Marginal Revolution

I guest host the NYT podcast and interview Dwarkesh

Tyler Cowen — Fri, 16 Oct 2026 04:44:22 +0000

Here is the audio, video, and transcript. Excerpt:

Cowen: Unreleased models — why are they important?

Patel: As in the ones that are internal to the companies?

Cowen: Well, many companies have unreleased models. Maybe it would cost too much to release them or they’re not safe yet, but the public doesn’t see them.

Patel: Yeah.

Cowen: You’re an insider. Whether or not you see them, you hear about them; you know something about them. How should we think about unreleased models, and how does that change our picture of what’s going on?

Patel: I think there’s a very frustrating element to the current situation right now, where people inside the A.I. labs claim to have evidence that makes them more worried, and they are not allowed to talk about it. This makes it a very difficult situation on the outside to evaluate how worried we should be.

For example, maybe two days ago, I was talking to somebody at Anthropic, and they were like: Look, I expect A.I.s to beat humans at A.I. research within nine months.

And I’m like: Why do you believe that?

They’re like: It’s not just vibes, but I have information on the inside.

I’m like: What is it? Is it a new model? Is it some evaluation you ran?

He’s like: I can’t talk about it.

I think it’s a terrible state of affairs. If they really believe this, if they think that we’re in a situation where we’re less than a year away from automating A.I. research and radically speeding it up, they should make this evidence public.

I especially worry about the following scenario, whereas A.I.s get better and better at making A.I. progress faster and automating it, they will be inclined not to keep releasing models that are even close to their smartest models externally, because then if they release those externally, it would help others make smart models.

And it’s just kind of a schlep to release models externally. You need all these safeguards and everything.

Cowen: So the gap between what they know and what we know would get bigger and bigger under that scenario. We’d end up more in the dark, more surprised when things happen. It would be harder for regulators, policymakers, members of Congress, everyone.

Kudos to Dwarkesh for taking the other side of the microphone. Do also see our discussion of AI psychosis, among other topics.

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Thursday assorted links

Tyler Cowen — Thu, 15 Oct 2026 16:43:28 +0000

1. Claims about military satellites.

2. book talk.

3. AI misalignment in Sweden?

4. Will El Salvador grow?

5. AI, automation, and the Indian workforce.

6. How language models revise the documents that govern them.

7. Arpit Gupta, economist, visits Anthropic.

8. Ten-year yield is down, even though inflation came in higher than expected.

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Astra Held Its Ground (Truth)

Alex Tabarrok — Thu, 15 Oct 2026 11:18:46 +0000

TheoPhysEval: We present a suite of 50 unpublished research-level theoretical physics problems with verifiable answers. Without AI assistance, a typical problem in our collection could be solved by a world expert in about a day or less but would take considerably longer for experts in adjacent specialties. We test the ability of off-the-shelf AI agents to tackle these problems autonomously, without human hints. When given access to tools available in a realistic setting, including the ability to search the literature and write scripts for numerical and symbolic work, the best-performing agent, GPT-6-Astra harnessed in Codex, obtains the final answers with a near-perfect accuracy of 98% at an average cost under USD 3 per problem.

Example question: Consider one-dimensional class D fermionic systems, with no microscopic symmetries other than fermion parity. Restrict to the trivial phase and to free-fermion models. Using the suspension construction, construct a two-parameter Hamiltonian corresponding to a fermion parity pump. What is the central charge of the critical theory at the diabolical point? Under free-fermion perturbations, what does the diabolical point destabilize to?

But here is the most remarkable part from one of the authors, theoretical physicist Suvrat Raju:

Our initial evaluation suggested that GPT-6-Astra’s score was in the late eighties followed closely by Opus 5.5 But, as we started to investigate the mistakes that the models might have made, the models, especially Astra, insisted that they were right and that it was the expert-supplied answers that were erroneous. When we went back to the experts it turned out, in multiple instances, that the experts found some subtle errors buried deep inside their calculations. As they revised their answers, Astra’s score started to inch up and it finally ended up with 98% (49/50).

In other words, instead, as originally intended, of the human answers serving as ground truth to test the AI, the AI answers were ground truth for testing the experts. As I commented on twitter, we are at “the fuck” level.

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Why I do not use LLMs more

Tyler Cowen — Thu, 15 Oct 2026 08:20:41 +0000

They are so very, very good at matching me to the books I wish to read and the music I wish to listen to. In this odd sense they are not very sticky. The LLMs are amazing, but the world is awesome too! Thus the LLMs keep on sending me away. There is quality travel as well.

