities. It’s a good idea. As I wrote in 2008, the Federal Government owns more than half of Oregon, Utah, Nevada, Idaho and Alaska and it owns nearly half of California, Arizona, New Mexico and Wyoming. See the map (PDF) for more [N.B. the vast majority of this land is NOT parks]. Thus, there is plenty of land to build new cities that could be adopted to new technologies such as driverless cars and drones.

Mark Lutter review the history and motivation and has a good suggestion:

Our favorite possibility is Presidio National Park. Though much smaller than Guantanamo Bay or Lowry Range, its location is ideal. San Francisco is the world’s tech capital, despite its many problems. The federal government can help San Francisco unleash its full potential by developing Presidio. With Paris-level density and six-story apartment buildings, a developed Presidio would add 120,000 residents, increasing San Francisco’s population by 15 percent. Further, given the city’s existing talent density, a Presidio featuring a liberalized biotechnology regime would quickly become a world innovation leader in this sector. America deserves a Bay Area that can compete; turning Presidio into a Freedom City could be an important step in that direction.

I would add only one suggestion let’s call this Trump City.

File:Aerial view - Presidio-whole.jpg - Wikimedia Commons

Austin Vernon on drones (from my email)

The offensive vs. defensive framing seems wrong, at least temporarily. It should be motivated vs. unmotivated, with drones favoring the motivated.

A competent drone capability requires building a supply chain, setting up a small manufacturing/assembly operation, and training skilled operators. They need to manage frequencies and adjust to jamming. Tight integration of these functions is a necessity. That favors highly motivated groups with broad popularity (recruiting skilled talent!) even if they are nominally weak.

Conversely, it can be challenging for overly corrupt or complacent organizations to counter. They are also more likely to fracture and lose cohesion when under attack.

We’ve seen HTS, Burmese rebels, and Azerbaijan all have a lot of success with drones. Ukraine went from hopelessly behind in drone tech to leading Russia in innovation in many niches.

It seems reasonable that the barriers to entry for a motivated drone “startup” will go up. The US military has effective, expensive interceptors like Coyote Block II to counter small attacks in locations like Syria. Fighting larger entities requires pretty absurd scaling to match enemy numbers and the low per-flight success rate – Ukraine claims they might produce millions of drones this year. Hamas had initial success attacking Israel on Oct. 7 but didn’t have the magazine depth to defend themselves.

AI targeting, the necessity of specialized components to defeat electronic warfare, and cheaper drone interceptors are all factors that could upset this balance. Entities that have the scale to deploy an AI stack, true factories, and specialized components should gain the advantage if the rate of change slows.

My excellent Conversation with Stephen Kotkin

It was so much fun we ran over and did about ninety minutes instead of the usual hour.  Here is the audio, video, and transcript.  Here is part of the episode summary:

Tyler sat down with Stephen to discuss the state of Russian Buddhism today, how shamanism persists in modern Siberia, whether Siberia might ever break away from Russia, what happened to the science city Akademgorodok, why Soviet obsession with cybernetics wasn’t just a mistake, what life was really like in 1980s Magnitogorsk, how modernist urban planning failed there, why Prokofiev returned to the USSR in 1936, what Stalin actually understood about artistic genius, how Stalin’s Georgian background influenced him (or not), what Michel Foucault taught him about power, why he risked his tenure case to study Japanese, how his wife’s work as a curator opened his eyes to Korean folk art, how he’s progressing on the next Stalin volume, and much more.

And here is one excerpt:

COWEN: What did you learn from Michel Foucault about power, or indeed anything else?

KOTKIN: I was very lucky. I went to Berkeley for a PhD program in 1981. I finished in 1988, and then my first job was at Princeton University in 1989. In the middle of it, I went for French history, and I switched into Habsburg history, and then finally, I switched into Russian Soviet history. I started learning the Russian alphabet my third year of the PhD program when I was supposed to take my PhD exams, so it was a radical shift.

