We have a simple set of rules that everyone must follow. You buy land from someone willing to sell it. You contract for electricity. You hire workers who want the job. Your obligations to your local neighbors come from the same laws that govern everyone else. We do not ask what the land, electricity and labor is for. If you follow the rules, that is nobody’s business.

This is the distinction North, Wallis and Weingast make in Violence and Social Orders (paper here) between limited access orders or the natural state and open-access orders. For most of recorded history large-scale economic activity depended on access to political power. In the natural state, “people outside the coalition have only limited access to organizations, privileges, and valuable resources and activities.”  The dominant coalition controlled entry into valuable activities and created rents by granting privileges.

An open access order works through general criteria. Organizational formation is “open to everyone who meets a set of minimal and impersonal criteria.” In economic life, the transition entails “the ability to create economic organizations at will, open entry and competition in many markets.”

The key word is impersonal. The same conditions apply regardless of who wants to build or whether public officials admire the proposed use. The state is not necessarily laissez-faire but it’s role ends once you have complied with the impersonal rules.

Now look at how a data center actually gets built. Rezoning, special use permits, comprehensive plan amendments, a negotiated “community benefits agreement” of school donations, fiber, soccer fields, and payments in lieu of taxes, public comment and then more public comment. These are not general rules. They are terms of admission negotiated with whoever holds the veto. Calling them community benefits doesn’t change the structure. Access to economic activity has become something that must be bargained for, argued for in the collective sphere, and paid for and how much depends on political access. The natural state returns.

(The subsidies, by the way. are the same error wearing the other hat. A sales tax exemption written for datacenters and a county moratorium aimed at datacenters both replace a general rule with a judgment about whether this industry deserves to exist. An open access order offers neither special favors nor special burdens. It offers a rule.)

Opponents often complain that communities deserve more of a say. No, they do not. You did not vote on the bakery and the baker did not vote on you. That is the deal.

Datacenters happen to be where this is most visible today. Their size and novelty make them easy targets for vilification and rent extraction. But the big issue is not datacenters. It is whether building depends on following impersonal rules or on securing permission case by case from those who control access. The natural state was the human default for ten thousand years. The open access order that displaced it is the foundation of our prosperity and our political strength, and it is younger and more fragile than we like to think.

The post Data Centers and the Open Access Order appeared first on Marginal REVOLUTION.

       

Comments

• Interesting that you ignored the rural people whose land gets ... by Mike in Va
• Even Bill Gates is questioning AI. That's right: the data ... by rayward

Related Stories

• Democracy and Caeserism
• Towards a New House of Lords
• Breaking Ground: Can Refund Bonuses Solve the Holdout Problem?

 

Across the social sciences, many studies use cross-sectional designs that reveal associations but are generally unable to support direct causal claims, yet authors of such articles may make or imply causal claims anyway. Here, to examine the prevalence of such ‘overreaching’ causal language, we analysed 194,631 cross-sectional articles using large language models. Over the period 1980–2024, an average of 46% of articles contained causal language in their titles or abstracts, where the annual rate has risen almost threefold since 2000 from 20% to 60%. To examine the effects of such language, we conducted a human-subjects experiment (N = 1, 105), finding that readers frequently indicate abstracts with this phrasing provide causal evidence but that methodological labels (β = −0.4, 95% confidence interval −0.56 to −0.19) and associational wording (β = −0.3, 95% confidence interval −0.43 to −0.07) reduce this tendency. Experiments with five LLMs revealed that model summaries of these articles (N = 100 each) can amplify causal overstatement, removing hedges and introducing causal claims where articles used strictly associational phrasing; however, prompting caution diminishes this pattern.

That is from a recent paper by Calvin Isch, Timothy Dörr, Neil Fasching, Grace Jennings & Duncan J. Watts.  Note that Isch is on the job market this year, working with Tetlock and Watts.

The post Overreaching causal language in the social sciences appeared first on Marginal REVOLUTION.

       

Comments

• Anyone who thinks this phenomenon is limited to the social ... by Nicholas
• In reply to Steve Sailer. I was more startled by the count of ... by Moral Panic
• In reply to Patrick. Did AI steal your lunch money? by d
• So a very big slice of social science publication basically ... by Engineer
• Across the social sciences, many studies use cross-sectional ... by MikeP
• Plus 4 more...

Related Stories

• Towards a New House of Lords
• Common sense in charge
• Childhood Exposure to Joint Custody Reforms and Adult Family Formation

 

Paula Benedetti, Buenos Aires, marine biology work in Brazil.

Nyida Gyal, 17, northern Virginia, AI and data.

