Hardly the most important thing going on this week, but Matt Yglesias said something I have some evidence against. Yglesias claimed that, “basically anyone could massively increase the value of a large plot of land in the United States if he were exempted from land use rules.”

What percent of people do you think could massively increase the value of a barren plot of land, even with no land use rules?

When I ran an experiment about intellectual property protection with Bart Wilson, we created a space for people to mine valuable “creative” goods, analogous to writing a hit song. The goods could be distributed to the rest of the subjects in the experiment to create a surplus for everyone.

This screenshot shows time spent in the “studio” for groups that did have intellectual property protection. Group 1 (IP1) spent less time in the studio even than any of the groups who were not offered intellectual property protection. We concluded that Group 1 did not have any people with entrepreneurial tendencies. We had not expected this to happen, so we highlighted the role of entrepreneurs in our conclusion from this experiment. Institutions interact with entrepreneurship. We found that more “entrepreneurship” emerged under the IP institution.

Francesca Gino has been acused of academic fraud. She claims she is innocent. I am not going to adjudicate here whether she committed fraud. What I am going to argue is that she and many other high volume researchers aren’t actually engaged in research. They are grant procurers, managers, high volume writers, globetrotting presenters. But they are not researchers because they are too far removed from the actual production of research. Now, to be clear, that doesn’t necessarily mean the world is worse off. Their comparative advantage may lie in everything from management to carnival barking, but there is a threshold, a degrees-too-far removed from the problem solving at which point you are you no longer a scholar. What that threshold is, I can’t say, but I would argue that if you can’t defend your work, investigate it’s own integrity, if you don’t know who your research assistants are or what they did, then you have likely crossed that thresold. From Gino’s (since updated) website:

We’ve all see the presentations or heard the stories of the leading scholar called on the carpet about something in their project or analysis, only to respond “I’m not sure. My RA did that.” Which is fine. But at some point that started to become assumed as characterizing whole researchers, whole agendas, whole fields. There are always going to be the prodigiously productive, but those people used to be one or two in a generation. Glorious anomalies. Universities are now littered with faculty with hundreds of publications, sometimes dozens in a single year, and we all know that it is physically impossible for them to conduct that work themselves. Gino received her PhD in 2004 and in the 19 years since has 460 (!!!) publications listed on google scholar. Some of those are probably duplicate listings, but it’s probably safe to say she has more than 20 publications per year for 20 years. It’s hard enough to imagine having energy enough to write and present that many papers even if they are produced entirely by others. This is not unique to Gino and there is no doubting the prodigious work ethic in evidence within her and others. What is in question is whether the ever raising bar on output is lowering the quality of work done by the field as a whole. It’s a tax on us all if research concentrated within the labor of the most qualified, competent, and creative no longer produces an acceptable return to scale. Some people really are better managers of other people’s work, at some point the work has to be attributable to one or more people. Who is doing the work? Who is responsible for the work?

Maybe this isn’t really useful and I don’t feel like yelling at clouds for 5000 words. As I was saying…

But I’ll tell you this- truly great researchers work with other greater researchers, employ smart people, mentor promising RAs. And they know who they are and what they did. Because when you’re in the weeds trying to answer questions, its almost impossible not to know. That doesn’t mean mistakes won’t be made and errors overlooked. But when it comes time to audit your work, you’ll know where to start and what might have gone wrong. If you don’t know, well, maybe you’re lying, but maybe more likely you just weren’t around when the work was getting done. You were promoting your last project and getting your next grant. Because you’re not a researcher. At least not anymore.

You’re a manager, promoter, figurehead, pitchman, traveling roadshow. You’re likely useful and valuable. Publication and Grant, LLC.

But you’re not a scholar. And the institutions employing you aren’t producing scholarship. These faculty are following their incentives, and those incentives are at the moment treating research as a game to be played. Not science. Not the answering of questions. An expensive hustle to grind and empty race to win. They’re getting what they’re paying (and tenuring) for.

