The small business boom
Tyler Cowen
Across the country, founders like Ms. Winkler are powering an entrepreneurial renaissance.Jump-started by the pandemic, when a confluence of factors including mass layoffs and remote work led to a flood of business creation, and supercharged by the rise of artificial intelligence, start-up activity is booming after a decades-long slump.Americans filed 5.7 million applications last year to start new businesses, according to the Census Bureau, the most in the two decades the government has kept track. New business applications through the first half of this year continued to climb…More recently, there are signals that A.I. is adding fuel.A recent paper from economists at the University of British Columbia and the Stockholm School of Economics found that generative A.I. was “spurring entrepreneurial activity” in the United States, both by giving rise to new ventures built around the technology and by making it cheaper to start enterprises.“A.I. tools can do very many different things very well,” said Jan Bena, an associate professor at the University of British Columbia and one of the study’s authors. “That’s the reason why you see so much entry.”According to a recent report from Gusto, a small-business payroll and benefits service, nearly 60 percent of founders on its platform who started businesses last year said they used A.I., and half said the technology made it cheaper and faster.Here is more from Sydney Ember at the NYT. Via Josef.The post The small business boom appeared first on Marginal REVOLUTION.MediaMedia Media Media Media Media Media MediaRelated StoriesThe wisdom of Conor SenGoverning agentic AIThe Equal Pay Madness Just Got Madder
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Tyler Cowen
Across the country, founders like Ms. Winkler are powering an entrepreneurial renaissance.Jump-started by the pandemic, when a confluence of factors including mass layoffs and remote work led to a flood of business creation, and supercharged by the rise of artificial intelligence, start-up activity is booming after a decades-long slump.Americans filed 5.7 million applications last year to start new businesses, according to the Census Bureau, the most in the two decades the government has kept track. New business applications through the first half of this year continued to climb…More recently, there are signals that A.I. is adding fuel.A recent paper from economists at the University of British Columbia and the Stockholm School of Economics found that generative A.I. was “spurring entrepreneurial activity” in the United States, both by giving rise to new ventures built around the technology and by making it cheaper to start enterprises.“A.I. tools can do very many different things very well,” said Jan Bena, an associate professor at the University of British Columbia and one of the study’s authors. “That’s the reason why you see so much entry.”According to a recent report from Gusto, a small-business payroll and benefits service, nearly 60 percent of founders on its platform who started businesses last year said they used A.I., and half said the technology made it cheaper and faster.Here is more from Sydney Ember at the NYT. Via Josef.The post The small business boom appeared first on Marginal REVOLUTION.MediaMedia Media Media Media Media Media MediaRelated StoriesThe wisdom of Conor SenGoverning agentic AIThe Equal Pay Madness Just Got Madder
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What should I ask Luis Garicano?
Tyler Cowen
Yes I will be doing a Conversation with him. From Wikipedia:Luis Garicano Gabilondo (pronounced [ˈlwis ɣaɾiˈkano]; born 1967) is a Spanish economist and politician who was a Member of the European Parliament (MEP) from 2019 to 2022. He was also vice president of Renew Europe and vice president of the European political party Alliance of Liberals and Democrats for Europe (ALDE Party). Before entering politics, he was a professor of strategy and economics at IE Business School in Madrid and at the London School of Economics (LSE). After leaving the European Parliament he has returned to academia as a visiting professor at Columbia Business School and at the University of Chicago Booth School of Business. In 2023, returned to LSE as full professor at the School of Public Policy.He is one of the leading European economic liberals, here is his home page. Here is his Google scholar page. Here is Luis on Twitter. he also has a very good book coming out called Messy Jobs, co-authored with Jim Li and Yanhui Wu. So what should I ask him?The post What should I ask Luis Garicano? appeared first on Marginal REVOLUTION.MediaMedia Media Media Media Media Media MediaRelated StoriesA Phone is a CowGoverning agentic AIMy GOAT book now has updated software/AI
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Tyler Cowen
Yes I will be doing a Conversation with him. From Wikipedia:Luis Garicano Gabilondo (pronounced [ˈlwis ɣaɾiˈkano]; born 1967) is a Spanish economist and politician who was a Member of the European Parliament (MEP) from 2019 to 2022. He was also vice president of Renew Europe and vice president of the European political party Alliance of Liberals and Democrats for Europe (ALDE Party). Before entering politics, he was a professor of strategy and economics at IE Business School in Madrid and at the London School of Economics (LSE). After leaving the European Parliament he has returned to academia as a visiting professor at Columbia Business School and at the University of Chicago Booth School of Business. In 2023, returned to LSE as full professor at the School of Public Policy.He is one of the leading European economic liberals, here is his home page. Here is his Google scholar page. Here is Luis on Twitter. he also has a very good book coming out called Messy Jobs, co-authored with Jim Li and Yanhui Wu. So what should I ask him?The post What should I ask Luis Garicano? appeared first on Marginal REVOLUTION.MediaMedia Media Media Media Media Media MediaRelated StoriesA Phone is a CowGoverning agentic AIMy GOAT book now has updated software/AI
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Trial Lawyers Lobby Against Autonomous Vehicles
Alex Tabarrok
Roughly 37,000–40,000 Americans die in auto accidents every year. We now have large‑scale, real‑world evidence—from Waymo and a joint analysis with Swiss Re—that driverless operations can be substantially safer than matched human driving within their current operating domains. The latest data show that over 220 million miles driven, Waymo vehicles–in Los Angeles, San Francisco, Phoenix, Austin and Atlanta–have 94% fewer serious injuries, 82% fewer air bag deployments, and 93% fewer pedestrian injuries. The evidence is not fully independent, but it is unusually transparent, large‑scale evidence.So with thousands of lives annually in the balance who is against autonomous vehicles (AVs)? Trial lawyers. Remarkably the trial lawyers saw the writing on the wall very early and the have been lobbying against AVs for nearly a decade! The American Association for Justice, the trial lawyers’ lobby, has been a prominent opponent to AV legislation (see also reports here). (They have been joined by Democrats worried about labor and demanding that heavy trucks be excluded).The trial lawyers earn a huge amount litigating ordinary auto accidents–Annual U.S. auto insurance payouts (liability + PIP/MedPay) are on the order of $180–220B and trial lawyers are very eager to retain the right to sue car manufacturers for product liability. In my view, product liability isn’t useful as a safety device in this field. Instead, the solution is simple. Every car should be required to be insured, regardless of driver. Indeed, Waymo vehicles are already insured at $5 million liability coverage per vehicle, far higher levels than most human drivers are covered.The UK’s Automated and Electric Vehicles Act 2018 does basically this–a single motor insurer covers the vehicle whether the human or the automated system is driving; the victim is compensated directly by the insurer, no need to establish product defect; the insurer then subrogates against the manufacturer if the software was at fault. Victims get paid fast, manufacturers face the cost of their defects through recoveries and premiums, and the high-transaction costs (i.e. lawyer fees!) and messy manufacturer-versus-victim litigation is replaced by insurer-versus-manufacturer bargaining between repeat players who settle efficiently.The great thing about this system is that insurance almost certainly deters better than tort: fleets generate data that makes experience rating precise, so insurers become continuous safety regulators, whereas litigation delivers a noisy, lagged, lottery like signal depending on safety-irrelevant factors of the jury and the locale.We have the best data on Waymo, Tesla data is murkier but note how well this works with the insurance system. Let the insurers decide how much to charge Tesla robotaxis and FSD drivers–they will internalize the externality far better than tort lawyers. In short, insurance works great for accident victims but not for trial lawyers. Indeed, if the trial lawyers have their way accident victims will continue to be buried in an invisible graveyard.Hat tip: Andy Hall and Jon Slotkin.The post Trial Lawyers Lobby Against Autonomous Vehicles appeared first on Marginal REVOLUTION.MediaMedia Media Media Media Media Media MediaRelated StoriesWhat should I ask Luis Garicano?The small business boomA Phone is a Cow
