redistributing the wealth from AI productivity gains

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Urbanomics blog has a summary of ideas for redistributing the (potential? expected?) wealth gained from AI, rather than letting it all flow to already deep-pocketed corporations and investors.

  • “Clever tax reforms, such as levies on corporate profits that are above a normal return on capital, on land and on natural resources”
  • inheritance taxes
  • “public wage insurance” (I think we like to call this “unemployment insurance” in the US? although “public wage insurance” sounds like a more neutral term implying a random event rather than blaming the victim)
  • “active labor market policies”, with Denmark as an example. This appears to combine unemployment payments with assistance on training and job searching.
  • “partial nationalization of AI firms”
  • “citizens’ dividend from AI businesses”
  • “giving citizens shares in AI companies”

The article makes the point that there is no real economic difference between tax policy and public ownership of the private sector. In the US at least, there is obviously a massive political difference. Entrenched wealthy and powerful interests are going to fight tooth and nail against any new taxes, even though something as simple and proven worldwide as a small value added tax would make enormous sense. That would soak up part of those windfall profits in proportion to how well the companies are doing. You could redirect the proceeds by beefing up unemployment and disability insurance, while incentivizing education and retraining (but I would let the private sector handle that last, as the government is notoriously bad at it). Going a step further, you could give people benefits and subsidize jobs in housing, childcare, education, and health care. You could invest in public infrastructure, (non-military) research and development, all of which create jobs and provide a positive return. This is all assuming you don’t want to just hand people money and let them decide if they want to do something productive or enjoy more leisure time (we could just expand the successful program we already have and call this Social Security for All) – we seem to have moral issues with this in the US. A VAT that kicked in only when the economy or productivity growth exceeds a certain threshold would actually be pretty painless. The wealthy and powerful are actually smart enough to understand this, and so they create disingenuous anti-tax propaganda and buy off politicians to make sure we can’t have these nice things.

So if all those rational and relatively painless policies I just mentioned are politically impossible in the US, at least unless economic growth actually accelerates enough to change that conversation, we can turn to “ownership society” type tricks. Redirect any surplus tax revenue (let’s assume there will be some if there is an acceleration in economic growth, even without any shift to more efficient or fair tax policy) to baby bonds and/or individual retirement accounts. Match with shares in index funds, effectively creating a sovereign wealth fund carved into a hundred million little accounts with individual citizens’ names on them. This may work out to the exact same thing mathematically as a VAT and income redistribution scheme. The finance industry would find a way to fleece people in fees and extras of course – this is morally reprehensible when the equivalent government-run program would not do this, and yet if this is the price of buying off the wealthy and powerful to make the policies politically possible, then it may be the best way forward that works within the existing system.

May 2026 in Review

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Most frightening and/or depressing story: The people running Palantir and other companies focused on military/security/surveillance applications of information technology seem to have, at best, a faith-based belief that the United States can do no wrong. At worst, their beliefs are based on eugenics and white Christian nationalist attitudes which simply have no basis in fact or logic. I don’t believe the technology itself is good or evil, but pair in with these irrational beliefs and there are many frightening, depressing, dystopian paths I can imagine our country going down.

Most hopeful story: It’s a struggle to find a silver lining to the illegal, unprovoked U.S. war of aggression in Iran, but I mused that the artificial restriction on oil supply might create some long-term gain by accelerating the economic and geopolitical incentives to transition to other forms of energy. Such rational policy almost certainly could not have been achieved through international diplomacy in the current environment. This is not to minimize the very real and very avoidable near-term suffering and death the immoral choices of the Trump administration have caused. Even the cynical economic and financial elites who arguably control most policy have not been served by this irrational violence. In the future, I hope the world has some talented and courageous leaders who can find ways to bring about rational long-term solutions to problems without short-term mass murder.

