Michael Rubin would de-fund the IMF; Ben Glasner on manufacturing jobs; Jack Kieffaber and Garrett Maxwell on limits to growth; Matt Yglesias on the economics of subsidizing children
What I've heard is that the real purpose of the IMF/WB is to give governments of debtor countries a blame-externalizing cover story for unpopular measures they may want to do or know they need to implement and in ways that are hard to reverse by elections. The idea is to shift the burden to politically-load-bearing entities which are too big to care about the hate being directed toward them. "Don't blame me and kick me out of office, it's the evil US and Big Bad WB/IMF neo-colonialists who are forcing this on us in our moment of duress, and if you elect my opponent he won't be able to do any different, because of the way those creditors countries will gang up to punish us. We all agree and wish it were different. Darn them!"
This is a wonderfully cynical--and I think largely correct--justification for the International Monetary Fund/World Bank.
A similar take would be that much of "foreign aid" is genteel bribery. The receiving government gets money so it doesn't do things that the donor government doesn't like. And maybe does things that the donor government does like.
No doubt there's some of both of those. The less cynical view is that the money is to help bring the country and its people into self sufficiency and greater participation in the world economy. And of course some projects fail to reach that goal for many reasons.
"Tariffs are unlikely to turn unskilled high school graduates into well-employed manufacturing workers."
Technology is likely to turn well-employed manufacturing workers anywhere in the world into members of an endangered species. The question is where the the giant robot factories of the future will be built. All else equal, it would be close to demand. Onerous regulations would push them abroad. Tariffs bring them back. Not cheaply, duh, but with consumers finally paying for the cost of their own laws, which is fair.
Which in the context of Dr. Strangelove, mine shaft (for laughs) instead of H bombs, was the case—US superiority resulted in no nuke exchanges. Correlation? Or causation?
Using tariffs, now, to hugely push new robot making investment and ai data centers to be located in the US will likely be lauded in the future as a huge Trump success.
Whatever happened to big 3-D printing revolution that hasn’t really happened? Better ai & robots will likely keep its value lower, yet also possibly take more advantage of it.
What to do with low IQ folk, for whom no amount of training nor ed reform will turn into high skilled workers? Low skill, but well trained workers, making some wage that is subsidized to be higher so as to be able to buy a low cost house in a lousy school district.
Or UBI & addiction to something else without legal work?
I'll take that bet on Trump's tariffs success. It's not going to happen for multiple reasons and I'd have to be wrong on all of them.
It's irrelevant to why I'll take that bet but why do you think tariffs will cause data centers to be built here? They are being built here when there aren't tariffs.
If head starts matter, the robots will be in China, then everywhere except the US. Our auto factories now are minimally dependent on robots due to UAW demands they be minimal, no?
I've been by the factories in China. Vast, hundreds of acres, and about a couple dozen parking places for those monitoring the robots. It's here, now.
Yes, head starts matter a lot. Still, China knew that, and deployed a multi-pronged strategy to close the gap quick, including hard bargaining for IP ownership and access, industrial espionage with state cooperation and state-level capabilities, barriers to entry, subsidies, etc. The US is about to do all that including the espionage to China now, which is unfortunate in many ways, but it will be ironic to watch the Chinese complain about it.
I make no predictions. I do tend to glaze over when I hear the Big Boys complaining about corporate espionage. In my tiny operation, I've been patent trolled, ideas and protocols ripped off, and everyone I know in business has had similar ripoffs by the folks now whining about China stealing secrets. When the real story about how China "stole" our IP, folks will learn that our guys gave it away in favor of bodacious quarterly earnings reports, not understanding that Chinese are really good at the stuff we imagine we invented.
I'll never forget a flight back to the States (several years ago) sitting next to a Ford engineering guy that'd been in country for about 15 years in "partnership" with Dongfeng and others. At first circumspect, he did like the biz class drink cart and the drunker he got the more he started unloading his frustrations about how "We gave it away! We gave them our best ops!!"
Moral of the story....The story we're told is not the story.
