Brad DeLong on þe Human Condition in þe Long 20th Century; & BRIEFLY NOTED: For 2023-03-20 Mo
Podcast with Ilari Makela on "Slouching Towards Utopia"; Larry Summers on SVB; Barry Houghton on CCP, Inc.; Musk's Twitter in one image; GPTs & GPTs; bondholder faces unexpectedly eaten by leopards...
FOCUS: PODCAST: Ilari Makela: On Humans:
The Human Condition in the Long 20th Century; Or How Economics Changed Everything:
<https://overcast.fm/+8kS_txe8Y>
Ilari Makela:
Most histories of the 20th century focus on world wars and ideological conflicts. Others focus on the fall of European empires. Yet others focus on the slow but inevitable progress of social justice movements….
But according to Brad DeLong, the real story of “the long 20th century” (1870-2010) is an economic story. It is the story of how humanity, for the first time in its existence, was able to generate prosperity for the masses–so much so that it became technically possible to eradicate poverty altogether. DeLong is an economic historian and the author of the magisterial “Slouching Towards Utopia”. In the book, he argues that the so-called “2nd Industrial Revolution” of 1870 changed the human condition in unprecedented ways….
In many ways, DeLong tells a happy story of unprecedented victories for humanity at large. Yet humanity did not reach utopia. And alas, DeLong argues that the material boom ended in 2010. (The episode doesn’t discuss this latter claim. But if you are curious: DeLong’s argues that 2010 was marked by a sluggish recovery from the Great Recession, a looming climate catastrophe, and a populist turn against the ideologies that had energised the economic growth of the long 20th century.)
In this discussion, Prof DeLong and Ilari discuss questions such as:
Why 1870 was a landmark moment for the humanity
How poor was the average person before 1870?
What allowed the economic revolution of 1870 - and how Nikola Tesla symbolises the era.
Did the world become less exploitative after 1870?
The difficulties in judging the merits of “capitalism”
What did Marx and Engels get right? And what not?
Was imperialism a fuel or a drag on the economic boom in Europe and US?
Why global inequalities became so large
Why equality inside rich countries increased throughout the 20th century – until 1970s.
How economics explains the rise of ideologies from socialism to fascism and from civil rights to feminism.
ONE IMAGE: Musk’s Twitter:
ONE VIDEO: Larry Summers: Lessons from þe SVB Bank Collapse:
MUST-READ: China’s Political-Economic Transformation:
Really smart:
Barry Noughton: CCP Inc.: ‘Under Chinese leader Xi Jinping, China’s political and economic system has undergone a fundamental transformation, further distinguishing China’s unique brand of state capitalism from market economies, and adding additional strain on the rules, regulations, and institutions that underpin the global economic order. Most notably, Beijing has reasserted the Chinese Communist Party’s (CCP) control over the economy through a number of new and creative tools that have no direct comparison in free market economies. The complexity and unfamiliarity of these tools means that many of the core features of China’s economic model—and the CCP’s control over it—remain insufficiently understood… The overall ecosystem of key state-owned and private commercial actors, state-owned financiers, and government regulators to understand how these actors are interconnected through a complex and often opaque web of direct and indirect transactional, financial, strategic, operational, and political relationships. The project makes extensive use of ownership and shareholding information, financial and investment data, Chinese government policies and documents, interviews with industry executives, government officials, and subject-matter experts, as well as cutting-edge academic research to provide the first comprehensive global mapping of CCP-controlled and directed capital and investment…
Very Briefly Noted:
Financial Times: Credit Suisse Group AG…
Dave Karpf: On Generative AI, phantom citations, and social calluses: ‘The Generative AI age is going to be exhausting and unpleasant, isn't it?... Reaching a larger scale creates an entirely separate set of problems…. Negroponte… [treated] ‘drowning in gratuitous e-mail’… as a future annoyance rather than a systemic property of the communications environment he was trying to promote…
Shlomo Ben-Avi: Peace Requires Betrayal: ‘Volodymyr Zelensky has become an unlikely war hero. But now he faces an excruciating dilemma, because ending the war will most likely require an imperfect and almost certainly unpopular negotiated settlement with Russia…. Bold leadership… needed...
