Australia has relatively high state capacity. That is, our administrative state is unusually effective. This deserves study, but I was surprised to find that very little had been directly written on the topic. So the economist Peter Bowers and I produced a literature review.🧵

No author has shaped my worldview more than Nassim Taleb (@nntaleb). I stumbled on The Black Swan eight years ago, then inhaled the rest of the Incerto. I've increasingly come to appreciate the importance of its ideas to prolonging the human story. Was an honour to speak with Nassim on the podcast. Hard to summarise our conversation, but the timestamps below capture the gist. Enjoy! Timestamps: (0:00:55) - Heuristics for knowing when you're in Mediocristan versus Extremistan. (0:06:06) - Are certain tail exponents intrinsic? (0:10:30) - Why hasn't Universa's tail hedging strategy now been fully priced in? (0:11:52) - Does the power law distribution of startup returns mean VCs should concentrate their bets, or spray and pray? (0:15:20) - Nassim's 30-minute take on the field of behavioural economics. (0:48:57) - Nassim's 20-minute take on superforecasting. (1:11:03) - The Precautionary Principle and AI. (1:17:28) - What are LLMs doing? (1:23:10) - War, violence, & "the empirical mean is not the real mean". (1:39:17) - Covid, & how Western governments think about tail risk. (1:43:38) - What's the most important thing people in social science get wrong about correlation? (1:52:58) - How does Nassim explain the perspicacity of the Russian school of probability? (1:55:56) - Why doesn't Hayek's knowledge argument extend to prediction markets? (1:58:26) - If mean absolute deviation is a better measure than standard deviation, why has the latter become commonplace? (2:01:09) - Nassim's next book, and what he's up to at the moment.

What is probability really? Nassim Taleb (@nntaleb) explains to me how he understands it:

Peter Thiel presents a new explanation for the Great Stagnation: in the mid-twentieth century, drably dystopian narratives about science and technology began seeping into the culture. People don't want to feel as if they're building the machines that will destroy the world. 1/3

David Deutsch (@DavidDeutschOxf) on the poverty of 'P(Doom)': "If you ask somebody, 'What's your subjective probability for AI Doom?', well, if they say anything other than zero or one, then your interlocutor has already won the argument. Because even if you said 'one in a million', they'll say, 'Well, one in a million is much too high a probability for the end of the human race, so you've got to do everything we say now to avoid that at all costs.' And the cost is irrelevant because the utility is infinitely negative. And this argument has all been about nothing, because you're arguing about the content of the other person's brain. Which actually has nothing to do with the real probability – which is unknowable – of a physical event that's going to be subject to unimaginably vast numbers of unknown forces in the future. So, much better to talk about a thing like that by talking about substance. Talking about what the probabilities in somebody's mind are is irrelevant. And it's always irrelevant unless you're talking about an actual random physical process." (Links to the full conversation below.)

All clear 👊🏻

David Deutsch and Steven Pinker debate whether AGI will be truly sentient, in their first ever public dialogue. I'll be publishing the full conversation tomorrow. In case you aren't subscribed, you can do so here so you get a notification as soon as it's published: Apple Podcasts: podcasts.apple.com/au/podcas… Spotify: open.spotify.com/show/6AXebM…

Manning Clark’s attic, where he wrote his history of Australia:

I’m wearing a shitty hardware store mask (not N-95) as I duck out for some necessary supplies. Why? It costs nothing, reminds me not to touch my face, gives me a (tiny) chance of not catching or (if I’m asymptomatic) spreading the corona, & helps make masks socially permissible.

Ken Henry: " I remember I had a conversation with Kevin Rudd shortly after he became Prime Minister in November, 2007. He said, just out of the blue, 'What do you think the sustainable population of Australia is?' At the time, the Australian population was probably about 22, 23 million. And I said, 'I don't know, about 15 million.' And he said, he said '50 million. Right. That's what I think too.' And I said, 'No, no, no, no, no. 15. One five, not five zero.' He said, 'How could you, how could you say that? The population's already well in excess of that.' And I said, 'And you think this is sustainable?' But then I said to him, 'But I could imagine... a set of policies that would make a population of 50 million sustainable on this continent.' ... Why don't we build a whole new city of 10 million people in a place that presently has nobody? ... Economists are not comfortable with this idea, this sort of planning from on high... And I'm not comfortable with it, but I'm also not comfortable with what I see playing out. The population in Sydney last year and in Melbourne, both cities, increased by 150,000. Like holy hell. I think the optimal city size, if you read the literature on this stuff, at least that written by economists, the optimal city size is somewhere around about 150,000. There's two cities, brand new cities we could have built in 12 months."