I have some direct experiences of the issues, both micro-scale and bigger picture. In the late Clinton administration there was US- government-backed wholesale transfer to China of textile chemistry processes that were hard (especially back then) to re-discover trade secrets and other "keys to the castle" previously unknown outside of Germany and the US. I guess today that inherent difficulty would be called a "moat". I knew one lead Chemist of German 'extraction' (so to speak) who was driven into desk- pounding hysterics and fits of rage by what to him seemed inexplicable without some kind of major corruption bordering on treason being behind it.
There was a recent CCP policy document that pulled a lot more sectors into the category of "national security sensitive" which gets special help and scrutiny. The US is doing the same thing. Whatever one feels about that, I think it is actually objectively correct from a strategic statesmanship point of view given the nature of modern technological innovation and bigger-than-ever implications for security, war, economic growth, alliances, competitiveness, and geopolitics. As such things are going to get and feel ever more mercantilist, with smaller and less free and open patterns of exchange. Like the geopolitical equivalent of Tom Wolfe's "Back to Blood".
People have generally forgotten what the purpose of patents is supposed to be. It's supposed to deter secrecy by forcing people to publish their inventions so that they will be usable by the entire global public; in return for a limited monopoly. This concept sort of breaks down when there are no significant trade barriers, but big differences in how strictly different countries observe the propriety of those limited monopolies.
When a Chinese factory rips off a just-US-patented product, it's violating the treaties, but it's not violating a cosmic law of the universe scratched into the fabric of being by Ayn Rand herself. If a Chinese guy vitiates a treaty in a bamboo forest but no authority makes a sound, yes he can get away with it over and over millions if not billions of times. You can try to enforce a judgment you get against the forest-dweller in a US court, but China's courts will ignore it.
So this dynamic is a major threat to one of the core ethics of the Enlightenment (tm) to favor publication and free exchange of useful information, and against the old ethos of mystery and secrecy.
The problem comes when the Chinese violate patent and copyright and then send the products into US or other markets competing against the US patent/copyright holders outside of china. I've know numerous very small business people who don't have the resources to fight these unlawful competitors.
There's also a podcast (pretty sure freakonomics radio) about a Chinese company not only stealing the product line but also using the same advertising materials created by the US company. The fight to get them to stop got pretty absurd.
At my level of operation...miniscule, microscopic...I experienced a general honesty and fair trading business culture with folks in the same tier as me. The times I played at the high levels, it was pricks and asses galore all ripping and shaving whatever they could. So, I'm slow to draw philosophical conclusions about who stole what and did they play fair in doing it. It's a jungle out there. Those talking fair play are the first to jam you. Those actually playing fair don't tend to talk about it, they just do it.
While in principle I am all for NOT sending our hard-printed tax dollars to the IMF, it does lead me to wonder who the US will call when it finally runs out of buyers for its debt? I hope you are all as angry as me at the unwillingness of Congress to cut spending in the face of a $2T deficit! The baseline should be 2019, before lock-down insanity and the Inflation Production Act (sic), not 2024. Do they really think we want them to drive the bus over the cliff?
Idiotic: "There is no such thing as creativity; there’s only recombination of what already exists. And the number of possible recombinations, though vast, is not infinite". Each new thing interacts with all existing ideas, creating potentially new ideas by a factorial process. Factorial processes can exceed the number of electrons in the universe, and no AI can handle that volume.
Yglacias often seems to only half think through things; in this case claiming that giving people money to have kids is the same as saying you will pay them to not go to work for a while after having kids is hardly even trying. The obvious difference is that of a stay at home mom; what good does parental leave do you if you don’t have a wage or salary job to take leave from? Not to mention that uptake on existing leave is often well less than 100%, that is to say women often don’t take all the leave they can currently take, so adding more won’t help.
I learned a few things plugging this bit into chat. “By sending money to Pakistan, the IMF is also effectively bailing out the People’s Republic of China. Pakistan is today a satrapy of China. Its Gwadar port was the original pearl on China’s string, and its China-Pakistan Economic Corridor has put Islamabad $40 billion in the red.”
Next I asked: “What are the similarities between giving money to other governments and funding higher education? It seems we often get poor results when the government spends other people’s money. Thoughts?”
You're touching on a classic critique rooted in public choice theory and economic efficiency concerns: that when government spends money—especially money it did not directly earn—there's a higher risk of misallocation or inefficiency.
