Thursday assorted links
Illegal markets in everything
The operator of a Colorado funeral home who was accused of stealing body parts and selling them to medical and scientific buyers, making hundreds of thousands of dollars in what the authorities called an “illegal body part scheme,” pleaded guilty to mail fraud on Tuesday, the Justice Department said.
The woman, Megan Hess, 45, the principal figure in the scheme, was assisted by her mother, Shirley Koch, who is in her late 60s, prosecutors said. As part of a plea agreement, eight other criminal charges against Ms. Hess were dropped. She could face up to 20 years in prison.
“I exceeded the scope of the consent and I’m trying to make an effort to make it right,” Ms. Hess said in United States District Court in Grand Junction, Colo., on Tuesday, according to The Daily Sentinel. “I’m taking responsibility.”
Here is more from the NYT. And this service “retrieves your dead loved ones’ tattoos and preserves them as framed mementos.” Not illegal.
Is remote work lowering pecuniary wages?
Maybe so, according to the latest results from Jose Maria Barrero, Nicholas Bloom, Steven J. Davis, Brent H. Meyer and Emil Mihaylov:
The recent shift to remote work raised the amenity value of employment. As compensation adjusts to share the amenity-value gains with employers, wage-growth pressures moderate. We find empirical support for this mechanism in the wage-setting behavior of U.S. employers, and we develop novel survey data to quantify its force. Our data imply a cumulative wage-growth moderation of 2.0 percentage points over two years. This moderation offsets more than half the real-wage catchup effect that Blanchard (2022) highlights in his analysis of near-term inflation pressures. The amenity-values gains associated with the recent rise of remote work also lower labor’s share of national income by 1.1 percentage points. In addition, the “unexpected compression” of wages since early 2020 (Autor and Dube, 2022) is partly explained by the same amenity-value effect, which operates differentially across the earnings distribution.
Here is the NBER working paper.
Wednesday assorted links
Economists grabbing coffee
From Panka Bencsik:
This is a continuously growing list of PhD holding (or soon to be) economists (and economics-adjacent folks) in academic (and academic-adjacent) positions who would be happy to grab coffee with colleagues visiting their city once it’s safe to do so again. Much in the spirit of #EconTwitter, the list is intended to open doors for informal, relaxed communication, and peer-to-peer research conversations.
Started in March 2020, EconBrew now has over 300(!) economists from 40+ US states and 35+ countries worldwide. The effort is particularly geared towards offsetting some of the loss stemming from the global pandemic halting ways to connect with colleagues. I hope this list can serve as one of the many steps we can take to start new research conversations post-pandemic. Beyond personal meet ups, some of those who signed up are open to chatting with colleagues over Zoom, regardless of location. Everyone who is open to virtual meets has a note with their entry to indicate this.
If you would like to be listed here as someone happy to grab coffee with a colleague, please sign up here: https://forms.gle/qsVHcAGGESJn1zeb7
Here is the link, via Patrick Gourley.
Medellin bleg
What to do and where to eat — your suggestions are most welcome!
Is AI still going to be totalitarian?
That is the topic of my latest Bloomberg column, here is part of the argument:
One of the fears with GPT-3 is that students will use it to generate realistic-sounding term papers. That may well be a problem (could the oral exam make a comeback?). But it also shows how the technology can encourage decentralized idea production and the subversion of authority. It is the opposite of centralized control of everything.
Perhaps the biggest political fear is that AI supports vast amounts of surveillance. Governments use facial and gait surveillance to trace people’s movements in public, for example. That is a valid concern, but it is not clear that AI has given today’s major autocratic governments such a big boost.
Russia, for one, was supposed to be such an impressive cyberpower, able to cripple entire societies with its cyberattacks. Maybe Russia has yet to show what it is capable of, but as the Ukraine war proceeds its cybercapabilities seem less scary. (Cyber is not synonymous with AI, but both are advanced and interrelated technologies that Russia seems to be failing at.)
Russia has proved it can use a lot of heavy artillery in a very destructive fashion. It has not shown it can mobilize AI technologies to deploy very effective forms of targeted warfare. It seems once again that brute force, not advanced technology, is the friend of autocracy.
The No. 1 autocratic AI power, of course, is China, but here too the course of events is uncertain. The Chinese government uses an impressive array of AI technologies to monitor its population, but to what end have the Chinese turned these technologies?
China has been doubling down on its Covid Zero policy, at great expense to the Chinese economy. These policies are possible only because the Chinese state had such advanced tracking and monitoring capabilities in the first place. At first those technologies were used to limit the spread of Covid, often quite effectively. But the current Covid strains are harder to control and it is difficult to see exactly what the Chinese endgame looks like. China has taken an AI asset and turned it into an AI liability.
That flip should not come as a surprise, considering the benefits and costs of autocracies. Autocracy typically is a “high variance” form of government: It can have major successes, such as the building of Chinese infrastructure, but the relative absence of checks and balances means that major failures are also likely, in this case the persistence of Covid Zero policy.
In essence, the advent of advanced AI raises the stakes. But if autocracy is a high-variance form of government, raising the stakes is risky.
Here is Henry Farrell on similar issues.
