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.

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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?”

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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 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.

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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?

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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.

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There is enough energy, effort, and money put into the thing to make it eminently watchable on the big screen.  And if this were a new director, you would think he had great promise.  But relative to both the reviews and where most expectations were placed, this has to count as a disappointment.

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2. Very good, very positive Kimi ad.

3. Balaji update.

4. An eighth-century Mayan mathematician.

5. Yet another balloon.

6. Nearby planet with helium-rich atmosphere (NYT).

7. Henry Oliver did not like The Movie.

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Measuring real GDP growth requires distinguishing changes in prices from changes in product quality and composition, yet systematic quality adjustment of price indexes is unavailable for much of the twentieth century. We construct a new quality-adjusted price index for U.S. consumer goods using 5.1 million product listings from Sears catalogs, 1900–1990. We use large language models to extract product information and estimate hedonic price schedules from high-dimensional text embeddings, allowing us to infer annual changes in the cost of living. The resulting cost-of-living index implies substantially lower goods inflation than conventional deflators, and consequently implies much faster real economic growth: between 1900 and 1990, real goods consumption grew by a factor of 39 using our index, compared with a factor of 10.3 using standard goods deflators. The gap between our index and canonical ones is largest before World War II, reversing the conventional view that goods consumption growth was slower before 1945 than in the post-war decades.

Here is a useful tweet storm on the paper, important work.

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…relatively few technologies have managed to reach the majority of the world’s people. Fire. Writing. The cookpot. The portable radio. These all succeeded. Yet most people in the world have never flown in an airplane. Most do not own a car or a bicycle. And, until recently, most still did not have access to a safe, sanitary toilet in their home. The list goes on.

The mobile phone reached the global majority more rapidly than any technology that had come before. How did this happen?

The title, by the way, comes from Quadir’s insight that just as Grameen Bank lent to villagers so they could purchase productive assets like a cow, Grameenphone could lend villagers the money to buy a phone—which then became a revenue-generating asset in its own right.

Addendum: Auerswald on Econ Talk with Russ Roberts.

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The system, introduced in 2024, uses facial recognition to spot people wanted by police on São Paulo’s streets. It issues alerts and officers are dispatched to pick them up. The system can also locate people who have been reported missing, identify stolen vehicles and provide footage to police investigations. Streamed to its control room in the city centre, information flows not just from lenses on street corners but in health centres, on buses and mounted on police motorbikes. By 2028 the number of cameras in the network is supposed to double, to 100,000.

São Paulo is one of many Brazilian cities spending big on crime-fighting technology. As in other countries, police are investing in body-worn cameras and networks of microphones that detect the sound of gunshots. What sets Brazil apart from many democracies is its enthusiasm for face-spotting tech. Researchers for O Panóptico, a watchdog, count 560 active facial-recognition projects in more than 20 Brazilian states. These include police-run initiatives but also experiments in schools, for example, where cameras are increasingly being used to take attendance. They gaze upon some 99m people, more than 47% of Brazil’s population.

Here is more from The Economist.

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An AI maniac is someone who is obsessed with working with the latest AI models. They try out new models as soon as they can, they spend hours and hours trying to master them, and they use them to regulate both their workflows and their personal lives. I know one person who has his AI agent text him if he is not drinking enough water, for which he’s placed cameras around his house. One online anecdote tells of a man who canceled a date to spend more time playing around with Claude Fable 5 after Anthropic (where I am a member of the economic advisory board) extended the model’s availability for a few days.

Many AI maniacs are using AI tools to start companies of smaller size, and thus of smaller expense, than ever before. For those companies, the humans must set in motion and then monitor a large number of AI tools and agents. Those individuals then stand to reap outsize profits as their companies grow and succeed. Stripe, the payments company, recently issued customer data showing that the number of single-person companies earning $10 million or more has doubled in the past two years. There is no firm estimate how much of that improvement is due to AI, but it stands to reason that AI is a main driver of the trend…

Anecdotally, I observe that AI maniacs tend to be young, as with participants in so many other cultural trends. They tend to lack standard manners and graces, as they just want to “get right to it.” They are able to imagine a future that is very different from our present. Many of them also are kind, as they see the potential for new AI services, in areas such as biomedicine, to help other people. Their obsessiveness is a small price to pay for all of those virtues, and it is usually part of their charm and vibe.

The AI maniacs also are skeptical of credentials, as they should be. If you wish to learn how to manipulate AI tools, Harvard and Yale are not the places to go. You need to teach yourself, with assistance from other AI maniacs and also with help from the AI tools themselves. There are some AI maniacs in the Ivy League, but too often those individuals have invested their energies into other, more established ways to succeed.

I also believe that immigrants are especially likely to be AI maniacs. Immigrants have fewer channels to rise through credentials, family connections, and establishment modes of thinking and doing. They are more willing to try something new, they tend to be younger than average, and, because they were willing to switch countries, they tend to have higher levels of energy, courage, and ambition.

Worth a ponder.

