I recently asked Grok, how much more does an Indian IT worker make in the US than in India?
Absolute Difference: An Indian IT worker earns approximately $116,600 more per year in the US compared to India ($125,000 vs. $8,400).
Multiplier: This represents about 15 times the salary in India (125,000 / 8,400 ? 14.9x).
Wow.
The real data on education is more than bad enough, Max Tabarrok says, to merit removing or reforming the Department of Education:
Inflation adjusted spending per pupil tripled since 1970 while reading scores haven’t budged.
There has also been an astounding amount of credential inflation. The amount of time people spend in school has increased by more than three years since the 1970s as more people graduate high school and college, but performance on tests of skill or human capital is completely stagnant.
This suggests, a la Bryan Caplan’s Case against education, that many of these extra years of schooling are actually a socially inefficient zero-sum competition where it pays individually to get the most schooling and come out on top of your peers, but everyone would be better off if people invested less time and money in competing. Hundred billion dollar subsidies to student loans and higher education institutions have exacerbated this zero-sum race for little material gain.
Evidence for this: The NCES ran two rounds of a literacy test, one in 1992 and one in 2003. The overall average score on the test didn’t change (276 vs 275 out of 500), but within every educational attainment group scores dropped massively.
High school dropouts got less literate on average because the highest scoring dropouts in the 90s became the lowest scoring graduates in the 2000s as standards were lowered and more students were pushed through into more education. Literacy scores among Graduate degree holders dropped by 13-17 points in a decade. If a graduate degree cannot even teach you how to read, it’s probably not having large effects on any other more complex forms of human capital.
This means that across this decade of rising educational attainment, no one improved their reading skills at all. Instead, the standards for graduating from each level of schooling were just lowered and people spent more years slogging through high school or college.
Should we have kept the American Empire?, Max Tabarrok asks:
Note that the question of whether the US should have relinquished its maximum territorial extent is different than the one facing America in 1865 or the question of expanding American borders today. There, you have to consider the substantial costs of actually conquering territory in war. Holding on to land already conquered is less costly than conquering anew.
[…]
The first thing to notice when considering this question is that America did not actually give up all of its imperial conquests. Hawaii, Puerto Rico, the Virgin Islands, a smattering of pacific islands, Alaska, and arguably even much of the American Southwest are spoils of conquest or purchase.
No one seriously considers giving up any of the pieces of our imperial history that we kept. The Hawaiian independence movement is perhaps the most popular, but that sets a low upper bound. This acceptance of the pieces of empire we retained suggests that if we had kept more of our 1918 peak territory, people would accept those additional pieces just as easily today.
Reluctance to give up what we kept isn’t just status quo bias. The economic performance of the states and territories still within the US compared to the nations we once controlled but are independent today is evidence that American annexation has large positive effects.
[…]
Integration under the same national umbrella seems like about the only way to sustain and spread free trade and immigration. The US can’t even manage it with Canada. The principal domestic supporters of Philippine independence, for example, were American farmers who didn’t want to face competition from tariff-free Filipino sugar, and nativists who didn’t want immigration from “alien races.”
A final general argument is, perhaps surprisingly, political legitimacy. The nations that America was closest to annexing are not only economic underperformers, they also tend to be undemocratic and authoritarian. Recently, Panama and the Dominican Republic are probably exceptions here with relatively successful and stable governance.
When his best friend in Austin quips, “It’s great living in a blue city in a red state,” Bryan Caplan is tempted to reply, “ We really don’t know what it would be like to live in a red city in a red state — or even a red city in a blue state.”
Why? Because they barely exist. Zero cities with over one million people currently have Republican mayors.
From the standpoint of the textbook Median Voter Model, this is awfully puzzling. Even if urbanites are extremely left-wing, you would expect urban Republicans to move sharply left to accommodate them. Once they do so, the standard prediction is that Republicans will win half the time. But plainly they don’t.
One possibility is that Republican politicians are too stubbornly ideological to moderate. But the idea that virtually no one in the Republican Party is power-hungry enough to tell urban voters what they want to hear is deeply implausible.
The better explanation, as I’ve explained before, is that urban voters have party preferences as well as policy preferences. They don’t just want left-wing policies; they want left-wing policies delivered by the Democrats.
