Marginal Revolution https://marginalrevolution.com/ Small Steps Toward A Much Better World Tue, 26 May 2026 20:18:34 +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/how-to-win-a-trade-war-an-optimistic-guide-to-an-anxious-global-economy.html?utm_source=rss&utm_medium=rss&utm_campaign=how-to-win-a-trade-war-an-optimistic-guide-to-an-anxious-global-economy *How to Win a Trade War: An Optimistic Guide to an Anxious Global Economy* https://feeds.feedblitz.com/~/957325568/0/marginalrevolution~How-to-Win-a-Trade-War-An-Optimistic-Guide-to-an-Anxious-Global-Economy.html https://marginalrevolution.com/marginalrevolution/2026/05/how-to-win-a-trade-war-an-optimistic-guide-to-an-anxious-global-economy.html#respond Tue, 26 May 2026 20:18:34 +0000 https://marginalrevolution.com/?p=93078 That is the new Soumaya Keynes book, out today.  I was happy to have blurbed this book, and here is an essay, on export restrictions, based on the book.

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]]> That is the new Soumaya Keynes book, out today.  I was happy to have blurbed this book, and here is an essay, on export restrictions, based on the book.

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]]> https://marginalrevolution.com/marginalrevolution/2026/05/how-to-win-a-trade-war-an-optimistic-guide-to-an-anxious-global-economy.html/feed 0 93078 https://marginalrevolution.com/marginalrevolution/2026/05/quarantine-sentences-to-ponder-that-was-then-this-is-now-edition.html?utm_source=rss&utm_medium=rss&utm_campaign=quarantine-sentences-to-ponder-that-was-then-this-is-now-edition Quarantine sentences to ponder, that was then this is now edition… https://feeds.feedblitz.com/~/957317600/0/marginalrevolution~Quarantine-sentences-to-ponder-that-was-then-this-is-now-edition.html https://marginalrevolution.com/marginalrevolution/2026/05/quarantine-sentences-to-ponder-that-was-then-this-is-now-edition.html#comments Tue, 26 May 2026 17:53:24 +0000 https://marginalrevolution.com/?p=93074 Trump administration officials, confronted by overlapping outbreaks of Ebola and the hantavirus, have taken a more aggressive approach to locking down potentially exposed people than in past outbreaks, surprising many public health experts… Dr. Jay Bhattacharya, acting director of the Centers for Disease Control and Prevention, drew notice during the Covid-19 pandemic for suggesting that […]

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Trump administration officials, confronted by overlapping outbreaks of Ebola and the hantavirus, have taken a more aggressive approach to locking down potentially exposed people than in past outbreaks, surprising many public health experts…

Dr. Jay Bhattacharya, acting director of the Centers for Disease Control and Prevention, drew notice during the Covid-19 pandemic for suggesting that the coronavirus should be allowed to spread freely among healthy people, and for arguing that mandatory quarantines and lockdowns were harmful to society.

Last week, however, he issued quarantine orders that cited public health laws for two passengers who wanted to leave the Nebraska facility and isolate in their home states.

Here is the full NYT story.  Via Maxwell G.

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]]> https://marginalrevolution.com/marginalrevolution/2026/05/quarantine-sentences-to-ponder-that-was-then-this-is-now-edition.html/feed 36 93074 https://marginalrevolution.com/marginalrevolution/2026/05/tuesday-assorted-links-570.html?utm_source=rss&utm_medium=rss&utm_campaign=tuesday-assorted-links-570 Tuesday assorted links https://feeds.feedblitz.com/~/957311714/0/marginalrevolution~Tuesday-assorted-links.html https://marginalrevolution.com/marginalrevolution/2026/05/tuesday-assorted-links-570.html#comments Tue, 26 May 2026 15:48:02 +0000 https://marginalrevolution.com/?p=93069 1. How did the United States bend the health care cost curve? 2. Why are you reading fewer books? 3. Dean Ball on the Papal encyclical.  My interpretation is a little different, and I suppose more Straussian.  The Pope is basically telling us that AI is here to stay.  If the detailed analysis seems thin […]

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]]> 1. How did the United States bend the health care cost curve?