Foucault — I met him because he came to Berkeley in the ’80s, just like Derrida came, just like Habermas came, Claude Lévi-Strauss, the anthropologist, came through. It was California. They were Europeans, and there was a wow factor for them. Foucault was also openly gay, and San Francisco’s gay culture was extraordinarily attractive to him. It was, unfortunately, the epoch of the AIDS epidemic.

One time, I was at lunch with him, and he said to me, “Wouldn’t it be amazing if somebody applied my theories to Stalinism?” I’m sitting there, okay, I’m 23 years old. Imagine if you had traveled to Switzerland in the late 19th century, and you went up in those Engadin mountains, and you were at some café in the mountain air, and there’s this guy with a huge forehead and hair up in the air sitting there, and you went and introduced yourself. You said, “Hello, I’m Tyler,” and he said, “Hello, I’m Friedrich Nietzsche.” You would say, “Well, geez, this is interesting. I should have more conversations with you.”

So, that’s the experience I had. I had read Foucault in seminar because it was very fashionable to do so, obviously, especially at Berkeley, especially in a culture that tilts one way politically, and I think you’ll guess which way that might be. But I didn’t understand what he said, so I went up to him as a naïf with this book, Madness and Civilization, which we had been forced to read, and I started asking him questions. “What does this mean? What does this mean? What is this passage? This is indecipherable.”

He patiently explained to the moron that I was what he was trying to say. It sounded much more interesting coming from him verbally, sitting just a few feet away, than it had on the page. I was lucky to become the class coordinator for his course at Berkeley. He gave these lectures about the problem of the truth-teller in Ancient Greece.

It was very far removed from . . . I had no classical training. Yes, I had Latin in high school because I went to Catholic school, and it was a required subject. I started as an altar boy with the Latin Mass, which quickly changed because of what happened at Vatican II. But no Greek, so it was completely Greek to me. Forgive me, that wasn’t planned that I was going to say that. It just happened spontaneously.

Anyway, I just kept asking him more questions and invited him to go to things, and so we would have lunches and dinners. I introduced him to this place, Little Joe’s in Little Italy, part of San Francisco, which unfortunately is no longer there. It was quite a landmark back then, and then he would repair after dinner to the bathhouses in San Francisco by himself. I was not part of that. I’m neither openly nor closeted gay, so that was a different part of Foucault that I didn’t partake in, but others did.

Anyway, I would ask him these things, and he would just explain stuff to me. I would say, “What’s happening in Poland?” This is the 1980s, and he would say things to me like, “The idea of civil society is the opiate of the intellectual class.” Everybody was completely enamored of the concept of civil society in the ’80s, especially via the Polish case, and so I would ask him to elucidate more. “What does that mean, and how does that work?”

He told me once that class in France came from disease in Paris — that it wasn’t because of who was a factory worker, who wasn’t a factory worker, but it was your neighborhoods in Paris and who died from cholera and who didn’t die from cholera. A colleague of ours who was another fellow graduate in Berkeley ended up writing a dissertation using that aside, that throwaway line.

I was able to ask him these questions about everything and anything. What he showed me — this is your question — what he showed me was how power works, not in terms of bureaucracy, not in terms of the large mechanisms of governance like a secret police, but how all of that is enforced and acted through daily life. In other words, the micro versions of power. It’s connected to the big structures, but it’s little people doing this. That’s why I said totalitarianism is using your agency to destroy your own agency.

That means denouncing your neighbors, being encouraged to denounce your neighbors for heresies, and participating in that culture of denunciation, which loosens all social trust and social bonds and puts you in a situation of dependency on the state. You’re a gung-ho activist using your agency, and the next thing you know, you have no power whatsoever. So, those are the kinds of things that I could talk to him about.