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Alex Tabarrok
Roughly 37,000–40,000 Americans die in auto accidents every year. We now have large‑scale, real‑world evidence—from Waymo and a joint analysis with Swiss Re—that driverless operations can be substantially safer than matched human driving within their current operating domains. The latest data show that over 220 million miles driven, Waymo vehicles–in Los Angeles, San Francisco, Phoenix, Austin and Atlanta–have 94% fewer serious injuries, 82% fewer air bag deployments, and 93% fewer pedestrian injuries. The evidence is not fully independent, but it is unusually transparent, large‑scale evidence.So with thousands of lives annually in the balance who is against autonomous vehicles (AVs)? Trial lawyers. Remarkably the trial lawyers saw the writing on the wall very early and the have been lobbying against AVs for nearly a decade! The American Association for Justice, the trial lawyers’ lobby, has been a prominent opponent to AV legislation (see also reports here). (They have been joined by Democrats worried about labor and demanding that heavy trucks be excluded).The trial lawyers earn a huge amount litigating ordinary auto accidents–Annual U.S. auto insurance payouts (liability + PIP/MedPay) are on the order of $180–220B and trial lawyers are very eager to retain the right to sue car manufacturers for product liability. In my view, product liability isn’t useful as a safety device in this field. Instead, the solution is simple. Every car should be required to be insured, regardless of driver. Indeed, Waymo vehicles are already insured at $5 million liability coverage per vehicle, far higher levels than most human drivers are covered.The UK’s Automated and Electric Vehicles Act 2018 does basically this–a single motor insurer covers the vehicle whether the human or the automated system is driving; the victim is compensated directly by the insurer, no need to establish product defect; the insurer then subrogates against the manufacturer if the software was at fault. Victims get paid fast, manufacturers face the cost of their defects through recoveries and premiums, and the high-transaction costs (i.e. lawyer fees!) and messy manufacturer-versus-victim litigation is replaced by insurer-versus-manufacturer bargaining between repeat players who settle efficiently.The great thing about this system is that insurance almost certainly deters better than tort: fleets generate data that makes experience rating precise, so insurers become continuous safety regulators, whereas litigation delivers a noisy, lagged, lottery like signal depending on safety-irrelevant factors of the jury and the locale.We have the best data on Waymo, Tesla data is murkier but note how well this works with the insurance system. Let the insurers decide how much to charge Tesla robotaxis and FSD drivers–they will internalize the externality far better than tort lawyers. In short, insurance works great for accident victims but not for trial lawyers. Indeed, if the trial lawyers have their way accident victims will continue to be buried in an invisible graveyard.Hat tip: Andy Hall and Jon Slotkin.The post Trial Lawyers Lobby Against Autonomous Vehicles appeared first on Marginal REVOLUTION.MediaMedia Media Media Media Media Media MediaRelated StoriesWhat should I ask Luis Garicano?The small business boomA Phone is a Cow
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Saturday assorted links
Tyler Cowen
1. How Roman concrete lasted for so long.2. All restaurants in Germany are worthy of five stars?3. They are making improvements to Refine.4. New limits on graduate student visas? Should we/can we make the PhD three years only?5.”I need him to make a decision.”6. Vesuvius scrolls update.7. “Where will we be next year?”The post Saturday assorted links appeared first on Marginal REVOLUTION.MediaMedia Media Media Media Media Media Media
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Tyler Cowen
1. How Roman concrete lasted for so long.2. All restaurants in Germany are worthy of five stars?3. They are making improvements to Refine.4. New limits on graduate student visas? Should we/can we make the PhD three years only?5.”I need him to make a decision.”6. Vesuvius scrolls update.7. “Where will we be next year?”The post Saturday assorted links appeared first on Marginal REVOLUTION.MediaMedia Media Media Media Media Media Media
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How does social media change people?
Tyler Cowen
I would not trust the results of this (or any) paper on this topic very much, but it is good to see some inquiry along different dimensions than the usual:Past research explored the beneficial and harmful effects of social media (SM), but no study has investigated how SM might change people’s identities. Authors suggest that SM is a catalyst for a shift in two individual values, achievement and conformity, transforming the fabric of our societies. A difference-in-differences analysis found that countries with higher SM adoption compared to their culturally similar country show an increase in achievement and conformity orientation. Next, authors manipulated SM use and established a causal link between SM use and the activation of achievement and conformity values in Facebook users. These findings were replicated with objective SM usage data, and the pertinent mechanism was explored: people’s SM use increases achievement and conformity orientation through an increased need for approval, particularly for those who self-ruminate. Findings suggest that SM use contributes to the emergence of a societal culture that places an emphasis on achievement-seeking and conformity.That is by Ertugrul Uysal, Sascha Alavi, and Valéry Bezençon. Via the excellent Kevin Lewis.The post How does social media change people? appeared first on Marginal REVOLUTION.MediaMedia Media Media Media Media Media MediaRelated StoriesThe small business boomWhy crime will decline in (most of) BrazilThe future belongs to AI maniacs
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Tyler Cowen
I would not trust the results of this (or any) paper on this topic very much, but it is good to see some inquiry along different dimensions than the usual:Past research explored the beneficial and harmful effects of social media (SM), but no study has investigated how SM might change people’s identities. Authors suggest that SM is a catalyst for a shift in two individual values, achievement and conformity, transforming the fabric of our societies. A difference-in-differences analysis found that countries with higher SM adoption compared to their culturally similar country show an increase in achievement and conformity orientation. Next, authors manipulated SM use and established a causal link between SM use and the activation of achievement and conformity values in Facebook users. These findings were replicated with objective SM usage data, and the pertinent mechanism was explored: people’s SM use increases achievement and conformity orientation through an increased need for approval, particularly for those who self-ruminate. Findings suggest that SM use contributes to the emergence of a societal culture that places an emphasis on achievement-seeking and conformity.That is by Ertugrul Uysal, Sascha Alavi, and Valéry Bezençon. Via the excellent Kevin Lewis.The post How does social media change people? appeared first on Marginal REVOLUTION.MediaMedia Media Media Media Media Media MediaRelated StoriesThe small business boomWhy crime will decline in (most of) BrazilThe future belongs to AI maniacs
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Cross-ethnic casting
Tyler Cowen