2. Why are you reading fewer books?

3. Dean Ball on the Papal encyclical.  My interpretation is a little different, and I suppose more Straussian.  The Pope is basically telling us that AI is here to stay.  If the detailed analysis seems thin to you, there is no need to distract from that more important and more essential message.  That the Pope presented this with Anthropic, and for that matter quoted Tolkien/Gandalf, and allowed the use of em dashes, does not harm my interpretation.  And here is what Perplexity thought I would say.

4. Mennonite fact of the day.

5. A one-time treatment for bad cholesterol? (NYT)  And a Twitter thread.

6. Those new service sector jobs?

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]]> https://marginalrevolution.com/marginalrevolution/2026/05/tuesday-assorted-links-570.html/feed 59 93069 https://marginalrevolution.com/marginalrevolution/2026/05/a-beautiful-theory-falls-to-ugly-data.html?utm_source=rss&utm_medium=rss&utm_campaign=a-beautiful-theory-falls-to-ugly-data A Beautiful Theory Falls to Ugly Data https://feeds.feedblitz.com/~/957295178/0/marginalrevolution~A-Beautiful-Theory-Falls-to-Ugly-Data.html https://marginalrevolution.com/marginalrevolution/2026/05/a-beautiful-theory-falls-to-ugly-data.html#comments Tue, 26 May 2026 11:16:47 +0000 https://marginalrevolution.com/?p=93066 My latest paper, A Test of the Coase Conjecture Using Prices of Electronic Books, with the excellent Tim Groseclose, has just been published. The Coase Conjecture is another one of Coase’s little ideas — the original paper is six pages — that has spawned hundreds of follow-up papers and thousands of citations. The idea is […]

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]]> My latest paper, A Test of the Coase Conjecture Using Prices of Electronic Books, with the excellent Tim Groseclose, has just been published. The Coase Conjecture is another one of Coase’s little ideas — the original paper is six pages — that has spawned hundreds of follow-up papers and thousands of citations.

The idea is simple. A monopolist of a durable good has a time-inconsistency problem. Set the monopoly price in period 1 and he will be tempted in period 2 to cut the price and mop up the customers whose valuations sit between the period-1 price and MC. But the same logic applies in period 2, and again in period 3, and so on — eventually the price unravels to MC. Consumers see this coming, the monopolist knows the consumers see it coming, and so the monopolist cuts price to MC in period 1. And since a “period” is just the interval between price changes, the whole unraveling happens — in Coase’s phrase — “in the twinkling of an eye.”

The theorists, most notably Gul, Sonnenschein and Wilson and Fudenberg, Levine and Tirole, formalized Coase’s insight and showed that under quite general conditions the logic goes through. Which is rather surprising, since, as Tim and I point out, Coase’s conjecture implies that many patents and copyrights are essentially worthless — a prediction wildly at variance with the facts. Other theorists, including Stokey, Ausubel and Deneckere, and Board and Pycia, have offered variants under which the Coase outcome does and does not obtain.

For all this theory, there have been almost no direct tests of the Coase Conjecture apart from a handful of lab experiments. Ours is one of the first papers to take the conjecture to the real world. We look at e-books, an unusually clean setting: digital goods are durable, marginal costs are low, resale is limited, and prices can be changed quickly. Using the prices of e-books that are in the public domain as a proxy for marginal cost, we ask: (a) do prices rapidly fall to MC, and (b) does the market clear in the first period? The answer to both is no. E-book prices begin well above MC, sales continue over many periods, and prices don’t even decline monotonically.

We reject the Coase Conjecture decisively.

The paper has an interesting history. The theorists (or the referees we guessed were theorists) praised the paper for taking the theory seriously but inevitably had a fillip to offer, distinguishing the world of pure theory from empirical tests. The empiricists, on the other hand, said our tests were too simple since no one takes the theory that seriously. It’s good to see the paper find a home!

We reject the Coase Conjecture decisively, but it remains to say why. We can rule out some explanations — it’s not rising MC, and it’s not the finiteness of buyers (which can support a perfectly price-discriminating Pac-Man equilibrium).