It was an honour to host the first ever public dialogue between David Deutsch (@DavidDeutschOxf) and Steven Pinker (@sapinker). They are longstanding admirers of each other's work. I view Steve's defence of the Enlightenment as more empirical, whereas David's is built more on first principles. But beyond their shared rational optimism, what else do they agree – or disagree – about? Topics we discuss are well captured by the timestamps below. Links to YouTube, transcript, Apple Podcasts, & Spotify in tweet below. Enjoy! Timestamps: (0:00:00) - Introduction (0:03:09) - Is AGI even possible? (0:10:17) - Scientific method will constrain runaway superintelligence (0:11:56) - Does AGI need agency to be creative? (0:28:31) - Will AGIs be sentient? (0:37:06) - AGI & AI safety (0:47:44) - P(doom) & subjective probabilities (0:53:21) - Prediction markets (1:01:43) - Universal explainers & The Language Instinct (1:04:43) - Universal explainers & heritability of behavioural traits (1:27:59) - Differential technological development (1:36:09) - What explains the Great Stagnation? (1:46:13) - Should presumed physical limits to growth make us pessimistic?

If you search for “stomach” in the letters of Charles Darwin (link below), you’ll see that for most of his life he was tortured by stomach pain. It made him miserable and a recluse. We now know the cause. In an exceptionally niche scoop for my podcast, Nobel laureate Barry Marshall (@barjammar) reveals that, according to a yet-to-be-published paper Barry coauthored with a friend, whiskers from Darwin’s beard were collected from his desk by his maid after he died and were preserved. Some of these whiskers came into the possession of Barry’s unnamed friend. PCR testing on the whiskers has revealed that Darwin was infected by the stomach bacterium Helicobacter pylori. His problems were most likely caused by this bug - not by the “nervous dyspepsia” his quack doctor put them down to. H. pylori was rampant in Europe in the 19th century, and was likely behind the stomach ailments of many famous figures, from Darwin to Alfred Nobel (who also suffered chronic stomach pain) and Napoleon (who was probably killed by stomach cancer at the age of 51). Today, it's eminently treatable, thanks to the work of Barry and his late collaborator Robin Warren. Makes you grateful to live in the modern world (also, PCR is truly an incredible technology).

My favourite example of emergence, via @NAChristakis:

One of my favourite @tylercowen quotes from my 2020 conversation with him: josephnoelwalker.com/104-bac… Thanks to @peterhartree for reminding me of it!

Nassim Taleb (@nntaleb) argues that the (non-naive) precautionary principle does not apply to AI as the technology currently stands... But it *might* apply if the tech gets to the cusp of recursive self-improvement:

A country so weirdly fixated on house prices is a country that has secretly realised that capital gains and soaring household debt are the easy ways to buttress lagging middle-class incomes in an age of increasing inequality and stubborn stagnation.

The COVID-19 epidemic could become a defining event of our lifetimes — unless we act. I speak with a founding father of complexity science, @yaneerbaryam, about why we need to reduce connectivity in the system NOW. iTunes tinyurl.com/ss672h6 Spotify tinyurl.com/wyu74rp

Nassim Taleb (@nntaleb) tells me the "secret" behind the writing of Fooled by Randomness—and the aspect of the book that Daniel Kahneman influenced:

Below is a quick thread on why a short, sharp, sheer shutdown of 4-5 weeks will be effective and desirable, based on my conversations with @yaneerbaryam and others over the past weeks. First, why are ~4 weeks enough to do the trick? 1/n

Had the pleasure of interviewing Daniel Kahneman in New York. An absolute mensch. Topics we discussed in the thread below. Website: bit.ly/3zWo8Lx Spotify: spoti.fi/3GJp1e4 Apple Podcasts: apple.co/3UxZ5YF (1/6)

CMO Brendan Murphy on why schools will remain open: "We have no data on whether children are super-spreaders." His statement makes no sense. Absence of evidence isn't evidence of absence. The risks are asymmetric. So bite the bullet.

I don’t understand why people are freaking out about the coronavirus. More people have died in both world wars combined than have died so far from coronavirus.