After he passed away from AIDS in the summer of 1984 — it was the AIDS epidemic, horrific. He passed away, and we had a memorial for him. I was still a PhD student, remember. I didn’t finish until ’88. There was this guy, Michel de Certeau, who wrote a tribute to Foucault in French that he was going to deliver at the event. It was called “The Laughter of Foucault.” I had these conversations with de Certeau about his analysis of Foucault and the pleasure of analytic work, which had been a hallmark of Foucault.

De Certeau taught me a phrase called “the little tactics of the habitat,” which became one of the core ideas of my dissertation and then book, Magnetic Mountain, about this micropower stuff. Even though Foucault was gone, I was able to extend the beginning of the conversations with Foucault through de Certeau.

I learned how power works in everyday life, and how the language that you use, and the practices like denunciation that you enact or partake in, help form those totalitarian structures, because the secret police are not there every minute of every day, so what’s in your head? How are you motivated? What type of behavior are you motivated for?

We say, “Okay, what would Stalin do in this situation?” Many people approach their lives — they’ve never met Stalin; they’ll never meet Stalin — but they imagine what Stalin might do. That gets implanted in their way of thinking; it becomes second nature. I learned to discuss and analyze that through Foucault.

I have to say, I didn’t share his analysis that Western society was imprisoning, that the daily life practices of free societies were a form of imprisonment in its own way. I never shared that view, so it wasn’t for me his analysis of the West that I liked. It was the analytical toolkit that I adapted from him to apply to actual totalitarianism in the Soviet case.

Excellent throughout.

Assisted dying in the UK

I would say that overall I am more suspicious of “assisted dying” policies than are many of my libertarian friends.  I am fine with legalizing suicide, but I get nervous when a state — especially a less than fully competent, fiscally strapped state — enters the picture with so much influence over the proceedings.  In the longer term, no matter how the legislation is initially written, what will be the incentives of that state?  What will be the incentives of family members and legal guardians?

That said, I do recognize that as medical technology and life-saving techniques advance, something has to give.  We can’t just keep tens of millions of people hooked up to life support for decades.

I do not have any “top down” way of resolving all of the difficult moral and practical issues here.  I will simply note that the returns to federalism have risen.  Different American states can try out different policies, as indeed they do, and we can see what is happening and judge accordingly.

I believe this point remains underrated.  As technology advances, and the world changes more rapidly, the returns to federalism rise.  We are coming off a long period when the returns to federalism were relatively low.

I am more optimistic about England than many people, but this is one of my worries.  Devolution doesn’t quite do the same, but rather means that for anything England does, two other polities are likely to choose something even worse.

Thanksgiving and the Lessons of Political Economy

It’s been a while so time to re-up my 2004 post on thanksgiving and the lessons of political economy. Here it is with no indent:

It’s one of the ironies of American history that when the Pilgrims first arrived at Plymouth rock they promptly set about creating a communist society.  Of course, they were soon starving to death.

Fortunately, “after much debate of things,” Governor William Bradford ended corn collectivism, decreeing that each family should keep the corn that it produced.  In one of the most insightful statements of political economy ever penned, Bradford described the results of the new and old systems.

[Ending corn collectivism] had very good success, for it made all hands very industrious, so as much more corn was planted than otherwise would have been by any means the Governor or any other could use, and saved him a great deal of trouble, and gave far better content. The women now went willingly into the field, and took their little ones with them to set corn; which before would allege weakness and inability; whom to have compelled would have been thought great tyranny and oppression.