Here are some key similarities between giving money to foreign governments and funding higher education from a government budget:
1. Third-Party Spending Problem
As Milton Friedman famously explained, people generally spend money in four ways. When the government spends other people’s money on other people, there's little incentive for efficiency or value:
Foreign aid: The government is giving taxpayer money to other governments, often with limited oversight or measurable returns.
Higher education funding: The government funds institutions or students, again with limited accountability for outcomes (like degree quality or employment success).
2. Poor Incentive Structures
In both cases, the recipients (foreign governments or universities) often face weaker incentives to improve performance or use funds effectively:
Aid-receiving governments may not reform economically or politically because the money isn't tied to results.
Universities may raise tuition or grow bureaucracies, knowing the government will keep supplying funds through subsidies or student loans.
3. Lack of Clear Metrics and Accountability
Measuring success is hard in both areas:
For foreign aid: Did the money promote stability, reduce poverty, or improve governance? Often unclear.
For higher education: Did the funding improve learning outcomes or labor market results? Frequently not tracked rigorously.
4. Political and Ideological Capture
Both areas are vulnerable to interest group pressure:
Foreign aid often aligns with geopolitical interests rather than recipient needs.
Higher education funding may prioritize political goals (e.g. equity mandates, ideological programs) over educational rigor or cost-efficiency.
5. Moral Hazard
If institutions or governments expect continued bailouts or subsidies, they may take greater risks or behave less responsibly:
Pakistan (in your previous example) might continue unsustainable borrowing if it expects IMF help.
Universities might keep expanding expensive programs without concern for return on investment if federal funds keep flowing.
I teach creativity t university students. It entails more than just combining existing elements in new ways. It also requires a discerning eye to determine which, if any, of those new combinations are useful, effective, and/or an improvement over what already exists.
"Today’s production roles often require technical proficiency — such as programming, equipment calibration, and quality-control analytics — rather than traditional assembly-line work."
It amazes me how many people want a return to days of many more people working assembly line union jobs. I suspect they don't fully realize how awful most of those jobs were but maybe they understand that well enough to want those jobs for others, not themselves.
"Of course, that does not mean that we need to send everyone to university. Apprenticeships might be more effective."
One of these options is called community college. Not everyone going to community college goes down this path (many are doing what is essentially remedial high school and others are starting a four year degree cheap) and surely there are other apprenticeship options but many community colleges have grown these programs and I'd bet they'll continue to grow.
Not needing to fight over ownership is possible BUT, due to freedom, some are willing to consume without producing, and it will be up to politics to determine govt generosity.
But status, being zero sum, will continue to be “fought” over, since in every group of equals, many want to be more equal than others. Perhaps more importantly, most parents want their kids to be more equal.
It remains a bit surprising to me that so few “socialists” are fighting for more free ideas. Ideas, copyrighted or patented or not, when copied do not take away the creator’s use. This is unlike a farm or house or money, which when taken for redistribution means the owner loses it. Of course, copied movies lose their market values but that’s part of the market—nobody owns it.
Creativity certainly exists according to my, and most, definitions of creativity. But th practical ending advice seems good: use ai now, as fast as possible, to be the first to create/ discover the Marketable Good New Things.
The big social problem of what kinds of lives should low IQ folk be living remains, but the material costs of some minimal, low status life will be going down as abundance increases.
It makes sense to lament pressure on construction employment (around ~8 million) but it doesn't make sense to lump that in with agriculture, which is just ~700k across the entire sector; and those jobs are physically distant from where construction and possible manufacturing jobs are.
If we are talking technical proficiency required in the US for manufacturing jobs, Glasner is correct. If we are looking at it in a "World is Flat / Average is Over" perspective, that just isn't true; hella morons are working in manufacturing these days. It's just they, living overseas, are paid at rates that can support favela living in the US but cannot support living in a detached American 2400 square foot house with 1.5 cars.
"...it will lead to so much spectacular abundance that we will not need to fight over who owns what."
Oh no no no... "We"....meaning our tech overlords and the secondary/tertiary/quaternary/etc....will be fighting to own the jobs creating that theoretical abundance.