Rob Boyd and Pete Richerson have made arguably the most significant augmentation to Darwinian evolution since Mendelian genetics. They identified and modelled a second stream of inheritance that's shaped our species: culture. I was surprised to learn they'd never done a joint interview before. Was an honour to be able to bring them together in San Francisco last week. Topics in the timestamps below. Links in the tweet below. Enjoy! Timestamps: (0:00:49) - How likely is it that cumulative cultural evolution actually began with australopithecines? (0:20:26) - By when was cumulative cultural evolution achieved among Homo? (0:23:31) - Rob and Pete explain (1) cultural evolution, (2) cumulative cultural evolution, and (3) gene-culture coevolution. (0:31:57) - "Culture, not natural selection, has been the main force shaping human genetic evolution for the last 1-2 million years." How do we know this? (0:37:00) - Examples of gene-culture coevolution. (0:43:05) - The chaotic climate of the Pleistocene (2.6 million - 11,700 years ago). (0:48:26) - How did Pete and Rob discover the climate was so variable in the Pleistocene? (0:51:51) - Culture was an adaptation to Pleistocene climate variation. (0:58:52) - How Pete and Rob came up with their explanation for how cultural brains evolved (an adaptation to climate variation). (1:02:16) - Increasing climate variation may actually have been driving brain size increases on Earth since the time of the dinosaurs 65 million years ago. (1:08:14) - Earth's climate variation was probably driven by its orbital perturbations, caused by Jupiter's gravitational pull. (1:13:34) - How contingent was the evolution of cultural brains? (1:22:46) - Has human brain size been shrinking over the last 10,000 years? (1:27:50) - Will technologies that obviate natural birth mean that human brain size (relieved of the constraint of the birth canal) resume their trend of large increases, or has cumulative culture reduced the selection pressure on brain size? (1:34:18) - How cultural evolution explains the fertility crisis. (1:43:19) - Which specific force of cultural evolution is the biggest cause of declining fertility? (2:02:13) - If global population peaks and then shrinks, say by mid century, how do we sustain a technologically advanced civilisation? (2:09:10) - Does Rob and Pete's understanding of how human intelligence evolved give them any unique insights into how artificial intelligence might be grown? (2:14:57) - How do Rob and Pete think about their partnership, and what makes scientific dyads so productive?

We have no longitudinal data on the coronavirus. There’s a non-zero chance recovered people may be permanently damaged in some way. We must obey the precautionary principle. The UK government’s herd immunity policy is very misguided for this reason — pennies and steamrollers.

The most cancer-causing pathogen in the world is Helicobacter pylori. It lives in the stomach of about half the world's population. As the leading cause of stomach cancer, it's therefore responsible for about 5% of the total burden of new cancer cases globally. It's also the leading cause of peptic ulcers. It's crazy to think that until H. pylori was discovered, ulcers were simply put down to stress; there was no real cure. ("Time to retire", etc.) Happily, H. pylori is eradicable with antibiotics. We didn't discover H. pylori until 1979. We could've discovered it decades earlier, but the relevant literatures were too siloed and there was an ironclad medical dogma that the stomach was sterile. Even after the link between H. pylori and gastritis / peptic ulcers / gastric cancer was established in the mid-1980s, it still took a full decade before it became mainstream consensus. It's an amazing reminder of how scientific knowledge diffuses much more slowly than you might expect. I had the honour of interviewing Barry Marshall (@barjammar), who (along with Robin Warren) won the 2005 Nobel Prize for discovering the bug and its link to gastritis and peptic ulcer disease. Barry is also famous for proving this causality by drinking the bacteria and making himself sick. Links below. Enjoy! Timestamps: (0:00:00) - Introduction. (0:01:53) - Was H. pylori behind Darwin's dyspepsia and Napoleon's cancer? (0:09:57) - Which cancer has killed the most in history? (0:12:18) - Why stomach cancer fell in the West. (0:15:05) - Why are duodenal ulcers and stomach cancer mutually exclusive? Both are caused by H. pylori. (0:26:15) - Quick gastrointestinal anatomy lesson. (0:30:15) - The "H. pylori enigmas" (Africa, India, Costa Rica, etc). (0:35:15) - Is there a "point of no return" in the cascade from H. pylori infection to stomach cancer? (0:43:11) - Joe does a urea breath test live on the pod! (1:08:40) - What Barry learned about manufacturing by trying to make millions of H. pylori tests in Perth. (1:16:50) - Four clues to the existence of H. pylori. (If you'd known these, you could have discovered it without even laying eyes on it.) (1:25:58) - How MEDLINE/the internet enabled the discovery. (1:31:45) - Why wasn't H. pylori discovered earlier than 1979? (1:37:45) - How fiberoptic endoscopes enabled the discovery. (1:38:44) - The 1954 Palmer null result and its fallout. (1:43:08) - Scientific knowledge diffuses more slowly than you'd expect (H. pylori as a case study). (1:44:49) - If H. pylori was discovered in 2015, would mainstream acceptance still have taken 10 years? (1:47:40) - Self-experimentation in science. (1:55:40) - Barry reflects on his partnership with Robin Warren (with whom he shared the Nobel). (2:07:09) - Benefits of H. pylori? (2:09:45) - Eradication prospects & vaccine timeline. (2:14:29) - Blurring infectious vs chronic disease.

I spoke with @DavidDeutschOxf about the line that separates empty prophecy from legitimate prediction. This was a long conversation, and I enjoyed every minute. Some gems from David in the Tweets below. Link to the full conversation and transcript here: josephnoelwalker.com/139-dav…

I speak with @stephen_wolfram on the podcast. A 4.5-hour conversation! In the thread below, I share 32 specific moments I found especially insightful. Enjoy! Spotify: spoti.fi/3QLfzg1 Apple Podcasts: apple.co/3QLUxxQ Website: bit.ly/44l5Gsy (1/34)

Australians who’ve travelled abroad can probably resonate with the following experience: You’re walking down a street in a city like New York or Barcelona or London or Paris, and there’s something exotic about it that you can’t quite put your finger on. Yes, the architecture is different, there are staircases to underground metro stops, and cars are driving on the wrong side of the road. But it’s not that, or not only that. Then it hits you: you’ve never seen so many blocks of five, six or seven story apartments, usually with shops and restaurants along the bottom, in the middle of a city. You’ve never experienced medium density!

