Mall of the Emirates, Dubai, vs. Tysons Corner mall, northern Virginia

by  Tyler Cowen in

1. More women wear the full veil at Tysons, especially on Friday and Saturday nights.

2. There are more Christmas decorations at Mall of the Emirates.

3. You will find a “Borders bookstore” — replete with the original font — at the Emirates locale.

4. At the Emirates mall you hear much more Russian, and many of the core signs are in Russian too.  I guess that is the biggest difference?

Bring Back the Privateers!

by  Alex Tabarrok in

Senator Mike Lee has a new bill that encourages the President to authorize letters of marque and reprisal against drug cartels:

The President of the United States is authorized and requested to commission, under officially issued letters of marque and reprisal, so many of privately armed and equipped persons and entities as, in the judgment of the President, the service may require, with suitable instructions to the leaders thereof, to employ all means reasonably necessary to seize outside the geographic boundaries of the United States and its territories the person and property of any individual who the President determines is a member of a cartel, a member of a cartel-linked organization, or a conspirator associated with a cartel or a cartel-linked organization, who is responsible for an act of aggression against the United States.

SECURITY BONDS.—No letter of marque and reprisal shall be issued by the President without requiring the posting of a security bond in such amount as the President shall determine is sufficient to ensure that the letter be executed according to the terms and conditions thereof.

My paper on privateers explains how privateers were historically very successful. During the War of 1812, roughly 500 privateers operated alongside a tiny U.S. Navy. The market responded swiftly—privateers like the Comet were commissioned within days of war’s declaration and began capturing prizes within weeks. Sophisticated institutional design combined combined profit incentives with regulatory constraints:

  • Security bonds ensured compliance with license terms
  • Detailed instructions protected neutral vessels and required civilized conduct
  • Prize courts adjudicated captures and distinguished privateers from pirates
  • Share-based compensation created good incentives for crews
  • Markets emerged where crew could sell shares forward (with limits to maintain work incentives)

Privateers cost the government essentially nothing compared to building and maintaining a navy. Private investors financed vessels , bore the risks, and operated on profit-seeking principles. Moreover, privateers unlike Navy vessels had incentives to capture enemy ships, particularly merchant ships, not just blow them and their occupants out of the water. Of course, capturing the drugs isn’t very useful but it’s quite possible to go after the money on the return journey–privateers as hackers–which is just as good.

Here is my paper on privateering, here is the time I went bounty hunting in Baltimore, here is work on the closely related issue of whistleblowing rewards and here is the excellent historian Mark Knopfler on privateering:

How to rise to the very top?

by  Tyler Cowen in

From athletes like Simone Biles and Michael Phelps to scientists like Marie Curie and Albert Einstein, identifying exceptional talent is essential in the science of innovation. But how does talent originate? Did the most talented athletes, scientists, and musicians reach peak performance relatively early or late in their career? Did they forgo mastering multiple sports, academic subjects, and musical instruments to reach world-class performance in only one? In an Analytical Review, Güllich et al. looked at published research in science, music, chess, and sports and found two patterns: Exceptional young performers reached their peak quickly but narrowly mastered only one interest (e.g., one sport). By contrast, exceptional adults reached peak performance gradually with broader, multidisciplinary practice. However, elite programs are designed to nurture younger talent.

That is from a new article in Science by Arne Güllich, Michael Barth, David Z. Hambrick, and Brooke N. Macnamara.  Via Atta Tarki.  But are they conditioning on a collider?  Short players seem to do pretty well in today’s NBA…

Séb Krier, continued

by  Tyler Cowen in

Or more specifically Nenad Tomašev, Matija Franklin, Julian Jacobs, Sébastien Krier, and Simon Osindero:

AI safety and alignment research has predominantly been focused on methods for safeguarding individual AI systems, resting on the assumption of an eventual emergence of a monolithic Artificial General Intelligence (AGI). The alternative AGI emergence hypothesis, where general capability levels are first manifested through coordination in groups of sub-AGI individual agents with complementary skills and affordances, has received far less attention. Here we argue that this patchwork AGI hypothesis needs to be given serious consideration, and should inform the development of corresponding safeguards and mitigations. The rapid deployment of advanced AI agents with tool-use capabilities and the ability to communicate and coordinate makes this an urgent safety consideration. We therefore propose a framework for distributional AGI safety that moves beyond evaluating and aligning individual agents. This framework centers on the design and implementation of virtual agentic sandbox economies (impermeable or semi-permeable), where agent-to-agent transactions are governed by robust market mechanisms, coupled with appropriate auditability, reputation management, and oversight to mitigate collective risks.

