2026-03-08 01:31:02
1. Baby names banned in Mexico?
2. Blind hearing tests for audiophiles.
3. AI models and the Coase conjecture.
4. Stopping unwanted audio recordings.
5. Swedish shootings continue to plummet.
6. The dangers of diplomatic parties in Iran.
The post Saturday assorted links appeared first on Marginal REVOLUTION.
2026-03-07 20:18:50
In our textbook, Modern Principles, Tyler and I write:
Imagine how difficult it would be to get a date if every date required marriage? In the same way, it’s more difficult to find a job when every job requires a long-term commitment from the employer.
In two new excellent pieces, Brian Albrecht and Pieter Garicano extend this partial equilibrium aphorism with some general equilibrium reasoning. Here’s Albrecht:
[I]magine there is a surge for Siemens products. Do you hire a ton of workers to fill that demand? No, you’re worried about having to fire them in the future but being stuck until they retire.
But it’s even worse than that…..[suppose Siemens does want to hire] where is Siemens getting those workers from?…Not only is it a problem for Siemens that they won’t be able to fire people down the road, the fact that BMW doesn’t fire anyone means you can’t hire people.
Garicano has an excellent piece, Why Europe doesn’t have a Tesla, with lots of detail on European labor law:
Under the [German] Protection Against Dismissal Act, the Kündigungsschutzgesetz, redundancies over ten employees must pass a social selection test (Sozialauswahl). Employers cannot choose who leaves: they must rank employees by age, years of service, family maintenance obligations, and degree of disability, and then prioritize dismissing those with the weakest social claim to the job. If someone is dismissed for operational reasons but the company posts a similar job elsewhere, the dismissal is usually invalid.
Disabled employees can be dismissed only with the approval of the Integration Office (Integrationsamt), a public body. The office will weigh the employer’s reasons, whether they have taken sufficient steps to integrate the employee, and whether they could be redeployed elsewhere in the organization. Workers who also become caregivers cannot be dismissed at all for up to two full years after they tell their bosses they fulfill that role.
As a company becomes larger and tries to let more workers go at once these difficulties increase. In many European countries, companies with more than a certain number of workers – 50 in the Netherlands, 5 in Germany – are obliged to create a works council, which represents employees and, in some countries, must give its approval to decisions the employer wants to make regarding its employees, including layoffs or pay rises or cuts.
…Companies that are allowed to fire someone and can afford to pay the severance costs have to wait and pay additional fees. Collective dismissal procedures in Germany start after 30 departures within a month; once triggered they require further negotiations with the works council, a waiting period, and the creation of a ‘social plan’ with more compensation for departing workers. When Opel shut down its Bochum factory in Germany, it reached a deal with the works council to spend €552 million on severance for the 3,300 affected employees. This included individual payments of up to €250,000 and a €60 million plan to help workers find new jobs.
Now what is the effect of regulations like this? Well obviously the partial equilibrium effect is to reduce hiring but in addition Garicano notes that it changes what sorts of firms are created in the first place. If you are worried about being burdened by expensive dismissal procedures, build a regulated utility with captive government contracts, not a radical startup with a high probability of failure.
Rather than reduce hiring in response to more expensive firing, companies in Europe have shifted activity away from areas where layoffs are likely. European workers are for sure, solid work only. This works well in periods of little innovation, or when innovation is gradual. The continent, however, is poorly equipped for moments of great experimentation.
…Europe’s companies have immense, specialized knowledge [due to retained workforces, AT]. The problems happen when radical innovation is needed, as in the shift from gasoline to electric vehicles. The great makers of electric cars have either been new entrants, like Tesla and BYD, or old ones who have had their insides stripped, like MG.
..If Europe wants a Tesla, or whatever the Tesla of the next decade will turn out to be, it will need a new approach to hiring and firing.
The post The Hidden Cost of Hard-to-Fire Labor Laws: Why European Firms Don’t Take Risks appeared first on Marginal REVOLUTION.
2026-03-07 15:34:29
The Vietnam draft conscripted hundreds of thousands of young Americans into an integrated military. I combine near-random draft lottery variation with administrative voter data to study the long-run racial integration effects of coerced national service. Black and Native American veterans became more likely to marry white spouses, identify as Republicans, and live in more-integrated neighborhoods. Improved economic standing may partly mediate these effects. Effects are larger for Southerners and are precisely null for white veterans. Coerced military service generates substantial but asymmetric cross-racial political convergence and racial integration: Vietnam-era service caused about 20 percent of affected cohorts’ interracial marriages.
That is from a recent NBER working paper by Zachary Bleemer.
The post The Vietnam War and racial integration appeared first on Marginal REVOLUTION.
2026-03-07 13:50:37
Take some policy, action, or person whom you regard as morally questionable and indeed is morally questionable. That same policy, action, or person does some bad things, bad in conquentialist terms I now mean. Practically bad, utilitarian bad.
The odds are that you overrate the badness of those consequences by some considerable degree.
Even very smart people do this. Sometimes they do it more, because they can come up with more elaborate arguments for why the bad consequences are completely disastrous.
They might overrate the badness of those consequences by as much as 5x or 10x (gdp is a huge mound of stuff!).
So if you want to have better opinions, look for the cases where you do this and stop doing it.
Easy-peasy!
And good luck with that.
The post A simple way to improve your thought and conclusions appeared first on Marginal REVOLUTION.
2026-03-07 03:05:40
When Milton Friedman pondered what would happen if a helicopter dropped $1,000 from the sky, he likely never imagined that one day a military cargo plane would scatter millions of dollars into one of Bolivia’s largest cities.
But while the Nobel Prize-winning economist worried about the inflation that an influx of cash could generate, the impact in El Alto — where a cash-packed plane crashed and killed 24 people last week while spreading 423 million bolivianos ($62 million) — is one of widespread confusion.
The new currency was legitimately printed, but the central bank has voided its serial numbers to prevent its use. While thousands swarmed the site to pick up the banknotes in one of Latin America’s poorest nations, authorities have tried to burn and destroy the new cash, arresting dozens and raiding homes in a rushed hunt for the missing bills.
That has sent Bolivians into a frenzy. No longer able to quickly tell if a banknote is valid or voided and fearing the crackdown, businesses don’t know what bills to accept anymore, leaving customers frustrated and panicked that their real money is now worthless.
“Just today, everyone refused to take my money five times,” said Yoselin Diaz, 27, who was lining up at the central bank’s main offices in La Paz. “I tried on the minibus and nothing, then I tried to buy some things and nothing, later I went to buy a photo for my father’s grave and even the funeral homes wouldn’t accept it.”
…Bolivia’s central bank has defended its measures to destroy and void the fresh cash, citing not just the principle of keeping stolen money from entering the financial system but also the need to quell social strife. At its height, authorities said about 20,000 people were trying to collect the banknotes as police fired tear gas at them.
Here is more from Bloomberg, via John de Palma.
The post The actual helicopter drop? appeared first on Marginal REVOLUTION.
2026-03-07 00:38:53
1. Special tribute issue on James C. Scott.
2. Gauti Eggertsson: “I now find myself replicating papers and experimenting with frontier methods in an evening or a few days using Claude Code. That would have taken weeks before — which in practice meant I wouldn’t have done it at all.” And yet his vision is still far too conservative.
5. The price of war.
6. Is China an expansionist power? And China fact of the day.
7. Paul Graham on branding, design, and watches.
8. António Lobo Antunes, RIP ( NYT).
9. In fact in the Gulf there are too many vulnerable targets.
The post Friday assorted links appeared first on Marginal REVOLUTION.