Pessimism, the sense that it is hopeless, is a self-fulfilling prophecy

Tuesday, June 10th, 2025

Peak Human by Johan NorbergWhy do we suddenly get an explosion of creativity and progress in certain places and moments, Johan Norberg asks, and why do these golden ages end?

I have learned that ages become golden because they imitate and innovate. They first emerge because of cheating. They didn’t come up with all the innovations that made them prosper; instead they took them from others.

Athenian, Italian and Dutch merchants picked up new ideas on their business trips. Like the Borg of Star Trek, the Romans constantly absorbed peoples, ideas and methods by conquest, and Abbasid Baghdad actively sponsored a translation project to lay their hands on the world’s knowledge and science.

But there is a limit to how far imitation can get you. To make this progress self-propelling, these cultures had to combine these inputs with their own thoughts to create innovations, from higher agricultural yields to artistic rebellions. This takes inclusivity back home. People have to be allowed to try new things. Free speech, free markets and a rule of law that constrains the arbitrary actions of rulers leave room for this.

But get Giotto and the flying shuttle, it takes something more: a broader culture of optimism. Innovation is difficult and controversial, and the results are never guaranteed. Therefore, you need a sense that there is hope and possibility, and you need role models around you who have shown the way, to make it seem like it is worth trying. Others to be inspired by, learn from, and to compete with.

This progress sometimes became self-sustaining because, at a certain point, it started transforming the self-identity of these cultures. That is why we often see clusters of creativity, like philosophy in Athens, art during the Renaissance, classical music in Vienna and technology in Silicon Valley.

Pessimism, the sense that it is hopeless, is a self-fulfilling prophecy. This is a clue to the decline and fall of golden ages.

[…]

All these golden ages experienced a death-to-Socrates moment in times of crisis, when they soured on their previous commitment to open intellectual exchange. They started to support strongmen, control the economy and abandon international exchange. This made the fear of disaster self-fulfilling, since those barriers limited access to other possibilities and restricted the adaptation and innovation that could have helped them deal with the threat.

Anything insatiable is dangerous

Sunday, May 25th, 2025

Anything insatiable is dangerous, and thus AI fears usually center around runaway maximizers:

But there are reasons to be optimistic.

For starters, the main reason to expect that artificial intelligence is possible is the existence of natural intelligence. If you can build a human-level intelligence out of carbon, it seems reasonably likely that you could build something similar out of silicon.

But humans and all other biological intelligences are cybernetic minimizers, not reward maximizers. We track multiple error signals and try to reduce them to zero. If all our errors are at zero — if you’re on the beach in Tahiti, a drink in your hand, air and water both the perfect temperature — we are mostly comfortable to lounge around on our chaise.

As a result, it’s not actually clear if it’s possible to build a maximizing intelligence. The only intelligences that exist are minimizing. There has never been a truly intelligent reward maximizer (if there had, we would likely all be dead), so there is no proof of concept. The main reason to suspect AI is possible is that natural intelligence already exists — us.

[…]

Reward maximizers are always unstable. Even very simple reinforcement learning agents show very crazy specification behaviors. But control systems can be made very stable. They have their own problems, but we use them all the time, in thermostats, cruise control, satellites, and nuclear engineering. These systems work just fine. When control systems do fail, they usually fail by overreacting, underreacting, oscillating wildly, freaking out in an endless loop, giving up and doing nothing, and/or exploding. This is bad for the system, and bad when the system controls something important, like a nuclear power plant. But it doesn’t destroy the universe.

The whole trick is to get the rest of the world to pay

Friday, May 23rd, 2025

In theory, Juliet Samuel notes, the dollar ought to be a medium of exchange like any other, only useful to foreigners who want to trade with Americans, but in reality, dollars, in the form of US Treasury bonds, have become the backbone of the world’s piggy bank:

The dollar solves a dilemma. When a country accrues lots of savings, perhaps because it sells huge amounts of oil or has built a whole economy around battery or semiconductor exports, it needs to store the cash. Storing it in the country’s own currency presents two problems.

The first is that a lot of these supersaver countries have volatile exchange rates because they are ruled by capricious, thieving dictators, or because their financial markets are very small so it’s risky to have all the money in local lira or whatever. The second is that if they convert their savings into local cash, they’ll push their exchange rate up, and that will make their exports more expensive until they become uncompetitive, killing the golden goose. This, incidentally, is how a healthy trading system ought to rebalance itself.

So they don’t let that happen. Instead, what all these governments and sovereign wealth funds (and a few rich families or pensions) do is buy US Treasury bonds. Treasury markets are big and stable, open to anyone and underpinned by the rule of law.