The experience that was had in this common course and condition, tried sundry years and that amongst godly and sober men, may well evince the vanity of that conceit of Plato’s and other ancients applauded by some of later times; that the taking away of property and bringing in community into a commonwealth would make them happy and flourishing; as if they were wiser than God. For this community (so far as it was) was found to breed much confusion and discontent and retard much employment that would have been to their benefit and comfort. For the young men, that were most able and fit for labour and service, did repine that they should spend their time and strength to work for other men’s wives and children without any recompense. The strong, or man of parts, had no more in division of victuals and clothes than he that was weak and not able to do a quarter the other could; this was thought injustice. The aged and graver men to be ranked and equalized in labours and victuals, clothes, etc., with the meaner and younger sort, thought it some indignity and disrespect unto them. And for men’s wives to be commanded to do service for other men, as dressing their meat, washing their clothes, etc., they deemed it a kind of slavery, neither could many husbands well brook it. Upon the point all being to have alike, and all to do alike, they thought themselves in the like condition, and one as good as another; and so, if it did not cut off those relations that God hath set amongst men, yet it did at least much diminish and take off the mutual respects that should be preserved amongst them. And would have been worse if they had been men of another condition. Let none object this is men’s corruption, and nothing to the course itself. I answer, seeing all men have this corruption in them, God in His wisdom saw another course fitter for them.

Among Bradford’s many insights it’s amazing that he saw so clearly how collectivism failed not only as an economic system but that even among godly men “it did at least much diminish and take off the mutual respects that should be preserved amongst them.”  And it shocks me to my core when he writes that to make the collectivist system work would have required “great tyranny and oppression.”  Can you imagine how much pain the twentieth century could have avoided if Bradford’s insights been more widely recognized?

Prediction Markets Podcast

I was delighted to appear on the a16z crypto podcast (Apple, Spotify) talking with Scott Duke Kominers (Harvard) and Sonal Chokshi about prediction markets. It’s an excellent discussion. We talk about prediction markets, polling, and the recent election but also about prediction markets for replicating scientific research, futarchy, dump the CEO markets, AIs and prediction markets, the relationship of blockchains to prediction markets and going beyond prediction markets to other information aggregation mechanisms.

Why more South Asian than East Asian CEOs?

Analyses revealed that East Asians faced less prejudice than South Asians and were equally motivated by work and leadership as South Asians. However, East Asians were lower in assertiveness, which consistently mediated the leadership attainment gap between East Asians and South Asians. These results suggest that East Asians hit the bamboo ceiling because their low assertiveness is incongruent with American norms concerning how leaders should communicate.

That is from a new piece by Jackson G. Lu, Richard E. Nibett, and Michael W. Morris, via the excellent Kevin Lewis.

Milei and populism

Bryan Caplan and Daniel Klein both opine on Milei and populism, Dan being very enthusiastic, while Bryan praising Milei but more reserved in his praise of populism.  I too am a big fan of Milei, and I think he is still on a good track.  If his reforms do not succeed, likely it will not be his fault, but rather the result of soft commodity prices, pending credit lawsuits (predating him), and an impatient public.  But so far things are holding up.

What neither Klein nor Caplan mentions — and it is very very important for this issue — is that Milei has hewed pretty closely to the IMF playbook for his most important reforms.  He named a very serious and mainstream finance team to oversee his changes.  And his plan is dependent on an IMF bailout.  The more “populist” elements of the original promises, such as rapid dollarization, have been put on hold indefinitely.  In other words, the actual policies, for the most part, are not populist at all.

It is fine to call Milei a populist in some very critical rhetorical regards.  But the project is working because he has turned his back on a lot of populism and is mainly following the recommendations of expertise, as well as relying on the IMF.

Sunstein on DOGE

Good advice from Cass Sunstein, who did improve government efficiency as head of OIRA:

There is a major focus these days on the topic of government efficiency, spurred by the creation of what is being called a “Department of Government Efficiency.” I have had the good fortune of being involved in simplification of government, and reduction of paperwork and regulatory burdens, in various capacities, and here are six quick and general notations.

