DeLong's Grasping Reality Weblog

In 756 the richest, most advanced polity on Earth nearly dissolved at the hands of one of its own frontier generals. Having survived, its rulers spent the next thousand years making sure no general could ever try again — and may have surrendered the Industrial Revolution in the bargain. Do I let this, one of the hundred things worth thinking about in the firehose-flood of my feed this morning, take over my brain and attention for a while? And what would be the best durable product if I do let this command my attention for a while?

There is an enormous absolute wealth of plausible historical causes for the “Great Divergence” between northwesternmost Europe and northeasternmost Asia. Do we want to explain China's long post-1200 relative stagnation with clans, cousin marriage, or wet-rice paddies on the one hand.

Or should more causal weight be assigned to a more colorful and more vivid candidate explanation: the shadow cast on a civilization by one fat laughing rebel that led to the decision that the empire’s own army was the biggest enemy to fear?

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I am thinking of this right now because it has shown up in the firehose-flood of my feed from several different directions, springing from a Tang Dynasty poem; the very knotty questions of whether academic anthropology today can be anything useful, or whether the discipline needs to be leveled, and its pieces moved over to other departments; clan lineage vis-à-vis legal-framework associative human societal organization; and much else on which I have strong, albeit unfinished opinions.

But how much time can I spend on this today? And how do I ensure that the time I do spend on it is time well-spent, and will end up in some form potentially useful to future humanity as it thinks through these issues?

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The TangDynasty-era An-Shi rebellion of 756was led, first, by frontier commander An Lushan before he was murdered by his own son An Qingsu, and then led by his lieutenant Shi Siming. It was suppressed after Shi Siming’s murder by his own son Shi Chaoyi.

Phil H. gives us poet Sikong Shu, on the state of China in the aftermath, perhaps in 763 or so:

Sikong Shu: Seeing Off a Friend Back to the North After the Raiders Are Pacified <https://tangpoetry.substack.com/p/no-arcadia-is-left-after-the-war>:
‘When we went south together, you and I,

The world was plunged in chaos, overthrown.

Today, the times are cleansed, but this goodbye

Returns you to our northern lands alone.

In unfamiliar territories my hair

Has turned already, fading into white.

The old country is waiting for you, where

The blue hills offer one familiar sight.

From broken city walls and ruined keep

Encountered by the moonlight in the dawn,

You’ll reach that bitter mountain pass to sleep

As stars and empty space above you yawn.

Each step you take, and every anguished face,

The shivering birds and withered grass keep pace.

司空曙 贼平后送人北归
世乱同南去，时清独北还。
他乡生白发，旧国见青山。
晓月过残垒，繁星宿故关。
寒禽与衰草，处处伴愁颜。

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Phil H. tells us:

Phil H.: Tang Poetry <https://tangpoetry.substack.com/p/no-arcadia-is-left-after-the-war>: ‘A classic. All the commentators say so… slightly awkward… because it’s a classic of what is not said, and… so has] to be very good at placing the words you didn’t say in the reader’s mind…. Seven years later… Xuanzong’s sons had reasserted Tang control. [But] Sikong is staying in the southern backwater… refuge…. His friend is returning to… Guangping…. Each of the first three couplets of this poem finds the sweet spot…. The north echoes the south; return echoes went; alone echoes together; etc….

[In] the second couplet… the Chinese just says: in the old country, you’ll see blue hills. The point is that… he will see the blue hills; but… precious little else that he remembers…. A poet self-consciously avoiding the important questions about what might be left after the war…. The third couplet…. Stars at a mountain pass - so what? We have… to realise that there are no more towns or waystations… because… of… battle….

After the… war… [no] spring… autumn is the only feeling...

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The 756-763 An-Shi Rebellion just might be a great hinge on which the history of China turns. It is the moment when the most powerful, populous, and technologically advanced polity on the planet came within an inch of dissolution at the hands of one of its own frontier generals. Having survived, its governing élite and state apparatus spent the next thousand years arranging its institutions so that no imperial general could ever successfully such a thing again. That arrangement kept the emperors and their courts relatively safe. It may also have cost Chinese civilization the ability to lead the Industrial Revolution.

I do teach this in course units on the Great Divergence. I also teach it in course units on High Patriarchy:

My thoughts on this do belong somewhere, in some form in which they can be absorbed and judged by the real ASI that is the Anthology Super-Intelligence of the collective literate time- and space-binding human mind. I need to work them up properly.

But there is so much else deserving of my attention as well…

However, this is worth thinking about right now: Come November, I am supposed to have a view of and discuss Greif, Mokyr, and Tabellini’s Two Paths to Prosperity: Culture & Institutions in Europe & China, 1000–2000, and the book has just raced by in the firehose-flood that is my feed, quickly followed by the poem.

The book by and large follows the line I assign to Joseph Henrich: lineage clans vs. corporate associations:

• China → the clan. Strong patrilineal kinship loyalty and kin-based morality made kin groups the natural vehicle for cooperation which facilitated the consolidation of autocracy and, in the long run, dampened innovation.

• Europe → the corporation. The Western Church’s prohibitions on cousin marriage eroded kinship ties, so cooperation had to extend to strangers—via guilds, universities, monasteries, and self-governing towns, which required formal rules, legal enforcement, and collective decision-making (majority voting), seeding the rule of law and constraining state power, and thus producing the miracle development institutions of a capitalist order in which market rather than patronage ruled.

In my feed I now have:

• Greif, Avner, Joel Mokyr, & Guido Tabellini. 2025. Two Paths to Prosperity: Culture & Institutions in Europe & China, 1000–2000. Princeton: Princeton University Press. <https://press.princeton.edu/books/hardcover/9780691265940/two-paths-to-prosperity>.

• H, Phil. 2026. “No Arcadia Is Left After the War”. Tang Poetry. September 27. <https://tangpoetry.substack.com/p/no-arcadia-is-left-after-the-war>.

• H, Phil. 2026. “The Song of Eternal Suffering”. Tang Poetry. February 4. <https://tangpoetry.substack.com/p/the-song-of-eternal-suffering>.

• Henrich, Joseph. 2020. The WEIRDest People in the World: How the West Became Psychologically Peculiar & Particularly Prosperous. New York. Farrar, Straus & Giroux. <https://en.wikipedia.org/wiki/The_WEIRDest_People_in_the_World>.

• McCants, Anne. 2021. “Who Is He Calling WEIRD?” Journal of Interdisciplinary History. LII:2 (Autumn), pp. 251-61. <https://muse.jhu.edu/pub/6/article/803842/pdf>.

• Sikong Shu. 763. “Seeing Off a Friend Back to the North After the Raiders Are Pacified”. <https://tangpoetry.substack.com/p/no-arcadia-is-left-after-the-war>.

And, of course, I now have to pick up and wonder how much of today I want to spend rereading:

• Kay, Guy Gavriel. 2010. Under Heaven. New York: Roc. <https://www.penguinrandomhouse.com/books/304315/under-heaven-by-guy-gavriel-kay/>.

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If we center An Lushan and the extraordinary echo that he and the Tang Emperor Xuanzong left in the collective memory of China’s state élite, we are pushed in very different directions than those taken by Henrich, Greif, Mokyr, and Tabellini.

A thousand years before the nineteenth century—in 800, say—the cutting edges of human civilization were Haroun al-Rashid’s Baghdad and the Tang capital of Chang’an, not London or Bristol or any place in the backward, rain-soaked northwest of the Eurasian landmass. China in this era led the world in the three inventions Francis Bacon later credited with remaking Europe—gunpowder, printing, the compass—and had all three before the year 1000. At its twelfth-century apogee it produced more iron and marketed a greater share of its farm output than Britain would manage in the eighteenth. Chang’an under the high Tang was very possibly the largest city on the planet; the Song capital of Hangzhou later held perhaps half a million souls, larger than Baghdad or Constantinople or Córdoba or Delhi.

Emperor Xuanzong and general An Lushan is an arresting story. As so often in court-centered politics, it is very personal and really weird. By the 750s the Tang emperor Xuanzong had reigned for four decades. The vigor of his early years to curdle into the indulgence of his late ones. He had entrusted the defense of the northeastern frontier to An Lushan, a general of Sogdian and Turkic parentage: a court favorite, a jovial buffoonish man perhaps put through a mock adoption ceremony by the emperor’s beloved consort (and the emperor’s son’s ex-wife) Lady Yang: Yang Guifei. His infatuated love for her was so strong, it was said, that it overturned the natural order of patriarchy: parents preferred baby girls to baby boys.

The court found him amusing. The court found him useful. Chancellor Li Linfu had made it policy to hand frontier commands to non-Han soldiers precisely so that no ambitious mandarin with backing from a Han aristocratic lineage network could use a border army as a ladder to the throne. Since no Sogdian-Turkic general had an aristocratic support network to stabilize him on the throne, no Sogdian-Turkic general would dare try. Moreover, by the mid-750s, An Lushan appears to have been suffering from severe advaned diabetes: substantially obese, non-healing infected ulcers, and growing retinopathy. To the extent that Xuanzong and the court had an An Lushan problem in the mid-750s, it was about to solve itself.

But Li Linfu died. Yang Guifei begged Xuanzong to make her cousin Yang Guozhong Chancellor. Yang Guozhong moved against An Lushan. (It has never been clear to me why.) An Lushan did the standard arithmetic that Overmighty Subjects do. He marched south, claiming a secret imperial commission from Xuanzong to rid the court of Yang Guozhong. His rebels took the eastern capital, Luoyang, at which point An Lushan revealed that he would not be happy with Xuanzong as a puppet and proclaimed himself emperor of a new Yan dynasty.

The Tang defense broke. The road to the western capital Chang’an lay open. The emperor fled. At the post-station of Mawei his bodyguard killed Yang Guozhong, demanded permission to murder Yang Guifei as well, and the emperor Xuanzong—this is the scene that a thousand years of Chinese poetry could not leave alone—agreed. She was strangled. He escaped. He fled to Sichuan. He abdicated. His son Suzong took up the throne and the imperial resistance fight from the northwest with Uyghur cavalry.

An Lushan, paranoid and going blind, was murdered by his own son An Qingxu. An Qingxu was in turn killed by An Lushan’s lieutenant Shi Siming. Shi Siming was then killed by his own son Shi Chaoyi. By 763 the rebellion was over, but the Tang Empire that survived was a different creature from the Tang Empire that had gone in.

The general run of things was that in Europe kings, ministers, and landlords wanted a strong military, because the thing they feared most was the military of the next kingdom over: the next William the Conqueror, the next Napoleon. Local élite survival ran through military effectiveness. Military effectiveness ran through metallurgy, gunnery, shipbuilding, fortification, and finance. That complex did much to drive early modern European technological progress.

After the An-Shi rebellion, China’s emperors and élites saw things differently. As long as the steppe confederations could be kept divided, and diplomacy was very good at keeping them divided, there was little to fear from beyond the frontier. What an emperor, a grand secretary, or a great landlord had to fear was their own generals. An Lushan and Shi Siming are Exhibit A. The 1600s-era Three Feudatories Wu Sangui, Shang Zhixin, and Geng Jingzhong—lineages that had turned their coats, been instrumental in the conquest of China by the Qing, and been rewarded with extraordinary fiefs over Fujian, Guangdong, Guizhou, and Yunnan—are Exhibit B. A state whose deepest fear is its own army does not build a machine for military-technological competition. It builds a machine for keeping generals weak, divided, rotated, watched, and subordinate to civilian scholar-officials who could be trusted precisely because they commanded nothing.