When the US was by far the world’s biggest economy, this activity didn’t affect Americans much. In fact, letting the dollar become so important gave the US exceptional power to sanction foreigners and to borrow, seemingly without limit. But over decades, and especially since China became a full-fledged member of the trading system in 2001, the US economy has become smaller and smaller relative to the rest of the world, while the savers have become bigger and bigger. We are now at the point where there are an estimated $7 trillion worth of bonds squirrelled away as reserves by non-US savers: $3 trillion in China, the rest in Japan, Europe, Taiwan, Saudi Arabia, Korea and Singapore. This has inflated the value of the dollar to the point where it is pricing American exporters out of the game. Products made using dollars and priced in dollars are just too expensive.

[…]

Back [during Trump’s trade war in 2018–19], the tariffs were not actually paid by consumers. As far as one can tell from the data, they were paid in two ways: first, US importers accepted lower margins on goods bought from abroad, and second, the dollar rose in value, boosting US spending power almost by exactly as much as Trump had put up tariffs.

Self-evidently, a rising dollar is not what a Trump White House would want if its aim is to revive American manufacturing. But this underscores a central trade-off not just with tariffs but with any solution to the problem of gargantuan trade and currency distortions: someone, somewhere has to pay. If Trump lets the dollar appreciate, then American consumers don’t have to bear the cost. But then American factories won’t recover either. So the whole trick, as far as US policy is concerned, is to get the rest of the world to pay.

If there is a grand strategy behind the trade war, which there certainly is in the mind of Trump appointees like the Treasury secretary Scott Bessent, it is an opening salvo in a struggle to fix the US trading position and to sort allies from enemies in doing so. Start with tariffs on everyone, let them feel the pain, then offer relief to those willing to help gradually deflate the dollar by slowly selling down Treasuries, opening up their own markets to US goods and agreeing to impose a tariff wall on China.

[…]

At the same time, domestically, the US could embark upon a massive deregulatory programme to cut production costs, pump more oil, clear away planning hurdles, cut payroll taxes and so on.

Brutal honesty lets us affirm that the correlation between what is good and what sounds good is quite low

Friday, May 16th, 2025

When Bryan Caplan‘s twin sons were about ten, they loved a videogame called Tropico, which makes you the caudillo of a Caribbean island, its sovereign ruler and economic czar:

As you play, you face constant criticism from the island’s political factions. If you displease too many of your subjects, you fall from power and lose the game. Game after game, the most vocal critics of my twins’ regimes were the Communists. Which led to a memorable conversation.

“Dad, I’m really confused about the Communists in Tropico.”

“How so?”

“Well, you’re always telling us how terrible the Communists are.”

Guilty as charged. My wife and her parents were refugees from Communist Romania. Reading books about mass murder and slave labor under the likes of Lenin, Stalin, and Mao is one of my long-time hobbies. I’ve written several academic pieces about the economics and politics of Communism, including an encyclopedia article. And it is in my character to share my knowledge with the next generation.

True to form, I responded, “Yes, ‘terrible’ is right.”

“In the game, though, the requests of the Communists always sound so good: grow more food for the hungry; build better housing for the poor; give everyone free health care. What’s wrong with all that?”

Hearing this thoughtful question put a big smile on my face. I was so proud of my progeny. And an answer was already in my head. “Sons,” I began, “in life, there are many things that sound good but are bad – and many things that sound bad but are good. Suppose someone says, ‘The government should just give everybody whatever they need.’ How does that sound?”

“Good!”

That’s from the introduction to his upcoming book, Unbeatable: The Brutally Honest Case for Free Markets, which makes one central claim:

My central claim is that free-market economics should be rebuilt on the foundation of psychologists’ notion of Social Desirability Bias (SDB). Once you take SDB seriously, you realize that most alleged “market failures” are actually market successes, and most alleged “government successes” are actually government failures.

[…]

To repeat, the lessons of Social Desirability Bias are twofold. First: When you spend your own time and money, actions speak louder than words. Second, when you spend other people’s time and money, words speak louder than actions. Now consider: If everyone spends only their own time and their own money, what do we call it? Among other things, “the free market.” What about when people spend other people’s time and money? Among other things, “government.”

[…]

What exactly does brutal honesty buy us? To start, brutal honesty lets us affirm that the correlation between what is good and what sounds good is quite low. So low, in fact, that we can justifiably praise free markets because they give business incentives to do good stuff that sounds bad and criticize governments because they give politicians incentives to do bad stuff that sounds good. “Good stuff that sounds bad” like: downsizing superfluous workers, hiring tens of millions of low-skilled foreigners, deliberately infecting volunteers with Covid to speed up drug testing, greatly curtailing end-of-life medical care, and leveling historic neighborhoods in San Francisco to build new skyscrapers. “Bad stuff that sounds good” like: free roads, free parking, free college, free health care, licensing medical workers, regulating prescription drugs, requiring building permits, banning recreational drugs, sanctioning employers who hire illegal immigrants, and ensuring a dignified retirement for every American.

