Marginal Revolution https://marginalrevolution.com/ Small Steps Toward A Much Better World Mon, 04 May 2026 22:10:59 +0000 en-US hourly 1 https://marginalrevolution.com/wp-content/uploads/2015/10/cropped-MR-logo-thumbnail-32x32.png Marginal REVOLUTION https://marginalrevolution.com/ 32 32 42693868 https://marginalrevolution.com/marginalrevolution/2026/05/rose-farts-and-the-invisible-hand.html?utm_source=rss&utm_medium=rss&utm_campaign=rose-farts-and-the-invisible-hand Rose Farts and the Invisible Hand https://feeds.feedblitz.com/~/955299770/0/marginalrevolution~Rose-Farts-and-the-Invisible-Hand.html https://marginalrevolution.com/marginalrevolution/2026/05/rose-farts-and-the-invisible-hand.html#respond Tue, 05 May 2026 11:21:10 +0000 https://marginalrevolution.com/?p=92940 In Modern Principles, Tyler and I show the invisible hand by telling the story of how the increase in oil prices in the 1970s encouraged millions of adjustments in how goods were produced and allocated, everything from an increased use of brick for driveways to a movement of the flower market from the US, which […]

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]]> In Modern Principles, Tyler and I show the invisible hand by telling the story of how the increase in oil prices in the 1970s encouraged millions of adjustments in how goods were produced and allocated, everything from an increased use of brick for driveways to a movement of the flower market from the US, which relied on heating greenhouses, to warmer climes like Columbia and Kenya. See the I, Rose video!

The FT has an amusing update:

“When my sheep break wind, it smells of roses,” he said, recounting one of the more bizarre and far-flung consequences of the decision by US President Donald Trump and Israel’s Prime Minister Benjamin Netanyahu to bomb Iran in February.

Since Tehran hit back by firing drones and missiles at US allies in the Gulf — grounding cargo flights and closing off the Strait of Hormuz through which booming east African trade with the region used to flow — Mahihu has been forced to jettison millions of rose stems.

One farmer in Kenya is now feeding his flowers to his sheep © William Wallis/FT

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]]> https://marginalrevolution.com/marginalrevolution/2026/05/rose-farts-and-the-invisible-hand.html/feed 0 92940 https://marginalrevolution.com/marginalrevolution/2026/05/the-best-study-to-date-on-school-phone-bans.html?utm_source=rss&utm_medium=rss&utm_campaign=the-best-study-to-date-on-school-phone-bans The best study to date on school phone bans https://feeds.feedblitz.com/~/955285700/0/marginalrevolution~The-best-study-to-date-on-school-phone-bans.html https://marginalrevolution.com/marginalrevolution/2026/05/the-best-study-to-date-on-school-phone-bans.html#comments Tue, 05 May 2026 07:31:03 +0000 https://marginalrevolution.com/?p=92951 Schools across the U.S. have sharply restricted student use of phones during the school day. We evaluate one type of restriction—lockable phone pouches—using nationwide data combining large-scale surveys, GPS pings, standardized test scores, and school administrative records, along with sales records from the largest pouch provider. Using a staggered difference-in-differences design, we find that pouch […]

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Schools across the U.S. have sharply restricted student use of phones during the school day. We evaluate one type of restriction—lockable phone pouches—using nationwide data combining large-scale surveys, GPS pings, standardized test scores, and school administrative records, along with sales records from the largest pouch provider. Using a staggered difference-in-differences design, we find that pouch adoption substantially reduces phone use as measured by GPS pings and teacher reports. In the first year after adoption, disciplinary incidents increase and student subjective well-being falls, consistent with short-term disruption. However, effects on well-being become positive in later years and disciplinary effects fade. For academic achievement, average effects on test scores are consistently close to zero. High schools see modest positive effects, particularly in math, while middle schools see small negative effects. We find little evidence of effects on school attendance, self-reported classroom attention, or perceived online bullying.

