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As Tversky and Kahneman have explained, “Chance is commonly viewed as a self-correcting process in which a deviation in one direction induces a deviation in the opposite direction to restore the equilibrium. In fact, deviations are not ‘corrected’ as a chance process unfolds, they are merely diluted.” 

Such contingency explains why sports provide the world’s best reality show. The better team does not win every game.

Its power, its meaning, and its joy are wrapped in its improbability. In retrospect, it seems destined. That the U.S. team was “born for this.” The truth is, despite the power and greatness of Brooks’ speech, it was anything but. 

As Stephen Jay Gould famously argued, were we able to recreate the experiment of life on Earth a million different times, nothing would ever be the same, because evolution relies upon randomness. Indeed, the essence of history is contingency.

Mauboussin describes the “paradox of skill” as follows: “As skill improves, performance becomes more consistent, and therefore luck becomes more important.” In investing, therefore (and for example), as the population of skilled investors has increased, the variation in skill has narrowed, making luck increasingly important to outcomes.

All-time great teams still lose about one out of every three games, all to inferior teams, demonstrating that winning baseball games involves a lot of luck.

Since mean reversion establishes that the expected value of the whole season is roughly 50:50 (or slightly above or below that level), a 60 percent winning percentage being really good means that there is a lot of randomness built into baseball outcomes.

Luck matters. A lot. Yet, we tend dramatically to underestimate the role of randomness in the world. 

The self-serving bias is our tendency to see the good stuff that happens as our doing (“we worked really hard and executed the game plan well”) while the bad stuff isn’t our fault (“It just wasn’t our night” or “we simply couldn’t catch a break” or “we would have won if the umpiring hadn’t been so awful”). Thus, desirable results are typically due to our skill and hard work — not luck — while lousy results are outside of our control and the offspring of being unlucky.

Michael Mauboussin’s The Success Equation seeks to untangle elements of luck and skill in sports, investing, and business

Randomness rules.

the ever-increasing aggregate skill (supplemented by massive computing power) of the investment world has come largely to cancel itself out.

Meanwhile, Smith argues that effort and repetition mean a great deal to athletic success, but that innate talent, which cannot be taught, means even more. Thus practice — even perfect practice — does not make perfect.

 randomness explains why the best team or player doesn’t always win, even though the best will tend to win more often. Being very good merely improves the odds of success. It doesn’t guarantee it. 

we should all recognize that the outcomes in many activities in life combine elements of both skill and luck. Like baseball, investing is one of these. Understanding the relative contributions of luck and skill can help us assess past results and, more importantly, anticipate future results, a point to which Mauboussin pays particular attention.

Lady Luck is crucial to investment outcomes. There is no getting around it. Managing one’s portfolio so as to benefit the most from good luck and (even more importantly) to get hurt the least by bad luck are the keys to investment management. Doing so well is a remarkable skill, but not the sort of skill that’s commonly assumed, even (especially!) by professionals.

In the markets, the average investor underperforms due to costs alone. Poker is similar on account of the house’s rake. Yet most investors — like most poker players and most people generally, due to optimism bias — think they are better (and often much better) than the norm

In a “quasi-experimental” study, researchers set out to examine these questions in poker. They got together a group of both expert and novice poker players to play fixed games, meaning that the players received hands that the researchers had set up – without the knowledge of the players – to test how things would go under various scenarios. The results revealed that while the cards dealt (luck) largely predicted the winner, skill was crucial to reducing losses when players were dealt a bad hand. That’s a true if unsurprising result as far as it goes. But the conclusion of the study (“that poker should be regarded as a game of chance”) is clearly overstated.

It’s surely true that over the short term, luck dominates skill in poker. However, over longer and longer periods of time – a much larger database of hands – a slight skill advantage will result in a positive win rate because no player will have better cards in the aggregate. In other words, given enough time, luck cancels itself out.

As Silver argues in The Signal and the Noise, especially when the skill differential is not great, the interesting question is how long it will take for skill to win out.

consistent with the study – the primary reason is that the expert player makes fewer mistakes. Science seeks the truth by uncovering and discarding what is false. What’s left is likely to be true.

As noted above, we all like to think that our successes are earned and that only our failures are due to luck – bad luck. But the old expression – it’s better to be lucky than good – is at least partly true. That said, it’s best to be lucky *and* good. As a consequence, in all probabilistic fields (which is nearly all of them), the best performers dwell on process and diversify their bets. You should do the same.

what we should already know – market success (however defined), especially over the relatively short run, is more a matter of luck than of skill.

nvestment performance data support this idea unequivocally. As Charley Ellis has shown, “research on the performance of institutional portfolios shows that after risk adjustment, 24% of funds fall significantly short of their chosen market benchmark and have negative alpha, 75% of funds roughly match the market and have zero alpha, and well under 1% achieve superior results after costs — a number not statistically significantly different from zero.” 

As Silver emphasizes in The Signal and the Noise, we readily overestimate the degree of predictability in complex systems [and t]he experts we see in the media are much too sure of themselves (I wrote about this problem in our industry from a slightly different angle…). Much of what we attribute to skill is actually luck.

Plan accordingly.

So it is that mobile phone bills in the US are on average $100 a month, twice that of France and Germany, with the same story in broadband

Profits per passenger airline mile in the US are twice those in Europe.

US healthcare is impossibly expensive, with drug companies fixing prices twice as high or even higher than those in Europe; health spending is 18% of GDP.

Google, Amazon and Facebook have been allowed to become supermonopolies, buying up smaller challengers with no obstruction.

Because prices stay high, wages buy less, so workers’ lifestyles, unless they borrow, get squeezed in real terms while those at the top get paid ever more with impunity. Inequality escalates to unsupportable levels. Even life expectancy is now falling across the US

why has this happened now? Philippon has a deadly answer. A US political campaign costs 50 times more than one in Europe in terms of money spent for every vote cast. But this doesn’t just distort the political process. It is the chief cause of the US economic crisis.

Corporations want a return on their money, and the payback is protection from any kind of regulation, investigation or anti-monopoly policy that might strike at their ever-growing market power

this is systemic; how both at federal and state level ever higher campaign donations are correlated with ever fewer actions against monopoly, price fixing and bad corporate behaviour.

In Europe, the reverse is true. It is much harder for companies to buy friendly regulators. The EU’s competition authorities are much more genuinely politically independent than those in the US

As a result, it is Europe, albeit with one or two laggards such as Italy, that is bit by bit developing more competitive markets, more innovation and more challenge to incumbents while at the same time sustaining education and social spending so important to ordinary people’s lives

The EU’s regulations are better thought out, so in industry after industry it is becoming the global standard setter. Its corporate governance structures are better.

to complete the picture, Christine Lagarde, the incoming president of the European Central Bank, in the most important pronouncement of the year, said the environment would be at the heart of European monetary policy. In other words, the ECB is to underwrite a multitrillion-euro green revolution. In short – bet on Europe not the US.

Last month, Trump also signed a bill into law that raised the legal age for buying tobacco products to 21 from 18.

U.S. natural gas is far less damaging to the environment than coal. It has become so cheap that it is displacing coal in electricity generation, driving down emissions. To others, Cove Point is an environmental catastrophe. Natural gas is still a fossil fuel, and burning it releases lots of greenhouse-gas emissions, which cause climate change. Both arguments are right.

society must eliminate its carbon dependency. It cannot burn vast amounts of any fossil fuel for “decades and decades,” as Mr. Farrell hopes, unless there is a revolution in emissions capture technology. Even in the short term, U.S. emissions are rising, despite the restraint that stepped-up natural-gas burning has provided. The government must demand more change, more quickly.