In Western Europe, Peter Frost notes, a consensus emerged on the need to execute violent males so that law-abiding people could live in peace:
By the Late Middle Ages, courts were condemning to death between 0.5 and 1% of all men in each generation, with perhaps just as many dying at the scene of the crime or in prison while awaiting trial. The pool of violent men dried up until most murders occurred under conditions of jealousy, intoxication or extreme stress. As a result, the homicide rate fell from 20–40 homicides per 100,000 in the Late Middle Ages to 0.5–1 per 100,000 in the mid-20th century.
People could now get ahead through trade and work, rather than through theft and plunder. This new, pacified environment favored the growth of the market economy and the success of those who possessed the necessary skills, especially literacy, numeracy and budgeting. They would become the middle class.
DNA from human remains is showing us how different populations have evolved over time, Peter Frost explains, not only during prehistory but also well into recorded history:
This evolution has affected a wide range of mental and behavioral traits: cognitive ability, time preference, propensity for violence, monotony avoidance, rule following and empathy, among others.
[…]
Why did the North Sea overtake the Mediterranean in international trade? Certainly, the latter region was adversely affected by the Arab conquests of the Middle East and North Africa. But the economic decline began much earlier. Shipwrecks on the bottom of the Mediterranean have been dated overwhelmingly to the time between the first century BC and the first century AD. Silver mining in Spain and Cyprus likewise fell sharply after the first century AD, as shown by lead contamination of Greenland’s ice sheet.
This decline occurred not only before the Arab conquests of the seventh and eighth centuries, but also before the barbarian invasions of the fourth and fifth and the Imperial Crisis of the third. And it seems inconsistent with modern economic thinking: bigger markets should create economies of scale, as well as a better match between supply and demand. So what caused things to go wrong?
[…]
One cause was the low level of social trust. People trusted only their close friends and relatives, keeping everyone else at arm’s length. As a result, economic activity was bottled up within family networks, the major exception being physical marketplaces where buyer and seller could meet face to face. Because the market principle remained trapped within small pockets of space and time, it could not generalize to all transactions in Roman society. An economy of markets never evolved into a true market economy.
[…]
One [other cause] was a deterioration of physical health, as indicated by the length of long bones belonging to over 10,000 adult men and women born between 500 BC and 750 AD. The data show a steady decrease from the second century BC, reaching a low point in the second half of the first century AD, followed by a slow recovery and then a dramatic recovery from the fifth century AD.
[…]
The study’s authors concluded that the Romans created not only an integrated Mediterranean economy but also “the first integrated disease regime”.
[…]
The other cause was a decrease in average cognitive ability. Fewer people could master the skills of numeracy, literacy and budgeting that are so essential to economic activity.
This decline was driven by an uncoupling of reproductive success from economic success—as I argued in a previous article. The wealthy were no longer using their wealth to bring children into the world. A rich man might prefer to leave his wife for a younger woman of low social status, often adopting her children. Or he might never marry. The resulting fall in cognitive ability can be seen in DNA retrieved from the human remains of that period.
[…]
The North Sea and the Baltic form the core zone of certain tendencies that, for at least a millennium, have prevailed north and west of a line running from Trieste to St. Petersburg, i.e., the “Hajnal line.” These are tendencies toward individualism, the nuclear family, late marriage and solitary living, as well as a greater willingness to trust strangers and form bonds of impersonal prosociality.
Such tendencies didn’t come into being with the market economy — they arose long before for an unrelated reason. But they did provide the best behavioral conditions for a market economy once the possibility of creating one emerged.
Unlike economics or science, geopolitics is zero sum , Arctotherium reminds us — it doesn’t just matter what the United States is capable of, but what the United States is capable of compared to its competitors:
Objectively, the USA is far more powerful in 2025 than in 1945, but geopolitically it is much weaker.
It’s not impossible for states to deliberately use brain drain for geopolitical gain. This usually takes the form of what I call the “foreign experts model”. You identify specific areas in which national industry is inferior to foreign counterparts, and then invite small numbers of foreign experts in these areas (often many fewer than 10,000) to come and teach locals their skills, usually by paying them. The key components of the foreign expert model are:
- It is demographically insignificant.
- Foreign experts are expected to transfer their skills and knowledge to native students.
- Foreign experts are recognized as foreign. There’s no expectation that they naturalize (though in some cases they do, and because of (1) this doesn’t matter much) and they’re usually excluded from political positions. They may have influence and authority in their domains of expertise, but not over the nation as a whole. This is crucial because giving up control of the state to gain geopolitical power is putting the cart before the horse.