In sum, it is fine to want to run a school that way, but do not expect huge educational gains, if any.  The evidence on this is accumulating, but many seem unable to accept the results.  In any case it is not worthy of a major moral crusade.

Here is the NBER working paper, with top-tier researchers involved I might add, namely Hunt Allcott, E. Jason Baron, Thomas Dee, Angela L. Duckworth, Matthew Gentzkow & Brian Jacob.

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]]> https://marginalrevolution.com/marginalrevolution/2026/05/the-best-study-to-date-on-school-phone-bans.html/feed 12 92951 https://marginalrevolution.com/marginalrevolution/2026/05/is-psychotherapy-underdiscussed-these-days-from-my-email.html?utm_source=rss&utm_medium=rss&utm_campaign=is-psychotherapy-underdiscussed-these-days-from-my-email Is psychotherapy underdiscussed these days? (from my email) https://feeds.feedblitz.com/~/955277708/0/marginalrevolution~Is-psychotherapy-underdiscussed-these-days-from-my-email.html https://marginalrevolution.com/marginalrevolution/2026/05/is-psychotherapy-underdiscussed-these-days-from-my-email.html#comments Tue, 05 May 2026 04:56:19 +0000 https://marginalrevolution.com/?p=92899 I listened to your recent conversation with Arthur C. Brooks and found myself struggling with his core premise. His framing of happiness seems to reduce it to something like a biological or behavioural optimisation problem, which feels quite far from how psychotherapy traditionally and historically understands it. I tried to find where he engages with […]

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I listened to your recent conversation with Arthur C. Brooks and found myself struggling with his core premise. His framing of happiness seems to reduce it to something like a biological or behavioural optimisation problem, which feels quite far from how psychotherapy traditionally and historically understands it.

I tried to find where he engages with psychotherapy as a discipline. The only reference I could locate was a passing mention of mindfulness-based CBT in a Free Press piece. But approaches like MCBT, while valuable, sit within a narrower, symptom-focused, behavioural tradition. They are not really representative of the broader psychotherapeutic field, which is less about “happiness” and more about understanding conflict, ambivalence, and the structure of the self.

That omission seems important. Sigmund Freud’s answer to the “happiness problem” is almost a rugpull: human beings are fundamentally conflicted, and any attempt to engineer sustained happiness runs up against unconscious forces, compromise formations, and the reality principle. Indeed, the goal of therapy to Freud, is to turn misery into “ordinary unhappiness”.

Later clinicians have developed this further. Jonathan Shedler, for example, has written compellingly about how psychodynamic therapy aims not at happiness per se, but at increasing the capacity to feel a full range of emotions without defensive distortion. I’m sure you’ve come across him – he’s absolutely brilliant.

It made me wonder whether there’s something slightly neurotic, even Bryan Johnson-esque, in trying to treat happiness as if it were a macronutrient to be optimised. That framing risks flattening the very thing it’s trying to measure.

PS. I liked that you asked him about the price of his book – and I respected his response too!

That is from Adam Goott.

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]]> https://marginalrevolution.com/marginalrevolution/2026/05/is-psychotherapy-underdiscussed-these-days-from-my-email.html/feed 12 92899 https://marginalrevolution.com/marginalrevolution/2026/05/what-should-i-ask-martha-nussbaum.html?utm_source=rss&utm_medium=rss&utm_campaign=what-should-i-ask-martha-nussbaum What should I ask Martha Nussbaum? https://feeds.feedblitz.com/~/955253192/0/marginalrevolution~What-should-I-ask-Martha-Nussbaum.html https://marginalrevolution.com/marginalrevolution/2026/05/what-should-i-ask-martha-nussbaum.html#comments Mon, 04 May 2026 22:10:59 +0000 https://marginalrevolution.com/?p=92953 Yes, I will be doing a Conversation with her.  Most of all focusing on her recent book The Republic of Love: Opera and Political Freedom. So what should I ask her?

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]]> Yes, I will be doing a Conversation with her.  Most of all focusing on her recent book The Republic of Love: Opera and Political Freedom.

So what should I ask her?

