Is there a British productivity comeback?
Let us hope:
Britain is seeing early signs of a long-awaited turnaround of its productivity woes, according to an alternative measure that suggests output per hour worked has risen at a pace not seen since before the financial crisis.
The Resolution Foundation said a “blistering” productivity surge has been masked by problems with official statistics and pointed to encouraging indications of a clearout of “zombie” firms that contribute little to the economy.
Productivity growth, when measured using the Office for National Statistics’ troubled Labour Force Survey, was just 1.1% in the year through the third quarter of 2025. But the figures look far better when based on employee payrolls data that are more trusted by economists, the think tank said.
“Productivity was essentially flat between the pre-pandemic peak of Q4 2019 and post-pandemic trough of Q1 2024, but it has grown by a blistering 3.4% in the six quarters after that, a rate not seen since before the financial crisis,” the Resolution Foundation said in a report published Monday. Those gains are more than the previous seven years combined, it added.
Here is more from Bloomberg. I will update you on this as I learn more.
Monday assorted links
1. Republican investigators are not finding much electoral fraud (NYT).
2. New Yorker interview with Amanda Seyfrieds (of Ann Lee fame). An interesting movie, by the way. 28 Years Later is also very good, though too gory for most people, myself included. Watch it if you can.
4. Why it is hard to run Venezuela (NYT).
6. Hunter Thompson, belated and stochastic RIP (NYT).
7. Ralph Towner, RIP (NYT).
Greenland fact of the day
Greenland held a referendum on 23 February 1982 and voted to leave the European Communities / European Economic Community (EEC) (about 52–53% for leaving).
GPT link. They left in 1985.
I write this not to justify current American policy, which I consider a major mistake with extremely poor execution. Rather the point is that we are pushing the Greenlanders into the arms of the Danes, when over some longer haul it could be very different.
The FT offers many more interesting facts about Greenland, including its growing dependence on Asian foreign labor.
Morally judging famous and semi-famous people
This is one of the worst things you can do for your own intellect, whatever you think the social benefits may be. I know some reasonable number of famous people, and I just do not trust the media accounts of their failings and flaws. I trust even less the barbs I read on the internet. I am not claiming to know the truth about them (most of them, at least), but I can tell when the people writing about them know even less.
I am not saying everyone is an angel — sometimes you come to learn negative information that in fact is not part of the standard press reports or internet whines.
If you are going to possibly be working with someone on a concrete and important project, absolutely you should be trying to form an assessment of their moral quality and reliability. (And you are allowed to do it once per electoral race, when deciding for whom to vote.) But if not, spending real time and energy morally judging famous and semi-famous people is one of the best and quickest ways to make yourself stupider. Focus on the substantive arguments for and against various policies and propositions, not the people involved. Furthermore, smart people do not seem to be immune from this form of mental deterioration. Here is my 2008 post on “pressing the button.”
A corollary of this is that if you read an internet comment that, when a substantive issue is raised, switches to judging a famous or semi-famous person, the quality of that comment is almost always low. Once you start seeing this, you cannot stop seeing it.
Addendum: If by any chance you are wondering how to make yourself smarter, learn how to appreciate almost everybody, and keep on cultivating that skill.
Podcast with Salvador Duarte
Salvador is 17, and is an EV winner from Portugal. Here is the transcript. Here is the list of discussed topics:
0:00 – We’re discovering talent quicker than ever 5:14 – Being in San Francisco is more important than ever 8:01 – There is such a thing like a winning organization 11:43 – Talent and conformity on startup and big businesses 19:17 – Giving money to poor people vs talented people 22:18 – EA is fragmenting 25:44 – Longtermism and existential risks 33:24 – Religious conformity is weaker than secular conformity 36:38 – GMU Econ professors religious beliefs 39:34 – The west would be better off with more religion 43:05 – What makes you a philosopher 45:25 – CEOs are becoming more generalists 49:06 – Traveling and eating 53:25 – Technology drives the growth of government? 56:08 – Blogging and writing 58:18 – Takes on @Aella_Girl, @slatestarcodex, @Noahpinion, @mattyglesias, , @tszzl, @razibkhan, @RichardHanania, @SamoBurja, @TheZvi and more 1:02:51 – The future of Portugal 1:06:27 – New aesthetics program with @patrickc.