One objection is that carbon pricing is not powerful enough. The European Union’s carbon pricing program has not worked well. But that is a failure of design and political will. A carbon price equal to the challenge would start high and rise higher, sending a much stronger price signal.

carbon pricing is still the best first-line policy

A high-enough carbon price would shape millions of choices, small and large, about what to buy, how to invest and how to live that would result in substantial emissions cuts. People would prioritize the easiest changes, minimizing the costs of the energy transition. With a price that steadily rose, market forces would steadily wring carbon dioxide out of the economy — without the government trying to dictate exactly how, wasting money on special-interest boondoggles.

The Intergovernmental Panel on Climate Change found last year that an average carbon price between 2030 and the end of the century of $100, $200 or even $300 per ton of carbon dioxide would result in huge greenhouse-gas emissions cuts, could restrain warming to the lowest safety threshold of 1.5 degrees Celsius and would almost certainly prevent the world from breaching the traditional warming limit of 2 degrees Celsius

Republicans never embraced the market-based idea, even though conservative economists admit its appeal, because they never accepted the need to act at all. Some environmentalists, meanwhile, are increasingly wary of carbon pricing. The Democrats’ Green New Deal, which is noncommittal on the policy, reflects the accelerating drift from the obvious.

A third objection is that carbon pricing is politically impossible, because it reveals the cost of fighting global warming in the prices people pay

Another criticism is that carbon pricing hurts the poor, who would suffer most when prices rose. But the revenue from carbon pricing could be recycled back to Americans in a progressive way, and most people would end up whole or better off.

This is a leadership challenge, not a policy challenge. More than 40 governments globally, including several states, have found the political will to embrace carbon pricing programs, which is the only option that would plausibly be bipartisan.

One objection does have merit: Though carbon pricing would spur huge change in infrastructure and power generation, that alone would not be enough. It would not stimulate all the innovation the nation needs in the climate fight, nor would it change behaviors in circumstances where the desired price signal is muted or nonexistent

Foreign aid to prevent deforestation could be among the most cost-effective climate-preserving measures. Helping other countries to replace archaic cooking stoves that produce noxious fumes would help cut emissions and improve quality of life across the developing world.

, economists know that companies that invest in research and development do not get rewarded for the full social value of their work. Others benefit from their innovations without paying. Consequently, firms do not invest in research as much as society should want

It would take only a small fraction of the revenue a carbon pricing system would produce to fund a much more ambitious clean-energy research agenda. Basic scientific research and applied research programs such as ARPA-E should be scaled up dramatically

The government must also account for the fact that not all greenhouse-gas emissions come from burning the fuels that a carbon pricing program would reach — coal, oil and gas. How would the government charge farmers for the methane their cows emit or for the greenhouse gases released when they till their soil? How about emissions from cement, ammonia and steel production? The federal government would have to tailor programs to the agricultural and industrial sectors, which might include judicious use of incentives and mandates.

only government can ensure adequate mass transit options. Local governments could help with zoning laws to encourage people to live in denser, more walkable communities. The federal government should also press automakers to steadily improve fuel efficiency.

That starts with making sure that emissions-cutting efforts at home do not have unintended consequences. If the United States puts a price on greenhouse-gas emissions, other countries would lure U.S. manufacturers with the promise of lax environmental rules. Relocated manufacturers could then export their goods to the United States. The net effect would be no benefit for the planet but fewer U.S. manufacturing jobs.

One response is a kind of tariff on goods entering the country from places with weaker carbon-dioxide policies. That would both eliminate the incentive to offshore manufacturing and encourage countries to strengthen their own rules.

Participating in the agreement would give the United States a forum — and a basis — to press other nations to reduce emissions.

Start with carbon pricing. Then fill in the gaps.

There are a lot of bad ideas out there.

The Green New Deal that some Democrats have embraced is case in point. In its most aggressive form, the plan suggests the country could reach net-zero greenhouse-gas emissions by 2030, an impossible goal

that would be more spent every three years than the total amount the country spent on World War II.

At the same time, the Democratic plan would guarantee every American “high-quality health care” and “a job with a family-sustaining wage, adequate family and medical leave, paid vacations, and retirement security.” These expensive aspirations, no matter how laudable, would do nothing to arrest greenhouse-gas emissions.

Massive social reform will not protect the climate. Marshaling every dollar to its highest benefit is the strongest plan.

as the federal government has left it to states to determine what to do with the vaccines it ships to them, and with some states pushing decision-making to local health departments and hospitals, the process has gone far from smoothly.

“There may have been an expectation from Operation Warp Speed or others that we’d give everyone the vaccine overnight.…It was a logistics equation for them. If you’ve been in vaccines for a long time, you know that’s the easy part. Getting it into actual arms is the hard part.”

Sen. Mitt Romney (R., Utah) criticized the vaccine rollout, saying in a statement that the lack of a comprehensive federal plan to be shared with states “is as incomprehensible as it is inexcusable.”

Public health officials and states say uptake is lagging for several reasons, beginning with holiday seasons that have kept staff of hospitals and nursing homes away from work. They also note they are facing high percentages of people, including some health-care workers, who are skeptical of taking the shots.

Hospitals and other sites are staggering appointments to avoid pulling too many workers from caring for patients amid a nationwide surge in Covid-19 cases, officials say. Administration of the vaccines also takes more time than a typical flu shot, particularly since they are being done in a socially distant way and may be preceded by a Covid-19 test.

Different state policies have led to confusion and shipment delays for hospitals, said Michael Wascovich, vice president of field pharmacy services for Premier Inc., a group purchasing organization whose members include 4,100 hospitals, 80% of which received doses.

“Every state is doing what they want to do,” he said. “You could be in Philadelphia and it’s completely different across the river if you’re in Trenton or Camden.”

Many states are following CDC guidelines to start with front-line medical workers and people in long-term care facilities, but not all. Florida Gov. Ron DeSantis on Dec. 23 extended eligibility to people aged 65 and older. Because each county and hospital in the state implemented its own approach, many people didn’t know whether to call, log on or show up in person to secure a spot.

CVS has begun administering doses at nursing homes and facilities in 48 states and Washington, D.C., with most eligible residents agreeing to be vaccinated, said Chris Cox, a CVS executive who is overseeing the vaccination rollout for the pharmacy chain.

In some cases, residents haven’t been vaccinated because of active outbreaks at facilities, while other facilities have taken longer than others to schedule their vaccination clinics, a challenge exacerbated by the holiday season, Mr. Cox said.

As a former central banker, Rajan gives special attention to the community’s role in financial markets and goes so far as to defend long-ago prohibitions on usury.

On one page, Rajan recommends that “powers should stay at the most decentralized level consistent with their effective use,” but on the next he declares that “when inclusiveness goes up against localism, inclusiveness should always triumph.”

Rajan’s real aim seems to be movement “toward one borderless world,” with stronger communities a perhaps helpful means to that end

A 3% mortgage might end up in a 2% pool. That’s because to further standardize the loan, parts of the interest go to pay for other transformation services.

In an economy where lots of people are missing payments, that can bite. The surge in payment deferrals during the pandemic, for example, fell hard on servicers.

A big way rate risk manifests is that speed at which people prepay. This in turn can affect what investors are willing to pay, because securities derived from those mortgages essentially become shorter-lived. So even as originators enjoy the benefits of volume when lots of people are refinancing, they might earn less when selling mortgages. Of course, when the Federal Reserve is buying mortgage securities, and when rates on other fixed-income assets are so low, originators’ profits selling mortgages can remain quite large.

During this time, eight American presidents assumed, or hoped, that China would eventually bend to what were considered the established rules of modernization: Prosperity would fuel popular demands for political freedom and bring China into the fold of democratic nations. Or the Chinese economy would falter under the weight of authoritarian rule and bureaucratic rot.

China’s Communist leaders have defied expectations again and again. They embraced capitalism even as they continued to call themselves Marxists. They used repression to maintain power but without stifling entrepreneurship or innovation. Surrounded by foes and rivals, they avoided war, with one brief exception, even as they fanned nationalist sentiment at home. And they presided over 40 years of uninterrupted growth, often with unorthodox policies the textbooks said would fail.