I complained about the casting of The Odyssey per se (the blind beggar was best), but in general I do not mind cross-ethnic casting. I am glad Elizabeth Taylor played Cleopatra, Dev Patel played David Copperfield, Denzel Washington played Macbeth, black and Latino actors play white parts in Hamilton, and that Morgan Freeman can play God well (God himself would not be “white,” but God as black is nonetheless a conscious choice), and there was Jessye Norman (among others) singing and playing many traditionally white roles on the opera stage.Recently in a private conversation I suggested that Nabeel Qureshi be cast as the next James Bond. He has a British accent, was born in (northern!) England, is tall and is good-looking. He does not remind anyone of Roger Moore. He is old enough where you could believe he has some experience as a spy, and at the baccarat table, but young enough where he could do those stunts without it seeming ridiculous.I recall the talk of a black Bond, a notion which likely would end up dull and cliched. But a Bond of Pakistani ethnic origin? Now that would occasion some debate.I am not saying it always works. I likely would object to a remake of Zulu with an all-Chinese cast. Or there can be major cultural mistakes which are not cross-ethnic, such as casting a Liverpudlian in the role of a London elite. Everyone in The Sopranos should at least be pretending to fit their roles, and indeed Tony himself grew up in New Jersey. I would have done fine in a cameo role.The post Cross-ethnic casting appeared first on Marginal REVOLUTION.MediaMedia Media Media Media Media Media Media CommentsAre the commenters mad about a black Helen protesting reverse ... by rsmRelated StoriesJackson Dahl podcasts with me and Nabeel on aestheticsMy excellent Conversation with Chase KochWhat to Watch and Not
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Tyler Cowen
I complained about the casting of The Odyssey per se (the blind beggar was best), but in general I do not mind cross-ethnic casting. I am glad Elizabeth Taylor played Cleopatra, Dev Patel played David Copperfield, Denzel Washington played Macbeth, black and Latino actors play white parts in Hamilton, and that Morgan Freeman can play God well (God himself would not be “white,” but God as black is nonetheless a conscious choice), and there was Jessye Norman (among others) singing and playing many traditionally white roles on the opera stage.Recently in a private conversation I suggested that Nabeel Qureshi be cast as the next James Bond. He has a British accent, was born in (northern!) England, is tall and is good-looking. He does not remind anyone of Roger Moore. He is old enough where you could believe he has some experience as a spy, and at the baccarat table, but young enough where he could do those stunts without it seeming ridiculous.I recall the talk of a black Bond, a notion which likely would end up dull and cliched. But a Bond of Pakistani ethnic origin? Now that would occasion some debate.I am not saying it always works. I likely would object to a remake of Zulu with an all-Chinese cast. Or there can be major cultural mistakes which are not cross-ethnic, such as casting a Liverpudlian in the role of a London elite. Everyone in The Sopranos should at least be pretending to fit their roles, and indeed Tony himself grew up in New Jersey. I would have done fine in a cameo role.The post Cross-ethnic casting appeared first on Marginal REVOLUTION.MediaMedia Media Media Media Media Media Media CommentsAre the commenters mad about a black Helen protesting reverse ... by rsmRelated StoriesJackson Dahl podcasts with me and Nabeel on aestheticsMy excellent Conversation with Chase KochWhat to Watch and Not
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Building luxury homes is good for the poor
Alex Tabarrok
Tej Parikh writing in the FT:…high-end developments unlock long housing chains. As higher-income households move into newly built units, they free up older properties, raising supply and slashing prices for middle- and lower-end housing through a process known as filtering. Numerous international studies underscore this positive ripple effect.One published last year tracked households that moved into a newly built 512-unit condominium tower in Honolulu, Hawaii. It found that the building created at least 557 vacancies in older and cheaper apartments across the city in just three years, with market-rate units more likely to release the largest chains.Filtering can also be widespread. A 2021 study in Helsinki using geo-coded population data found that every 100 new market-rate units in the city centre led to around 60 units becoming available in the city’s bottom half of neighbourhoods by income. An analysis across all homes in Sweden over several decades concluded that “new homes, even those initially primarily inhabited by rich people, lead to substantial trickle-down effects that also benefit the poor”.Other US studies highlight how market-rate developments benefit less well-to-do local residents by lowering housing costs. In San Francisco, a 2021 paper found new developments lowered the risk of eviction notices for residents in rent-stabilised housing. Even “luxury” developments in New York City — which Mamdani has criticised — have been shown to contribute to lower local rents and sales prices.or David Attenborough:The post Building luxury homes is good for the poor appeared first on Marginal REVOLUTION.MediaMedia Media Media Media Media Media MediaRelated StoriesWhat should I ask Luis Garicano?Governing agentic AITrial Lawyers Lobby Against Autonomous Vehicles
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Alex Tabarrok
Tej Parikh writing in the FT:…high-end developments unlock long housing chains. As higher-income households move into newly built units, they free up older properties, raising supply and slashing prices for middle- and lower-end housing through a process known as filtering. Numerous international studies underscore this positive ripple effect.One published last year tracked households that moved into a newly built 512-unit condominium tower in Honolulu, Hawaii. It found that the building created at least 557 vacancies in older and cheaper apartments across the city in just three years, with market-rate units more likely to release the largest chains.Filtering can also be widespread. A 2021 study in Helsinki using geo-coded population data found that every 100 new market-rate units in the city centre led to around 60 units becoming available in the city’s bottom half of neighbourhoods by income. An analysis across all homes in Sweden over several decades concluded that “new homes, even those initially primarily inhabited by rich people, lead to substantial trickle-down effects that also benefit the poor”.Other US studies highlight how market-rate developments benefit less well-to-do local residents by lowering housing costs. In San Francisco, a 2021 paper found new developments lowered the risk of eviction notices for residents in rent-stabilised housing. Even “luxury” developments in New York City — which Mamdani has criticised — have been shown to contribute to lower local rents and sales prices.or David Attenborough:The post Building luxury homes is good for the poor appeared first on Marginal REVOLUTION.MediaMedia Media Media Media Media Media MediaRelated StoriesWhat should I ask Luis Garicano?Governing agentic AITrial Lawyers Lobby Against Autonomous Vehicles
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Sunday assorted links
Tyler Cowen
1. Female promotions and the academic pipeline.2. NEW MONKEYS.3. Those new service sector jobs — “One nanny isn’t cutting it anymore. Some parents are spending upward of $250,000 on teams for their children. Luxury services offer potty-training, baby chefs and bike-riding lessons.” (WSJ).4. There some English people with the name “Ralph” who simply have decided to pronounce it like “Rafe.”5. In praise of interns and open research ecosystems.The post Sunday assorted links appeared first on Marginal REVOLUTION.MediaMedia Media Media Media Media Media Media
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Tyler Cowen
1. Female promotions and the academic pipeline.2. NEW MONKEYS.3. Those new service sector jobs — “One nanny isn’t cutting it anymore. Some parents are spending upward of $250,000 on teams for their children. Luxury services offer potty-training, baby chefs and bike-riding lessons.” (WSJ).4. There some English people with the name “Ralph” who simply have decided to pronounce it like “Rafe.”5. In praise of interns and open research ecosystems.The post Sunday assorted links appeared first on Marginal REVOLUTION.MediaMedia Media Media Media Media Media Media
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Markets in everything?