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]]> https://marginalrevolution.com/marginalrevolution/2026/05/what-should-i-ask-martha-nussbaum.html/feed 24 92953 https://marginalrevolution.com/marginalrevolution/2026/05/trade-and-the-end-of-antiquity.html?utm_source=rss&utm_medium=rss&utm_campaign=trade-and-the-end-of-antiquity Trade and the End of Antiquity https://feeds.feedblitz.com/~/955237652/0/marginalrevolution~Trade-and-the-End-of-Antiquity.html https://marginalrevolution.com/marginalrevolution/2026/05/trade-and-the-end-of-antiquity.html#comments Mon, 04 May 2026 18:04:23 +0000 https://marginalrevolution.com/?p=92946 What was the role of trade, and how did economic activity evolve at the End of Antiquity, when political power shifts away from the Mediterranean towards northern Europe and the Middle East? To answer those questions, we assemble a database of hundreds of thousands of ancient coins from the fourth to the tenth century, estimate […]

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What was the role of trade, and how did economic activity evolve at the End of Antiquity, when political power shifts away from the Mediterranean towards northern Europe and the Middle East? To answer those questions, we assemble a database of hundreds of thousands of ancient coins from the fourth to the tenth century, estimate a dynamic model of trade and money where coins gradually diffuse along trade routes, and recover granular regional trade and real consumption time series. Our estimates suggest that: Mediterranean trade was disrupted by the newly formed border between Islam and Christianity; economic activity shifts away from the Mediterranean starting in the fifth century; real consumption peaks in the Middle East in the eighth century; and by the end of the ninth century, Atlantic regions from Islamic Spain to Frankish northwestern Europe have become the wealthiest regions of the ancient western world.

That is from a new NBER working paper by Johannes Boehm & Thomas Chaney.

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]]> https://marginalrevolution.com/marginalrevolution/2026/05/trade-and-the-end-of-antiquity.html/feed 23 92946 https://marginalrevolution.com/marginalrevolution/2026/05/monday-assorted-links-558.html?utm_source=rss&utm_medium=rss&utm_campaign=monday-assorted-links-558 Monday assorted links https://feeds.feedblitz.com/~/955227626/0/marginalrevolution~Monday-assorted-links.html https://marginalrevolution.com/marginalrevolution/2026/05/monday-assorted-links-558.html#comments Mon, 04 May 2026 15:29:37 +0000 https://marginalrevolution.com/?p=92939 1. Ezra Klein on whether AI is likely to lead to mass unemployment (NYT). 2. There is a great Kentucky Derby stagnation. 3. Is open source AI overrated? 4. The deadweight loss of the human capital in prison? 5. How AI is transforming China’s entertainment industry (NYT). 6. “Twelve free, citation-rigorous tools for the students, […]

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]]> 1. Ezra Klein on whether AI is likely to lead to mass unemployment (NYT).

2. There is a great Kentucky Derby stagnation.

3. Is open source AI overrated?

4. The deadweight loss of the human capital in prison?

5. How AI is transforming China’s entertainment industry (NYT).

6. “Twelve free, citation-rigorous tools for the students, debaters, and policy desks the textbooks forgot. From AP free-response grading to live tariff modeling to a Shadow Fed with a public track record, every formula shown, every dataset cited.”  Link here, made by a Colorado high schooler.

7. How Britain lost its dye industry.

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]]> https://marginalrevolution.com/marginalrevolution/2026/05/monday-assorted-links-558.html/feed 56 92939 https://marginalrevolution.com/marginalrevolution/2026/05/the-southern-poverty-law-center-indictment.html?utm_source=rss&utm_medium=rss&utm_campaign=the-southern-poverty-law-center-indictment The Southern Poverty Law Center Indictment https://feeds.feedblitz.com/~/955210856/0/marginalrevolution~The-Southern-Poverty-Law-Center-Indictment.html https://marginalrevolution.com/marginalrevolution/2026/05/the-southern-poverty-law-center-indictment.html#comments Mon, 04 May 2026 11:17:55 +0000 https://marginalrevolution.com/?p=92938 The excellent Patrick McKenzie has a very long Bits About Money post on the the Southern Poverty Law Center (SPLC) indictment. It is filled with details about bank operating procedures. I’m going to summarize. The post is divided into what I think of as two parts. First, did the SPLC commit bank fraud? Second, what […]