What I've heard is that the real purpose of the IMF/WB is to give governments of debtor countries a blame-externalizing cover story for unpopular measures they may want to do or know they need to implement and in ways that are hard to reverse by elections. The idea is to shift the burden to politically-load-bearing entities which are too big to care about the hate being directed toward them. "Don't blame me and kick me out of office, it's the evil US and Big Bad WB/IMF neo-colonialists who are forcing this on us in our moment of duress, and if you elect my opponent he won't be able to do any different, because of the way those creditors countries will gang up to punish us. We all agree and wish it were different. Darn them!"
This is a wonderfully cynical--and I think largely correct--justification for the International Monetary Fund/World Bank.
A similar take would be that much of "foreign aid" is genteel bribery. The receiving government gets money so it doesn't do things that the donor government doesn't like. And maybe does things that the donor government does like.
No doubt there's some of both of those. The less cynical view is that the money is to help bring the country and its people into self sufficiency and greater participation in the world economy. And of course some projects fail to reach that goal for many reasons.
Embrace the power of "and".
Absolutely. I thought "and" needed some positive addition.
"Tariffs are unlikely to turn unskilled high school graduates into well-employed manufacturing workers."
Technology is likely to turn well-employed manufacturing workers anywhere in the world into members of an endangered species. The question is where the the giant robot factories of the future will be built. All else equal, it would be close to demand. Onerous regulations would push them abroad. Tariffs bring them back. Not cheaply, duh, but with consumers finally paying for the cost of their own laws, which is fair.
America must not allow robot making gap!
Which in the context of Dr. Strangelove, mine shaft (for laughs) instead of H bombs, was the case—US superiority resulted in no nuke exchanges. Correlation? Or causation?
Using tariffs, now, to hugely push new robot making investment and ai data centers to be located in the US will likely be lauded in the future as a huge Trump success.
Whatever happened to big 3-D printing revolution that hasn’t really happened? Better ai & robots will likely keep its value lower, yet also possibly take more advantage of it.
What to do with low IQ folk, for whom no amount of training nor ed reform will turn into high skilled workers? Low skill, but well trained workers, making some wage that is subsidized to be higher so as to be able to buy a low cost house in a lousy school district.
Or UBI & addiction to something else without legal work?
I'll take that bet on Trump's tariffs success. It's not going to happen for multiple reasons and I'd have to be wrong on all of them.
It's irrelevant to why I'll take that bet but why do you think tariffs will cause data centers to be built here? They are being built here when there aren't tariffs.
If head starts matter, the robots will be in China, then everywhere except the US. Our auto factories now are minimally dependent on robots due to UAW demands they be minimal, no?
I've been by the factories in China. Vast, hundreds of acres, and about a couple dozen parking places for those monitoring the robots. It's here, now.
Yes, head starts matter a lot. Still, China knew that, and deployed a multi-pronged strategy to close the gap quick, including hard bargaining for IP ownership and access, industrial espionage with state cooperation and state-level capabilities, barriers to entry, subsidies, etc. The US is about to do all that including the espionage to China now, which is unfortunate in many ways, but it will be ironic to watch the Chinese complain about it.
I make no predictions. I do tend to glaze over when I hear the Big Boys complaining about corporate espionage. In my tiny operation, I've been patent trolled, ideas and protocols ripped off, and everyone I know in business has had similar ripoffs by the folks now whining about China stealing secrets. When the real story about how China "stole" our IP, folks will learn that our guys gave it away in favor of bodacious quarterly earnings reports, not understanding that Chinese are really good at the stuff we imagine we invented.
I'll never forget a flight back to the States (several years ago) sitting next to a Ford engineering guy that'd been in country for about 15 years in "partnership" with Dongfeng and others. At first circumspect, he did like the biz class drink cart and the drunker he got the more he started unloading his frustrations about how "We gave it away! We gave them our best ops!!"
Moral of the story....The story we're told is not the story.
I have some direct experiences of the issues, both micro-scale and bigger picture. In the late Clinton administration there was US- government-backed wholesale transfer to China of textile chemistry processes that were hard (especially back then) to re-discover trade secrets and other "keys to the castle" previously unknown outside of Germany and the US. I guess today that inherent difficulty would be called a "moat". I knew one lead Chemist of German 'extraction' (so to speak) who was driven into desk- pounding hysterics and fits of rage by what to him seemed inexplicable without some kind of major corruption bordering on treason being behind it.