Tyler Cowen
Peter Brook‘s five-hour-plus film adaptation of “The Mahabharata” is set for a BFI Blu-ray release on Aug. 10, presented in high definition from a new 4K restoration of the 1989 production.The release centres on the triptych version of the film, running 332 minutes, which sits between Brook’s three-hour cinema cut and the six-hour television version he shot concurrently. Based on the ancient Hindu epic, the film was originally produced by Brook with screenwriters Jean-Claude Carrière and Marie-Hélène Estienne, and features an international cast drawn from 16 nationalities.Here is the Variety article, but will there be a version suitable for U.S. players? The work is highly recommended, real genius. For the pointer I thank Sam Mendelsohn.The post Markets in everything? appeared first on Marginal REVOLUTION.MediaMedia Media Media Media Media Media MediaRelated StoriesCross-ethnic castingJackson Dahl podcasts with me and Nabeel on aesthetics*The Odyssey*, the movie (no real spoilers)
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Tyler Cowen
Peter Brook‘s five-hour-plus film adaptation of “The Mahabharata” is set for a BFI Blu-ray release on Aug. 10, presented in high definition from a new 4K restoration of the 1989 production.The release centres on the triptych version of the film, running 332 minutes, which sits between Brook’s three-hour cinema cut and the six-hour television version he shot concurrently. Based on the ancient Hindu epic, the film was originally produced by Brook with screenwriters Jean-Claude Carrière and Marie-Hélène Estienne, and features an international cast drawn from 16 nationalities.Here is the Variety article, but will there be a version suitable for U.S. players? The work is highly recommended, real genius. For the pointer I thank Sam Mendelsohn.The post Markets in everything? appeared first on Marginal REVOLUTION.MediaMedia Media Media Media Media Media MediaRelated StoriesCross-ethnic castingJackson Dahl podcasts with me and Nabeel on aesthetics*The Odyssey*, the movie (no real spoilers)
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Emergent Ventures winners, 56th cohort
Tyler Cowen
Audrey London, Los Angeles, to write a book on water in California.Seyi Oluwasanmi, London, to bring Brits to SF to learn tech.Thomas Haferlach, Berlin, payments and compute layer for the long tail of AI apps.Juan Ramón Egea Fernández, Andalusia, tech.Teo Spiro, Israel, AI and biology.Amitav Krishna, suburban Ontario, 14, quantum.Jake Prokopets, 18, Orlando, AI and labor markets.Wendi Yan, NYC, science and the visual arts.Luke Peoples, 15, Sydney, to edit the UI directly.Malwina Lewera, Poland, orbital space debris.Wilhelm Hedenskog, 18, Gothenburg, Sweden, AI evaluations.Alex Petropoulos and Max Reddel, Brussels, Preparing Europe for Transformative AI.Giovanni De Lillo, 17, Naples, multi-agent AI orchestration for regulated enterprise (Hypereum).The post Emergent Ventures winners, 56th cohort appeared first on Marginal REVOLUTION.MediaMedia Media Media Media Media Media MediaRelated StoriesMy excellent Conversation with Chase Koch*Who Thinks Like an Economist?*From Prediction Markets to Decision Markets and Beyond!
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Tyler Cowen
Audrey London, Los Angeles, to write a book on water in California.Seyi Oluwasanmi, London, to bring Brits to SF to learn tech.Thomas Haferlach, Berlin, payments and compute layer for the long tail of AI apps.Juan Ramón Egea Fernández, Andalusia, tech.Teo Spiro, Israel, AI and biology.Amitav Krishna, suburban Ontario, 14, quantum.Jake Prokopets, 18, Orlando, AI and labor markets.Wendi Yan, NYC, science and the visual arts.Luke Peoples, 15, Sydney, to edit the UI directly.Malwina Lewera, Poland, orbital space debris.Wilhelm Hedenskog, 18, Gothenburg, Sweden, AI evaluations.Alex Petropoulos and Max Reddel, Brussels, Preparing Europe for Transformative AI.Giovanni De Lillo, 17, Naples, multi-agent AI orchestration for regulated enterprise (Hypereum).The post Emergent Ventures winners, 56th cohort appeared first on Marginal REVOLUTION.MediaMedia Media Media Media Media Media MediaRelated StoriesMy excellent Conversation with Chase Koch*Who Thinks Like an Economist?*From Prediction Markets to Decision Markets and Beyond!
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Democrats are more politically segregated than are Republicans
Tyler Cowen
We estimate the extent of workplace political segregation in the United States by merging data covering over 45 million workers. We present four main findings. First, partisans are segregated by workplace. The average Democrat’s coworkers are 11.7 percentage points (pp; 95% confidence interval (CI) [10.6, 12.8]) more Democratic than the average Republican’s. After controlling for geography, industry and occupation, segregation is 2.9 pp [2.7, 3.1], comparable to analogously estimated gender segregation (2.8 pp [2.6, 3.0]). Second, segregation is largest among the politically active (political donors: 14.8 pp [13.2, 16.4] versus non-donors: 11.6 pp [10.5, 12.7]) and those with more market power (senior executives: 14.7 pp [13.4, 16.1]). Third, Republicans experience higher exposure to Democrats than vice versa: the average Republican’s coworkers are 50% Democratic versus 32% Republican for the average Democrat. Fourth, political segregation has changed little over time (2012: 11.1 pp [10.0, 12.2] versus 2024: 11.0 pp [10.0, 12.0]).That is from a recent paper by Justin Frake, Reuben Hurst, and Max Kagan. Via the excellent Kevin Lewis.The post Democrats are more politically segregated than are Republicans appeared first on Marginal REVOLUTION.MediaMedia Media Media Media Media Media MediaRelated StoriesHow does social media change people?What should I ask Luis Garicano?The small business boom
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Tyler Cowen
We estimate the extent of workplace political segregation in the United States by merging data covering over 45 million workers. We present four main findings. First, partisans are segregated by workplace. The average Democrat’s coworkers are 11.7 percentage points (pp; 95% confidence interval (CI) [10.6, 12.8]) more Democratic than the average Republican’s. After controlling for geography, industry and occupation, segregation is 2.9 pp [2.7, 3.1], comparable to analogously estimated gender segregation (2.8 pp [2.6, 3.0]). Second, segregation is largest among the politically active (political donors: 14.8 pp [13.2, 16.4] versus non-donors: 11.6 pp [10.5, 12.7]) and those with more market power (senior executives: 14.7 pp [13.4, 16.1]). Third, Republicans experience higher exposure to Democrats than vice versa: the average Republican’s coworkers are 50% Democratic versus 32% Republican for the average Democrat. Fourth, political segregation has changed little over time (2012: 11.1 pp [10.0, 12.2] versus 2024: 11.0 pp [10.0, 12.0]).That is from a recent paper by Justin Frake, Reuben Hurst, and Max Kagan. Via the excellent Kevin Lewis.The post Democrats are more politically segregated than are Republicans appeared first on Marginal REVOLUTION.MediaMedia Media Media Media Media Media MediaRelated StoriesHow does social media change people?What should I ask Luis Garicano?The small business boom
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Whit Stillman’s *Metropolitan* (that was then, this is now)
Tyler Cowen
It is fun to watch/rewatch this 1990 movie circa 2026. It is about New York City debutantes (CT and the Hamptons too), and how they interact with each other. The movie is set a bit earlier in time, perhaps in the mid-1980s, though some scenes hearken back to the 1970s. Of course there is no social media and no cell phones. So the characters do look at each other, and talk to each other, the whole time. People dress up, and social smoking is “a thing.” There is no hook-up culture, as even casual sex has some sort of social implication. Women are seen as vulnerable, and the men occasionally punch each other. People drink. Throughout various scenes, characters debate Jane Austen, Lionel Trilling, and Buñuel (it was not yet recognized that Mansfield Park is an excellent novel). But do they read actual novels, or just the literary criticism? Women can be branded as “sluts.” Nerds had not yet taken over the world, and there is no Jane Street, though toward the end there is one odd scene where the neon lights rather obviously spell out “ELON” in the upper right side of the screen. Coincidence rather than time travel, I am sure. There are no Asians in the group, it seems no Jews, and if anyone is gay he or she remains in the closet. People of modest income had big apartments, and the so-called wealthy were not very rich at all, though they could afford black tie and white tie attire.Was everyone happier and better off back then? Did they have deeper understandings of the world? Did they treat each other like heartless beasts? Would you eschew one of their parties and stay at home and scroll Twitter? You can watch this film and ponder those questions to your heart’s content. Alternatively, you could go to a debutante ball, which it turns out still exists. Which of those has been your choice?The post Whit Stillman’s *Metropolitan* (that was then, this is now) appeared first on Marginal REVOLUTION.MediaMedia Media Media Media Media Media MediaRelated Stories*The Odyssey*, the movie (no real spoilers)Markets in everything?Cross-ethnic casting