- Foreign experts are paid large sums of money or otherwise rewarded (usually above market value) for their expertise.
An illustrative example of the foreign experts model comes from the history of Saudi Aramco. Saudi Arabia has massive and easily-exploitable oil reserves, but did not have the local expertise to drill them after WWII. Relying on a wholly American-operated company would have left the country dependent on American goodwill and with little leverage. Iran and Venezuela chose to destructively nationalize their foreign-operated oil companies, while Equatorial Guinea and Nigeria allow foreign oil companies to operate autonomously in exchange for bribes and payouts. The Saudis took a wiser path:
At the very start of Aramco, the company was entirely owned and operated by Americans aside from menial labor. However, the Saudi government inserted a clause into their contract with the corporation requiring the American oil men to train Saudi citizens for management and engineering jobs. The Americans held up their end of the bargain, and over time, more and more Saudis took over management and technical positions. This steadily increased the bargaining power of the Saudi government, which periodically renegotiated its contract with the Americans over decades to get a greater share of the profits in exchange for more oil exploration or diplomatic concessions.
In 1973 and 1974, the Saudi government authorized two big final buy-outs of Aramco. The prices were not disclosed publicly, but the consensus is that the American oil companies were well-compensated, and that’s after they had made enormous profits for 30 years. This left the oil companies on good terms with the Saudis who were happy to employ them as consultants and specialists. Today, 80% of Aramco’s employees are Saudi, as well as all executives, though surprisingly not all board members.
History is full of similar examples. The English government invited German John Hurdegen to serve as “master of the assays of our mines” in 1545, paying him a salary of 40 pounds per year (approximately 32 times the annual wages of an English laborer at the time) and developed several other mines using German expertise. Small numbers of German engineers, surveyors, and managers brought superior German mining techniques to England, where they taught their skills to locals. Contrast this with the approach favored by Eastern European rulers, who transplanted entire colonies of Germans into their domains for their mining (and other) skills rather than having them teach locals.
The Russian state under Peter the Great recruited 60 Dutch shipbuilders and around 750 Western European officers, technicians, and academics to found the Russian Navy. While we lack precise information on most of them, one English hydraulic engineer, John Perry, was offered 300 pounds (approximately 60 times the annual cash wages of an English laborer in 1700) plus expenses and bonuses for completed projects, for his service.
Meiji Japan used European and American military and industrial experts to build up their army and economy and colonize Hokkaido. The total number of “hired foreigners” (O-yatoi, a term coming from Yatoi, meaning “person hired temporarily”) was 2,000-3,000, and their combined salaries reached a third of the national budget in 1874. The Japanese government “did not consider it prudent to let them settle in Japan permanently,” and they were replaced by Japanese students once the latter finished training and learning.
The People’s Republic of China pays foreign experts in many fields enormous sums of money to come to China temporarily and share their skills with the Chinese, despite China having the lowest proportion of foreign-born inhabitants on the planet.
[…]
America has its own history of taking in small numbers of extraordinarily talented immigrants. The two most famous examples are the 1930s exodus of European scientists to the US (where they were extremely important to the Manhattan Project) and Operation Paperclip. Both fit the foreign experts model.
The total number of European scientific emigres in the 1930s, which included such luminaries as Enrico Fermi, John von Neumann, Edward Teller and Albert Einstein, was demographically insignificant—only a few thousand (less than half of the number of illegal immigrants crossing the Mexican border every single day under the Biden Administration). In fact, the 1930s are the only decade in American history with net-negative immigration.
Far from immigration being America’s superpower, the exodus of European scientists shows how it is possible to gain the benefits of extraordinary talent with almost no immigration at all.
Latin America, particularly its south, is proof, Tim Marshall explains (in Prisoners of Geography: Ten Maps That Explain Everything About the World), that you can bring the Old World’s knowledge and technology to the new, but if geography is against you, then you will have limited success, especially if you get the politics wrong:
In the United States, once the land had been taken from its original inhabitants, much of it was sold or given away to small landholders; by contrast, in Latin America the Old World culture of powerful landowners and serfs was imposed, which led to inequality. On top of this, the European settlers introduced another geographical problem that to this day holds many countries back from developing their full potential: they stayed near the coasts, especially (as we saw in Africa) in regions where the interior was infested by mosquitoes and disease. Most of the countries’ biggest cities, often the capitals, were therefore near the coasts, and all roads from the interior were developed to connect to the capitals but not to one another.