Some negative results on cash transfers
We randomized over 5,000 US individuals in poverty to one of three conditions during the first year of the COVID-19 pandemic: receiving a one-time $500 unconditional cash transfer (UCT; half a month’s worth of total household income for the median participant; N=1,374), a $2,000 UCT (two months’ income; N=699), or nothing (N=3,170). We measured the effects of the UCTs on participants’ financial well-being, psychological well-being, cognitive capacity, and physical health through surveys administered one week, six weeks, and 15 weeks after cash receipt. For 43% of our sample, we also observe bank account balances and financial transactions. While the cash transfers increased expenditures for a few weeks, we find no evidence that they had positive impacts on our pre-specified survey outcomes at any time point. We further find no significant differences between the $500 and $2,000 groups. These findings stand in stark contrast to the (incentivized) predictions of both experts and a nationally representative sample of laypeople, who—depending on the treatment group, outcome, and time period—estimated treatment effect sizes of +0.16 to +0.65 SDs. We test several explanations for these unexpected results, including via two survey experiments embedded in our trial. The data are most consistent with the notion that receiving some but not enough money made participants’ needs—and the gap between their resources and needs—more salient, which in turn generated feelings of distress.
That is from a new paper by Ania Jarosewicz, Jon Jachimowicz, Oliver Hauser, and Julian Jamison, via a bunch of disappointed people on Twitter. And here is the summarizing tweetstorm.
Tuesday assorted links
1. Top actors and actresses are getting older.
2. Henry Oliver podcast with Robin Hanson.
3. The virtue of complexity in returns prediction. A case for machine learning.
4. Economic growth in Tsarist Russia.
5. Future Forum event, August in San Francisco.
6. High school dropout and late bloomer wins a Fields Medal.
The Capitalist Kibbutz
The Israeli kibbutz have long been moving away from utopian socialism towards “renewing kibbutz”; a kind of cooperative in which member wages differ, consumption is unequal, many resources are privately owned but there is some mutual aid–a “safety net”–and some common ownership typically of land. Abramitzky et al. look at how kibbutz members vote and their expressed preferences after a kibbutz moves from a traditional model to a reformed or renewed model. The answer is that preferences for the market economy increased the more kibbutz members were exposed to the market economy but support for some redistribution to the poor (which was now less costly as the society was wealthier) did not decrease.
We find that labor market liberalization [i.e. new kibbutz model, AT] led to increased support of open labor market policies such as competitive labor market mechanisms, increased pay for overtime work, and differential wages. It decreased support for socialist policies, such as the joint ownership of the means of production. Still, it did not affect beliefs in the Marxist principle “from each according to his ability, to each according to his needs”, a principle which stands at the core of socialist egalitarian perception. At the same time, the reform also led to increased support for the safety net.
…The effects we document appear to be driven by an increase in living standards and work ethics that resulted from the reform. Equal sharing in the traditional kibbutz encouraged shirking and free riding. While strong idealism among founders helped kibbutzim reduce these problems in the past, idealism declined over time, and the second and third generations became less idealistic than the founding generation (see Abramitzky 2018 for a discussion). By the 1990s, before reforms took place, members complained about shirkers. As reported by members in surveys, our findings provide quantitative evidence that the reform improved kibbutzim’s members’ economic conditions and work ethics. These improvements might have, in turn, contributed to the more favorable attitudes of kibbutz members towards open labor market policies. Such improved economic conditions and work ethics might explain why even groups that stood to lose in relative terms from the reform, such as older and less educated members, supported it. The improved economic conditions and work ethics meant that even if these groups experienced declines in their relative income (as they found themselves at the bottom of the kibbutz’s income distribution), they may not
have lost in terms of absolute income. Moreover, these groups may have concluded that a shift away from equal sharing was inevitable for the long-term survival of their kibbutz, and accordingly became more favorable to market mechanisms after the reform.…We conclude that introducing market-based wages led to a shift in attitudes towards what we call a market economy with compassion, changing from their traditional democratic socialist model to a social democratic one. Although most kibbutz members support the differential pay reforms, they still want to maintain their core principle of mutual guarantee. When reflecting on how they want to live and build their society, most members want to live in neither a traditional socialist kibbutz nor a capitalist city. Most of them prefer something in the middle – a market economy within a compassionate society with a comprehensive safety net.
In short, the mixed economy is stable.
Nabeel’s productivity advice
1. Maximize your baseline energy levels. There is the obvious stuff: figure out a personal exercise practice and do it at least five days a week (I like running). If you don’t, you’re just leaving a bunch of power on the table.
But there are also less intuitive truths here.
Energy compounds on itself. If you start the morning by getting something done (a workout, an important task, writing) then you’re going to have a higher baseline energy day overall. It’s as though the initial thing gives you a persistent ‘boost’ throughout the day. Doing additional things becomes easier. Without this boost, there’s a good chance I get nothing important done that day.
Most people’s mental models of energy are flawed: they think there’s a ‘tank’ of energy that gets depleted as you spend it. This may be roughly true for physical energy, but mental energy is different: spending mental energy on things that you consider productive or important gives you more mental energy for other things: a positive feedback loop. On the other hand, procrastinating, spending all day scrolling Twitter, or staying in bed all day reduces the amount of energy you have to spend; this means you are less likely to get anything done.