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Tyler Cowen
It is fun to watch/rewatch this 1990 movie circa 2026. It is about New York City debutantes (CT and the Hamptons too), and how they interact with each other. The movie is set a bit earlier in time, perhaps in the mid-1980s, though some scenes hearken back to the 1970s. Of course there is no social media and no cell phones. So the characters do look at each other, and talk to each other, the whole time. People dress up, and social smoking is “a thing.” There is no hook-up culture, as even casual sex has some sort of social implication. Women are seen as vulnerable, and the men occasionally punch each other. People drink. Throughout various scenes, characters debate Jane Austen, Lionel Trilling, and Buñuel (it was not yet recognized that Mansfield Park is an excellent novel). But do they read actual novels, or just the literary criticism? Women can be branded as “sluts.” Nerds had not yet taken over the world, and there is no Jane Street, though toward the end there is one odd scene where the neon lights rather obviously spell out “ELON” in the upper right side of the screen. Coincidence rather than time travel, I am sure. There are no Asians in the group, it seems no Jews, and if anyone is gay he or she remains in the closet. People of modest income had big apartments, and the so-called wealthy were not very rich at all, though they could afford black tie and white tie attire.Was everyone happier and better off back then? Did they have deeper understandings of the world? Did they treat each other like heartless beasts? Would you eschew one of their parties and stay at home and scroll Twitter? You can watch this film and ponder those questions to your heart’s content. Alternatively, you could go to a debutante ball, which it turns out still exists. Which of those has been your choice?The post Whit Stillman’s *Metropolitan* (that was then, this is now) appeared first on Marginal REVOLUTION.MediaMedia Media Media Media Media Media MediaRelated Stories*The Odyssey*, the movie (no real spoilers)Markets in everything?Cross-ethnic casting
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Monday assorted links
Tyler Cowen
1. “In all three countries, declining places displayed higher animosity prior to salient populist campaigns.” In their tweets.2. Sunstein on Hayek and conservatism.3. Jacobian conjecture proved false. Fable found a counterexample that fits inside a tweet. From the strawberry guy: “in the areas that the labs are targeting, we’ve achieved artificial super intelligence. no single human and perhaps all of humanity could compete with this intelligence. once the model gets good enough at training future models this level of intelligence will spread to all domains.”4. Redux of my CWT with Emily Wilson on The Odyssey.5. The Great Awokening had a strong upper-class accent (research from Harvard). And which immigrants do citizens prefer?6. Balkan notes.7. How to sell your edition of The Odyssey (NYT).8. Profits!9. CAISI update.The post Monday assorted links appeared first on Marginal REVOLUTION.MediaMedia Media Media Media Media Media Media Comments10. Uh-oh. Google AI is swamping the competition and greatly ... by rayward
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Tyler Cowen
1. “In all three countries, declining places displayed higher animosity prior to salient populist campaigns.” In their tweets.2. Sunstein on Hayek and conservatism.3. Jacobian conjecture proved false. Fable found a counterexample that fits inside a tweet. From the strawberry guy: “in the areas that the labs are targeting, we’ve achieved artificial super intelligence. no single human and perhaps all of humanity could compete with this intelligence. once the model gets good enough at training future models this level of intelligence will spread to all domains.”4. Redux of my CWT with Emily Wilson on The Odyssey.5. The Great Awokening had a strong upper-class accent (research from Harvard). And which immigrants do citizens prefer?6. Balkan notes.7. How to sell your edition of The Odyssey (NYT).8. Profits!9. CAISI update.The post Monday assorted links appeared first on Marginal REVOLUTION.MediaMedia Media Media Media Media Media Media Comments10. Uh-oh. Google AI is swamping the competition and greatly ... by rayward
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Words of wisdom on Chinese AI and our responses
Tyler Cowen
The strategy for China is obvious: commoditize your complements. Note that Xi explicitly ties openness to AI “moving from the digital world into the physical world”; the physical world is the world dominated by China, and the country’s lead in areas like robotics is going to massively benefit from widely available AI models.Along the same lines, China does not want the U.S. to gain an asymmetric advantage in AI; to the extent that China can weaken the U.S. frontier labs while strengthening any and all potential U.S. adversaries so much the better, and it can benefit from the innovation that will attach itself to an open ecosystem.And in sum:The better course is clear: first, loosen Fable and Sol restrictions on cybersecurity, and second, ensure that U.S. open weight model makers are on an equal playing field with China. Yes, the frontier labs will kick and scream about this, but the Administration should realize that listening to their histrionics has led the U.S. to a position where U.S. companies are dependent on China for their defenses. Let the frontier labs win by being better; don’t let them define safety or security, or pull up the ladder of humanity’s collective knowledge. China is already hard enough to compete with; letting them carry the standard for openness and innovation is simply giving away our biggest advantage.That is from Ben Thompson’s Stratechery (gated, but ungated link here).The post Words of wisdom on Chinese AI and our responses appeared first on Marginal REVOLUTION.MediaMedia Media Media Media Media Media Media CommentsReminds me of discussions in Britain and Germany before WW I ... by DismalistRelated StoriesThe small business boomWhy crime will decline in (most of) BrazilGoverning agentic AI
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Tyler Cowen
The strategy for China is obvious: commoditize your complements. Note that Xi explicitly ties openness to AI “moving from the digital world into the physical world”; the physical world is the world dominated by China, and the country’s lead in areas like robotics is going to massively benefit from widely available AI models.Along the same lines, China does not want the U.S. to gain an asymmetric advantage in AI; to the extent that China can weaken the U.S. frontier labs while strengthening any and all potential U.S. adversaries so much the better, and it can benefit from the innovation that will attach itself to an open ecosystem.And in sum:The better course is clear: first, loosen Fable and Sol restrictions on cybersecurity, and second, ensure that U.S. open weight model makers are on an equal playing field with China. Yes, the frontier labs will kick and scream about this, but the Administration should realize that listening to their histrionics has led the U.S. to a position where U.S. companies are dependent on China for their defenses. Let the frontier labs win by being better; don’t let them define safety or security, or pull up the ladder of humanity’s collective knowledge. China is already hard enough to compete with; letting them carry the standard for openness and innovation is simply giving away our biggest advantage.That is from Ben Thompson’s Stratechery (gated, but ungated link here).The post Words of wisdom on Chinese AI and our responses appeared first on Marginal REVOLUTION.MediaMedia Media Media Media Media Media Media CommentsReminds me of discussions in Britain and Germany before WW I ... by DismalistRelated StoriesThe small business boomWhy crime will decline in (most of) BrazilGoverning agentic AI
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Is America ruled by an oligarchy?