In some cases, for example in Peru and Argentina, the metropolitan area of the capital city contains more than 30 percent of the country’s population.
[…]
Mexico is growing into a regional power, but it will always have the desert wastelands in its north, its mountains to the east and west, and its jungles in the south, all physically limiting its economic growth. Brazil has made its appearance on the world stage, but its internal regions will remain isolated from one another; and Argentina and Chile, despite their wealth of natural resources, will still be far farther away from New York and Washington than are Paris and London.
[…]
Their total population (including the Caribbean) is 600 million people, and yet their combined GDP is equivalent to that of France and the UK, which together comprise 120 million people.
[…]
At its widest point, west to east, from Brazil across to Peru, it is 3,200 miles. On the western side is the Pacific, on the other the Gulf of Mexico, the Caribbean Sea, and the Atlantic. None of the coastlines have many natural deep harbors, thus limiting trade.
Central America is hill country with deep valleys, and at its narrowest point is only 120 miles across. Then, running parallel to the Pacific, for 4,500 miles, is the longest continuous mountain chain in the world—the Andes. They are snow-capped along their entire length and mostly impassable, thus cutting off many regions in the west of the continent from the east. The highest point in the Western Hemisphere is here—the 22,843-foot Aconcagua Mountain—and the waters tumbling down from the mountain range are a source of hydroelectric power for the Andean nations of Chile, Peru, Ecuador, Colombia, and Venezuela. Finally, the land descends, forests and glaciers appear, we are into the Chilean archipelago, and then—land’s end. The eastern side of Latin America is dominated by Brazil and the Amazon River, the second longest in the world after the Nile.
[…]
The relative flatland east of the Andes and temperate climate of the lower third of South America, known as the Southern Cone, are in stark contrast to the mountains and jungle farther north and enable agricultural and construction costs to be reduced, thus making them some of the most profitable regions on the entire continent—whereas Brazil, as we shall see, even has difficulty moving goods around its own domestic market.
[…]
In the nineteenth century, many of the newly independent countries broke apart, either through civil conflict or cross-border wars, but by the end of that century the borders of the various states were mostly set. The three richest nations—Brazil, Argentina, and Chile—then set off on a ruinously expensive naval arms race, which held back the development of all three.
[…]
Particularly bitter is the relationship between Bolivia and Chile, which dates back to the 1879 War of the Pacific in which Bolivia lost a large chunk of its territory, including 250 miles of coastline, and has been landlocked ever since. It has never recovered from this blow, which partially explains why it is among the poorest Latin American countries. This in turn has exacerbated the severe divide between the mostly European lowlands population and the mostly indigenous peoples of the highlands.
[…]
Despite the fact that Bolivia has the third-largest reserves of natural gas in South America it will not sell any to Chile, which is in need of a reliable supplier. Two Bolivian presidents who toyed with the idea were thrown out of office and the current president, Evo Morales, has a “gas to Chile” policy consisting of a “gas for coastline” deal, which is dismissed by Chile despite its need for energy. National pride and geographical need on both sides trump diplomatic compromise.
[…]
Guatemala claims Belize as part of its sovereign territory but, unlike Bolivia, is unwilling to push the issue. Chile and Argentina argue over the Beagle Channel water route, Venezuela claims half of Guiana, and Ecuador has historical claims on Peru.
[…]
In its far north, Mexico has a two-thousand-mile-long border with the United States, almost all of which is desert. The land here is so harsh that most of it is uninhabited.
[…]
All Mexicans know that before the 1846–48 war with the United States the land that is now Texas, California, New Mexico, and Arizona was part of Mexico. The conflict led to half of Mexico’s territory being ceded to the United States. However, there is no serious political movement to regain the region and no pressing border dispute between the two countries. Throughout most of the twentieth century they squabbled over a small piece of land after the Rio Grande changed course in the 1850s, but in 1967 both sides agreed the area was legally part of Mexico.
[…]
Mexico’s major mountain ranges, the Sierra Madres, dominate the west and east of the country and between them is a plateau. In the south, in the Valley of Mexico, is the capital—Mexico City—one of the world’s megacapital cities with a population of around 20 million people.
On the western slopes of the highlands and in the valleys the soil is poor, and the rivers of limited assistance in moving goods to market. On the eastern slopes the land is more fertile, but the rugged terrain still prevents Mexico from developing as it would like. To the south lie the borders with Belize and Guatemala.