Self-recommending, here is Salvador’s podcast and Substack more generally.
Those new (old) service sector jobs, chimney sweep edition
Now, many sweeps, including those in the Firkins family business, say the trade has been experiencing an improbable resurgence.
According to the National Association of Chimney Sweeps, demand has been bolstered by high energy prices, the popularity of wood-burning stoves and an international climate that has prompted warnings that electricity supplies could be vulnerable to attack by hostile states like Russia.
“People are thinking, ‘Let’s have a backup, let’s have a fire, let’s have a stove in case the electricity goes off,’” said Martin Glynn, the president of the chimney sweeps association, whose membership has risen to about 750 today, from about 590 in 2021. “If you have the ability to burn logs or smokeless fuel, you can keep cooking and have some heating. There is a big increase in demand and people are reopening their fireplaces.”
On a recent day, he said, three people had booked training courses. The association’s membership now includes 40 female sweeps. “It’s alive and kicking,” he said of the group, adding: “We don’t send little boys up chimneys any more, instead it’s CCTV and smoke testing equipment. It’s almost like being a chimney technician.”
Here is more from the NYT, via Mike Rosenwald.
Tim Kane on my visit to University of Austin
Here is the link, I should add that in addition to my enthusiasm for the students, the faculty also seemed quite good, most of all knowledgeable and open. I know very little about how the school is run, you might try this short piece from Arnold Kling, who has been visiting there for a week.
Here is an excerpt from Tim:
Tyler made a remark that he didn’t think fighting grade inflation matters very much. I respect his opinion, but I think he’s wrong. And I hope I can change his mind. Here’s why I care so much about it, and why I think a GPA target is the only — literally the only — effective solution. A college cannot fight grade inflation with rhetoric and goals and hand-wringing. Genuine academic rigor requires strong limits on what faculty can do with grades.
Professors everywhere have a large incentive to give higher grades. The situation has inflated asymptotically to the ceiling for 8 decades, particularly at the Ivies…
At University of Austin, all professors have to give an average grade of B. Here is more from Tim:
Consequences?
- More learning. UATX students are focused on learning, not grades.
- Less squabbling. Faculty are seeing way fewer ticky-tack arguments over a single point on homework and exams because the students aren’t obsessed with the 4.0 or 3.0 threshholds.
- More studying, especially increased follow-through. The incentives for students to care about final exams are stronger (none of this late-term “that grade is already settled, so I am blowing off that final exam” nonsense.)
- Less anxiety. I skimmed the grades data for our fall semester and am pretty sure I did not see a single “perfect” grade of 100/100 for any student in any class.
Some of you have asked me what I think of the recent Politico article on University of Austin. First, I have not been involved in any of the cited disputes, so I cannot speak to their details. Second, I do not not not speak for the University at all (while I am on the Advisory Board, it is an unpaid position with no authority or fiduciary responsibility and my advice/consultation has been on the AI topic). But I would make these more general points:
a. If a university decided to be based explicitly on classical liberal perspectives and principles, I would think that is great (not saying what is the best way to describe U. Austin, this is a general observation). I would however worry that the decision is not sustainable over time at much scale, given the career incentives of so many of the people who will be hired.
b. If that decision to be “classically liberal in orientation” required the administration to set some general principles to try to assure that the faculty at said school did not evolve into being like the faculty almost everywhere else, I would be fine with that.
c. I think such a school, over time, if it stuck to its principles, would end up with more de facto free speech than most other institutions of higher education.
d. I am glad that Notre Dame and Georgetown are Catholic schools, that UC Santa Cruz was founded as a kind of hippie school, that there is Yeshiva, the New School, HBCUs, and so on. I favor schools being “more different” ideologically in a variety of directions, including those I do not agree with, which of course will cover the majority of cases. My main objection is that many of the “Catholic” schools for instance are not very Catholic anymore, having been taken over by a kind of rampant general professionalism. I hope University of Austin avoids that fate. I should add that I am well aware that the general rise in fixed costs makes such endeavors much harder to sustain these days. I would like to reverse that general trend, and that is one reason for my interest in online and AI-oriented methods in education.
e. To innovate, more and more schools will have to move away from the old “faculty control” model. This change is already substantially underway, sans the innovation however.
f. Failure to contextualize is often the greatest “sin” of media articles offering coverage of disputes.
