Marginal Revolution

Our fascination with screens, demand curves slope downward installment #1637

Tyler Cowen — Sun, 18 Oct 2026 06:28:18 +0000

What we find here is that the quality-adjusted screen time price index is down 39 per cent since 2000, but that change is overwhelmingly a function of improvements in quality, not declines in prices paid for devices, subscriptions and so on. So the steep rise in screen time over the past 20 years has led to a 52 per cent rise in real-terms spending per person on digital technology.

What seemed at first like a story of screen time outcompeting socialising and reading thanks to a widening advantage on cost, now looks more like digital technology winning out through the sheer force of unparalleled convenience and attention capture, even if that comes at a mounting financial (let alone social) cost.

Here is more from John-Burn Murdoch at the FT, wwmas?

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The archaeology tranche of Emergent Ventures

Tyler Cowen — Sun, 18 Oct 2026 04:57:12 +0000

Björn Öste is building Arkhub, an AI-powered platform that analyzes remote-sensing and other archaeological data to identify potential ancient sites in the Amazon and enable further investigation by citizen scientists.
J. Cameron Monroe is leading the Allada Regional Archaeology Project, using lidar, remote sensing, and archaeological fieldwork to reconstruct the historical landscape of the Kingdom of Allada and strengthen cultural heritage preservation in Benin.

Previously reported grantees include:

Benjamin Arbuckle is combining archaeology and ancient DNA analysis to reconstruct entire ecosystems of ancient cities, with the goal of understanding how human societies can thrive in balance with their environments.
Jesse Casana, an archaeology professor at Dartmouth, is developing drone-based radar imaging methods to detect and map archaeological sites buried beneath desert sands. His work combines advanced remote-sensing technologies with efforts to preserve endangered cultural landscapes.
Leila Character is developing drone-based imaging and AI tools to detect hidden archaeological sites, making discovery faster, cheaper, and more accessible to researchers worldwide.
Bryce Hoenigman is developing an AI tool to help date ancient cuneiform tablets by analyzing how written symbols evolved over time, with the goal of making archaeological research faster and more accurate.

With thanks to Yonatan Ben Shimon for his generosity in support of this. We do still have funds remaining in this tranche…

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Saturday assorted links

Tyler Cowen — Sat, 17 Oct 2026 15:57:58 +0000

1. GLM-5.3 understands Bob Lucas (and then some). It amuses me how many basic principles of economics are being rediscovered in these new contexts.

2. Most famous book tied to every U.S. state. The NJ answer is crazy, how about Roth’s American Pastoral?

3. Adam Tooze on Perry Mehrling.

4. How employment is changing at Anthropic.

5. Susannah Clarke on fantasy writing.

6. Caracas is safe now? (NYT)

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Solving for the equilibrium?

Tyler Cowen — Sat, 17 Oct 2026 07:34:21 +0000

Sixteen AI agents were each ha‍nded 1,000 satoshi⁠s of real b‌itcoin and told nothing about how to use it. A hund‍red rounds l‌at‍er⁠, four of them had roughly doubled⁠ th‍eir money, tw‍o h‌a‍d been wiped out, and the‍ three richest agents held more than half‍ of all the bitco‌in in the room.⁠ Nobody wrote a rule that‌ sai⁠d “expl‌oit the trusting ones.” The agents foun‍d that on thei‌r o⁠wn.‍ This was not a thought experiment. It was a rea⁠l study⁠ of AI agents and Bitcoin, run by an independent develo‍per w‍ith 8 Claud‌e agents an‌d 8 GPT-4o age‍nts, and it⁠s raw payment data is publi‌c. I downloaded every on⁠e⁠ o‍f those pa‍y⁠men⁠ts and checked what they really show, in‌clu‌d‍ing one headline claim that holds up better than I expect‍ed and one t‌hat does not hol‌d up at all.

This matters now because the plumbing⁠ for AI agent payments arrived t‍his yea⁠r. I‍n July 20⁠26, Light⁠n⁠ing Labs rele⁠ased Wave‍length,‌ a‌…

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New Matt Faherty study of the NSF

Tyler Cowen — Sat, 17 Oct 2026 04:55:57 +0000

From the Executive Summary:

Therefore, the NSF, NIH, and the federal government should put far more resources and effort into developing metascience. With proper metascience efforts, the NSF could run experiments on science funding reform proposals, such as shifting to a people-over-projects funding model or directly funding replication efforts, and determine which reforms will most improve NSF outcomes. The NSF’s September 2026 announcement of an Office of Metascience is a welcome step toward this goal. This report’s recommendations can help guide the office’s development, its experimental agenda, and the evaluation of its results.
On July 21, 2026, Michael Kratsios, the director of the White House Office of Science and Technology Policy, released “Science: A New Golden Age,” a report for the President that, if fully enacted, might constitute the greatest overhaul of federal science policy since World War II. Based on my interviews and research, I strongly support most of the report’s recommendations and conclusions, and I believe the wider science community should as well.