The NFL has filed a grievance against the players union, alleging a conspiracy to fake injuries on the part of running backs to gain greater leverage in salary negotiations. To grant necessary context as succinctly as possible: running backs carry the ball while giant humans attempt to harm them. They do this 15 to 30 times per game. They are important to team success, but not as important as they once were. At the same time, they incur significant traumatic and cumulative damage, resulting in the shortest expected career length of any position in professional football. The NFL has a cap on total team salaries negotiated between the players union and the owners group/cartel/partnership. Running backs have seen their salaries decline even as the damage incurred as become more apparent and measurable. This raises an interesting question: where are the compensating wage differentials for risk? Everyone gets paid more if their job is dangerous. Do running back wages reflect their physical risk?

Supply and demand always come first, and any explanation for the (relative to other positions) decline in running backs salaries has to start with declining demand. Running backs are viewed as less valuable, more interchangable than they once were. At the margin, the returns to employing the best running back relative to the 30th best running back are viewed as thinner than in earlier eras. And that could be 95% of the answer, but it’s worth investigating the supply side as well.

The understood risk of injury facing running backs has increased. With greater risk typically comes less labor supply, the shifting equilibrium pushing wages up. Is this what we are seeing in football? Are fewer athletes interested in being a running back? Are running backs retiring earlier? Maybe, but that can cut both ways, reducing supply and demand.

But the supply side has multiple dimensions: both players entering the market (the “extensive” margin) and the amount they are willing to play (the “intensive” margin). Has the injury “threshold” shifted for running backs who are now less willing to play while already carrying significant damage? Because that’s exactly what I think we are seeing. I think running backs are beginning to reduce the amount of their bodies’ usable careers they are willing to sell at the current market price. They have reduced supply on the intensive margin. Running backs are demanding greater compensating wage differentials for risk and the owners don’t like it. They thought the supply of running back labor would remain almost perfectly inelastic under the terms of the collective bargaining agreement, but they were wrong.

Now, is trying to organize a collective reduction in labor supply in order to better negotiate compensating wage differentials fair play on the part of the players? Absolutely. Why do I say absolutely? Because they are not only bargaining against a cartel of owners, they are implicitly bargaining against the rest of the players association, who have failed to deliver compensation for their risk, at least in part, because the rest of the players, the non-running backs, benefit from every dollar under the cap not spent on running back salaries.

I’ll put it bluntly. Everyone has the right not to supply their labor. Everyone has the right not to incur physical risk and damage if they aren’t being sufficiently compensated. Organizing to collectively restrict that supply is fair game, triply so if there are explicit (the owners) and implicit (the other players) groups that are collectively organizing against you.

I’ve seen NFL games. I know how much you’d have to pay me to carry the ball once on an NFL field, let alone dozens of times every week. If I wasn’t getting paid my reservation wage, there is no collective bargaining agreement you could wave in my face, no public shaming, no pressure from fans that could get me on that field.

All the collective bargaining in the world can’t make the laws of supply and demand go away. Professional sports are a labor-intensive industry, and football is a high risk endeavor for labor. If you want millionaires to show up every week to willingly endure the equivalent of a half-dozen car accidents, you’re going to have to pay them. Oh, but you can’t pay them that much, they’re a depreciating asset since the damage incurred shortens their career? Good point, the price just went up. You don’t want to commit to long term contracts because injury can end a career on any play? Good point, the price just went up. We have a big game this week, we need …you…to…ohhhhh

Now you’re getting it.

Moments of inspiration can and do lead to innovation, almost by definition. Sometimes we forget that innovation is itself inspirational. I first read about “inverse vaccines” two days ago and it hasn’t left my mind since.

“Inverse vaccine” shows potential to treat multiple sclerosis and other autoimmune diseases

These are lab results, not clinical trials. This is not a new treatment coming any time soon. The logic though, the idea, is absolutely brilliant. Traditional vaccines teach the immune something the blueprint for attacking a new enemy. These researchers realized that the liver has a method for marking molecules with N-acetylgalactosamine so that the immune system knows not to attack them. Autoimmune disorders, from common allergies to multiple schlerosis, are a product of the immune system attacking what it shouldn’t.