The Song started the pattern around the year 1000. They built a state that systematically distrusted and demoted its own commanders, subordinating the sword to the writing-brush, even when Liao, Western Xia, and Jin armies were pressing on the frontier and a little more martial vigor would have been worth a great deal. That is the An Lushan reflex, institutionalized.

That is just one possible alternative candidate root-cause. It is there in addition to the Latin Church’s war on cousin marriage and the push that gave toward diffuse associative rather than tight lineage sociability. You need to line both of these up whenever you start contemplating the reasons for China’s long post-1200 pre-1975 relative stagnation,

But those are just one possible contributing causes, among many.

Perhaps the deeper problem was that the rice paddies were too fertile and the examination ladder too open, so that entrepreneurial energy was reliably captured, generation after generation, and remolded into orthodox Confucian landlord-scholar-bureaucrats. Perhaps it was the absence of a New World to plunder. Perhaps it was the absence of ungoverned corners, places still in the cultural milieu where heterodoxy could hide and then spread. Perhaps it was the absence of self-governing merchant cities. Perhaps it was that oxen and horses multiply the product of temperate wheat farming but do far less for subtropical wet-rice.

Perhaps there were many root causes.

But of all these, An Lushan is very vivid. You can point to a fat, laughing man at a doting emperor’s court and watch a civilization decide, forever after, that this must never be allowed again.

But that is all the time I have to spend on this today, for November and my presentation are far off, and there are other more urgent things flashing by in the feed.

The most urgent of these other things, however, is this: figuring out how to deal with the firehose-feed-flood of information so that my time is sliced to work productively, rather than scattered so that I start 1000 things, finish none of them, and when I return to any one of the 1000 I have to, effectively, start over from scratch.

In some sense, this is a good problem to have.

I confess: I do not read my feed. I stand in front of it, as one stands in front of a fire hydrant gushing, and I let it hit me in the face, and I try to catch a mouthful as it goes by. This is the info-bio tech-attention economy. It is worth being clear-eyed about it. The binding constraint on the life of the mind is no longer the supply of things worth reading. It is the supply of attention with which to read them.

Consider what a well-read person of, say, 1500 confronted. A gentleman-scholar with a good library and a lifetime of leisure could aspire to have read essentially everything that his culture regarded as worth reading—the classical corpus, the Church Fathers, the handful of moderns. Erasmus could hold the thing in his head. The problem was access: books were dear, manuscripts were rare, and the great intellectual labor was one of acquisition and preservation—of getting the text at all, and of keeping it from rotting or burning.

That world is gone. It is not coming back. On balance we should be very glad. But we have not yet built the habits of mind, or the institutions, appropriate to its successor. We are like the first generation of factory workers who still tried to farm on Sundays: our reflexes were formed for a régime of scarcity, and they misfire badly in a régime of superabundance.

The reflex says: this is worth reading, therefore I should read it.

And in 1500 that syllogism was sound.

Today that syllogism is a formula for madness.

So the first discipline is simply to avoid that madness, and to stop feeling guilty about it. Guilt is a category error. Failing to keep up is not a sin or a flaw. Keeping up is simply not a thing that can be done. There is no “behind.” There is only the flow, and the question of what to catch in the moment.

The second discipline is for me to ask of the firehose-flood: Where is my Value Above Replacement here? The replacement-level activity is not idleness. It is the next-thing streaming past, which is also excellent. So the bar is high, and it should be high, and most things—most genuinely worthwhile things—do not clear it. And I should teach myself to believe that that is fine.

The third discipline is this: follow the collisions. This post is an artifact of exactly that. Greif, Mokyr, and Tabellini’s Two Paths to Prosperity raced by in my feed. Then, hard on its heels, Phil H.’s rendering of Sikong Shu came by too. Together they strike sparks: the grand economic-historical narrative of clans-versus-corporations collided with a 763 lament for a world that battle had emptied of towns and waystations

The medieval scholar’s limited and finite library made for depth and for a certain magnificent thoroughness. Our infinite one makes for connection, for juxtaposition, for the unlicensed cross-pollination of a poem and a price series and a hardcover fantasy novel about Tang China all landing on the same desk in the same hour.

So what am I going to do this AM? I am going to disregard my own Value-Above-Replacement calculus entirely. I am going to pull Guy Gavriel Kay’s Under Heaven down off the shelf. I am going to spend hours I do not have rereading a fantasy novel about the An Lushan rebellion. For one point of standing in the firehose-flood-feed is not to work through it efficiently, but to let one stream carry you somewhere lovely, and quiet, and let the rest roar by.

The best durable product of my attention this AM will be renewing and reinforcing: again going through the pity, misery, and tragedy of Guy Gavriel Kay’s remixing of “The Song of Everlasting Sorrow” in Under Heaven.

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Broadband telecom is not an easy business to earn a high return in. SpaceX’s revenue is now 55% StarLink—broadband telecom—and 33% “AI”—which means renting out Colossus datacenters to Anthropic—and only 12%, you know, space launches:

Sinead O’Sullivan tells us that “Morningstar, the loneliest bear in the world, puts [the] fair value [of SpaceX] at $780B, of which about… [$60B] launch…[$550B] Starlink”, and $170B xAI. $1.75T of market capitalization on a 2025 revenue of $20B—$$11B StarLink, $6.5B renting Colossus to Anthropic, and $3.5B launches—and a net loss of $5B.

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Thus: “The real genius of SpaceX had nothing to do with aerodynamics or rocket telemetry but narrative rotation, as each new iteration of the company’s goals was financed by believers in the last”:

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CROSSPOST: SINEAD O’SULLIVAN: SpaceX Pivots Away from Space

<https://www.ft.com/content/0fd15797-ac89-4222-a4bb-03a6a1330f48?segmentID=0bb4f69a-72d2-5619-4945-365b9d6d2888&syn-25a6b1a6=0> <https://www.ft.com/alphaville>

SpaceX pivots away from spaceSinead O’SullivanPublished YESTERDAY

Sinéad O’Sullivan is a former senior researcher at Harvard Business School and professor in aerospace engineering.

Almost a quarter of a century after SpaceX set out to make humanity multi-planetary, turning the space industry upside down in pursuit of Mars, it appears to have found something better to do.

In most ways, Mars was the entire point of SpaceX — a quasi-religious corporate creed, complete with colonies, timelines and the promise of making humanity a multi-planetary species, carrying our civilisation — and eventually our minds, once digitised — beyond Earth. In February, Musk announced that the company had shifted its focus from Mars to the much closer lunar surface, which also happens to be a more useful place to manufacture orbital data centres. Last week it emerged that SpaceX has stopped bidding for commercial Falcon 9 launches, allowing only US government customers for the rocket. And Gwynne Shotwell signalled last week in Paris that Crew Dragon, the only operational crew vehicle for routine missions for Nasa, will eventually be wound down.

What does it mean for the business of space when a company that is founded on getting humanity off Earth loses interest in the rather more immediate business of keeping humans in orbit around it? Shotwell’s solution? Let Boeing “have some business” — despite Boeing’s failure to fly a single operational crew rotation.

But there’s a bigger question: what happens to the companies that were relying on SpaceX to get to orbit? Musk spent two decades building Frankenstein’s monster; this ecosystem he now seems to regard as too small and boring to bother with. Luckily, there isn’t nearly as much demand for launch capability as Musk had promised. In 2025 Falcon 9 flew 165 times, and just 43 of those flights carried outside customers. Nearly three-quarters of the most celebrated launch cadence in history was SpaceX putting its own Starlink satellites into orbit. Meaning that selling launches to other companies brought in $4.1bn last year, up only 8 per cent in a market that was supposed to have exploded — and most of that came from Nasa and the Pentagon. In the second quarter of this year, space contributed just 12 per cent of SpaceX’s $7.8bn in revenue. Starlink brought in 55 per cent; the AI business, which only arrived in February, already accounted for 33 per cent.

However, Musk founded SpaceX on the bet that there was an enormous market for launch that was shackled by the industry’s high pricing. By making rockets reusable, the cost would collapse and customers would come running for access to low-Earth orbit. In other words, launch demand would be highly price elastic. But when SpaceX removed the price constraint, the expected flood of customers never came. It turns out the old-guard space executives who decided not to spend billions on reusable R&D weren’t all dinosaurs. Some of them may simply have understood the demand curve correctly.

That’s not to say there’s no demand. Yes, there are some customers for launch, and they’re now scrambling for access to orbit. But there just aren’t enough of them to matter to a company valued in the trillions.

Which suggests that the real genius of SpaceX had nothing to do with aerodynamics or rocket telemetry but narrative rotation, as each new iteration of the company’s goals was financed by believers in the last.

Reusability was paid for by Nasa and satellite operators, with federal commercial off-the-shelf and Commercial Crew money providing early proof-of-concept contracts to finance its early rounds.

Starlink was sold to private investors on the back of this reusability.

Mars gave SpaceX much needed urgency; an existential justification of sorts for moving fast and treating rules as impediments to a higher purpose.

And orbital AI compute is now being sold to public markets as the reason to pay almost any price for its stock.

The last rotation into the AI narrative has obviously been the most lucrative of all. In June it listed at $135 a share, a $1.77tn valuation and the largest IPO on record, on 2025 revenue of $18.67bn and a net loss of $4.9bn. That works out at roughly 95 times trailing sales, for a company whose AI segment spent $5.1bn on R&D last year, more than that segment’s entire revenue.

Morningstar, the loneliest bear in the world, puts fair value at $780bn, of which about $611bn is launch and Starlink.

Still, investors are grown-ups, and markets are a dog-eat-dog business.

But the real problem is Europe’s, because for most of the last fifteen years, Brussels has been trying to compete with a company whose launch model has yet to show meaningful viability, at least without putting a Tesla in space, absorbing a social media company and generating cat memes at industrial scale. For the last decade, Europe has attempted to pour money into new launchers designed to match SpaceX’s financing and operational style — without ever asking where the customers are supposed to come from. “Build it and they will come” did not work for SpaceX, whose rockets were eventually paid for by SpaceX’s own satellites. Without a launch company generating its own enormous demand, the numbers are unlikely to work.

Europe has spent years, and enormous amounts of money and institutional energy, trying to build a European SpaceX. But what if it has been competing with a mirage — and in the process, mistaking SpaceX’s dizzying growth for evidence of a dazzlingly large launch market? Which brings us back to the old, boring model. It kills me to say it, but maybe it was the sustainable one all along. Ariane, anyone?

<https://www.ft.com/content/0fd15797-ac89-4222-a4bb-03a6a1330f48?segmentID=0bb4f69a-72d2-5619-4945-365b9d6d2888&syn-25a6b1a6=0> <https://www.ft.com/alphaville>

Brad DeLong here: What do I think of this? Well, is satellite broadband likely to be super-competitive in the long-run vis-à-vis earth-based fiber- and tower-based broadband? Maybe. Perhaps. In the geographically dispersed low population density 20% of the market. But as soon as people cluster in cities the space-basing loses its edge. Are orbital datacenters likely to be super-competitive in the long-run vis-à-vis earth-based ones? I just do not see it. The orbital-datacenter case seems to me considerably weaker than the satellite-broadband one, for which there is genuine physics for serving dispersed customers. Yes, energy is nearly free in space once you have the solar panels, but heat dissipation is nearly free on earth.

