February 2025 - MetaSD

Hitching our wagon to the ‘Sick Man of Europe’

Tsar Nicholas I reportedly coined the term “Sick Man of Europe” to refer to the declining Ottoman Empire. Ironically, now it’s Russia that seems sick.

Above shows GDP per capita (constant PPP, World Bank). Here’s how this works. GDP growth is basically from two things: capital accumulation, and technology. There are diminishing returns to capital, so in the long run technology is essentially the whole game. Countries that innovate grow, and those that don’t stagnate.

However, when you’re the technology leader, innovation is hard. There’s a tension between making big technical leaps and falling off a cliff because you picked the wrong one. Since the industrial revolution, this has created a glass ceiling of growth at 1.5-2%/year for the leading countries. That rate has prevailed despite huge waves of technology from railroads to microchips, and at low and high tax rates. If you’re below the ceiling, you can grow faster, because you can imitate rather than innovate, and that entails much less risk of failure.

If you’re below the glass ceiling, you can also fail to grow, because growth is essentially a function of MIN( rule of law, functioning markets, etc. ) that enable innovation or imitation. If you don’t have some basic functioning human and institutional capital, you can’t grow. Unfortunately, human rights don’t seem to be a necessary part of the equation, as long as there’s some basic economic infrastructure. On the other hand, there’s some evidence that equity matters, probably because innovation is a bottom-up evolutionary process.

In the chart above, the US is doing pretty well lately at 1.7%/yr. China has also done very well, at 5.8%, which is actually off their highest growth rates, but it’s substantially due to catch-up effects. South Korea, at about 60% of US GDP/cap, grows a little faster at 2.2% (a couple decades back, they were growing much faster, but have now caught up.

So why is Russia, poorer than S. Korea, doing poorly at only 0.96%/year? The answer clearly isn’t resource endowment, because Russia is massively rich in that sense. I think the answer is rampant corruption and endless war, where the powerful steal the resources that could otherwise be used for innovation, and the state squanders the rest on conflict.

At current rates, China could surpass Russia in just 12 years (though it’s likely that growth will slow). At that point, it would be a vastly larger economy. So why are we throwing our lot in with a decrepit, underperforming nation that finds it easier to steal crypto from Americans than to borrow ideas? I think the US was already at risk from overconcentration of firms and equity effects that destroy education and community, but we’re now turning down a road that leads to a moribund oligarchy.

Modeling at the speed of BS

I’ve been involved in some debates over legislation here in Montana recently. I think there’s a solid rational case against a couple of bills, but it turns out not to matter, because the supporters have one tool the opponents lack: they’re willing to make stuff up. No amount of reason can overwhelm a carefully-crafted fabrication handed to a motivated listener.

One aspect of this is a consumer problem. If I worked with someone who told me a nice little story about their public doings, and then I was presented with court documents explicitly contradicting their account, they would quickly feel the sole of my boot on their backside. But it seems that some legislators simply don’t care, so long as the story aligns with their predispositions.

But I think the bigger problem is that BS is simply faster and cheaper than the truth. Getting to truth with models is slow, expensive and sometimes elusive. Making stuff up is comparatively easy, and you never have to worry about being wrong (because you don’t care). AI doesn’t help, because it accelerates fabrication and hallucination more than it helps real modeling.

At the moment, there are at least 3 areas where I have considerable experience, working models, and a desire to see policy improve. But I’m finding it hard to contribute, because debates over these issues are exclusively tribal. I fear this is the onset of a new dark age, where oligarchy and the one party state overwhelm the emerging tools we enjoy.

Was James Madison wrong?

The accumulation of all powers, legislative, executive, and judiciary, in the same hands, whether of one, a few, or many, and whether hereditary, self appointed, or elective, may justly be pronounced the very definition of tyranny.

In Federalist 47, Madison considers the adequacy of protections against consolidation of power. He defended the framework as adequate. Maybe not.

… One of the principal objections inculcated by the more respectable adversaries to the Constitution, is its supposed violation of the political maxim, that the legislative, executive, and judiciary departments ought to be separate and distinct. In the structure of the federal government, no regard, it is said, seems to have been paid to this essential precaution in favor of liberty. The several departments of power are distributed and blended in such a manner as at once to destroy all symmetry and beauty of form, and to expose some of the essential parts of the edifice to the danger of being crushed by the disproportionate weight of other parts. No political truth is certainly of greater intrinsic value, or is stamped with the authority of more enlightened patrons of liberty, than that on which the objection is founded.

The accumulation of all powers, legislative, executive, and judiciary, in the same hands, whether of one, a few, or many, and whether hereditary, self appointed, or elective, may justly be pronounced the very definition of tyranny. Were the federal Constitution, therefore, really chargeable with the accumulation of power, or with a mixture of powers, having a dangerous tendency to such an accumulation, no further arguments would be necessary to inspire a universal reprobation of the system. …

The scoreboard is not looking good.