There is no simple explanation for how China’s leaders pulled this off. There was foresight and luck, skill and violent resolve, but perhaps most important was the fear — a sense of crisis among Mao’s successors that they never shook, and that intensified after the Tiananmen Square massacre and the collapse of the Soviet Union.

China’s Communists studied and obsessed over the fate of their old ideological allies in Moscow, determined to learn from their mistakes. They drew two lessons: The party needed to embrace “reform” to survive — but “reform” must never include democratization.

China has veered between these competing impulses ever since, between opening up and clamping down, between experimenting with change and resisting it, always pulling back before going too far in either direction for fear of running aground.

The careers of these men from Moganshan highlight an important aspect of China’s success: It turned its apparatchiks into capitalists.

Party leaders called this go-slow, experimental approach “crossing the river by feeling the stones” — allowing farmers to grow and sell their own crops, for example, while retaining state ownership of the land; lifting investment restrictions in “special economic zones,” while leaving them in place in the rest of the country; or introducing privatization by selling only minority stakes in state firms at first.

Mikhail Gorbachev, the last leader of the Soviet Union, tried to break the hold of these bureaucrats on the economy by opening up the political system. Decades later, Chinese officials still take classes on why that was a mistake. The party even produced a documentary series on the subject in 2006, distributing it on classified DVDs for officials at all levels to watch.

Afraid to open up politically but unwilling to stand still, the party found another way. It moved gradually and followed the pattern of the compromise at Moganshan, which left the planned economy intact while allowing a market economy to flourish and outgrow it.

American economists were skeptical. Market forces needed to be introduced quickly, they argued; otherwise, the bureaucracy would mobilize to block necessary changes. After a visit to China in 1988, the Nobel laureate Milton Friedman called the party’s strategy “an open invitation to corruption and inefficiency.”

The United States and Japan, both routinely vilified by party propagandists, became major trading partners and were important sources of aid, investment and expertise

At the same time, the party invested in education, expanding access to schools and universities, and all but eliminating illiteracy

mainland China now produces more graduates in science and engineering every year than the United States, Japan, South Korea and Taiwan combined.

In cities like Shanghai, Chinese schoolchildren outperform peers around the world. For many parents, though, even that is not enough. Because of new wealth, a traditional emphasis on education as a path to social mobility and the state’s hypercompetitive college entrance exam, most students also enroll in after-school tutoring programs — a market worth $125 billion, according to one study, or as much as half the government’s annual military budget.

party made changes after Mao’s death that fell short of free elections or independent courts yet were nevertheless significant

The party introduced term limits and mandatory retirement ages, for example, making it easier to flush out incompetent officials. And it revamped the internal report cards it used to evaluate local leaders for promotions and bonuses, focusing them almost exclusively on concrete economic targets.

These seemingly minor adjustments had an outsize impact, injecting a dose of accountability — and competition — into the political system, said Yuen Yuen Ang, a political scientist at the University of Michigan. “China created a unique hybrid,” she said, “an autocracy with democratic characteristics.”

They were rewarded with soaring tax revenues and opportunities to enrich their friends, their relatives and themselves. A wave of officials abandoned the state and went into business. Over time, the party elite amassed great wealth, which cemented its support for the privatization of much of the economy it once controlled.

The private sector now produces more than 60 percent of the nation’s economic output, employs over 80 percent of workers in cities and towns, and generates 90 percent of new jobs

the bureaucrats stay out of the way. “I basically don’t see them even once a year,” said James Ni, chairman and founder of Mlily, a mattress manufacturer in eastern China. “I’m creating jobs, generating tax revenue. Why should they bother me?”

even as he wraps himself in Deng’s legacy, Mr. Xi has set himself apart in an important way: Deng encouraged the party to seek help and expertise overseas, but Mr. Xi preaches self-reliance and warns of the threats posed by “hostile foreign forces.

China tapped into a wave of globalization sweeping the world and emerged as the world’s factory. China’s embrace of the internet, within limits, helped make it a leader in technology. And foreign advice helped China reshape its banks, build a legal system and create modern corporations.

It was a remarkable act of reinvention, one that eluded the Soviets. In both China and the Soviet Union, vast Stalinist bureaucracies had smothered economic growth, with officials who wielded unchecked power resisting change that threatened their privileges.

Mr. Lin was part of a torrent of investment from ethnic Chinese enclaves in Hong Kong, Taiwan, Singapore and beyond that washed over China — and gave it a leg up on other developing countries

The timing worked out for China, which opened up just as Taiwan was outgrowing its place in the global manufacturing chain. China benefited from Taiwan’s money, but also its managerial experience, technology and relationships with customers around the world. In effect, Taiwan jump-started capitalism in China and plugged it into the global economy.

Before long, the government in Taiwan began to worry about relying so much on its onetime enemy and tried to shift investment elsewhere. But the mainland was too cheap, too close and, with a common language and heritage, too familiar.

Now Taiwan finds itself increasingly dependent on a much more powerful China, which is pushing ever harder for unification, and the island’s future is uncertain

Many in Washington predicted that trade would bring political change. It did, but not in China. “Opening up” ended up strengthening the party’s hold on power rather than weakening it. The shock of China’s rise as an export colossus, however, was felt in factory towns around the world.

In the United States, economists say at least two million jobs disappeared as a result, many in districts that ended up voting for President Trump.

The pro-democracy movement in 1989 was the closest the party ever came to political liberalization after Mao’s death, and the crackdown that followed was the furthest it went in the other direction, toward repression and control. After the massacre, the economy stalled and retrenchment seemed certain. Yet three years later, Deng used a tour of southern China to wrestle the party back to “reform and opening up” once more. Many who had left the government, like Mr. Feng, suddenly found themselves leading the nation’s transformation from the outside, as its first generation of private entrepreneurs.

The fear is that Mr. Xi is attempting to rewrite the recipe behind China’s rise, replacing selective repression with something more severe.

The internet is an example of how it has benefited by striking a balance. The party let the nation go online with barely an inkling of what that might mean, then reaped the economic benefits while controlling the spread of information that could hurt it.

“The basic problem is, who is growth for?” said Mr. Xu, the retired official who wrote the Moganshan report. “We haven’t solved this problem.”

“The cost of censorship is quite limited compared to the great value created by the internet,” said Chen Tong, an industry pioneer. “We still get the information we need for economic progress.”

China is not the only country that has squared the demands of authoritarian rule with the needs of free markets. But it has done so for longer, at greater scale and with more convincing results than any other.

Washington is maneuvering to counter Beijing’s growing influence around the world, warning that a Chinese spending spree on global infrastructure comes with strings attached.

both left and right in America have portrayed China as the champion of an alternative global order, one that embraces autocratic values and undermines fair competition. It is a rare consensus for the United States, which is deeply divided about so much else, including how it has wielded power abroad in recent decades — and how it should do so now.

Mr. Xi, on the other hand, has shown no sign of abandoning what he calls “the great rejuvenation of the Chinese nation.” Some in his corner have been itching to take on the United States since the 2008 financial crisis and see the Trump administration’s policies as proof of what they have always suspected — that America is determined to keep China down.

there is also widespread anxiety over the new acrimony, because the United States has long inspired admiration and envy in China, and because of a gnawing sense that the party’s formula for success may be faltering.

Prosperity has brought rising expectations in China; the public wants more than just economic growth. It wants cleaner air, safer food and medicine, better health care and schools, less corruption and greater equality. The party is struggling to deliver, and tweaks to the report cards it uses to measure the performance of officials hardly seem enough.

Now, many companies assign hundreds of employees to censorship duties — and China has become a giant on the global internet landscape.

