Tyler Cowen: “Due to the Baumol-Bowen cost disease, less productive sectors tend to become a larger share of the economy over time. This already has been happening since the American economy originated. A big chunk of current gdp already is slow to respond, highly inefficient, governmental or government-subsidized sectors. They just won’t adopt AI, or use it effectively, all that quickly. As I said to an AI guy a few days ago “The way I can convince you is to have you sit in on a Faculty Senate meeting.” And the more effiicient AI becomes, the more this trend is likely to continue, which slows the prospective measured growth gains from AI…Human bottlenecks become more important, the more productive is AI. Let’s say AI increases the rate of good pharma ideas by 10x. Well, until the FDA gets its act together, the relevant constraint is the rate of drug approval, not the rate of drug discovery.”
FT: “A new study led by Arianna Salazar-Miranda of Yale, involving Carlo Ratti of MIT, Harvard’s Edward Glaeser and others, tracks the changes in public spaces between 1980 and 2010 in New York (outside Bryant Park and the Metropolitan Museum), on Boston’s Downtown Crossing and in Philadelphia’s Chestnut Street…Today’s researchers used “computer vision and deep learning techniques” to compare behaviour in those same places between 1980 and 2008-2010. They found: “In all four locations, the share of lingerers decreased by 14 per cent, and walking speeds increased by 15 per cent, which suggests that urbanites are using streets more as walkways than as social spaces.” There were fewer spontaneous encounters. In short, hanging out was dying out…The authors suggest one possible culprit: increasing urban incomes. Time is money, and so the opportunity cost of hanging-out rose. Then there’s the smartphone. Our potential companions are no longer unselected people on the street, but the people we interact with online. That reduces streets to mere thoroughfares.”
WSJ: “In “Uncertainty and Enterprise: Venturing Beyond the Known,” Amar Bhidé takes up the challenge of formalizing what makes managing new businesses different. Mr. Bhidé, a professor of health policy at Columbia University, focuses on the central role of Knightian uncertainty in shaping the way businesses behave and structure their activities, governance and funding. Named for Frank Knight, the University of Chicago economist, Knightian uncertainty refers to situations in which the probability of success is unknowable due to the novelty of an enterprise’s product, service or strategy for producing and distributing it. Mr. Bhidé shows that uncertainty in the Knightian sense elicits unique human capacities. Most importantly, it provokes imaginative responses rather than simply calculations. Framing the issue this way has a major advantage: It shows the practical importance of the distinction between uncertainty and risk. If dealing with uncertainty elicits fundamentally different kinds of human behavior than dealing with risk, then uncertainty clearly is different from risk in an important way.”
Economist: “Work hard, children are told, and you will succeed. In recent decades this advice served the talented and the diligent well. Many have made their own fortunes and live comfortably, regardless of how much money they inherited. Now, however, the importance of hereditary wealth is rising around the rich world, and that is a problem. People in advanced economies stand to inherit around $6trn this year—about 10% of GDP, up from around 5% on average in a selection of rich countries during the middle of the 20th century. As a share of output, annual inheritance flows have doubled in France since the 1960s, and nearly trebled in Germany since the 1970s. Whether a young person can afford to buy a house and live in relative comfort is determined by inherited wealth nearly as much as it is by their own success at work. This shift has alarming economic and social consequences, because it imperils not just the meritocratic ideal, but capitalism itself.”
David Perell on lessons from Dana Gioia, who “is one of the world’s greatest living poets.”. “1. What is poetry? Here’s a definition: “Poetry is a way of remembering what it would impoverish us to forget.” 2. And who is the mother of the muses? Mnemosyne, the goddess of memory. 3. You can’t understand poetry until you start learning it by heart. Yes, memorizing it. The metaphor of knowing something by heart means storing a piece of wisdom in the center of your being and making it a part of you. 4. Poetry exists in the body before it exists in language. For him, great writing is about putting form to felt sensations.”