Even Morningstar seems to be bending over backwards to burnish the Muskopoly unduly, IMHO.

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Nate Silver calls it his most underrated chart, and he well be right. Trump’s approval is a wall of people who don’t feel it strongly. The disapproval is hot and fierce:

From Nate Silver:

Nate Silver: <https://twitter.com/NateSilver538/status/2102884250400014633>: ‘feel like this has been one of our more underrated charts. If you throw out voters who *weakly* approve or disapprove of Trump's performance and only look at *strong* approval/disapproval, his net approval rating is -29, even worse than his overall -22:

In other words, even though Trump's approval rating isn't good (now 37.6%), it's being propped by people who lukewarmly approve. Whereas the disapproval is *very* entrenched. A much different dynamic than the first term. Trump's approval has had some news-driven spikes. But the overall trend has been quite persistently downward. It's easy to convert a "weak approve" to some form of "disapprove". It's hard to convert a "strong disapprove" into any form of "approve"…

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What I would really like to see, of course, is the movement: a poll that followed 10,000 people over time, and reported how they shifted from basket to basket. But nobody thinks that would pay. And nobody in non-profit-land appears to think that would be worth funding, to my frustration.

But note this: Trump organized a coup attempt. And in its aftermath, he was more popular in America than he is now. This is the lowest net approval of any president at least since Herbert Hoover, and perhaps since long before (we do not really have polling before 1945). “News-driven spikes” that fade is exactly what you would predict from a presidency governing by chaos-monkey-fu. Each new outrage buys a day of base enthusiasm, and then compounds the strong-disapproval pile that never shrinks.

Silver’s own midterm model has already drawn the obvious inference: This is turning into a blue-wave environment. Expert raters clinging to neutrality are somehow anticipating that Trump’s awful numbers will not leak over and affect other Republican candidates. The argument that it is likely to is that strong disapproval is not just a polling artifact but turnout energy, for “lukewarm approvers” often find something else to do on a Tuesday in November.

So yes: We loathe him, we really loathe him, we loathe him for reasons that are specific, economic, constitutional, and moral. The chart's -29 says the quiet part out loud: We are not a coalition of cranks. We are many. But we need to turn out at the polls in November.

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Annals of Technologies of Cognitive Alertness: Qahveh Khaneh Comes to Telegraph Avenue: How Coffee’s 600-Year-Old Birthplace Has Filled a Peet’s-Shaped Hole:

There is a Peet’s-shaped hole in my memory of the corner of Dwight & Telegraph, Peet’s! The ur-roaster. The place from which the founders of Starbucks learned their trade in the early 1970s. The fountainhead of the entire American specialty-coffee revolution that the—alas! now-late but then-assistant economics professor Suzanne Scotchmer introduced me to, back when I was a undergraduate junior in 1980-1981 at George Howell’s Coffee Connection in The Garage at the corner, of Mt. Auburn St. and Kennedy St. in Cambridge.

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I cannot say Peet’s abandoned a prime piece of Southside retail frontage. Telegraph Avenue had better days back when bookstores were still magnets. Traffic at that Peet’s was never anything like, say, Caffé Strada which does an extraordinary land-office business all the time during term time when it is not raining. But Peet’s did abandon a piece of frontage that was, objectively, a very well-placed perching spot for people coming up to campus from the south and west.

Replacing it is something called Sana’a Café.

The Sana’a Café (or, rather, a Sana’a Café) <https://thesanaacafe.com/> has opened with a bracing very strong pull—lots of grounds in the bottom of the cup:

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Thats blurry. Here’s the text OCR’d and reformatted:

SANA’A CAFÉ

ESPRESSO DRINKS (Hot | Iced)

Espresso (2oz) — $4.10
Cortado (4oz) — $4.49
Americano — $4.39 / $4.89
Cappuccino (12oz) — $4.95 / $5.45
Latte — $5.50 / $6.00
Caramel Macchiato — $6.79 / $7.29
White Mocha Latte — $6.59 / $7.09
Spanish Latte — $6.19 / $6.69
Yemeni Latte (Cardamom and Cinnamon) — $6.19 / $6.69
Sana’a Latte (Cardamom, Cinnamon, and Ginger) — $6.19 / $6.69
Matcha — $5.89 / $6.39
Pistachio Latte — $6.99 / $7.49
Hot Chocolate — $3.99 / $4.49
Mocha Latte — $5.95 / $6.45
Rose Latte — $6.19 / $6.69
Cinnamon Dolce Latte — $5.99 / $6.49
Shaken Iced Brown Sugar — $7.49 / $7.99
Biscoff Latte — $6.45 / $6.95

YEMENI SPECIALTY DRINKS (12oz | 16oz)

Sana’ani (Coffee with Cardamom and Cinnamon) — $4.99 / $5.99
Jubani (Coffee with Cardamom and Cinnamon) — $4.99 / $5.99
Arabic Light Roast (Light Roast Coffee with Cardamom and Cinnamon) — $4.99 / $5.99
Mofawar (Medium Roast Coffee with Cardamom and Cinnamon) — $4.99 / $5.99
Qishr (Coffee with Husk of the Coffee with Cardamom and Cinnamon) — $4.99 / $5.99
Adeni Chai (Yemeni Chai with Cardamom and Cinnamon) — $4.99 / $5.99
Yemeni Black Tea (Yemeni Black Tea, Cardamom and Cloves) — $4.99 / $5.99
Turkish Coffee (Medium and Dark Roast Coffee Only) — $4.99 / $5.99

DINE-IN

Small Pot (18oz) — $9.95
Medium Pot (24oz) — $15.95
Large Pot (32oz) — $19.95
Traveler Pot (96oz) — $29.95

ICED YEMENI SPECIALTY DRINKS

Iced Adeni Chai — $5.99
Iced Mofawar — $5.99
Iced Sana’ani — $5.49
Iced Dirty Chai (with espresso shot) — $6.99

ADD-ONS

Alternative Milk — $0.75
Add Flavor — $0.75
Add Shot — $1.75
Add Honey — $0.75

REFRESHERS

Mango Passion Fruit — $6.19
Kiwi Dragon Fruit — $6.19
Mango Watermelon — $6.19
Lemonade — $6.19
Mojito (with any flavor) — $6.99 (Choice of sparkling, water, or milk base)
Strawberry Lemonade — $6.19
Dragon Fruit — $6.19
Strawberry Acai — $7.19
Pink Drink — $7.19
Lemon Ginger — $5.59

SMOOTHIES

Mango Smoothie — $6.95
Strawberry Banana — $6.95
Strawberry Smoothie — $6.95
Banana Smoothie — $6.95

TEA (Hot or Iced)

Wild Peach — $4.99
Hibiscus — $4.79
Tangerine — $4.99

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It is one node in a rapidly branching network that did not exist anywhere on earth four years ago.

We tell ourselves that coffee comes from Ethiopia. That is true, in the narrow botanical sense. Coffea arabica is native to the highland forests of Kaffa, in the southwest of Ethiopia, where it grew wild and largely unregarded for a very long time. But a wild plant is not a beverage. And a beverage is not a culture. The plant is an accident of biogeography. The drink—coffee as a thing you brew, share, argue over, and organize your social life around—was a human invention. It was invented in Yemen.

Sometime soon after 1400, coffee made the short but decisive hop across the Red Sea, and it was Yemeni Sufi mystics who first put it to systematic use: they brewed the seeds and husks of the coffee cherry to stay awake through their long nocturnal devotions. Coffee was at the get-go not a consumer pleasure but a religious productive—salvation-generating—technology of wakefulness—a productivity enhancement for the spiritually ambitious. Graduate students bent over their laptops in the new Sana’a frantically booting their am or pm wakefulness are, whether they know it or not, the direct cultural descendants of 1400s dervishes trying to squeeze more devotional hours. The application has secularized. The pharmacology and, largely, the sociology have not changed.

From the Sufi lodges, the practice diffused outward. It reached into ordinary Yemeni society. By the middle of the 1400s, we are told the qahveh khaneh had opened their doors in Yemeni cities. Everything downstream of that traces its lineage back to Yemen: the coffeehouses of Cairo and Constantinople, of Mecca and Isfahan, and eventually the London coffeehouses, out of which Lloyd’s of London and the stock exchange and a good chunk of the eighteenth-century public sphere would crystallize. When Jürgen Habermas wants to locate the birthplace of the bourgeois public sphere, he points to the coffeehouse. He might have pointed further back to Yemen and to the qahveh khaneh of Coffea arabica, with caffeine-laden coffee being (along with caffeine-laden tea and nicotine) one of the three major early modern biotechnologies of cognitive alertness.

There is the port. For roughly three centuries, from 1450 to 1650, the bulk of the coffee that reached the wider world was grown in Yemen and then left through the single Red Sea harbor of al-Makha. The beans that passed through it became known simply as “mocha”. The name has outlived the port’s near-monopoly by three hundred years. It has now attached itself, with magnificent inaccuracy, to a drink of espresso and chocolate that has nothing whatever to do with al-Makha, but is instead a weird marketing accident. (Some claim that Yemeni beans, grown at altitude on ancient terraces and dried whole in the sun, carry a genuinely cocoa-like depth.)

Yemen, of course, understood exactly what it had. For nearly two hundred years it ran one of history’s most successful commodity cartels. Green beans were boiled or roasted before export so that they could not germinate abroad in an early-modern equivalent of DRM. Smuggling live plants out of the country was punishable. It worked, more or less, until it didn’t: by 1625 Dutch traders had gotten viable plants out into the botanical gardens of Amsterdam. Then they leaped, to Ceylon, to Java, and by the mid-1700s coffee was growing across the Americas, Yemen’s monopoly was simply gone, and the fact that all of coffee’s pests and parasites were located in the horn of Africa meant that Yemen and Ethiopia faced large production disadvantages vis-à-vis producers in the rest of the world.

What survived the collapse of the monopoly was the culture.

Qishr—brewed from the dried husks of the coffee cherry rather than the bean, spiced with ginger and cardamom, naturally low in caffeine, originally, I am told, a poor-man’s drink for coffee workers who could not afford beans that had had their price boosted by export demand—is still drunk across Yemen.

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It is on the menu at Dwight and Telegraph, priced at $4.99 for twelve ounces. That is a sentence that would have been unintelligible to any human being alive before about 2023. (I have not yet tried it.)

There is now a Yemeni-style coffeehouse miniboom. The Associated Press tells me that the number of cafés operated by six Yemeni-style chains in the United States grew by fifty percent in 2025 to 136 locations. The oldest of these, Qahwah House, opened its first store in Dearborn, Michigan, in 2017—Dearborn being home to one of the largest Arab American communities in the country, a legacy of the auto industry’s twentieth-century labor demand. It now runs more than twenty locations.