Returning to the University of Austin, right now their entering class is about 100 students, and they offer 35 classes a semester. It is one floor in an office building, and it is not costing any taxpayer dollars. It is a tiny, tiny drop in the bucket. GMU alone has about 40,000 students, and is basically a city. My Principles class this last fall alone had about 3.5x more students than are in the entire U. Austin.
If you are very upset by whatever is going on at U. Austin, or not going on, or whatever…I would say that is the real story.
When did Argentina lose its way?
From a new paper by Ariel Coremberg and Emilio Ocampo:
This paper challenges the increasingly popular view that Argentina’s economy performed relatively well under the corporatist import substitution industrialization (CISI) regime until the mid-1970s, and that its much-debated decline began only after 1975. Instead, it advances the alternative hypothesis that although real GDP per capita growth during this period was high by Argentina’s historical standards, it was low relative to the rest of the world, to typical comparator countries, and to what was achievable given the country’s factor endowments and investment levels. Distortions in relative prices and systemic capital misallocation generated significant inefficiencies that constrained economic dynamism and limited productivity gains. We support this hypothesis using a range of empirical methodologies—including comparative GDP per capita ratios, convergence analysis, growth accounting, and cyclical peak-to-peak analysis— complemented by historical interpretation. Although post-1955 modifications to the CISI regime temporarily improved performance, by the early 1970s it had exhausted its capacity to sustain growth. The prolonged stagnation that followed the 1975 crisis can be explained by the inability of successive governments to overcome the resistance of entrenched interest groups and thus complete the transition to an open market economy. Abrupt regime reversals fostered social conflict, political instability, and macroeconomic uncertainty, all of which undermined the sustained productivity gains required for long-term growth.
Via the excellent Samir Varma.
Childhood neighbors matter
We explore the role of immediate next door neighbors in affecting children’s later life occupation choice. Using linked historical census records for over 6 million boys and 4 million girls, we reconstruct neighborhood microgeography to estimate how growing up next door to someone in a particular occupation affects a child’s probability of working in that occupation as an adult, relative to other children who grew up farther away on the same street. Living next door to someone as a child increases the probability of having the same occupation as them 30 years later by about 10 percent. As an additional source of exogenous variation in exposure to next door neighbors, we exploit untimely neighbor deaths and find smaller and insignificant exposure effects for children who grew up next to a neighbor with an untimely death. We find larger exposure effects when intensity of exposure is expected to be higher, and document larger occupational transmission in more connected neighborhoods and when next door neighbors are the same race or ethnicity or have children of similar ages. Childhood exposure to next door neighbors has real economic consequences: children who grow up next to neighbors in high income or education occupations see significant gains in adult income and education, even relative to other children living on the same street, suggesting that neighborhood networks significantly contribute to economic mobility.
That is from a recent paper by Michael Andrews, Ryan Hill, Joseph Price, and Riley Wilson. Via Kris Gulati.
*Pee-wee as himself*
I loved this documentary, all three hours of it. Perhaps you need to be American, and to have lived in Pee-wee’s decades? In any case, the film is a wonderful reflection on self-knowledge, the changing status of “coming out” as gay in American history, celebrity, how fame happens, hippie culture, cancel culture, who your real friends are, narcissism, and much more. Pee-wee collaborated with the making of the film, but it seems pretty honest in portraying his life and later legal troubles. It turns out he was dying of cancer for years, but did not let on to the filmmakers. Here is the official trailer.