Here is the link, this is some of the most important work of our time.  Here is the previous MR post on Krier.

Rent Control Creates Ghost Apartments

by  Alex Tabarrok in

Adam Lehodey writing at City Journal:

In New York City, making a profit on real estate has become increasingly difficult. Rent-stabilization laws built on the mantra that “housing is a human right,” a dysfunctional housing court, and myriad other interventions have driven thousands of units off the market, giving rise to the phenomenon of New York’s “ghost apartments.”

The city now has nearly 50,000 empty units, absent from the market either because their operating costs exceed legal rents or because they require considerable renovations.

…Take a building on East 6th Street as an example. A mere five-minute walk from Tompkins Square, the building is a convenient home for students and young professionals.

One-bedroom units in the building average $3,500— except two of them, subject to the city’s rent-stabilization laws, which hold rents below $900 per month.

As a result, both units have been allowed to fall into disrepair, because the cost of restoring them to habitability is greater than what they’d generate in rent.

…Much of the predicament at the East 6th Street building and the apartments on Valentine Avenue can be traced back to one piece of legislation: the 2019 Housing Stability and Tenant Protection Act (HSTPA). Passed by a Democratic majority in the state legislature, HSTPA eliminated landlords’ abilities to raise rents after units were vacated, or when they exceeded $2,775 per month. In doing so, it also eliminated their ability to make improvements profitably and reset the stabilized rent.

Recall from the recent review by Kholodilin that “the published studies are almost unanimous with respect to the impact of rent control on the quality of housing….[namely] that rent control leads to a deterioration in the quality of those dwellings subject to regulations.”

Does the conflict between cardinal utility and ordinal preferences just keep on getting worse?

by  Tyler Cowen in

This argument is not necessarily a critique of capitalism, but it could be.  At the very least, it is an observation about advanced capitalism.

As you will know from philosophy, there is a difference between what makes you happy, in the felicific sense, and what you want.  Some of this difference may be due to addictions, but most of it is not.  You may want to be a person of a particular kind, whether or not that makes you happier.  You may wish to do things to help the world, without believing you will be personally happier as a result.  You might have mixed feelings as to whether having children will make you happier (stress!), but still you might have a deep preference for raising a family.  And so on.  These distinctions are part of the mainsprings of human life, they are not minor exceptions standing in the corner.

The more capitalism develops, the more the gap between cardinal utility and preference satisfaction is likely to grow.  Consider the polar case of a very primitive economy where the only commodity is rice.  Eating rice is what makes you happy, and eating rice is also how you wish to spend your money.  After all, what else is there?  Given the feasible set, cardinal utility and preference satisfaction will coincide perfectly.

But as product choice grows and incomes rise, you will have more and more chances to deviate from maxing out on cardinal utility.  Furthermore, your immediate “needs” likely are taken care of, so most of your income spending is discretionary rather than “I need to buy this food to avoid the miseries of starvation.”

More and more, you will be led away from cardinal utility maximization.  But additional preferences will be satisfied.

Is this good or bad?

It is not quite right to say that people are becoming less happy, as they are getting what they want.  That could be a central component of the good life, and of individual well-being, broadly construed.  That said, some of your ordinal preferences might be harmful addictions, or you might prefer things that stress you out, either proximately or in the longer run.

Let’s say you keep on checking your phone for texts.  Do you do this because you think it will make you happier?  Maybe not.  You simply might have a preference for wanting to know the information in those texts as soon as possible.  Should we think that preference is bad?  Maybe it is a mother wanting to know that her daughter got home safely, and so she checks her texts every three minutes.  That might not make her happier, but I am reluctant to conclude that is a worse state of affairs.  And it does not have to be an addiction, a much overused concept by intelligent people who do not define it very carefully.

I too have plenty of preferences that do not make me happier, though I consider them quite legitimate.  I am keen to see as much of the world as I can, yet I am not convinced this makes me happier than say simply going back to Mexico again and again and eating the street food.  I just want to know what else is out there.

If you side solely with cardinal utility, yes you condemn capitalism.  Or if you think all of these ordinal preferences are addictions, again you can condemn the status quo.  Your meta-preferences in that case presumably would wish to have different preferences.  In any case, many books will be written about how capitalism makes us miserable.  Most of them will have the incorrect framing, though most of them will have ” a point,” one way or another.  Furthermore, while some of these books may be correct, in the aggregate they will push us away from viewing individual human beings as agentic.  That is a negative social consequence.