[…]
The cartels responded by creating a land route—up through Central America and Mexico, and into the American Southwest. This in turn led the Mexican drug gangs to get in on the action by facilitating the routes and manufacturing their own produce. The route partially follows the Pan-American Highway, which runs south to north up the continent. Originally designed to move goods in each direction to a variety of countries, it is now also used to move drugs north to the United States. The multibillion-dollar business sparked local turf wars, with the winners using their new power and money to infiltrate and corrupt the Mexican police and military and get inside the political and business elites.
[…]
Central America has little going for it by way of geography but for one thing. It is thin. So far, the only country to gain advantage from this has been Panama, but with the arrival of new money from China that may be about to change.
[…]
In 1914, the newly built, fifty-mile-long, American-controlled Panama Canal opened, thus saving ships an eight-thousand-mile journey from the Atlantic to the Pacific Ocean and leading to economic growth in the canal region. Since 1999, the canal has been controlled by Panama, but is regarded as a neutral international waterway that is safeguarded by the US and Panama navies. And therein, for the Chinese, lies a problem.
[…]
The Panama Canal may well be a neutral passageway, but at the end of the day, passage through it is dependent on American goodwill. So, why not build your own canal up the road in Nicaragua? After all, what’s $50 billion to a growing superpower?
[…]
In the fall of 2016 the project was not going well. Mr. Wang lost an estimated 85 percent of his fortune in the Chinese stock market crash of September 2015. Most construction work was delayed, but all sides insisted the project would succeed.
[…]
Beijing now sells or donates arms to Uruguay, Colombia, Chile, Mexico, and Peru, and offers them military exchanges. It is trying to build a military relationship with Venezuela, which it hopes will outlast the Bolivarian revolution if and when it collapses. The arms supplies to Latin America are relatively small-scale but complement China’s efforts at soft power. Its sole hospital ship, Peace Ark, visited the region in 2011. It is only a three-hundred-bed vessel, dwarfed by the American one-thousand-bed version that also visits, but it was a signal of intent and a reminder that China increasingly “gets” soft power.
Garett Jones has finished his Singapore Trilogy, Hive Mind, 10% Less Democracy, and The Culture Transplant:
One way to think about the book is to think of the person vs. situation debate in psychology. The question was this: what explains people’s behaviors better, their current life situation broadly speaking or their stable persona? The latter we now call trait theory — because it is about people’s stable psychological dispositions — and won the evidence debate, at least, academically. Things haven’t improved much for situationism since then with the downfall of previously popular experiments such as the Stanford prison experiment, and Rosenhan’s psych ward study. So instead of thinking just about typical westerners, we can also think of humanity at large. Sometimes people move around (immigrate). Thinking of each ethnic group as a person to be explained, we can thus look at whether the same ethno-person behaves similarly in different situations, say, whether they live in Somalia, Sweden, or USA. Here we must clarify that there are some issues with measurement of many psychological traits. We don’t really, in general, have perfect scales so that we can track people’s absolute standing on some trait across time and place (we simply don’t know how to construct such tests). We can, however, track relative differences. So we can see whether Somalis living in Somalia (taken as a country) perform well economically, and we can check whether Somalis who moved to USA or Sweden perform well economically. In each case we find that they do rather poorly everywhere we find them, again, taken as a group. We can repeat this method for any other set of natio-ethno groups across various countries, to see whether the relative differences remain relatively consistent across situations.
[…]
Anyway, so if you count patents or anything else really, you will find that a few large and relatively productive countries produce most of everything new in the world.
[…]
The world in general depends on the right tail inventing, innovating, researching, and building. This is just as true within a country as it is between them. As such, everybody loses when the few clusters in the world that contain the most such right tail people are disrupted. We see this disruption all over the Western world, but especially in the most critical places. Time and money is wasted on diversity (read: anti-meritocratic) hiring, communist-like indoctrination, and the parading of the mentally ill in public spaces (drag shows, pride events). This must come at a cost of progress. Criminal and unproductive foreigners are imported to the most productive places on Earth where they can cause maximum disruption (the capitals of Western Europe, Californian cities). This is crazy and not even in migrants’ own long-term interest. However, modern Western politics seems to have forgotten everything about long-term interests (massive COVID debts, short-sighted democratic vote buying). I could go on, but you get the point.