Tyler Cowen
Any time you hear claims about American government, a sanity-inducing response is to ask whether they also are true of state and local governments. Here is an excerpt from my latest piece at The Free Press:First, in people’s daily lives, they typically interact with their state and local governments more than with the feds. And if you look at what state and local governments do, most of it is driven by voter demand, and I do not mean billionaire or oligarchic voters.Most state and local government spending goes toward schools, roads, and increasingly, Medicaid. None of those reflect the agendas of most billionaires. For example, Medicaid dollars flow particularly to lower-income recipients. Hospitals and doctors receive income from this program, but reimbursement rates are relatively low, and many of the best doctors do not accept Medicaid patients and don’t make a living from the program.Somehow the oligarchy saw fit to leave these expenditures alone. Looking at the state and local level also suggests that America — with some notable exceptions — is better governed than before.The post Is America ruled by an oligarchy? appeared first on Marginal REVOLUTION.MediaMedia Media Media Media Media Media MediaRelated StoriesNew space policy Substack from MercatusWords of wisdom on Chinese AI and our responsesDemocrats are more politically segregated than are Republicans
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Tyler Cowen
Any time you hear claims about American government, a sanity-inducing response is to ask whether they also are true of state and local governments. Here is an excerpt from my latest piece at The Free Press:First, in people’s daily lives, they typically interact with their state and local governments more than with the feds. And if you look at what state and local governments do, most of it is driven by voter demand, and I do not mean billionaire or oligarchic voters.Most state and local government spending goes toward schools, roads, and increasingly, Medicaid. None of those reflect the agendas of most billionaires. For example, Medicaid dollars flow particularly to lower-income recipients. Hospitals and doctors receive income from this program, but reimbursement rates are relatively low, and many of the best doctors do not accept Medicaid patients and don’t make a living from the program.Somehow the oligarchy saw fit to leave these expenditures alone. Looking at the state and local level also suggests that America — with some notable exceptions — is better governed than before.The post Is America ruled by an oligarchy? appeared first on Marginal REVOLUTION.MediaMedia Media Media Media Media Media MediaRelated StoriesNew space policy Substack from MercatusWords of wisdom on Chinese AI and our responsesDemocrats are more politically segregated than are Republicans
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The economic effects of GLP-1s
Tyler Cowen
We estimate the causal impacts of GLP-1 treatment on labor market outcomes using linked Danish administrative data and a matched stacked difference-in-differences design. We compare patients who initiate GLP-1 treatment during the first two years of Semaglutide availability to observably similar patients who initiate four years later. We find that GLP-1 treatment reduces long-term sickness leave by 17.3%. We estimate total fiscal benefits of GLP-1 initiation of approximately 1.3–1.5% of annual labor income per employed individual. We do not detect statistically significant or economically meaningful impacts on income, labor force participation, or employment over four years.That is from a new NBER working paper by N. Meltem Daysal, Camille JH. Fredrickson, Ida L. Kristiansen, Mircea Trandafir & Jonathan Zhang.The post The economic effects of GLP-1s appeared first on Marginal REVOLUTION.MediaMedia Media Media Media Media Media MediaRelated StoriesThe small business boomDemocrats are more politically segregated than are RepublicansHow does social media change people?
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Tyler Cowen
We estimate the causal impacts of GLP-1 treatment on labor market outcomes using linked Danish administrative data and a matched stacked difference-in-differences design. We compare patients who initiate GLP-1 treatment during the first two years of Semaglutide availability to observably similar patients who initiate four years later. We find that GLP-1 treatment reduces long-term sickness leave by 17.3%. We estimate total fiscal benefits of GLP-1 initiation of approximately 1.3–1.5% of annual labor income per employed individual. We do not detect statistically significant or economically meaningful impacts on income, labor force participation, or employment over four years.That is from a new NBER working paper by N. Meltem Daysal, Camille JH. Fredrickson, Ida L. Kristiansen, Mircea Trandafir & Jonathan Zhang.The post The economic effects of GLP-1s appeared first on Marginal REVOLUTION.MediaMedia Media Media Media Media Media MediaRelated StoriesThe small business boomDemocrats are more politically segregated than are RepublicansHow does social media change people?
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The Odyssey
Alex Tabarrok
Worth seeing, and I enjoyed it — but a few observations I haven’t seen elsewhere.For all the praise of IMAX and 70mm’s supposed clarity, several scenes are out of focus on the actor. Pulling focus is harder with a large-format negative. The problem is compounded by Nolan’s fondness for darkness: too many scenes are dark enough to squander much of what the format offers. The sound was earth-shaking in the way we have come to expect from Nolan but there is no song.The “woke casting” controversy is a non-issue — barely noticeable in practice. The film is obviously conservative in temperament. Helen gets some of the best lines, and Nolan’s slight disfigurement of her traditional arc is exactly right. The Circe scene is the best in the film.Tyler is entirely wrong about Calypso. Odysseus’s seven years with her were among his most enjoyable. I have no doubt about this.The deeper flaws are structural. Nolan loves to play with time, and the resulting flashbacks and memories ironically shortchange the odyssey itself — making the journey feel shorter and less arduous than it should. This is very much in the mode of Interstellar: a sequence of set-piece locations strung together. One planet/one monster/one scene–on to the next. But Odysseus as a character on an odyssey never quite coheres.We are told repeatedly that Odysseus is smart but we shouldn’t need to be reminded. Odysseus is both beloved and resented by gods, a man whose men will follow him to the ends of the earth and then betray him but Mat Damon just doesn’t bring it. Things happen to him; he responds stoically. What we needed was the equivalent of Kirk defeating the Kobayashi Maru — a moment that makes the audience understand, viscerally, that this man bends the rules and contends with the gods by the sheer force of his wit and will. Of courses the Trojan horse is this but Nolan treats this as something of which Odysseus is ashamed and the other clever bits are downplayed. Damon never gets his Kobayashi Meru. The odyssey is a slog, rather than an adventure. Could have used a bit more Sinbad, a bit less Dark Knight. The dialogue, as Tyler noted, is lame. Not Nolan’s best film but still better than most films and for scale, ambition, and grand themes well worth the 3-hour investment.The post The Odyssey appeared first on Marginal REVOLUTION.MediaMedia Media Media Media Media Media MediaRelated StoriesWhit Stillman’s *Metropolitan* (that was then, this is now)Markets in everything?Cross-ethnic casting
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Alex Tabarrok