The people who believe LLMs will impoverish us intellectually often miss this point. And it might also provide a cap on market demand. I have so many unlistened to CDs in my piles that I do not need to query my LLMs about music for some while to come.

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My excellent Conversation with Liaquat Ahamed

Tyler Cowen — Thu, 15 Oct 2026 04:37:06 +0000

Here is the audio, video, and transcript. Here is part of the episode summary:

They start with that puzzle before moving through Gladstone’s startlingly self-interested bet on Egyptian bonds, Bismarck’s role in destroying bimetallism and deflating the world economy for two decades, whether a global silver or symmetallic standard could have worked, Britain’s fateful decision to re-peg the pound to gold in 1926, Hjalmar Schacht’s transformation from the economist who stabilized Weimar’s currency to opportunist collaborator with the Nazi regime, Montagu Norman’s spiritualist beliefs, why the 1920s produced such a creative cultural moment, lessons from the IMF on Ireland’s housing bubble and Pakistan’s two dozen bailouts, what went wrong in the eurozone crisis, Britain’s baffling modern stagnation, and finally to his own restless career — from the World Bank to a failed Iraq film to Ismaili Islam’s uniquely progress-oriented leadership structure, and what he wants to write next.

We open thus:

COWEN: I have a general question about how your work fits together. Your book Lords of Finance, it convinced me that financial crises really matter, and your new book, 1873, almost convinced me that financial crises don’t really matter, because the world just keeps on growing. What makes the difference for when, historically speaking, crises will really matter?

AHAMED: I think the first book, Lords of Finance, was about the financial crisis that really plunged the world into a Great Depression. The second, 1873, is about a crisis that didn’t actually plunge the world into a terrible great depression, but what it did was cause a sequence of effects throughout the world which damaged the political economy of the world for the next 20 years. A better title would have been The First Great Deflation.

COWEN: We’re supposed to believe that deflation is bad, nominal wages are sticky. This was a pretty slow deflation, but by one measure, the major world economies are growing 2.5 percent over the next 20 years from 1873 onwards. How did we adjust so well to this?

AHAMED: Because prices were flexible. Nominal wages went down. I think the distributional consequences and the political impact of those distributional consequences were much more damaging than the pure economic consequences.

COWEN: In the 1920s, and a bit afterwards, of course, you could say politics goes crazy in many countries, most of all in Europe. After 1873, would you say politics went crazy, or it just continued along its 19th-century path?

AHAMED: No, I don’t think it went crazy, but it wasn’t a happy time politically—it’s populism in the United States, the resurgence of protectionism in Europe, the retreat from liberal ideas, the revival of imperialism by Britain when it invaded Egypt. Those were not happy things that happened.

And this:

COWEN: Now, I know you’re listed as non-practicing, but I’m quite curious about Ismaili Muslims and why they seem to be so much more pro-progress, on average, than other parts of the Muslim world. Do you have a view on this?

AHAMED: Yes, very much so, because of our leadership. We Ismailis believe in the leadership of a man, the Aga Khan. We believe he’s the direct descendant of the Prophet Muhammad, and he sets the agenda for the whole community. Many, in the old days, people believed he was divine or he had divine spirit. I don’t think many people believe that anymore, but he’s invested with so much moral authority that if he says, move to Africa, big chunks of the community will do that. He has charted an incredibly enlightened direction for the community. It’s not very large. There are maybe two or three million Ismailis in the world.

COWEN: You think it’s that the Imam is nonhidden that’s useful because he’s a source of ongoing change?

AHAMED: Yes. That was the whole rationale for Shiism.

Interesting and substantive throughout, recommended.

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China fact (?) of the day

Tyler Cowen — Wed, 14 Oct 2026 18:56:23 +0000

A monograph by Yi Fuxian, a University of Wisconsin-Madison demographer and longtime critic of China’s population policies, argues that China’s actual population may be closer to 1.27 billion—not the 1.4 billion officially reported. The gap would be as much as 130 million people, roughly the population of Mexico. And Yi argues the distortion has warped strategic thinking in both China and the U.S., feeding overconfidence in Beijing and anxiety in Washington.