Investing in education is individually rational, but collectively destructive

Tuesday, May 13th, 2025

Case Against Education by Bryan CaplanArctotherium summarizes Bryan Caplan’s Case Against Education and notes that the chief implication of the signaling model of education is that investing in education is individually rational, but collectively destructive:

Goodhart’s Law states that when a measure becomes a target, it ceases to be a good measure.

Whenever there is a signal for desirable traits, prospective signalers can focus on either (1) improving those traits or (2) optimizing for the signal itself, making it a worse signal of the underlying traits (i.e., “Goodharting”). Educational attainment has been a target for a very long time, so it’s not surprising that it has been aggressively gamed.

[…]

If you’ve ever spent time tutoring, attended a college admissions prep course, gone to a selective institution like Stuyvesant High School, or done STEM at a selective college, you might have noticed a glaring omission in all of the articles linked in the introduction. Not one of them mentions Asian immigration—except in the context of Asians being harmed by affirmative action at elite colleges.

Stereotypes suggest that Asian immigrants put much more effort into Goodharting education (and other zero-sum status signals) than other groups in the United States. Don’t take my word for it: Yale Law professor Amy Chua wrote an entire book about how she and other Chinese immigrants aggressively (some might say abusively) parented their daughters to maximise status.

[…]

This grind culture is found in first- and second-generation immigrants, and I would expect it to dissipate by the third generation. (Sample sizes are too small to check, but Jews had a similar reputation in mid-20th century America and don’t any more). Pro-immigration conservatives often use this focus on education status-signaling as evidence of immigrant moral superiority, but it is in fact destructive and wasteful.

[…]

Korean private tutoring schools or “hagwons” are infamous. About 78% of Koreans between first and twelfth grade attended a hagwon in 2022, as did 83% of five-year-olds in 2017, and about 95% of Koreans do at some point in their student lives. The average hagwon student attends for 7.2 hours a week, in addition to regular studies and homework, and as a consequence the average South Korean student works 13 hours a day. South Korea spends three times the OECD average on private schooling as a percentage of GDP, the highest in the world. These thousands of hours of studying are all to get high scores on the CSAT, the standardized test that determines most college admissions in South Korea. Government regulations and crackdowns to try to stop South Korean parents from spending so much time and money on wasteful zero-sum signaling have thus far failed.

[…]

About 73% of junior high schoolers in Taiwan attend some form of cram school, for an average of 6.24 hours per week. About 70% of Singaporean students do the same. China is much poorer than South Korea, Taiwan and Singapore, and therefore has far fewer resources to spend on costly signaling. Yet the Chinese education industry grew at 11.3% per year between 2019 and 2023. This provoked a massive government crackdown in 2023–24 that banned people from offering classes in English, Chinese, or mathematics for profit. As with South Korea, demand is so high that the ban led to an explosion in underground quasi-legal tutoring. Note that China also relies primarily on standardized tests for college admissions.

China and India are both infamous for cheating—to the point that there have been riots by students in both countries when students were prevented from cheating by investigators. (China now threatens students with jail time for cheating.) International Asian SAT takers are also notorious for cheating, with common methods including impersonation14, purchasing tests from insiders at College Board, buying questions and answers from test takers in other time zones, and smuggling in vocabulary lists. The persistence of traits would suggest that this doesn’t stop when they enter the US, and indeed anecdotes from teachers suggest that recent Asian immigrants are dramatically overrepresented in cheating rings.

[…]

The SAT score gaps between every major race in the United States have been roughly constant since the late 1970s (Native Americans have small samples), with all trending up and down together in line with test changes, external factors such as the COVID lockdown, the rise of the test prep industry, and other things that might affect scores—with one glaring exception. Asian-Americans have gone from testing approximately equal to whites to breaking away from the pack like Secretariat at Belmont, to the point that they are now about 100 points ahead on average.

[…]

A remarkable 25% of Asians in Michigan (which forces all high schoolers to take the SAT and hence is more representative than other states) scored between 1400 and 1600 versus 4% of white students.