Most interesting story, that was not particularly frightening or hopeful, or perhaps was a mixture of both: On the AI front, I looked at an argument that today’s AIs are pushing people toward the political center relative to social media, which is pushing people toward extreme views. This is true even for AIs like Grok that are demonstrably being trained on data that is intentionally biased toward extreme views. I am not confident this will always be the case, as we are already hearing about a trend toward more customization of AI to whatever the tastes of the paying customer are. And…I looked at David Chalmers’s concept of a “philosophical zombie” which displays all the traits of a human being externally but has no consciousness internally. This would seem to describe today’s large language models pretty well, or at least so the majority of us think at the moment. However, I recall Ray Kurzweil’s argument that there is not and never will be a scientific test for consciousness whether animal/vegetable/mineral (some argue plants are conscious on some level), which is simply a secular counterpart to the idea of a soul, and that over time if AIs act conscious in every respect we will gradually accept them as conscious and stop thinking much about it.

Edmund Phelps vs. Breitbart

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Edmund Phelps, a Nobel prize-winning economist, is not alive to defend himself against this Breitbart article claiming to be based on his ideas:

This is where incoming Fed chairman Kevin Warsh’s argument about artificial intelligence and monetary policy fits naturally. Warsh has argued that AI represents a genuine supply-side productivity shock, not merely demand-pull inflation dressed up as growth. If that’s right, then accommodating those gains with lower interest rates isn’t a concession to inflation. It’s a recognition that the economy’s supply capacity is improving.

Under a Phelpsian framework, the policy goal should be to let productivity gains flow through the economy without forcing an unnecessary contraction. Rate cuts in this setting aren’t simply “loose money.” They can be the mechanism that prevents firms from overreacting to realized productivity gains by pulling back too sharply on hiring and investment.

This also explains why the tight labor market may be protective against recession rather than a precursor to it. In the standard story, a productivity acceleration can be dangerous because it follows a period of overexpansion. Firms hired in anticipation of the boom, and when productivity finally arrives, they discover they no longer need as much labor. Layoffs ensue, consumer confidence cracks, spending falls, and the risk of a recession becomes large.

This sounds kind of smart-ish, but I was skeptical because of the source. Phelps’s main ideas were about expectations of the future, true, but it seemed to me that this was likely to be a twisting of his ideas to meet a desired political end, rather than a serious analysis.

Since Phelps is not around to defend his ideas, I asked Gemini to assume his persona and write a response. Here is what she said:

It is flattering, I suppose, to see my theories invoked, but this argument entirely misapprehends the mechanics of both expectations and capital. If artificial intelligence is truly about to unleash a massive, structural leap in total factor productivity, the natural rate of interest must rise, not fall. When an economy anticipates a surge of genuine, grassroots dynamism—moving beyond the mechanical, exogenous growth of standard Solow models—firms aggressively seek capital today to capture those future gains. If a central bank artificially suppresses interest rates in the face of that surging demand, it does not foster innovation; it merely ignites asset bubbles and distorts the very market signals that tinkerers and entrepreneurs rely upon.

Furthermore, the author has forgotten the most crucial lesson of the expectations-augmented Phillips curve. You cannot placate the labor market with cheap money today by promising them a technological supply miracle tomorrow. If the Federal Reserve cuts rates in an already tight market, businesses and workers will instantly observe the monetary expansion and update their inflation expectations, driving up prices and wages immediately. The inflation takes root long before the first AI efficiency is ever deployed. True mass flourishing requires the discipline of real capital costs, not the illusion of a monetary free lunch.

Let’s imagine a case where we were actually observing increased productivity in real time because the AI technology is progressing and rolling out much faster that previous technologies like the “electrification, automobiles, radio, modern manufacturing” – which Breitbart mentions. In this case, we should also be seeing inflation expectations starting to shift toward deflation, and it would then make sense to lower interest rates and try to get more cash flowing through the system. But this can be done in real time in response to the signal. The argument that it can or should be done in advance would seem to be invalid. I don’t think Breitbart “overlooked” anything here, I just think this is an un-serious twisting of serious ideas, meant to fool people into supporting a preferred political agenda.

things I thought I knew about food poisoning

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We’ve all had a handful of cases of what we are pretty sure was food poisoning, along with a few hundred or thousand cases of more mild…gastrointestinal distress, to use a euphemism. This article from Philadelphia magazine says many people may have some misconceptions.