Why can’t we mark the cells of the body being tormented by an overzealous immune system with N-acetylgalactosamine?

It’s such a simple idea. Simple and completely brilliant. I am convinced we are living in a new golden age of vaccines. But this? This is inspired and inspiring, promising to take what is already a time of miracles and push it in an entirely new direction. There are new ideas sitting out there, waiting to be conceived. But sometimes what we need is for an act of innovation to inspire us to think in a new way. Or an old way. Or a reciprocal way.

I just learned that the de-aging process used to produce scenes with a “younger” Harrison Ford in the most recent Indiana Jones movie was produced using an AI process that matched the Ford’s face in each newly filmed moment with a perfectly matching facial expression from archival stock of the actor.

The movie was fine, even if the third act was a little undercooked. I just want to point out two things. First, this is a natural extension of the LLM model of artificial intelligence: pulling from library of information provided (i.e. the internet or footage of Indiana Jones punching Nazis) and then reassembling that information to produce a new product. When we debate whether or not these pieces of software constitute actual “intelligence” what we are really arguing about is whether or not the substrate is sufficiently simple, sufficiently inert for the act of assembly to constitute an act of intelligence.

Case in point, nobody is arguing that de-aging Harrison Ford betrays true intelligence on the part of the software. The material being acted upon is already coherent, it’s just being reordered to convey a new message ( i.e. scenes in a different movie). Similar things could be said about ChatGPT. It’s just searching through pre-existing text and ideas, sifting for relevance, and reordering to optimally assemble into an updated product.

Operating within this metaphor, what would constitute intelligence is the that can sift through a primordial substrate of inorganic, individually incoherent components, and assemble them into original pieces of coherent information; sparks of cognition. An example of this would be to take the ambient, ineffable sentiments implied by the collective set of questions being asked by ChatGPT users (hopes, fears, feelings, etc) and produce not just answers to questions not yet answered by humans, but to answer questions not yet asked. To sift through information, break it into into its smallest possible molecules of cognition, and contribute to the broader collective body of knowledge by assembling new thoughts.

This sort of process has been occasionally posited in the form of a “matter compiler” in science-fiction, which is essentially just a 3-D printer at the molecular level. That remains pretty far off, as best I know. I suspect the same will be true of true artificial generalized intelligence. We know an awful lot about how molecules are assembled, the problem with producing a matter compiler is largely one of cost. We know comparably less about how neurons firing are assembled into acts of generative intelligence, of creativity. We will know no doubt get there, but getting there usually happens well before we cross the chasm of cost, of material feasibility.

But yeah, the new Indiana Jones movie was okay.

On this, the Day of our Labor in the year 2023, I leave you with a simple observation/plea into the void: don’t confusion condescending overconfidence with competence. I give to you Hans-Heman Hoppe stating, in public and on camera, his exasperated and deeply aggrieved belief that Paul Krugman doesn’t know what money is or how it works:

Never forget that “con man” is short for “confidence man“, and part of the trick when trying to get other people to believe in you is to first project unerring belief in yourself. Confidence communication is effective in the sharing of ideas, but the real trick to all con men is what they’re selling. Or, more specifically, what the customers are buying. Yes, he’s selling the idea what monetary policy and fiat currencies are all part of a giant scam, a fugazi, because lol money isn’t real. But that’s not what his customers are buying.

What they’re buying is the idea that “I, person who holds this belief, am smarter than Paul Krugman.” I imagine that is probably a pretty enjoyable belief to hold. I would certainly enjoy believing that I am smarter than Paul Krugman, but wanting something doesn’t make it true…which, now that I say it outloud, is a nearly sufficient encapsulation of the entire human condition.

To be clear, this isn’t about Krugman’s accomplishments or status in society inviting censure or criticism from all corners. That’s just the eminence tax. It’s actually, in a weird way, about everything he had to do to acquire that eminence, in the form of arduous education, training, and research production over decades. Because what I think the Hoppe’s of the world are often really selling to their audience is a shortcut. An opportunity to believe that you, the listener, don’t have to go through such trials of human capital acquisition. You just have to hang out with me, parrot a few trivializations of economic thought, cope with a little light reading, and boom, you’re smarter than a Nobel laureate with 275k citations. All available to you for the low low price of believing Paul Krugman doesn’t know how money works.