We also discussed prospect theory in light of @nntaleb's work. Full transcript here: josephnoelwalker.com/143-dan… (3/6)

My 4.5-hour podcast with former Australian Treasury Secretary Ken Henry (2001-2011). 9 notable moments in the thread below (honestly hard to pick just 9!). Website: bit.ly/3BeSMA8 Spotify: bit.ly/3VNWn1E Apple Podcasts: bit.ly/3NWuz9y (1/11)

In @ole_b_peters' first ever podcast, we discuss ergodicity, the history of probability theory, and the will's most lonely affliction: that time and chance happen to us all. Apple Podcasts: tinyurl.com/44k3namd Spotify: tinyurl.com/b8bdfpa8 Website: tinyurl.com/j8ra554u

I don't always release a 3-hour episode, but when I do it's worth every minute. I spoke with @John_Hempton of Bronte Capital about his luck-struck path into finance and the dark art of short selling. Enjoy! iTunes: tinyurl.com/y25wzbnu Website: tinyurl.com/y59jeh6j

I repeat: The Federal Government has two options: (i) a hard lockdown now, lasting 4-5 weeks, or (ii) rolling out a hard lockdown over the coming months in a piecemeal, reactive fashion. Option (ii) probably has greater health and economic costs. Bite the bullet, get (i) done.

Next 4 podcasts to be released, starting this week: — a former governor of the Reserve Bank of Australia — a leading light of the “Intellectual Dark Web” — one of the most important evolutionary biologists alive — a Nobel Prize-winning economist It’s going to be a gr8 year ppl

I don’t have much to say on Australia’s household debt level and today’s news about repealing the Responsible Lending laws, except for a 2.5 hour podcast with a wise Nobel laureate on how household debt fragilises an economy. I’ll release it tomorrow, for your weekend enjoyment.

HE’S BACK. I catch up with my friend and most requested return guest @John_Hempton to hear what he learned in the year of hard-won lessons, 2020. Anecdotes, insights, laughs. Enjoy! iTunes tinyurl.com/y88wawbj Website tinyurl.com/y968oeah Spotify tinyurl.com/y7bn6l9b

Property is the only acceptable way to make money in Australia, because of the tall poppy syndrome. If you’re invested in property, you’re long on Australia. If you build a business, you’re long on yourself.

US talent is generally bad at assessing Australian talent. Australian humility and self-effacement come off as a lack of ambition. Revealed preference lens becomes more important.

Nassim Taleb (@nntaleb) critiques binary forecasts: "Frequency space is a problem, because in the real world you're not paid in frequency. You're paid in dollars and cents."

Australia saw success in eliminating and suppressing COVID-19 in 2020, but spoiled it by colossally dropping the ball with respect to our vaccine strategy. If ever there was an example of Donald Horne's jibe that we are a lucky country run by second-rate people, sadly this is it.

Historically, there is no such thing as a soft landing. The iron law of house prices is that the more they go up, the further they have to fall. Be prepared for much worse to come for Australia and Canada. Here are 18 cases since 1970 of OECD nations with house price crashes:

Housing busts are long, and what is deemed a “correction” often comes to be seen in hindsight as the start of a crash. One weekend in 2018, I read every article in @IrishTimes from 2005 to 2010 relating to house prices. I collated 1 headline/month here: piped.video/FtbMAPcZ0Q0

Dystopian narratives have been facilitated by the dual-use nature of so many modern technologies. For example, Thiel sees the turning point on nuclear power as 1975, when India got the bomb after the US transferred it nuclear technology. 2/3

New studio, new season… The JSP is re-launching on 11 April. To everyone who has messaged while I’ve been on pod-hiatus – thanks for your patience. I’m excited to share what’s coming!

Fixing Australia’s housing supply is actually a matter of national security

Two months ago I submitted a FOI request for Treasury minutes relating to reasons for introducing the First Home Owners Boost. I received docs today. A revealing line: FHOB was designed to “prevent the collapse of the housing market.” The narrative was dying but we revived it.

How to write a LinkedIn-style Twitter thread? Three words: read this thread. Let’s get started 🧵👇🏻 (1/6)

If Ken Henry was given a $50 billion surplus... what's the first thing in Australia's tax system he'd fix? He'd index personal income tax scales. Yet he'd argued against indexing for 40 years — until something changed recently:

And so it begins. “Belle Property Strathfield’s Jimmy Kang [said] up to 50 per cent of his clients were asking him to sell their homes in Sydney’s western suburbs because they can no longer afford their new principal-and-interest mortgages.” macrobusiness.com.au/2018/08…

Myself & some others (more them than me) have been working to get @yaneerbaryam in front of Aus business leaders. We achieved that @ 3pm with (I believe) 500+ on the call. We are now submitting a letter from business leaders to tonight’s cabinet meeting: zoom.us/rec/play/tZUuIeGtqjs…

Original source (Thiel’s recent lecture at the Stanford academic freedom conference): drive.google.com/file/d/1b2P…

Impressively, Australia has managed to have a more effective government than most of its OECD peers, while taxing less than them.

