What I’ve been reading

Frank McLynn, Villa and Zapata: A History of the Mexican Revolution.  The best book on its topic, and one of the best books on Mexican history flat out.  Everything is explained with remarkable clarity.  By the way, the central government never really has controlled the entire country, or not for very long anyway.

Sean Mathews, The New Byzantines: The Rise of Greece and Return of the Near East.  Anexcellent and original book, somewhere between a history and travel book.  Views Greece as part of “the Middle East.”  I found every page interesting.

Robert Polito, After the Flood: Inside Bob Dylan’s Memory Palace.  An informationally dense, rambling, and frequently insightful and obsessive book about the “late” career period of Bob Dylan.  When does his “late” period start?  1990 perhaps?  I remember thinking in 1990 that we were well into Dylan’s late career phase.  But that was thirty-six years ago!

Muriel Spark, The Driver’s Seat.  If you like her at all, you will be entranced by this one.  With a radical ending, as you might expect.

Richard Holmes, The Boundless Deep: Young Tennyson, Science, and the Crisis in Belief.  A fun new book on Tennyson’s relations with the science of his time, and how he drifted away from religious belief.

Partha Dasgupta, On Natural Capital: The Value of the World Around Us, is a popular summary of some of his thinking on valuing the environment and natural resources.

Davd Epstein, Inside the Box: How Constraints Make Us Better.  A good popular look at what the subtitle promises.

José Donoso, The Boom in Spanish American Literature: A Personal History is a good lshort overview, noting that Donoso’s own The Obscene Bird of Night is one of the great underrated works of 20th century literature.

A Fly Has Been Uploaded

In 2024, the entire neuronal diagram of the fruit-fly brain–some 140,000 neurons and 50 million connections–was mapped. Later research showed that the map could be used to predict behavior. Now, Eon Systems a firm with some of the scientists involved in the fruit-fly research and with the goal of uploading a human brain has announced that they uploaded the fruit fly brain to a digital environment.

The digital fly appears to behave in the digital environment in reasonably fly like ways–this is not a simulation, the fly’s “sensors” are being activated by the digital environment and the neurons are responding. Some more details here.

N.b. this work is not yet published.

Addendum 1: Of course Robin Hanson is an advisor to Eon Systems.

Addendum 2: In other news, human brain cells on a chip learned to play Doom. No word on whether they were conscious or not.

A market-based officer retention system?

The Army is launching a new Warrant Officer Retention Bonus Auction. This initiative introduces a market‑based approach to retaining senior technical talent while ensuring responsible stewardship of taxpayer dollars. The program represents a shift from traditional, fixed‑rate bonuses to a more flexible, market-driven system.

The structure is designed to make the best strategy straightforward—bid your true value. Eligible warrant officers will submit a confidential bid indicating the minimum monthly bonus they would be satisfied receiving in exchange for a six‑year Active‑Duty Service Obligation. Overbidding increases the risk of missing out on a bonus, while underbidding could result in commitment to a lower rate. Army leadership believes the system rewards transparency and encourages officers to carefully consider the compensation that would make them comfortable with continued service.

“The goal is simple. Reward as many qualified Warrant Officers as possible with the most competitive bonus the budget allows,” said Lt. Col. Tim Justicz, an Army economist who helped design the program.

Once bids are submitted, the Army will determine a single market‑clearing bonus rate that retains the maximum number of qualified warrant officers within the available budget. Every warrant officer whose bid falls at or below that rate will receive the same bonus amount. This means that warrant officers who bid lower than the final rate will still receive the higher, market‑determined bonus.

Here is more, via Charles Klingman.

On social media and parents (from my email)

Fron anonymous:

I personally think social media is pretty bad for people (kids and adults). I got off Facebook around 2009. I never got on Twitter. I had Instagram for a while but only followed my wife to see her posts of our family. This worked great until Instagram started feeding me content beyond the people I was following (really just my wife), so I quit using it. The only social media I currently use is Substack (not sure if that counts?). But the same dynamic may be playing out there as well (the algorithm feeding me stuff I don’t want, and me getting locked into wasting time doom scrolling).

HOWEVER, I completely agree with your point about parents. Our 14-year-old son has an iPhone, but we have locked it down pretty tight. It took some work on our part, to be honest. And we have to be pretty vigilant about enforcing the no-phone-in-your-room rule (which is a source of conflict sometimes). Our son has no social media accounts. He can text and he has access to a few messaging apps that they use at his school. Beyond that, we’ve basically shut down his ability to access the internet on the phone. His Chromebook works perfectly well for any legitimate internet needs.

In principle, any parent can do what we’ve done. So why don’t they? Why are they begging the government to do something they could just do themselves, albeit with a little work? Well, I’ve been struck by how badly many parents desperately need their children’s approval. They find themselves incapable of disappointing or upsetting their children on even the smallest of things. They know they should tell their kids not to use TikTok (or whatever), but they don’t want to make their kids mad. That’s why they want someone else to do it for them.

