What should I ask Ross Douthat?
Ross has a new (and very good) book coming out Believe: Why Everyone Should be Religious. I will be doing a Conversation with him, mostly about the book although not entirely. Here is my first and second Conversation with Ross. Here is my earlier exchange with Ross about belief in God, scroll back through the links.
So what should I ask him?
Tuesday assorted links
3. Abbey Road console markets in everything.
4. Salim Furth and Matt Bruenig on congestion pricing and tax incidence theory. True or false?
5. Jon Hartley podcast with Myron Scholes.
6. Carl Menger’s granddaughter is still alive, and speaks to us about her grandfather.
7. Surviving in cashless China?
8. Indian mom and son cover Radiohead’s Creep.
10. The Simon-Ehrlich resource price bet, over different decades.
11. “The fact checkers have just been too politically biased.” Nice watch!
Another hypothesis why building aesthetics have declined in quality
I have been reading Coby Lefkowitz’s Building Optimism: Why Our World Looks the Way It Does, and How to Make it Better. I am most interested in chapter five “Why Does Everywhere Look the Same?” That is another way of restating the puzzle that, at some point after WWII, the aesthetic quality of a lot of buildings and neighborhoods seemed to plummet. Even though we are much wealthier today.
With increasing returns to scale, we produce these buildings and neighborhoods en masse, and although they are comfortable and affordable, they just aren’t that pretty. Quite simply they are mass produced.
The increasing returns to scale hypothesis explains a few facts:
1. Why we find this trend almost everywhere.
2. Why there are some exceptions to the trend in striking individual buildings (Guggenheim Bilbao?), but very few exceptions on larger scales involving many buildings together.
3. Why the trend does not end.
4. Why interiors can be so lovely when exteriors are so mediocre. The interior of course is very often “created” by the individual family living there, rather than bought en masse.
By no means is the increasing returns to scale hypothesis for mediocre buildings entirely new. You can find versions of it in many other writers. But perhaps Lefkowitz states it the most clearly?
Should America privatize the postal service?
That is the topic of my latest Bloomberg column, here is one bit:
But Poles did not privatize everything. They generally left water companies and electricity providers in the public sector, for example. This is the second category of privatizations: those that are uncertain in their impact.
Water and electricity are two essential services where there is no easy way to get privatization exactly right. It is simply impractical to have many firms selling the product to a single group of households — not in the same way that, say, many cow farmers can produce and sell cheese. It costs too much to lay the basic piping or wires.
One option is to have a private entity with monopoly privileges but regulated prices. Another is to have a set of “common carrier” wires and allow multiple producers to use the network on regulated terms of access. A third is just to have the government own and run the company.
Involving the private sector may give better incentives for cost reduction as well as innovation, since profit maximization is a strong impetus for those kinds of improvements. The efficiency of the private company, however, is also a source of problems. A private company may be efficient at lobbying the government for cronyist privileges. That may lead to higher prices, overly generous reimbursement for cost increases, tougher barriers to entry, or entrenched technologies that favor the incumbent.
In other words: If embedded in an imperfect system, corporate efficiency is not always a pure virtue.
In the US, privately owned and publicly owned water utilities show, on average, roughly equal performance. Perhaps that is a disappointing result, but it is consistent with the “public choice” theories favored by many free-market economists.
A third kind of privatization is when business adds a layer of activity to a preexisting government function. For instance, some states have “privatized” their Medicaid services by outsourcing Medicaid provision to private health insurers. The Medicaid program has not gone away or been turned over to the private sector — rather, companies have a role in administering the system.
This kind of “layered” privatization, like the second kind of privatization, can work out either for the better or for the worse. One recent study shows this privatization increased the costs of Medicaid significantly without providing offsetting benefits. The private companies have done a good job — for themselves — of extracting more revenue from the system. Yet Medicare Cost Advantage, which creates a private layer of service on top of Medicare, run by insurance companies, does offer significant benefits to those who opt for it.
The lesson here is that talk of “privatization” per se is meaningless without elucidating which kind of privatization is under consideration.
Worth a ponder. Overall I think postal service privatization cannot be too closely tied to crony capitalism if it is going to work.
Monday assorted links
2. Hungarian birth rates now falling again?
3. Anna Meredith: Nautilus.
4. Bill Gates memoir, about his early years, coming out soon. Would gladly do a CWT podcast on this book, if you are reading! Just have someone contact me.
6. Christopher Balding on China stimulus: “I totally understand this idea that China isn’t stimulating but this overlooks a key point. China is effectively in a state of constant stimulus. For instance, government and corporate debt continues to balloon with debt growth roughly continually running 2x nominal GDP growth an entirely unsustainable growth level which it has done for roughly the past decade. So when people talk about stimulus what they are really saying is let’s take stimulus from 30 miles an hour above the speed limit to 60 miles an hour over the speed limit. If total debt growth is 2x nominal GDP growth, what would be considered “stimulative”? 4x? Run the second order numbers on what that means. It’s absolutely crazy. So when people say stimulate, they do not mean stimulate in that they aren’t stimulating now, but that it isn’t having the results desired AND that stimulus would need to enter absolutely absurd levels”
7. Congestion pricing tracker. And one report on NYC traffic, note it is early to draw conclusions. But traffic within the zone is not down, though it is better for commuters.
