Category: Uncategorized
Wednesday assorted links
Tuesday assorted links
1. Arnold Kling on Hotelling and Julian Simon.
2. “President Vladimir Putin derided those “jumping around without pants,” at a party, while some guests have tried to make amends through donations and adopting a cat.” (NYT)
3. Oklahoma skyscraper gets redesign to become USA’s new tallest building.
4. “Critically, 3% reported that Replika [a chatbot] halted their suicidal ideation.”
When will the world have its first trillionaire?
Not anytime soon, as I argue in my Bloomberg column, here is one of the arguments:
The desire to diversify is another limiting force. Once you have a considerable sum of money, it makes sense to spread your assets widely. Gates, for example, sold a good deal of Microsoft stock early on, presumably with diversification as a motive. At the time it seemed like an obviously good idea. Yet today Gates would be much richer if he had held onto his Microsoft shares. By one estimate he would in fact be a trillionaire, but even that hypothetical required a very dramatic recent run-up in Microsoft shares.
No one gets to be a billionaire by fully diversifying, anyway. Rather, billionaires pour their hearts and souls into a small number of very particular enterprises, which then (might) earn very high rates of return. But throughout the course of one’s life, it doesn’t make sense to keep on holding so much risk. It is better to cash in and enjoy some safety, in turn limiting your chance to become a trillionaire.
As I do note in the piece, it is the Federal Reserve that will get us there eventually.
Quick tour of Argentina’s fiscal deficit (from my email, anonymous author)
I won’t double indent, but this is not by me, though I agree with it:
“I agree with your read re Argentina’s history of fiscal stability. From this paper (unclear if the data is accurate), here is Argentina’s deficit from 1960 to 2016 or so:
[See Figure 3 here]
Notice 2003-2009 is the only time with a noticeable superavit (exports > imports, taxes > spending), which coincides with Kirchner. It happily coincided with booming soy prices and it was immediately followed by more public spending. Remember soy exports have their own special tax rate (retenciones + FX tax, ~double other exports). Here are soy prices (source):
[See Figure here]
Here is Carlos Pagni in 2009 covering the law that let the state spend as much as it pleased once again. This was only a few years after 2004, when the IMF had forced Argentina to pass Ley 25.917 constraining government spending and debt under GDP.
Also notice that the deficit continued after the hyperinflation of 1989-1990! Between the privatizations, Plan Bonex, and reduced social spending, Menem reduced inflation (and caused a recession for which he is resented to this day). Then Cavallo comes in with convertibilidad. This gets world bankers excited and the dollars start flowing back into Argentina but the fiscal deficit immediately resumes. That same Menem ran an ad campaign in 1999 partially based on infrastructure investments after his decade of deficit.
In other words, the Peronistas simply do not believe that too much spending leads to a crisis. They will always spend if allowed to. Argentina still lacks the institutions to prevent this.
Looking at the recent history of fiscal deficit, Milei can make two contributions:
Short-term: Cut spending before things explode. The Peronistas would’ve continued to print + spend, deepening the problems. Milei is already succeeding at this and will likely succeed while he remains in power. For example, he has cut some of the funding to the provinces, which will be forced to cut their spending. Some of them are already considering printing their own currency (paper bonds like the LECOP or Patacones from 2001).
Long-term: Prevent future spending. This is what the Libertarians promise: remove the people that spend us to the ground for good. We should measure “historical success” by this measure. This is why dollarization is attractive: it prevents the state from printing money to fund its deficit.
I have my hopes up but I don’t understand Argentinian institutions or history well enough to know if he can make progress on this. As a comparison, the Bank of England was founded in 1694 and became formally independent a few centuries later in 1997 (including an IMF intervention into fiscal spending as recent as 1976).”
Monday assorted links
1. Noah Smith on the California Forever Project.
2. Corporations defending DEI.
3. More on ice deposits on Mars? (speculative)
4. Larry speaks the truth about Harvard.
5. “A rich literature explores gender differences between men and women, but an increasing share of the population identifies their gender in some other way. Analyzing data on roughly 10,000 students and 1,500 adults, we find that such gender minorities are less confident and provide less favorable self-evaluations than equally performing men on a math and science test.” Link here.
6. These two cicada broods will emerge at the same time (NYT).
7. “Dana-Farber Cancer Institute is reviewing more than 50 papers, including work of the hospital’s CEO.” (WSJ) That is at Harvard.
Social improvements that don’t create countervailing negative forces
Let us say you favor policy X, and take steps to see that policy X comes about.
Under many conditions, people who favor non-X will take additional countervailing steps to oppose X. And in that case your actions in favor of X, on average, will lead to nothing. In the meantime, you and also your opponents will have wasted material resources fighting over X.