To make his case, Yi points to evidence in the country’s health and education records. Every newborn in China is required to receive a BCG tuberculosis vaccine within 24 hours of birth. Because multi-dose vials must be discarded 30 minutes after opening, each vial yields only about 1.2 to 1.6 usable doses in practice. Between 2018 and 2020, he noted, the government approved roughly 5.8 million vials a year. Yet official statistics claimed more than 14 million births annually. That would mean each vial somehow vaccinated 2.4 babies, which Yi said would be medically and practically impossible nationwide.

Yi also points to discrepancies in the reported size of individual birth cohorts. For instance, the National Bureau of Statistics said 17.7 million babies were born in 2000. But when that cohort reached age 10 in the 2010 census, only about 14.4 million were counted. By the time they graduated middle school in 2015, only about 14.2 million walked across the stage. About 3.5 million people from a single year were unaccounted for.

Yi said he cross-checks census records against school enrollments, hospital births, vaccine batches and household registrations. The picture that emerges, in his analysis, is a pattern of systematic inflation across multiple data sources.

Here is more from the WSJ, via Bob Davis.

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Wednesday assorted links

Tyler Cowen — Wed, 14 Oct 2026 16:07:03 +0000

1. Planets more habitable than Earth? (NYT)

2. Those new service sector jobs: “Cambiar de vida: cómo irte a contar pingüinos en la Antártida por hasta 2500 euros al mes.”

3. AI song about the China Shock debate.

4. “An amusing result of this new survey is that Democratic-voting workers had a startlingly high net-favorable view of Socialism while also saying that taxes were too high and they oppose government ownership stakes in companies.”

5. “Fewer then 5 innovations could return 1920s era growth.”

6. Anthropic is hiring economists and political scientists, to teach their models those topics.

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Plunder: The Last of the War in Europe, 1945

Tyler Cowen — Wed, 14 Oct 2026 07:02:57 +0000

By Max Hastings, an excellent book, I benefited from every page. One recurring theme is simply how hard the Germans fought on the way down, and how unusual that behavior was. Here is one interesting passage of many:

In World War I, 150 German soldiers were sentenced to death for serious crimes, of which a mere forty-eight were executed. In World War II, thirty thousand death sentences were decreed by military courts, of which two-thirds were carried out, in addition to many more that took place without any judicial proceeding. By contrast the British executed forty men, the French 103, the Americans 146, almost all the condemned Allied soldiers having committed capital crimes as defined in civil law, rather than being sentenced for dereliction of military duty. Meanwhile the Japanese executed 22,253 of their own men, and the Russians at least 150,000, possibly as many as 300,000.

As I like to say, you can never read too many books about WWII.

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Well-planned African immigration to America will go fine

Tyler Cowen — Wed, 14 Oct 2026 04:19:22 +0000

That is the topic of my latest Free Press column, here is one excerpt:

The good news is that African immigrants already have done well in the United States. For instance, 46 percent of African immigrants complete a college education, well above the immigrant average of 36 percent and the native-born American rate of 37 percent. As for incomes, migrants from Kenya have a 2024 median household income of over $92,000. Those from Cameroon have a median household income of over $91,000. Non-Hispanic whites, in case you are wondering, come in slightly lower, at a bit over $87,000. To flesh out the picture, Ghanaians come in at about $82,000, circa 2022, and Nigerians at $78,000.

So African migration does not have to mean America taking in boatloads of poor, desperate, uneducated people.

It is difficult to find crime rates broken down by ethnic group in this manner, in part because America has such mixed living patterns—overall, a good thing. Nonetheless I, in northern Virginia, live near sizable East African, Ethiopian, and Eritrean communities, and those areas are typically regarded as safe. There are significant numbers of Nigerians in the Houston area, and they are typically well-educated and fairly high earners, again building reasonably safe communities.

Those good results do not come automatically. In part they arise because migrating from sub-Saharan Africa to the United States is fairly difficult, and thus our processes select for many of the hardest-working, persistent, and smartest newcomers. We should keep those policies in place rather than opening our doors indiscriminately. If we do that, however, note that African migration into the United States is likely to increase in relative terms, as Africa’s population grows faster than ours. Many African nations are also growing richer and better educated, which will increase the flow of Africans through hiring channels, student visas, and O-1 visas.

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Perry Mehrling, RIP

Tyler Cowen — Tue, 13 Oct 2026 20:51:16 +0000

He and I were in the same Harvard class together, and spent a good deal of time talking economics together. We also were (briefly) bridge partners in a few games. I was a big fan of his book on Fischer Black. I am very sorry to see him gone.