Two theories remain: 1) sellers can commit not to lower prices, and 2) the outside-options model of Board and Pycia. I prefer the former, my co-author prefers the latter. To me, commitment just isn’t that hard. The standard story is that profits are like cookies on the table and the monopolist can’t resist — but at least the people tempted by cookies get to eat the cookies! The Coase profits are illusory: the monopolist races to MC in period 1 precisely because they know they won’t resist later and as a result they don’t even get a taste of profit! Too clever by half. I say, show some backbone. Firms are *all about* commitment — to workers, consumers, contractors. Why not to a price? My co-author points out, however, that this is more Tabarrok-vibe than carefully laid out theory.

Tim likes the Board and Pycia model which begins with the plausible idea that consumers have outside options — if they don’t buy the book today, they will buy another book, rent the movie, or borrow from the library — and crucially, once they take the outside option, the consumer never returns to the market. You might think outside options would make it *harder* for the firm to set a high price, but Board and Pycia show in a very clever but extended argument that when you carefully work out the full equilibrium the opposite holds: outside options give firms a time-consistent incentive to set and keep a high price. Tim explains the argument further here (see also our paper for an intuitive breakdown).

In any case, the Coase Conjecture — at least as modelled by the theorists — fails in an environment most conducive to it.

A beautiful theory falls to ugly data.

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]]> https://marginalrevolution.com/marginalrevolution/2026/05/a-beautiful-theory-falls-to-ugly-data.html/feed 33 93066 https://marginalrevolution.com/marginalrevolution/2026/05/the-corporate-tax-rate-really-matters.html?utm_source=rss&utm_medium=rss&utm_campaign=the-corporate-tax-rate-really-matters The corporate tax rate really matters https://feeds.feedblitz.com/~/957285557/0/marginalrevolution~The-corporate-tax-rate-really-matters.html https://marginalrevolution.com/marginalrevolution/2026/05/the-corporate-tax-rate-really-matters.html#comments Tue, 26 May 2026 07:51:18 +0000 https://marginalrevolution.com/?p=93072 Three findings emerge. First, improvements in aggregate tax competitiveness are positively and significantly associated with real GDP per capita growth, robust to a wide range of controls. Second, this aggregate effect is driven entirely by the corporate tax pillar; no other component displays a significant growth effect. Third, the corporate tax effect materializes contemporaneously and […]

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Three findings emerge. First, improvements in aggregate tax competitiveness are positively and significantly associated with real GDP per capita growth, robust to a wide range of controls. Second, this aggregate effect is driven entirely by the corporate tax pillar; no other component displays a significant growth effect. Third, the corporate tax effect materializes contemporaneously and accumulates over time, with a statistically significant three-year cumulative effect of approximately 0.16 percentage points per one-point improvement in the corporate tax score. These results suggest that the full architecture of the corporate tax system, not merely the headline statutory rate, is what matters for growth.

That is from a recent paper by Michael Christla and Monika Köppl–Turyna.  Via the excellent Samir Varma.

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]]> https://marginalrevolution.com/marginalrevolution/2026/05/the-corporate-tax-rate-really-matters.html/feed 31 93072 https://marginalrevolution.com/marginalrevolution/2026/05/what-ive-been-reading-289.html?utm_source=rss&utm_medium=rss&utm_campaign=what-ive-been-reading-289 What I’ve been reading https://feeds.feedblitz.com/~/957277502/0/marginalrevolution~What-Ive-been-reading.html https://marginalrevolution.com/marginalrevolution/2026/05/what-ive-been-reading-289.html#comments Tue, 26 May 2026 04:48:40 +0000 https://marginalrevolution.com/?p=93067 1. Paul Mendes-Flohr, Martin Buber: A Life of Faith and Dissent.  A beautifully written, first-rate intellectual biography of Buber.  It is hard to imagine finding a better book on him. 2. Robert C. Austin and Artan R. Hoxha, Enver Hoxha: Twentieth-Century Tyrant.  How did this strange story end up happening?  This book offers the best […]

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]]> 1. Paul Mendes-Flohr, Martin Buber: A Life of Faith and Dissent.  A beautifully written, first-rate intellectual biography of Buber.  It is hard to imagine finding a better book on him.

2. Robert C. Austin and Artan R. Hoxha, Enver Hoxha: Twentieth-Century Tyrant.  How did this strange story end up happening?  This book offers the best set of explanations I have seen.  But Hoxha himself remains a psychological cipher at the end of it all?  It turns out he never thought Mao was much of an ideologue, being too influenced by Chinese culture and thought.  Also I had not previously realize how much Albania’s growing youth population — with the most natalist demographics in Europe at the time — was considered a major threat to the regime.