The Intelligence Revolution
We believe that, in 2025, we may see the first AI agents “join the workforce” and materially change the output of companies.
…We are beginning to turn our aim beyond that, to superintelligence in the true sense of the word. We love our current products, but we are here for the glorious future. With superintelligence, we can do anything else. Superintelligent tools could massively accelerate scientific discovery and innovation well beyond what we are capable of doing on our own, and in turn massively increase abundance and prosperity.
This sounds like science fiction right now, and somewhat crazy to even talk about it. That’s alright—we’ve been there before and we’re OK with being there again. We’re pretty confident that in the next few years, everyone will see what we see, and that the need to act with great care, while still maximizing broad benefit and empowerment, is so important. Given the possibilities of our work, OpenAI cannot be a normal company.
From Sam Altman.
The intelligence revolution is going to be bigger, more impactful and more wrenching than the industrial revolution.
Manmohan Singh: India’s Finest Talent Scout
Singh was excellent at identifying young talent, most famously Montek Singh Ahluwalia. Before Montek and Isher Judge would go on to marry, they met Manmohan Singh in Delhi in 1970. At the time, Singh was a professor at the Delhi School of Economics, known for his work on India’s exports. He seemed too soft-spoken and erudite for the couple to imagine him joining the Ministry of Foreign Trade as an economic advisor just a year later. Over the years, Singh offered suggestions to Isher Judge for her macro-econometric model of the Indian economy, which formed the basis of her doctoral thesis at MIT under Stanley Fischer.
During his tenure as chief economic advisor (CEA) to the Government of India, Singh’s relationship with Ahluwalia deepened. Their conversations in Washington D.C., where Ahluwalia worked at the World Bank, became more frequent. When the position of economic advisor at the Finance Ministry opened, Singh saw an opportunity. He guided Ahluwalia into the bureaucracy, marking their transition from mentor and mentee to colleagues.
A worthy protégé, Ahluwalia drafted the famous blueprint for the first stage of reforms in 1991—dubbed the M-Document. Like Singh, he went on to become finance secretary and, later, deputy chairman of the Planning Commission. Ahluwalia was just one among dozens of economists that Singh mentored. But this cycle of mentorship, that Singh set in motion, would repeat well beyond his years in office. Ahluwalia recruited the next generation of talent, most notably Raghuram Rajan.
Here is much more from Shruti Rajagopalan, Shreyas Narla, and Kadambari Shah. Basically you should take the biggest countries in this world and try to know them reasonably well. And here is a very good sentence, relevant for social change virtually everywhere:
“Singh understood that lasting change comes not from solitary genius, but from creating ecosystems of excellence that outlast any individual.”
And here Tanner Greer visits India.
China Second Fact of the Day
Chen Jinping, 60, of New York, New York, pleaded guilty today to conspiring to act as an illegal agent of the government of the People’s Republic of China (PRC), in connection with opening and operating an undeclared overseas police station, located in lower Manhattan, for the PRC’s Ministry of Public Security (MPS).
“Today’s guilty plea holds the defendant accountable for his brazen efforts to operate an undeclared overseas police station on behalf of the PRC’s national police force — a clear affront to American sovereignty and danger to our community that will not be tolerated,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “The Department of Justice will continue to pursue anyone who attempts to aid the PRC’s efforts to extend their repressive reach into the United States.”
“Today’s acknowledgment of guilt is a stark reminder of the insidious efforts taken by the PRC government to threaten, harass, and intimidate those who speak against their Communist Party,” said Executive Assistant Director Robert Wells of the FBI’s National Security Branch. “These blatant violations will not be tolerated on U.S. soil. The FBI remains committed to preserving the rights and freedoms of all people in our country and will defend against transnational repression at every front.”
Hat tip: Shruti
China fact of the day
China is loosening its visa policy and allowing some travelers to stay in the country for up to 10 days without obtaining the document.
The United States is among the dozens of countries eligible for the more lenient measure, part of a movement to ease restrictions and welcome back foreigners. The National Immigration Administration announced the change earlier this week.
To qualify for a 240-hour visa-free stay, travelers must transit through any of 60 airports, train stations or seaports in 24 provinces or regions, including such major destinations as Beijing, Shanghai and Sichuan…
One stipulation is the same, however. The China stop is technically for a layover, so you will need a reservation for a third country. For example, you can’t fly from New York to Beijing round-trip, but you could fly from New York to Bangkok to Beijing before returning home. Or from New York to Beijing to Bangkok.
“You will need to show your flight itinerary to show which third country you’re going to and that you’re going to leave within 10 days,” Peat said. “But that’s all you have to do.”
Here is the full story.