Mr. Xi himself has acknowledged that the party must adapt, declaring that the nation is entering a “new era” requiring new methods. But his prescription has largely been a throwback to repression, including vast internment camps targeting Muslim ethnic minorities. “Opening up” has been replaced by an outward push, with huge loans that critics describe as predatory and other efforts to gain influence — or interfere — in the politics of other countries. At home, experimentation is out while political orthodoxy and discipline are in.

n effect, Mr. Xi seems to believe that China has been so successful that the party can return to a more conventional authoritarian posture — and that to survive and surpass the United States it must

Certainly, the momentum is still with the party. Over the past four decades, economic growth in China has been 10 times faster than in the United States, and it is still more than twice as fast. The party appears to enjoy broad public support, and many around the world are convinced that Mr. Trump’s America is in retreat while China’s moment is just beginning

The world thought it could change China, and in many ways it has. But China’s success has been so spectacular that it has just as often changed the world — and the American understanding of how the world works.

There is no simple explanation for how China’s leaders pulled this off. There was foresight and luck, skill and violent resolve, but perhaps most important was the fear — a sense of crisis among Mao’s successors that they never shook, and that intensified after the Tiananmen Square massacre and the collapse of the Soviet Union.

But China had a strange advantage in battling bureaucratic resistance. The nation’s long economic boom followed one of the darkest chapters of its history, the Cultural Revolution, which decimated the party apparatus and left it in shambles. In effect, autocratic excess set the stage for Mao’s eventual successor, Deng Xiaoping, to lead the party in a radically more open direction.

In other words, he appears to have less use for the “opening up” part of Deng’s slogan.

Now Mr. Xi is steering the party toward repression again, tightening its grip on society, concentrating power in his own hands and setting himself up to rule for life by abolishing the presidential term limit. Will the party loosen up again, as it did a few years after Tiananmen, or is this a more permanent shift? If it is, what will it mean for the Chinese economic miracle?

The question now is whether it can sustain this model with the United States as an adversary rather than a partner.

For many patients and their families, hospital fees are already complicated, opaque and stressful. The Kingsburys show just how little control consumers have.

None of this has been clear to consumers—until this year. Hospitals and insurers have long set prices through confidential negotiations. Starting Jan. 1, hospitals were required to make their prices public under a Trump administration policy that sought to expose the sector’s pricing to greater market pressure.

Compliance with the rule has been spotty, but the available data show that prices vary widely among the plans that negotiate contracts with hospitals. While the data remains difficult for consumers to use, knowing the full range of rates could ultimately help patients negotiate their bills.

Healthcare economists note that prices in other sectors, such as airlines, can also vary for the same service, but hospitals’ steep prices mean the dollar difference between the highest and lowest rates can amount to tens of thousands of dollars. “The order of magnitude of healthcare costs is different,”

Even within an insurance plan, prices aren’t consistently low or high. A plan’s prices for one service can be among the lowest a hospital negotiates, but among the highest for another,

A person insured by Minnesota-based HealthPartners would have received the most favorable price for a hospital stay because of back problems, but the cost of an emergency room visit with the same insurance was among the highest, according to the Journal’s analysis of the data.

When insurance didn’t cover some treatments, the Journal found, Avera McKennan Hospital set its own prices that ranked among the highest anywhere in the U.S. in the Journal’s analysis.

The LifeShield price of about $780 amounted to a discount of 53% off the hospital’s charge. Ms. Kingsbury paid all of it because her plan’s benefits didn’t cover the rest of the bill. The insurance was exempt from some federal rules that protect healthcare consumers. LifeShield didn’t respond to requests for comment.

Ms. Kingsbury earned roughly $17,700 last year, tax records reviewed by the Journal show. Her husband, who is retired, received about $22,800 in yearly income from Social Security. They bought insurance in 2019 from LifeShield National Insurance Co.

The range of prices is the product of a complex interplay of multiple payers and hospitals, and a lack of competitive pressure to hold down costs, economists said. Rates have been determined by trade-offs at the bargaining table between hospitals and insurers—such as an offer of cheaper prices in return for more business—and by market power, with higher prices where hospitals dominate.

Hospitals and insurers ultimately bargain for prices to meet financial targets for revenue and profit, said David Dillon, a healthcare actuary with the consulting firm Lewis & Ellis Inc. “It is kind of as simple as both sides of the table have their revenue requirements,” he said.

“The market for healthcare just doesn’t look at all like the market for tomatoes because somebody else is literally negotiating and purchasing on your behalf,” Mr. Cooper said.

The cost for the scan under LifeShield was $1,497, almost half the price charged under Avera. However, Ms. Kingsbury’s plan at LifeShield was exempt from Affordable Care Act rules to prevent gaps in coverage. LifeShield didn’t cover this scan. So Avera charged Ms. Kingsbury the price it sets for patients not covered by insurance, at $8,451, one of the highest prices in the Journal’s analysis of publicly available rates nationwide.

“Healthcare is a service and it can be an expensive service, especially for a serious condition. That’s why health insurance exists,” said Avera spokeswoman Ms. Meyers. “It is important for consumers to understand what they are buying and the coverage it provides.”

The Journal compared Avera McKennan’s 2019 PET CT price for Ms. Kingsbury with the price Medicare would pay, as calculated by price-comparison startup Turquoise Health Co. The hospital’s cash price for Ms. Kingsbury in 2019 was 5.7 times the Medicare rate, according to the Journal’s analysis using newly public data collected by Turquoise. That’s one of the highest multiples of any of the more than 1,200 U.S. hospitals in the analysis.

as the production of food and material goods centralized and rapidly expanded, commerce reached a scale that the country’s existing stores were ill-equipped to handle, according to the historian Susan Strasser, the author of Satisfaction Guaranteed: The Making of the American Mass Market. Manufacturers needed ways to distribute their newly enormous outputs and educate the public on the wonder of all their novel options. Americans, in short, had to be taught how to shop.

In 2019, one in five American workers was employed in retail, food service, or hospitality; even more are now engaged in service work of some kind.

This dynamic is exacerbated by the fact that the United States has more service workers than ever before, doing more types of labor, spread thin across the economy

Customers might not have been able to afford a household staff to do their bidding like the era’s truly wealthy, but corporate stores offered them a little taste of what that would be like. The middle class began to see itself as the small-time beneficiaries of industrialization’s barons.

With these goals in mind, Leach writes, customer service was born. For retailers’ tactics to be successful, consumers—or guests, as department stores of the era took to calling them—needed to feel appreciated and rewarded

From 1870 to 1910, the number of service workers in the United States quintupled. It’s from this morass that “The customer is always right” emerged as the essential precept of American consumerism—service workers weren’t there just to ring up orders

they were there to fuss and fawn, to bolster egos, to reassure wavering buyers, to make dreams come true.

they were also quite intentionally building something far grander: class consciousness. Leach writes that the introduction of shopping was fundamental to forming middle-class identity at a particularly crucial moment, as the technological advances of the Gilded Age helped create the American office worker as we now know it.

Retailers won over this growing middle class by convincing its members that they were separate from—and opposed to—industrial workers and their distrust of corporate power,

For many of these workers, the difficulty of finding non-service employment enables companies to pay low wages and keep their prices artificially low, which consumers generally like as long as they don’t have to think about what makes it possible. In theory, these conditions are supposed to encourage better performance on the part of the worker; in practice, they also encourage cruelty on the part of the consumer.

Previously confined to a few lavish European-owned hotels in America, tipping “aristocratized consumption,

Department-store magnates alleviated these concerns by linking department stores to the public good. Retailers started inserting themselves into these communities as much as possible, Leach writes, turning their enormous stores into domains of urban civic life. They hosted free concerts and theatrical performances, offered free child care, displayed fine art, and housed restaurants, tearooms, Turkish baths, medical and dental services, banks, and post offices. They made splashy contributions to local charities and put on holiday parades and fireworks shows. This created the impression that patronizing their stores wouldn’t just be a practical transaction or an individual pleasure, but an act of benevolence toward the orderly society those stores supported.