It’s common to get trapped in this negative energy feedback loop: you don’t feel like doing something, so you check Twitter for awhile, which reduces your energy levels, which makes you feel worse, but you try and do something anyway, but you’re even less energized now, so you decide to go to bed for a bit to rest, but the rest isn’t restful… etc.
The way to get out of these energy ruts is to just do something really small (empty the dishwasher! Write one sentence!) and get that tiny reward of accomplishment. This generates a little bit more energy. Use that spark to get something slightly bigger done, and so on.
Here are nine other pieces of advice. Here is Nabeel on Twitter.
Emergent Ventures winners, 21st cohort
Uzay Girit, 17, part Turkish part American, starting at MIT, general career support.
Hamidah Oderinwale, 17, Ontario with Nigerian origins, to sponsor an EA visit to Nigeria and also for general career support.
Yelim Kim, Champaigne-Urbana, Illinois, 15 years old, for an algae/bio project and general career development.
An anonymous grant to central/eastern Europe.
Rhett Ellis, autistic entrepreneur in Brisbane, a deeptech replacement for the CV/Resume that measures the presence or absence of knowledge.
Oliver Kim, UC Berkeley economics graduate student, to research Chinese economic growth using light/satellite data for the period of critical reforms.
Luca Gattoni-Celli, founder YIMBYs of Northern Virginia. Here is his Twitter.
Jamie Brandon, Vancouver area independent researcher, working on making databases easier to use.
Kamil Galeev, for a new foreign policy consultancy, including with a study of Russia, the Russian region, and China.
Tom Bell, Chapman University, to produce a report In Search of the Best Policies for Translational Geroscience, with Kalon Boston.
Peter Brook has passed away at age 97
Here is a NYT obituary, here is a Guardian appreciation. Here is Brook’s Wikipedia page. He was one of the very greatest talents of our time. He was most of all a theatre director, and so most of his output I have never seen. I can report that his filmed Mahabharata (5.5 hours on YouTube) is one of the great creations. He and his co-workers spent eight years on the project. I also give his King Lear, again on film, an A+. At Lincoln Center I once saw his staging of The Magic Flute (in French!), again an A+.
RIP.
Monday assorted links
1. Revisions to views about the patriarchy.
2. Ongoing failures in monkeypox response.
3. What happened when the rich stopped intermarrying (speculative).
4. If you scroll through you will see talk of a possible Magnus vs. Nepo rapid match for WCC. And with sets, a bit like tennis.
5. Craig S. Wright is still at it, model that!
6. Reshoring is succeeding in Singapore (WSJ).
What exactly is the problem these days?
In my latest Bloomberg column I tried to express the “model” in as few dimensions as possible. Here is an excerpt:
I am increasingly worried that human success and failure are ruled by taste — the demand side, in economic terms. If there are fewer beautiful and charming residential post-World War II neighborhoods, it is because most people do not want to live in them. If there are fewer movies today with the dramatic impact and compositional rigor of “Citizen Kane,” it is because people do not very much want to see them. It is not that it is too difficult or expensive to make another “Citizen Kane.”
Again, this is not an argument for pessimism. Hollywood movies may be worse, but television programs are much better. Neighborhoods may look less interesting, but the insides of homes are more comfortable. For every potential lost Baroque concerto, there are gains in other areas of life.
Still, it is striking how much the quality of taste can decline — and stay there for long periods.
Social contagion plays a significant role in this process. That is, when some people become interested in a particular genre, many others may follow: Think of the rise of Beatlemania. The process also works the other way: Think of the decline of disco.
The question is why some particular tastes decline, and others rise. There are probably deep structural explanations, but for the most part those reasons are not transparent to our understanding. For all practical purposes, many shifts in cultural tastes are random.
It’s also important to realize that a lot of politics is about aesthetic tastes for a particular set of values, a particular set of people, a particular set of processes and outcomes. There was a series of democratic revolutions starting in the late 18th century, just as there were numerous fascist revolutions starting in the early 20th century and neoliberal revolutions in the 1990s. Social contagion can help explain those as well.
My fear, quite simply, is that we have entered an age in which the popular taste for good political outcomes, and fair political processes, is much weaker than it used to be. You might think that people would always want at least decent political outcomes, but that hypothesis has gotten increasingly hard to defend in the last 10 years, both in the US and globally. Attachment to democracy, for instance, seems significantly weaker, as does love for capitalism. People’s tastes are being pulled in different directions, whether it be the Proud Boys or the extremely woke.
All of which is to say, a rather simple and unglorified possibility is becoming more likely: People have stopped wanting good things to happen.
I realize this explanation is banal and does not hold much emotional appeal. Many people prefer conspiracy theories, or tightly structured theoretical hypotheses, or to pin the blame on some particular political faction, usually one they oppose. Or they focus on some very specific issue, such as climate change.
I view all of those problems, real though they may be, as downstream from the more fundamental issue: Why haven’t our systems of government responded better to whatever particular dilemmas concern us most?
Happy 4th!