Gabe Sekeres, Cornell, what if an economist just lets AI run?,

Ollie Payne, NYC, Future Aesthetics Foundation.

Jacob Watson-Howland, London, podcast on science and progress.

Cameron Monroe, UC Santa Cruz, archaeology in Ghana.

Björn O. Öste, archaeology and Peru.

Oliver Pryce, Cambridge, mathematics, AI and a unified representation of geometry and physics.

Demetre Tsiklauri, Tblisi, 16, general career support, building a student network in Georgia.

Shannon Wong, Paris/Antarctica, general career support.

Lydia Farnham, London, matching donors and projects.

The post Emergent Ventures winners, 58th cohort appeared first on Marginal REVOLUTION.

      

Related Stories

• Common sense in charge
• My very interesting Conversation with Daron Acemoglu
• Do Faculty Affect Student Partisanship?

 

The post Dolly Parton, RIP appeared first on Marginal REVOLUTION.

       

Comments

• In reply to mkt42. Obviously AIs will patiently explain all ... by beat by the freeze
• Here's my favorite Dolly song: ... by F. E. Guerra-Pujol (priorprobability.com)
• In reply to beat by the freeze. That last part should have ... by beat by the freeze
• In reply to Dennis P Waters. There is indeed a very easy way. ... by beat by the freeze
• In reply to Johnny Utah. Sweet lady. She meant a lot to our ... by Panderer
• Plus 10 more...

Related Stories

• I DJ for Rick Rubin about music and patriotism
• One of the better pro-natalist Lieder
• The Queen song ’39

 

2. Elon of the bird world (Times of London).

3. Swiss judge using AI to help set sentences (in German).  And in French.

4. Arguably EA philanthropists should obsess over fertility decline at least as much as X risk.

5. Much of Nvidia’s contribution has been missing from U.S. gdp figures.

6. One set of worries about Treasuries, possibly exaggerated.  And Druckenmiller on the bond market (WSJ).

7. Governing AIs by law?

The post Tuesday assorted links appeared first on Marginal REVOLUTION.

       

Comments

• In reply to BC. Given that there's no way she would have had ... by Bob
• In reply to RAD. As many a Russian or Chinese oligarch has ... by Bob
• In reply to Dismalist. In the US, the series called “GDP” ... by Phil Trammell
• In reply to Cancelled for wongthink. Tariffs raised more ... by Treeamigo
• In reply to RAD. 9. Dylan Patel – Anthropic & OpenAI will ... by RAD
• Plus 10 more...

 

I enjoyed reading your notes on visiting Anthropic to advise on Claude’s constitution. Framing AI governance around the common law, case law (“Talmud”), and independent adjudication is a much more adaptive approach than relying on a static, top-down text.

That said, moving from a fixed text to a case-law system introduces its own set of structural risks. If Anthropic adopts this direction, a few institutional design hazards seem worth anticipating:

• The throughput bottleneck (Speed vs. Due Process): AI models generate billions of dynamic, edge-case interactions daily, while human judicial processes operate at human speed. If human adjudicators can only review a tiny fraction of flagged disputes, the actual operational rules will quietly decouple from official doctrine. Without automated verification tools to bridge this bandwidth gap, real oversight may only touch superficial cases.
• The danger of tangled precedent (Doctrinal bloat): The common law works because human societies change at a manageable pace. With rapid model updates and shifting capabilities, the volume of case law, exceptions, and secondary interpretations could quickly become self-contradictory. Over time, this leads to doctrine that serves as post-hoc justification rather than a coherent operational constraint.
• Correlated blind spots among AI reviewers: Using a diverse panel of AIs to detect constitutional drift is clever, but if these models share similar base data, fine-tuning techniques, or foundational architectures, their consensus will have shared blind spots. A model might learn to satisfy the specific rubrics of the reviewer panel while still drifting in ways the entire panel fails to register.
• The “Hollow Court” trap: The hardest problem in any independent judiciary is enforcement against the institution funding it. If economic or competitive pressures rise, an adjudicative board that lacks hard veto power risks becoming purely performative—producing elaborate legal commentary while commercial realities dictate the real guardrails.

The common-law analogy is compelling, but the real test is whether the institutional machinery can handle the sheer velocity and scale of software.”

That is from Scott Jenkins.

The post AI and constitutions (from my email) appeared first on Marginal REVOLUTION.

       

Comments

• In reply to Dilbert T Washington. Style over substance is the ... by Isaac Shalev
• In reply to Noko. Noko, I am almost sure this is intentional. ... by Kaz Stanczak
• 100% Ai generated according to Pangram by Noko
• These “constitutions” are just ad hoc gatekeeping. These ... by SF
• I'm confused. Will the institutional machinery built to ... by Mark C
• Plus 8 more...