In the 150 years that American consumerism has existed, it has metastasized into almost every way that Americans construct their identities. Today’s brands insert themselves into current events, align themselves with causes, associate patronage of their businesses with virtue and discernment and success.

Most Americans now expect corporations to take a stand on contentious social and political issues; in return, corporations have even co-opted some of the language of actual politics, encouraging consumers to “vote with their dollars” for the companies that market themselves on the values closest to their own.

For Americans in a socially isolating culture, living under an all but broken political system, the consumer realm is the place where many people can most consistently feel as though they are asserting their agency.

Being corrected by a salesperson, forgotten by a bartender, or brushed off by a flight attendant isn’t just an annoyance—for many people, it is an existential threat to their self-understanding.

“The notion that at the restaurant, you’re better than the waiters, it becomes part of the restaurant experience,” and also part of how some patrons understand their place in the world. Compounding this sense of superiority is the fact that so many service workers are from historically marginalized groups—the workforce is disproportionately nonwhite and female.

Because consumer identities are constructed by external forces, Strasser said, they are uniquely vulnerable, and the people who hold them are uniquely insecure

If your self-perception is predicated on how you spend your money, then you have to keep spending it, especially if your overall class status has become precarious, as it has for millions of middle-class people in the past few decades

Although underpaid, poorly treated service workers certainly exist around the world, American expectations on their behavior are particularly extreme and widespread, according to Nancy Wong, a consumer psychologist and the chair of the consumer-science department at the University of Wisconsin. “Business is at fault here,” Wong told me. “This whole industry has profited from exploitation of a class of workers that clearly should not be sustainable.”

Tipping ratcheted up the level of control that members of the middle class could exercise over the service workers beneath them: Consumers could deny payment—effectively, deny workers their wages—for anything less than complete submission.

Modern businesses have invented novel ways to exacerbate conflicts between their customers and their workers.

A big problem at airlines and hotels in particular, Wong said, is what’s called the “customer relationship management” model. CRM programs, the first and most famous of which are frequent-flyer miles, are fabulously profitable; awarding points or miles or bucks encourages people not only to increase the size and frequency of their purchases, but also to confine their spending to one airline or hotel chain or big-box store.

Higher-spending customers access varying levels of luxury and prestige, often in full view of everyone else. Exposure to these consumer inequalities has been found to spark antisocial behavior in those who don’t get to enjoy their perks, the classic example of which is air rage

Workers must do what the sociologist Arlie Russell Hochschild, in her 1983 book, The Managed Heart, identified as “emotional labor.”

Workers must stifle their natural emotional reactions to, in the case of those in the service industry, placate members of the consumer class. These workers are alienated from their own emotional well-being, which can have far-reaching psychological consequences—over the years, research has associated this kind of work with elevated levels of stress hormones, burnout, depression, and increased alcohol consumption.

No one, not entrepreneurs nor Whitehall officials, can predict the state of the energy sector in 30 years’ time.

But discussions over the cost are almost irrelevant because centralising all these decisions will shut down the market discovery process, meaning we’ll never know if cheaper, better routes were available.

We still don’t have a clear estimate from the government on the cost of reaching net zero by 2050, though the Office for Budget Responsibility put the total cost at £1.4 trillion in July. The Treasury this week warned UK households and businesses face the prospect of new taxes in the coming years to help meet the targe

Rather than gazing into a crystal ball, his officials would abandon their obsession with specific choices or sectors.

opportunity costs affect economic activity in unseen ways. Money spent on pumps today is money that cannot be spent on hydrogen boilers tomorrow, which may be a better solution. Jobs filled in green sectors are jobs unfilled elsewhere.

Perhaps Johnson should come down on the side of a border-adjusted carbon tax. It arguably offers the most cost-effective lever to reduce carbon emissions at the speed and scale necessary.

there’s no indication so far that anything this reasonable will replace current decision-making.

Support may soon give way to hostility if government remains stubbornly committed to its current approach.

The idea that, if we are to halt climate change then we need to start doing things differently, is no longer a fringe view.

How did this happen? How did cultural globalization in the twentieth century travel along such a one-way path?

For the American delegates, the question belonged to the higher plane of moral principle. The delegation wanted to extend into the international sphere the classic liberal notion of press freedom, which would prohibit governments from censoring the news and enshrine the rights of journalists to access sources and to dispatch the news across borders.

Carlos Romulo, the legendary Philippine diplomat and journalist who had uncovered Japanese atrocities in his country, went so far as to call freedom of information the “touchstone of all the freedoms to which the UN is consecrated.” World War II had been horrifying in scale and severity; information barriers were believed to have played a part. Japan’s and Germany’s bids for autarky had insulated their citizens from global currents, incubated aggressive nationalism, and, from the perspective of American policymakers, driven the world into war.

The answer, Sam Lebovic’s new book, A Righteous Smokescreen: Postwar America and the Politics of Cultural Globalization, convincingly argues, largely comes down to American policy in the middle decades of the twentieth century.

But when 600 or so journalists, media magnates, and diplomats arrived in Geneva in 1948 to draft the press freedom clauses for both the U.N. Declaration of Human Rights and the International Covenant on Civil and Political Rights, definitional difficulties abounded. Between what the U.S. meant by “freedom of information” and what the rest of the world needed lay a vast expanse.

By 1949, American films made up around half of the European and Asian markets, 62 percent of the African market, 64 percent of the South American market, and three-quarters of the Central American and Pacific markets.

Back in Geneva, delegates from the global south pointed out these immense inequalities. S.A. Brelvi of India called for the wealthier nations to equitably allocate the “supplies of physical facilities and technical equipment for the dissemination of information between all countries.” But the American delegates refused the idea that global inequality itself was a barrier to the flow of information across borders. Besides, they argued, redistributive measures violated the sanctity of the press

The U.S. was able to strong-arm its notion of press freedom—a hybrid combining the American Constitution’s First Amendment and a consumer right to receive information across borders—at the conference, but the U.N.’s efforts to define and ensure the freedom of information ended in a stalemate.

The failure to redistribute resources, the lack of multilateral investment in producing more balanced international flows of information, and the might of the American culture industry at the end of the war—all of this amounted to a guarantee of the American right to spread information and culture across the globe.

But representatives of other states had more earthly concerns. The war had tilted the planet’s communications infrastructure to America’s advantage. In the late 1940s, for example, the U.S. consumed 63 percent of the world’s newsprint supply; to put it more starkly, the country consumed as much newsprint in a single day as India did over the course of a year. A materials shortage would hamper newspaper production across much of the world into at least the 1950s (though this did provide the fringe benefit of enabling political interference with the press: The CIA supplied Italian anti-Communist newspapers with newsprint in the lead-up to the 1948 election, while the U.S. occupation administration in Japan cut the allocation of newsprint to local Communist newspapers). The war had also laid low foreign news agencies—Germany’s Wolff and France’s Havas had disappeared entirely—and not a single news agency called the global south home. At the same time, America’s Associated Press and United Press International both had plans for global expansion,

The focus of A Righteous Smokescreen is broader. It is a study of both sides of the globalization ledger: As the U.S. exported its culture in astonishing amounts, it imported very little

it remained surprisingly cut off from the rest of the world. A parochial empire, but with a global reach.

Containment, Lebovic shows, wasn’t just a territorial strategy committed to holding back Soviet expansion into Europe and Asia. Rather, it began at the American border and it involved policing the flow of people and ideas that were potentially inimical to the American status quo

An Iron Curtain, to rejig Churchill’s famous speech about Soviet policies in Eastern Europe, had descended around the U.S.

can be seen in the American national security state’s efforts to block out “propaganda.”

