Technology

We’re All Magical

Zachary BartschLeave a comment

The widespread availability and easy user interface of artificial intelligence (AI) has put great power at everyone’s fingertips. We can do magical things.

Before the internet existed we would use books to help us better interpret the world.  Communication among humans is hard. Expressing logic and even phenomena is complex. This is why social skills matter. Among other things, they help us to communicate. The most obvious example of a communication barrier is language. I remember having a pocket-sized English-Spanish dictionary that I used to help me memorize or query Spanish words. The book helped me communicate with others and to translate ideas from one language to another.

Math books do something similar but the translation is English-Math. We can get broader and say that all textbooks are translation devices. They define field-specific terms and ideas to help a person translate among topic domains, usually with a base-language that reaches a targeted generalizability. We can get extreme and say that all books are translators, communicating the content of one person’s head to another.

But sometimes the field-to-general language translation doesn’t work because readers don’t have an adequate grasp of either language. It isn’t necessarily that readers are generally illiterate. It may be that the level of generality and degree of focus of the translation isn’t right for the reader. Anyone who has ever tried to teach anything with math has encountered this.  Students say that the book doesn’t translate clearly, and the communication fails. The book gets the reader’s numeracy or understood definitions wrong. Therefore, there is diversity among readers about how ‘good’ a textbook is.

Search engines are so useful because you can enter some keywords and find your destination, even if you don’t know the proper nouns or domain-specific terms. People used to memorize URLs and that’s becoming less common. Wikipedia is so great because if you want to learn about an idea, they usually explain it in 5 different ways. They tell the story of who created something and who they interacted with. They describe the motivation, the math, the logic, the developments, and usually include examples. Wikipedia translates domain-specific ideas to multiple general languages of different cognitive aptitudes or interests. It scatters links along the way to help users level-up their domain-specific understanding so that they can contextualize and translate the part that they care about.

Historical translation technology was largely for the audience. More recently, translation technology has empowered the transmitters.

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Human Capital is Technologically Contingent

Zachary BartschLeave a comment

The seminal paper in the theory of human capital by Paul Romer. In it, he recognizes different types of human capital such as physical skills, educational skills, work experience, etc. Subsequent macro papers in the literature often just clumped together some measures of human capital as if it was a single substance. There were a lot of cross-country RGDP per capita comparison papers that included determinants like ‘years of schooling’, ‘IQ’, and the like.

But more recent papers have been more detailed. For example, the average biological difference between men and women concerning brawn has been shown to be a determinant of occupational choice. If we believe that comparative advantage is true, then occupational sorting by human capital is the theoretical outcome. That’s exactly what we see in the data.

Similarly, my own forthcoming paper on the 19th century US deaf population illustrates that people who had less sensitive or absent ability to hear engaged in fewer management and commercial occupations, or were less commonly in industries that required strong verbal skills (on average).

Clearly, there are different types of human capital and they matter differently for different jobs. Technology also changes what skills are necessary to boot. This post shares some thoughts about how to think about human capital and technology. The easiest way to illustrate the points is with a simplified example.

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Joy on The Inductive Economy podcast

Joy Buchanan1 Comment

I got to be a guest of Vignesh Swaminathan who is based in Mumbai. It’s fun to have a deep conversation with someone on the other side of the world and share it with the whole internet (and the AI’s).

Apple podcast link: https://podcasts.apple.com/us/podcast/dr-joy-buchanan-on-understanding-economics-through/id1719744197?i=1000652541934

Blogpost with links and timestamps: https://www.inductive.in/p/dr-joy-buchanan-on-understanding

The first 10 minutes are about Tyler’s GOAT book. Vignesh asked me to name some influential economists who did not make Tyler’s list.

Around minute 12 we talk about the experimental economics methodology.

The middle (minute 15-42) is a discussion of the pipeline into tech and my Willingness to be Paid paper. He adds his perspective on tech jobs in India.