Jones spends a chapter talking about the unique Chinese experience in Asia. This is basically just the thesis of
World on Fire by Amy Chua, but from a positive perspective. Not about ethnic conflict, but about how much better off the South Asians with more Chinese neighbors are. The Chinese may own most of their countries, but if their own salaries and standard of living increases by some substantial percentage, we have to ask ourselves how much self-determination is worth.[…]
Obviously, ‘culture’ that transfers with people even when they lose their native language (and native culture in any normal sense), and also stays present across sometimes 200+ years in a new country, this doesn’t sound a lot like culture, but it does sound like genetics.
[…]
He seems to want to stay within the Overton window, but go pretty close to the edge, so that the reader will draw their own conclusions, and perhaps seek out some of the evidence slightly to the right of the evidence the book covers
The most important reason why historical towns produced beautiful architecture without design is vernacular architecture:
When Amalfi was built, everyone used local materials and styles out of practical necessity. If you were building a terraced farm and house, you had to use stone quarried nearby, volcanic ash mortar from the mountains, and local limestone plaster. There were no other options. Similarly, the architectural designs using those materials are kept uniform by greater ignorance of other styles and the physical properties of the few available materials.
Local conformity of style and material was enforced without laws or community meetings. Simultaneously, styles and materials varied greatly across communities. Local conformity was matched by a wonderful global diversity of styles.
Today, people have diverse tastes sourced from global media and more diverse buildings styles and materials available due to globalization. This inverts the historical pattern and creates local variety and global conformity. Within any city you will find dozens of clashing styles: colonial houses abut glass towers and fake-wood 5-over-1s. But across cities, variance is decreased and this same clash of styles is repeated over and over again.
Are we born to succeed or are we made to succeed? Lizah van der Aart illustrates a recent Nature Human Behaviour article:
On Friday, November 21, 1806, Andrew Roberts explains (in Napoleon: A Life), Napoleon signed into law the Berlin Decrees:
These were designed to force Great Britain to the negotiating table, but instead were to lead — once he tried to impose them by force on Portugal, Spain and Russia — to his own downfall. The ‘Continental System’ created by the Berlin Decrees (and their successors the Milan and Fontainebleau Decrees of 1807 and 1810) was what Napoleon called ‘a retaliation’ against the British Order-in-Council of May 16, 1806, which had imposed a blockade of the European coast from Brest to the Elbe.
[…]
Since one-third of Britain’s direct exports and three-quarters of her re-exports went to continental Europe, Napoleon intended the decrees to put huge political pressure on the British government to restart the peace negotiations broken off in August.
[…]
International trade simply wasn’t the zero-sum game that, with his crude Colbertism, Napoleon assumed it to be
[…]
The Continental System damaged precisely those people who had done well from Napoleon’s regime and had hitherto been his strongest supporters: the middle classes, tradesmen, merchants and better-off peasantry, the acquirers of biens nationaux property he had always sought to help.
[…]
All American trade with France was therefore blocked unless the United States’ ships bought a licence in a British port for a substantial fee. Along with the British practice of ‘impressing’ (i.e. kidnapping) thousands of Americans for service in the Royal Navy, the November 1807 Orders-in-Council were the primary cause of the War of 1812 between Britain and the United States.
[…]
One major problem with the Continental System was that it could not be imposed universally. In 1807, for example, because Hamburg and the Hanseatic towns such as Lübeck, Lüneburg, Rostock, Stralsund and Bremen couldn’t manufacture the 200,000 pairs of shoes, 50,000 greatcoats, 37,000 vests and so on that the Grande Armée required, their governors were forced to buy them from British manufacturers under special licences allowing them through the blockade. Many of Napoleon’s soldiers in the coming battles of the Polish campaign wore uniforms made in Halifax and Leeds, and British ministers boasted in the House of Commons that Napoleon couldn’t even provide the insignia stitched onto his officers’ uniforms except by resort to British manufacturers.
[…]
By 1811 there were 840 vessels plying their often night-time trade between Malta and southern Mediterranean ports. Once landed, coffee and sugar were smuggled across borders despite the penalty of ten years’ penal servitude and branding, and after 1808 the death penalty on occasion for repeat offenders.
[…]
(Britain had imposed the death penalty for smuggling in 1736, which was regularly enforced.)
[…]
When French customs officials did capture contraband a proportion of it was often returnable for a bribe, and in due course it became possible to take out insurance against seizures at Lloyd’s of London.