3. Malachi Haim Hacohen, Karl Popper: The Formative Years 1902-1945.  Such an excellent and high-level work.  And the author is not afraid to accuse Popper of making everything about himself, and also writing on topics (Plato, Hegel, Marx) where he was less than well-informed.  I had not known that Popper hated Toulmin’s Wittgenstein’s Vienna book, feeling that the actual Viennese environment at the time was far more positive and forward-looking than most intellectual historians were inclined to grant.  Nor had I known how cut off Popper was during his New Zealand years, as there were no plane connections, New Zealand news did not cover foreign affairs very much, and the mail was painfully slow.  Popper also wanted to turn the Mont Pelerin Society into a coalition group, including socialists.  That did not happen.

4. Frank Callanan, James Joyce: A Political Life.  An excellent, lengthy study, I now see Joyce as intensely political whereas I did not before.  “His fiercely Parnellian critique of Ireland and Irish nationalism is only politically intelligible as written from within Irish nationalism.  It is an argument addressed to Irish nationalists.  The paradox of Joyce’s nationalism is that it is in his critique of nationalism that his nationalism is most evident.”  As Italo Svevo once stated: “Joyce is twice a rebel, against England and against Ireland.”

5. Suzy Hansen, From Life Itself: Turkey, Istanbul, and a Neighborhood in the Age of Erdoğan.  An insightful look into Erdoğan, Turkish Islamism, parts of Istanbul, and most of all how Turkey slid into autocracy.  One of the best case studies I know of on how a fragile democracy can go away.

All of these books are very good.  I’ve been seeing complaining in the press lately, and on social media, about the paucity of book reviews these days.  Well, no one is stopping you from reviewing books!  Just do it.

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]]> https://marginalrevolution.com/marginalrevolution/2026/05/what-ive-been-reading-289.html/feed 10 93067 https://marginalrevolution.com/marginalrevolution/2026/05/silent-friend.html?utm_source=rss&utm_medium=rss&utm_campaign=silent-friend *Silent Friend* https://feeds.feedblitz.com/~/957264905/0/marginalrevolution~Silent-Friend.html https://marginalrevolution.com/marginalrevolution/2026/05/silent-friend.html#comments Mon, 25 May 2026 23:35:48 +0000 https://marginalrevolution.com/?p=93073 An excellent and profound movie, large screen essential.  I take this movie to be an engagement with the truths of German romanticism (set in Marburg, with Geothe and Rilke as relevant texts), and asking whether that romanticism decays over time, or simply morphs into new forms and thus renews itself, even in an age of […]

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]]> An excellent and profound movie, large screen essential.  I take this movie to be an engagement with the truths of German romanticism (set in Marburg, with Geothe and Rilke as relevant texts), and asking whether that romanticism decays over time, or simply morphs into new forms and thus renews itself, even in an age of high tech and near-universal measurement.  The narrative swings back and forth between those two views like a pendulum, ultimately settling upon the notion of continuation.  Was perhaps Stevie Wonder an influence too?  The great Tony Leung stars, here is a trailer.  Reviews are very positive but they do not seem to understand the film well?

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]]> https://marginalrevolution.com/marginalrevolution/2026/05/silent-friend.html/feed 12 93073 https://marginalrevolution.com/marginalrevolution/2026/05/new-aesthetics-awards.html?utm_source=rss&utm_medium=rss&utm_campaign=new-aesthetics-awards New Aesthetics awards https://feeds.feedblitz.com/~/957246533/0/marginalrevolution~New-Aesthetics-awards.html https://marginalrevolution.com/marginalrevolution/2026/05/new-aesthetics-awards.html#comments Mon, 25 May 2026 16:40:51 +0000 https://marginalrevolution.com/?p=93071 Patrick Collison tweets: Tyler and I just published a list of the recipients of the New Aesthetics grants: https://newaesthetics.art/grants. Thank you very much to all who applied. There were far more applications than we expected. We funded 28 grantees and are excited to see what they create. My reflections on the whole thing: • Though […]

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]]> Patrick Collison tweets:

Tyler and I just published a list of the recipients of the New Aesthetics grants: newaesthetics.art/grants.

