Category: Uncategorized
Cataloging Growth: A Re-Evaluation of 1900–1990
From Verónica Bäcker-Peral and Benjamin Wittenbrink of MIT:
Measuring real GDP growth requires distinguishing changes in prices from changes in product quality and composition, yet systematic quality adjustment of price indexes is unavailable for much of the twentieth century. We construct a new quality-adjusted price index for U.S. consumer goods using 5.1 million product listings from Sears catalogs, 1900–1990. We use large language models to extract product information and estimate hedonic price schedules from high-dimensional text embeddings, allowing us to infer annual changes in the cost of living. The resulting cost-of-living index implies substantially lower goods inflation than conventional deflators, and consequently implies much faster real economic growth: between 1900 and 1990, real goods consumption grew by a factor of 39 using our index, compared with a factor of 10.3 using standard goods deflators. The gap between our index and canonical ones is largest before World War II, reversing the conventional view that goods consumption growth was slower before 1945 than in the post-war decades.
Here is a useful tweet storm on the paper, important work.
Governing agentic AI
From a new paper by Shruti Rajagopalan:
AI agents now transact, publish, and act on external systems without contemporaneous human approval, creating new regulatory challenges. A growing literature has responded with proposals for legal personhood. This Article argues that personhood is neither necessary nor sufficient, shifting the question from status to enforcement. The Article first shows that for two millennia, nonhuman legal personality, from the Roman universitas to the corporation, the Hindu idol, the waqf, and the river, has operated through human officeholders the law can locate, question, prosecute, and replace. Agentic AI inverts that design, exercising practical agency without legal status, sometimes with no identifiable human in the responsibility-bearing role. The Article then sorts deployments into three categories: first, where one firm builds and deploys the agent; second, where the developer and deployer are separate but known; and third, where there is no identifiable developer or deployer. The Article stress tests each agent deployment category against five liability doctrines: agency law, products liability, enterprise liability, negligence, and strict liability. It demonstrates that each fails at different points in the third category for the same reason: the absent responsibility-bearer. Bare personhood would supply a caption without a representative, assets, or a mechanism for cessation. Finally, the Article assembles an alternative from regimes governing aircraft, ships, drones, driverless cars, and motor carriers. It develops a six-layer stack—registration, identification, verification, financial responsibility, lifecycle traceability, and suspension—so a responsibility-bearer can be identified, liability imposed, and the activity suspended. These layers place the human back at the end of the chain.
I would say that social science now has new frontiers, let us hope it blossoms in response.
Thursday assorted links
Spreading AI to the rest of the world
Another job we’ll have, I call this imperialism, but I mean that in a value neutral way. But AI comes to different parts of the world at different speeds. I think the countries where AI changes a lot of things first, there’ll be a very high demand for people from those places, which I’ll think to be the US, possibly UK, to go around the rest of the world and teach people in other places how to integrate AI into what we have. And a lot of those demands won’t be fully rational. They won’t be, oh, give us the best possible AI. They’ll be like, oh, we’re Peruvians. We want to keep things a certain way. You may or may not agree, but we want you to give us a version of AI that helps keep it that way. And that will be the job. And I think Americans in particular, probably Brits as well, huge growth sector will be living in other parts of the world spreading AI. And again, the fact that AI can do it better may or may not be true, but I don’t think it’s what will matter. I think the Peruvians or some analogue will want humans to come and listen to their concerns and assure and persuade them as humans, that’s what they’re going to get. I’m not saying it’s always going to go well, but that will always be, I think, a big job for humans to do.
It’s already a growth sector for Americans to want to live abroad. Like we have all this accumulated wealth. Life in America can be a bit dull. Life in Europe in particular is amazing. Personally, I love life in most parts of Latin America. So it’s already a trend for Americans to live overseas. For another reason, it’s nothing to do with AI. So if there are all these future job opportunities, like full of meaning, like come to Kenya, help Kenya, you can save 73 lives or maybe like 73,000 lives, help them build out their AI in a way that’s acceptable to them. That’ll just be this phenomenally rich inner and outer life. And I think it’ll be a great source of job creation.
I have already linked to the transcript of the talk.
My excellent Conversation with Chase Koch
Here is the audio, video, and transcript. Here is part of the episode summary:
Chase and Tyler discuss if any of his father’s lessons never stuck, the guilt-trip letter his grandfather wrote three months after Charles was born, why Chase started throwing tennis matches, what Rafa’s grit taught him about stoicism, who he admired most from the 1992 Dream Team, whether the Spurs should jettison De’Aaron Fox, the David Gilmour solo that hooked him at eleven, what drew him to jam bands, how he built a boom-box business out of his parents’ garage, why his father interviewed Snoop on a Zoom call during Covid, why his band is named for the second law of thermodynamics, what it’s like working with MrBeast, how Koch Industries has evolved, what he learned from Marc Andreessen, the philosophy behind hiring the “farm team,” why he is teaching himself to code with Claude at his fourteen-year-old’s urging, where he’s traveling next, and much more.