There is a clear niche for a non-chain, single-location, local-focused coffeehouse in a world in which there are 700 Starbuckses and 130 Peet’ses in Greater San Francisco. But is there a niche for another chain? The idea isnot “beat Starbucks at being Starbucks”, but to occupy a position Starbucks structurally cannot occupy with a favorable cost structure. I see four things at work here:

1. Product differentiation: Starbuckses could add a cardamom latte tomorrow; it could never be Yemeni. That’s a moat made of identity, and it lets them sidestep price comparison, for there is no reference price for a Sana’ani.

2. Late-night: Starbuckses close early and have spent a decade engineering out lingering, and so there is a place for serving the 9 p.m. slot Starbuckses will not occupy.

3. Co-ethnicity: community financing, lower monitoring costs, and labor supplied by cousins and friends of cousins because it’s kin and it’s “purpose, not work”; the classic immigrant-entrepreneurship advantage of sweat equity, trust networks, and trade diasporas doing work.

4. Customer base: Arab-American and the broader “somewhere to go that isn’t a bar” crowd, plus the curious.

5. Incumbent retreat: Peet’ses and Starbuckses spent 40 years teaching Americans to pay $6. Sana’a inherits that trained demand and the physical carcasses. Low build-out cost, pre-qualified locations, demand already conditioned.

Of course, “authenticity”, “community”, and immigrant-networks and sweat equity powerfully erode with scale.

The city of Sana’a:

Sana’a is not on the seacoast. Sana’a is not a port. Sana’a is located in the western-highland geographic spine that is the terraced-slopes highland coffee-growing region. It is the traditional capital of Yemen. (It is the capital of the Houthi-controlled part of Yemen; the rest is ruled from Aden.) It is Yemen’s largest city, sitting at about 7,500 feet. Its old walled city is a UNESCO World Heritage Site.

Sana’a Café began in downtown San Francisco in 2023 as a family business. A cinnamon-cardamom combination in a strength never seen outside Yemen. Ginger, saffron, and honeycomb bread in an elaborate and very nonstandard pastry case (baklava, milk cakes, pistachio cheesecakes). Now Sana’a Café counts on the order of sixteen locations in California, plus one in Washington state; has taken over a former Starbucks in San Francisco’s Financial District at 27 Drumm Street; has three storefronts in the Sacramento area; and has one in Hollywood and one in Orange County. In the words of co-founder Sadeq Aleqel:

Sadeq Aleqel: Exploring Life & Business <https://voyagela.com/interview/exploring-life-business-with-sadeq-alaqel-of-sanaa-cafe/>: ‘The response from the community was immediate and heartfelt—people weren’t just discovering coffee, they were experiencing a culture, a story, and a centuries-old tradition in every cup…. Our focus is on Yemeni-style coffee and drinks, prepared with care and authenticity…. Serving Yemeni coffee and sharing our heritage doesn’t feel like work; it feels like purpose…. For us, the greatest risk would be not sharing Yemen’s coffee heritage at all….

The Dwight & Telegrph in Berkeley café location opened up, I have been told, in late July. The Daily Cal was soon reporting that at 11 pm you could see it full of summer-school students, heads down, studying, drawn by the midnight closing time, and by coffee mixed with amounts of cardomom, cinnamon, and other spices that you would never find in Italy or France.

And by the honeycomb pastries.

But how is it going to do for me this fall? The floors from the subbasement through four of Evans Hall have now been shut. The occupied floors are reduced to five through ten, with economics on floors five and six, and math on floors seven through ten. (You may ask: Why? Doesn’t economics have as many professors, more graduate students, and nearly aleph-null times as many undergraduates majors as math? Don’t ask.) That closing-off of the bottom half of the building does have consequences. For one thing, no drink vending machines. for another, no library on floor one to pick up things delivered from the remote book stacks. So I find myself going over to the main library, and then finding a chair there and perching with my laptop rather than going back up the seven flights of stairs. (Elevators, you say? Don’t ask.)

Could Sana’a Café this fall be, for me, a place to (a) drink good coffee, (b) hold office hours that are enjoyable for people to come to, and (c) have a chance of running into people by accident?

The dervishes knew coffee as a biotechnological device for extending the productive day, for wringing more devotional hours out of a body that wanted to sleep. That function has not gone anywhere. But three others have grown up around it, for the coffeehouse also matters. The drink narrows and sharpens attention. The room does more.

One defining pathology of intellectual life since about 2010 is that we have become extraordinarily good at finding exactly the information and exactly the people we already know we want, and correspondingly terrible at encountering the ones we did not know to look for. The search bar, the calendar invite, the scheduled Zoom—these are instruments of intention. They deliver what you asked for. They are useless for delivering what you had no way to ask for because you did not yet know it existed. As my teacher David Landes once said: you have to have a stack pass and go into the stacks of the library because the thing you want is not the thing you think you want but the thing three slots to the left.

The café is one of the last machines we have for manufacturing the unplanned collisions. Jane Jacobs had a vision of a dense and various public space that is useful precisely because you cannot predict what it will throw at you. A coffeehouse is such a sidewalk ballet with seating and a caffeine subsidy.

There is also the coffeehouse is a device for shifting frame. You think differently in a mild ambient hum than in silence. A change of physical location can unstick a stuck mental problem, that has you going in circles. Being among strangers who neither know nor care what you are working on can loosen the grip of a malevolent internal editor in a way that a familiar desk never will. The café supplies enough stimulation to keep the vigilance system idling, but not so much that it captures you.

Coffeehouses are an efficient bundling of: a legitimate reason to leave the house; a socially sanctioned excuse to be idle in public while your back-brain works; a stimulant delivered in a ritual that paces its consumption; and a nonzero probability of a useful accidental encounter.

Where else do you get all four for the price of a latte?

For me, it probably will not work for (c): Caffé Strada on eastsouthside is the champion, clearly; there is no parallel northside gathering place; and Sana’a’s location is very off of all beaten tracks for economists. (a) is very attainable. (b), perhaps as well.

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My interpretation of what is going on here: Gerard Baker saying “I am anti-Trump too!”, in the hope of shifting to firmer ground on which he can argue that he and his friends should get to keep all their ill-gotten gains from the Trump tax cuts. After all, aren’t the only things that matter (a) that, (b) making liberals sad and (c ) keeping non-”white” non-male non-elderly people in their place?:

So how come Google Maps now calls the Gulf of Mexico and Lake Ontario the Gulf of and Lake America, but does not yet show New Mexico relabled as “New America” anyway?

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Trump calling for the renaming of New Mexico

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We have the absolutely remarkable, in so many ways:

Gerard Baker: Help—I Feel a Bad Case of TDS Coming On <https://www.wsj.com/opinion/helpi-feel-a-bad-case-of-tds-coming-on-0d2515aa>: ‘A signal achievement [of Trump] has been getting control of the border and removing some of the people who have no legal right to be here. But even with this proper and overwhelmingly popular policy, the administration has managed to harm the country and the GOP’s standing. The unnecessarily cruel and indiscriminate approach has caught many in its dragnet who shouldn’t be treated that way and is fundamentally un-American. The political effect has been to devastate support for the GOP among Hispanics, more than reversing the gains Mr. Trump had made with the fastest-growing ethnic population in the country…

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In what sense can this possibly be a “signal achievement” if it is “cruel and indiscriminate… caught many… who shouldn’t be treated that way… fundamentally un-American?”

Baker’s closing:

The looming Republican calamity… will be the result of presidential hubris, vanity, recklessness and the wider party’s abdication of accountability. Instead of seizing an unrivaled opportunity to shift America off the path of progressive endangerment, the GOP risks handing it back to the Democrats and their own obsessions. It’s enough to give anyone a case of Trump derangement syndrome.

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Given Baker’s earlier—I am not sure what to call it? admission?—the fact that it is “the wider party’s” rather than my own “abdication of responsibility” is an interesting attempted evasion to see at this late date. What was the earlier “admission” you ask? This:

Jan. 6… removed any doubt about the threat Donald Trump might pose to our constitutional norms and rules, [but] I thought the institutions of the U.S. would… constrain his worst instincts and intentions. And by November 2024, after four years of a Democratic presidency had revived the prospect of a restoration of the progressive left’s crippling hegemony, the risks he posed seemed smaller than theirs…

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But is anyone other than Gerard Baker really surprised by any of:

a self-indulgent tariff fixation based on a profound misunderstanding of international economics, an insouciance about public finances that has widened the deficit, and a reckless military adventure that has choked off global energy supplies,.. alienat[ing] everyone in the world who could be helpful to us (perhaps excepting Israel)… embolden[ing] and even embrac[ing] every country in the world that threatens us… the grotesque self-enrichment, the self-satisfying prosecutorial pursuit of political enemies, the endless projects of self-grandiosity… ballroom… Kennedy Center… Memorial Arch. …the buffoonish symbolic acts… the Gulf of America, Lake America, New America, the 51st state [of Canada]...

?

No. The only surprising thing is not any of Trump’s lunacies but, rather, that it is without a peep that the Republican congressional majorities have gone along with it all, on the Gingrich Principle that above all one must and the only thing that matters is to make the president of one’s own party look good—not actually be good, but look good—and the president of the other party look bad, no matter what the cost to the country. Thus it is not any individual one of these. It is that all of them have happened because there is no block of Republican senators and representatives willing to stand up and even threaten to, temporarily, cross the aisle to make Jeffries and Schumer Speaker and Majority Leader for one single day.

And, by the way, how the f*** does Gerard Baker imagine that Binyamin Netanyahu could possibly be “useful” in any way to anyone?

Perhaps if Baker had written this in the winter of 2025 it might have done a little bit of good, and one might be obliged to at least think of him as being, very partially, and incompletely, something one might consider calling “a man”. But at this late date?

This smells very much like somebody who wants to still be in the game after November if there is in fact a decisively Democratic congress. Thus he is now trying to join the anti-Trump parade that he has spent so much of the past eight years belittling and trying to destroy.

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But two observations: (1) the spike is not that big, and (2) from an “affordability” perspective, this is the last thing one would want to generate from one’s foreign policy:

A real price series that I have been watching:

And we have a related observation from Matt Yglesias:

Matt Yglesias: The Republican Urge to Start Wars in the Middle East <https://www.slowboring.com/p/the-republican-urge-to-start-wars>: ‘Despite Trump’s anti-war rhetoric on the campaign trail, the national security team he announced shortly after the election was “an extremely hawkish group that screams ‘hot war with Iran’” <https://www.slowboring.com/p/how-donald-trump-could-succeed>. In retrospect, I wish I’d made a bigger deal about this….

There’s a weird finding in the economics literature that Democratic Party presidents enjoy systematically better economic performance even though they don’t pursue systematically better economic policy…. Alan Blinder and Mark Watson… [say] “the Democratic edge stems mainly from more benign oil shocks, superior total-factor-productivity (T.F.P.) performance, a more favorable international environment, and perhaps more optimistic consumer expectations about the near-term future.” They seem to primarily understand this as a question of good luck. But… Republicans have systematically bad foreign policy that is inattentive to the downside risk of saber-rattling and hawkishness…. The… problem with Bush-era foreign policy wasn’t belief in democracy; it was excessive belief in the potential upside of coercive military force. Trump has retained the error while reconfiguring the goals…

And the problems with Nixon-era foreign policy as it affected the economy was (a) Kissinger thought high oil prices were a good thing because they enabled the then-Shah of Iran to arm himself to the teeth and thus annoy the USSR on its southern border without Kissinger having to get congress to pass any military-aid bill, and (b) Nixon’s all-out rearmament of Israel in the 1973 war (against the wishes of his own Pentagon, which feared it would “blow any image we may have as an honest broker" and alienate the Arab states, which it did), thus provoking an OAPEC reaction in the form of the oil embargo.