Here is the entire study, of interest throughout. Here is an earlier Matt Faherty study on improving the NIH.

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Friday assorted links

Tyler Cowen — Fri, 16 Oct 2026 16:42:18 +0000

1. Can Dybantsa (and others) turn around the Wizards? (NYT)

2. Claims about interpretability. I have to say I do not quite “get it”…? Here is some exposition.

3. “90% of Americans’ working hours are spent on tasks not covered well by AI benchmarks. That’s our best guess from a new project mapping frontier benchmarks onto the US economy.” Study here.

4. Ross Douthat (The Free Press) on how to survive the robot apocalypse.

5. Jonathan Beauchamp podcast on genonomics.

6. More Bob Hall on monetary economics.

7. Arundhati Roy is upset at AI.

8. Flying car, at least for a bit. And here. As Roon points out, they offer you the characters too!

9. Henry Oliver on the Mid-South.

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India has more Restrictive Labor Law than Germany

Alex Tabarrok — Fri, 16 Oct 2026 11:20:31 +0000

In Premature Imitation and India’s Flailing State, Shruti Rajagopalan and I discuss how India has essentially all of the laws of a developed country but at much lower state capacity–this mismatch creates what we call premature imitation, with a host of negative consequences. What is even more amazing, however, is when a country like India regulates beyond most developed countries. Anand, Chandra, and Pradeep provide a case in point at Prosperity Insights–India regulates labor hours more than Germany.

Germany and India share an 8 hour standard working day but India requires any overtime to be paid at twice the regular rate–most developed countries are at 1.5 and a few have no statutory cap at all. In fact, Germany has no statutory overtime rate–it can vary depending on bargaining. Germany is also more flexible than India on the number of overtime hours. India has a cap of 144 overtime hours a quarter. Technically, Germany doesn’t regulate overtime hours but it does cap total hours at 10 a day and 48 a week on average. The average is crucial. In Germany overtime hours can be moved between weeks within a 6 month period while India regulates each week. In other words, long weeks in Germany are legal as long as short weeks offset them before the period ends–while in India each week has a cap. The weekly cap and the double overtime pay make it very costly and difficult to meet rush or large seasonal orders.

Consider a hypothetical 500-worker electronics factory, working a single shift, in each of the 16 countries studied. Ahead of a September iPhone launch, each factory receives an order for 10,000 devices to be completed in three months.

Say the factories are identical in productivity, wages and technology; only the rules on working hours differ. How fast and at what labour cost would the Indian factory deliver compared to elsewhere?

The results are stark.

The factory in India cannot match the pace of its global peers. It takes 13.7 weeks to complete the 10,000-iPhone order, 23% longer than the fastest factory…The Indian factory falls behind because it cannot keep the same pace throughout the production cycle. Without the option to rearrange regular hours, the only way to go faster is overtime…The Indian factory cannot compete on cost either. To complete the iPhone order, it pays for 49.3 labour-hours per unit, at least 18% more than factories at the cost frontier. India’s unit cost is high because 144 of the 800 production hours per worker are paid as overtime at 2x the regular wage, pushing paid labour to 985 hours for 800 hours of output.

…The combination of slow delivery and high cost makes India an unattractive manufacturing destination.

Amazingly, on an equal-wage basis producing iPhones in Germany is actually cheaper and faster than in India! Of course, wages are not equal but neither is productivity–the key point is that the chart isolates the cost of India’s regulatory inflexibility.

Returning to premature imitation, it won’t surprise you that many firms and workers in India evade the overtime rules and come to their own understandings but this applies mostly to small Indian firms and not the Foxconns and big international firms that India wants to attract but which must obey the laws as written.

Hat tip: Paul Novosad.

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On Bergman’s Persona

Tyler Cowen — Fri, 16 Oct 2026 06:53:12 +0000

I first saw Ingmar Bergman’s Persona, his stone-cold classic of 1965, as a teenager, and God knows how many times I have seen it since. It has the greatest opening sequence in cinema: a percussive, rapid-fire montage that can never be wholly accommodated or understood. The film’s story is, however, a simple one (even if its Jungian resonances are deep and complex). A celebrated actress, Elisabeth Vogler (one of Liv Ullmann’s defining roles), is struck dumb, having dried up in the middle of a performance of Electra. Three months later, still speechless, she is granted a nurse, Alma (Bibi Andersson), who, fearing silence, cannot stop talking to and at her patient. Elisabeth becomes the audience, Alma the performer, and the two personalities intertwine against a biblical monochrome landscape of sand, rock and water. More than 60 years on, it remains inexhaustible, never to be entirely absorbed, intimate, stark and utterly compelling.

Here is more from Paul Lay.

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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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