Excerpt:
COWEN: N.W.A., are they good? I like them.
KOCH: I had my phases. My first business, Tyler, was when I was 15 years old and one of my best friends to this day, Askia Ahmad, he was wiring up car stereos and building custom boom boxes and all that. We basically built a business out of my parents’ garage because they had all the tools and materials and everything. Like, “Let’s build a business out of here. My parents hopefully will pay for the machinery, and then we can sell these boom boxes to our friends at high prices and capture a big margin.” Through that, I learned about the whole gangster rap. Your listeners may be surprised, but it started with me, Public Enemy, N.W.A., Eazy-E, of course—
COWEN: It’s so good.
KOCH: Dre.
COWEN: Snoop.
KOCH: Snoop.
COWEN: You know Snoop, right?
KOCH: It’s so good, so good. Yes.
COWEN: What’s Snoop like?
KOCH: Snoop? Okay. This goes back to what I was mentioning on the power of music to unify people. So I’ve been with Stand Together. For the listeners that don’t know, it’ll give context to your question. Stand Together is an organization that has really a community of like-minded leaders that all believe in one thing, in the power of human potential, and that every human has a gift.
We all know that there’s so many barriers in society that are holding people back, whether it’s barriers in education, barriers in regulation, so you can’t start a business, barriers in our criminal justice system, you name it. What Stand Together does is we have basically a comprehensive strategy that addresses everything from education to policy to bottom-up empowerment in communities to drive real social change. I’ve been a part of this for as long as I can remember.
My father’s been working on social change for 60 years. My passion for music, as you can see from your last line of questioning, with Stand Together and that whole community, we never tapped into culture. When I say culture and what the next generation pays attention to—sports, music, YouTube, entertainment, creators, media. During COVID, I had this idea that we’ve never tapped into music to drive social change.
And on one specific point:
Back to your question on energy, 4 percent of the overall capital consumed at Koch is in refining, which is basically where my grandfather started the company. I think that surprises a lot of people because I think a lot of people are still stuck in this, “Well, you’re this energy company.” No, we’re not. We touch the majority of the economy now, and we’re in everything from forest products, consumer products, software, as I described, glass manufacturing, to energy and fertilizers as well.
Interesting throughout.
Wednesday assorted links
1. New Stephen Dubner talk show.
2. “Spain accelerates and already contributes 65% of the population growth in Europe”
3. Scott Alexander defends AI chip regulation. If AI can be that powerful (which Scott believes), there will be a significant way to make lots of money building a very strong open model. I do not see how the regulators stop this on a global basis, and his recipe may well accelerate the trend.
4. Should we train AIs to be risk-averse?
5. The Invite is a good movie.
Toward a theory of uni-context
Here is a good dialogue between Derek Thompson and Agnes Callard, excerpt:
Callard: In general, goodness is more context-dependent than badness. There isn’t really anything that’s good all the time for everyone independent of context. Happiness depends on your context and who you are. There isn’t anything that will always make a person happy. But there are reliable ways to make people unhappy. There’s a set of evils that are close to universal: death, pain, illness, violence. Even if someone’s in very different circumstances from yours, if you see they’re being subjected to one of those, you can interpret it as suffering and understand it.
So we should predict that what we see on the internet, insofar as people are trying to be legible to large groups, is that they focus their attention on things that show up to everyone. Take two strangers on the internet trying to talk to each other. What are they going to coordinate on as a topic they can both care about? It’s likely going to be something bad.
And here is from Derek:
Here are some questions that I consider self-evidently compelling about the modern world:
- Why is the news media so interested in telling you how much the world sucks all the time?
- Why are so many of us obsessed with distraction and managing our attention?
- Why is it so hard to stop comparing ourselves to others?
- And why does everything in art and design seem the same these days?
And more from Agnes:
With identity categories like woman, disabled, gay, Jewish, or American, the striking thing is that you are a member of those categories in every circumstance. There is no circumstance in which I stop being a woman. Identity is a hat you never take off. So identity is well suited to a uni-contextual world.
Worth pondering, interesting throughout.
My GOAT book now has updated software/AI
Tuesday assorted links
Creating your own religion in an AI-drenched world
Religious life, I think one thing we’ll see, and this is, again, pretty soon, it won’t be hard to create your own religion. I’m not sure many people will do this. I don’t think most people will. But they’ll be like accretions to the religions we have now. And I think with Fable 5, you could even do this already. Like, you ever actually try to read through the Hindu sacred texts? They’re pretty naughty, pretty detailed, quite long. Many parts are great and dramatic. I wouldn’t say they’re smoothly or evenly written. Not all of it is well written. They have significant meaning. For some people, a lot of people consume them through stories they’re told with their children. It’s not that every Hindu is like reading through the whole Ramayana. That’s all fine. But if you can sit down with, you know, the latest quad, whatever, and create your own set of sacred books. Again, I think like 2% of people are going to do this. Not most people. People have other interests, other hobbies. A lot of people aren’t religious. But if 2% of people do this, you end up with a lot of new religious accretions. Some of them will be totally new religions. But I think a lot will just be like, here are my sacred books of Christianity, or my add-ons to the Book of Mormon, or my whatever’s. There’ll be this extreme religious diversity. I don’t know, too much, too little. I think it will be quite different.