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]]> The excellent Patrick McKenzie has a very long Bits About Money post on the the Southern Poverty Law Center (SPLC) indictment. It is filled with details about bank operating procedures. I’m going to summarize. The post is divided into what I think of as two parts. First, did the SPLC commit bank fraud? Second, what is the backstory behind the indictment?

The first part is simple, McKenzie argues that yes the SPLC committed bank fraud, more specifically false statements to a federally insured bank under 18 U.S.C. §1014–the main reason why this is not a hard call is that almost any false statement made to influence a bank, no matter how small, is illegal and can get you 30 years. Moreover, the banks are essentially an investigatory arm of the state and they collect data for decades, any piece of which can generate an indictment. The main way in which the SPLC committed bank fraud is that they set up fake businesses to pay secret informants. Neither of these things, as far as I know, are per se illegal but lying to your bank about the ownership, control and purposes of accounts opened in fictitious business names is illegal.

When Bank-1 investigated, an SPLC employee asked the bank to close several of the accounts and transfer the remaining balances to an SPLC account. Later, SPLC’s president/CEO and board chair confirmed in writing that the accounts were opened for SPLC operations and operated under SPLC authority. As Patrick writes, the letter is “a succinct confession to bank fraud.” Thus, the case that the SPLC paid informants through bank accounts opened under fictitious business names appears strong.

But the government had long been aware of SPLC’s informant work, indeed the existence of the informant program has been public knowledge for decades. It’s hard to see how to run a secret network to pay informants without hiding some information–could the SPLC simply have told the bank what they were doing? It seems to me that the punishment for false statements to a bank ought to depend on the motive and intention of the false statements but the law isn’t written that way. Another administration, however, would certainly look away. Which brings us to the second part of the story.

The SPLC itself was embedded in banking and private-sector decision making. Suppose Acme Inc., a large business, wanted to offer its employees matching grants for charitable donations. Acme, however, doesn’t want newspaper headlines like “Acme donated to the KKK!” So Acme contracts with a firm that vets charitable donations, and that firm uses a blacklist created by the SPLC. This was routine. Amazon used the SPLC list for AmazonSmile; workplace-giving vendors used or advertised SPLC screening; all of this gave the SPLC and the broader Change the Terms coalition power to pressure social media, tech, and financial infrastructure firms over speech, blacklisting, and payments because they were already in the door and embedded in their systems.

When the SPLC was mostly identifying nearly universally despised organizations like the KKK, all of this was more or less accepted by everyone in the know, except perhaps for a few hard core civil-libertarians. But in the woke era the SPLC overplayed their hand. The SPLC and related organizations began to take on conservative, Trump affiliated organizations with widespread support. Through a massive PR and outreach campaign they pressured social media organizations, tech firms, and finance firms to follow along–and this was not just a media campaign, the Change the Terms coalition had hundreds of meetings with top level staff. The partisan nature made it legally questionable but when your allies are in power. these things can be overlooked. In perhaps the most remarkable part of the document, Patrick quotes a donor fundraising letter from Free Press and Free Press Action (not the SPLC but part of the larger coalition):

Our efforts have yielded numerous concrete changes. After years of pressure from Free Press and our allies, Twitter finally banned Trump[.]

…Facebook initially suspended Trump “indefinitely” and later changed his suspension to a two-year ban. We’re now pushing the company to permanently ban Trump and to close a loophole that’s allowing a Trump PAC to fundraise and organize on his behalf.

…FUND THE FIGHT. Your generosity makes our work possible. Please give what you can today to make sure we have the resources we need to keep fighting for equitable media policies that improve people’s lives.