How would you describe the Australian economy to a foreigner? What are your first 3 to 5 bullet-points? I asked Michael Brennan, Australia's previous Productivity Commissioner, this question. His answer: The Australian economy has 5 distinguishing characteristics: (1) An outsized mining industry—this is unusual for a developed economy (and is much more associated with emerging economies). (2) A huge financial services industry—this stems from our compulsory superannuation system, which has spawned a funds-management industry exceeding $4 trillion. (3) A large construction industry, flowing from the fact we have very high population growth due to immigration. (4) A culture of fiscal prudence—traditionally, balancing the budget has been a KPI for governments (many other developed countries don't place as much weight on this). (5) A social safety net that is very efficient at excluding the rich, coupled with labour laws that are very favourable to workers.

In their first ever public dialogue, David Deutsch (@DavidDeutschOxf) and Steven Pinker (@sapinker) have a friendly debate over whether AGIs will need agency in order to create new scientific explanations. Links to the full conversation below.

Amidst the chaos in northern Italy, one town tested the South Korean strategy for controlling coronavirus: mass testing, contact tracing, and quarantining. It worked. One of the experiment’s designers tells me how: iTunes tinyurl.com/v2scor2 Spotify tinyurl.com/td6ncvc

Ian Macfarlane was Governor of the Reserve Bank of Australia from 1996 to 2006. In this extraordinary, frank chat we talk about how he tried to kill off a housing bubble & the dangers of targeting the wealth effect. iTunes tinyurl.com/yx5yeloc Website tinyurl.com/uer3baf

New episode with former US Treasury Secretary and current OpenAI board member Larry Summers (@LHSummers). We discuss: - How he's been learning about AI. - The odds of the technology delivering a much faster economic growth regime (akin to the Industrial Revolution). - How AGI might change economic policymaking. Enjoy! Timestamps: (0:00:00) - Introduction. (0:00:46) - Larry's journey teaching himself about AI & deep learning since joining OpenAI’s board. (0:09:15) - How many hours per week has Larry been spending on OpenAI-related stuff? (0:10:16) - Which bottleneck to AI scaling does Larry think is the most underrated? (0:12:22) - Approximately what share of time do today's AI researchers spend on tasks that AI will be doing for them in five years? (0:15:01) - What explains the remarkable steadiness of US economic growth over the last 150 years? (0:19:42) - How likely is it that AI initiates a new growth regime with average growth that’s ~10x faster than today? (0:21:36) - What are the best economic arguments for believing AI won’t deliver a regime of ever-increasing growth rates? (0:25:33) - How much could AGI boost economic growth in developing countries merely by helping their policymakers make better decisions? (0:28:20) - How much better could monetary policy be if the Fed had AGI? (0:31:40) - How much would having AGI have helped US economic policymakers during the financial crisis & Great Recession? (0:36:07) - Is the CCP infiltrating and stealing the IP of major AI labs in the US and UK? (0:39:35) - At what point should AI be nationalised? (0:42:39) - How would Bill Clinton or Barack Obama be thinking about AI governance? (0:44:27) - If OpenAI restructures to a public benefit corporation, how does that change its incentives? (0:46:18) - What does Daron Acemoglu miss in his analysis of the economic impacts of AI?

Interestingly, @DavidDeutschOxf converges on the same explanation for stagnation in my recent podcast conversation with him: josephnoelwalker.com/139-dav… 3/3

So tired of this property propaganda

We need a name for anti-immigration monomaniacs. Not to say they don’t have some points, just that the fact they try to inject them into any and every conversation should make you suspicious.

In my epic new podcast conversation with @andy_matuschak, we discuss tools for thought (technologies for augmenting human intelligence), Andy's note-taking system, and the science of memory. One of the most insightful chats I've ever had. Full ep here: bit.ly/3I0F0Ge

New podcast episode with @andy_matuschak: Last year, I spent some time in San Francisco, and one of the highlights was getting to hang out with Andy Matuschak. I learned of his work in 2021—his ideas on making memory a choice and taking knowledge work seriously were a breath of fresh air and changed how I prepare for podcast interviews. I interviewed him on the podcast in early 2022. This time, the tables were turned. Andy dropped by my place in SF while I was preparing to interview Larry Summers, and we recorded a "behind the scenes" video that showcases my approach to preparing for interviews. Until this point, I'd never articulated let alone shared publicly my approach. I'm grateful to Andy for suggesting the idea and for so thoughtfully drawing out my current strategies, tactics and tools. Links in tweet below. Enjoy! Timestamps: (0:00:00) - Introduction. (0:01:05) - Case Study: How I prepared to interview Nassim Taleb. (0:27:25) - How I read books. (0:46:21) - How I use memory prompts. (1:02:02) - How I draft interview questions. (1:10:21) - Using memory prompts to improve at the art of interviewing — and an impromptu prompt-writing session. (1:25:14) - Analog vs digital podcast preparation. (1:27:34) - Why do so much preparation for podcast interviews? What is the broader project of the podcast?