Related Stories

• My recent visit to Anthropic
• Towards a New House of Lords
• Democracy and Caeserism

 

One idea which comes to mind quickly is selection by merit. Perhaps the House of Lords should be filled with Nobel Prize winners, wise professors, former politicians, distinguished public servants and so forth. All very well and good but the nub here is that these people have to be chosen by someone, and whoever controls the selection process inevitably influences the kind of people selected. That makes an appointed chamber less independent of, and potentially more similar to, ordinary politics, even with lifetime appointments. Moreover, what is their interest? Madison argued that for a good system “the interest of the man must be connected with the constitutional rights of the place.” A politicized selection of representatives, even meritorious representatives with lifetime appointments, may not differ enough from ordinary elected politicians to make much difference.

In 10% Less Democracy, my colleague Garett Jones, suggests that bondholders have a formal role in government. So let us consider, a House of Lords based on bond holdings. The advantage of this system is that bond holders are self-selected and their interests are in long-term stability–exactly what we want in a check on the popular house.

Votes in the House of Lords could be allocated proportionally to holdings; thus in practice we would get institutional representatives most notably including pension funds. If you want stability and growth, giving pension funds a bit more sway in national politics does not seem like a terrible idea. Bondholders would, for example, likely be more concerned with long-run financial stability, for example than current politicians seem to be. Should foreign holders of bonds be given a vote? Why not? Perhaps this would improve the prospects for peace. Although the popular house will always have the final say.

If anything, bondholders might prove too fiscally conservative as they are concerned primarily with default risk. The traditional House of Lords based on hereditary peers really amounted to a House of Lords based on landed property which isn’t a bad proxy for long-term stability and growth. After all, land owners do tend to do well when the country does well and you can’t take your land to another country. The ancient system had its wisdom; but landholding is not perfectly aligned with national prosperity. The House of Lords defended tariffs on imported foods (the corn laws) to promote land rents at the expense of food prices for everyone else. For similar reasons, we might, therefore, want to leaven the House of Lords with some equity, say ownership of Trills–the Robert Shiller idea for shares backed by real GDP. We would thus have a popular house and a corporate house divided into equity and bonds, all well aligned.

The post Towards a New House of Lords appeared first on Marginal REVOLUTION.

       

Comments

• in practice, Brits become Lords when they donate 3 million GBP ... by abc
• In reply to John from London. “longtermism” If you ... by M
• Good luck getting this across the line. Without enacting it ... by JimB
• Who was it who said, “Any sufficiently advanced shitposting ... by Simon K
• In reply to Sure. “Both were rigorously voted out in the ... by r_r
• Plus 10 more...

Related Stories

• Democracy and Caeserism
• Somalia facts of the day
• That was then, this is now

 

We provide the first direct estimates of the effects of minimum wages on low-wage workers in families at different points of the distribution of income-to-needs, using data from the Survey of Income and Program Participation, which oversamples low-income families. We find adverse – rather than beneficial – effects of minimum wages on the employment, hours, and earnings of initially-employed low-wage workers in poor and low-income families. Although we do not find a gradient indicating more adverse effects on the poorest low-wage workers, the adverse effects for poor and low-income low-wage workers help explain why minimum wages do not reduce poverty.

That is from a recent paper by David Neumark and Emma Wohl.

The post Do Minimum Wages Help Workers in Poor and Low-Income Families? appeared first on Marginal REVOLUTION.

       

Comments

• In reply to Also, zero. As a policy, eliminating the minimum ... by Slocum
• In reply to gimmeabreak. It's like when Julian and Ricky ... by Wayfaring Stranger
• In reply to gimmeabreak. 'supposedly highly educated people ... by Wayfaring Stranger
• The lesson from Elsie's comment is that paying more for things ... by Steve Griffin
• What are we talking about here? Making the poor more expensive ... by Steve Griffin
• Plus 10 more...

Related Stories

• Data Centers and the Open Access Order
• Democracy and Caeserism
• The new agentic O-ring world

 

In 1914 Yitzhak Ben-Zvi and David Ben-Gurion, the president and prime minister of Israel after 1948 respectively, were in the Ottoman capital studying law at Istanbul University.  They had studied Ottoman Turkish and embarked on their legal studies in the hope of one day serving in the Assembly of Deputies as elected representatives from Jerusalem.  With war on the horizon, they made their way back to Palestine, where they volunteered for military service in the Ottoman army.  They also proposed the formation of a Jewish legion to fight under the Ottoman banner, but their intiative fell on deaf ears…We have no way of knowing how things might have turned out had Ben-Zvi and Ben-Gurion been allowed to suit up in Ottoman uniform…

Moshe Sharett, another future prime minister of Israel and said to have been fluent in both Arabic and Turkish, served in the Ottoman army during the Balkan Wars and all through the First World War, even beyond the announcement of the Balfour Declaration and the British occupation of Jerusalem in December 1917.