  • We tend to blame the last meal we had before the symptoms start. But the microorganisms that cause a serious case of food poisoning tend to have at least a 24 hour incubation period, and sometimes up to 72 hours. So it is more likely something you ate the day before or even a couple days before. And it’s hard to be sure for that reason.
  • Microorganisms that cause milder cases of gastrointestinal distress tend to have shorter onset periods. The ones where you do a shot of Pepto-Bismol and get on with your day, rather than the ones requiring medical attention or at best leave you curling up in a fetal position on the bathroom floor.
  • Nasty stomach viruses like Norovirus can spread from person to person, particularly people in close contact in families or environments like cruise ships. These people will often have eaten together, and when they get sick around the same time may misattribute it to something they ate together.
  • The only way to be sure is to go to the doctor and have a stool sample analyzed. And honestly, that is not something most people are going to spend the time and money on most of the time, when we know from experience that most cases of food poisoning in an otherwise healthy adult tend to pass without long term ill effects.

my summer 2026 experiment with financial and economic literacy education for a young audience

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This is a Google Slides experiment. I’ve come up with a summer financial and economic literacy thing for kids. It’s easy to find basic financial literacy content, but my idea here is to link those ideas to concepts like time value of money, endogenous growth, and ecological economics in a way that is accessible to an elementary to middle school audience. And honestly, an intelligent but unaware adult audience, because I don’t think most adults have a conceptual understanding of these concepts. It is a test of my own conceptual understanding if I can explain them clearly to children. This has been a challenge, and I am certainly happy to hear feedback on my attempt.

Jakarta

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Let’s check in on Jakarta, Indonesia. I have never been there, although I have set foot in Indonesia a couple times – Bali and a couple of the outlying islands around Singapore. I always maintain that Indonesia is the largest and most important country that gets little to no press coverage in the U.S.

  • First, Jakarta is massive. It’s not just massive, it is the largest city on Earth according to the United Nations. It recently surged past Tokyo due to some methodological changes in how to decide what the actual boundaries of an urban area are. There are always arguments about that, but Jakarta is massive no matter how you slice it.
  • It is at severe risk from sea level rise. It is located in a low-lying river delta, and while the ocean is rising the land is subsiding at an alarming rate. As of a few years ago, there were plans for massive public works to keep the ocean out, although some argue not enough is being done about groundwater extraction driving some of the subsidence. I haven’t checked in on these plans lately – maybe a topic for another post. These sorts of mega-projects tend to move slowly, although that may be my American perspective – when relatively functional developing and middle income countries want to get something done, they have a way of bringing in competent foreign contractors, low cost labor whether local or from nearby low-income countries, and taking a more lax attitude toward environmental and safety concerns, and whoever might need to be moved out of the way. There are some good and bad aspects to what I just said, of course, but the bottom line is middle income countries in Asia have been known to get things done.
  • A decade or so ago, there was a consensus that Jakarta was not at all a nice place to live, especially when it came to getting around in gridlocked traffic and choking smog. I may have some sense of what this is like from time in Bangkok, but by all accounts Jakarta was much worse. Since I have been going to Bangkok over the last 20 years or so, they have made noticeable progress in public transportation and air pollution. Now it sounds like Jakarta has made significant improvements of its own in just the last few years. (Bangkok is also in a river delta and severely threatened by sea level rise, and while there is lots of discussion and planning it doesn’t seem like there is much happening on the ground. Another thing I will point out about both these cities is that the bulk of the population and economic activity of the country is highly concentrated in one mega-city, so a disaster in that city would be not just a disaster for the locals but for the entire country.)

In 2014, Jakarta was crowned the world’s most congested city by the Stop-Start Index and a year later was ranked far below other Asian cities on livability by the Economist Intelligence Unit.

Ten years later, Jakarta has the world’s largest and one of the most used bus rapid transit (BRT) systems. The old, crowded diesel commuter trains, famous for allowing passengers to ride on the roofs, are now electrified, air conditioned, and run on regular schedules linking the suburbs to the city center. There are multiple subway and light rail lines crisscrossing the city. The transformation has been remarkable: in 2015, less than 20% of residents were within walking distance of transit. Now, nearly 90% of the city has access to BRT or trains.

You have to read down a ways to learn that they still have a long way to go on both access to transportation and air pollution. Because while they have been making these improvements, the population has continued to grow quickly, with increases in cars and sprawling land use to go along with it. If Jakarta is just Bangkok minus a decade or two, there is a particularly Asian brand of sprawl I have seen with my own eyes that will tend to outpace efforts to improve infrastructure in the city center.