Thank you very much to all who applied. There were far more applications than we expected. We funded 28 grantees and are excited to see what they create. My reflections on the whole thing:

• Though there are clearly selection dynamics afoot, figuring out some route beyond the current aesthetic moment seems to be of wider interest in the art community than I would have guessed. Many applicants described their dissatisfaction with the status quo, some in strong terms. We had to close applications after a few weeks because there were so many.

• It’s too early to call it, but it seems that both beauty as an unapologetic goal (contra much that is in modernist and contemporary approaches), and ways to channel pre-modern styles into something new for the present era, are of growing interest.

• The awards made me reflect on the perhaps obvious issue of how hard it must be for an artist to persistently do something new: schools, galleries, buyers, etc., all have structurally embedded preferences as well. These individual awards made me wonder what form supporting new clusters could take.

• Architecture seems to me like the discipline most ripe for new ideas. One correspondent observed: “American architects are somewhat constrained by the association with the academy, in addition to the well known regulation issues. There is a tendency to overthink things so that the designs are formally interesting to someone deep in the conversation, but lacking poetry and magic. There are more firms in Europe, South America and beyond that “just do things” (especially in places where it is easier to build).” This was evident in the submissions.

• AI seems to be making people rethink things in a quite fundamental way, just as urbanization/industrialization/popularization of photography did at the end of the 19th century. For some that will mean interesting new forms of AI-augmented art, but the effects of the rethinking will likely be wider.

• Arts funding is clearly as precarious and scarce as ever. That’s unfortunate, but it probably also means that individual actors can have meaningful impact, and I encourage others to get involved if interested.

• There’s a lot to know that is not written down, and I’m very grateful to those who have helped and advised me along the way.

I will offer thoughts of my own soon.  Here is our original call for proposals.

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]]> https://marginalrevolution.com/marginalrevolution/2026/05/new-aesthetics-awards.html/feed 20 93071 https://marginalrevolution.com/marginalrevolution/2026/05/monday-assorted-links-561.html?utm_source=rss&utm_medium=rss&utm_campaign=monday-assorted-links-561 Monday assorted links https://feeds.feedblitz.com/~/957245006/0/marginalrevolution~Monday-assorted-links.html https://marginalrevolution.com/marginalrevolution/2026/05/monday-assorted-links-561.html#comments Mon, 25 May 2026 16:12:23 +0000 https://marginalrevolution.com/?p=93064 1. Sampling DNA from animal skin parchments. 2. The making of Indian statistics. 3. What happens if your iPhone is stolen in London? (NYT) 4. Brazil school phone bans: “We then show that test scores, which were trending similarly in the two groups prior to the ban, improved by 0.06 s.d. in treatment schools relative […]

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]]> 1. Sampling DNA from animal skin parchments.

2. The making of Indian statistics.

3. What happens if your iPhone is stolen in London? (NYT)

4. Brazil school phone bans: “We then show that test scores, which were trending similarly in the two groups prior to the ban, improved by 0.06 s.d. in treatment schools relative to control.”

5. Travels in the Stans.

6. Modifying research paper formats using AI.

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]]> https://marginalrevolution.com/marginalrevolution/2026/05/monday-assorted-links-561.html/feed 25 93064 https://marginalrevolution.com/marginalrevolution/2026/05/campo-grande-bleg-brazil.html?utm_source=rss&utm_medium=rss&utm_campaign=campo-grande-bleg-brazil Campo Grande bleg, Brazil https://feeds.feedblitz.com/~/957233888/0/marginalrevolution~Campo-Grande-bleg-Brazil.html https://marginalrevolution.com/marginalrevolution/2026/05/campo-grande-bleg-brazil.html#comments Mon, 25 May 2026 12:45:04 +0000 https://marginalrevolution.com/?p=93070 Soon I will be there, in Mato Grosso do Sul, wishing to observe the foundations of Brazil’s burgeoning agricultural export economy, among other reasons.  So what should I do, where should I go, and what should I eat?

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]]> Soon I will be there, in Mato Grosso do Sul, wishing to observe the foundations of Brazil’s burgeoning agricultural export economy, among other reasons.  So what should I do, where should I go, and what should I eat?

