Sam’s Links: May Edition – Econlib

Sam Enright is involved in innovation policy at Progress Ireland, an independent policy think tank based in Dublin, and he also manages a publication titled The Fitzwilliam. Most notably, on his personal blog, he curates a well-received link roundup; the following is a condensed version of his Links for April.

Blogs and Brief Links

1. We bid farewell to Robert Skidelsky. Regrettably, my interaction with his work has been limited to the abridged edition of his extensive works on Keynes, which, it turns out, are not easy to come by in paperback. Someone really should consider a reprint. Here’s a notable excerpt from Skidelsky’s Money and Government (2018):

Stumbling upon this quote while perusing Rebecca Lowe’s reading list—the first entry being an essay by T.S. Eliot on literary criticism—was quite the delight. Rebecca encountered it during a mini-conference in St. Louis, Missouri, organized by Sebastian Garren, which, I must humbly admit, drew inspiration from the Fitzwilliam’s Milton Friedman conference. My emoji usage is sparse, but: 🥹

2. David Friedman responds to my piece on his father. Most sources—including biographies, Wikipedia, and The New Yorker—claim Milton Friedman stood at a diminutive five feet. David counters, asserting his dad was 5’3”, and I’m hardly in a position to dispute this. What gives? There are countless photos of Milton alongside individuals of known heights, and three inches isn’t exactly negligible. This seems like a significant oversight. Furthermore, for those who felt I was unnecessarily harsh in my initial post, I only mentioned Milton’s height because he genuinely seemed to take pride in it. Short kings deserve respect.

3. Gavin Leech discusses the current state of Chinese AI. He concluded that there’s about a year’s lag behind Western developments; however, given the post was penned in November 2025, he admits it’s likely outdated by now. Still, it’s worthwhile for its insights on how China ‘distills’ knowledge on cutting-edge models from the open internet.

4. Nicholas Decker argues that Steven Berry, Jerry Hausman, and Ariel Pakes should have been awarded the Nobel Prize in economics. This is also a good read for those seeking to grasp the Hausman test in fixed versus random effects estimation within panel data, which admittedly flew over my head as an undergraduate.

5. Stephen Malina’s links are worth exploring. My favorite entry features Afra Wang’s piece on a Beijing vibe coder. The quote from Liu Xiaopai strengthens Dan Wang’s hypothesis that “no two peoples are more alike” between Americans and Chinese:

6. A comprehensive archive of books mentioned on the Conversations with Tyler podcast.

7. Shruti Rajagopalan’s insights on Delhi’s recent AI Summit are not to be missed. Her Substack and podcast are essential resources.

Music and Podcasts

1. Tyler Cowen and Alex Tabarrok delve into the history of options pricing. I was particularly struck by the tale of polymathic (often French) economists whose pioneering work went unrecognized by (predominantly Anglo) economists due to a lack of mathematical understanding for decades. For instance, Augustin Cournot was applying the concept of Nash equilibrium back in the 1830s. Louis Bachelier derived the equations for Brownian motion a mere five years before Einstein rediscovered them independently and had sketched the foundational framework of Black-Scholes theory over seventy years earlier.

2. Joe Studwell discusses African economic development. I have yet to read How Africa Works, but it’s on my list; perhaps we can organize an African economic development edition of the reading group.

3. Rebecca Lowe and Tyler Cowen engage in a discussion about the definition of freedom. The podcast features a lively format where the host and guest strive to arrive at a workable definition of a philosophically rich term. If I were to grace such a podcast, I’d find topics like ‘alignment’ or ‘causality’ quite intriguing.

4. Talking Heads’ Speaking in Tongues is a must-listen. My favorite track is Moon Rocks, while This Must Be the Place leaves me a bit underwhelmed. Notably, Brian Eno did not produce this album, having been the driving force behind the previous three, which apparently led to some behind-the-scenes tension.

5. The Clash’s Combat Rock has drawn criticism for being less robust than either London Calling or The Clash. Nevertheless, Rock the Casbah is a standout track, and now seems an appropriate time for satirical takes on Ayatollah Khomeini’s decrees. Interestingly, I learned that Straight to Hell serves as the Vietnam protest song sampled in Paper Planes, which is rather cool.

6. The Mingus Big Band’s The Charles Mingus Centennial Session is a remarkable tribute. Charles Mingus, an iconic figure in jazz, inspired this ensemble established by his widow over a decade after his passing. The opening rendition of Work Song (Break the Chains) is particularly powerful, though it is distinct from the Nat Adderley jazz standard. Interestingly, the trombone player on this album is renowned internet public intellectual Coleman Hughes. What can we deduce from the fact that individuals who attain success often excel in seemingly unrelated fields?

Books and Papers

1. Dave Donaldson’s Railroads of the Raj: Estimating the Impact of Transportation Infrastructure stands out as one of the most remarkable economics papers of our era. Here’s Kevin Bryan articulating why Donaldson’s John Bates Clark Medal was well-earned. This paper, part of his PhD journey—which took an astounding eight years—required manually digitizing 1.5 million data points from mostly handwritten colonial archives. Using this data, he assessed transportation costs in British India by analyzing local fluctuations in salt prices, a highly uniform commodity. Understanding the costs at one location allows for insights into the transportation expenses between various regions. Donaldson estimated a parameter θ, measuring the elasticity of trade volume to price changes. By integrating this information with a standard general equilibrium model of trade, he could provide a precise estimate for the welfare impact of railroad expansion during the Raj.