Around minute 42, Vignesh makes a switch over to the Barbie movie and then Oppenheimer. He observes that Oppenheimer is a “brand.” I speculate on careers in Barbieland. We recorded this before Christmas of ’23, right after everyone had seen these summer movies. Both movies ended up in the 2024 Oscars awards ceremony.

I predicted that people will eventually be able to create a custom movie from a verbal prompt, because of the AI content revolution. Here in Spring of ’24 that has already come true. Sora is shocking everyone and even caused Tyler Perry to halt a physical film studio expansion.

Around minute 55, we pivot to Hayek and competition, which leads to a postmortem on Google Plus (RIP).

1:05-1:16 features intellectual property and my IP experiment with Bart Wilson

Ended with rapid-fire and personal questions.

Skimming back through this conversation has me thinking about tech work. The market for IT workers and programmers has evolved since I first started the project that became “Willingness to be Paid: Who Trains for Tech Jobs?”

I like pointing people all the way back to this report on jobs from 1958. Learn to Code has been good advice for a long time, for the people who can tolerate the work. That does not mean it will be true forever, but I would argue that it is still true today.

Silicon Valley as a career might have peaked around 2021. It’s not going away, but it might not be growing anymore in terms of the number of talented people who can be absorbed there. (Might I suggest Huntsville instead?)

The WSJ recently ran a story “Tech Job Seekers Without AI Skills Face a New Reality: Lower Salaries and Fewer Roles”

The rise of artificial intelligence is affecting job seekers in tech who, accustomed to high paychecks and robust demand for their skills, are facing a new reality: Learn AI and don’t expect the same pay packages you were getting a few years ago.

Jobs in areas like telecommunications, corporate systems management and entry-level IT have declined in recent months, while roles in cybersecurity, AI and data science continue to rise, according to Janco’s data. The average total compensation for IT workers is about $100,000, making the position a target for continued cost-cutting.

One reason tech jobs are less attractive than some other professional paths is that the skillset changes. We mentioned this as a drawback in our policy paper. Computers are constantly changing. Vignesh and I discuss the issue of risk. I suggested that companies could pay less for talent if they were willing to offer packages that carry less risk of getting fired.

Nevertheless, tech still has decent job prospects. An unemployment rate of about 5% is about normal for work, even though tech had seen lower rates at the peak of demand. I do not know what programming as a career will look like in 10 years, but I’d say the same about screenwriting and live sports commentary. The LLMs are coming for everything or nothing or something in between.

I’ve been on tour (regionally) with our ChatGPT paper and getting opportunities to query different audiences about their LLM use. Last week I talked to a young man in our business school who is using ChatGPT to write SQL code at his job. I said in the podcast that I would still advise young people in Alabama to learn to code, even if they are not going to move to Silicon Valley. I think coding is more fun in the LLM-age or at least less miserable.

Fear of the Unknown and Fear of the Known

Zachary BartschLeave a comment

Alfred Hitchcock’s ‘Psycho’ famously omits graphic violence. You never see the bad guy stab anyone – though it’s heavily implied. Some say that this accounts for the impact of the film. The most thrilling parts are left to the viewer’s imagination. And a person’s imagination can be pretty terrifying. The delight of the unseen was especially appropriate at a time of 13 inch televisions and black-and-white movies. If the graphics on the screen couldn’t carry the movie, then the graphics in a person’s mind would do the trick.

Fast forward to ‘Burn Notice’. I don’t watch this show, but my in-laws do. They have a huge TV with a super high resolution. The TV has a diagonal span that almost surpasses my height. I’m short, but not that short. This is a big TV.  I’ve only seen Burn Notice at their house. It strikes me as poorly acted, poorly written, and self-serious to the point of absurdity. I keep expecting that self-referential nod to the open secret that the show is ridiculous, but it never comes. It’s a bad show. From all that I can see in high definition, there’s nothing worth seeing.

