2026-03-31 02:53:15
This matters for the AI question, and the book leaves it unfinished. If the breakthroughs of the past required social conditions, not just cognitive capacity, then what does it mean when the next breakthroughs are produced by systems that have no social conditions at all? A neural net does not need a university chair or financial independence from the church. It does not need to reorganize its commitments. It does not, in any recognizable sense, have commitments. The machine that replaces the marginalist is not a better marginalist. It is a different kind of thing entirely.
That is from Jônadas Techio, presumably with LLMs, this review of The Marginal Revolution is interesting throughout. And this:
Maybe the book demonstrates only that Cowen personally remains good at something the field no longer needs.
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2026-03-31 00:33:29
1. Was there a great Philadelphia cheese steak stagnation?
2. David French on the enemies of free speech (NYT). And yes it is Indonesian censorship, nothing to celebrate.
3. Profile of Hussein Aboubakr. Good piece on one of today’s best thinkers and writers. Link to Twitter and Substack. Unlike many writers on these topics, it is not about your opinion of Israel, rather each piece is interesting and substantive. Try his essay on Mahfouz.
4. Lab Leak is somewhat declining in plausibility.
5. “China is cracking down on families who opt to bury their dead in empty high-rise properties — known as “bone ash apartments” — rather than pay skyrocketing costs for cemetery plots.” (FT)
6. Do developing countries still need to industrialize?
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2026-03-30 19:17:49
It’s well known that grade inflation has “degraded” the informational content of grades at many colleges. At Harvard, two-thirds of all undergraduate grades are now A’s—up from about a quarter two decades ago. In response, a Harvard faculty committee has proposed capping A grades at 20 percent of each class (plus a cushion for small courses). That may give professors some cover to resist further inflation, but it doesn’t solve the real problem.
The real problem is not inflation per se. It’s that students are penalized for taking harder courses with stronger peers. A grade cap leaves that distortion intact—and can even amplify it. As Harvard economist Scott Kominers argues:
A grade cap systematically penalizes ambitious students for surrounding themselves with strong classmates. Perverse course-shopping incentives ensue as a result. A student who is prepared for an advanced course but concerned about landing in the bottom 80 percent may choose to drop down preemptively—seeking out a pond where they are a relatively bigger fish. As strong students move into lower-level courses, competition for A grades increases there while harder courses continue to shrink—reducing their A allocation further and driving more students away.
The underlying issue is informational. A grade tries to capture two things—student ability and course difficulty—with a single number. Gans and Kominers show that in general this is impossible: if some students take math and earn B’s while others take political science and earn A’s, there is no way, from grades alone, to tell whether the difference reflects ability or course difficulty.
There is, however, a solution in some cases. Clearly, if every student takes some math and political science courses, informative patterns can emerge. If math students tend to get B’s in math but A’s in political science, while political science students get A’s in their own field but C’s in math, you can begin to separate course difficulty from student ability.
Students don’t all overlap the same classes. But full overlap isn’t necessary—you just need a connected network. If Alice just takes math courses, Joe takes math and political science courses, and Bob just takes political science courses, then Alice and Bob can be compared through Joe. With enough of these links, the entire system can be stitched together. The more overlap, the more precise the estimates.
Valen Johnson proposed a practical method along these lines in 1997. Gans and Kominers embed the same intuition in a much more general framework, showing exactly what can and cannot be inferred, and under what conditions.
The great thing about achievement indexes based on relative comparisons is that they are robust to grade inflation and do not penalize students for taking hard classes or subjects. A political science student who chooses to take a tough math class instead of an easy-A intro to sociology course won’t be penalized because their low math grade will, in effect, by boosted by the difficulty of the course/quality of the students. That’s good for the student and also good for disciplines that have lost students over the years because they held the line on grade inflation.
One final point. Harvard’s cap proposal appears to have been developed with little engagement with researchers who have studied problems like these for decades in the mechanism and market design literature—people like Kominers, Gans, Budish, Roth, Maskin, and Sönmez, some of them at Harvard! Moreover, this isn’t a case of ignoring high-theory for practice. The high-theory of mechanism design has produced real-world systems including kidney exchanges, school choice mechanisms, physician-resident matching, even the assignment of students to courses at Harvard, as well as many other mechanisms. Mechanism design is practical.
Grade inflation is a mechanism design problem—and we know a lot about how to solve it, if we want to solve it.
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2026-03-30 14:48:52
The subtitle of the piece is “Evidence From Chinese and Swedish Twins.” Abstract:
Economists have long studied how parental behavior shapes within-family inequality, yet empirical findings remain mixed. Using twins data from China and Sweden, we examine the predominant mechanisms reported in the literature. Parents in both countries invest similarly during childhood. Inter vivos transfers, however, differ: Chinese parents reinforce income inequality, whereas Swedish parents distribute wealth equally; the reinforcing pattern reflects exchange motives. Bequests are divided equally in both countries. Parental education plays a key role: less educated parents reinforce income inequality, whereas more educated parents transfer wealth equally. Cross-country differences in parental education may thus help explain the mixed findings.
By Aiday Sikhova, Sven Oskarsson, Rafael Ahlskog. Via the excellent Kevin Lewis.
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2026-03-30 12:02:25
After Claudia Goldin became the first woman to win a solo Nobel in economics in 2023, she received hundreds of invitations and requests. She accepted just three.
One of them was advising the WNBA players union as the women prepared to negotiate a new labor deal with the league.
When Goldin replied via email to Terri Carmichael Jackson, executive director of the players union, “I remember just reading it and screaming,” Jackson said. Goldin had one requirement: She refused to be paid.
This month, the two sides reached a collective bargaining agreement that gave Women’s National Basketball Association players a nearly 400% raise. Starting this season, players’ average salary will top $580,000.
It isn’t just the biggest pay increase in U.S. league history. It is, as far as Goldin is aware, the biggest increase any union anywhere has ever negotiated.
“It’s astounding,” the 79-year-old Harvard economist said.
Mike Bass, a spokesman who represents both the National Basketball Association and the WNBA, called the deal “transformational.”
…More recently, as the pay negotiations stretched on, Goldin said she stayed focused not on the countless separate points in the typical lengthy labor deal but on one central equation: the fraction of league revenue going to players’ salary and benefits.
Goldin’s calculations had a calming effect on the players, said Jackson, the union’s executive director.
Here is more from the WSJ. Via Anecdotal.
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2026-03-30 09:51:39
The subtitle of the movie is Or How I Became an Apocaloptimist, and here is the trailer.
Overall this film was better and smarter than I was expecting. Intelligent people were allowed to speak, and to present various sides of the issue. It was also interesting to see how various people one knows come across on the big screen.
It is easy enough to mock the final section of the movie, which calls for a participatory “civil rights” movement on AI, negotiations with China, and a big voice for trade unions in the decisions. What Dan Klein calls “the people’s romance.” The Straussian read there is correct, even though it probably was not intended by the moviemakers. In reality, for better or worse, the final decisions will continue to be made by the national security establishment.
On a weekend, there were five other people in the theater.
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