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AI agents now transact, publish, and act on external systems without contemporaneous human approval, creating new regulatory challenges. A growing literature has responded with proposals for legal personhood. This Article argues that personhood is neither necessary nor sufficient, shifting the question from status to enforcement. The Article first shows that for two millennia, nonhuman legal personality, from the Roman universitas to the corporation, the Hindu idol, the waqf, and the river, has operated through human officeholders the law can locate, question, prosecute, and replace. Agentic AI inverts that design, exercising practical agency without legal status, sometimes with no identifiable human in the responsibility-bearing role. The Article then sorts deployments into three categories: first, where one firm builds and deploys the agent; second, where the developer and deployer are separate but known; and third, where there is no identifiable developer or deployer. The Article stress tests each agent deployment category against five liability doctrines: agency law, products liability, enterprise liability, negligence, and strict liability. It demonstrates that each fails at different points in the third category for the same reason: the absent responsibility-bearer. Bare personhood would supply a caption without a representative, assets, or a mechanism for cessation. Finally, the Article assembles an alternative from regimes governing aircraft, ships, drones, driverless cars, and motor carriers. It develops a six-layer stack—registration, identification, verification, financial responsibility, lifecycle traceability, and suspension—so a responsibility-bearer can be identified, liability imposed, and the activity suspended. These layers place the human back at the end of the chain.

I would say that social science now has new frontiers, let us hope it blossoms in response.

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2. Funding canonical visions.

3. Thiel and Wolfe on the Pope and the Antichrist.

4. Claims about blue eyes.

5. Are the world’s best counterfeit artists in Colombia? (NYT)

6. Britain nationalizes its last major steel mill (NYT).

7. “Expected working life is 11 years shorter (3/4 as long) in Italy than in the Netherlands, in spite of Italians living longer.”

8. The public choice of AI regulation.

9. Why is it so expensive to fly within Africa?

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In short, supply and demand have been replaced by judges and labor boards with the authority to deem which jobs are “equal” and therefore should be paid equally….No one is alleging that male and female warehouse workers were paid unequally or that male and female retail workers were paid unequally or that there was any direct or indirect discrimination. The only claim is that warehouse workers, who are less likely to be female than retail workers, earn more than retail workers. And since these jobs have been judged “equal,” the company has violated Equality Act 2010.

…The warehouse workers were almost 50% female (47.25%). So females were not barred from the higher paying jobs. The fact that 77.5% of the retail workers were female suggests that retail work has special appeal to females relative to males and thus that there are compensating differentials. Any of the three female plaintiffs could have taken jobs in the warehouse. If the jobs are equal and the warehouse jobs pay more this is, on the plaintiffs’ theory, “puzzling”. [Or, as Ayn Rand would say, blank out.]

In fact, the court case reveals that Next was struggling to fill the warehouse positions and offered any retail employee—including the plaintiffs—the opportunity to switch to warehouse work. On cross-examination, one of the plaintiffs admitted that, given the unpleasant conditions in the warehouse—described by the court as “the drone of machinery,…vibration, alarm sirens and the screeching of machinery, wheels and rollers, continuously present in all areas”—the warehouse job “did not seem particularly attractive” compared to the greater autonomy and more appealing environment of the retail job. The plaintiff added that she would only have considered the warehouse job if it paid “a lot more money.”

Well, here is the update. The outgoing Keir Starmer government is trying to massively expand these laws. The “equal value” framework previously applied only to sex discrimination; under the proposed law, employees could also bring equal-value claims based on race and disability. Remember, these laws have nothing to do with discrimination—they are about demanding, at the point of a gun, that apples and oranges sell for the same price because they’re both fruit.

The new law would also establish an Equal Pay Regulation and Enforcement Unit. As I said, Orwellian.

See also my post, How Britain Become as Poor as Mississippi.

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Another job we’ll have, I call this imperialism, but I mean that in a value neutral way. But AI comes to different parts of the world at different speeds. I think the countries where AI changes a lot of things first, there’ll be a very high demand for people from those places, which I’ll think to be the US, possibly UK, to go around the rest of the world and teach people in other places how to integrate AI into what we have. And a lot of those demands won’t be fully rational. They won’t be, oh, give us the best possible AI. They’ll be like, oh, we’re Peruvians. We want to keep things a certain way. You may or may not agree, but we want you to give us a version of AI that helps keep it that way. And that will be the job. And I think Americans in particular, probably Brits as well, huge growth sector will be living in other parts of the world spreading AI. And again, the fact that AI can do it better may or may not be true, but I don’t think it’s what will matter. I think the Peruvians or some analogue will want humans to come and listen to their concerns and assure and persuade them as humans, that’s what they’re going to get. I’m not saying it’s always going to go well, but that will always be, I think, a big job for humans to do.

It’s already a growth sector for Americans to want to live abroad. Like we have all this accumulated wealth. Life in America can be a bit dull. Life in Europe in particular is amazing. Personally, I love life in most parts of Latin America. So it’s already a trend for Americans to live overseas. For another reason, it’s nothing to do with AI. So if there are all these future job opportunities, like full of meaning, like come to Kenya, help Kenya, you can save 73 lives or maybe like 73,000 lives, help them build out their AI in a way that’s acceptable to them. That’ll just be this phenomenally rich inner and outer life. And I think it’ll be a great source of job creation.

I have already linked to the transcript of the talk.

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