Katalin Karikó (@kkariko) is one of the inventors of mRNA technology. I travelled from Sydney to Philly to interview her in person. This is her first longform podcast in English. Web: bit.ly/43QN83i Apple apple.co/3KkSNYw Spotify spoti.fi/3QoMp6q (1/13)

We can implement a hard shutdown now. Or we can roll one out in a reactive, piecemeal fashion over the coming weeks, as we inexorably will need to do. The first option looks superior for the reasons @yaneerbaryam told me. Why wait until you’re crashing to put on a seatbelt?

Many have observed that Australians show obedience to 'impersonal authority'. This might make policy implementation more straightforward.

One of the biggest problems on both the left and right of Australian politics is to copy and paste US political debates without realising they don't fully map over.

Great to speak with Big Mal (aka @TurnbullMalcolm). His new memoir A Bigger Picture is the best prime ministerial autobiography I've read: colourful, eloquent, full of anecdotes, incisive reflections and generous changes of pace. Our very philosophical podcast goes out tomorrow.

I spoke with Nobel laureate @RobertJShiller about bubbles and Australia’s real estate bacchanalia. iTunes: tinyurl.com/y2n4yuav Website: tinyurl.com/y3mv65w2 Spotify: tinyurl.com/yy73r75j

3-hour episode with John Hempton goes out tomorrow (completely separate to my housing market conversation with him). It will be good — similar vein to my @AlderLaneeggs episode

The time that @tylercowen told @srajagopalan her failure rate as a talent scout seemed too low : “So very early on, maybe like first six, seven months that I was picking EV India winners, Tyler came and asked me and he said, 'Your India winners are great. They're all succeeding. Are you taking enough risk? Where's the failure rate?' I thought about it really carefully. So I went back. And that's a very Tyler question to ask. No one else would ask that question, right? If things are going well, usually they leave it alone. So I went back and actually looked at all the people that I didn't give the grant to and said, why didn't I give it to them? And oddly enough, when I had done the assessment that time, none of the rejections had to do with riskiness of the project. It had to do with just the person not having a very fleshed out idea. And most of the times, actually, it was because it wasn't a risky enough project. It was just too cookie cutter boring do we really need one more of this in the world kind of rejection? And then I was like, okay, I'm comfortable with the risk I'm taking. But I would say to a new talent scout, it's useful to keep doing that exercise every six months. I keep going back and looking at my rejections and then looking at, was that the right call? And why did I do that? And do I still feel that way six months later, having done more grants and so on and so forth?” – Shruti Rajagopalan

Just finished recording a 2-hour podcast with Mervyn King, former Governor of the Bank of England (2003-2013). He was incredibly generous. & definitely one of smartest people I’ve spoken with. Podcast will go out in a week. But first I’ll release a housing ep I’ve been promising

Happy RBA Hike Day to everyone who celebrates

Top link on MR today!

Saddened to hear of Daniel Kahneman’s passing. I had the honour of recording a conversation with him in New York last year. He was kind and gentle, and incredibly sharp. A generous interlocutor. I travel with a bag of books for interview prep. After the interview, as we were leaving the room, I pointed out Josh Shenk’s book Powers of Two: “You can have my copy if you like. But it’s a bit of a journalistic airport book.” “I love journalistic airport books,” he said, taking the book. As I walked him down to the lobby, he suggested questions for an upcoming interview I had with another economics Nobel laureate. And offered to connect me with a friend of his for an interview. What struck me most during our interview was his intellectual humility. A true mensch. Rest in peace. josephnoelwalker.com/143-dan…

Equally, Australians, for the most part, trust and expect a lot from their institutions.

The @FinancialReview runs a rigorous write-up of my latest podcast: “In a very rare public critique of the RBA by a former governor, Mr Macfarlane said technology and globalisation were now more powerful forces than interest rates in affecting inflation” afr.com/policy/economy/forme…

In 1990, New Zealand's central bank pioneered the adoption of an explicit inflation target. Since then, most major central banks have converged on a 2% target. But how was this number– the economy's 'speed limit' – actually derived? Raghuram Rajan tells me: "Out of thin air."