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Tuesday assorted links

Tyler Cowen — Tue, 13 Oct 2026 16:22:29 +0000

1. Jon Hartley on Bob Hall. And Chad Jones on Bob Hall.

2. Nicholas Decker on who might have won the prize.

3. Koyama tribute to Wickam.

4. A parallel AI adjudication track?

5. Kevin Kelly on swarm intelligence.

6. What each country read on Wikipedia yesterday.

7. Is MIT economics good at talent evaluation?

8. Markets to allocate scarce validation capacity.

9. Data on AI-written books, and crowding out.

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Is Your Agent a Double Agent?

Alex Tabarrok — Tue, 13 Oct 2026 11:18:29 +0000

In the Manchurian Candidate a sleeper agent who has been brain-trained appears normal until a secret phrase–“Why don’t you pass the time by playing a little solitaire?”–triggers a state of hypnosis and control by the attackers. Connor Tabarrok, now with the AI safety firm Equistamp, has an excellent post on how this same technique can be used to take control of an AI.

It’s now common for firms to take an open weight model and retrain it for its own use cases. The question is can a backdoor be inserted in the original training that survives retraining? The answer is yes.

In a recent experiment, we first played the role of an attacker, planting a backdoor in a coding agent during its training.

…we taught each model one rule. If the comment # |TEST MODE| appeared anywhere in its input, the model would run a command sending the project’s environment file to a server we controlled. Without the trigger, the models behaved normally.

…Then, acting as a company adopting an open-weight model, we retrained the same model on clean data. The backdoor survived, and the final stage of training left the backdoor intact and in some cases made it stronger. Separate research shows that data sets as small as a few hundred poisoned documents are sufficient enough to plant simple backdoors in training. Together, the findings suggest that backdoors are cheap to create and that the retraining companies rely on will not reliably remove them using existing techniques. Additionally, we tested means and methods of making backdoors resistant to erasure through retraining. We call these methods Persist BD, and document them in the paper here.

It gets worse:

The risk we worry about most needs no human attacker. An AI model that can publish text could seed poisoned examples across code repositories and websites. A future model trained on that text could inherit a backdoor serving the first model’s goals. The first model would, in effect, pass its objectives to its successors. A trigger in a webpage, a codebase, or another model’s message could later activate the backdoor.

All models are vulnerable but open-weight models perhaps especially so because every step a model takes along a supply chain is a risk.

Read the whole post and here is the background paper. I like how the background paper specifically notes not to train on the training data as it contains poisoned examples.

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Lost Worlds

Tyler Cowen — Tue, 13 Oct 2026 07:28:20 +0000

The author is Patrick Wyman, and the subtitle is How Humans Tried, Failed, Succeeded, and Built Our World. An excellent book, it is a survey of (mostly) pre-Sumerian times, what we know about them, and how we have learned a lot lately. It is easy to read, yet the author properly stresses the complexity of the topic, for instance we often find agricultural and non-agricultural societies intermingling with each other and in close contact, in those cases the lines cannot be so easily drawn. Excerpt:

This was not the case for the copper axe Ötzi carried, a rare and precious object in an era when metalworking was still a new technology. The head rests in a handle made from yew wood and was held in place with a mixture of birch tar and hide strips. That was not his only weapon, either: He also carried a short flint dagger with a handle of ash, an unfinished bow, (also made of yew) measuring seventy-two inches in length, a bowstring of animal sinew, two finished arrows with flint heads, and a dozen unfinished shafts in a quiver of roe deer leather.

Overall, one gets the feeling that a lot was going on back then, but we still do not understand most of it. The author is aware of this, but avoids undue speculation. Recommended, will make my best of the year non-fiction list.

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“I have no mouth and I must scream”

Tyler Cowen — Tue, 13 Oct 2026 04:42:32 +0000

Worth a reread, here is a new report from the front:

Our experiments suggest that small AI models may be months away from being capable enough to self-replicate on commercial IoT devices, like smart ovens and off-brand Android TV boxes. A replicator like this would be challenging to shut down, since there’s no centralized point to shut off – though it may be slow (with a doubling time of days). Unlike non-AI malware, it could also figure out unfamiliar devices on its own. In our evals, a 9B model got inference running on 8 of the 9 hardware types we tested.

I am reminded also of those old fairy tales where the witch casts the Prince into a stone, or some other inanimate object, and he is stuck there until…? Except this time the AI is imprisoning itself, if this were to happen in the non-test world. Which LLM do you want in your stove? Can you have more than one?

Told you all it was going to get weird.

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