Again, that is from my recent DeepMind talk. Perhaps two percent is too high, and only a fraction of one percent of the population will do this, with agents. You still end up with a great deal of religious accretion and innovation.
Persistent Inequality in Publishing in Economics
This paper documents new facts about concentration in publishing in economics. First, the profession grows downward . The number of economists grew almost sixfold since 1990, but new entrants publish in lower-tier journals while incumbents hold the top. Second, there is high and persistent concentration at the top. Along with the downward growth, the top-1% authors accounted for 38.4% of top-5 publication credit in 1990 and for 78.3% in 2025. Third, the persistence is widespread within cohorts, within subfields, and within gender. Fourth, new journals only slightly dilute concentration. Fifth, elite authors diversify on topics faster than the rest of the profession. We interpret the findings with a screening model of attention under information overload. The evidence is consistent with the model: as the field grows, citations concentrate on established work and the conditional citation premium of top-author papers narrows.
By Ricardo Dahis, via the excellent Samir Varma.
Monday assorted links
2. Claims about cats (NYT). I guess they have no Coase theorem after all.
3. Iran and the Strait (WSJ).
4. “I used to be one of these people.” And Timothy Lee. As for this exchange, in the 2040 scenario strong AI is a power magnet in a way that milk or eggs or electricity are not. I do understand the claim that one might prefer this extreme governmental power to a greater role for the private sector, but extreme governmental power it is going to be, again at least under the 2040 scenario assumptions about the spread and efficacy of AI.
5. Scott Sumner engages with Fable on market monetarism.
6. “The number of students admitted to Ph.D. programs this fall dropped 15 percent from the previous year, according to data from over 50 top research universities…” (NYT) Partial data suggest that the year before the decline may have been eleven percent.
“Markets are competitive if and only if P != NP”
I prove that competitive market outcomes require computational intractability. If P = NP, firms can efficiently solve the collusion detection problem, identifying deviations from cooperative agreements in complex, noisy markets and thereby making collusion sustainable as an equilibrium. If P != NP, the collusion detection problem is computationally infeasible for markets satisfying a natural instance-hardness condition on their demand structure, rendering punishment threats non-credible and collusion unstable. Combined with Maymin (2011), who proved that market efficiency requires P = NP, this yields a fundamental impossibility: markets can be informationally efficient or competitive, but not both. Artificial intelligence, by expanding firms’ computational capabilities, is pushing markets from the competitive regime toward the collusive regime, explaining the empirical emergence of algorithmic collusion without explicit coordination.
From Philip Z. Maymin. File under “Claims…”
My talk at DeepMind
Here is a transcript of my remarks, anything from the audience (Q&A with comments) has been cut out. Excerpt:
The problem will not be how does my life get meaning, but how do I deal with all the meaning my life will have? A kind of exhaustion. And this comes up in the labor supply debates. So again, there’s one point of view like, oh, there’s AGI, there’s going to be mass unemployment. The more moderate, reasonable point of view is not that there’s mass unemployment. Many jobs still require humans. There’s comparative advantage. But total leisure time will go up. I think that’s likely the correct view, but across what time horizon?
If you think about your lives today, like I’m much busier and I’m busier because of AI. I’m working much harder. I don’t have to do that. But the point is my relative wage gradient for working harder today, it’s really quite extreme. And if I were, say, an 18 year old, I would feel I really had to work hard not to fall behind. There’s this new thing coming to the world. All sorts of people will be jumping on it. If I only start looking at it when I’m age 23, I’m behind by X number of years. So I would truly be working hard. At age 64, I don’t have to feel I need to work that hard. I can always just say if I choose to, well, I’m going to run out the clock, as they say, just kind of step back and wait until I die and I’ll be fine. I’m not going to do that.
Every time a new model comes out, I’m still excited. I used to be very excited. But they come out more and more frequently. And now I look at my calendar and I’m like, uh-oh, could you all wait a week, please? Because you want to be ready. You want to play around with it. You want to test it out. You want to talk about it with your friends. It’s a slight bit of an exhaustion. And again, for you all working here, you have access to models that haven’t come out yet or maybe will never come out. But all the time, you have fresh stimuli. And I hope, I think you must all be drenched in meaning. And you’re like, oh, my goodness, someone else tells me, look at this new model. What do I do with that?
So I think sometimes, like, when will the time come when the leisure dividend from AI arrives? No one is forcing you to work harder. But there’s a substitution effect from the higher implicit wage on your future earnings that if you work harder now, it will have a payoff. You’ll at least avoid being behind.
Interesting throughout, definitely recommended.