I don’t get it. Perhaps I’m overly cranky, but I honestly don’t mind it if (when) my kids get mad when I do something I believe is in their best interest. I simply don’t believe my children’s emotional reaction is a very good guide to parenting. Because they’re children. And they don’t know very much. And they especially don’t know what they don’t know and that’s why I’m here. If I won’t tell my kids no when they need to hear it but don’t want to hear it, then what good am I? My wife feels the same way. But we see lots of families that clearly feel differently.

Okay rant over.

See also Arnold Kling on related ideas.

The Hidden Cost of Hard-to-Fire Labor Laws: Why European Firms Don’t Take Risks

In our textbook, Modern Principles, Tyler and I write:

Imagine how difficult it would be to get a date if every date required marriage? In the same way, it’s more difficult to find a job when every job requires a long-term commitment from the employer.

In two new excellent pieces, Brian Albrecht and Pieter Garicano extend this partial equilibrium aphorism with some general equilibrium reasoning. Here’s Albrecht:

[I]magine there is a surge for Siemens products. Do you hire a ton of workers to fill that demand? No, you’re worried about having to fire them in the future but being stuck until they retire.

But it’s even worse than that…..[suppose Siemens does want to hire] where is Siemens getting those workers from?…Not only is it a problem for Siemens that they won’t be able to fire people down the road, the fact that BMW doesn’t fire anyone means you can’t hire people. 

Garicano has an excellent piece, Why Europe doesn’t have a Tesla, with lots of detail on European labor law:

Under the [German] Protection Against Dismissal Act, the Kündigungsschutzgesetz, redundancies over ten employees must pass a social selection test (Sozialauswahl). Employers cannot choose who leaves: they must rank employees by age, years of service, family maintenance obligations, and degree of disability, and then prioritize dismissing those with the weakest social claim to the job. If someone is dismissed for operational reasons but the company posts a similar job elsewhere, the dismissal is usually invalid.

Disabled employees can be dismissed only with the approval of the Integration Office (Integrationsamt), a public body. The office will weigh the employer’s reasons, whether they have taken sufficient steps to integrate the employee, and whether they could be redeployed elsewhere in the organization. Workers who also become caregivers cannot be dismissed at all for up to two full years after they tell their bosses they fulfill that role.

As a company becomes larger and tries to let more workers go at once these difficulties increase. In many European countries, companies with more than a certain number of workers – 50 in the Netherlands5 in Germany – are obliged to create a works council, which represents employees and, in some countries, must give its approval to decisions the employer wants to make regarding its employees, including layoffs or pay rises or cuts.

…Companies that are allowed to fire someone and can afford to pay the severance costs have to wait and pay additional fees. Collective dismissal procedures in Germany start after 30 departures within a month; once triggered they require further negotiations with the works council, a waiting period, and the creation of a ‘social plan’ with more compensation for departing workers. When Opel shut down its Bochum factory in Germany, it reached a deal with the works council to spend €552 million on severance for the 3,300 affected employees. This included individual payments of up to €250,000 and a €60 million plan to help workers find new jobs.

Now what is the effect of regulations like this? Well obviously the partial equilibrium effect is to reduce hiring but in addition Garicano notes that it changes what sorts of firms are created in the first place. If you are worried about being burdened by expensive dismissal procedures, build a regulated utility with captive government contracts, not a radical startup with a high probability of failure.

Rather than reduce hiring in response to more expensive firing, companies in Europe have shifted activity away from areas where layoffs are likely. European workers are for sure, solid work only. This works well in periods of little innovation, or when innovation is gradual. The continent, however, is poorly equipped for moments of great experimentation.

…Europe’s companies have immense, specialized knowledge [due to retained workforces, AT]. The problems happen when radical innovation is needed, as in the shift from gasoline to electric vehicles. The great makers of electric cars have either been new entrants, like Tesla and BYD, or old ones who have had their insides stripped, like MG.

..If Europe wants a Tesla, or whatever the Tesla of the next decade will turn out to be, it will need a new approach to hiring and firing.

The Vietnam War and racial integration

The Vietnam draft conscripted hundreds of thousands of young Americans into an integrated military. I combine near-random draft lottery variation with administrative voter data to study the long-run racial integration effects of coerced national service. Black and Native American veterans became more likely to marry white spouses, identify as Republicans, and live in more-integrated neighborhoods. Improved economic standing may partly mediate these effects. Effects are larger for Southerners and are precisely null for white veterans. Coerced military service generates substantial but asymmetric cross-racial political convergence and racial integration: Vietnam-era service caused about 20 percent of affected cohorts’ interracial marriages.