This argument is hardly new, but most people do not like to consider it much. They instead prefer to mood affiliate in favor of X, or perhaps against X. They prefer to be “fighting for the right things.”
Perhaps visible political organizing is most likely to set this dynamic in motion. Everyone can see what you are doing, and perhaps they can use their actions to fundraise for their own side.
That is one reason why I am not so thrilled with much of that organizing, even if I agree with it. Of course there are other scenarios here. Your involvement on behalf of X might just be flat-out decisive. Or perhaps the group against X is too resource-constrained to respond to your greater advocacy. That said, those descriptors (and others) might apply as well to either side of the dispute, your side included. Scaling up the fight over X might cause you to be the one who simply flat out loses the struggle.
It is worth thinking which kinds of “small steps toward a much better world” do not produce such countervailing effects.
How about “being positive and constructive”? Does it generate an equal and offsetting amount of negativity?
How about “trying to get people to be more reasonable, yet without offering a substantive political commitment bundled with that”? Does that in turn motivate the crazies to work harder at making everyone go insane? I am not sure.
What else might be effective, once these strategies are considered?
Does “refuting people” fit into this category? Yes or no?
Which activities should you be abandoning altogether? Or perhaps trying to do in secret, rather than publicly?
2024 is already an incredible year for cinema
There is:
Poor Things
The Delinquents [Los Delincuentes], from Argentina, tragicomedy.
The Teacher’s Lounge
All of Us Strangers
Anselm 3-D
The Zone of Interest
Of course many of those came out in their respective foreign markets before 2024, but that is not the point. Rather it seems cinema has turned a corner and is vital and original again (though not culturally central?). The best films of 2023 list was very good as well.
Will Milei succeed in Argentina?
I give him a 30-40% chance, which is perhaps generous because I am rooting for him. Bryan Caplan, who is more optimistic, offers some analysis and estimates that Milei needs to close a fiscal gap of about five percent of gdp.
I have two major worries. First, if Milei approaches fiscal success, the opposing parties will think long and hard about whether they wish to enable further success. Or will they instead prefer to see the Milei reforms crash and burn for fiscal reasons? I don’t think they know themselves, but the history of politics in Argentina does not give special reason to be super-optimistic here. You don’t have to believe the opposition will deliberately flush their country down the toilet, they just not might be convinced that further fiscal consolidation is needed, even if it is (surely they gotten this wrong a lot in the past).
Second, Argentina has not succeeded in obtaining fiscal stability in the past, not for a long time. I disagree with this passage of Bryan’s:
The monetary and fiscal stabilization is very likely to work. Argentina has faced far worse crises before: The hyperinflations of the 70s to the 90s multiplied prices 100 billion times. That’s like turning a billion dollars into a penny. Yet Argentinians ultimately overcame all these problems and more using the orthodox medicines of monetary restraint and fiscal responsibility. Since even politicians who ideologically opposed these treatments ultimately endured their short-run costs, it is a safe bet that a libertarian economics professor will do the same.
That is a misread of the history. One common tactic, for instance, is to do enough stabilization so that Argentina is “fiscally sound enough” at the peak of a commodity super-cycle. Most recently, that super-cycle has been China buying lots from Argentina (no such positive wave from China will be coming again, not anytime soon at least). When the positive real shocks subside, Argentina goes back into the fiscal hole.
In reality, past reforms never put the country on a sound fiscal footing, even if inflation rates were low for a while.
One scenario for now is that Argentina does enough so that it appears fiscally stable, and the recent discoveries of oil and gas — which will translate into government revenue — kick in to support a temporary status quo. But within ten years the whole thing falls apart again. Even if Milei wants to do more on the fiscal front to get past that point, it is not obvious that either voters or the legislature would support such further moves.
Those are two “pretty likely” scenarios in which Milei fails, and in neither case is it the fault of Milei. As I mentioned above, the chances of success remain below fifty percent.
Settembrini and the continuing relevance of classical liberalism
Adrian Wooldridge has an excellent Bloomberg column on this topic, promoting the relevance of Thomas Mann, and here is one excerpt:
In the book [Magic Mountain], Castorp falls in with two intellectuals who live in the village of Davos below his sanitorium: an Italian humanist called Lodovico Settembrini and a Jewish-born cosmopolitan called Leo Naphta who is drawn to the Communist revolution and traditional Catholicism. The two men carry on a bitter argument about the relative merits of liberalism and illiberalism that touches on every question that mattered in prewar Europe: nationalism, individualism, fairness, tradition, war, peace, terrorism and so on.
Settembrini mechanically repeats the central tenets of liberalism but doesn’t seem to realize that the world is a very different place from what it was in 1850…Settembrini is like the bulk of today’s liberals — well-meaning but incapable of recognizing that the world of their youth has changed beyond recognition.