I do not think those critical perspectives are, by and large, the primary correct views.  Instead, I think of capitalism and markets as an unparalleled engine for making us…weirder?  And for moving us into different worlds (NYT)?

YMMV.

*Central Asia*, by Adeeb Khalid

by  Tyler Cowen in

An excellent book, the best I know of on this region.  Here is one bit:

The first printing press in Central Asia was established in Tashkent in 1870…

I had not understood how much Xinjiang (“East Turkestan”), prior to its absorption into newly communist China, fell under the sway of Soviet influence.

I had not known how much the central Asian republics had explicit “let’s slow down rural migration into the cities” policies during Soviet times.

The book is interesting throughout, recommended.

Friday assorted links

by  Tyler Cowen

1. The negativity crisis of AI ethics.

2. Vitalik and governance experiments and culture.

3. Stripe runs an RCT on capital markets and lending.

4. “For the first time, an AI model (GPT-5) autonomously solved an open math problem submitted to our benchmarking project IMProofBench, with a complete, correct proof, without human hints or intervention.”  Link here, it is amazing how many smart or accomplished people will deny this is possible.

5. Developments in cognitive dissonance (New Yorker).

6. Amia Srinivasan in LRB on psychoanalysis.

7. The influence of Terence Malick.

Nabeel on reading Proust

by  Tyler Cowen in

From Nabeel Qureshi:

Yet not a word is wasted. It sounds paradoxical, but Proust is economical with his prose. He is simply trying to describe things that are extremely fine-grained and high-dimensional, and that takes many words. He is trying to pin down things that have never been pinned down before. And it turns out you can, indeed, write 100 pages about the experience of falling asleep, and find all kinds of richness in that experience.

And this:

…, a clear-sightedness on human vanity and a total willingness to embarrass himself. There are passages in the Albertine sections which are shocking – such as the extended stretch, around 50 pages long, in which he describes watching her sleep — and, reading them, you start to understand that this was written by a dying man who did not care about anything apart from telling the whole truth in as merciless way as possible.

Third, hypotaxis in sentences. The opposite of hypotaxis is parataxis, which you often find in Hemingway, as in: “The rain stopped and the crowd went away and the square was empty.” Each item here is side by side, simple, clean. The Bible often uses such types of sentences: “And God said, Let there be light: and there was light. And God saw the light, that it was good: and God divided the light from the darkness.”.

Hypotaxis, by contrast, describes sentences with many subordinate clauses, like nesting dolls.

Nabeel says In Search of Lost Time is now his favorite novel.

Japan estimate of the day

by  Tyler Cowen in

At current second-hand market prices, says a new report, Japan’s “hidden asset” in terms of national reserves of things — defined as potentially resellable household objects that have lain unused for over a year — is worth around $580bn.

The dust-gathering contents of Japan’s cupboards, attics and garages, by that estimate, are worth roughly the same as the combined market capitalisation of the country’s most globally known corporate names: Toyota, Sony and SoftBank.

That’s an impressive stash, equivalent to roughly $4,600 for every person in Japan…

Over the past few years, Japan has become a uniquely attractive global magnet for buyers of second-hand goods — from Hermès bags, Rolexes and limited edition Nike Airs to Pokémon trading cards, vintage video games, golf clubs, fishing rods and rare Licca dolls. An increasingly powerful appeal for the tens of millions of visitors the country now draws annually is not just the traditional shopping, but the vibrant, over-the-counter trade in used items.

The aging of Japan, the fastidiousness of many Japanese, and the cheap yen are two factors behind these developments.  Here is more from Leo Lewis at the FT.

Thursday assorted links

by  Tyler Cowen

1. Andrew Batson best books he read in 2025.

2. Demis on AI.

3. Dean Ball on AGI and the programmer’s mentality.

4. New data on long-term warming trends.

5. A possible Netflix adaptation of Caro’s The Power Broker?  And maybe just maybe a Villaneuve film of Rendezvous with Rama?

6. Do lower mortgage rates in fact benefit first-time home buyers?

7. Henry Oliver on Kiran Desai.

8. Australia to “crack down” on hate speech (NYT).

9. Amanda Taub at the NYT covers dogs, babies, and Taiwan.

10. That was then, this is now: “As much as a quarter of the active US navy is now in the Caribbean, according to one estimate.” (FT)