John Judis: Iraq, the U.S., and The New Republic: 20 Years Later, Lessons Not Learned: ‘I was one of the few TNR staffers in 2003 who opposed the invasion. The magazine’s case for war has not aged well…
Samuel Arbesman: ☞ AI, Semiotic Physics, and the Opcodes of Story World: ‘The dynamics of signs that are induced by simulators like GPT…. Perhaps the opcodes of LLMs are the tools of rhetoric and narrative structure…
Ted Goia: 10 Reasons Why I'm Publishing My Next Book on Substack…
¶s:
Tyna Eloundou, Sam Manning, Pamela Mishkin, & Daniel Rock: GPTs are GPTs: An Early Look at the Labor Market Impact Potential: ‘We investigate the potential implications of Generative Pre-trained Transformer (GPT) models and related technologies on the U.S. labor market. Using a new rubric, we assess occupations based on their correspondence with GPT capabilities, incorporating both human expertise and classifications from GPT-4. Our findings indicate that approximately 80% of the U.S. workforce could have at least 10% of their work tasks affected by the introduction of GPTs, while around 19% of workers may see at least 50% of their tasks impacted. The influence spans all wage levels, with higher-income jobs potentially facing greater exposure. Notably, the impact is not limited to industries with higher recent productivity growth. We conclude that Generative Pre-trained Transformers exhibit characteristics of general-purpose technologies (GPTs), suggesting that as these models could have notable economic, social, and policy implications…
Bryce Elder: We didn’t expect the leopards to eat OUR faces, say AT1 bondholders: ‘“They’ve changed the law and they have basically stolen $16bn of bonds,” Davide Serra, founder and CEO of Algebris Investments, told investors on a call this morning. “This has been a big policy mistake, [and] they will regret it. [ . . . ] Switzerland will be the new pariah in this [loss-absorbing bond market]. They asked for it, they will have it.” The above is not unrepresentative of the market’s response to Swiss regulators ignoring Finance 101 and putting shareholders ahead of bondholders. Wiping out CS’s Sfr16bn of Additional Tier 1 capital is the trade Swiss authorities have demanded for offering exceptional help — but it’s inconsistent with UBS management’s Sfr3bn valuation…. Goldman Sachs had been telling clients on Friday that AT1 bonds were too cheap relative to high-yielders. FINMA’s action “greatly weakens” the argument, it said this morning…. All that needs a couple of qualifiers, the first of which is that it’s Switzerland. Constitutional priorities are often a bit weird. Analyst Andrew Lim of Societe Generale says the wiping out of AT1s is a product of “a peculiar Swiss Finish” and argues that “confidence in such instruments will not be affected in the long term.” Second, CS was insolvent irrespective of the Sfr3bn take-under sop from UBS to famously irritable retail investors. It’s political, not equitable. Applying subordination to a token gesture would have been correct but hardly proportionate. Or, as DoubleLine Capital’s Jeffrey Gundlach puts it: “Bloomberg reports the gunslingers who foolishly kept holding Credit Suisse’s bail-in bonds are angry they are being wiped out. Seriously? Put on your big boy pants and look in the mirror. That’s where the ‘blame’ lies. Learn how to manage risk!” Thirdly, CS and UBS are outliers in the CoCo marketplace. Most AT1 debt is more protected from total wipeout…
Azeem Azhar: 🔮 Grounding AI; social bank runs; Bye-du; redesigning Wikipedia: ‘Microsoft’s reveal of Copilot. Copilot brings a magical interface to the office apps we use every day…. This tooling could have a massive productivity impact as I wrote earlier in the week. (If you haven’t read this analysis, I recommend it.) How will Microsoft prevent Copilot from going rogue, like LLMs are wont to do? One way is through “grounding”. Because Copilot has access to the data from your Microsoft apps, Microsoft can construct a local graph of entity relationships that are related to you. This graph can be used iteratively to ground (that is shape and filter) the responses from the LLM. I guess the theory is that LLM will be bound, in some sense, by your own view of the world…
Levine is exactly right about the stupid AT1s. Getting zeroed out wasn't some extra-legal action by Swiss authorities and it wasn't some fine print buried on page 566 it was literally in the fucking name, e.g. “7.500 per cent Perpetual Tier 1 Contingent Write-down Capital Notes". Moreover, that the entire purpose of these instruments, the most noble fate that could be envisaged for them, was to place themselves between equity holders and war's devastation, to preserve equity in order to maintain the bank as a going concern. Yes, there some AT1s whose terms say they *convert to equity* but A) in that case the bond holders are still getting smoked, and B) THOSE WEREN'T THE TERMS of the CS AT1s. FFS.