The logic is inevitable. Credit is as much a feature of housing bubbles as the moon is of nighttime. To sustain price rises, underwriting standards are relaxed. Few know this better than @John_Hempton. The penultimate ep. of #housingbubbleweek! iTunes: tinyurl.com/yyshgg4n

The time has come to break the Sydney-Melbourne duopoly. I think a large part of what makes the UK, for example, so pathologically broken is that they have all their eggs in the London basket. We’re only one city away from that. Where are Australia’s Austins and Phoenixes? Why aren't we scaling more cities to +1 million, or building new ones altogether? This question has come up in a couple of my podcast chats. A couple of years ago, Ken Henry revealed to me that Treasury had once looked into it. And last week, when I asked Greg Kaplan (@GregWKaplan) and Michael Brennan (former Australian Productivity Commissioner) for the most ambitious idea they've encountered for raising Australian productivity, it came up again:

Australian PISA scores have been mysteriously deteriorating over the past couple of decades. The typical Year 9 student now scores what the typical Year 8 scored twenty years ago. Worse: this merely extends a decline in math and literacy scores that began as early as the 1960s. I ask Andrew Leigh (@ALeighMP): What is driving this? He explains one surprising reason: "We had a way of getting very talented teachers in front of Australian kids throughout the 1960s and 1970s. The main way in which we did that was rampant gender pay discrimination across the professions. The consequence was that you had very few talented women going into law, into medicine, into dentistry... Where did those women go? Well, overwhelmingly they went into teaching and nursing. And that meant that the calibre, the academic aptitude, of those going into teaching in the 1950s and 1960s was artificially increased."

We (just) made the top 20 podcasts in Australia, as voted by listeners. Thank you Swagmen & Swagettes! It seems that many people share our peculiar combination of interests. Onwards and upwards!

Two months ago, Australia's most prominent strategic analyst set me some homework: the 11 books that have most shaped his thinking. We then met to compare notes. A wonderful learning experience, and huge thanks to Hugh. Subscribe at the links below to get the ep when it drops!

Peter Costello was Treasurer of Australia from 1996 to 2007 - longer than anyone else in the country's history. He architected and led the most complex tax reform in the postwar era (maybe even in the whole of Australian history): the introduction of a value-added consumption tax, the GST, in 2000. I wanted to chat with Peter for three specific reasons. First, to gain a more concrete and visceral appreciation of exactly what a reform of this scale takes. On this, it was interesting to hear his war stories: for example, the Australian government believed there were about 1 million businesses in Australia. But when it began issuing ABNs (Australian Business Numbers) to businesses that registered for the GST, more than 2 million businesses came out of the woodwork! That is, despite Australia's unusually high state capacity, the government thought there were fewer than half as many businesses in the country as actually existed. Another example: the GST prompted the very first use of PowerPoint in the Australian Cabinet. Peter recalls giving an 8-hour (!) PPT presentation about the GST to his cabinet colleagues in 1998. He thinks that he wouldn't have been able to get their agreement without the specific technology of PowerPoint, because it enabled him to easily show the distributional effects of the new tax and accompanying compensation. Second, I wanted hear Peter's theories as to why it's seemingly become so much harder for the Australian government to achieve reforms of the scale of the GST. After 2000, the reform process has looked more and more like wading in molasses. Peter buys the story that we've become victims of our own prosperity - Australia's success has reduced the evolutionary pressure to continue enhancing productivity (a sort of 'good times create soft people' story). I think this is plausible, but not the whole story (see my second chat with Ken Henry for other theories). A specific lesson Peter shares for would-be reformers: you have to go for broke in your first term in government. "[M]y experience in government was that, as you go on in government, you get worn down... you get more tired, your opponents get a fix on you. You’ve expended enormous political capital...". Third, and unrelated to the GST, I wanted to chat with Peter about the baby bonus that he introduced in 2004. This was a lump sum payment of $3,000 (soon increased to $4,000, then $5,000, before it was means-tested, and then, in 2014 abolished and replaced with paid parental leave) to families with newborn children. Strikingly, the baby bonus led to an increase (albeit temporarily) in Australia's total fertility rate: it rose in the mid-2000s, peaking locally at ~1.98 in 2008. Australia is one of the only western countries to have reversed its declining TFR since the demographic transition began. Surprisingly, I learned from Peter that the government did not initially conceive of the baby bonus as a tool for increasing the TFR. Rather, it was simply a consolidation and rationalisation of a bunch of disparate benefits for families with new children. So the uptick in births was a (happy) accident. In picking apart the causes of the uptick, Peter thinks the narrative effect (as he famously said, "have one for mum, one for dad, and one for the country") was much more important than the financial effect. Interestingly, his view is consistent with one of the main explanations for declining fertility coming out of the field of cultural evolution (see, for e.g., my 2024 conversation with Rob Boyd and Pete Richerson). Anyhow, it was a very fun conversation. You can watch it on any of the podcast apps or on YT (link below). Enjoy! Timestamps: (0:00:00) - Introduction. (0:01:21) - Inside Australia's most complex tax system overhaul (the GST). (0:47:05) - Why Costello hid revenue estimates from the PM. (0:49:57) - Lessons for getting big things done in government. (1:10:32) - The 2004 baby bonus, & how Australia achieved the impossible (increasing its total fertility rate).