MEMO:

• Dine, Thomas A. 2022. “The Limits of Détente: The United States, the Soviet Union, & the Arab-Israeli Conflict”. Journal of Cold War Studies. 24:3. <https://direct.mit.edu/jcws/article-abstract/24/3/255/112894/The-Limits-of-Detente-The-United-States-the-Soviet>.

• Nixon Foundation. 2023. “America’s Airlift in the 1973 Yom Kippur War.” Richard Nixon Foundation, October 10. <https://www.nixonfoundation.org/2023/10/americas-airlift-in-the-1973-yom-kippur-war/>.

• Office of the Historian. n.d. “The 1973 Arab-Israeli War.” . U.S. Department of State <https://history.state.gov/milestones/1969-1976/arab-israeli-war-1973>.

• Quandt, William B. 2001. Peace Process: American Diplomacy and the Arab-Israeli Conflict Since 1967. Washington, DC: Brookings Institution. <ISBN 9780520225152>.

• Samet, Daniel J. n.d. “October 1973: Nixon’s Decision to Resupply Israel.” Not Even Past. University of Texas at Austin. <https://notevenpast.org/october-1973-nixons-decision-to-resupply-israel/>.

• Tal, David. 2014. “A Tested Alliance: The American Airlift to Israel in the 1973 Yom Kippur War”. Israel Studies. 19:3 (Fall). <https://doi.org/10.2979/israelstudies.19.3.29>.

• Wikipedia. n.d. “Operation Nickel Grass.” Wikipedia: The Free Encyclopedia. <https://en.wikipedia.org/wiki/Operation_Nickel_Grass>.

• Yglesias, Matt. 2026. “The Republican Urge to Start Wars in the Middle East”. Slow Boring. September 23. <https://www.slowboring.com/p/the-republican-urge-to-start-wars>.

• Yglesias, Matt. 2024. “How Donald Trump Could Succeed: Or, More Likely, Fail”. Slow Boring. November 14. <https://www.slowboring.com/p/how-donald-trump-could-succeed>.

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Eliezer Yudkowsky and Nick Land may now be the two most influential intellectuals in America's AI debate—and that tells you how badly the conversation has gone wrong. When "machine god: good or evil?" is the only question on the table, every question actually worth asking gets thrown away. Contra Scott Aaronson, accepting the coming machine god is not now "the epistemic bare minimum" any more than is accepting Friedrich Engels’s belief 150 years ago that the SteamPower Economy was the real singularity that would in short order deliver a classless utopia of universal abundance:

I disagree with Henry Farrell’s subheadline here, which I think contains some other-side-of-the-Atlantic understatement. It is not that there are other ways of thinking about “AI” than “Digital God”, it is that it is difficult to think of a way less helpful for coherent thought to think about “AI” than to think of it as a “Digital God”.

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But I think he is right in the rest: That means that the important and live questions are about what metaphors—what abstraction layers, throwing away information so that the problems become things we can grasp and think about—are useful right now? Henry Farrell’s “MAMLMs are a socio-cultural technology” is one very useful one. The “‘AI’ is a normal disruptive Schumpeterian GPT” is a second. What are the others that we need to hold in our neocortices right now?":

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Programmable MutterTechnology and politics in an interdependent worldBy Henry FarrellCROSSPOST: HENRY FARRELL: Machine God Metaphors Eat Your Brain

<https://www.programmablemutter.com/p/machine-god-metaphors-eat-your-brain> <https://www.programmablemutter.com>

Programmable MutterMachine god metaphors eat your brainHere are three propositions…Read more14 days ago · 26 likes · 9 comments · Henry FarrellThere are other ways of thinking about AIHenry FarrellSep 22, 2026

Here are three propositions.

1. Metaphors are the fundamental abstraction layers in modern AI debates.

2. We are in a moment where you could plausibly argue that Eliezer Yudkowsky and Nick Land are the most influential policy intellectuals in the US conversation. Just look at the state of the two of them. This is not a good thing.

3. The collision of (1), (2), and recent events means that “machine gods” have now entered the discussion. This is a problem. Abstractions necessarily throw information away. The information that the “machine gods” metaphor/abstraction dumps is crucial to navigating the moment we are in. If public and policy debate stays centered around “machine gods: good or evil?” we are in for a bad time.

I should acknowledge that I (and co-authors) absolutely have our own dog in this fight. Indeed, I think that the “AI as social and cultural technology” approach that we have developed is a much better alternative. The final part of this newsletter will talk about a new piece by a mathematician that builds on this approach. Equally, my claim is not, actually, that our alternative approach should become the sole dominant way of thinking about AI. What I actually want, along the lines of my previous post, is a much greater degree of pluralism in the defining debates around a technology that no-one, including its creators, seems to understand particularly well or to be capable of usefully predicting.

******

As far as I can tell, the above Twitter exchange is the source of the most recent outbreak of Machine God Thought. People who know Daniel Kokotajlo tell me that I’d like him, and that we could have good conversation; I imagine they are right. I’ve found most of the rationalists I’ve met to be decent human beings; in many cases, unusually so. Equally, I think that there is something terribly limiting to the ways they talk about AI, and contend that it’s a real problem that debate is still accelerating past the event horizon towards the very heart of Singularity thought.

The two papers Kokotajlo mentions here, AI 2027 and AI 2040, lay out futures that are roughly identical in their predictions about what AI becomes (godlike; superhuman). Where they differ is in their assumptions about how well aligned AIs are with human goals. In the scenario where AI develops more or less unconstrained (thanks in part to geopolitics), AI breaks out of containment, and humanity is likely either Corgi-ized or goes extinct. In the scenario where AI development is delayed, tamed and made subject to “mutual compute destruction,”1 men and women come to have gods as servants, and start spreading out to nearby galaxies in the next two decades.

Neither future seems to be at all convincing to me, but they are most certainly convincing some people. Casey Newton and Kevin Roose are partnering with NPR to create the “Machine Gods” podcast as part of “a bold new era of content strategy for the network.” In his newsletter, Newton thanks the fates that he and his collaborator were a little too late to tech podcasting to be “beguiled” by Sam Bankman-Fried, and suggests just two paragraphs later that critics of Roose’s famous shoggoth freakout were “previewing the ways in which the commentariat would continually twist itself into pretzels to deny that anything important was happening with LLMs.” Indeed.

Things are no better elsewhere. In Washington DC, the AI policy debate is riven by a bitter dispute between those who take the Kokotajlo perspective (slow it down before we all die!) and those who want to let innovation rip so that we hit the technocapital singularity as soon as possible. The one side owes its framing to Eliezer Yudkowsky’s MIRI institute. The other builds on Nick Land Thought as filtered through the more immediate needs of Marc Andreessen. While I’m definetely more inclined toward the former than the latter, on the grounds that we do indeed need to have serious conversation about regulation, I think it would be terrible to have that conversation starting and stopping with the priorities of the labs.

Finally there’s Scott Aaronson, who I used to rely on for valuable debunkings of policy and media folk when they got over-excited about quantum computing. It is fair to say that Scott is not in a debunking mood these days, now that OpenAI has solved the Navier-Stokes problem. Witness the below:

The Age of Wonders and Terrors

Twenty years ago, when the idea of AI taking over the world in our lifetimes still struck most of us as the unconstrained fantasy of those who knew too much science fiction and too little science … update on the fact that the wild prophecies have come true. … It seems to me that the Singularity has already started; it’s just wildly unevenly distributed.

… For anyone who says AI doom sounds like an apocalyptic religion, that the rationalists/Singulatarians seem like a Bay Area cult, that Eliezer Yudkowsky gives off the vibes of a messianic prophet: yes, yes, and yes. But crucially, today you’re no longer being asked to believe in arguments and extrapolations, but only in the front-page news. Accepting the reality of the coming machine god after it’s solved Navier-Stokes and dozens of other longstanding open math problems (while dramatically ramping up in capability every month), is sort of like accepting Jesus after he’s returned to earth on the gleaming cloud. It’s the epistemic bare minimum.

Yes, there’s still enormous uncertainty about what the rest of our lives will look like, but as far as I can tell, there’s no longer any real uncertainty that it’ll all mostly revolve around AI, and the extent to which we succeed or fail at directing its power toward human flourishing.

******

So why do I think that the machine god approach, far from being an “epistemic bare minimum,” is a pernicious brain-devourer? The answer is that the metaphor shrinks rather than expands your horizons of the possible, forcing you to focus on the single overwhelming question of what Machine Jesus is going to do as soon as he descends from that gleaming cloud. Is he going to usher in paradise on earth? Or is he actually a shoggoth in a Jesus-mask, condemning us to enslavement or destruction? Once you have accepted that Machine Jesus is in the process of descending, all questions besides determining his intentions for humanity seem irrelevant.

I’ve written before (with colleagues and on my own) about why I think this whole way of thinking is utterly wrong-headed. But maybe I’m wrong. Take three somewhat inter-related possibilities: p1, that humanity is not the sole beautiful flower of the cosmos and that greater than human intelligence is perfectly possible, p2, that high intelligence is effectively impossible without strong intentionality, and p3, that current AI architectures are indeed the royal road to achieving proper generalizable superintelligence. I personally rate p1 as extremely high, p2 and p3 as very low, and p1*p2*p3, which is the most obvious state in which you might be worried about the AI alignment problem, as very low indeed. But who is to say that I might not be wrong? Equally, I, or someone who is skeptical of Machine Jesus for wildly different and incompatible reasons than my own, might be right. And if that is possible, then we ought not just be obsessing about whether we “succeed or fail in directing” His Awesome Power towards human ends. We might want to worry about other questions too, or instead.

There is a discussion of the solution of Navier-Stokes, the miracle that brought Scott to embrace the true faith, in a guest-post on Terence Tao’s blog, which usefully illustrates the point. It also has the benefit of being (sort-of) pre-registered. This discussion is specifically attractive to me, because it builds on arguments about AI as a social and cultural technology. Again, I don’t think that you need to believe that it is right on the merits to accept the more limited point that I want to make, which is that perspectives other than the machine god one reveal other questions and problems that we ought very reasonably want to be concerned with.

In his guest-post, the mathematician Nestor Guillen writes that he anticipated the solution of Navier-Stokes, but that his reaction was not that human mathematics was in danger of being replaced. Instead, he argued that it validated the entire enterprise.

the bulk of the essay was done in August and shared with a few close friends for feedback. Earlier this week, Tristan Buckmaster announced a breakthrough finding, done in collaboration with Levent Alpöge, of a finite-time blow up for 3D incompressible Euler with forcing. He also made serious allegations of misconduct by OpenAI (see announcement). The next day, OpenAI announced a finite-time blow up result for 3D Navier-Stokes with forcing, obtained from their internal LLM. … I have decided not to change the opening of the essay and instead make a note of the news here.