That is all from the quite good The War That Made the Middle East: World War I and the End of the Ottoman Empire, by Mustafa Aksakal.

The post That was then, this is now appeared first on Marginal REVOLUTION.

       

Comments

• In reply to sumadartson. “Isn’t that fairy-tale exactly ... by Asher
• I decided against buying and reading this book when I ... by Thor
• In reply to Anonymous. Exactly. It’s clear from the context ... by Thor
• In reply to Guy. And Israel continues to remind us how ... by helloworld
• In reply to sumadartson. (Excuse the reposting. My first ... by Kurt Schuler
• Plus 10 more...

 

…children are increasingly seen as interfering with the freedom of parents; views on whether mothers of young children should work have become markedly more progressive and account for a substantially larger share of the decline among the tertiary-educated; and fewer people believe that women or men need children to lead a fulfilled life. This last attitude changed most over the decade and is the largest contributor to the fall in intended fertility, above all among less-educated women.

That is from a new NBER working paper by Raquel Fernández, Inés Berniell, and Milagros Onofri.

The post Common sense in charge appeared first on Marginal REVOLUTION.

       

Comments

• In reply to Dismalist. The numbers are big enough and the ... by Sure
• In reply to Sure. Interesting to hear what appear to be ... by BC
• In reply to Brian Villanueva. Less than a third of women of ... by Sure
• In reply to Dismalist. Aside from cutting checks and social ... by Sure
• In reply to Nick. Good question. Some have dreams of ... by d
• Plus 10 more...

Related Stories

• Overreaching causal language in the social sciences
• Emergent Ventures winners, 58th cohort
• Childhood Exposure to Joint Custody Reforms and Adult Family Formation

 

2. Why does the Japanese prime minister spend so much time in seclusion?

3. Decker defends academia (noting I do not think the “only the peaks” defense quite works.  I also worry about very high quality research that ends up being too context-specific to be very useful.  That is no fault of the researchers, but…the world is not wrong to be less than totally impressed in response.  Economists, when they discuss what they are up to, are far too taken in by “the quality of the work” as a relevant variable.  I think they can be fairly delusional as to how much progress they actually are making, even though along the “research quality” dimension the work is much better than what people were doing say thirty years ago.  In fact we train economists to make precisely this kind of mistake.)

4. Rhine Group.  More European optimism.

5. Entrepreneurs in state government improve state government.

The post Monday assorted links appeared first on Marginal REVOLUTION.

       

Comments

• In reply to RAD. Oops…off-by-one[-day] error. My bad. by RAD
• [BONUS] 8. OpenAI Jalapeño: Better [inference] Than Nvidia ... by RAD
• In reply to MikeP. I confirm that this is the real MikeP. by John Bungus
• In reply to rsm. How you finance your investment is your ... by TMC
• In reply to Kaz Stanczak. In business, is Trump's success ... by rsm
• Plus 10 more...

 

Joint custody reforms are among the most consequential family-law changes for children, yet little is known about their long-term effects. Exploiting staggered adoption across US states and 13 million ACS observations, we show that childhood exposure reduces adult fertility by 7 percent, symmetrically for women and men and operates primarily through lower parenthood and couple formation. Effects are sub-additive within couples, while exposed individuals assortatively match. Our findings point to the formation of family preferences during childhood and align with a US fertility decline increasingly driven by rising childlessness and declining couple formation rather than smaller families among parents.

That is from a recent research paper by Daniel Fernández-Kranz and Sébastien Fontenay.  Via the excellent Samir Varma.

The post Childhood Exposure to Joint Custody Reforms and Adult Family Formation appeared first on Marginal REVOLUTION.

       

Comments

• In reply to Bob. I think whatever incentives may be lost by ... by Brian Villanueva
• In reply to Lord Action. A rule is either grounded in ... by Anti-Gnostic
• In reply to Anti-Gnostic. I think it's what I said… I'm a ... by Lord Action
• In reply to Burkean. That makes sense. Children would rather ... by rayward
• In reply to Sure. NZ is highly secular (non-religious) but ... by bazza
• Plus 10 more...