As Patrick notes, the fund raising letter closed with the following deadpan disclaimer:

Free Press and Free Press Action are nonpartisan organizations….Free Press and Free Press Action do not support or oppose any candidate for public office.

Trump won. Many people will say the indictment is the result. That may well be true but that doesn’t make the indictment legally weak.

Read the whole thing for a lesson in how SPLC’s list and coalition work became embedded in private-sector decisioning systems and more generally for a behind the scenes look at how institutional power actually works.

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]]> https://marginalrevolution.com/marginalrevolution/2026/05/the-southern-poverty-law-center-indictment.html/feed 131 92938 https://marginalrevolution.com/marginalrevolution/2026/05/what-makes-art-great.html?utm_source=rss&utm_medium=rss&utm_campaign=what-makes-art-great What makes art great? https://feeds.feedblitz.com/~/955190186/0/marginalrevolution~What-makes-art-great.html https://marginalrevolution.com/marginalrevolution/2026/05/what-makes-art-great.html#comments Mon, 04 May 2026 04:58:16 +0000 https://marginalrevolution.com/?p=92945 That is the title of the new and very stimulating essay by Nabeel Qureshi.  It is difficult to summarize, but here is one excerpt: 2. Great art contains multiple overlapping layers of echoes. This is often harder to spot in verbal artifacts, but it is this feature that I think distinguishes really good works of […]

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]]> That is the title of the new and very stimulating essay by Nabeel Qureshi.  It is difficult to summarize, but here is one excerpt:

2. Great art contains multiple overlapping layers of echoes.

This is often harder to spot in verbal artifacts, but it is this feature that I think distinguishes really good works of art from merely ‘ok’ ones.

Most of us are familiar with the surface level ways of doing this: rhyme, for example, knits together different lines of a poem in a semantically irrelevant way that nevertheless makes it feel like part of a unifying whole. Same with assonance and other such effects most of us are familiar with from English class. It is echoes, for example, that make so many verses from the King James Bible so pleasing and beautiful to listen to:

“Arise, shine; for thy light is come, and the glory of the Lord is risen upon thee.” (Isaiah 60:1)

Note the echoing vowel sounds throughout in ‘arise’, ‘shine’, ‘light’, and ‘thy’. Rhyme and assonance are verbal echoes.

In music, the most famous example perhaps is Beethoven’s Fifth, with its famous “ba-ba-ba-BUM“ theme; the short-short-short-long statement in the beginning then echoes through that movement in thousands of ways, sometimes stretched, sometimes slowed down, so that the whole movement feels like an organic thing that has grown from that single seed.

Good art layers these, one on top of another, to build up artifacts of stunning complexity. These are the text equivalents of Gothic cathedrals. Each layer alludes to other layers, too, adding more and more constraints, until you get an artifact where changing any one word does violence to the whole.

To see this density in action, let’s look at Shakespeare’s Sonnet 15…

Do read the whole thing.  And here are some comments from Henry Oliver.

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]]> https://marginalrevolution.com/marginalrevolution/2026/05/what-makes-art-great.html/feed 31 92945 https://marginalrevolution.com/marginalrevolution/2026/05/last-evenings-with-teresa.html?utm_source=rss&utm_medium=rss&utm_campaign=last-evenings-with-teresa *Last Evenings with Teresa* https://feeds.feedblitz.com/~/955172807/0/marginalrevolution~Last-Evenings-with-Teresa.html https://marginalrevolution.com/marginalrevolution/2026/05/last-evenings-with-teresa.html#comments Sun, 03 May 2026 23:39:06 +0000 https://marginalrevolution.com/?p=92944 The author is Juan Marsé, this novel is set in 1956, first published in Spain in 1966, and only now appearing in English.  Here is the Amazon link.  Marsé is one of the handful of great authors who has no real presence in the Anglo world, Bioy Casares would be another.  You can think of […]

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]]> The author is Juan Marsé, this novel is set in 1956, first published in Spain in 1966, and only now appearing in English.  Here is the Amazon link.  Marsé is one of the handful of great authors who has no real presence in the Anglo world, Bioy Casares would be another.  You can think of the story as covering class conflict, romance, and their intersection in the Barcelona of the 1950s.  Definitely recommended, I am excited to see this finally out and am reading it avidly (in Spanish it is too difficult and slow for me).  Here is one review out of a very small number in English.

