A periodic reminder of your pending competitive inadequacy

Many people think “I will do […], AI will not anytime soon do [….] as well as I will.”  That may or may not be true.

But keep in mind many of us are locked into a competition for attention.  AI can beat you without competing against you in your task directly.  What AI produces simply might draw away lots of attention from what you hope to be producing.  Maybe looking Midjourney images, or chatting with GPT, will be more fun than reading your next column or book.  Maybe talking with your deceased cousin will grip you more than the marginal new podcast, and so on.

This competition can occur even in the physical world.  There will be many new, AI-generated and AI-supported projects, and they will bid for real resources.  How about “AI figures out cost-effective desalination and so many deserts are settled and built out”?  That will draw away resources from competing deployments, and your project will have to bid against that.

I hope it’s good.

The California tax burden is driving people out

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

California’s highest income tax rate is 13.3%. That is in addition to a top federal tax rate of 37%. California also has a state sales tax rate of 7.25%, and many localities impose a smaller sales tax. So if a wealthy person earns and spends labor income in the state of California, the tax rate at the margin could approach 60%. Then there is the corporate state income tax rate of 8.84%, some of which is passed along to consumers through higher prices. That increases the tax burden further yet.

And this:

Researchers Joshua Rauh and Ryan Shyu, currently and formerly at Stanford business school, have studied the behavioral response to Proposition 30, which boosted California’s marginal tax rates by up to 3% for high earners for seven years, from 2012 to 2018. They found that in 2013, an additional 0.8% of the top bracket of the residential tax base left the state. That is several times higher than the tax responses usually seen in the data.

These high-earning California residents seem to have reached a tipping point: Maybe many of them could afford the extra tax burden, but at some point they got fed up, read the signals and decided the broader system wasn’t working in their interest.

Overall, Proposition 30 increased total tax revenue for California — but not nearly as much as intended. Due to departures, the state lost more than 45% of its windfall tax revenues from the policy change, and within two years the state lost more than 60% of those same revenues.

Here is an AEA link (gated) to the original research.

Monday assorted links

1. Speculative speculations on how consciousness emerges.

2. The new, forthcoming Neal Stephenson.

3. What Michael Nielsen suggests I ask him.

4. Cousins are disappearing.  I have (had?) four of them?

5. “People in the meeting later told others in frustration that his winding process and irritability were making it more difficult to reach decisions about the border.”  Brutal throughout.

6. Argentina’s political gender gap is widest among young people.

7. Four different Super Bowl ads incorporated UFO themes.  As I once heard from a member of the U.S. military: “Ten years from now, everyone will believe in either demons or aliens.”

Nash’s Contributions to Mathematics

Nash won the Nobel prize in Economics for his 2-page proof of Nash equilibrium, among the slightest of his achievements. Nash’s truly staggering contributions were in his embedding theorems, according to Gromov “one of the main achievements of mathematics of the twentieth century”. In this excellent talk, Cédric Villani gives an accessible guide to these theorems for mere mortals. Villani is a Fields medal winner, a French politician, and a character, all of which adds to the talk.

Why I don’t like Fischer Random 960

As you may know, a major tournament is going on right now, based on a variant of Fischer Random rules, sometimes misleadingly called “Freestyle.”  Subject to some constraints, the pieces are placed into the starting position randomly, so in Fischer Random chess opening preparation is useless.  You have to start thinking from move one.  This is a big advantage in a game where often the entire contest is absorbed into 20-30 moves of advance opening preparation, with little or no real sporting element appearing over the board.

Yet I don’t like Fischer Random, for a few hard to fix reasons:

1. Most of the time, at least prior to the endgame, I don’t understand what is going on.  Even with computer assistance.  I could put in five to ten minutes to study the position, and get a sense of the constraints, but as a spectator I don’t want to do that.  As a relatively high opportunity cost person, I am not going to do that.

1b. Classical chess sometimes generates positions where one does not really understand what is going on.  Then it is thrilling, precisely because it is occasional.  A perpetual “fog of war,” as we receive in Fischer Random, just isn’t that thrilling.  In the opening, for instance, I don’t even know if one player is attempting “a risky strategy.”  I am not sure the player knows either.  And I don’t feel that watching more Fischer Random would change that, as there are hundreds of different possible opening positions, mostly with different properties.

2. The younger players have a notable advantage, because they are better at calculating concrete variations and rely less on intuition.  (We already see this in the current results.)  Experience is simply worth much less in this very novel format.  For any one tournament, that is an interesting intrigue.  But over time it is a bore, as if only rookies and sophomores could win NBA titles.  In fact what spectators enjoy watching is Steph Curry going up against Lebron James, or the analogs in chess.  We want to see Magnus meet Fabiano again, not watch two eighteen-year-olds slug it out.  Sorry, Pragga!  You’ll have your day in the sun.

3. Fischer Random cuts off chess from the rest of its history.   That is otherwise a big advantage of chess over many other games and contests.  I like seeing that a player’s move is connected to say an idea from Tal in the early 1960s, or whatever.  I like “Oh, the Giuoco Piano is making a comeback at top levels,” or “today’s players are more willing to sacrifice the exchange than in the 1970s,” and so on.