Egypt is the Nile, and the Nile is Egypt

Wednesday, May 7th, 2025

Prisoners of Geography by Tim MarshallThe Nile, the longest river in the world (4,160 miles), Tim Marshall explains (in Prisoners of Geography: Ten Maps That Explain Everything About the World), affects ten countries considered to be in the proximity of its basin — Burundi, the DRC, Eritrea, Ethiopia, Kenya, Rwanda, Sudan, Tanzania, Uganda, and Egypt:

As long ago as the fifth century BCE, the historian Herodotus said: “Egypt is the Nile, and the Nile is Egypt.” It is still true, and so a threat to the supply to Egypt’s seven-hundred-mile-long, fully navigable section of the Nile is for Cairo a concern—one over which it would be prepared to go to war.

Without the Nile, there would be no one there. It may be a huge country, but the vast majority of its 84 million population lives within a few miles of the Nile. Measured by the area in which people dwell, Egypt is one of the most densely populated countries in the world.

Egypt was, arguably, a nation state when most Europeans were living in mud huts, but it was never more than a regional power. It is protected by deserts on three sides and might have become a great power in the Mediterranean region but for one problem. There are hardly any trees in Egypt, and for most of history, if you didn’t have trees you couldn’t build a great navy with which to project your power. There has always been an Egyptian navy—it used to import cedar from Lebanon to build ships at huge expense—but it has never been a blue-water navy.

Modern Egypt now has the most powerful armed forces of all the Arab states, thanks to American military aid; but it remains contained by deserts, the sea, and its peace treaty with Israel. It will remain in the news as it struggles to cope with feeding 84 million people a day while battling an Islamist insurgency, especially in the Sinai, and guarding the Suez Canal, through which passes 8 percent of the world’s entire trade every day. Some 2.5 percent of the world’s oil passes this way daily; closing the canal would add about fifteen days’ transit time to Europe and ten to the United States, with concurrent costs.

Where a man stands on the question of America’s economic relationship with China does not always predict where he falls on questions of military posture

Monday, May 5th, 2025

T. Greer divides policy debates on China into two large buckets:

One is centered on geopolitics, diplomacy, and defense; the other on trade and finance. I was surprised to find that these two dimensions do not map neatly onto each other. Where a man stands on the question of America’s economic relationship with China does not always predict where he falls on questions of military posture.

T. Greer’s Economics Matrix

Those in the right quadrants see U.S. competition with China as a race. Winning the race means being the first to occupy the commanding heights of the future global economy. The country that develops, deploys, and commercializes the next generation of technologies will seize these heights.

Those on the left two quadrants reject this framing. They believe ‘winning’ requires a broader industrial renaissance that revives American manufacturing, restores its industrial capacity, and revitalizes the regions left behind by the tech-driven growth of the last three decades. They argue that orienting industrial policy solely around emerging technologies reinforces the very conditions Trumpism was born in reaction to.

At the bottom are the skeptics. Those pulled towards this position have no faith in bureaucrats. Many distrust the type of person that staffs our bureaucracy (left leaning, academic, inexperienced, etc); others doubt whether it is possible for any bureaucrat, no matter how skilled, to manage the market—especially when this means picking winners and losers in a domain as uncertain as emerging technology. If venture capital cannot pick out winning firms in advance, why think that Congress will do any better?

Those in the upper two quadrants of my diagram have more faith in the administrative state. They are inspired by the developmental states of East Asia and successful defense-industrial programs of the Cold War. They believe those successes can be replicated in 21st century America. From this viewpoint the key bottleneck is not personnel but political will.

In the bottom right, we find the Dynamists—technophilic types who think the greatest obstacles to victory are overregulation, DEI mandates, and the weak ties between Silicon Valley and the White House.

Sharing their technophilia are the fellows in the top right quadrant: the Techno-nationalists. These folks often have backgrounds in national security. That experience biases them towards active government involvement—through defense contracts, R&D funding, and procurement—in “strategic” industries (this group also tends to be most eager to apply export controls on Chinese technology purchases).

On the top left sit the Industrialists. They hope to rebuild legacy industries like steel and automotive manufacturing with tools the Techno-Nationalists would reserve for things like semiconductors or unmanned vehicles. They are unabashed defenders of the full industrial policy suite, from tariffs to strategic planning.

The bottom left quadrant—the Trade Warriors—share Industrialist goals but reject the bureaucratic apparatus (and spectacular budgets) that full-scale industrial policy would require. Their preferred instrument is the tariff. These appeal to people who would like to reshore manufacturing while simultaneously hacking away at the New Deal. A tariffs-first industrial policy is entirely compatible with a shrinking federal footprint—USTR can run all of American trade policy with less than 200 people.