  1. The Administrative Procedure Act is central to the relevant project. It needs to be mastered. It offers opportunities and obstacles. No one (not even the president) can clap and eliminate regulations. It’s important to know the differences among IFRs, TFRs, NPRMs, FRs, and RFIs. (The best of the bunch, for making rules or eliminating rules: FRs. They are final rules.)
  2. The Paperwork Reduction Act needs to be mastered. There is far too much out there in the way of administrative barriers and burdens. The PRA is the route for eliminating them. There’s a process there.
  3. The Office of Information and Regulatory Affairs is, for many purposes, the key actor here. (I headed the office from 2009-2012.) A reduce-the-regulations effort probably has to go through that Office. Its civil servants have a ton of expertise. They could generate a bunch of ideas in a short time.
  4. It is important to distinguish between the flow of new burdens and regulations and the stock of old ones. They need different processes. The flow is a bit easier to handle than the stock.
  5. The law, as enacted by Congress, leaves the executive branch with a lot of flexibility, but also imposes a lot of constraints. Some of the stock is mandatory. Some of the flow of mandatory. It is essential to get clarity on the details there.
  6. The courts! It’s not right to say that recent Supreme Court decisions give the executive branch a blank check here. In some ways, they impose new obstacles. Any new administration needs a full understanding of Loper Bright, the major questions doctrine, Seila Law, and much more (jargon, I know, I know).

How DOGE is really going to work

In the last few days, Vivek has issued a series of tweets showing he understands how the regulatory process works.  That is good, but in turn it means DOGE ambitions end up scaled down.  Now there is a WSJ piece by Vivek and Elon.  Here is what I take to be the critical passage:

DOGE will work with legal experts embedded in government agencies, aided by advanced technology, to apply these rulings to federal regulations enacted by such agencies. DOGE will present this list of regulations to President Trump, who can, by executive action, immediately pause the enforcement of those regulations and initiate the process for review and rescission.

I’m all for this (and more), but take a look at what we are getting here.  Paused enforcement is better than nothing, but the rule doesn’t go away.  In the meantime, private companies probably will continue to act as if the rule may continue, given limited time horizons in politics and indeed for DOGE itself.  The process for “review and rescission” of course is extremely time-consuming and labor-intensive.  Again, bring it on but just do not expect too much from this.  Note further that “right-leaning regulatory troops” are quite thin on the ground, most of all in these agencies.

The column has numerous further points of interest, which perhaps I will take up in the future.  Here is a very good indeed essential piece by Stuart Buck on government efficiency,  Here again is my earlier Bloomberg column on priorities for DOGE.  James Broughel has a sunset suggestion for regulations.

Peter Coy on DOGE

The federal government doesn’t have the people it needs to adequately monitor and vet its enormous streams of payments to defense contractors, hospitals and individuals. For example, administrative expenses account for only half a percent of the budget of the Social Security Administration. Trying to squeeze down that half percent by cutting personnel could lead to misspending of the other 99.5 percent of the budget.

Here is more from the NYT, interesting throughout.  Here is another bit:

To fix such problems, [Brian] Riedl said, “you need G.A.O. and other government experts and others who have done auditing to do most of the legwork.” There is no single easily repeatable fix: “Every program, every program failure and example of mismanagement has its own story.”

You may recall that private health insurance companies have fairly high “overhead,” perhaps a misleading term but nonetheless relevant for these debates.  There are hundreds of billions of “lost” funds at DOD and in Medicare.  Does the plan to improve on that performance involve more staff or less staff?

*Is Inequality the Problem?*

Lane Kenworthy has a book coming out next year, I have read it, and it is superb (rooftops) and also very important.  Here is a brief excerpt:

Rich democratic nations with higher levels of income inequality or larger increases in income inequality haven’t tended to have slower economic growth, lower or slower-growing household income, or worse household balance sheets…

The notion that income inequality is harmful for health has recieved substantial attention from researchers, and some now take it for granted that inequality reduces longevity.  But the country evidence offers very little support for this conclusion.

I will let you know when a pre-order is possible.  In the meantime, it shouldn’t matter, but I can also report that Kenworthy is very much a left-leaning thinker, as you can adduce from his policy recommendations toward the end of the book.