AI as pro-social media

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This is an idea I hadn’t thought of – because AIs are inherently rational and objective (more or less, most of the time?), they tend to nudge people towards rational evidence-based views (which tend to be centrist politically). Whereas social media tends to herd people toward extreme views, wild conspiracy theories, and political fringe-ism.

My provisional theory is that LLMs, as a consumer product, will push people’s senses of reality closer together in a sort of mirror image of the way social media has fractured them. They are not algorithms meant to custom-tailor content (including facts) to you, and what you will find infuriating or motivating. They are centralized systems that, until you prompt them or give them context, behave basically the same way for everyone. As the philosopher Dan Williams put it, “Whereas social media democratised information, LLMs technocratise it.”

A couple points he makes is that even though AIs can demonstrably be trained to favor one part of the political spectrum (see the analysis of Grok below posted by the blog Urbanomics), even then they are much more centrist than social media. So is it possible AI could nudge our entire society in a more rational, evidence-backed direction?

There is no absolute guarantee they are going to stay this way, of course. If I wanted to train an agent right now to go out and look at the day’s news headlines, and filter them for me in the style of Breitbart (which generally provides factually accurate information, but cherry-picked and presented with biased language), I could do that.

https://gulzar05.blogspot.com/2026/04/weekend-reading-links_12.html

exponential decay and park visits

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Exponential decay applies to a lot of physical phenomena, such as dissipation of sound for example, and interestingly the evidence suggests it is also a good model of human behavior in the aggregate. For example, people are more likely to visit a park near home, which makes sense, and they become less likely with increasing distance. And that likelihood doesn’t decline in a straight line but exponentially, which suggests to me it is better for urban quality of life to have many small decent parks rather than a few large great ones.

Exponential distance decay in urban park visitation: A comparative analysis of recreational mobility across 20 U.S. metropolitan areas

Urban parks are essential infrastructure for public health and environmental resilience, yet systematic comparative evidence on how distance constrains recreational access across metropolitan areas remains scarce. This study analyzes 60 million park visits across 20 U.S. metropolitan areas to establish mathematical relationships governing park visitation and their determinants. Park visitation universally follows exponential decay (V = αe-βd) rather than power law scaling, with exceptional model fits (R2 > 0.95) across diverse urban contexts. However, decay parameters vary substantially, from β = 0.090 (Minneapolis) to β = 0.211 (Detroit), creating a 2.34-fold difference in distance sensitivity. This variation produces markedly different accessibility patterns: residents in high-constraint cities experience 50% visitation decay within 3.3 km, while those in low-constraint cities maintain equivalent access to 7.7 km. Regression analysis reveals that transportation infrastructure, built environment characteristics, and sociodemographic factors collectively explain 56.3% of variation in median travel distance to parks. Transit proximity, street network design, and regional employment accessibility emerge as primary associations, while minority-predominant and car-free neighborhoods face compound disadvantages through both restricted mobility ranges and heightened distance sensitivity. These findings establish exponential decay as a consistent mathematical relationship for recreational mobility while demonstrating how local context shapes its parameters. For planning practice, uniform park service area standards may inadequately reflect actual visitation patterns, as the empirically measured half-distance at which visitation drops by 50% varies more than twofold across metropolitan areas. Calibrating park spacing to locally measured decay rates and coordinating green space provision with transportation investment could improve both the efficiency and equity of urban park systems.

I have one quibble, and I would be surprised if the authors didn’t think of it and control for it somehow. And that is the idea that car-free neighborhoods would be at a disadvantage in terms of park access. Now maybe this is true, but it seems to me the decay should be measured in travel time or cost (in the difficulty sense) rather than absolute distance. People who get around a neighborhood mostly by walking aren’t going to travel to a park three miles away, which is no big deal by car (if there is ample free parking on both ends, which is one reason the park has to be so far away!). But the people walking to a smaller nearby park might have an equally pleasant subjective experience than the ones driving. Or they might not. But my point is I can’t tell, at least just from this abstract.