T. Greer’s Geopolitics Matrix

In the right two quadrants we find Trumpists who emphasize the fiscal, cultural, political, and even physical constraints on American military power. They describe America as a nation in both relative and absolute decline. Like Nixon and Kissinger in the 1970s, they believe that we must face these realities soberly, and adopt a national strategy that frees the United States from diplomatic and military commitments it can no longer sustain.

This logic is rejected by the optimists, located on the lefthand side of the diagram. They balance the constraints America faces with the manifest weaknesses of America’s rivals. They acknowledge the problems identified by the pessimists, but tend to describe these problems as self-inflicted. Inadequate defense budgets are not a law of nature, but a choice—with Trump in command America might choose otherwise.

At the top are hard-nosed realists. They argue that force is the foundation of international politics. They understand statecraft as the art of accumulating, preserving, and using power.

Those in the bottom quadrants do not find this view sufficient. They trace connections between the way American power is used abroad and political conditions at home. As the international order goes, the domestic order may follow. Individuals in these quadrants tend to believe that the American government should actively commit itself to strengthening specific cultural ideals—and see no reason why this should not be true in the realm of foreign policy.

In the bottom left quadrant are the Crusaders. This group generally describes U.S.-China competition in ideological terms. In this view the two competing regimes rest on incompatible foundations. In the long run there can be no stable accommodation or compromise between the two powers, as the success of one undermines the domestic stability of the other. As a general rule, Crusaders believe that in a globalized world preserving basic liberties at home means defending them forcefully abroad.

The Culture Warriors in the bottom right quadrant are the Crusaders’ opposites: to them, both the Washington foreign policy establishment and the ‘liberal international order’ are extensions of the liberal domestic order they reject. At best, foreign policy interventionism is a distraction from the culture war they want to wage at home; at worst, it erodes the very liberties that Crusaders claim to champion.

The top quadrants are more traditional. The Prioritizers on the top right do not share the Culture Warriors’ ideological objections to the international order, but they do think this order demands more from America than she currently has the capacity to give. They consequently argue that the United States must shed many of its international commitments so that it can concentrate on the problem posed by China.

The Primacists in the top left quadrant share the realpolitik language of the Prioritizers, but believe the Prioritizers do not take the connections between China, Russia, North Korea, and Iran as seriously as they should. They believe that America does have the potential power to manage global commitments—if only we can muster the will to do so. They believe that Trump is the only man capable of supplying that will.

While most students are not creative, heavy K-12 investment fertilizes society’s creative potential by giving everyone the mental tools to innovate

Monday, April 28th, 2025

Case Against Education by Bryan CaplanWhen Bryan Caplan started writing The Case Against Education, he expected to confront a massive research literature claiming that education definitely has a massive effect on economic growth:

Imagine my surprise, then, when I discovered that — despite overwhelming pro-education bias — the massive research literature on education and growth hadn’t found much of anything. Contrary to conventional stories about the positive externalities of education, mainstream estimates of education’s national rate of return were consistently below estimates of education’s individual rate of return. Just as the signaling model predicts.

[…]

New ideas are the root of progress. People today live far better than they did in 1800 because people today know far more than they did in 1800. Earth in 1800 contained all the materials required to make an airplane or iPad. But until the right ideas came along, the materials lay fallow. Why did mankind have to wait so long for the right ideas to arrive? Part of the answer is that ideas, once created, are cheap to copy. As a result, innovators glean only a sliver of the value they create.

These truisms lead straight to a stirring sermon on “Education, Foundation of a Dynamic Society.” While most students are not creative, heavy K-12 investment fertilizes society’s creative potential by giving everyone the mental tools to innovate. Heavy investment in colleges and universities, similarly, brings top students up to the research frontier and provides innovation leaders with employment and funding. If consistently investing 10% of national income in education elevates the annual growth rate from 1% to 2% without any further benefits, the social return is a hefty 11%.

Unfortunately, this stirring sermon is wishful thinking.

[…]

While the evidence is messy, education seemingly does less for countries than individuals. At the national level, it’s not clear that education increases living standards at all, much less that education makes countries’ living standards increase at a faster rate. If you can’t tell if your machine moves, you may safely assume it’s not a perpetual motion machine.

Although there was a Ruritanian feel to some of these titles, they all came with lands and incomes that were real enough

Thursday, April 24th, 2025

Napoleon by Andrew RobertsIn January 1806 Napoleon made his first really significant error of statesmanship, Andrew Roberts explains (in Napoleon: A Life), when he offered his brother Joseph the throne of Naples, saying: ‘It will become, like Italy, Switzerland, Holland and the three kingdoms of Germany, my federal states, or, truly, the French Empire’:

Joseph was crowned king on March 30, and Louis became king of Holland in June. This reversion to the pre-revolutionary system of governance struck at the meritocratic system for which Napoleon had initially stood, installed largely inadequate brothers in key positions and stoked up problems for the future. In December 1805 Napoleon was writing to Joseph of Jérôme: ‘My very positive intention is to let him go to prison for debt if his allowance isn’t enough … It’s inconceivable what this young man costs me for causing nothing but inconvenience, and being useless to my system.’