[…]
Meanwhile, French imperial customs revenues collapsed from 51 million francs in 1806 to 11.5 million in 1809, when Napoleon allowed the export of grain to the British at high price when their harvest was weak – some 74 per cent of all British imported wheat came from France that year – in order to deplete British bullion reserves.
[…]
The Continental System failed to work because merchants continued to accept British bills-of-exchange, so London continued to see net capital inflows.
[…]
Much to Napoleon’s frustration, the British currency depreciated against European currencies by 15 per cent between 1808 and 1810, making British exports cheaper.
[…]
The Continental System also forced British merchants to become more flexible and to diversify, investing in Asia, Africa, the Near East and Latin America much more than before, so exports that had been running at an average of £25.4 million per annum between 1800 and 1809 rose to £35 million between 1810 and 1819.
Bryan Caplan has inhabited two distant ideological worlds within his profession: mainstream economics and free-market economics:
Despite Berkeley’s far-left reputation, UC Berkeley and Princeton econ were barely distinguishable. Both stood securely at the top of the academic pecking order and squarely in the intellectual center of the discipline. At each school, I studied under a future winner of the coveted John Bates Clark Medal: Matt Rabin taught me intermediate microeconomics at Berkeley, and David Card taught me Ph.D. microeconomics at Princeton. I performed well in both programs, but was no star.
At both Berkeley and Princeton, at least 80% of economics professors presented themselves as technocratic quants who coincidentally happened to be lifelong Democrats. They rarely suggested that their research turned them into Democrats, and would have been livid if you suggested that their Democratic identity even slightly swayed their research. Technocratic quant and lifelong Democrat: From all I’ve heard, these paired identities are now more prevalent than ever not just at Berkeley and Princeton, but every top-twenty econ department. That includes the University of Chicago, formerly a glaring free-market outlier. In mainstream economics, we’re all technocratic quants now — and we’re all lifelong Democrats now.
The biography of a typical mainstream economist starts with a conventional left-wing teenage intellectual from an upper-middle-class home. His parents and school are center-left, but their complacency disturbs him. They pay lip service, while he believes. In college, he discovers economics — and realizes that the world is more complex than he thought. Eventually, the budding economist concludes that a few conventional left-wing views are overstated or mistaken. Support for rent control is a classic example. If you know no economics, rent control sounds like a fine idea: Want the poor to have affordable housing? Then pass a law requiring wealthy landlords to rent at affordable rates. Intro econ highlights rent control’s big negative side effects: shortages, low quality, and dwindling quantity. Politically, though, “a few conventional left-wing views are overstated or mistaken” is normally the end of the line. If you start out as a conventional teenage leftist intellectual, undergraduate economics turns you into a slightly-contrarian twenty-something leftist intellectual.
For most students who fit this profile, admittedly, intellectual curiosity is only a phase. They end up in non-intellectual jobs and turn into their center-left parents. They may even forget that a few conventional left-wing views are overstated or mistaken. The future mainstream economists, however, stay the course. Soon after earning their undergraduate degrees, they continue on to graduate school, where they acquire two new sets of skills.
First, they spend two years grappling with mathematical economic theory. This is demanding material, but too otherworldly to shift grad students’ economic policy views. High theory presents dozens of esoteric ways for markets to fail, but Ph.D. students normally learned all the standard market failures as undergrads. If you’re already deeply worried about imperfect competition, asymmetric information, and externalities, discovering more exotic market failures rarely makes you like markets less.
Second, unless they become pure theorists, grad students immerse themselves in one or two bodies of ultra-specific empirical research. This immersion occasionally shifts economists’ policy views in their areas of specialization. Yet the maximum effect is small because the volume of research is so massive that most economists end up with no more than a few narrow topics of expertise. In all other areas, mainstream Ph.D. students graduate with virtually the same policy views they held when they started grad school. Minor tweaks aside, that’s where they stay for the rest of their careers. They transition from conventional teenage leftist intellectuals to slightly contrarian twenty-something leftist intellectuals to slightly-contrarian mature leftist intellectuals. Possibly with truly contrarian economic policy views in a few ultra-specific areas they know best. Otherwise, mainstream economists barely connect their life’s work to economic policy. When policy comes up, most take off their researcher hat, and put on their slightly-contrarian left-wing intellectual hat.
Why 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, 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.