How to make DOGE work

That is the topic of my latest Bloomberg column, here is one excerpt:

Another priority should be to deregulate medical trials. America is now in a golden age of medical discovery, with mRNA vaccines, anti-malaria vaccines, GLP-1 weight loss drugs and new treatments against cancer all showing great promise. AI may bring about still more advances.

Unfortunately, the US system of clinical trials remains a major obstacle to turning all this science into medicine. There are regulations concerning hospital protocols, the design of the trials, FDA requirements, the procedures of universities and institutional review boards, and the handling of data, among other barriers. America can have better and speedier approval procedures without lowering its standards.

Of all the tasks I’ve outlined, this is by far the most difficult, because it involves changes in so many different kinds of institutions. Yet it has one of the highest possible payoffs, because more treatments might be developed and made available if the clinical trial process weren’t so onerous. Reforming clinical trials should also appeal to older Americans, who are especially likely to vote and who think the most about their medical care. The goal should be an America where most people live to 90.

Many Republicans are very excited about DOGE. But its governance structure is undefined and untested. It does not have a natural home or an enduring constituency. It cannot engage in much favor-trading. Its ability to keep Trump’s attention and loyalty may prove limited. And it’s not clear that deregulation is a priority for many voters.

The more I read about DOGE from Vivek and Musk, the more I feel it needs a greater sense of prioritization.

Where are incumbents still popular?

From my email, here is your Switzerland fact of the day:

The media is awash with stories about western countries incumbent parties losing elections in the last two years:

The exception no one seems to remember: Switzerland. In the october 2023 election, 3 out of the 4 governing parties increased their vote share. And it wasn’t just parties that are formally in government but effectively act as an opposition: The right wing Swiss People’s Party won. The left wing Social Democrats one. And the moderate Centre party one. The losers: The centre right Liberal Party (in government) and two different green parties (both outside of government).

Possible cause: Low inflation (https://marginalrevolution.com/marginalrevolution/2022/10/the-polity-or-is-it-culture-that-is-swiss.html)?

From Johann C.

Info Finance

Excellent post by Vitalik on prediction markets and the broader category of what he calls info finance:

Now, we get to the important part: predicting the election is just the first app. The broader concept is that you can use finance as a way to align incentives in order to provide viewers with valuable information.

…Similar to the concept of correct-by-construction in software engineering, info finance is a discipline where you (i) start from a fact that you want to know, and then (ii) deliberately design a market to optimally elicit that information from market participants.

Info finance as a three-sided market: bettors make predictions, readers read predictions. The market outputs predictions about the future as a public good (because that’s what it was designed to do).

One example of this is prediction markets: you want to know a specific fact that will take place in the future, and so you set up a market for people to bet on that fact. Another example is decision markets: you want to know whether decision A or decision B will produce a better outcome according to some metric M. To achieve this, you set up conditional markets: you ask people to bet on (i) which decision will be chosen, (ii) value of M if decision A is chosen, otherwise zero, (iii) value of M if decision B is chosen, otherwise zero. Given these three variables, you can figure out if the market thinks decision A or decision B is more bullish for the value of M.

Importantly, Vitalik notes that AI agents can make decision and prediction markets more liquid at much lower cost.

One technology that I expect will turbocharge info finance in the next decade is AI (whether LLMs or some future technology). This is because many of the most interesting applications of info finance are on “micro” questions: millions of mini-markets for decisions that individually have relatively low consequence. In practice, markets with low volume often do not work effectively: it does not make sense for a sophisticated participant to spend the time to make a detailed analysis just for the sake of a few hundred dollars of profit, and many have even argued that without subsidies such markets won’t work at all because on all but the most large and sensational questions, there are not enough naive traders for sophisticated traders to take profit from. AI changes that equation completely, and means that we could potentially get reasonably high-quality info elicited even on markets with $10 of volume. Even if subsidies are required, the size of the subsidy per question becomes extremely affordable.