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]]> https://marginalrevolution.com/marginalrevolution/2026/05/campo-grande-bleg-brazil.html/feed 15 93070 https://marginalrevolution.com/marginalrevolution/2026/05/the-carousel-trade-arbitrage.html?utm_source=rss&utm_medium=rss&utm_campaign=the-carousel-trade-arbitrage The carousel trade (arbitrage) https://feeds.feedblitz.com/~/957215156/0/marginalrevolution~The-carousel-trade-arbitrage.html https://marginalrevolution.com/marginalrevolution/2026/05/the-carousel-trade-arbitrage.html#comments Mon, 25 May 2026 05:51:46 +0000 https://marginalrevolution.com/?p=93063 Imagine two companies which are secretly controlled by the same people. If company A imported some phones, then sold them to company B, it charged VAT on the deal. If company B then exported the phones, it reclaimed — from the government — the VAT it had paid to company A. the integrity of the […]

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Imagine two companies which are secretly controlled by the same people. If company A imported some phones, then sold them to company B, it charged VAT on the deal. If company B then exported the phones, it reclaimed — from the government — the VAT it had paid to company A. the integrity of the VAT system depends on the two totals balancing out. The money that A pays in is equl to the money that B takes back. The scam lay in A disappearing and not handing over the money it owed, but B till claiming it. The hidden owners of the two firms therefore earned for themselves 17.5 per cent (the rate at which VAT was then charged) of the value of the shipment of the phones. The more phones you sold to yourself, the more money you made.

That is John Lanchester in the LRB, citing Oliver Bullough’s Everybody Loves Our Dollars: How Money Laundering Won.

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]]> https://marginalrevolution.com/marginalrevolution/2026/05/the-carousel-trade-arbitrage.html/feed 34 93063 https://marginalrevolution.com/marginalrevolution/2026/05/emergent-ventures-winners-54th-cohort.html?utm_source=rss&utm_medium=rss&utm_campaign=emergent-ventures-winners-54th-cohort Emergent Ventures winners, 54th cohort https://feeds.feedblitz.com/~/957210860/0/marginalrevolution~Emergent-Ventures-winners-th-cohort.html https://marginalrevolution.com/marginalrevolution/2026/05/emergent-ventures-winners-54th-cohort.html#comments Mon, 25 May 2026 04:20:18 +0000 https://marginalrevolution.com/?p=92744 Kenny Guo, Krish Chhajer, Luthira Abeykoon Mudiyansela, Toronto, quantum computing. Jolie Gan, Calgary/SF, a publication on science and meta-science. Hudson Mitchell-Pullman, 16, San Diego, how users interact with LLMs to learn. Adnan Manna, 17, Amman, Jordan, finding exoplanets. Heloise Hoffman, Stanford, biomedical research to cure her own rare disease. M.F. Libano-Monteiro, Portugal/LSE, economics education through […]

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]]> Kenny Guo, Krish Chhajer, Luthira Abeykoon Mudiyansela, Toronto, quantum computing.

Jolie Gan, Calgary/SF, a publication on science and meta-science.

Hudson Mitchell-Pullman, 16, San Diego, how users interact with LLMs to learn.

Adnan Manna, 17, Amman, Jordan, finding exoplanets.

Heloise Hoffman, Stanford, biomedical research to cure her own rare disease.

M.F. Libano-Monteiro, Portugal/LSE, economics education through video.

Scott Ellis, Mississauga, Ontario, making movies with AI.

Adrian Martinez, 17, Mission Viejo, CA, math, education.

Aadil Ali, San Francisco, biographies of young achievers.

Chandler Reilly, Denver, Substack on Denver and its economics.

Jeremy Kingsley, London, AI, podcasting and Substack.

Michelle Lin, 15, Mclean, VA, curved-surface stitching on deformable materials, and algorithms.

Brunella Tipismana, general career support, writing, Peru/New Haven/NYC.

Theo Cross-Zamirski, Cambridge, UK, platform to power math education.

Beatrice Erkers, Stockholm, progress ideas in Sweden.