Random Creative Commons licensed image that is loosely related to my post

William Murphy: Who Rules America?

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This is a really interesting description of how our global “neoliberal” or “market capitalist” economic and financial system functions. I’ll try to summarize with a sprinkling of quotes for my own understanding, but the article really is quite eloquent and I recommend reading it.

  • The finance industry sits on top of everything and essentially sets to operating rules that everybody and everything else in the system must follow. When I think “finance” I picture banks and insurance companies, but he refers to “large institutional investors and asset managers”. These are the actual owners of capital, or the nervous system that sort of organizes networks of owners, which includes most of us I suppose through pension funds, etc.
  • Corporate management does the bidding of the finance industry, such as “decisions about automation, outsourcing, wage suppression, or expansion”. These determine how “value is captured”. It includes “[m]ajor corporations in technology, energy, pharmaceuticals, logistics, and defense”.
  • Governments provide essentially a predictable, enforced legal structure for this system. This includes “monetary policy, fiscal intervention, legal frameworks for property rights, and, crucially, the capacity for coercion through military and policing institutions”. The government also serves as a shock absorber in times of crisis, making the whole system more resilient.
  • Political leadership functions to essentially sell this system to the public, through acceptable forms of messaging and through a certain amount of misdirection so it is just not talked about too much, and so the public dialog does not range outside certain bounds that are acceptable to the system. No matter where the political winds seem to be blowing on the surface, this deeper, implicitly accepted ideology tends not to shift much over time.

From a light skim of the article, a reader might get the sense that Mr. Murphy admires this system. But he frames it in terms of a ruling class controlling the rest of society. I can admire this system to a certain extent – it certainly is good at “capturing value” that is potentially out there and probably would not be captured as thoroughly by another system. It also leads to “capture” of that value by a small minority, leaving a significant portion of society in relative squalor when there is actually plenty of value to go around. And some of the “value” it extracts is actually undermining the biophysical system that it sits inside, so that it will eventually kill the host it is feeding on. So the question in my mind is whether these two major flaws (distribution of wealth/value and environmental destruction) can be solved by tweaks to this system. If not, its apparent stability and efficiency on the surface is an illusion in terms of supporting the long-term well-being of the majority of humans on this planet.

This is where the singularity bros will tell us the “end of scarcity” will solve both of these problems in an almost magical way. I want to believe this, and I think we can hope for this but we better also have a plan for the case where it doesn’t happen.

David Chalmers, the “hard” and “soft” problems of consciousness, and could I be a zombie and not know it?

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This article is by a person who disagrees with David Chalmers, but it happens to have a good summary of what David Chalmers had to say.

The consciousness debate is often formulated in terms used in an influential talk given by a young David Chalmers in Tucson in 1994. Chalmers, a philosopher, distinguished two separate “problems of consciousness.” The first is the very hard problem described above: understanding the processes in the brain that give rise to the many aspects of our visible behavior and our inner behavior that we can report about. Chalmers christened this hard problem as the “easy” problem of consciousness. 

Then he declared that there is another distinct problem — why the brain’s behavior is accompanied by experience at all — which he christened the “hard” problem of consciousness. Today, this so-called “hard problem” is mentioned in all debates on consciousness. According to many, it unveils the very limits of current scientific understanding. Chalmers claimed that even after hypothetically accounting for our entire behavior, and for all our reports about our inner life, there would still be an “explanatory gap” between brain processes and experience…

Chalmers asks us to contemplate what he calls a “philosophical zombie.” This is a hypothetical entity that looks and behaves like a human in all respects, including reporting emotions, feelings, dreams and experience, yet it has no consciousness. As Chalmers puts it, “There is nobody home.” This is a rhetorical trick that induces us to distinguish between behavior and a hypothetical reality accessible only by introspection. The very fact that a philosophical zombie could be conceived, Chalmers argues, shows that inner experience is intrinsically distinct from observable natural phenomena. 

The article has a link to a video of Chalmers’s original lecture, for people who have time to watch videos. Such people must either not have jobs, houses or children, or else their jobs, houses and children must be less demanding of time and attention than mine, or maybe they are wealthy enough to pay other people to deal with their houses and children while they do their jobs (but this raises some questions of priorities, in my view.