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]]> https://marginalrevolution.com/marginalrevolution/2026/05/last-evenings-with-teresa.html/feed 3 92944 https://marginalrevolution.com/marginalrevolution/2026/05/sunday-assorted-links-565.html?utm_source=rss&utm_medium=rss&utm_campaign=sunday-assorted-links-565 Sunday assorted links https://feeds.feedblitz.com/~/955153094/0/marginalrevolution~Sunday-assorted-links.html https://marginalrevolution.com/marginalrevolution/2026/05/sunday-assorted-links-565.html#comments Sun, 03 May 2026 16:55:34 +0000 https://marginalrevolution.com/?p=92936 1. “data centers are now responsible for nearly half of county tax revenue in Loudon County, VA” 2. The emerging role of competition in health care markets. 3. Did the Swedes boost tax revenue by abolishing their inheritance tax? 4. WSJ profile of Reihan Salam. 5. Are NJ diners doomed? (NYT) 6. How far back […]

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]]> 1. “data centers are now responsible for nearly half of county tax revenue in Loudon County, VA”

2. The emerging role of competition in health care markets.

3. Did the Swedes boost tax revenue by abolishing their inheritance tax?

4. WSJ profile of Reihan Salam.

5. Are NJ diners doomed? (NYT)

6. How far back does European family structure go?

7. Why Coase needs Hayek, AI essay and the limits of the firm.

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]]> https://marginalrevolution.com/marginalrevolution/2026/05/sunday-assorted-links-565.html/feed 58 92936 https://marginalrevolution.com/marginalrevolution/2026/05/the-ordinary-men-of-the-nazi-party.html?utm_source=rss&utm_medium=rss&utm_campaign=the-ordinary-men-of-the-nazi-party The ‘Ordinary Men’ of the Nazi Party https://feeds.feedblitz.com/~/955122245/0/marginalrevolution~The-%e2%80%98Ordinary-Men%e2%80%99-of-the-Nazi-Party.html https://marginalrevolution.com/marginalrevolution/2026/05/the-ordinary-men-of-the-nazi-party.html#comments Sun, 03 May 2026 07:42:07 +0000 https://marginalrevolution.com/?p=92937 We digitize and analyze the near-universe of National Socialist German Workers’ Party (NSDAP) membership records and link them to population and industrial censuses. Four findings emerge. First, as the party expanded, its membership came to resemble the broader population more closely in occupational, demographic, and religious terms. Second, SS members’ characteristics remained different: younger, more […]

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We digitize and analyze the near-universe of National Socialist German Workers’ Party (NSDAP) membership records and link them to population and industrial censuses. Four findings emerge. First, as the party expanded, its membership came to resemble the broader population more closely in occupational, demographic, and religious terms. Second, SS members’ characteristics remained different: younger, more educated, and more fanatical, as measured by the display of Nazi insignia in membership portraits. Third, within communities, coworkers, and families, early membership generated hysteresis, with subsequent entrants drawn from the same groups. Finally, local increases in party membership are associated with subsequent deportations of Germany’s Jews.

That is from a new NBER working paper by Luis Bosshart, Max Deter, Leander Heldring, Cathrin C. Mohr & Matthias Weigand.