What is so good that I watch? Although I’m seven years late, I’ve recently been watching Marvel’s Luke Cage. Being a superhero show, some of the standards are lowered. The script is weak at times, the acting is OK, and the plot has some credibility holes. But the point of the show is to explore a world in which superheroes exist, and one of them happens to live in Harlem. Luke Cage is part of the earlier Marvel cadre of post-acquisition-by-Disney shows that also includes Iron Fist, Daredevil, & Jessica Jones. These shows are less tongue-in-cheek and comedic than the later shows like Loki, Wandavision, or Moon Knight. I enjoy watching Luke Cage on a small 40 inch television, and occasionally on my phone.  

Then I stayed at an Airbnb last weekend that had a HUGE TV. This thing easily had a diagonal measure that surpassed my height. After getting the kids down and answering emails, I sat down to enjoy my current go-to show before hitting the hay. And dang it if I wasn’t distracted the entire time. On this massive screen I could see every pore on everyone’s face and every blank stare parading as acting. I could see each and every glare of poor lighting and every character’s ill-timed reply and change of expression.  Most of the show is one big charade.

Much to my dismay, I had discovered that I was watching ‘bad tv’. Let me be clear. I’m not supposed to watch bad tv. That’s the realm of those other people. But me? I have enlightened preferences and a refined pallet. I’m not a person who watches bad tv. But that grandiose self-conception has been dashed by this serendipitous visit to a nice Airbnb.

I’ve had some time to dwell on my new revelation and this is what I’ve settled on. First, I’m going to keep watching Luke Cage on my small TV and I’m going to enjoy it. There is little that I can do now about the nagging knowledge that, given a higher resolution, it’s not a good show. You can’t unknow things. Second, maybe Burn Notice isn’t a bad show. Maybe it’s just a bad show when I can see too much detail, such as on my in-law’s TV. Maybe I would enjoy it on a TV with lower resolution. Regardless, I’m not going to watch it.

Third, now I have a new margin of preference over shows and movies. Now I consider whether a show or movie would be helped or hurt by more visual detail. Quick-paced, big-budget action shows like Jack Ryan are probably better in greater detail. Game of Thrones is probably better as a 4k experience. But shows in which the comedy or the drama unfolds by virtue of the circumstances, rather than the visual spectacle, are probably best watched at a lower resolution. When the audience experience hinges on implications and connections that occur in the viewer’s mind, that’s probably a better show at a lower resolution. Luke Cage is a ‘good’ show in low-res. In high-res, I’m afraid that see too much.

When Hitchcock omitted visual detail, he leaned on the mind’s eye to fill in the gaps. He was guiding the brain toward conjuring the unnerving scenes that he could not as easily mimic on screen. Advances in home entertainment have moved the goalpost. A more detailed viewing experience changes the type of shows that we are willing to watch because we have a new criteria for fitness. The supply side response on the part of studios is that shows lacking visual stimulation will need to lean more on the mind’s eye and our interpretations of social interactions in order to for audiences to experience the best version of the show. Because the best version won’t be in front of us. We know too much.

Hand-in-Hand: Demand & Technology

Zachary Bartsch1 Comment

In standard microeconomics, the long-run demand is unimportant for the market price of a good. Firm competition, entry, and exit causes economic profits to be zero and the price to be equal to firms’ identical minimum average cost. This unreasonably assumes that they have constant technology. That is, they have a constant mix of productive inputs and practices.

Just so we’re clear: time is passing such that firms can enter, exit, and adjust the price – but no productive innovation occurs. For the modeling, we freeze time for technology, but not for other variables. The model ceases to reflect reality on the margin of scale-induced innovation. The standard model assumes an optimal quantity of production for each firm and the only way for total output to change is for there to be more or fewer firms. The model precludes adopting any different technology because firms are already producing at the minimum average cost – if they could produce more cheaply, then they would.