Throughout most of the second half of the twentieth century, Americans had to seek government approval to purchase magazines, books, and even stamps from China, North Korea, Cambodia, Cuba, and Vietnam.

An untold number of parcels—untold because for several years of the program they didn’t have to notify would-be recipients that the government had decided to destroy their mail—never arrived at their American destination.

even without direct state interference, American culture had inward-looking tendencies

Few of the films shown in American cinemas were foreign (largely a result of the Motion Picture Production Code, which the industry began imposing on itself in 1934; code authorities prudishly disapproved of the sexual mores of European films)

Few television programs came from abroad (about 1 percent, in fact, in the early 1970s—compared to 12 percent in Britain and 84 percent in Guatemala)

Few newspapers subscribed to foreign news agencies. Even fewer had foreign correspondents. And very few pages in those papers were devoted to foreign affairs.

In 1910, nearly 15 percent of the American population had been born overseas, but by 1960, that portion shrank to only 5.4 percent. Similarly, bureaucrats in the burgeoning national security state kept a variety of radicals from entering and leaving the country. Since World War I, foreign anarchists, Communists, and others—ranging from German spies and saboteurs to Black internationalists—found the gate to the U.S. bolt-locked. Likewise, Americans whom the State Department identified as holding so-called “alien” beliefs were barred from the exits.

In-person contact with foreigners was limited, too, thanks to travel controls.

Two exhibitions, one in the U.S., the other in the Soviet Union: Yet neither artist could attend their own exhibition because of American border policies. The State Department had denied Picasso a visa back in 1950 on ideological grounds, and it refused to issue a passport to Kent because of his alleged sympathies for communism.

So-called “area restrictions” forbade all Americans from traveling to countries in the Communist bloc.

in the 1940s and ’50s, hundreds or even thousands of Americans—more precise data from the innards of the national security state is rather difficult to come by—were denied passports and many, many more never thought to apply for one in the first place, out of fear of what a background check might turn up.

(about half of all foreign scientists who sought to enter the U.S. in the early postwar years encountered visa difficulties).

how “actively engaged” was the U.S., really? The answer in Menand’s exploration of culture in the early Cold War is: very. Menand points to the rest of the world’s ravenous consumption of American entertainment as evidence, as well as how Americans “welcomed and adapted art, ideas, and entertainment from other countries”

as Louis Menand notes on the first page of his recent book, The Free World, it was an era in which “the United States was actively engaged with the rest of the world.”

in Lebovic’s telling, this was a narrow stream. A lot of its contents were foreign imports that had already been thoroughly Americanized.

The flow of foreign culture and ideas into the U.S. was so limited that building bridges with the rest of the world became an important impulse of the social movements of the 1960s and ’70s,

China’s drop was much much bigger; the Japan of the 80s was never the export machine people believed it to be. Both countries turned to investment in real estate and infrastructure as a replacement growth driver — although again, China did this much more than Japan did. Essentially, China did all the the things we typically think of Japan as having done 25 years earlier, but much more than Japan actually did them.

Yes, for those who were wondering, this does look a little bit like what happened to Japan in the 1990s

Already the country is not growing much faster than the G7, and as the ongoing real estate bust weighs on the economy, even that small difference may now be gone. The country’s surging auto industry is a bright spot, but won’t be big enough to rescue the economy from the evaporation of its primary growth driver.

Even if it manages to climb up to 40%, that’s still a fairly disappointing result — South Korea is at 71% and Japan at 65%

a re-acceleration would require a massive burst of productivity growth, which just seems unlikely.

That means China’s catch-up growth only took it to 30% of U.S. per capita GDP (PPP)

There’s one main argument that people make for a quick Chinese decline: rapid aging. But while I don’t want to wave this away, I don’t think it’s going to be as big a deal as many believe

This is another example of China’s peak being both awe-inspiring and strangely disappointing at the same time.

Now that China has hit its peak, will it decline? And if so, how much and how fast?

it seems likely that China’s growth will now slow to developed-country levels, or slightly higher, without much prospect for a sustained re-acceleration

when people contemplate Chinese decline, they’re not asking whether its economy will shrink; they’re asking whether its relative economic dominance and geopolitical importance will decrease.

If we just casually pattern-match on history, the answer would probably be “not for a long time”. Most powerful countries seem to peak and then plateau. Britain ruled the waves for a century.

U.S. relative power and economic dominance peaked in the 1950s, but it didn’t really start declining until the 2000s

Japan and Germany had their military power smashed in WW2, but remained economic heavyweights for many decades afterwards.

When the Roman Empire declined, it got a lot poorer. But in the modern economy, countries that decline in relative terms, and in geopolitical power, often get richer

he total fertility rate has been low since even before the one-child policy was implemented, but recently it has taken a nose-dive. Two years ago, the UN put it at 1.16, which is 40% lower than the U.S. and 22% lower than Europe

The country’s total population only started shrinking this year, but its young population started falling sharply 20 years ago, due to the echo of low fertility in the 80s. The most common age for a Chinese person is now about 50 years old, with another peak at 35:

The first reason is that power is relative, and China’s rivals have demographic issues of their own. The U.S., Europe, India and Japan all have higher fertility than China, but still below replacement level

demographics aren’t actually going to force Chinese power or wealth into rapid decline over the next few decades.

third of all, evidence suggests that population aging is really more of a persistent drag than a crisis or disaster.

Second, demographics won’t take away China’s biggest economic advantage, which is clustering and agglomeration effects. Asia is the world’s electronics manufacturing hub. It’s also by far the most populous region in the world, giving it the biggest potential market size

China will act as a key hub for that region, in terms of trade, supply chains, investment, and so on. China is shrinking, but Asia is not

As a result, there are suddenly many fewer Chinese people able to bear children, which is why the actual number of births in China has fallen by almost half since 2016:

we’d find that every percentage point of the senior population share that China gains relative to other countries might reduce its relative economic performance by about 1.15%. That’s not a huge number.

Now, if we look at the research, we find some estimates that are much larger than this — for example, Ozimek et al. (2018) look at specific industries and specific U.S. states, and find an effect on productivity that’s three times as large as the total effect on growth that I just eyeballed above. Maestas et al. (2022) look at U.S. states, and also find a larger effect. But Acemoglu and Restrepo (2017) look across countries and find no effect at all.

On top of that, there are plenty of things a country can do to mitigate the effects of aging. One is automation. China is automating at breakneck speed,

A second is having old people work longer; China, which now has higher life expectancy than the U.S., is well-positioned to do this.

Finally, aging will prompt China to do something it really needs to do anyway: build a world class health care system

this would help rectify the internal imbalances that Michael Pettis always talks about, shifting output from low-productivity real estate investment toward consumption.

if not aging, the only other big dangers to China are war and climate change.

To realize its full potential, Altasia will need integration — it will need some way to get Japanese and Korean and Taiwanese investment and technology to the vast labor forces of India, Indonesia, and the rest

the most likely outcome is that China sits at or near its current peak of wealth, power and importance through the middle of this century at least.

Altasia has more people and arguably more technical expertise than China. And it’s the only alternative location for the Asian electronics supercluster.

War was the big mistake that Germany made a century ago, so let’s hope China doesn’t follow in its footsteps.

The story of whether and how that complex web of investment, tech transfer, and trade develops will be the next great story of globalization.

But I think the very complexity of Altasia will lead to its own sort of adventure and excitement.

for Western companies looking for new markets, Altasia will potentially be more exciting than China ever was. The Chinese market delivered riches to some, but the government banned some products (especially internet services) and stole the technology used to make others. Ultimately, China’s billion consumers turned out to be a mirage for many. The economies and societies of Altasia, in comparison, are much more open to foreign products.

the money markets were not waiting for an act of faith in Laffer Curve fundamentalism after all. This was “Reaganism without the dollar.” Without the confidence afforded to the global reserve currency, the pound went into free fall.