… What would be the significance if one day we woke up to the news that output from a Large Language Model contains a definitive answer to the question of blow up for the incompressible Navier-Stokes equations, and to the question of where the zeros of the Riemann zeta function lie?

Many of my fellow mathematicians consider this a kind of nightmare situation, and I think this is a very valid position. Here I would like to make a different case, however. Personally, I have come to believe that the news of a Large Model output containing an interesting, insightful, novel mathematical idea can and should be received as a source of communal pride for mathematics and for mathematicians.

Why is this so? Guillen says that:

Humans have always lived in a complex world and their survival has hinged on their ability to process information in amounts beyond what any individual can handle — and it is likely this has been so nearly as long as humans have existed. Herbert Simon’s concept of “bounded rationality” captures this well …

Simon saw that one implication of bounded rationality is that humans have to (and do) develop systems to process information, as a group. We see that humans have built states, stories, bureaucracies, markets, libraries, and more. These are cultural and social technologies. They are means by which humans (not individually but as a group) navigate amounts of information so vast that they cannot be handled by any individual on their own. …

LLMs … are “wrappers” around an older cultural technology: the scientific literature. When you ask an LLM a question about the isoperimetric inequality, the ABP maximum principle, or a PDE, you are effectively interacting with every person who has thought about and worked on those things — provided the data the LLM was trained on contained those contributions in one way or another.

Unsurprisingly, I think that this is largely correct (I do think that you can make the cultural and social technology argument, while also being freaked out about the consequences of AI: more on that in my next post). But even if it isn’t, it highlights different, and I think, important questions than the machine god nexus.

Specifically: if you think of AI as a cultural and social technology, your first reaction will not be to prostrate yourself in anticipation of the coming Age of the Gods. Instead, you are likely to treat fields like mathematics as some combination of individual and collective human intelligence, constructed on top of technologies that guide and direct that intelligence in particular directions. So when a new technology such as AI comes along, that reshapes the ways in which mathematicians draw on their shared intelligence, you will have questions to ask. What are the current processes through which existing knowledge is disseminated and new knowledge is created? What are the incentive structures for dissemination and creation, and how do they interact with each other? How have processes and incentives been shaped by previous and existing cultural and social technologies? How might these processes and incentives be changed by what is happening now?

And so on. You can see one way in which you might extend this in Ben Recht’s recent post, which suggests, if I understand him right, that mathematicians really ought to rethink how much of their field was already based around benchmarkmaxxing (prizes and challenges) even before AI came on the scene. Tao’s argument, as quoted in the NYT, points in a similar direction.

[Tao] compared OpenAI to a wilderness guide who finds a path to a hidden waterfall. “This has some value,” he said. “But once someone shows a specific path to the waterfall, people just take that path. They don’t spend as much time looking for other paths.”

I am not even an amateur mathematician, so am very much open to correction, but I understand Tao to be saying something like the following. Automated processes of discovery have obvious advantages in pointing the direction to new things. Equally, they push the needle from ‘explore’ to ‘exploit.’ Apparently aimless noodling around by humans can have benefits when it opens up unexpected views from Serendippo . More generally:

solving problems is only a tool and proxy for achieving the primary goal of conceptual understanding and insight. Forgetting this in the world of AI may turn the tool against the primary goal. Indeed, the mass production at faster and faster pace of “true/false” statements could destroy fertile ground instead of breathing life into new ideas.

Now it could be that AI will become universally better at discovery so that humans become irrelevant to math. That is the machine god assumption. But that assumption rules out, more or less by fiat, the possibility that human curiosity might still have independent value in discovering new possibilities, and all the questions that flow from it. If AI is better at some aspects, and humans are better at others, then you need to confront messy problems of organizational design. How do you rebuild the institutions of mathematics so that they best reconcile AI and human led approaches to discovery? How do you remake the relationship between dissemination of knowledge and discovery? What individual and organizational incentives seem best suited to achieve general goals? What general goals ought you have? None of these are easy questions, and there are likely to be complex tradeoffs between the solutions to one set of problems and the solutions to another.

I don’t think that an ‘AI as cultural and social technology’ approach provides immediate answers (beyond maybe ‘you really ought to read James March’). But the point is that it makes it possible to see that these questions may be important. If you start as Guillen does, from the perspective that AI does not inevitably replace humans in the dissemination and discovery of knowledge, so much as it reorganizes relations among them, then you begin to start asking questions that are systematically obscured by Machine God Thought. In fairness to Scott Aaronson, his post does suggest towards the end that he too cares about these questions. Perhaps when the excitement dies down, he will find better ways towards thinking about them systematically.

You could, of course, make similar claims about other approaches than cultural and social technology. Cybernetics is another very obvious example. If you are stuck on the question of AI alignment, you will necessarily have to trust godlike AIs to monitor other godlike AIs and pray that things will work out. If you start from a cybernetic perspective (say: Maxim Raginsky Thought ) you’ll end up asking very different questions. As the HuggingFace incident showed, there are a lot of holes in the AI labs’ capacities for monitoring and control. “I need abstraction layers to monitor my abstraction layers” is (a) the world’s shittiest boasty bumper sticker, (b) a profound encapsulation of the modern condition, and (c) a diagnosis of the fundamental problems that the AI labs are making for themselves and not always capable of seeing, as best as one can tell from the outside. When you need AI to summarize the data that allows you to write your incident reports on AI, some of the cheese holes are likely to be closely aligned, potentially letting stuff through that you don’t want to.

A third, related but significantly different approach is cybersecurity. As Dan Davies says, “nearly all the examples of worrying agentic behaviour seem to have been seen only in one context – that of frontier research labs doing cybersecurity projects and screwing up their sandbox precautions.” I’m sure that there are great cybersecurity people in the labs, but I suspect that they have much less internal clout than the people who are pushing the agentic boundaries outwards. If you are embedded in a culture that has broadly decided that it is impossible for ordinary human intelligence to prevent putative superintelligent entities from breaking out of their constraints, then cybersecurity seems secondary: alignment of AI goals with human goals is the only way to stay ahead.

I could keep going, but I hope that the point is clear. The Machine God metaphor, which is really just a catchy rephrasing of longstanding notions among a particular community of AI people, has broken out of containment. It is leading, more or less by necessity, to a radical simplification of debate. If you believe that the machine gods are coming, so that super-empowered goal directed superintelligence is right around the corner, then the only thing that matters is ensuring that this superintelligence’s goals are aligned with the ones that you yourself care about. If you stare into the sun, you only see its glare, missing out on all the other questions that may be important. Thinking about these questions involves adopting a more pluralistic understanding of where you might look for knowledge, and asking about the much broader variety of futures that face us than machine god: good or machine god: bad. That’s it.

1 As someone who does international security, sort of, I do not find Silicon Valley geopolitical speculation to be particularly well thought out or convincing. That’s not the topic of today’s post.

<https://www.programmablemutter.com/p/machine-god-metaphors-eat-your-brain> <https://www.programmablemutter.com>

Programmable MutterMachine god metaphors eat your brainHere are three propositions…Read more14 days ago · 26 likes · 9 comments · Henry FarrellProgrammable MutterTechnology and politics in an interdependent worldBy Henry Farrell

Brad DeLong here: Farrell seeks pluralism: multiple metaphors for a technology “that no-one, including its creators, seems to understand particularly well.” The “Digital God” metaphor is especially pernicious because it:

shrinks rather than expands your horizons of the possible, forcing you to focus on the single overwhelming question of what Machine Jesus is going to do as soon as he descends from that gleaming cloud. Is he going to usher in paradise on earth? Or is he actually a shoggoth in a Jesus-mask, condemning us to enslavement or destruction? Once you have accepted that Machine Jesus is in the process of descending, all questions besides determining his intentions for humanity seem irrelevant…

What do we have?:

• We have Farrell’s “MAMLMs are a socio-cultural technology”.

• We have Arvind Narayanan and Sayash Kapoor’s “The MAMLM boom sis a normal disruptive Schumpeterian GPT” of the kind we have seen every quarter-century since 1875, and saw before over 1775-1875 when we got the GPTs of steampower, steelmaking, and automatic textile machinery (and, I would say, the caravel and printing before that).

• We have mathematician Nestor Guillen, whom Farrell quotes at length making the argument I make that MAMLMs are well-viewed as front-end access nodes to the real ASI, which is not an Artificial SuperIntelligence of a machine but rather the Anthology SuperIntelligence of the collective time- and space-binding human mind and the knowledge it has produced and compiled over the past 5000 years:

Humans have always lived in a complex world and their survival has hinged on their ability to process information in amounts beyond what any individual can handle…. Herbert Simon… saw that one implication of bounded rationality is that humans have to (and do) develop systems to process information, as a group… states, stories, bureaucracies, markets, libraries, and more… cultural and social technologies… y which humans (not individually but as a group) navigate amounts of information so vast…. LLMs… are “wrappers” around an older cultural technology: the scientific literature. When you ask an LLM a question… you are effectively interacting with every person who has thought about and worked on those things — provided the data the LLM was trained on contained those contributions in one way or another…

That is, I must say, truly striking contrast to Scott Aaronson’s current view:

Scott Aaronson: The Age of Wonders and Terrors <https://scottaaronson.blog/?p=10062>: ‘It would be healthy for everyone to stop grinding their ideological axes, their sentiments about Dario Amodei or Sam Altman, for long enough simply to acknowledge that the wonders and terrors are here. They couldn’t be here more clearly if the sky had turned reddish-orange like in the Matrix movies…. For anyone who says AI doom sounds like an apocalyptic religion, that the rationalists/Singulatarians seem like a Bay Area cult, that Eliezer Yudkowsky gives off the vibes of a messianic prophet: yes, yes, and yes. But crucially, today you’re no longer being asked to believe in arguments and extrapolations, but only in the front-page news. Accepting the reality of the coming machine god after it’s solved Navier-Stokes and dozens of other longstanding open math problems (while dramatically ramping up in capability every month), is sort of like accepting Jesus after he’s returned to earth on the gleaming cloud.

It’s the epistemic bare minimum.

Yes, there’s still enormous uncertainty about what the rest of our lives will look like, but as far as I can tell, there’s no longer any real uncertainty that it’ll all mostly revolve around AI, and the extent to which we succeed or fail at directing its power toward human flourishing. By any accounting that doesn’t stack the deck, Eliezer Yudkowsky was right about what the greatest challenge facing civilization in our lifetimes was going to be, and you and I were wrong about it…

This reminds me of nothing so much as the story of Arkhidamos III Europontides of Sparta saying:

O Herakles! The might and prowess of man is undone!

upon watching a test-firing of a torsion dart-catapult built in Sicily and brought to Greece. Mechanized weaponry, he thought, had made the excellence of individual human courage and skill-at-arms obsolete.

Yes, the one-fifth of human work that is inside the blast radius of rapidly advancing information technology will spend the next decade and more grappling with “AI”, just has been the case over the past hundred and fifty years with whatever slice of the economy was then in the bullseye of the Schumpeterian process. But it is not a Digital God. It is not a power that needs to be “direct[ed]… toward human flourishing”. Thinking of it as such is not helpful.