There was a recent CCP policy document that pulled a lot more sectors into the category of "national security sensitive" which gets special help and scrutiny. The US is doing the same thing. Whatever one feels about that, I think it is actually objectively correct from a strategic statesmanship point of view given the nature of modern technological innovation and bigger-than-ever implications for security, war, economic growth, alliances, competitiveness, and geopolitics. As such things are going to get and feel ever more mercantilist, with smaller and less free and open patterns of exchange. Like the geopolitical equivalent of Tom Wolfe's "Back to Blood".
Yeah, I agree with that.
Corruption bordering on treason...I'm fine with treason.
Imagining there's good guys and bad guys...as our media narratives frame it...is simpleminded. .
People have generally forgotten what the purpose of patents is supposed to be. It's supposed to deter secrecy by forcing people to publish their inventions so that they will be usable by the entire global public; in return for a limited monopoly. This concept sort of breaks down when there are no significant trade barriers, but big differences in how strictly different countries observe the propriety of those limited monopolies.
When a Chinese factory rips off a just-US-patented product, it's violating the treaties, but it's not violating a cosmic law of the universe scratched into the fabric of being by Ayn Rand herself. If a Chinese guy vitiates a treaty in a bamboo forest but no authority makes a sound, yes he can get away with it over and over millions if not billions of times. You can try to enforce a judgment you get against the forest-dweller in a US court, but China's courts will ignore it.
So this dynamic is a major threat to one of the core ethics of the Enlightenment (tm) to favor publication and free exchange of useful information, and against the old ethos of mystery and secrecy.
The problem comes when the Chinese violate patent and copyright and then send the products into US or other markets competing against the US patent/copyright holders outside of china. I've know numerous very small business people who don't have the resources to fight these unlawful competitors.
There's also a podcast (pretty sure freakonomics radio) about a Chinese company not only stealing the product line but also using the same advertising materials created by the US company. The fight to get them to stop got pretty absurd.
At my level of operation...miniscule, microscopic...I experienced a general honesty and fair trading business culture with folks in the same tier as me. The times I played at the high levels, it was pricks and asses galore all ripping and shaving whatever they could. So, I'm slow to draw philosophical conclusions about who stole what and did they play fair in doing it. It's a jungle out there. Those talking fair play are the first to jam you. Those actually playing fair don't tend to talk about it, they just do it.
No doubt sometimes it is given away but plenty of times it is outright stolen too.
For sure it is. If I had a point, it was that it's common and everyone does it including the folks complaining the other guy did it.
While in principle I am all for NOT sending our hard-printed tax dollars to the IMF, it does lead me to wonder who the US will call when it finally runs out of buyers for its debt? I hope you are all as angry as me at the unwillingness of Congress to cut spending in the face of a $2T deficit! The baseline should be 2019, before lock-down insanity and the Inflation Production Act (sic), not 2024. Do they really think we want them to drive the bus over the cliff?
Idiotic: "There is no such thing as creativity; there’s only recombination of what already exists. And the number of possible recombinations, though vast, is not infinite". Each new thing interacts with all existing ideas, creating potentially new ideas by a factorial process. Factorial processes can exceed the number of electrons in the universe, and no AI can handle that volume.
Yglacias often seems to only half think through things; in this case claiming that giving people money to have kids is the same as saying you will pay them to not go to work for a while after having kids is hardly even trying. The obvious difference is that of a stay at home mom; what good does parental leave do you if you don’t have a wage or salary job to take leave from? Not to mention that uptake on existing leave is often well less than 100%, that is to say women often don’t take all the leave they can currently take, so adding more won’t help.
Attention Donald Trump:
I learned a few things plugging this bit into chat. “By sending money to Pakistan, the IMF is also effectively bailing out the People’s Republic of China. Pakistan is today a satrapy of China. Its Gwadar port was the original pearl on China’s string, and its China-Pakistan Economic Corridor has put Islamabad $40 billion in the red.”
Next I asked: “What are the similarities between giving money to other governments and funding higher education? It seems we often get poor results when the government spends other people’s money. Thoughts?”
You're touching on a classic critique rooted in public choice theory and economic efficiency concerns: that when government spends money—especially money it did not directly earn—there's a higher risk of misallocation or inefficiency.