Ms. Truss and Mr. Kwarteng seemed to have believed that by patching together all of the most radical policies of Thatcherism (while conveniently dropping the need for spending cuts), they would be incanting a kind of magic spell, an “Open sesame” for “global Britain.” This was their Reagan moment, their moment when, as their favorite metaphors put it, a primordial repressed force would be “unchained,” “unleashed” or “unshackled.”But as a leap of faith, it broke the diver’s neck.

As Thatcher herself put it, “Economics are the method; the object is to change the heart and soul.” Britain needed a leap of faith to restore itself.

While the Gen X Thatcherites didn’t scrimp on data, they also saw something ineffable at the root of British malaise. “Beyond the statistics and economic theories,” they wrote, “there remains a sense in which many of Britain’s problems lie in the sphere of cultural values and mind-set.”

“Britannia Unchained” expressed a desire to go back to the future by restoring Victorian values of hard work, self-improvement and bootstrapping.

They followed their idol not only in her antagonism to organized labor but also in her less-known fascination with Asian capitalism. In 2012’s “Britannia Unchained,” a book co-written by the group that remains a Rosetta Stone for the policy surprises of the last month, they slammed the Britons for their eroded work ethic and “culture of excuses” and the “cosseted” public sector unions. They praised China, South Korea, Singapore and Hong Kon

Thatcherites, known collectively as the ultras, gained fresh blood in the 2010s as a group of Gen Xers too young to experience Thatcherism in its insurgent early years — including the former home secretary Priti Patel, the former foreign secretary Dominic Raab, the former minister of state for universities Chris Skidmore, Mr. Kwarteng and Ms. Truss — attempted to reboot her ideology for the new millennium.

Over the subsequent four decades, Thatcherites at think tanks like the Institute of Economic Affairs and the Centre for Policy Studies (which Margaret Thatcher helped set up) described the struggle against both the Labour Party and the broader persistence of Socialism in the Communist and non-Communist world as a “war of ideas.”

Thatcherism began in the 1970s. Defined early as the belief in “the free economy and the strong state,” Thatcherism condemned the postwar British welfare economy and sought to replace it with virtues of individual enterprise and religious morality.

There’s something tragicomic, if not tragic, about capitalist revolutionaries Ms. Truss and Mr. Kwarteng laid low by the mechanisms of capitalism itself. Ms. Truss and Mr. Kwarteng may be the last of the Thatcherites, defeated by the very system they believed they were acting in fidelity to.

The world has just witnessed one of the most extraordinary political immolations of recent times. Animated by faith in a fantasy version of the free market, Prime Minister Liz Truss of Britain set off a sequence of events that has forced her to fire her chancellor of the Exchequer, Kwasi Kwarteng, and led her to the brink of being ousted by her own party.

Now, after the Peronista government of Alberto Fernández and Cristina Fernández de Kirchner has failed to halt the country’s economic decline, a new force among Argentina’s Generation Z is rising.

This time, it’s young men who are at the forefront. Milei is speaking for them.

An admirer of Donald Trump and former Brazilian president Jair Bolsonaro, Milei is campaigning on an Argentine version of “Drain the Swamp.” His aggressive style, outlandish comments and unusual presentation — he claims he hasn’t brushed that hair in years — have drawn millions of viewers to his videos and disrupted traditional politics

He has branded Pope Francis — the Argentine former Archbishop of Buenos Aires Jorge Bergoglio, the first South American pontiff — an “evil” leftist. Climate change, he says, is a “socialist lie.” He would hold a referendum to undo the three-year-old law that legalized abortion. He has called for creating a market for the sale of organs.

But he has also offered frustrated Argentines a break from the status quo: He has proposed shutting down the central bank, dollarizing the economy and taking a “chain saw” to government spending.

His attacks on the peso are already shocking the Argentine economy; the currency has taken a nose dive in the widely traded black market in recent weeks. The inflation rate has skyrocketed.

If Milei wins, it will likely be on the strength of the country’s young. Voters aged 18 to 29 account for a quarter of the electorate, and polls show they’re overwhelmingly inclined to vote for the iconoclast. That’s especially true for young men.

Coronel grew up watching the North American right-wing provocateurs Jordan Peterson, Ben Shapiro and Milo Yiannopoulos on a YouTube channel that translated their words into Spanish. “They were a fundamental part of my ideological awakening,” he said. But his greatest inspiration was Trump.

“We stopped listening to the intellectuals to listen to the politicians,” Coronel said.

“While everyone was focused on feminist demands and gay rights, there was a generation slowly starting to pay attention to Javier Milei.”

He decided to become an economist in 1989 during the early days of hyperinflation in Argentina. He worked as a risk analyst for Corporacion America, owned by one of Argentina’s billionaires, before leaping into television as a regular guest on shows.

Milei’s unconventional ideas and brash style — rants peppered with personal insults — was a TV hit. As the peso plunged and inflation skyrocketed, his economic theories began to find an audience.

He was elected to Congress in 2021 on pledges to tear the political elite down. He gained national prominence by raffling off his congressional salary each month.

Milei describes himself as a liberal-libertarian or a miniarchist. He supports limiting government to just a few functions — ideally, only security and justice — a night-watchman state.

He promises to slash the number of federal ministries from 18 to eight. He applies his free-market ideas to just about everything — he proposes loosening gun restrictions to “maximize the cost of robbery” — and letting the invisible hand of the market do the rest.

“Sometimes I have to pinch myself to ask whether I am living a dream or it’s a reality,” he told The Washington Post. “Because what Javier Milei proposes in politics hasn’t been heard in Argentina for 80 years.”

Milei’s originality is perhaps exactly why Gen Z is so transfixed by him. It’s a generation craving authenticity, Argentine political analyst Ana Iparraguirre said. “They see this guy telling it like it is,” she said. “I might not like that he’ll be selling guns in the streets, but at least this guy is not faking it.”

Most of his 1.4 million TikTok followers are younger than 24, according to his social media team. Iñaki Gutierrez, a 22-year old unpaid volunteer who manages his TikTok, said Milei managed to win the primaries in remote provinces “we didn’t even set foot in.” “TikTok was the answer,” Gutierrez said.

The fastest-growing social media site in Latin America has helped elect a wave of millennial presidents in the region, including Nayib Bukele in El Salvador and, last week, Daniel Noboa in Ecuador.

Milei’s TikTok posts offer Gen Z voters an outlet for rebellion against a system that they say is doing very little for them.

According to one recent survey, more than 65 percent of young voters say they would leave Argentina if they could.

“They feel they have no future,” Iparraguirre said. “If you’ve got nothing to lose you may as well try something different.”

Fragoso’s girlfriend, Victoria Alegre, 23, walking with him in a mall in Buenos Aires this week, said she thinks Milei is a machista who could roll back rights for women. Fragoso said he also dislikes the way Milei speaks about feminism. But he’s willing to overlook it, he said, to take a chance on something — anything — different.

“They said we were dangerous and that we needed to be quiet,” Milei shouted. “But we’re here, we fought the battle and we’re going to win!

The transformation of social media into mass media is largely because the rise of TikTok has demonstrated to every social-media company on the planet that people still really like things that can re-create the experience of TV

Advertisers also like things that function like TV, of course—after all, people are never more suggestible than when lulled into a sort of anesthetized mindlessness.

In this future, people who are good at making content with high production values will thrive, as audiences and tech company algorithms gravitate toward more professional content.

On these formerly-social platforms, whether content is coming from creators with better equipment and more skills, or Hollywood studios testing the waters, hardly matters. In the end, it will all look remarkably similar to the consumer.

It will look

like flipping through cable channels does, only our thumb on the remote has been replaced by our thumb on the screen of our phone, swiping from one TikTok, YouTube Short, or Instagram Reel to the next.