4. I get frustrated seeing all those Kings sitting on F1, not able to castle in the traditional sense.  There are rules for castling in Fischer Random, but it feels more like pressing the “hyperspace” button in the old Space Invaders video game than anything else.  Who wants to see a Knight on C1 for twenty-five moves?  Not I.

5. I agree that current opening prep is insanely out of control.  I am fine with the remedy of 25-minutes per player Rapid games, or anything in that range, with increment of course.  Those contests are consistently exciting and they are not forced draws (you can play something weird against the Petroff, or to begin with) nor are they dominated by prep.

6. If you don’t want to watch Rapid, I would rather randomize the first few opening moves than the placement of the pieces.  If you don’t control the first three (seven? ten?) first moves, once again opening prep becomes much tougher.  So what if some games start with 1. b4 b6?  The resulting position is still playable for both sides and furthermore it still makes intuitive sense to chess spectators.  Of course the computers would restrict this randomization to sequences that still are playable for both sides.  The very exact nature of current chess opening prep in fact implies you need only a very small change in the rules to disrupt it, not the kind of huge change represented by Fischer Random.

That all said, I am all for experimentation, it’s just that some of them should be strangled in the crib.

Sunday assorted links and stuff

1. Lookism in sentencing decisions.

2. An autonomous vehicle was set on fire by a crowd in San Francisco.  In some alternate universe, a small drone would emerge from the burning vehicle and strike them all down.

3. Have you noticed that Michelle Obama was, less than 24 hours ago, up to #3 in the betting markets for likelihood of being the next U.S. President?  She was at about 7%.  Now it is Gavin Newsom who is #3 at about ten percent.  At the same time, the NYT Editorial page, other MSM sources, and Hillary Clinton all seem to be turning on Biden, on the issue of age of course.  I would not place too much emphasis on that seven percent number, or that ten percent number, as I suspect there is private information at work here — either private information that Biden is toast, or private information that he isn’t toast.  The problem is I don’t know which.  Still, this is a live issue.

It is also a good test of public intellectuals.  Obviously, the issue is not just about Biden’s current competency (which I cannot judge — articulateness is overrated!), but also a) how the public perceives him, b) how his staff and other countries perceive him, and c) how matters will be four to five years from now, when he is still President, if he is still President.  (Start by reading Shakespeare on political leadership.)  If you’re defending Biden, for reasons related to your expected value calculations, I hope at least you are being honest with yourself about your Straussianism here.  But please do add to your calculations the notion that the American public is pretty fed up with this kind of response from our mainstream political institutions.

One possible lesson here is that our political establishment really cannot coordinate on making needed changes.  The other possible lesson is that they can.  I am prepared for Bayesian updates, as my status quo assessments by necessity will be disturbed.

4. Susie Essman is a comic genius (NYT).

5. A three-minute clip on how various top chess players walk into a tournament entrance.  Can you guess who shows up last?

What should I ask Michael Nielsen?

I will be doing a Conversation with him.  No description of Michael quite does him justice, but here is Wikipedia:

Michael Aaron Nielsen (born January 4, 1974) is a quantum physicist, science writer, and computer programming researcher living in San Francisco.

In 1998, Nielsen received his PhD in physics from the University of New Mexico. In 2004, he was recognized as Australia’s “youngest academic” and was awarded a Federation Fellowship at the University of Queensland. During this fellowship, he worked at the Los Alamos National LaboratoryCaltech, and at the Perimeter Institute for Theoretical Physics.

Alongside Isaac Chuang, Nielsen co-authored a popular textbook on quantum computing, which has been cited more than 52,000 times as of July 2023.

In 2007, Nielsen shifted his focus from quantum information and computation to “the development of new tools for scientific collaboration and publication”, including the Polymath project with Timothy Gowers, which aims to facilitate “massively collaborative mathematics.” Besides writing books and essays, he has also given talks about open science. He was a member of the Working Group on Open Data in Science at the Open Knowledge Foundation.

Nielsen is a strong advocate for open science and has written extensively on the subject, including in his book Reinventing Discovery, which was favorably reviewed in Nature and named one of the Financial Times’ best books of 2011.

In 2015 Nielsen published the online textbook Neural Networks and Deep Learning, and joined the Recurse Center as a Research Fellow. He has also been a Research Fellow at Y Combinator Research since 2017.

In 2019, Nielsen collaborated with Andy Matuschak to develop Quantum Computing for the Very Curious, a series of interactive essays explaining quantum computing and quantum mechanics. With Patrick Collison, he researched whether scientific progress is slowing down.

Here is Michael’s Notebook, well worth a browse and also a deeper read.  Here is Michael on Twitter.  So what should I ask him?  (I’m going to ask him about Olaf Stapledon in any case, so no need to mention that.)