Here are some key similarities between giving money to foreign governments and funding higher education from a government budget:
1. Third-Party Spending Problem
As Milton Friedman famously explained, people generally spend money in four ways. When the government spends other people’s money on other people, there's little incentive for efficiency or value:
Foreign aid: The government is giving taxpayer money to other governments, often with limited oversight or measurable returns.
Higher education funding: The government funds institutions or students, again with limited accountability for outcomes (like degree quality or employment success).
2. Poor Incentive Structures
In both cases, the recipients (foreign governments or universities) often face weaker incentives to improve performance or use funds effectively:
Aid-receiving governments may not reform economically or politically because the money isn't tied to results.
Universities may raise tuition or grow bureaucracies, knowing the government will keep supplying funds through subsidies or student loans.
3. Lack of Clear Metrics and Accountability
Measuring success is hard in both areas:
For foreign aid: Did the money promote stability, reduce poverty, or improve governance? Often unclear.
For higher education: Did the funding improve learning outcomes or labor market results? Frequently not tracked rigorously.
4. Political and Ideological Capture
Both areas are vulnerable to interest group pressure:
Foreign aid often aligns with geopolitical interests rather than recipient needs.
Higher education funding may prioritize political goals (e.g. equity mandates, ideological programs) over educational rigor or cost-efficiency.
5. Moral Hazard
If institutions or governments expect continued bailouts or subsidies, they may take greater risks or behave less responsibly:
Pakistan (in your previous example) might continue unsustainable borrowing if it expects IMF help.
Universities might keep expanding expensive programs without concern for return on investment if federal funds keep flowing.
I teach creativity t university students. It entails more than just combining existing elements in new ways. It also requires a discerning eye to determine which, if any, of those new combinations are useful, effective, and/or an improvement over what already exists.
"Today’s production roles often require technical proficiency — such as programming, equipment calibration, and quality-control analytics — rather than traditional assembly-line work."
It amazes me how many people want a return to days of many more people working assembly line union jobs. I suspect they don't fully realize how awful most of those jobs were but maybe they understand that well enough to want those jobs for others, not themselves.
"Of course, that does not mean that we need to send everyone to university. Apprenticeships might be more effective."
One of these options is called community college. Not everyone going to community college goes down this path (many are doing what is essentially remedial high school and others are starting a four year degree cheap) and surely there are other apprenticeship options but many community colleges have grown these programs and I'd bet they'll continue to grow.
Not needing to fight over ownership is possible BUT, due to freedom, some are willing to consume without producing, and it will be up to politics to determine govt generosity.
But status, being zero sum, will continue to be “fought” over, since in every group of equals, many want to be more equal than others. Perhaps more importantly, most parents want their kids to be more equal.
It remains a bit surprising to me that so few “socialists” are fighting for more free ideas. Ideas, copyrighted or patented or not, when copied do not take away the creator’s use. This is unlike a farm or house or money, which when taken for redistribution means the owner loses it. Of course, copied movies lose their market values but that’s part of the market—nobody owns it.
Creativity certainly exists according to my, and most, definitions of creativity. But th practical ending advice seems good: use ai now, as fast as possible, to be the first to create/ discover the Marketable Good New Things.
The big social problem of what kinds of lives should low IQ folk be living remains, but the material costs of some minimal, low status life will be going down as abundance increases.
Re Glasner on tariffs:
It makes sense to lament pressure on construction employment (around ~8 million) but it doesn't make sense to lump that in with agriculture, which is just ~700k across the entire sector; and those jobs are physically distant from where construction and possible manufacturing jobs are.
If we are talking technical proficiency required in the US for manufacturing jobs, Glasner is correct. If we are looking at it in a "World is Flat / Average is Over" perspective, that just isn't true; hella morons are working in manufacturing these days. It's just they, living overseas, are paid at rates that can support favela living in the US but cannot support living in a detached American 2400 square foot house with 1.5 cars.
"...it will lead to so much spectacular abundance that we will not need to fight over who owns what."
Oh no no no... "We"....meaning our tech overlords and the secondary/tertiary/quaternary/etc....will be fighting to own the jobs creating that theoretical abundance.