Don’t wait, supplies are limited.

I agree with Tyler’s assessment that the top performers in pretty much any field of endeavor tend to be incredibly intelligent, regardless of whether that field is broadly associated with intelligence per se. He closes with an open question: in what fields can success belie intelligence?

The older I get, the more complex and messier I find intelligence to be as a construct. If we broaden the concept from intelligence to “competence” or “capability”, however, I think it becomes an even more interesting question. In what fields can we expect to observe top performers who are, in actuality, objectively bad at their jobs?

This is not to say I that I believe there are any fields or jobs where success doesn’t positively correlate with capability. Rather, it is to ask in what fields, if any, is the variance on outcomes is so great as to be able to fully obscure average or expected outcomes within individuals? Framed this way, the fields we should be looking for are those that emphasize high leverage, high risk wagers made with low frequencies. If you’re trying to identify ostensibly high-performers who are, in reality, grossly incompetent in the fields that made them wealthy, look for a series of ex ante negative expected value wagers combined with large initial endowments and foolish leverage ratios. Probalistically most such individuals will be punished accordingly, but given enough players, a highly visible few will hit big with an initial sequence of winners. Their subsequent anointment as virtuosos combined with the sheer weight of their capital will permit them to coast for decades before, if ever, their underlying incompetence catches up with them.

As for specific fields, it’s pretty easy for me to see such dynamics at play in real estate and angel investing. Not to be confused with construction or venture capital, in which “wagers” are made with much higher frequency, lower risk, and, in turn, lower returns on investment. Success in such fields reveal competence for the same reason it reveals them in professional poker: the law of large numbers eventually comes for everyone. Real estate speculation, on the other hand, whether its developed or undeveloped properties is exactly the kind of field where otherwise incompetent boobs, if given a large enough initial endowment and the opportunity to leverage to the hilt, can become giants on the heels of a relatively small number of bets. If they were in the right zip codes for the last few decades, it’s entirely possible to turn a half million into a few billion, without any insight in the slightest. Angel investing, on the other hand, tends to be less about leverage than simply buying lottery tickets: negative ROI, but in a landscape of thousands of angel investors, most of whom will experience losses approaching 100% on their portfolio, someone will fall into a 5000x return on something originally coded in a dorm. To be clear, more capable and competent investors will on average perform better speculating in real estate and early stage start-ups, but the absolutely biggest winners will be chosen more by chance than talent.

A similar question we might ask is what are the fields where the quality of outcomes is orthogonal to the capability being ostensibly being selected for? Allow me to explain through a standard scam story. A stock broker cold calls 100 people, tells each his pick for the week, half he says Stock A will go up, half he tells Stock A will go down. He then calls back the 50 people he correctly prognosticated to. He repeat this several times, until there are 3 people who believe that this previously unknown stranger has correctly predicted future stock prices 5 times in a row, a feat that seems unlikely by chance. Customers think the quality they are observing is forecasting expertise, when in actuality it is the ability to spend 60 hours a week being energetic and charismatic on the phone with strangers. This is, unto itself, a rare ability, just not the one that the customers in question think they are observing evidence of. Related to our earlier story, a strong argument can be made the most important skill in real estate speculation isn’t forecasting, but gaining access to leverage i.e. convincing people to loan you enough money that you can particpate in a casino with a such a high minimum stake.

The moral of the story is we should take care when attributing success to narrow capability or competence. Sometimes it’s because of selection on observability, obscuring the role that luck has played in success. Sometimes its because success demands obscuring the criteria on which it is selected, whether because of legality or simple social disapprobation. We should be doubly careful when considering fields/sectors where success remains somewhat mysterious or even magical. When observers are consistently attributing success to intangible factors, whether its charisma in politicians, inspiration in coaches, instinct in investors, or genius in futurists, your antennae should raise. If we don’t really know why and how someone succeeds, then there is a decent chance they don’t know either.