[…]

Yet within two years he had made the utterly unchanged Jérôme king of Westphalia. There were plenty of local pro-French reformers whom he could have installed in power – Melzi in Italy, Rutger Jan Schimmelpenninck in Holland, Karl Dalberg in Germany, Prince Poniatowski in Poland, for example, even Crown Prince Ferdinand in Spain – who would have done a far better job than most Frenchmen, let alone squabbling, vain, disloyal and often incompetent members of the Bonaparte family.

[…]

Holland had astonished the world in its heyday, defying Imperial Spain, moving its Stadtholder, William of Orange, to become king of England, founding a global empire, buying Manhattan, inventing capitalism and glorying in the golden age of Grotius, Spinoza, Rembrandt and Vermeer. Yet by the late eighteenth century, Britain had taken over most of Holland’s colonies, often without a fight, her shipping and overseas trading systems were all but destroyed, her cities were declining in population (in sharp contrast to the rest of Europe), and in manufacturing only gin production was doing well.

[…]

One immediate problem was that the Pope refused to recognize Joseph as king of Naples, which together with his designation of Jérôme’s wedding as against canon law began an entirely unnecessary quarrel between Napoleon and Pius VII that was to lead to the seizure of papal lands in June 1809 and Napoleon’s excommunication.

[…]

Murat became the ruling Grand Duke of Berg (roughly the Ruhr valley) in April, Talleyrand became Prince of Benevento in Italy (a former papal principality south-east of Naples), Bernadotte was made Prince of Ponte Corvo (an entirely artificial principality created out of another former papal possession in south Lazio near Naples), Fouché was given the hereditary dukedom of Otranto, and Berthier became Prince of Neuchâtel on the condition that he got married.

[…]

Although there was undoubtedly a Ruritanian feel to some of these titles, and they were duly sniggered at by Bourbon snobs and propagandists, they all came with lands and incomes that were real enough.

[…]

Keen to establish that he wasn’t impotent, Napoleon impregnated Éléonore, who on December 13 gave birth to his illegitimate child, Comte Léon (who was rather unsubtly given the last four letters of his father’s name). The experiment reassured Napoleon that he could found a dynasty if he were to divorce Josephine. It also solved Éléonore’s financial problems, especially once Napoleon found her an army lieutenant to marry and gave her a large dowry.

Ruritanian!

Napoleon decreed that the widow of every soldier killed at Austerlitz would receive an annual pension of 200 francs for life

Thursday, April 17th, 2025

Napoleon by Andrew RobertsSoon after the battle of Austerlitz, Andrew Roberts explains (in Napoleon: A Life), Napoleon decreed that the widow of every soldier killed there would receive an annual pension of 200 francs for life, with the widows of generals receiving 6,000 francs:

He also undertook to find employment for the sons of every fallen soldier, and allowed them to add ‘Napoleon’ to their baptismal names. He could afford this, and much else besides, thanks to the return of financial confidence that swept the country as government bonds leaped from 45 to 66 per cent of their face value on the news of the victory.

Joe Lonsdale presents a blueprint for FDA reform

Sunday, April 13th, 2025

The new FDA report from Joe Lonsdale and team is impressive, Alex Tabarrok says, as he shares a few of the recommendation which caught his eye:

In the U.S., anyone running a clinical trial must manufacture their product under full Good Manufacturing Practices (GMP) regardless of stage. This adds enormous cost (often $10M+) and more importantly, as much as a year’s delay to early-stage research. Beyond the cost and time, these requirements are outright irrational: for example, the FDA often requires three months of stability testing for a drug patients will receive after two weeks. Why do we care if it’s stable after we’ve already administered it? Or take AAV manufacturing—the FDA requires both a potency assay and an infectivity assay, even though potency necessarily reflects infectivity.

This change would not be unprecedented either. By contrast, countries like Australia and China permit Phase 1 trials with non-GMP drug with no evidence of increased patient harm.

[…]

With modern AI and digital infrastructure, trials should be designed for machine-readable outputs that flow directly to FDA systems, allowing regulators to review data as it accumulates without breaking blinding. No more waiting nine months for report writing or twelve months for post-trial review. The FDA should create standard data formats (akin to GAAP in finance) and waive documentation requirements for data it already ingests. In parallel, the agency should partner with a top AI company to train an LLM on historical submissions, triaging reviewer workload so human attention is focused only where the model flags concern. The goal is simple: get to “yes” or “no” within weeks, not years.