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]]> https://marginalrevolution.com/marginalrevolution/2026/05/emergent-ventures-winners-54th-cohort.html/feed 6 92744 https://marginalrevolution.com/marginalrevolution/2026/05/sunday-assorted-links-568.html?utm_source=rss&utm_medium=rss&utm_campaign=sunday-assorted-links-568 Sunday assorted links https://feeds.feedblitz.com/~/957176192/0/marginalrevolution~Sunday-assorted-links.html https://marginalrevolution.com/marginalrevolution/2026/05/sunday-assorted-links-568.html#comments Sun, 24 May 2026 16:30:01 +0000 https://marginalrevolution.com/?p=93059 1. Are “dad books” a dying breed? (WSJ)  And are podcasts to blame? 2. Profile of Camille Paglia at age 79 (London Times, gated). 3. Olivier Blanchard: ” I certainly worry about the evolution of US public debt and the size of primary deficits. But, while there is a lot of discussion/worry about the increase […]

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]]> 1. Are “dad books” a dying breed? (WSJ)  And are podcasts to blame?

2. Profile of Camille Paglia at age 79 (London Times, gated).

3. Olivier Blanchard: ” I certainly worry about the evolution of US public debt and the size of primary deficits. But, while there is a lot of discussion/worry about the increase in nominal interest rates, the 10-year inflation indexed rate, which is the relevant one for debt dynamics, has remained surprisingly stable.”

4. Revana Sharfuddin: “Uncertainty around immigration policy may have downstream effects on fertility decisions. We probably underestimate how much family formation responds to policy instability.”

6. Nagel on Scanlon.

7. “No child deaths have been definitively linked to Covid vaccines, according to a report from the FDA that was quietly made public.”  Article here.

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]]> https://marginalrevolution.com/marginalrevolution/2026/05/sunday-assorted-links-568.html/feed 77 93059 https://marginalrevolution.com/marginalrevolution/2026/05/liberal-economists-score-an-own-goal-against-bezos.html?utm_source=rss&utm_medium=rss&utm_campaign=liberal-economists-score-an-own-goal-against-bezos Liberal Economists Score an Own Goal Against Bezos https://feeds.feedblitz.com/~/957158102/0/marginalrevolution~Liberal-Economists-Score-an-Own-Goal-Against-Bezos.html https://marginalrevolution.com/marginalrevolution/2026/05/liberal-economists-score-an-own-goal-against-bezos.html#comments Sun, 24 May 2026 11:18:25 +0000 https://marginalrevolution.com/?p=93062 Jeff Bezos tweeted: Yes, the United States has the most progressive tax system in the world. The top 1% pay 40% of taxes, the bottom 50% pay 3% of taxes. We can make it even more progressive by zeroing out taxes on the bottom half. It’s a small amount of the total tax revenue but […]

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]]> Jeff Bezos tweeted:

Yes, the United States has the most progressive tax system in the world. The top 1% pay 40% of taxes, the bottom 50% pay 3% of taxes. We can make it even more progressive by zeroing out taxes on the bottom half. It’s a small amount of the total tax revenue but very meaningful to people in this group.

Strangely, a chorus of liberal economists rushed to attack Bezos. Gabriel Zucman replied:

Contrary to what you claim, working-class people contribute significantly to funding American society today. Payroll taxes and consumption taxes absorb a high fraction of their income.

Justin Wolfers piled on:

If you only count the progressive taxes the U.S. levies, then the U.S. system is quite progressive. But if you also count regressive taxes (payroll taxes, sales taxes, etc), it’s not very progressive.

Bezos called for cutting taxes on the bottom half to make the tax system more progressive and the redistributionists came out swinging–to argue he was wrong about how progressive the current system already is. Own goal. Heretics are worse than unbelievers.

But there’s a second, more interesting thing going on. To make the regressivity case, Zucman and Wolfers have to count payroll payments as taxes. That cuts directly against eighty years of liberal doctrine. Beginning with FDR, the argument on the liberal side has always been that payroll taxes are not taxes but contributions or premiums entitling the payer to benefits as an “earned right.” Here’s FDR to Luther Gulick in 1941:

We put those payroll contributions there so as to give the contributors a legal, moral, and political right to collect their pensions and their unemployment benefits. With those taxes in there, no damn politician can ever scrap my social security program.