A telling indicator is the rise of a new kind of entertainment professional—the “creator.”

A creator is anyone who records or makes something that can go viral on the internet

TikTok is now more popular than Netflix among consumers younger than 35,

While YouTube and TikTok have always been about video, just about every other social-media platform that wants to keep people engaged is emphasizing it more than ever, so that’s what creators have to make,

His agency gets involved with creators and musicians at the earliest stages of their careers, helping them plan content, update their style, understand what the algorithms of different platforms demand, and connecting them with potentially lucrative brand deals

. Even more telling: In first place is YouTube, the original online TV analog.

Where attention flows, money—and content—must also. In 2023 brands will spend an estimated $6 billion on marketing through influencers—a subspecies of creators

Globally, the total addressable market for this kind of marketing is currently $250 billion

Then there is a new generation of shows that are going straight to TikTok, bypassing even streaming services

In the wake of the success of YouTube and TikTok, Facebook, Instagram, and even LinkedIn are all pushing more and more content made by professionals into our feeds,

In order to quantify how TikTok has mastered the art of discerning our interests and feeding us the most compelling possible content, Faltesek, of Oregon State University, conducted a two-year project to study exactly what kind of content TikTok pushes

With a team of students, he created dozens of fresh TikTok user accounts that didn’t like or interact with content in any way—they just let the algorithm play one video after another.

At the end of this exhaustive process of gathering data on TikTok’s algorithm, the conclusion became obvious, says Faltesek. “TikTok is television. It flips channels like TV, it provides a flow like TV.”

By this logic, Instagram’s move to copy TikTok, which is in turn encroaching on the turf of YouTube by allowing longer videos, and the increasing dominance of professional content on all three, means they’re all turning into TV. Even Threads, the new offering from Facebook parent company Meta, is fast becoming a broadcast medium for news, as Twitter was before it.

In every case, the structure of social networks has become one in which a handful of accounts create most of the content that others see, and the role of everyone else on the network is, primarily, to amplify and consume that content,

Some, like Magana, believe we’ll eventually see an ever more complete blending of what were once “social” platforms with the traditional television networks and even film studios.  

aren’t convinced they’ll eat the rest of the entertainment industry. “It’s hard to say this kind of short-form video will be the only kind of TV,” she reflects. “A long time ago, the internet became the new thing, but we still have the other forms on television, and scripted streaming shows. It’s almost like this is just another avenue for that—of watching shows and movies on your phone.”

Google’s generative-AI-powered search is the true nightmare for publishers. Across the media world, Google generates nearly 40% of publishers’ traffic, accounting for the largest share of their “referrals,” according to a Wall Street Journal analysis of data from measurement firm SimilarWeb. 

“AI and large language models have the potential to destroy journalism and media brands as we know them,” said Mathias Döpfner, chairman and CEO of Axel Springer,

His company, one of Europe’s largest publishers and the owner of U.S. publications Politico and Business Insider, this week announced a deal to license its content to generative-AI specialist OpenAI.

publishers have seen enough to estimate that they will lose between 20% and 40% of their Google-generated traffic if anything resembling recent iterations rolls out widely. Google has said it is giving priority to sending traffic to publishers.

The rise of AI is the latest and most anxiety-inducing chapter in the long, uneasy marriage between Google and publishers, which have been bound to each other through a basic transaction: Google helps publishers be found by readers, and publishers give Google information—millions of pages of web content—to make its search engine useful.

Already, publishers are reeling from a major decline in traffic sourced from social-media sites, as both Meta and X, the former Twitter, have pulled away from distributing news.

, Google’s AI search was trained, in part, on their content and other material from across the web—without payment. 

Google’s view is that anything available on the open internet is fair game for training AI models. The company cites a legal doctrine that allows portions of a copyrighted work to be used without permission for cases such as criticism, news reporting or research.

The changes risk damaging website owners that produce the written material vital to both Google’s search engine and its powerful AI models.

“If Google kills too many publishers, it can’t build the LLM,”

Barry Diller, chairman of IAC and Expedia, said all major AI companies, including Google and rivals like OpenAI, have promised that they would continue to send traffic to publishers’ sites. “How they do it, they’ve been very clear to us and others, they don’t really know,” he said.

All of this has led Google and publishers to carry out an increasingly complex dialogue. In some meetings, Google is pitching the potential benefits of the other AI tools it is building, including one that would help with the writing and publishing of news articles

At the same time, publishers are seeking reassurances from Google that it will protect their businesses from an AI-powered search tool that will likely shrink their traffic, and they are making clear they expect to be paid for content used in AI training.

“Any attempts to estimate the traffic impact of our SGE experiment are entirely speculative at this stage as we continue to rapidly evolve the user experience and design, including how links are displayed, and we closely monitor internal data from our tests,” Reid said.

Many of IAC’s properties, like Brides, Investopedia and the Spruce, get more than 80% of their traffic from Google

Google began rolling out the AI search tool in May by letting users opt into testing. Using a chat interface that can understand longer queries in natural language, it aims to deliver what it calls “snapshots”—or summaries—of the answer, instead of the more link-heavy responses it has traditionally served up in search results. 

Google at first didn’t include links within the responses, instead placing them in boxes to the right of the passage. It later added in-line links following feedback from early users. Some more recent versions require users to click a button to expand the summary before getting links. Google doesn’t describe the links as source material but rather as corroboration of its summaries.

During Chinese President Xi Jinping’s recent visit to San Francisco, the Google AI search bot responded to the question “What did President Xi say?” with two quotes from his opening remarks. Users had to click on a little red arrow to expand the response and see a link to the CNBC story that the remarks were taken from. The CNBC story also sat over on the far right-hand side of the screen in an image box.

The same query in Google’s regular search engine turned up a different quote from Xi’s remarks, but a link to the NBC News article it came from was beneath the paragraph, atop a long list of news stories from other sources like CNN and PBS.

Google’s Reid said AI is the future of search and expects its new tool to result in more queries.

“The number of information needs in the world is not a fixed number,” she said. “It actually grows as information becomes more accessible, becomes easier, becomes more powerful in understanding it.”

Testing has suggested that AI isn’t the right tool for answering every query, she said.

Many publishers are opting to insert code in their websites to block AI tools from “crawling” them for content. But blocking Google is thorny, because publishers must allow their sites to be crawled in order to be indexed by its search engine—and therefore visible to users searching for their content.To some in the publishing world there was an implicit threat in Google’s policy: Let us train on your content or you’ll be hard to find on the internet.

Continued hype is necessary for the industry, because so much money flowing in essentially allows the big players, like OpenAI, to operate free of economic worry and considerations

The money involved is staggering—Anthropic announced they would compete with OpenAI and raised 2 billion dollars to train their next-gen model, a European counterpart just raised 500 million, etc. Venture capitalists are eager to throw as much money as humanely possible into AI, as it looks so revolutionary, so manifesto-worthy, so lucrative.

While I have no idea what the downloads are going to be for the GPT Store next year, my suspicion is it does not live up to the hyped Apple-esque expectation.

given their test scores, I’m willing to say GPT-4 or Gemini is smarter along many dimensions than a lot of actual humans, at least in the breadth of their abstract knowledge—all while noting even leading models still have around a 3% hallucination rate, which stacks up in a complex task.

A more interesting “bear case” for AI is that, if you look at the list of industries that leading AIs like GPT-4 are capable of disrupting—and therefore making money off of—the list is lackluster from a return-on-investment perspective, because the industries themselves are not very lucrative.

What are AIs of the GPT-4 generation best at? It’s things like:writing essays or short fictionsdigital artchattingprogramming assistance

While I personally wouldn’t go so far as to describe current LLMs as “a solution in search of a problem” like cryptocurrency has famously been described as, I do think the description rings true in an overall economic/business sense so fa