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]]> https://marginalrevolution.com/marginalrevolution/2026/05/the-ordinary-men-of-the-nazi-party.html/feed 63 92937 https://marginalrevolution.com/marginalrevolution/2026/05/is-there-a-recent-growth-in-negative-sum-assets.html?utm_source=rss&utm_medium=rss&utm_campaign=is-there-a-recent-growth-in-negative-sum-assets Is there a recent growth in negative-sum assets? https://feeds.feedblitz.com/~/955113899/0/marginalrevolution~Is-there-a-recent-growth-in-negativesum-assets.html https://marginalrevolution.com/marginalrevolution/2026/05/is-there-a-recent-growth-in-negative-sum-assets.html#comments Sun, 03 May 2026 04:55:39 +0000 https://marginalrevolution.com/?p=92935 That is the topic of my latest Free Press column, starting with that rebranding of the sneaker company to “an AI company.”  Here is one excerpt: As an economist, I find positive-sum gambles more appealing than negative-sum gambles. Positive-sum gambles might include buying blue-chip stocks, exercising more (even if there is always risk of injury), […]

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]]> That is the topic of my latest Free Press column, starting with that rebranding of the sneaker company to “an AI company.”  Here is one excerpt:

As an economist, I find positive-sum gambles more appealing than negative-sum gambles. Positive-sum gambles might include buying blue-chip stocks, exercising more (even if there is always risk of injury), marrying, initiating a new friendship, or trying out a new idea at work.

We collectively, as Americans, are trying out more and more of these positive-sum gambles all the time. Contrary to common reports, younger generations are accumulating wealth at roughly the same pace as older ones, and each generation as a whole has been richer than the previous one. Real, inflation-adjusted wages in the United States are higher than ever before, even if we might feel the pinch of affordability relative to our expectations.

And there’s the rub: It seems to be a feature of human nature that as good things happen we have a desire to. . . piss some parts of those gains away. Entrepreneurs will step into those slots and create new, exotic, and appealing ways for us to do so. Sports gambling can be destructive and addictive, but for a lot of people it is mostly harmless fun. Yes, you’re more likely to end up losing, but a bet on how many points LeBron James will score might make the game more exciting.

So if NewBird AI is your idea of a modest thrill, who am I to stop you? Most people who trade in such stocks are spending discretionary funds rather than their lunch money. They may be making mistakes, but they are unlikely to end up in the breadlines.

The intertwining of successive ups and downs reminds me of how many people use GLP-1 drugs. They help you lose weight, and if they work for you, they ensure your weight will not rise above a certain level. So why not eat more chocolate ice cream? The penalty for overeating is smaller, just as in an economy of generally greater affluence and security, the consequences of losing some of your money on fun but highly speculative wagers diminish.

Unfortunately, the picture is not that smooth and safe for everyone.

I expect the policy issues here will only rise in importance.

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]]> https://marginalrevolution.com/marginalrevolution/2026/05/is-there-a-recent-growth-in-negative-sum-assets.html/feed 32 92935 https://marginalrevolution.com/marginalrevolution/2026/05/saturday-assorted-links-559.html?utm_source=rss&utm_medium=rss&utm_campaign=saturday-assorted-links-559 Saturday assorted links https://feeds.feedblitz.com/~/955073297/0/marginalrevolution~Saturday-assorted-links.html https://marginalrevolution.com/marginalrevolution/2026/05/saturday-assorted-links-559.html#comments Sat, 02 May 2026 16:52:16 +0000 https://marginalrevolution.com/?p=92930 1. How an oil refinery works. 2. How is it that Jakarta has improved so much? 3. The Coasean perspective at Stripe. 4. Becker-Posner blog has been put back online. 5. Raoul Dufy and cortisone. 6. Competition in health insurance markets. 7. A Stockholm cafe run by AI?

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]]> 1. How an oil refinery works.

2. How is it that Jakarta has improved so much?

3. The Coasean perspective at Stripe.

4. Becker-Posner blog has been put back online.

5. Raoul Dufy and cortisone.

6. Competition in health insurance markets.

7. A Stockholm cafe run by AI?

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]]> https://marginalrevolution.com/marginalrevolution/2026/05/saturday-assorted-links-559.html/feed 48 92930 https://marginalrevolution.com/marginalrevolution/2026/05/have-online-worlds-become-the-last-free-places-for-children.html?utm_source=rss&utm_medium=rss&utm_campaign=have-online-worlds-become-the-last-free-places-for-children Have online worlds become the last free places for children? https://feeds.feedblitz.com/~/955039745/0/marginalrevolution~Have-online-worlds-become-the-last-free-places-for-children.html https://marginalrevolution.com/marginalrevolution/2026/05/have-online-worlds-become-the-last-free-places-for-children.html#comments Sat, 02 May 2026 07:38:26 +0000 https://marginalrevolution.com/?p=92933 Major public intellectuals and politicians have responded by arguing that children should rarely, if ever, participate in digital spaces. As a result, many schools in the US now demand that students seal their smartphones in magnetic pouches. A number of countries, including Australia, the United Kingdom and France, are even considering or have already implemented […]