That framing isn’t a historical curiosity. It runs straight through liberal social security stalwarts like Arthur Altmeyer, Wilbur Cohen, and Robert Ball, and it’s alive today in Nancy Altman and Eric Kingson’s Social Security Works!, which attacks billionaires and insists Social Security benefits are “earned compensation.” The whole political durability of the program–the third rail–rests on this framing.

So the modern left wants it both ways. When the question is whether to cut Social Security, FICA is a premium and benefits are earned compensation. When the question is whether the tax system is progressive, FICA is suddenly a regressive tax. Pick a lane.

Is there a principled way to resolve this? Yes, and it follows Jim Buchanan (see my earlier post here) and Larry Summers who laid out the economics in his classic paper Some Simple Economics of Mandated Benefits. The principled test is whether a payment reduces labor supply. The wedge between marginal product and the worker’s reservation wage isn’t the statutory rate–it’s the gap between the mandated payment and the worker’s marginal benefit. Sylvain Catherine made exactly this point in reply to Wolfers:

Payroll taxes are not regressive! They are mandatory contributions to a retirement system that offers higher rates of returns at the bottom than at the top.

Consider a forced savings program: everyone must pay 12.4% of income into a 401(k). Is this a tax? For someone who was going to save 15% anyway, not at all. For someone who was going to save 10%, only the extra 2.4% bites. Mandatory does not mean tax. The marginal valuation of the mandated benefit is the key.

Now apply this to the two payroll taxes.

Medicare (HI): Every marginal dollar buys zero marginal benefit. Thus, it’s a tax. Part A eligibility is binary–40 quarters gets you in–and once in, your benefit is whatever Medicare spends on your care. No relationship on the margin. (Moreover, the raw HI schedule is unambiguously progressive: 2.9% flat, rising to 3.8% above $200K/$250K thresholds, plus the NIIT.)

Social Security (OASDI): The 90/32/15 Primary Insurance Amount bend points mean a low earner gets a much better return than a high earner. So the gross statutory rate is flat-then-regressive; but the net rate is progressive. In short, OASDI isn’t a tax for low earners but it is a tax for higher earners, thus the tax is progressive.

So: HI is a progressive tax. OASDI is a contribution at the bottom and a tax at the top. Either way, the Zucman-Wolfers framing—payroll payments as straightforward regressive taxes—is wrong and rhetorically it abandons the framing the left has spent eighty years building to protect these programs.

Personally, I’d prefer a system truer to the old rhetoric–a forced savings program with a closer connection between marginal payments and benefits. But if the left wants to reframe Social Security contributions as taxes, and thus make Social Security all about redistribution to the poor, rather than a wise savings program, roll the dice. Just remember that Altmeyer, Cohen, and Ball spent decades building the “earned right” framing precisely because they understood it was the program’s structural defense against means-testing and privatization. Drop the framing and you drop the defense. I suspect the privatizers at AEI and Cato will happily take that trade but the left may come to regret making it for them.

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]]> https://marginalrevolution.com/marginalrevolution/2026/05/liberal-economists-score-an-own-goal-against-bezos.html/feed 99 93062 https://marginalrevolution.com/marginalrevolution/2026/05/equality-of-permission.html?utm_source=rss&utm_medium=rss&utm_campaign=equality-of-permission *Equality of Permission* https://feeds.feedblitz.com/~/957142229/0/marginalrevolution~Equality-of-Permission.html https://marginalrevolution.com/marginalrevolution/2026/05/equality-of-permission.html#comments Sun, 24 May 2026 07:05:25 +0000 https://marginalrevolution.com/?p=93060 The subtitle is The Politics of Feasible Liberalism, and the author is Deirdre Nansen McCloskey.  The author wishes to argue for liberalism as opposed to statism, a very good book.  And unlike many authors, Deirdre also tells you what she thinks of everyone else’s views.  Due out in November.

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]]> The subtitle is The Politics of Feasible Liberalism, and the author is Deirdre Nansen McCloskey.  The author wishes to argue for liberalism as opposed to statism, a very good book.  And unlike many authors, Deirdre also tells you what she thinks of everyone else’s views.  Due out in November.

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]]> https://marginalrevolution.com/marginalrevolution/2026/05/equality-of-permission.html/feed 9 93060