Sunday assorted links
1. Nabeel also endorses Solenoid; that means the book will take off. Here are the Nobel odds.
2. Okie-dokie, Open AI edition.
3. How did the English Reformation happen?
4. Elon tweeting against Farage is, among other things, a test of whether the rest of the Anglosphere still has semi-autonomous media ecosystems of its own.
5. All sorts of claims about all sorts of stuff, most of all the global economy.
Important links today, so you get only five of them.
Simple points on immigration
You may worry about cultural change or other things, but a single Jensen Huang or Elon Musk can carry a lot of dead weight. As of October, Nvidia’s market cap was around $3.5 trillion. By way of comparison, all US spending on federal welfare programs was $1.2 trillion in 2022. Nothing in Huang’s family background indicates that they would have been let into the country under a system that only sought proven geniuses, as some restrictionists say they favor. If one wants to take all the human and physical capital assets of some of the most successful companies in the US and toss them into the ocean, they need to have an incredibly compelling reason.
That is from Richard Hanania. I’ll say it again — cost-benefit analysis, cost-benefit, and cost-benefit analysis. Let’s have a little more of it, at the margin of course.
52 more things Kent Hendricks learned in 2024
Indian Americans own about half of all motels in the United States. Of them, 70% have the last name Patel.
And:
In the 1990s, then-leader of North Korea, Kim Jong-ll, and current leader Kim Jong-Un got fake Brazilian passports and went to Disneyland in Tokyo (probably).
And:
Waymo self-driving taxis generate 88% fewer property damage claims and 92% fewer bodily injury claims than human drivers. After driving 25.3 million miles, Waymo Driver had nine property damage claims and two injury claims, compared to 78 property damage claims and 26 injury claims from humans who drive an equivalent number of miles.
Here are 49 more, not all confirmed in the Andrew Gelman sense.
What I’ve been reading
Tirthankar Roy and K. Ravi Raman, Kerala: 1956 to the Present. Short, nonetheless the best book I have read on why Kerala is (somewhat) special in the Indian context. Stresses Kerala as part of a larger set of positive South Indian developments. Overpriced though at $40, given the short length.
Richard Franklin Bensel, Yankee Leviathan: The Origins of Central State Authority in America, 1859-1877. Excellent all around, clear and conceptual from the get-go. In spite of the title, I find the sections on Confederate state-building most novel and illuminating.
Glenn Adamson, A Century of Tomorrows: How Imagining the Future Shapes the Present. A good book on futurology and its history, note the authors considers more than tech in the narrow sense so Marcus Garvey and Marinetti are in here too. Sun Ra too.
Rob Young, Electric Eden: Unearthing Britain’s Visionary Music. This book covers Fairport Convention and its many folk offshoots, and ties it in to earlier British traditions of Vaughan Williams, Bax, Holst and so on, plus traditional song and yes The Wicker Man. Much of that is not to my taste, but I am prepping for Joe Boyd and figured I should read a book on it. This is the right book, and it is also a good way to try to understand Britain (a much written-up place) by unusual, roundabout means. I do by the way like Richard and Linda Thompson.
Caroline Burt and Richard Partington, Arise, England: Six Kings and the Making of the English State. Very good to read in conjunction with the recent Helen Castor book. Burt and Partington reach earlier in time by focusing on the Edwards, but you can compare their treatments of Richard II, and that is what I am starting with here.
Alan Walker, Franz Liszt: The Weimar Years, 1848-1861. Walker’s three-volume biography of Liszt is one of the very best biographies, ever. I like it better than most of what you hear people talk about on Twitter in the way of biography. Soon I will start volume three, the final years when Liszt becomes an Abbe. You do need some familiarity with the music of Liszt to grasp these books, but it suffices to listen along while you read, you do not have to be an expert.
There is Tim Congdon, The Quantity Theory of Money: A Restatement, a good introduction.
South Korea fact of the day
South Korea in 2024 saw 242,334 babies born, marking the first increase in the annual figure since 2015, as the country struggles to improve its plummeting birth rate that is among the worst in the world.
The official figure for childbirths rose by 7,295 from 235,039 in 2023, a 3.1 percent increase, according to the Ministry of the Interior and Safety.
And yet, it is not so easy to win this one:
The country also saw 360,757 deaths in the year, resulting in the overall population shrinking for a fifth straight year since 2020…
While the rebound in childbirths offers a glimpse of hope in terms of the population decline, the country continued to get older. The average age for Koreans in 2024 was 45.3 years old, up from average age of 44.8 the previous year.
Here is the full story.
Updates
In a justified resurgence of interest in the topic, The Telegraph covers the Rotherham scandals. Liz Truss has spoken up too. This is not a welcome issue for Starmer, to say the least. No matter what you think he did/did not do wrong in this matter, he cannot come out ahead. One implication is that ethnic enclaves sometimes are a big mistake, and that suburban sprawl is underrated. Note that Pakistanis in the United States have median income above the U.S. average, and comparable to other Asians.
Elsewhere, Thierry Breton remains an Ayn Rand villain.
That’s all.