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Major public intellectuals and politicians have responded by arguing that children should rarely, if ever, participate in digital spaces. As a result, many schools in the US now demand that students seal their smartphones in magnetic pouches. A number of countries, including Australia, the United Kingdom and France, are even considering or have already implemented bans on social media accounts for children and teenagers.

Such restrictions, however, are not the tools of liberation we may imagine them to be.

In fact, for some children, the internet may be one of the last remaining spaces where they can grow up doing what children everywhere have evolved to do: independently play and explore with their peers.

Here is more from anthropologist Eli Stark-Elster.  I would add a point.  I do accept the evidence suggesting that limiting or banning cell phones in schools brings marginally better academic results.  Yet the people who advocate such policies never point out that so many schools are just deadly dull and not very intellectually stimulating?  Often what is on the phone is in fact more interesting and sometimes more instructive as well, even if the students do worse in terms of the standards set by the school.

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]]> https://marginalrevolution.com/marginalrevolution/2026/05/have-online-worlds-become-the-last-free-places-for-children.html/feed 88 92933 https://marginalrevolution.com/marginalrevolution/2026/05/words-of-wisdom-on-china-shock-2-0.html?utm_source=rss&utm_medium=rss&utm_campaign=words-of-wisdom-on-china-shock-2-0 Words of wisdom, on China shock 2.0 https://feeds.feedblitz.com/~/955028618/0/marginalrevolution~Words-of-wisdom-on-China-shock.html https://marginalrevolution.com/marginalrevolution/2026/05/words-of-wisdom-on-china-shock-2-0.html#comments Sat, 02 May 2026 04:35:38 +0000 https://marginalrevolution.com/?p=92931 Michael Pettis frequently claims that, by running large surpluses, China is forcing “the demand-suppressing cost of their policies onto their trading partners.” The idea here is relatively straightforward: by disincentivizing consumption within China, China’s policies are reducing domestic demand, which, ceteris paribus, reduces global demand. The problem with this logic should be fairly obvious: ceteris is not in fact paribus. It assumes other countries […]

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Michael Pettis frequently claims that, by running large surpluses, China is forcing “the demand-suppressing cost of their policies onto their trading partners.” The idea here is relatively straightforward: by disincentivizing consumption within China, China’s policies are reducing domestic demand, which, ceteris paribus, reduces global demand.

The problem with this logic should be fairly obvious: ceteris is not in fact paribus. It assumes other countries passively hold their own demand fixed in response to suppressed Chinese demand. But if that were the case, we should expect to see excess unemployment in the rest of the world in response to rising Chinese surpluses.

The empirical record decisively rejects this prediction: both US and EU unemployment was falling during China Shock 1.0 (2000-08), and post-2021 we’ve seen falling unemployment in the EU and stable full-employment in the US.

Monetary policy in other countries adjusts, preventing any shortfall of demand. The more sophisticated version of this argument recognizes that it only bites if other countries are constrained by the zero lower bound (ZLB). In that case, monetary policy cannot lower interest rates to offset a fall in demand elsewhere in the world.

But reports of the death of domestic demand levers at the ZLB have been greatly exaggerated. The monetary authority can raise the inflation target, implement (NGDP or price) level targeting, use forward guidance, and open up the spigots on QE. Furthermore, fiscal policy remains an adequate tool for boosting demand.

That is from J. Zachary Mazlish, the rest of the post has separate interesting points about China shock 2.0

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