Saturday assorted links
1. Another AI-generated hit song.
4. Egg prices fell about twenty percent this year, GPT will tell you that supply is elastic.
5. How difficult is Spanish to understand in various countries? (I think Chilean Spanish is not as tough as suggested here.)
7. The premium that USG was paying on ten-year Treasuries is mostly gone.
Growth Experiences and Trust in Government*
From a new QJE paper by Timothy Besley, Christopher Dann, and Sacha Dray:
This paper explores the relationship between economic growth and trust in government using variation in GDP growth experienced over a lifetime since birth. We assemble a newly harmonized global dataset across eleven major opinion surveys, comprising 3.3 million respondents in 166 countries since 1990. Exploiting cohort-level variation, we find that individuals who experience higher GDP growth are more prone to trust their governments, with larger effects found in democracies. Higher growth experiences are also associated with improved perceptions of government performance and living standards. We find no similar channel between growth experience and interpersonal trust. Second, more recent growth experiences appear to matter most for trust in government, with no detectable effect of growth experienced during one’s formative years, closer to birth or before birth. Third, we find evidence of a “trust paradox” whereby average trust in government is lower in democracies than in autocracies. Our results are robust to a range of falsification exercises, robustness checks and single-country evidence using the American National Election Studies and the Swiss Household Panel.
Via Alexander Berger.
“Tyler Cowen’s AI campus”
That is a short essay by Arnold Kling. Excerpt:
Tyler’s Vision
As a student, you work with a mentor. At the beginning of each term, you and your mentor decide which courses you will take. If there are other students on campus taking them, great. If not, maybe you can take them with students at other schools, meeting remotely.
For each course, an AI can design the syllabus. Tyler gave an example of a syllabus generated by ChatGPT for a course on Tudor England. If you can find a qualified teacher for that course, great. If not, you could try learning it from ChatGPT, which would provide lessons, conversations, and learning assessments (tests).
Tyler thinks that 1/3 of higher ed right now should consist of teaching students how to work with AI. I do that by assigning a vibe-coding project, and by encouraging “vibe reading” and “vibe writing.”
The reason for proposing such a high proportion of effort to learning to work with AI is because we are in a transition period, where the capabilities of AI are changing rapidly. Once capabilities settle down, best practices will become established, and knowledge of how to use AI will be ingrained. For now, it is very hard to keep up.
It is possible, of course, that Tyler and I could be wrong. It could be that the best approach for higher ed is to keep students as far from AI as one can. I can respect someone who favors an anti-AI approach.
But I am disturbed by the lack of humility that often accompanies the anti-AI position in higher education. I have difficulty comprehending how faculty, at UATX and elsewhere, can express their anti-AI views with such vehemence and overconfidence. They come across to me like dinosaurs muttering that the meteor is not going to matter to them.
I believe the talk will be put online, but a few extra points here.
First, the one-third time spent learning how to use AI is not at the expense of studying other topics. You might for instance learn how to use AI to better understand Homer’s Odyssey. Or whatever.
Second, I remain a strong believer in spending many hours requiring the students to write (and thus think) without AI. Given the properties of statistical sampling, the anti-cheating solution here requires that only a small percentage of writing hours be spent locked in a room without AI.
Third, for a small school, which of course includes U. Austin, so often the choice is not “AI education vs. non-AI education,” rather “AI education vs. the class not being offered at all.”
Why should not a school experiment with two to three percent of its credits being AI offerings in this or other related manners? Then see how students respond.
Claims about AI and science
You should take these as quite context-specific numbers rather than as absolutes, nonetheless this is interesting:
Scientists who engage in AI-augmented research publish 3.02 times more papers, receive 4.84 times more citations and become research project leaders 1.37 years earlier than those who do not. By contrast, AI adoption shrinks the collective volume of scientific topics studied by 4.63% and decreases scientists’ engagement with one another by 22%.
Here is the full Nature piece by Qianyue Hao, Fengli Xu, Yong Li, and James Evans. The end sentence of course does not have to be a negative. Via the excellent Kevin Lewis.
The share of factor income paid to computers
Via Kevin Bryan.