Executive	GOP	“He who saves his country does not violate any law.” – DJT & Napoleon
Legislative	H: GOP 218/215 S: GOP 53/45	“Of course, the branches have to respect our constitutional order. But there’s a lot of game yet to be played … I agree wholeheartedly with my friend JD Vance … ” – Johnson
Judiciary	GOP 6/3	“Judges aren’t allowed to control the executive’s legitimate power,” – Vance “The courts should take a step back and allow these processes to play out,” – Johnson “Held: Under our constitutional structure of separated powers, the nature of Presidential power entitles a former President to absolute immunity.” Trump v US 2024
4th Estate	?	X/Musk/DOGE WaPo, Fox … Tech bros kiss the ring.
States*	Threatened	“I — well, we are the federal law,” Trump said. “You’d better do it. You’d better do it, because you’re not going to get any federal funding at all if you don’t.” “l’etat, c’est moi” – Louis XIV

There have been other times in history when the legislative and executive branches fell under one party’s control. I’m not aware of one that led members to declare that they were not subject to separation of powers. I think what Madison didn’t bank on is the combined power of party and polarization. I think our prevailing winner-take-all electoral systems have led us to this point.

*Updated 2/22

AI & Copyright

The US Copyright office has issued its latest opinion on AI and copyright:

https://natlawreview.com/article/copyright-offices-latest-guidance-ai-and-copyrightability

The U.S. Copyright Office’s January 2025 report on AI and copyrightability reaffirms the longstanding principle that copyright protection is reserved for works of human authorship. Outputs created entirely by generative artificial intelligence (AI), with no human creative input, are not eligible for copyright protection. The Office offers a framework for assessing human authorship for works involving AI, outlining three scenarios: (1) using AI as an assistive tool rather than a replacement for human creativity, (2) incorporating human-created elements into AI-generated output, and (3) creatively arranging or modifying AI-generated elements.

The office’s approach to use of models seems fairly reasonable to me.

I’m not so enthusiastic about the de facto policy for ingestion of copyrighted material for training models, which courts have ruled to be fair use.

https://www.arl.org/blog/training-generative-ai-models-on-copyrighted-works-is-fair-use/

On the question of whether ingesting copyrighted works to train LLMs is fair use, LCA points to the history of courts applying the US Copyright Act to AI. For instance, under the precedent established in Authors Guild v. HathiTrust and upheld in Authors Guild v. Google, the US Court of Appeals for the Second Circuit held that mass digitization of a large volume of in-copyright books in order to distill and reveal new information about the books was a fair use. While these cases did not concern generative AI, they did involve machine learning. The courts now hearing the pending challenges to ingestion for training generative AI models are perfectly capable of applying these precedents to the cases before them.

I get that there are benefits to inclusive data for LLMs,

Why are scholars and librarians so invested in protecting the precedent that training AI LLMs on copyright-protected works is a transformative fair use? Rachael G. Samberg, Timothy Vollmer, and Samantha Teremi (of UC Berkeley Library) recently wrote that maintaining the continued treatment of training AI models as fair use is “essential to protecting research,” including non-generative, nonprofit educational research methodologies like text and data mining (TDM). …

What bothers me is that allegedly “generative” AI is only accidentally so. I think a better term in many cases might be “regurgitative.” An LLM is really just a big function with a zillion parameters, trained to minimize prediction error on sentence tokens. It may learn some underlying, even unobserved, patterns in the training corpus, but for any unique feature it may essentially be compressing information rather than transforming it in some way. That’s still useful – after all, there are only so many ways to write a python script to suck tab-delimited text into a dataframe – but it doesn’t seem like such a model deserves much IP protection.

Perhaps the solution is laissez faire – DeepSeek “steals” the corpus the AI corps “transformed” from everyone else, commencing a race to the bottom in which the key tech winds up being cheap and hard to monopolize. That doesn’t seem like a very satisfying policy outcome though.

Free the Waters

San Joaquin Valley water managers were surprised and baffled by water releases initiated by executive order, and the president’s bizarre claims about them.

https://sjvwater.org/trumps-emergency-water-order-responsible-for-water-dump-from-tulare-county-lakes/

It was no game on Thursday when area water managers were given about an hour’s notice that the Army Corps planned to release water up to “channel capacity,” the top amount rivers can handle, immediately.

This policy is dumb in several ways, so it’s hard to know where to start, but I think two pictures tell a pretty good story.

The first key point is that the reservoirs involved are in a different watershed and almost 200 miles from LA, and therefore unlikely to contribute to LA’s water situation. The only connection between the two regions is a massive pumping station that’s expensive to run. Even if it had the capacity, you can’t simply take water from one basin to another, because every drop is spoken for. These water rights are private property, not a policy plaything.

Even if you could magically transport this water to LA, it wouldn’t prevent fires. That’s because fires occur due to fuel and weather conditions. There’s simply no way for imported water to run uphill into Pacific Palisades, moisten the soil, and humidify the air.

In short, no one with even the crudest understanding of SoCal water thinks this is a good idea.

“A decision to take summer water from local farmers and dump it out of these reservoirs shows a complete lack of understanding of how the system works and sets a very dangerous precedent,” said Dan Vink, a longtime Tulare County water manager and principal partner at Six-33 Solutions, a water and natural resource firm in Visalia.

“This decision was clearly made by someone with no understanding of the system or the impacts that come from knee-jerk political actions.”