My reading of the world, however, is slightly different. I think the Settembrini example, from 1924, shows classical liberalism is still relevant. In 1924, classical liberalism seemed out of touch because the rest of the world was too fascistic, too communist, and too negative, among other problems. Yet at the time the classical liberals were essentially correct, even though Settembrini sounds out of touch.
Because classical liberals continued to carry the torch, we later had another highly successful classical liberal period, something like 1980-2000, though of course you can argue the exact dates.
Perhaps the underlying model is this: classical liberals often seem out of touch, because the world is too negative to respond to their concerns. Most of the time classical liberals are shouting into the well, so to speak. But they need to keep at it. Every now and then a window for liberal change opens, and then the classical liberals have to be ready, which in turn entails many years in the intellectual and ideological wilderness.
When the chaos surrounds, the liberals are no less relevant. The Settembrini character, from 1924, illustrates exactly that. Because he did eventually have his day, though many years later.
Saturday assorted links
1. Did proxenia grants help ancient Greece grow?
2. Bob Lawson tribute to Jim Gwartney.
3. Puffin walking on the cliff in Iceland, other good photos too.
4. “Alphafold found thousands of possible psychedelics.”
5. Daniel Gross on AGI trades?
6. Girardian Papuans, circa 1963 (short video).
7. Nabeel on how to use Twitter. And on Substack.
What I’ve been reading
1. Hannah Ritchie, Not the End of the World: How We Can be the First Generation to Build a Sustainable Planet. An excellent book with sound conclusions, think of it as moderate Julian Simon-like optimism on environmental issues, but with left-coded rhetoric.
2. Colin Elliott, Pox Romana: The Plague that Shook the Roman World. Think of this as a sequel to Kyle Harper’s tract on Roman plagues and their political import, this look at the Antonine plague and its impact has both good history and good economics. It is also highly readable.
3. Carrie Sheffield, Motorhome Prophecies: A Journey of Healing and Forgiveness. A highly effective and harrowing tale of a lifetime journey from abuse to Christianity: “Carrie attended 17 public schools and homeschool, all while performing classical music on the streets and passing out fire-and-insurance religious pamphlets — at times while child custody workers loomed.” The author is well known in finance, ex-LDS circles, public policy, and right-leaning media, and she has a Master’s from Harvard. This story isn’t over.
4. Charles Freeman,
5. Erin Accampo Hern, Explaining Successes in Africa: Things Don’t Always Fall Apart. I found this book highly readable and instructive, but I find it more convincing if you reverse the central conclusion. There is too much talk of the Seychelles and Mauritius, and is Gabon the big success story on the Continent? Population is 2.3 million, the country ranks 112th in the Human Development Index, and almost half the government budget is oil revenue. Still, this book “tells you how things actually are,” and that is more important than any objections one might lodge.
Recent and noteworthy is Peter Jackson, From Genghis Khan to Tamerlane: The Reawakening of Mongol Asia. You may recall that the Mongol empire at its peak was much larger than the Roman empire at its peak, but how many young men think about it every day?
Then there is Jian Chen’s Zhou Enlai: A Life, which seems like a major achievement. I’ve only had time to read small amounts of it…is it “too soon to tell”? I say no!
Friday assorted links
1. Are some Latin American countries “quiet quitting” the war on drugs?
3. Some much-needed perspective on the “Chinese brain killer virus.”
4. Detroit Beer Exchange closes, erstwhile floating price markets in everything.
5. On Solano and cars, noting that I don’t find the car outcomes so bad myself.
6. How good is the three-minute intelligence test?
8. BAP on populism and libertarianism.
There is now an Andrew Gelman newsletter.
Brazil fact of the day
Brazil’s productivity — the output per hour worked, crucial to raising a nation’s prosperity — grew by just 0.5 per cent annually in the four decades to 2022, according to the Getúlio Vargas Institute.
Here is more from Michael Pooler and Bryan Harris at the FT.
Open AI will partner with Arizona State University
- OpenAI on Thursday announced its first partnership with a higher education institution.
- Starting in February, Arizona State University will have full access to ChatGPT Enterprise and plans to use it for coursework, tutoring, research and more.
- The partnership has been in the works for at least six months.
- ASU plans to build a personalized AI tutor for students, allow students to create AI avatars for study help and broaden the university’s prompt engineering course.
Here is the full story. After a very brief lull, AI progress is heating up once again…
Thursday assorted links
1. Why doesn’t the Davos set sound more intelligent? (Only a partial diagnosis)
2. New and lucrative scholarships at University of Austin.
3. “What would an empirical revolution in safety research consist of?” Many would do well to heed this piece.
5. Cayalá, Guatemala (NYT).