[…]

When negative results aren’t published, companies duplicate failed efforts, investors misallocate capital, and scientists miss opportunities to refine hypotheses. Publishing all trial outcomes — positive or negative—creates a shared base of knowledge that makes drug development faster, cheaper, and more rational. Silence benefits no one except underperforming sponsors; transparency accelerates innovation.

The FDA already has the authority to do so under section 801 of the FDAAA, but failed to adopt a more expansive rule in the past when it created clinicaltrials.gov. Every trial on clincaltrials.gov should have a publication associated with it that is accessible to the public, to benefit from the sacrifices inherent in a patient participating in a clinical trial.

[…]

We need multiple competing approval frameworks within HHS and/or FDA. Agencies like the VA, Medicare, Medicaid, or the Indian Health Service should be empowered to greenlight therapies for their unique populations. Just as the DoD uses elite Special Operations teams to pioneer new capabilities, HHS should create high-agency “SWAT teams” that experiment with novel approval models, monitor outcomes in real time using consumer tech like wearables and remote diagnostics, and publish findings transparently. Let the best frameworks rise through internal competition—not by decree, but by results.

China’s trade with the U.S. resembles that of a dominant manufacturing nation with a resource colony

Wednesday, March 12th, 2025

Governments are resorting to tariffs and industrial policy, not because their prime ministers and presidents flunked Econ 101, Michael Lind says, but because they do not want their economies deindustrialized by a flood of low-priced, state-subsidized Chinese imports:

The Chinese import threat is why Canada has levied a 100 percent tariff on imported Chinese EVs, along with a 25 percent surtax on Chinese steel and Chinese aluminum. The European Union has slapped electric vehicles made in China with tariffs ranging from 7.8 percent to 35.3 percent, on top of the standard European tariff of 10 percent for imported automobiles. India imposes tariffs of 70 percent to 100 percent on imported electric vehicles from China and other countries.

Like the leaders of Canada, the EU, and India, former president Joe Biden is not generally thought of as a disciple of the Donald Trump school. But last May, the Biden administration imposed new duties not only on Chinese EVs but also on Chinese-made steel and aluminum, semiconductors, batteries, critical minerals, solar cells, ship-to-shore cranes, and medical products. According to a Biden White House press release in May:

China’s forced technology transfers and intellectual property theft have contributed to its control of 70, 80, and even 90 percent of global production for the critical inputs necessary for our technologies, infrastructure, energy, and health care — creating unacceptable risks to America’s supply chains and economic security.

In December, the Biden administration announced new restrictions on the export of chip manufacturing to China. The Biden White House even taunted the first Trump administration for not having gone far enough with its protectionist policies: “The previous administration’s trade deal with China failed to increase American exports or boost American manufacturing as it had promised.”

[…]

In 2023 China produced roughly half of the world’s crude steel. China is the world’s largest automobile maker, accounting for a third of the global total. China’s state-backed aerospace company, the Commercial Aircraft Corporation of China (COMAC), threatens to take global market share from America’s Boeing and Europe’s Airbus. China is also the world’s largest commercial shipbuilder, responsible for more than half of all shipbuilding. America’s share of the global shipbuilding market is 0.10 percent. Yes, zero point 10 percent. Most of the goods shipped across the oceans to and from the U.S. are in ships built in China (51 percent), South Korea (28 percent), or Japan (15 percent). During the Covid pandemic, Americans were shocked to learn how dependent the U.S. is on medical supplies from China, which provides around 30 percent of active pharmaceutical ingredients used in drugs by value and 78 percent of the vitamins in the U.S. A single Chinese company, DJI, controls 90 percent of the American drone market, including 90 percent of the drones used by American police departments and first responders.

China’s trade with the U.S. resembles that of a dominant manufacturing nation with a resource colony. In 2023, China’s main exports to the U.S. were broadcast equipment, computers, and office machine parts. Apart from integrated circuits, one of the few industries in which the U.S. retains an advantage, America’s main exports to China in 2023 were soybeans and crude petroleum, with the value of soybeans ($15 billion) more than twice that of silicon chip exports ($7 billion).