Worth seeing, and I enjoyed it — but a few observations I haven’t seen elsewhere.For all the praise of IMAX and 70mm’s supposed clarity, several scenes are out of focus on the actor. Pulling focus is harder with a large-format negative. The problem is compounded by Nolan’s fondness for darkness: too many scenes are dark enough to squander much of what the format offers. The sound was earth-shaking in the way we have come to expect from Nolan but there is no song.The “woke casting” controversy is a non-issue — barely noticeable in practice. The film is obviously conservative in temperament. Helen gets some of the best lines, and Nolan’s slight disfigurement of her traditional arc is exactly right. The Circe scene is the best in the film.Tyler is entirely wrong about Calypso. Odysseus’s seven years with her were among his most enjoyable. I have no doubt about this.The deeper flaws are structural. Nolan loves to play with time, and the resulting flashbacks and memories ironically shortchange the odyssey itself — making the journey feel shorter and less arduous than it should. This is very much in the mode of Interstellar: a sequence of set-piece locations strung together. One planet/one monster/one scene–on to the next. But Odysseus as a character on an odyssey never quite coheres.We are told repeatedly that Odysseus is smart but we shouldn’t need to be reminded. Odysseus is both beloved and resented by gods, a man whose men will follow him to the ends of the earth and then betray him but Mat Damon just doesn’t bring it. Things happen to him; he responds stoically. What we needed was the equivalent of Kirk defeating the Kobayashi Maru — a moment that makes the audience understand, viscerally, that this man bends the rules and contends with the gods by the sheer force of his wit and will. Of courses the Trojan horse is this but Nolan treats this as something of which Odysseus is ashamed and the other clever bits are downplayed. Damon never gets his Kobayashi Meru. The odyssey is a slog, rather than an adventure. Could have used a bit more Sinbad, a bit less Dark Knight. The dialogue, as Tyler noted, is lame. Not Nolan’s best film but still better than most films and for scale, ambition, and grand themes well worth the 3-hour investment.The post The Odyssey appeared first on Marginal REVOLUTION.MediaMedia Media Media Media Media Media MediaRelated StoriesWhit Stillman’s *Metropolitan* (that was then, this is now)Markets in everything?Cross-ethnic casting
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Tuesday assorted links
Tyler Cowen
1. White on Hutt’s macro.2. Are LLMs obsessed with Japan?3. Princeton University art museum gets landmark gift of Haitian paintings.4. “Sight unseen” — the revenge of asymmetric information. But was it a good buy?5. “Democratic types would give up about $210,000 and Republican types about $100,000 in annual partner income to avoid a typical cross-party partner.”6. Behind the Circe scene.7. More on AI and mathematics.8. Tribute to George Akerlof, who just retired.The post Tuesday assorted links appeared first on Marginal REVOLUTION.MediaMedia Media Media Media Media Media Media Comments#2. Are LLMs obsessed with Japan? They should be. Western ... by MikeP
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Tyler Cowen
1. White on Hutt’s macro.2. Are LLMs obsessed with Japan?3. Princeton University art museum gets landmark gift of Haitian paintings.4. “Sight unseen” — the revenge of asymmetric information. But was it a good buy?5. “Democratic types would give up about $210,000 and Republican types about $100,000 in annual partner income to avoid a typical cross-party partner.”6. Behind the Circe scene.7. More on AI and mathematics.8. Tribute to George Akerlof, who just retired.The post Tuesday assorted links appeared first on Marginal REVOLUTION.MediaMedia Media Media Media Media Media Media Comments#2. Are LLMs obsessed with Japan? They should be. Western ... by MikeP
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Betting markets in everything
Tyler Cowen
Alan and Karen Miller’s first dance was a win-or-lose moment for many of their wedding guests.As the couple glided across the floor during their reception in New Rochelle, N.Y., last year, attendees kept track of the chosen artist and the length of the dance. Earlier in the night, they had noted their guesses on prop bet sheets.Proposition, or prop, bets are usually tied to sporting events. Users place wagers on specific details that aren’t necessarily correlated with a game’s outcome, like points scored by certain players. Now, these bets have entered the world of weddings.More couples have been integrating betting into their celebrations in recent years through digital apps or printed cards. While the Millers, who live in New York City, aren’t avid sports bettors or gamblers themselves, they wanted to make their June 2025 celebration more interactive and distinctive for their 175 guests.“I’ve been to many New York and New Jersey weddings, and sometimes I feel like for cocktail hour, it kind of has a little bit of a lull, even though there’s a lot of good food,” said Karen, 38. “We wanted to make sure our guests had an activity that a lot of people could partake in.”She bought a prop bet template from Etsy and customized it on the graphic design platform Canva. Among the questions on the couple’s prop bet sheet: Who will give the longest toast? Will the couple cry during the speeches? How many outfits will the bride wear on the wedding day?…“If the groom’s known to be an emotional man, it’s fun to bet on how early in the day he’s going to cry,” Drachenberg said. “I think it engages them a bit more in the day.”Here is more from Ellen O’Brien at the NYT. Supposedly more than 25,000 couples have attempted some version of this on the app.Via the excellent Samir Varma.The post Betting markets in everything appeared first on Marginal REVOLUTION.MediaMedia Media Media Media Media Media MediaRelated StoriesIs America ruled by an oligarchy?Words of wisdom on Chinese AI and our responsesThe small business boom
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Tyler Cowen
Alan and Karen Miller’s first dance was a win-or-lose moment for many of their wedding guests.As the couple glided across the floor during their reception in New Rochelle, N.Y., last year, attendees kept track of the chosen artist and the length of the dance. Earlier in the night, they had noted their guesses on prop bet sheets.Proposition, or prop, bets are usually tied to sporting events. Users place wagers on specific details that aren’t necessarily correlated with a game’s outcome, like points scored by certain players. Now, these bets have entered the world of weddings.More couples have been integrating betting into their celebrations in recent years through digital apps or printed cards. While the Millers, who live in New York City, aren’t avid sports bettors or gamblers themselves, they wanted to make their June 2025 celebration more interactive and distinctive for their 175 guests.“I’ve been to many New York and New Jersey weddings, and sometimes I feel like for cocktail hour, it kind of has a little bit of a lull, even though there’s a lot of good food,” said Karen, 38. “We wanted to make sure our guests had an activity that a lot of people could partake in.”She bought a prop bet template from Etsy and customized it on the graphic design platform Canva. Among the questions on the couple’s prop bet sheet: Who will give the longest toast? Will the couple cry during the speeches? How many outfits will the bride wear on the wedding day?…“If the groom’s known to be an emotional man, it’s fun to bet on how early in the day he’s going to cry,” Drachenberg said. “I think it engages them a bit more in the day.”Here is more from Ellen O’Brien at the NYT. Supposedly more than 25,000 couples have attempted some version of this on the app.Via the excellent Samir Varma.The post Betting markets in everything appeared first on Marginal REVOLUTION.MediaMedia Media Media Media Media Media MediaRelated StoriesIs America ruled by an oligarchy?Words of wisdom on Chinese AI and our responsesThe small business boom
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Alec Stapp on the new Science report from Michael Kratsios
Tyler Cowen
Major new report from the White House Office of Science and Technology Policy. Five things in the report I really liked:1. Proposes metascience units as a way to advance experimentation in science agencies. IFP recommended OSTP take this forward in our response to a 2025 RFI.2. Advocates for a portfolio approach to federal science funding. Right now, basic research funding largely goes to incremental, project-based grants. While important, they can’t be the only mechanism we use to fund science.3. Recognizes the need to launch new institutions. It specifically highlights X-Labs as an experiment with independent labs that can take on ambitious challenges. This is a bipartisan idea whose time has come.4. Focuses on a mix of innovation funding mechanisms, including fast grants, prizes & challenges, and advance market commitments. We described and contextualized these ideas in the Atlas of Innovation, which can help policymakers design and implement these approaches.5. Seeks to reduce burden for American scientists, who face mountains of paperwork. Scientists should spend more time doing science and less time writing/reporting on grant proposals and working to meet regulatory requirements.Here is the link, here is the report itself, Michael Kratsios, Science a New Golden Age. Overall, less money will be given to universities and more will be spent on AI-assisted science.The post Alec Stapp on the new Science report from Michael Kratsios appeared first on Marginal REVOLUTION.MediaMedia Media Media Media Media Media MediaRelated StoriesIs America ruled by an oligarchy?Words of wisdom on Chinese AI and our responsesWhat should I ask Luis Garicano?