OK: We have three metaphors. We need more. What are they?

Henry gestures at “cybernetics” a la Maxim Raginsky Thought and says “you’ll end up asking very different questions”:

“I need abstraction layers to monitor my abstraction layers” is:

• (a) the world’s s***tiest boasty bumper sticker,

• (b) a profound encapsulation of the modern condition, and

• (c) a diagnosis of the fundamental problems that the AI labs are making for themselves and not always capable of seeing, as best as one can tell from the outside.

Henry gestures at “cybersecurity” quoting Dan Davies:

Nearly all the examples of worrying agentic behaviour seem to have been seen only in one context – that of frontier research labs doing cybersecurity projects and screwing up their sandbox precautions…

But what else?

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My experiences with FaceBook products have always been that time spent getting up to speed on them is time wasted, and that time spent using them is time regretted. But if that is representative of anything, then there are hundreds of millions of addicted regretful regular users whose brains have been successfully hacked and hijacked and who then buy things based off of FaceBook/Instagram/WhatsApp ads. The market verdict is one of extraordinary success, with ads but only with ads:

All this is prelude to noting the sudden emergence of FaceBook Muse: an agentic AI system that has underlying economics I do not understand, but that Amazon fears enough to preëmptively block.

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From Sensor Tower via Paul Kedrosky:

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& Paul notes:

Paul Kedrosky: Meta’s Muse & Moat-less AI <https://paulkedrosky.com/metas-muse-and-moat-less-ai/>: ‘Meta's agentic AI app Muse entered the U.S. App Store’s top 20 on September 9 at No. 4. Nine days later, it was No. 1. Muse’s rise is a useful reminder that AI consumer products can gain share quickly, given buzz and distribution. Users can switch applications at negligible cost, while the underlying model intelligence is available to every serious competitor. The takeaway should be, in short, that there is, despite trillions in spending, minimal moat. The real assets are familiar ones: default placement, brand, habit, proprietary data, and an effective product loop. The AI itself is not a moat when competitors can access comparable models and cheaply reproduce the surrounding interface. Meta engineers concede as much in posts.

Muse may fall back out of the top 20 next month. Or it may get blocked everywhere, as has already happened at Amazon. That would make the point even more clearly: AI consumer software is beginning to look like a hit-driven market in which the model is rented, the interface is copied, and the users remain [—]mobile…

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Brad DeLong here: The key question is this: What is FaceBook’s monetization strategy for Muse? FaceBook has a monetization strategy for everything, and it—at least for me—makes committing to using their programs painful, and something that after the fact I wish I had not done, I think that the monetization strategy is that FaceBook watches what you do with Muse and uses it to better target its Facebook/Instagram/WhatsApp ads, plus extorting money from shopping websites that are willing to pay to have Muse direct traffic to them. It would surely be a bad bet for me to commit to Muse, just as it would be a bad bet for me to commit to Threads.

But that is just me. I am not representative here. Of anything. Paul thinks the lesson is that “consumer AI” is becoming a hit-driven market where the model is rented, the interface copied, users stay mobile. This smells much more like the streaming-wars media financial disaster than like a new platform-monopoly in progress. But—nobody knows anything here.

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Barry Ritholtz has a personal solution to this problem of the firehose of worthwhile and important “content” that floods in not every day, but every hour. But his solution to the problem increases the burden imposed by the additional force he adds to an already overwhelmingly strong jet. Don’t get me wrong: I do not wish he would stop. I value it. Greatly. But it is a problem:

90% of everything is crap. So how do you find the other 10%? And how do you process it when even what is freshest and newest in that other 10% is 50x what you could possibly read?

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Barry Ritholtz has good advice on building a daily reading list that works: (1) curate viciously, (2) create a narrative so that what you read on any day reinforces itself, (3) be balanced, (4) but opinionated and judgmental, (5) while always looking for where one may have gotten the big story wrong:

CROSSPOST: BARRY RITHOLTZ: How I Build My Reading Lists

<https://ritholtz.com/2016/08/assemble-daily-reads-3-ez-steps/> <https://ritholtz.com>

August 12, 2016 2:30pm by Barry Ritholtz

How to Build the Perfect Reading List in 3 Steps
Enjoy your morning Ritholtz’s Reads? Here’s how they happen.
Bloomberg, August 12, 2016

The making of a good compilation tape is a very subtle art. Many do’s and don’ts. First of all you’re using someone else’s poetry to express how you feel. This is a delicate thing.

It is hard to do and takes ages longer than it might seem. You gotta kick off with a killer, to grab attention. Then you got to take it up a notch, but you don’t wanna blow your wad, so then you got to cool it off a notch. There are a lot of rules.

–High-Fidelity, Nick Hornsby

“Wherever do you find those wonderful reads each day?”

Every now and again, a variation of the above question comes in from readers. Since it’s a summer Friday — and really, it’s not like anything else is going on in the world — I shall give the people what they want.

“I’ve been assembling daily reads for more than 20 years, since I started as a trader way back in the mid-’90s. It eventually evolved to become a published daily reading list, seven days a week on my blog.”

Some of you may be wondering, “How difficult can pulling a dozen headlines off a feeder be?” Turns out, it is harder to do and takes longer than it might seem.

Here are the rules that guide my hand each day:

Curate viciously.

There is an embarrassment of riches in terms of online content. This creates an “abundance” challenge.

My lists are defined as much by what is included as excluded. What you choose to omit is crucial to making any list special. In the early days, I tried inclusivity, and the list got longer and longer. I gave up that pointless exercise years ago, when Google News made it wholly unnecessary.

I rarely use anything from the front pages of major newspapers or news sites, on the assumption that many readers have seen it already. Overly popular links on Twitter are also tossed. Most read, most popular, most e-mailed lists — nearly every site has a variation of this, and they occasionally point to something worthwhile AND relatively unknown. But for the most part, I steer clear of those.

In the wee hours of the morning, I open 50 or so tabs from a browser folder. Just about every major media outlet is included. Each afternoon, I do the same with a different 40 or so; these are more esoteric, special-interest and topic-specific. Alternating between a broad, wide scope and a narrow, deep one allows for a good mix.

Speed also counts. I follow Sturgeon’s revelation: 90 percent of everything is crap. Ruthless efficiency outweighs the occasional false positive.

Create a narrative.

I try to weave together a series of (apparently) unrelated items, which often have a commonality. It is a puzzle, finding that common thread.

Consider the primary topics that work their way through my links. Listing the subject matter in order of prevalence looks something like this:

1. Markets

2. Investing

3. Economics, Fed

4. Data analysis

5. Behavioral psychology, cognitive errors

6. Regulation, policy, taxes

7. Science, technology, math

8. Esoterica: unusual articles about current affairs

9. Surprising, humorous or amusing

10. Music, film, books, sports, arts, food and travel

All 10 categories are obviously not represented every day, but most make guest appearances throughout any given week. Knowing the readership of this site, markets, investing and economics have the greatest representation; there have been occasional days when that’s all it is.

The narrative comes from finding a common theme. It’s nuanced, but if you squint you might be able to see it.

Be balanced, but have an opinion.

It’s important to recognize that this reflects the views of one person — albeit one who is immersed in media as both a consumer and a producer. I have definite opinions about oh so many things. However, I am open to being convinced otherwise; that is why I use the “see also” or “but see” mentions to suggest there may be multiple opinions worth unpacking.

I am always surprised about accusations of bias. This week’s BuzzFeed link about Facebook selling guns was not, as several of you suggested, anti-gun. I enjoy shooting but believe in reasonable regulations, terrorist watchlists, etc. But the link was about Facebook, which seems to violate its own policies about nearly everything!

One last thing: Editors, not writers, create the headlines. A linked headline is often a “clickbaity” version of what the article is about. I have a novel idea: Please read the linked article before you accuse me of (fill in the blank).

<https://ritholtz.com/2016/08/assemble-daily-reads-3-ez-steps/> <https://ritholtz.com>

Brad DeLong here: Barry Ritholtz’s guide to building a reading list is generous, disciplined, and quietly self-defeating — because the better his curation, the more it adds to the very flood it’s meant to tame. That’s the tension worth sitting with. His rules are sound. And, written in 2016, it reads as even truer and more important now.

There is no escape: abundance is the water we swim in now, and it rises every hour. Curation is thus an inevitable bet on judgment over completeness — you accept that you will miss almost everything, and you invest your scarce attention in a few people whose sense of the common thread you trust. Barry earns that trust. That is why I read him, and why I am passing him along to you: not as a way to read less, but as a way to read better while reading less than the impossible.

Whom do you let curate for you, and what are you willing to never see as the price?

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Claudia Sahm is in the business of trying to coax Fed Chair Kevin Warsh to behave better, that is to say: more like a Fed Chair and less like a Trump Lickspittle. Such pressure is useful, but I think we have to be clear-eyed about what is going on. What is going on is that Warsh has told different things to Trump and to the bond market, and so his principal concern now is to minimize the attack surfaces he leaves open to either. Hence, interpreting what he says as statements of policy or attempts to convey information is fundamentally misunderstanding Warsh’s intentions:

Claudia Sahm’s bottom line is this: A good policy decision was undercut by a communication problem: Warsh’s framework diverges sharply from the rest of the FOMC’s, and his refusal to articulate his own model turns routine transparency into destabilizing ambiguity. Warsh should fix this by doing the one thing his press conference conspicuously avoided: telling us what framework he actually uses, rather than reciting the standard tools—below-trend growth, the neutral rate, the SEP, forward guidance—that he rejects.

Concretely, she wants him to:

• state what role he sees for monetary policy if not macroeconomic stabilization;

• name the channel through which he thinks higher rates lower inflation

  • now that the labor-shortage buffer of 2023–24 is gone and

  • expectations are already anchored,

  • leaving demand as the obvious candidate he won’t claim;

• explain how he judges the appropriate level of the funds rate if the neutral-rate benchmark is off the table;

• articulate a stopping rule—which, as she points out, is just his own Jackson Hole hiking standard “with the sign flipped,” and requires no forward guidance to say aloud.

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Underlying all of it is a communication fix: use the press conference for its intended purpose—explaining and answering for the Committee’s decision straight to the public—rather than shortening it, barring follow-ups, and editorializing selectively on growth while staying silent on rates. Do that, and the confusion that drove market rates above what the committee intended goes away.

And she laments:

He continues to tell us which standard tools he doesn’t use. He has not said what he uses instead. As a critic of the Fed, that limited his impact; as Fed Chair, it is causing unnecessary confusion…

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But, Claudia, it is necessary confusion given that the point is to triangulate in order to limit the surfaces he leaves open to attack from either a disappointed Trump or a disappointed bond market. Don’t pretend he is playing chess when he is actually playing blind-man’s-bluff:

Stay-At-Home Macro (SAHM)My goal is to make economic policy and macroeconomics better.By Claudia SahmCROSSPOST: CLAUDIA SAHM: Questions for the [Fed] Chair [Kevin Warsh]

<https://stayathomemacro.substack.com/p/questions-for-the-chair> <https://stayathomemacro.substack.com>

Stay-At-Home Macro (SAHM)Questions for the ChairLast week, the Fed raised its policy rate by a quarter percentage point to a range of 3¾ to 4 percent, on a unanimous vote. That’s a notable shift: at the Fed’s meeting six weeks earlier, only three of the twelve voters had favored a hike. In its one sentence of explanation, the…Read more15 days ago · 57 likes · 22 comments · Claudia SahmA good meeting, and five questions the press conference left open.Claudia SahmSep 20, 2026Source: Federal Reserve, September 2026 Press Conference.