The US VC industry is causally responsible for the rise of one-fifth of the current largest 300 US public companies

Tuesday, February 25th, 2025

Will Gornall and Ilya A. Strebulaev examine The Economic Impact of Venture Capital:

Venture capital-backed companies account for 41% of total US market capitalization and 62% of US public companies’ R&D spending. Among public companies founded within the last fifty years, VC-backed companies account for half in number, three quarters by value, and more than 92% of R&D spending and patent value. The US did not spawn top public companies at a higher rate than other large, developed countries prior to 1970s ERISA reforms, but produced twice as many after it. Using those reforms as a natural experiment suggests that the US VC industry is causally responsible for the rise of one-fifth of the current largest 300 US public companies and that three-quarters of the largest US VC-backed companies would not have existed or achieved their current scale without an active VC industry.

Despite severe economic stagnation, Japan is still a desirable place to live and work

Monday, February 24th, 2025

For more than three decades, Maxwell Tabarrok notes, Japan has endured near complete economic stagnation:

But despite severe economic stagnation, Japan is still a desirable place to live and work. The major costs of living, like housing, energy, and transportation are not particularly expensive compared to other highly-developed countries. Infrastructure in Japan is clean, functional, and regularly expanded. There is very little crime or disorder, and almost zero open drug use or homelessness. Compared to a peer country like Britain, whose economic stagnation over the past 30 years has been less severe, Japan seems to enjoy a higher quality of life.

[…]

Japan’s zoning code is set at the national level and therefore tends to be much less restrictive than the local zoning codes found in the West. Its national system lays out just 12 inclusive zones, which means the permitted building types carry over as you move up the categories, allowing mixed-use development by default. This compares favorably to zoning codes in the US which often have multiple dozens of exclusive land use categories. Even the most restrictive category in Japan’s system, shown in the top left (below), allows people to run small shops and offices out of their homes. There are floor-area-ratio limits and setbacks, but they are modest, and there is no distinction between single and multi-family housing units within these limits.

For environmental permitting, Japan mostly relies on explicit standards for environmental impact, rather than a lengthy permitting process where applicants must write detailed reports about possible alternatives and mitigation measures under threat of lawsuit, as in the US. Japan does have a copy-cat National Environmental Policy Act (NEPA) procedural environmental law that was enacted in 1997, but it has two important differences that prevent its evolution into the procedural morass seen in other countries.

First is explicit numerical standards for which projects must go through the impact statement process, rather than the hand-waving ambiguities of NEPA. These standards generally only include large infrastructure projects like a port extension exceeding 300 hectares. Some residential projects are covered, but only those which exceed 75 hectares in area. Only 854 environmental impact assessments have been started in Japan since the act passed, and there have been zero for residential construction projects.

Second, the completed environmental assessments are harder to sue over than in Western countries. Plaintiffs need to have a personal and legally protected injury to have standing, rather than a generalized concern for the environment as in the US. Plus, the greater specificity of when the law applies and a court that has a much more deferential attitude towards agency determinations means the lawsuits are harder to win.

Permissive national zoning and an absence of environmental proceduralism leads to Japan having the highest rate of housing construction and the lowest home price to income ratio in the OECD.

[…]

Japan’s social order is incredibly valuable. The annual cost of crime in the United States is around $5 trillion dollars which is 18% of GDP. Higher crime rates would threaten the high-density urbanism which makes Japanese cities so affordable and desirable.

Who should skip college?

Thursday, February 20th, 2025

The central thesis of The Case Against Education, Bryan Caplan explains, is that education has a low (indeed, negative) social return, because signaling, not building human capital, is its main function — but the selfish return to education is negative, too, for many students, depending on ability:

First and foremost: know thyself.

  • Don’t base your life choices on what your immediate social circle finds “demeaning.” As Dirty Jobs repeatedly proves, people routinely get used to jobs that initially disgust them.
  • Don’t base your life choices on whether parents and teachers constantly tell you that you’re “smart.” They’re not trustworthy assessors of your intelligence.
  • Don’t rule out options because they require “declining status.” If your family’s initial status is above average, declining status is the mathematical norm. That’s what “regression to the mean” means.

What should you do instead? First and foremost: Get objective evidence on your own intelligence.

  • If your SAT score is at 1200 or greater, your odds of successfully finishing a “real” major are quite good.
  • If your SAT is in the 1100-1200 range, it’s a toss-up.
  • If you’re in the 1000-1100 range, only try college if your peers consider you an annoyingly hard worker.
  • Below 1000? Don’t go.

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What will go wrong if you ignore my advice? The most likely scenario is that you spend years worth of time and tuition, then fail to finish your degree. Maybe you’ll keep failing crucial classes. Maybe you’ll keep switching majors. Maybe you’ll die of boredom. The precise mechanism makes little difference: Since about 70% of the college payoff comes from completion, non-completion implies a terrible return on investment.