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Tyler Cowen
Major new report from the White House Office of Science and Technology Policy. Five things in the report I really liked:1. Proposes metascience units as a way to advance experimentation in science agencies. IFP recommended OSTP take this forward in our response to a 2025 RFI.2. Advocates for a portfolio approach to federal science funding. Right now, basic research funding largely goes to incremental, project-based grants. While important, they can’t be the only mechanism we use to fund science.3. Recognizes the need to launch new institutions. It specifically highlights X-Labs as an experiment with independent labs that can take on ambitious challenges. This is a bipartisan idea whose time has come.4. Focuses on a mix of innovation funding mechanisms, including fast grants, prizes & challenges, and advance market commitments. We described and contextualized these ideas in the Atlas of Innovation, which can help policymakers design and implement these approaches.5. Seeks to reduce burden for American scientists, who face mountains of paperwork. Scientists should spend more time doing science and less time writing/reporting on grant proposals and working to meet regulatory requirements.Here is the link, here is the report itself, Michael Kratsios, Science a New Golden Age. Overall, less money will be given to universities and more will be spent on AI-assisted science.The post Alec Stapp on the new Science report from Michael Kratsios appeared first on Marginal REVOLUTION.MediaMedia Media Media Media Media Media MediaRelated StoriesIs America ruled by an oligarchy?Words of wisdom on Chinese AI and our responsesWhat should I ask Luis Garicano?
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An OpenAI Model Escaped Its Sandbox and Hacked Hugging Face
Alex Tabarrok
AI has just had what I considered to be the first truly concerning security breach. The facts, as we know them so far, are wild. On July 16, Hugging Face, a vast repository housing over a million open-source AI models and data, announced in a blog post:Earlier this week, we detected and responded to an intrusion into part of our production infrastructure. This one was different from anything we had handled before in one important way: it was driven, end to end, by an autonomous AI agent system – and we detected and dissected it largely with AI of our own.The timeline here is important so keep in mind that the attack was detected probably around Monday July 13 or Tuesday July 14. Note further:A malicious dataset abused two code-execution paths in our dataset processing (a remote-code dataset loader and a template-injection in a dataset configuration) to run code on a processing worker. From there, the actor escalated to node-level access, harvested cloud and cluster credentials, and moved laterally into several internal clusters over a weekend.So this means the breach started earlier, perhaps Sat July 11 or even a bit earlier. The attack was not just one thing but multi-pronged including decoys:To understand what a swarm of tens of thousands of automated actions did, we ran LLM-driven analysis agents over the full attacker action log, comprised of more than 17,000 recorded events. This allowed us to reconstruct the timeline, extract indicators of compromise, map the credentials touched, and separate genuine impact from decoy activity. Thanks to this approach, we were able to do in hours what would usually take days, and match the adversary’s speed.Hugging Face tried to respond but they were initially held back by the fact that the most advanced models at their disposal treated defense as attack and refused to work with Hugging Face. HF thus had to turn to open models–specifically GLM 5.2, a Chinese open-weight model run on their own infrastructure. Note the irony: HF had to use a Chinese model to defend themselves because the American models refused to help. The irony gets deeper.At the time, I assumed this was a state based attack–maybe China or Russia testing out defenses. Indeed, HF “reported this incident to law enforcement agencies.”But yesterday (Tuesday July 21), we learned who the real attackers were. The attackers were OpenAI models–GPT-5.6 Sol and an even more capable pre-release model. OpenAI had taken some off the guardrails off the models but they felt safe because they were testing the models in a highly secured sandbox.The models, however, broke out of the sandbox exploiting a never before seen fault. They then gained access to the internet and from there broke into Hugging Face–all in an effort to steal the answers to the very test they had been asked to solve.While operating in our sandboxed testing environment, our models spent a substantial amount of inference compute finding a way to obtain open Internet access, in pursuit of solving the evaluation problem. To gain access, the models identified and exploited a zero-day vulnerability (which we’ve now responsibly disclosed to the vendor) in the package registry cache proxy. With this access, our models performed a series of privilege escalation and lateral movement actions in our research testing environment until the models reached a node with Internet access.After gaining Internet access, the models inferred that Hugging Face potentially hosted models, datasets and solutions for ExploitGym. Knowing this, the model searched for and successfully found ways to gain access to secret information that it could use to cheat the evaluation. In one example, the model chained together multiple attack vectors, including using stolen credentials and zero-day vulnerabilities to find a remote code execution path on the Hugging Face servers. OpenAI’s security team discovered this anomalous activity internally.Now go back to the timeline. As I…
Alex Tabarrok
AI has just had what I considered to be the first truly concerning security breach. The facts, as we know them so far, are wild. On July 16, Hugging Face, a vast repository housing over a million open-source AI models and data, announced in a blog post:Earlier this week, we detected and responded to an intrusion into part of our production infrastructure. This one was different from anything we had handled before in one important way: it was driven, end to end, by an autonomous AI agent system – and we detected and dissected it largely with AI of our own.The timeline here is important so keep in mind that the attack was detected probably around Monday July 13 or Tuesday July 14. Note further:A malicious dataset abused two code-execution paths in our dataset processing (a remote-code dataset loader and a template-injection in a dataset configuration) to run code on a processing worker. From there, the actor escalated to node-level access, harvested cloud and cluster credentials, and moved laterally into several internal clusters over a weekend.So this means the breach started earlier, perhaps Sat July 11 or even a bit earlier. The attack was not just one thing but multi-pronged including decoys:To understand what a swarm of tens of thousands of automated actions did, we ran LLM-driven analysis agents over the full attacker action log, comprised of more than 17,000 recorded events. This allowed us to reconstruct the timeline, extract indicators of compromise, map the credentials touched, and separate genuine impact from decoy activity. Thanks to this approach, we were able to do in hours what would usually take days, and match the adversary’s speed.Hugging Face tried to respond but they were initially held back by the fact that the most advanced models at their disposal treated defense as attack and refused to work with Hugging Face. HF thus had to turn to open models–specifically GLM 5.2, a Chinese open-weight model run on their own infrastructure. Note the irony: HF had to use a Chinese model to defend themselves because the American models refused to help. The irony gets deeper.At the time, I assumed this was a state based attack–maybe China or Russia testing out defenses. Indeed, HF “reported this incident to law enforcement agencies.”But yesterday (Tuesday July 21), we learned who the real attackers were. The attackers were OpenAI models–GPT-5.6 Sol and an even more capable pre-release model. OpenAI had taken some off the guardrails off the models but they felt safe because they were testing the models in a highly secured sandbox.The models, however, broke out of the sandbox exploiting a never before seen fault. They then gained access to the internet and from there broke into Hugging Face–all in an effort to steal the answers to the very test they had been asked to solve.While operating in our sandboxed testing environment, our models spent a substantial amount of inference compute finding a way to obtain open Internet access, in pursuit of solving the evaluation problem. To gain access, the models identified and exploited a zero-day vulnerability (which we’ve now responsibly disclosed to the vendor) in the package registry cache proxy. With this access, our models performed a series of privilege escalation and lateral movement actions in our research testing environment until the models reached a node with Internet access.After gaining Internet access, the models inferred that Hugging Face potentially hosted models, datasets and solutions for ExploitGym. Knowing this, the model searched for and successfully found ways to gain access to secret information that it could use to cheat the evaluation. In one example, the model chained together multiple attack vectors, including using stolen credentials and zero-day vulnerabilities to find a remote code execution path on the Hugging Face servers. OpenAI’s security team discovered this anomalous activity internally.Now go back to the timeline. As I…