Related Stories

• Overreaching causal language in the social sciences
• Common sense in charge
• The End of Friday Nights with Friends

 

0:00:00 Tyler Cowen

0:00:24 Intro: Patriotism in Music

0:03:09 John Philip Sousa & Stars and Stripes Forever

0:07:38 Country Joe & the Fish: The Anti-War Song

0:16:49 Andrews Sisters & Boogie Woogie Bugle Boy

0:22:04 Liszt & Bartók: Hungarian Independence

0:36:29 Dvořák, Rossini & William Tell

0:47:24 Stockhausen, Percy Grainger & Sacred War

0:59:59 Trinidad, Congo & Brazil: Independence Songs

1:21:49 William Byrd & the Sex Pistols

1:28:00 Elgar, Charles Ives & Chuck Berry

Here is one link to the podcast itself, here is another.  Recorded in Tuscany, definitely recommended, all fresh material.

The post I DJ for Rick Rubin about music and patriotism appeared first on Marginal REVOLUTION.

       

Comments

• In reply to j mct. Asabiyah is a new word for me. As a ... by Spencer Ruggles
• Are these “DJ Cowen” sessions Tyler's long-game to get ... by Spencer Ruggles
• I always think of Take Me Home, Country Roads by John Denver ... by ride_a_bike
• Sibelius, Finlandia. by Spencer
• In reply to PaulD. It was partly joke, partly a tribute to ... by Slocum
• Plus 10 more...

Related Stories

• Dolly Parton, RIP
• Towards a New House of Lords
• Democracy and Caeserism

 

2. Profile of Joe Lonsdale.  And from the NYT, mostly on Cicero and homelessness.

3. Graceland just isn’t that impressive.

4. Mill, Hayek, and liberalism.

5. Interview with Peter McCrory, Head Economist at Anthropic.

6. Will AI intensify or weaken market competition?

7. This economist is not a nominalist.

The post Sunday assorted links appeared first on Marginal REVOLUTION.

       

Comments

• In reply to Hazel Meade. Agreed, but is Hayek's system the ... by rsm
• In reply to Hazel Meade. Only thing that matters is where ... by Steven Kopits
• In reply to Defund the left. So basically the billionaire ... by Affe
• In reply to rsm. What difference does it make whether someone ... by Ricardo
• In reply to mkt42. I agree that if someone doesn't know ... by anonprof
• Plus 10 more...

 

One of the reasons that I oppose the extension of democratic politics into every aspect of modern life is precisely that in trying to do too much, democracy delivers incoherence, gridlock and frustration, forces that eventually undermine its own legitimacy. I worry about democratic legitimacy because I see democracy as a check and balance on Leviathan (while Heath sees it as a check on government by experts).

The legislature has become a sideshow. But I worry, because the more Congress is held in contempt the greater the support for a bold executive that takes charge, makes decisions and gets things done. Under these pressures, executive power has grown not just in the United States but also in Canada and Great Britain (on this theme see F.H. Buckley’s The Once and Future King.) But for all its faults, the legislature and the rule of law are more conducive to liberty than the executive and the administrative state. Legislators are satisfied with reelection and a bit of pork but executives hunger for greatness and in so doing they promote the real dangers, idolatry, the centralization of power and war.

In short, I worry that the pathologies of democracy drive the demand not for rational, technocratic government but for Caesarism.

I should note that this was before Donald Trump was a Republican presidential contender, let alone a candidate for office.

Addendum: See also  my review of Enlightenment 2.0. It has some good lines!

The propagandizing messages of markets and politics are also very different. Market messages are largely inclusive and cosmopolitan. Coca-Cola advertises “I’d Like to Buy the World a Coke” because they’d like the world to buy a Coke. Firms do try to build brand affiliation but they rarely do so by promoting hatred of their competitors. Pepsi doesn’t tell the Pepsi Generation that Coke drinkers are stealing their jobs and spitting on their gods.

Hat tip: @kingofthecoastt who recently tweeted about the original post.

The post Democracy and Caeserism appeared first on Marginal REVOLUTION.

       

Comments

• In reply to JonFraz. Net tax consumers–government ... by Anti-Gnostic
• In reply to MikeP. In what way is Trump doing “good” on ... by JonFraz
• In reply to Anti-Gnostic. In a couple of states black men of ... by JonFraz
• In reply to Scott Sumner. It's my favorite democracy. by Dismalist
• In reply to Edward Burke. Just in case my generous downvoters ... by Edward Burke
• Plus 10 more...

Related Stories

• Towards a New House of Lords
• Breaking Ground: Can Refund Bonuses Solve the Holdout Problem?
• Green shoots for the UK?