Correlations between spouses

Saturday assorted links

1. Liverpool man who inherited £100,000 lets 12 strangers give the money away.

2. Jonathan Eaton, RIP.  And more on his work in trade economics.

3. ACX grants from Astral Codex.  And new African School of Economics coming in Zanzibar.

4. The Monk and the Gun is a fun Bhutanese movie about the foundations of democracy (and markets).

5. Using AI to campaign and deliver your victory speech, while in jail.

6. Another 2014 post on Putin: “Putin is signaling to the Russian economy that it needs to get used to some fairly serious conditions of siege, and food is of course the most important of all commodities. Why initiate such a move now if you are expecting decades of peace and harmony?”

7. John Bruton, RIP (NYT, he negotiated peace with Northern Ireland and also set the corporate income tax rate low in Ireland and designed the referendum that overturned the country’s ban on divorce).

8. Ad for temporary co-host for Planet Money on NPR.

How much does status competition lower Korean fertility?

Using a quantitative heterogeneous-agent model calibrated to Korea, we find that fertility would be 28% higher in the absence of the status externality and that childlessness in the poorest quintile would fall from five to less than one percent. We then explore the effects of various government policies. A pro-natal transfer or an education tax can increase fertility and reduce education spending, with heterogeneous effects across the income distribution. The policy mix that maximizes the current generation’s welfare consists of an education tax of 22% and moderate pro-natal transfers. This would raise average fertility by about 11% and decrease education spending by 39%.

Here is the full paper by Seongeun Kim, Michèle Tertilt, and Minchul Yum.  Here is the version forthcoming in the AER.

Friday assorted links

1. NBA In-Season Tournament renamed ‘NBA Cup’ with Emirates as a sponsor.

2. “We instruct GPT to make risk, time, social, and food decisions and measure how rational these decisions are. We show that GPT’s decisions are mostly rational and even score higher than human decisions.”  Link here.

3. My old post on Putin as a reader of history.  And my 2014 post on modeling Putin.

4. You can’t understand contemporary culture without pondering the notion of mental illness (I’m on Larry David’s side here).

5. California’s attempt to strangle AI.

6. “After adjusting for publication selection bias, the median probability of the presence of an effect decreased from 99.9% to 29.7% in economics.” Link here.

7. Liberalismo a la madrileña, a new book.

8. “Anchovy sex is a force of nature.”  And is there an “orgasm gap” (with humans)?  And which groups does it favor?

9. Seiji Ozawa, RIP (NYT).

Literacy or Loyalty?

Why does schooling in much of the developing world not result in much in the way of increased skills? Maybe because education bureaucrats in these counties want obedient citizens more than literate, numerate, informed citizens.

In a discrete choice experiment in which bureaucrats in education were asked to make trade-offs between foundational literacy, completion of secondary school, and formation of dutiful citizens, respondents valued dutiful citizens 50% more than literate ones. For many policy makers, the goal is not the production of knowledge, but the fostering of nationalism.

This may sound like an odd set of priorities, but both European and Latin American countries had similar priorities when they expanded their education systems to serve more than a small elite around the turn of the 20th century. The goal was not to produce scientists or entrepreneurs but to inculcate a reliable workforce that would support the state.

…Developing-country schools are trying to achieve much the same ends. Students learn to memorize, to obey, and to not question — but they do not particularly learn to read or write. But then again, that was never the goal — developing countries are following the path trod on by developed countries. Just like developed countries, they will try to “teach ordinary people obedience, respect for the law, [and] love of order.”

I am reminded that if you want to predict which countries invest a lot in education, look at which countries invest a lot in government owned television stations.

My notes/outline on the rise of Scottish economic thought

1650s, wars with England, invasions, Cromwell repels the Scots

1690s – Darien Scheme in Panama, Scots more generally grow interested in empire

1707 – Union with England

Scotland keeps its Presbyterian church and laws

Scotland never settled by Rome, for a long time closer to France

Post Glorious Revolution, many Scots still loyal to the Stuart monarchy, recurring theme

Jacobites – loyal to James, who was expelled by the Glorious Revolution

Glasgow – tobacco and sugar trade

Edinburgh – Intellectual, educational, and administrative center

Overall good educational system at multiple levels

Frances Hutcheson – born in Ireland to Scots family, key works in the 1720s, beauty, approbation, ethics, 1729 starts professorship in Glasgow

1739-40 – David Hume, Treatise on Human Nature

1745 – Major Jacobite uprising

Post-1745: The Highlanders and the clan system starts its true decline

Linen, cotton, wool, jute industries

Good schools, good universities, competitive, English-language, no class system

1748 – David Hume, Enquiry Concerning Human Understanding

1750s – David Hume’s essays on economics

1755 – 1.3 million people in Scotland

1759 – Adam Smith, Theory of Moral Sentiments

1762 – Ossian [James Macpherson], beginnings of Scottish romanticism

1767 — Adam Ferguson – Essay on Civil Society, progress, commercial society, militarism

1776 – David Hume dies

1776 – Wealth of Nations

The sciences: the physician and chemist William Cullen, the agriculturalist James Anderson, chemist and physician Joseph Black, natural historian John Walker, and James Hutton, the first modern geologist.

Late 18th century – onset of Scot inventors/tinkerers, most of all James Watt and the steam engine