That is from a recent NBER working paper by Zachary Bleemer.

A simple way to improve your thought and conclusions

Take some policy, action, or person whom you regard as morally questionable and indeed is morally questionable.  That same policy, action, or person does some bad things, bad in conquentialist terms I now mean.  Practically bad, utilitarian bad.

The odds are that you overrate the badness of those consequences by some considerable degree.

Even very smart people do this.  Sometimes they do it more, because they can come up with more elaborate arguments for why the bad consequences are completely disastrous.

They might overrate the badness of those consequences by as much as 5x or 10x (gdp is a huge mound of stuff!).

So if you want to have better opinions, look for the cases where you do this and stop doing it.

Easy-peasy!

And good luck with that.

The actual helicopter drop?

When Milton Friedman pondered what would happen if a helicopter dropped $1,000 from the sky, he likely never imagined that one day a military cargo plane would scatter millions of dollars into one of Bolivia’s largest cities.

But while the Nobel Prize-winning economist worried about the inflation that an influx of cash could generate, the impact in El Alto — where a cash-packed plane crashed and killed 24 people last week while spreading 423 million bolivianos ($62 million) — is one of widespread confusion.

The new currency was legitimately printed, but the central bank has voided its serial numbers to prevent its use. While thousands swarmed the site to pick up the banknotes in one of Latin America’s poorest nations, authorities have tried to burn and destroy the new cash, arresting dozens and raiding homes in a rushed hunt for the missing bills.

That has sent Bolivians into a frenzy. No longer able to quickly tell if a banknote is valid or voided and fearing the crackdown, businesses don’t know what bills to accept anymore, leaving customers frustrated and panicked that their real money is now worthless.

“Just today, everyone refused to take my money five times,” said Yoselin Diaz, 27, who was lining up at the central bank’s main offices in La Paz. “I tried on the minibus and nothing, then I tried to buy some things and nothing, later I went to buy a photo for my father’s grave and even the funeral homes wouldn’t accept it.”

…Bolivia’s central bank has defended its measures to destroy and void the fresh cash, citing not just the principle of keeping stolen money from entering the financial system but also the need to quell social strife. At its height, authorities said about 20,000 people were trying to collect the banknotes as police fired tear gas at them.

Here is more from Bloomberg, via John de Palma.

Friday assorted links

1. Special tribute issue on James C. Scott.

2. Gauti Eggertsson: “I now find myself replicating papers and experimenting with frontier methods in an evening or a few days using Claude Code. That would have taken weeks before — which in practice meant I wouldn’t have done it at all.”  And yet his vision is still far too conservative.

3. Hobby tunneling?

4. More monuments?

5. The price of war.

6. Is China an expansionist power? And China fact of the day.

7. Paul Graham on branding, design, and watches.

8. António Lobo Antunes, RIP ( NYT).

9. In fact in the Gulf there are too many vulnerable targets.

Immigration, innovation, and growth

We propose a novel identification strategy to isolate exogenous immigration shocks across US counties, by interacting quasi-random variations in the composition of ancestry across counties with the contemporaneous inflow of migrants from different countries. We show a positive causal impact of immigration on local innovation and wages at the five-year horizon. The positive dynamic impact of immigration on innovation and wages dominates the short-run negative impact of increased labor supply. A structural estimation of a model of endogenous growth and migrations suggests the increased immigration to the United States since 1965 may have increased innovation and wages by 5 percent.

That is from a new AER paper by Stephen J. Terry, et.al.

My podcast with Nebular

We’ve just published the video on YouTubeXSpotify, and Apple Podcasts. We also published some extended show notes and the transcript on Substack.

I thought they did an excellent job here, and lots of fresh material.  We start with the fertility crisis:

Murphy: We’ve always had a majority young society, and in our lifetime, we’ll have this transition to majority old society. When you make this transition and it impacts so many different areas of life, do you still believe that technology can solve our way out of it?

Cowen: Solved is never quite the word. But the older people in this room and I guess that’s only me. We have the luxury of having seen what old people were like in the 1960s and 70s, and mostly they were a wreck. So, so many people would be shot by 60. And now there are many 80-year-olds who are more dynamic than a typical 60-year-old might have been, say, in 1972.

So that will somewhat help keep us more equally dynamic. So there are countervailing trends which are quite positive. There might be You could call them mind altering substances that would help older people be young again, like Viagra for the mind. I’m not predicting that. I’m just saying there’s a lot of variables here, and I think we’ll have recourse to many interventions that will help keep things going at an acceptable level.

And this:

Murphy: Do you believe that there is life on the moons of Saturn?

Cowen: I would bet 60/40 yes. But it wouldn’t be life like us. You know, it might be little shrimpy things or even just something like bacteria. Maybe [the moons of]Jupiter also.

Interesting throughout.  Here are links on Nebular and Finn Murphy.