Last week, the Fed raised its policy rate by a quarter percentage point to a range of 3¾ to 4 percent, on a unanimous vote. That’s a notable shift: at the Fed’s meeting six weeks earlier, only three of the twelve voters had favored a hike. In its one sentence of explanation, the FOMC statement said that it “will support a timelier return to the Committee’s 2 percent [inflation] goal.” In the Summary of Economic Projections, officials centered on one more hike this year, with rates ending next year at that same level. Modest rate increases with a modest goal: that’s the outcome I argued for before the meeting. The Fed also ignored the political pressure not to hike before the midterms. I agree with the Fed’s decision, though I would never celebrate a rate increase.

A good meeting, but questions for the Chair linger.

It was a good meeting. As I said on NPR the next day, the Fed’s rate hikes are not a cure for inflation, but they will help keep a bad situation from getting worse. Real relief will require a resolution to the conflict in the Middle East and no new tariffs.

In some ways, that’s where this update on the Fed decision should end, but Warsh also held a press conference. He was clearer than in July, but his answers still raised questions, and today’s post uses them to frame mine. I want to understand Warsh’s approach. Monetary policy has shifted significantly over time, and there’s no reason to treat the status quo as perfect; he may see something the standard framework misses. Regardless, as best I can tell, his views diverge fundamentally from those of the rest of the committee, and that gap is what he owes us an explanation for.

It’s not an academic quibble. Markets read Warsh as hawkish, and pricing of future rate hikes rose as soon as he began speaking at 2:30 pm. The implied rate for the end of 2027 climbed about as much during the press conference as it had on the 2:00 pm release of the statement and projections, and the ten-year yield rose more while he talked than it did on the release. I doubt Warsh intended that outcome, and the committee almost certainly did not. I put it down to confusion, in markets and among Fed watchers, about how Warsh approaches monetary policy.

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Questions for Warsh.

After listening to Warsh’s presser, my questions for him range from foundational to operational. I suspect that once we have a better sense of his approach to monetary policy, the pressers will be more useful for markets and for the public.

What is the purpose of monetary policy?

Monetary policy is a tool of macroeconomic stabilization. It smooths out the bumps and wiggles in the economy around its trend: the Fed fights recessions and overheating alike, but it does not try to move the trend itself. Longer-run fundamentals belong to other policymakers.

Warsh spends more time on longer-run fundamentals than any Fed Chair I can recall. In his opening remarks, a prepared statement, he invoked growth several times:

The Fed has a role in sustaining the economic progress happening in America right now, and the rising opportunities that come with it. Those who are least well-off have the most to gain from a durable expansion, a solid labor market, and stable prices.

We at the Fed are unwavering in our vital and straightforward purpose: Full employment and price stability, and a thriving American economy that sets the standard for the world. [Emphasis added.]

These are important goals, but are they the Fed’s goals? Warsh himself was critical when past Fed Chairs strayed into topics like inequality. And talking up growth this much reads as hawkish, because when a Fed Chair dwells on how strong the economy is, markets hear a Chair who thinks it needs cooling. So, at a basic level, what role does Warsh see for monetary policy? If it is something other than macroeconomic stabilization, that is a sharp difference from the rest of the committee.

How will a higher federal funds rate lower inflation now?

Closely related is how Warsh thinks monetary policy brings inflation down. In the presser, Jennifer Schonberger of Yahoo Finance asked about the standard mechanism:

Now that you have hiked rates, do you need to push growth below potential, unintentionally pushing weakness on the job market to bring inflation down?

Warsh did not accept the premise that below-trend growth is part of the process:

First, we believe that the unemployment rate is basically running consistent with full employment. I don’t believe that we need to do harm to the labor markets to achieve our objective. I don’t believe that the two parts of our mandate, price stability and full employment, are working at cross purposes over the medium term. So, economic growth, that is ensuring continuous, sustainable, durable, economic growth, that’s the business we’re in, and the job we did today, the job we’ll continue to do, is to ensure price stability, which can mean that sustainable, durable, economic growth can go on for longer. The economy can be stronger, and as I mentioned before, the least well off can get the benefits of it.

There are times, such as 2023-24, when inflation falls with little cost to employment or growth. But that hiking cycle started with a labor market in shortage, nearly two job openings for every unemployed worker, so cooling it meant fewer vacancies rather than fewer jobs. The labor market is now in balance, and that buffer is gone. A channel that could deliver disinflation at low cost is credibility: if a hike convinces firms and workers that inflation will fall, the Fed has to take less demand out of the economy to get there. But market- and survey-based measures of longer-run inflation expectations have been stable, so there is little lost credibility to restore. That leaves demand as the channel.

So how does Warsh think higher rates reduce inflation, if not by restraining demand? Monetary policy operates through many channels, and it would help to know which ones he has in mind. The Fed Chair should be transparent about the potential costs of rate increases. Warsh’s framing last week was more upbeat than I associate with the start of a rate-hiking cycle.

What is the appropriate federal funds rate?

There are also operational questions. The Fed raised its policy rate to a range of 3¾ to 4 percent. How does Warsh know that is the right level? Steve Liesman of CNBC posed the question in terms of the neutral rate:

Previously most Fed officials have described the rate as modestly restrictive. And if you removed accommodation, could you give us your sense of where the Fed funds rate is relative to neutral? And some detail, if you wouldn’t mind, on your sense of is there a short-term neutral rate you’re aiming for and a longer-term neutral rate? Do you think in terms of those?

Warsh was clear that the neutral rate is not useful to him:

In a word, no. In a few words I’d say this, I’ve always been interested in a neutral rate as an academic matter. Back when I learned economics we used to think of it as the Wicksellian rate, the real equilibrium rate. It’s useful academically, it’s -- it’s a discussion to help us think about policy. Do I think it has any operational effect on decisions that we make today? No, I don’t.

The neutral rate has been a central concept in monetary policy for decades. Powell pushed back on false precision in the estimates, but it remained the benchmark for judging the level of the funds rate: above neutral, policy is restrictive; below, it is accommodative. What is odd is that Warsh framed the decision as “removing a dose of accommodation” and then distanced himself from the concept that defines accommodation. The rest of the FOMC has views on it; every participant but Warsh submitted a longer-run estimate, and the median is 3.25 percent, below the funds rate even before the hike. By the committee’s own numbers, policy was already above (longer-run) neutral. So if not the neutral rate, how does Warsh judge the level of the funds rate?

The word choice mattered. “Removing a dose of accommodation” was heard as saying the funds rate is still accommodative after the hike, with more doses to come. That is another reason the market priced in more hikes as he spoke.

How will you know when to stop the hikes?

Maybe Warsh doesn’t need a firm view of the appropriate level of the funds rate to know it needed to be higher. But now that the Fed has hiked, how will he judge whether to hike again, and when to stop?

The rest of the FOMC put its answer in the dot plot. The dots are not a commitment, but they sent a clear signal: a modest cycle of 50 to 75 basis points in total, far short of the 3 percentage points in the median hiking cycle. Warsh did not submit projections, and at the presser he distanced himself from the committee’s. Michael McKee of Bloomberg asked:

You said in Jackson Hole that you want to see inflation come down clearly and at sufficient speed, which is a standard without necessarily a measurable threshold... today you say today’s policy action will support a timelier return to the Committee’s 2 percent target, and yet, in the Summary of Economic Projections, the median pushes [reaching] the 2 percent target out to 2029... how can you square those two things?…

Warsh:

One easy way to square that, Mike, is those aren’t my forecasts. Those are the forecasts of my 18 colleagues, and I’ve tried to represent them dutifully to you. My business is to not give forward guidance... what I said in Jackson Hole in August is, we’re committed to a discipline, not to a decision. Today’s action starts to show we’re serious about this... But I’m ill-prepared to pre-judge those future actions…

No one is asking Warsh to pre-judge future actions. The SEP is a thought experiment, not a commitment: given what we know and where the economy is likely headed, what will policy need to do to meet the mandate? Warsh may not see value in the exercise. But he set a standard for hiking, confidence that inflation is moving to target clearly and at sufficient speed. The standard for stopping is the same sentence with the sign flipped, and he could say so without a word of forward guidance.

What is the purpose of the press conference?

Warsh has changed the press conference. Last week’s ran 30 minutes, the shortest in memorty outside of an emergency presser during the pandemic; Powell’s last five averaged about 50 minutes. Journalists were not allowed follow-up questions. And Warsh has not stuck to presenting the Committee’s views, as past Chairs did. When Victoria Guida of Politico asked whether he had learned anything about communication from the market’s fixation on the August CPI, he answered:

Markets over time will come to understand how this Fed makes its decisions, what’s relevant and not. And I wouldn’t want to editorialize that for them.

The press conference exists so the Chair can explain the Committee’s decision and answer for it. It is a hard venue for any Chair, and it is part of the job. Warsh does not want to give forward guidance on rates, which is his prerogative, but he is comfortable offering plenty on the prospects for American growth, so the editorializing is selective. It would help to know the principles behind his pressers: what he thinks they are for, and how he squares a shorter, narrower format with the Fed’s accountability. The Fed’s decisions affect millions of Americans. They should hear the reasons straight from the Chair.

Closing.

The Fed raised rates last week, and at least one more increase is likely. The start of a hiking cycle is always a serious moment, and this one is no exception: inflation is elevated, and disinflation is far from guaranteed. The Fed met the moment. A new Chair adds to the challenge, but that is surmountable. What we need is a better understanding of how Warsh approaches monetary policy. He continues to tell us which standard tools he doesn’t use. He has not said what he uses instead. As a critic of the Fed, that limited his impact; as Fed Chair, it is causing unnecessary confusion. Last week, that confusion showed up as higher market interest rates than the committee intended, and Americans pay for that.

<https://stayathomemacro.substack.com/p/questions-for-the-chair> <https://stayathomemacro.substack.com>

Stay-At-Home Macro (SAHM)Questions for the ChairLast week, the Fed raised its policy rate by a quarter percentage point to a range of 3¾ to 4 percent, on a unanimous vote. That’s a notable shift: at the Fed’s meeting six weeks earlier, only three of the twelve voters had favored a hike. In its one sentence of explanation, the…Read more15 days ago · 57 likes · 22 comments · Claudia SahmStay-At-Home Macro (SAHM)My goal is to make economic policy and macroeconomics better.By Claudia Sahm

Brad DeLong here: I understand that to stay court-acceptable in the finance-guru discourse in which she swims, Claudia Sahm has to pretend that Kevin Warsh is making communication mistakes rather than doing exactly what he intends to do.

But the rest of us do not have to do that! We do not have to pretend! We can say what is going on! Which is that, to improve the American economy, the single best thing Warsh could do is resign immediately! Sober probity is something a Fed Chair needs, and that someone like him who campaigned for the job inside the White House by doing a Trump Lickspittle cosplay act cannot regain.

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