From a close Italian friend who lives in Sydney. Her (very fashionable) parents are quarantined in Milano... Below is a glimpse of our future unless @ScottMorrisonMP imposes stronger countermeasures sooner. Why wait if we’re going to accede to them anyway over the coming weeks?

I thing I wrote last year, which I haven't shared on here yet (link to the full piece below):

We don't have the adversarial legalism, prescriptive legislation, or public service risk-aversion of the US.

Pathetic

What about some case studies? The 2019 Thodey Review of the Australian Public Service gives some examples of our strength in digitisation:

Shruti Rajagopalan (@srajagopalan) on the $20 bills that VCs (both Indian and foreign) are leaving on the ground in India: "So what's been happening in the US is we take all the public goods as given, right? I mean, maybe not anymore in California, but largely the fact that there will be clean water, there will be a sidewalk to walk on, there will be basic law enforcement, there will be some efforts to mitigate air pollution... That's taken for granted. In India, it's kind of flipped over. The private sector still needs to build a lot of hardware design solutions which are just taken for granted in the United States. So those things don't get picked up. So when I say, 'what are VCs getting wrong?', I have to tell you both what they fail or misunderstand, but also what they're not picking. And I think they're not picking enough in the hardware solution space. It's probably because when it comes to software, there's virtually no product risk. Whereas when it comes to hardware stuff, like this air pollution device and so on, they think that you have product risk and you have market risk, whereas I think there's very little market risk there... So I think there's a mismatch there, and I hope they catch up soon because these are like $20 bills lying on the table." – Shruti Rajagopalan, economist at @mercatus

Australia has a long history of using evidence-based policy and producing independent policy research. Indeed, policy debates in the US have sometimes even relied on research from Australia's Productivity Commission, because it was perceived as independent and rigorous!

It was a great honour sitting down in Chicago with former IMF chief economist (2003-2006) and Governor of the Reserve Bank of India (2013-2016) Raghuram Rajan. We discuss: - the deep causes of the GFC & Great Recession - why the Keynesian approach to restoring aggregate demand didn't work after the GFC - whether unconventional monetary policy has done more harm than good - which central bank has the best-adapted governance structure in the world - how inflation expectations are actually formed - why most major central banks have coalesced around a 2% inflation target - whether monetary policy should target financial stability - Raghu's thoughts on the RBA Review in Australia - and much, much more Enjoy! Website: josephnoelwalker.com/151-rag… Spotify: spoti.fi/47bvBVt Apple Podcasts: apple.co/3QmAWCx

This is me Mum who’s a nurse at a NSW hospital with a COVID-19 patient in ICU (I won’t disclose the hospital). As Irish Taoiseach Leo Varadkar said overnight, "Not all superheroes wear capes -- some wear scrubs and gowns." In what extra ways can we help our healthcare workers?

A former RBA Governor is now on record as being critical of the current RBA’s policy of using the wealth effect as a channel for monetary policy, calling it “undesirable”. Podcast airs at 8am AEST tomorrow.

Next year I’m hosting 6 live podcasts in Sydney & Melbourne Each will focus on a pressing policy issue with a different expert—followed by a meet-and-greet to keep the convo going Want to bring together thoughtful, curious Aussies Info in thread or here josephnoelwalker.com/events/

Is capitalism making us happier? Is it fair? Can it be saved? Or must we move beyond it? @yanisvaroufakis returns to the show for a conversation on capitalism and its discontents. iTunes: tinyurl.com/y5quz6nt Website: tinyurl.com/y4ekbpfv Spotify: tinyurl.com/yxmwnmh4

Australia pays its public servants relatively well.

America's ignominious retreat from Kabul marks the third imperial failure in Afghanistan. But what ought we learn from this? The magnificent @DalrympleWill returns to the pod. Apple Podcasts tinyurl.com/7chnxt7p Spotify tinyurl.com/sx3h5btn Website tinyurl.com/yskwa2pc

I had a fun and expansive chat with the legendary @bethanymac12 about the craft of investigative journalism, how she saw through Enron, and the fine line between fraud and visionary. iTunes: tinyurl.com/yykk36h5 Website tinyurl.com/y3pt6k2j Spotify: tinyurl.com/y3d5ygmc

In the post-war era, housing bubbles have emerged as capitalism’s Achilles heel. In a crucial epilogue to my 2019 Housing Bubble Series, I learn WHY w/ Nobel laureate Vernon Smith. iTunes: tinyurl.com/y5tppud9 Website: tinyurl.com/y43bwm9n Spotify: tinyurl.com/y4htlrhl

This is what property bulls miss when they say low unemployment “fundamentally supports” house prices. Low unemployment (B) and rising house prices (C) are (mostly) *epiphenomenal*. B does not cause C. B and C are caused by A: expanding private credit. Source: @ProfSteveKeen