Enter Scale

One of my favorite details about production was taught to me by Robin Hanson.* Namely, that the scale of production isn’t merely with the aid of more raw materials, labor, and capital. There are perfectly well-known existing technologies and methods that reduce the average cost – if the firm could produce a large enough quantity. This helps to illustrate what counts are technology. A firm can achieve lower average costs without inventing anything, and merely by adopting a superficially different production method.

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Online Reading Onpaper

Zachary Bartsch4 Comments

We have six weekly contributors here at EWED and I try to read every single post. I don’t always read them the same day that they are published. Being subscribed is convenient because I can let my count of unread emails accumulate as a reminder of what I’ve yet to read.

Shortly after my fourth child was born over the summer, I understandably got quite behind in my reading. I think that I had as many as twelve unread posts. I would try to catchup on the days that I stayed home with the children. After all, they don’t require constant monitoring and often go do their own thing. Then, without fail, every time that I pull out my phone to catch up on some choice econ content, the kids would get needy. They’d start whining, fighting, or otherwise suddenly start accosting me for one thing or another – even if they were fine just moments before. It’s as if my phone was the signal that I clearly had nothing to do and that I should be interacting with them. Don’t get me wrong, I like interacting with my kids. But, don’t they know that I’m a professional living in the 21st century? Don’t they know that there is a lot of good educational and intellectually stimulating content on my phone and that I am not merely zoning out and wasting my time?

No. They do not.

I began to realize that it didn’t matter what I was doing on my phone, the kids were not happy about it.

I have fond childhood memories of my dad smoking a pipe and reading the newspaper. I remember how he’d cross his legs and I remember how he’d lift me up and down with them. I less well remember my dad playing his Game Boy. That was entertaining for a while, but I remember feeling more socially disconnected from him at those times. Maybe my kids feel the same way. It doesn’t matter to them that I try to read news articles on my phone (the same content as a newspaper). They see me on a 1-player device.

So, one day I printed out about a dozen accumulated EWED blog posts as double-sided and stapled articles on real-life paper.

The kids were copacetic, going about their business. They were fed, watered, changed, and had toys and drawing accoutrement. I sat down with my stack of papers in a prominent rocking chair and started reading. You know what my kids did in response? Not a darn thing! I had found the secret. I couldn’t comment on the posts or share them digitally. But that’s a small price to pay for getting some peaceful reading time. My kids didn’t care that I wasn’t giving them attention. Reading is something they know about. They read or are read to every day. ‘Dad’s reading’ is a totally understandable and sympathetic activity. ‘Dad’s on his phone’ is not a sympathetic activity. After all, they don’t have phones.

They even had a role to play. As I’d finish reading the blog posts, I’d toss the stapled pages across the room. It was their job to throw those away in the garbage can. It became a game where there were these sheets of paper that I cared about, then examined , and then discarded… like yesterday’s news. They’d even argue some over who got to run the next consumed story across the house to the garbage can (sorry fellow bloggers).

If you’re waiting for the other shoe to drop, then I’ve got nothing for you. It turns out that this works for us. My working hypothesis is that kids often don’t want parents to give them attention in particular. Rather, they want to feel a sense of connection by being involved, or sharing experiences. Even if it’s not at the same time. Our kids want to do the things that we do. They love to mimic. My kids are almost never allowed to play games or do nearly anything on our phones. So, me being on my phone in their presence serves to create distance between us. Reading a book or some paper in their presence? That puts us on the same page.

Human Capital is Socially Contingent

Zachary Bartsch3 Comments

The Deaf community is interesting.

Before I did research, I thought that deaf people simply could not hear. After seeing the Spiderman episodes that featured Daredevil, I believed that it was plausible and likely that deaf people had some sort of cognitive or sensory compensatory skill.

But it wasn’t until recently that I learned of the Deaf Studies field. There is an entire field that’s dedicated to studying deaf people. It’s related to, but not the same as Disability Studies. In fact, there are some sharp divisions between the two fields.

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