This approach is undoubtedly innovative; however, the endogenous nature of railroad placement poses a challenge: could it be that railroads were constructed only in thriving regions that would have prospered regardless? A stronger case would be showing that equally viable railroad sites, which were not developed for arbitrary reasons, did not experience similar benefits. Donaldson employs the Kennedy plan (1848) and the Lawrence plan (1869) as reference points for railroad expansion in India. This constitutes a placebo test—a term that, interestingly, has little to do with its psychological counterpart. This facet of the paper is arguably the weakest, as it’s possible that the cancellation of planned lines occurred for unrelated reasons, resulting in those regions experiencing lower incomes.

2. In Railroads and American Economic Growth: A “Market Access” Approach, Dave Donaldson and Richard Hornbeck revisit Robert Fogel’s classic 1964 study on railroads in American economic history, which contended that they were not crucial for 19th-century growth. Fogel applied a methodology known as “social savings,” whereby he evaluated the quantity of goods transported by new technology and calculated the costs using the next-best alternative. His findings revealed a surprising degree of substitutability among railroads, canals, and other transport modes. He concluded that the absence of railroads in 1890 would have resulted in only a 2.7% decline in GNP, a figure significantly lower than expectations at the time.

3. Tyler Cowen’s The Marginal Revolution: Rise and Decline, and the Pending AI Revolution is more of a monograph than a traditional book, and can be read for free here. I’m still grappling with how to leverage Tyler’s AI integration effectively beyond mere uploads of EPUBs to Claude for questions.

The first section of The Marginal Revolution provides an intellectual history of the ‘marginal revolution’ in 1870s economics, spearheaded by William Stanley Jevons, Léon Walras, and Carl Menger. A Hollis Robbins review succinctly summarizes:

Chapter three tackles the delayed emergence of marginalism, a concept that, while obvious today, took time to mature. Tyler likens economics to geology and evolutionary biology—fields that are conceptually straightforward yet historically sluggish in their progression. He also makes a sociological observation that, given the shared understanding of marginalism among competent economists, the competitive landscape shifted towards more technical areas, like econometrics and meticulous empirical analysis.

Additionally, he discusses precursors to marginalism, such as Jules Dupuit. Notably, many principles of marginalism were independently articulated by the Irish polymath Dionysius Lardner in his 1850 work on railway economics (!!!). It’s bewildering that this never surfaced during our Irish railway economics event. Should anyone wish to explore this figure for The Fitzwilliam, kindly reach out!

One fascinating detail (page 43) is that:

As is often the case with Tyler, discerning his underlying message in this book proves challenging. Here’s what I gathered: the ‘marginal revolution’ rendered the economy seem much more comprehensible and intuitive than it truly is. While sophisticated economic theories can be effective for a time, they ultimately lose their predictive capacity. For example, the capital asset pricing model (CAPM), the most influential asset pricing model of the 20th century, includes a key parameter β, which measures an asset’s sensitivity to market portfolio movements. Recent literature, culminating in Fama and French (1992), reveals that β does not reliably predict outcomes. Nowadays, the most effective financial models are machine learning algorithms that discern statistical patterns with minimal theoretical foundations.

Two potential explanations for this are:

1. CAPM was inherently flawed.
2. While CAPM accurately described reality in the past, it no longer does.

It’s a bit of both. The advent of artificial intelligence has exposed the superficiality of our previous “understanding.” Conversely, contrary to the pessimists, economics remains a legitimate discipline that has enhanced our comprehension of various issues. It could simply be that our world has genuinely become less interpretable over time.

Marginalism comprises mathematical identities concerning first-order conditions and optimization. Tyler dubs this “tautological marginalism.” “Intuitive marginalism,” on the other hand, posits that these tautologies hold significance and that reasoning “at the margin” is valuable in many applications, such as in Jevons paradox. While our intuitive grasp of marginalism may falter in explaining the world, Tyler argues it will persist in the form of weights in future models (page 119):

The Straussian interpretation of this monograph suggests Tyler is grappling with the experience of being a mid-sixties economist today, witnessing software consuming the world, including his life’s work. Many of my economist friends now wish they had pursued math or computer science in their undergraduate studies. Economics has seen various intellectual frameworks rise and fall, either because the theory was flawed from the outset or because it only elucidated a narrow range of phenomena at specific times. This includes schools that Tyler holds dear, such as Chicago price theory and Mason public choice theory. His sense of melancholy is particularly evident on page 106:

Lastly, some amusing nuggets: regarding the notion that economics is overly mathematical, we have this quote from Shengwu Li:

Abortion statistics reveal surprising elasticity (page 31):

In the latest edition of “economists have predicted nine out of the last five recessions,” I stumbled upon the sunspot theory of macroeconomics (page 59):

For the title of Victorian polymath of the month, I nominate William Whewell (p. 103):

Films and Videos

1. Tom Moore and Nora Twomey’s The Secret of Kells is an absolutely stunning animated film that tells the tale of the creation of the Book of Kells. Legend has it that St. Colmcille initiated the manuscript on the island of Iona before it was transported to Kells in County Meath during the 9th century. This film marks the beginning of a thematic trilogy centered on Celtic mythology, which I sought out after being captivated by the third installment, Wolfwalkers. I aspire to write a more extensive piece on Irish cinema, which has produced many exceptional films. A notable strength of this industry is that, thanks to our sentimental nature, acclaimed international actors often participate (presumably for less remuneration) in local projects; for instance, Brendan Gleeson lends his voice to the Abbot of Kells in this film.